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SHARE-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Omnibus Share Plan On January 7, 2015 our board and initial shareholder approved the Urban Edge Properties Omnibus Share Plan, under which awards may be granted up to a maximum of 15,000,000 of our common shares or share equivalents. Pursuant to the Omnibus Share Plan, stock options, LTIP units, operating partnership units and restricted shares were granted. Outperformance Plans The Compensation Committee of the Board of Trustees of the Company approved the Company’s 2015 Outperformance Plan (“2015 OPP”) on November 3, 2015 and the Company’s 2017 Outperformance Plan (“2017 OPP”) on February 24, 2017. Both Outperformance Plans are multi-year, performance-based equity compensation plans under which participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units if, and only if, we outperform a predetermined total shareholder return (“TSR”) and/or outperform the market with respect to a relative TSR in any year during the requisite performance periods as described below. The aggregate notional amounts of the 2015 OPP grant and the 2017 OPP grant are $10.2 million and $12.0 million, respectively. Awards under the 2015 OPP and the 2017 OPP may be earned if we (i) achieve a TSR level greater than 7% per annum, or 21% over the three-year performance measurement period, and/or (ii) achieve a TSR equal to or above, that of the 50 th percentile of a retail REIT peer group (“Peer Group”) comprised of our peer companies, over a three-year performance measurement period. Distributions on awards accrue during the measurement period, except that 10% of such distributions are paid in cash. If the designated performance objectives are achieved, LTIP units are also subject to time-based vesting requirements. Awards earned under the 2015 OPP and the 2017 OPP vest 50% in year three, 25% in year four and 25% in year five. The fair values of the 2015 OPP and the 2017 OPP on the dates of grant were $3.9 million and $4.1 million, respectively. A Monte Carlo simulation was used to estimate the fair values based on the probability of satisfying the market conditions and the projected share prices at the time of payments, discounted to the valuation dates over the three-year performance periods. For the 2015 OPP, assumptions include historical volatility (25.0%), risk-free interest rates (1.2%), and historical daily return as compared to our Peer Group (which ranged from 19.0% to 27.0%). For the 2017 OPP, assumptions include historical volatility (19.7%), risk-free interest rates (1.5%), and historical daily return as compared to our Peer Group. For both plans, such amounts are being amortized into expense over a five-year period from the dates of grant, using graded vesting attribution models. In the years ending December 31, 2018, 2017, and 2016 we recognized $1.7 million, $2.0 million and $1.1 million of compensation expense related to the 2015 and 2017 OPPs’ LTIP Units, respectively. As of December 31, 2018, there was $2.4 million of total unrecognized compensation cost related to the 2015 and 2017 OPPs’ LTIP Units, which will be recognized over a weighted-average period of 1.4 years. 2018 Long-Term Incentive Plan On February 22, 2018, the Compensation Committee of the Board of Trustees of the Company approved the Company’s 2018 Long-Term Incentive Plan ("2018 LTI Plan") under the Omnibus Share Plan, a multi-year equity compensation program, comprised of both performance-based and time-based vesting awards. Equity awards granted under the 2018 LTI Plan are weighted, in terms of grant date and fair value, 80% performance-based and 20% time-based. For the performance-based awards under the 2018 LTI Plan, participants have the opportunity to earn awards in the form of LTIP Units if, and only if, Urban Edge’s absolute and relative total shareholder return (“TSR”) meets certain criteria over the three-year performance measurement period (the “Performance Period”) beginning on February 22, 2018 and ending on February 21, 2021. The Company issued 328,107 LTIP Units under the 2018 LTI Plan. Under the Absolute TSR component (25% of the performance-based awards), 40% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to 18%, 100% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to 27%, and 165% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or greater than 36%. The Relative TSR component is based on the Company’s performance compared to a peer group comprised of 14 companies. Under the Relative TSR Component (75% of the performance-based awards), 40% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 35 th percentile of the peer group, 100% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 55 th percentile of the peer group, and 165% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or above the 75 th percentile of the peer group, with earning determined using linear interpolation if between such relative TSR thresholds. The fair value of the performance-based award portion of the 2018 LTI Plan on the date of grant was $3.6 million using a Monte Carlo simulation to estimate the fair value through a risk-neutral premise. The time-based awards under the 2018 LTI Plan, also granted in the form of LTIP Units, vest ratably over three years except in the case of our Chairman and Chief Executive Officer, where the vesting is ratably over four years. The Company granted time-based awards under the 2018 LTI Plan that represent 33,172 LTIP units with a grant date fair value of $0.7 million. Deferred Share Units Granted to Trustees The Company has authorized Trustee Deferred Share Unit Agreements (“DSU Agreements”) under the Omnibus Share Plan, in connection with the services of the trustees to the Company. Each deferred share unit (“DSU”) is equivalent to one common share of the Company. All DSUs shall vest in full on the agreed upon vesting date, provided the trustee remains in service as a member of the Board of Trustees of the Company on such date. If the service of the trustee to the Company or its affiliates terminates for any reason prior to the vesting date, any DSUs that have not vested as of such date shall automatically and without notice terminate and be forfeited. Once vested, the common shares underlying the DSUs are granted to the trustees on predetermined dates or upon their departure as trustees. During the year ended December 31, 2018, some of our trustees elected to receive a portion of their compensation in deferred share units and an aggregate of 13,656 shares were credited to those trustees based on the weighted average grant date fair value of $19.33. During the year ended December 31, 2018, the Company incurred expenses of $0.2 million related to deferred share units granted to trustees. 2018 Inducement Equity Plan The Inducement Plan was approved by the Compensation Committee of the Board of Trustees of the Company on September 26, 2018. Under the Inducement Plan, the Compensation Committee of the Board of Trustees may grant, subject to any Company performance conditions as specified by the Compensation Committee, awards to individuals who were not previously employees as an inducement material to the individual’s entry into employment with the Company. The terms and conditions of the Inducement Plan and any awards thereunder granted are substantially similar to those under the 2015 Omnibus Share Plan. As of December 31, 2018, the Company had granted an aggregate of 352,890 restricted LTIP Units and 2,000,000 stock options under the Inducement Plan with grant date fair values of $7.2 million and $9.3 million, respectively, which were granted in connection with inducing the Company’s new Chief Operating Officer and new President of Development to join the Company. Shares Under Option All stock options granted have ten-year contractual lives, containing vesting terms of three to five years. As of December 31, 2018, the weighted average contractual term of shares under option outstanding at the end of the period is 8.1 years. The following table presents stock option activity for the years ended December 31, 2018, 2017, and 2016:
| Shares Under Options |  | Weighted Average Exercise Price per Share |  | Weighted Average Remaining Expected Term
|  |  |  |  | (In years)
Outstanding at January 1, 2016 | 2,289,139 |  |  | $ | 23.89 |  |  | 6.15 |
Granted | 196,713 |  |  | 23.52 |  |  | 6.00 |
Exercised | (8,501 | ) |  | 24.46 |  |  | — |
Forfeited or expired | (5,067 | ) |  | 24.46 |  |  | — |
Outstanding at December 31, 2016 | 2,472,284 |  |  | 23.86 |  |  | 5.33 |
Granted | 137,259 |  |  | 28.36 |  |  | 6.01 |
Exercised | — |  |  | — |  |  | — |
Forfeited or expired | (5,879 | ) |  | 23.17 |  |  | — |
Outstanding at December 31, 2017 | 2,603,664 |  |  | 24.09 |  |  | 4.40 |
Granted | 2,146,885 |  |  | 21.71 |  |  | 4.58 |
Exercised | — |  |  | — |  |  | — |
Forfeited or expired | — |  |  | — |  |  | — |
Outstanding at December 31, 2018 | 4,750,549 |  |  | $ | 23.02 |  |  | 4.48 |
Exercisable at December 31, 2018 | 807,352 |  |  | $ | 24.03 |  |  | — |
The weighted average grant date fair value of options granted in 2018, 2017 and 2016 was $4.68, $5.10, and $3.56, respectively. No options were exercised during the years ended December 31, 2017 and 2018. The total cash received from options exercised in the year ended December 31, 2016 was $0.2 million with an intrinsic value of $26 thousand. As of December 31, 2018, there was no intrinsic value for the outstanding and exercisable shares under option. During the years ended December 31, 2018, 2017 and 2016, the fair value of the options granted was estimated on the grant date using the Black-Scholes pricing model with the following assumptions:
| February 8, 2016 |  | February 24, 2017 |  | February 22, 2018 |  | September 27, 2018
Risk-free interest rate | 1.31% |  | 1.93% |  | 2.73% |  | 3.00%
Expected option life | 6.25 |  | 6.25 |  | 6.25 |  | 7.00
Expected volatility | 23.94% |  | 25.06% |  | 32.23% |  | 30.42%
The options were granted with an exercise price equivalent to the average of the high and low share price on the grant date. Restricted Shares The following table presents information regarding restricted share activity during the years ended December 31, 2018, 2017, and 2016:
| Shares |  | Weighted Average Grant Date Fair Value per Share
Unvested at January 1, 2016 | 30,717 |  |  | $ | 22.62 |
Granted | 117,399 |  |  | 24.55 |
Vested | (15,977 | ) |  | 23.17 |
Forfeited | (2,744 | ) |  | 23.55 |
Unvested at December 31, 2016 | 129,395 |  |  | 24.29 |
Granted | 104,698 |  |  | 27.69 |
Vested | (53,236 | ) |  | 25.13 |
Forfeited | (5,427 | ) |  | 24.64 |
Unvested at December 31, 2017 | 175,430 |  |  | 26.05 |
Granted | 103,814 |  |  | 21.65 |
Vested | (84,185 | ) |  | 25.67 |
Forfeited | (32,482 | ) |  | 23.32 |
Unvested at December 31, 2018 | 162,577 |  |  | $ | 23.99 |
During the years ended December 31, 2018, 2017 and 2016, we granted 103,814, 104,698, and 117,399 restricted shares, respectively, that are subject to forfeiture and vest over periods ranging from one to four years. The total grant date value of the 84,185, 53,236, and 15,977 restricted shares vested during the years ended December 31, 2018, 2017 and 2016 was $2.2 million, $1.3 million and $0.4 million, respectively. Restricted Units During the years ended December 31, 2018 and 2017, respectively, there were 444,954 and 31,734 additional LTIP units issued. During the years ended December 31, 2018, 2017 and 2016, 24,722, 16,789, and 39,439 units vested, respectively. The remaining 480,227 units vest over a weighted average period of 4.0 years. Share-Based Compensation Expense Share-based compensation expense, which is included in general and administrative expenses in our consolidated statements of income, is summarized as follows:
| Year Ended December 31,
(Amounts in thousands) | 2018 |  | 2017 |  | 2016
Share-based compensation expense components: |  |  |  |  |
Restricted share expense | $ | 2,051 |  |  | $ | 1,961 |  |  | $ | 1,314 |
Stock option expense | 2,778 |  |  | 2,569 |  |  | 2,437 |
LTIP expense(1) | 2,218 |  |  | 557 |  |  | 473 |
Outperformance Plan (“OPP”) expense | 2,530 |  |  | 2,050 |  |  | 1,209 |
DSU expense | 164 |  |  | — |  |  | — |
Total Share-based compensation expense | $ | 9,741 |  |  | $ | 7,137 |  |  | $ | 5,433 |
(1) LTIP expense excludes the expense associated with LTIP units under the 2015 OPP, 2017 OPP and 2018 LTI Plan because we recognize these expenses as part of our OPP expense. As of December 31, 2018, we had a total of $25.8 million of unrecognized compensation expense related to unvested and restricted share-based payment arrangements including unvested stock options, LTIP units, deferred share units, and restricted share awards which were granted under our Omnibus Share Plan as well as OPP awards. This expense is expected to be recognized over a weighted average period of 3.4 years.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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