Share Incentive Plan

During 2012, the Company terminated the 1999 and 2003 Plans and adopted the Amended 2006 Plan (the "Share Incentive Plan"). The Share Incentive Plan increased the authorization to issue options, Restricted Shares and LTIP Units (collectively "Awards") available to officers and employees by 1.9 million shares to 2.1 million shares. Options are granted by the Compensation Committee (the "Committee"), which currently consists of three non-employee Trustees, and will not have an exercise price less than 100% of the fair market value of the Common Shares and a term of greater than ten years at the grant date. Vesting of options is at the discretion of the Committee. The Committee determines the restrictions placed on Awards, including the dividends or distributions thereon and the term of such restrictions. The Committee also determines the award and vesting of the Awards based on the attainment of specified performance objectives of the Company within a specified performance period.

During 2015, the Company issued 247,863 LTIP Units and 8,640 Restricted Share Units to employees of the Company pursuant to the Share Incentive Plan. These awards were measured at their fair value on the grant date, which was established as the market price of the Company's Common Shares as of the close of trading on the day preceding the grant date. The total value of the above Restricted Share Units and LTIP Units as of the grant date was $8.6 million. Total long-term incentive compensation expense, including the expense related to the above mentioned plans, was $6.8 million, $6.2 million and $7.3 million for the years ended December 31, 2015, 2014 and 2013, respectively and is recorded in General and Administrative on the Consolidated Statements of Income.

In addition, members of the Board of Trustees (the "Board") have been issued units under the Share Incentive Plan. During 2015, the Company issued 14,179 Restricted Shares and 10,601 LTIP Units to Trustees of the Company in connection with Trustee fees. Vesting with respect to 6,469 of the Restricted Shares and 6,131 of the LTIP Units will be on the first anniversary of the date of issuance and 7,710 of the Restricted Shares and 4,470 of the LTIP Unites vest over three years with 33% vesting on each of the next three anniversaries of the issuance date. The Restricted Shares do not carry voting rights or other rights of Common Shares until vesting and may not be transferred, assigned or pledged until the recipients have a vested non-forfeitable right to such shares. Dividends are not paid currently on unvested Restricted Shares, but are paid cumulatively from the issuance date through the applicable vesting date of such Restricted Shares. Trustee fee expense related to this issuance was $0.3 million for the year ended December 31, 2015.

The weighted average fair value for Restricted Shares and LTIP Units granted for the years ended December 31, 2015, 2014 and 2013 were $33.90, $26.30 and $26.40, respectively.

In 2009, the Company adopted the Long Term Investment Alignment Program (the "Program") pursuant to which the Company may award units primarily to senior executives which would entitle them to receive up to 25% of any future Fund III Promote or Fund IV Promote when and if such Promotes are ultimately realized. The Company has awarded all of the units under the Program related to the Fund III Promote and 20% of the units related to the Fund IV Promote. During the quarter ended September 30, 2015, the Company amended the Program to require Board approval for all amounts paid in connection with units awarded to senior executives. Compensation relating to these awards will be recognized in each reporting period in which Board approval is granted.

This amendment to the Program was not applicable to awards issued to non-senior executives of the Company. In accordance with ASC Topic 718, "Compensation - Stock Compensation," compensation relating to these non-senior executive awards will be recorded based on the change in the estimated fair value at each reporting period. During the year ended December 31, 2015, compensation expense of $0.7 million was recognized in connection with the Fund III awards and the units awarded in connection with Fund IV were determined to have no value.

As of December 31, 2015, the Company had 249 options outstanding to officers and employees and 3,000 options outstanding to non-employee Trustees of the Company all of which have vested. These options are for ten-year terms from the grant date and vested in three equal annual installments, which began on their respective grant dates.

A summary of option activity under all option arrangements as of December 31, 2015 and 2014, and changes during the years then ended, is presented below:

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. Share Incentive Plan, continued



Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (dollars in thousands)
Outstanding and exercisable at December 31, 2013	113,086		$	19.28	3.5	$	628
Granted	—		—		—	—
Exercised	(57,739	)	17.68		—	828
Forfeited or Expired	—		—		—	—
Outstanding and exercisable at December 31, 2014	55,347		20.93		1.1	614
Granted	—		—		—	—
Exercised	(49,098	)	20.76		—	608
Forfeited or Expired	(3,000	)	22.40		—	—
Outstanding and exercisable at December 31, 2015	3,249		$	22.27	1.1	$	35

The total intrinsic value of options exercised during the years ended December 31, 2015, 2014 and 2013 was $0.6 million, $0.8 million and $0.2 million, respectively.

A summary of the status of the Company’s unvested Restricted Shares and LTIP Units as of December 31, 2015 and 2014 and changes during the years then ended is presented below:



Unvested Restricted Shares and LTIP Units	Restricted Shares		Weighted Grant-Date Fair Value		LTIP Units		Weighted Grant-Date Fair Value
Unvested at December 31, 2013	63,737		$	23.34	884,334		$	21.62
Granted	28,563		27.18		441,946		26.24
Vested	(34,598	)	23.40		(263,556	)	20.23
Forfeited	(2,684	)	23.54		(800	)	24.66
Unvested at December 31, 2014	55,018		25.90		1,061,924		23.92
Granted	22,819		32.78		258,464		34.00
Vested	(24,744	)	25.44		(292,544	)	22.82
Forfeited	(3,194	)	26.25		(7,723	)	25.90
Unvested at December 31, 2015	49,899		$	25.90	1,020,121		$	23.92

As of December 31, 2015, there was $17.0 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under share incentive plans. That cost is expected to be recognized over a weighted-average period of 2.4 years. The total fair value of Restricted Shares that vested during the years ended December 31, 2015, 2014 and 2013 was $0.6 million, $0.8 million and $0.5 million, respectively. The total fair value of LTIP Units that vested during the years ended December 31, 2015, 2014 and 2013 was $6.7 million, $5.3 million and $6.8 million, respectively.