Share-Based Compensation

6 Months Ended

Jun. 30, 2011

Share-Based Compensation [Abstract]

Share-Based Compensation

9.   Share-Based Compensation

Stockholder Approved Equity Compensation Plans

As of June 30, 2011, we had one share-based incentive compensation plan, the Kilroy Realty 2006 Incentive Award Plan as amended (the “2006 Plan”). As of June 30, 2011, 3,821,041 shares were available for grant under the 2006 Plan. The number of shares that remains available for grant is calculated using the weighted share counting provisions set forth in the 2006 Plan, which are based on the type of awards that are granted. The maximum number of shares available for grant subject to full value awards (which generally include equity awards other than options and stock appreciation rights) was 1,308,576 shares as of June 30, 2011.

Summary of Nonvested Shares

A summary of our nonvested shares activity from January 1, 2011 through June 30, 2011 is presented below:

				Weighted-
				Average
				Grant Date
				Fair Value
Nonvested Shares	Shares			Per Share
Outstanding at January 1, 2011		50,032		$	58.40
Granted		68,727			37.83
Vested(1)		(9,474	)		56.76
Outstanding as of June 30, 2011		109,285		$	45.61

(1) The total shares vested include 2,198 shares that were then tendered to satisfy minimum statutory tax withholding requirements related to the restricted shares that have vested in accordance with the terms of the 2006 Plan. We accept the return of shares at the current quoted market price of the Company’s common stock to satisfy tax obligations.

A summary of our nonvested and vested shares activity for the six months ended June 30, 2011 and 2010 is presented below:

	Shares Granted				Shares Vested
			Weighted-Average
			Grant Date					Total Vest Date
	Non-Vested Shares		Fair Value					Fair Value(1)
Six Months Ended June 30,	Issued		Per Share		Vested Shares			(in thousands)
2011		68,727	$	37.83		(9,474	)	$	370
2010		3,239		30.88		(16,358	)		474

(1) Total fair value of shares vested was calculated based on the quoted closing share price of the Company’s common stock on the NYSE on the day of vesting.

Summary of Restricted Stock Units

A summary of our restricted stock unit (“RSU”) activity from January 1, 2011 through June 30, 2011 is presented below:

	Nonvested RSUs
				Weighted-Average
				Grant Date
				Fair Value
	Amount			Per Share		Vested RSUs			Total RSUs
Outstanding at January 1, 2011		125,754		$	29.88		588,068			713,822
Granted		107,673			37.94		—			107,673
Vested		(23,035	)		30.57		23,035			—
Issuance of dividend equivalents(1)							13,494			13,494
Canceled(2)							(8,448	)		(8,448	)
Outstanding as of June 30, 2011		210,392		$	33.93		616,149			826,541

(1)	RSUs issued as dividend equivalents are vested upon issuance.
(2)	We accept the return of RSUs, at the current quoted market price of the Company’s common stock, to satisfy minimum statutory tax-withholding requirements related to either RSUs that have vested or RSU dividend equivalents in accordance with the terms of the 2006 Plan.

A summary of our RSU activity for the six months ended June 30, 2011 and 2010 is presented below:

	RSUs Granted				RSUs Vested
			Weighted-Average
			Grant Date				Total Vest-Date
	Non-Vested RSUs		Fair Value				Fair Value(1)
Six Months Ended June 30,	Issued		Per Share		Vested RSUs		(in thousands)
2011		107,673	$	37.94		23,035	$	897
2010		159,606		30.24		23,564		740

(1) Total fair value of RSUs vested was calculated based on the quoted closing share price of the Company’s common stock on the NYSE on the day of vesting.

Compensation Cost Recorded During the Period

The total compensation cost for all share-based compensation programs was $1.4 million and $2.2 million for the three months ended June 30, 2011 and 2010, respectively, and $2.8 million and $4.3 million for the six months ended June 30, 2011 and 2010, respectively. Of the total share-based compensation cost, $0.3 million was capitalized as part of real estate assets for the three months ended June 30, 2011 and 2010, and $0.6 million and $0.7 million was capitalized as part of real estate assets for the six months ended June 30, 2011 and 2010, respectively. As of June 30, 2011, there was approximately $7.1 million of total unrecognized compensation cost related to nonvested incentive awards granted under share-based compensation arrangements that is expected to be recognized over a weighted-average period of 1.6 years. The remaining compensation cost related to these nonvested incentive awards had been recognized in periods prior to June 30, 2011.