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Share-Based Compensation | 3 Months Ended
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Mar. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | Share-Based Compensation Restricted Shares The following table summarizes restricted share activity under our share-based compensation plans for the three months ended March 31, 2023:
|  | Number of Shares |  | Weighted Average Grant Date Fair Value
Unvested as of December 31, 2022 |  | 325,083 |  |  | $ | 26.27 |
Granted |  | 158,242 |  |  | $ | 25.72 |
Forfeited |  | (24,510) |  |  | $ | 25.89 |
Vested |  | (124,838) |  |  | $ | 26.02 |
Unvested as of March 31, 2023 |  | 333,977 |  |  | $ | 26.13 |
Restricted shares granted to employees vest based on increments and over periods of time set forth under the terms of the respective awards provided that the employee remains employed by us. Restricted shares granted to non-employee Trustees vest on the first anniversary of the grant date, provided that the Trustee remains in his or her position. The aggregate intrinsic value of restricted shares that vested was $3.2 million for the three months ended March 31, 2023. Profit Interest Units in COPLP (“PIUs”) We granted two forms of PIUs: time-based PIUs (“TB-PIUs”); and performance-based PIUs (“PB-PIUs”). TB-PIUs are subject to forfeiture restrictions until the end of the requisite service period, at which time the TB-PIUs automatically convert into vested PIUs. PB-PIUs are subject to a market condition in that the number of earned awards are determined at the end of the performance period (as described further below) and then settled in vested PIUs. Vested PIUs carry substantially the same rights to redemption and distributions as non-PIU common units. TB-PIUs The following table summarizes TB-PIUs activity under our share-based compensation plans for the three months ended March 31, 2023:
|  | Number of TB-PIUs |  | Weighted Average Grant Date Fair Value
Unvested as of December 31, 2022 |  | 187,330 |  |  | $ | 26.19 |
Granted |  | 82,334 |  |  | $ | 25.72 |
Forfeited |  | (27,182) |  |  | $ | 26.46 |
Vested |  | (73,869) |  |  | $ | 26.07 |
Unvested as of March 31, 2023 |  | 168,613 |  |  | $ | 25.97 |
TB-PIUs granted to senior management team members vest based on increments and over periods of time set forth under the terms of the respective awards provided that the employee remains employed by us. TB-PIUs granted to non-employee Trustees vest on the first anniversary of the grant date, provided that the Trustee remains in his or her position. The aggregate intrinsic value of TB-PIUs that vested was $1.9 million for the three months ended March 31, 2023. PB-PIUs On January 1, 2023, we granted certain senior management team members 275,402 PB-PIUs with a three-year performance period concluding on the earlier of December 31, 2025 or the date of: (1) termination by us without cause, death or disability of the employee or constructive discharge of the employee (collectively, “qualified termination”); or (2) a sale event. The number of earned awards at the end of the performance period will be determined based on the percentile rank of COPT’s total shareholder return (“TSR”) relative to a peer group of companies, as set forth in the following schedule:
Percentile Rank |  | Earned PB-PIUs Payout %
75th or greater |  | 100% of PB-PIUs granted
50th (target) |  | 50% of PB-PIUs granted
25th |  | 25% of PB-PIUs granted
Below 25th |  | 0% of PB-PIUs granted
If the percentile rank exceeds the 25th percentile and is between two of the percentile ranks set forth in the table above, then the percentage of the earned awards will be interpolated between the ranges set forth in the table above to reflect any performance between the listed percentiles. If COPT’s TSR during the measurement period is negative, the maximum number of earned awards will be limited to the target level payout percentage. During the performance period, PB-PIUs carry rights to distributions equal to 10% of the distribution rights of non-PIU common units but carry no redemption rights. At the end of the performance period, we will settle the award by issuing vested PIUs equal to: the number of earned awards; and the excess, if any, of (1) the aggregate distributions that would have been paid with respect to vested PIUs issued in settlement of the earned awards through the date of settlement had such vested PIUs been issued on the grant date over (2) the aggregate distributions made on the PB-PIUs during the performance period, divided by the price of our common shares on the settlement date. If a performance period ends due to a sale event or qualified termination, the number of earned awards is prorated based on the portion of the three-year performance period that has elapsed. If employment is terminated by the employee or by us for cause, all PB-PIUs are forfeited. These PB-PIU grants had an aggregate grant date fair value of $4.3 million ($31.54 per target-level award associated with the grants) which is being recognized over the performance period. The grant date fair value was computed using a Monte Carlo model that included the following assumptions: baseline common share value of $25.94; expected volatility for common shares of 35.0%; and a risk-free interest rate of 4.28%. During the three months ended March 31, 2023, 126,890 PB-PIUs were forfeited; these PB-PIUs had a weighted average grant date fair value per target-level award of $31.49. Based on COPT’s TSR relative to its peer group of companies, for the 2020 PB-PIUs issued to executives that vested on December 31, 2022, we issued 141,152 PIUs in settlement of the PB-PIUs on February 1, 2023.

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