Share-Based Compensation

9 Months Ended

Sep. 30, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

9.    Share-Based Compensation

Stockholder Approved Equity Compensation Plans

As of September 30, 2011, we had one share-based incentive compensation plan, the Kilroy Realty 2006 Incentive Award Plan as amended (the “2006 Plan”). As of September 30, 2011, 3,799,737 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 1,301,280 shares as of September 30, 2011.

Summary of Nonvested Shares

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

Nonvested Shares	Shares		Weighted-Average Grant Date Fair Value 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 September 30, 2011	109,285		$	45.61

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(1) The total shares vested include 2,198 shares that were 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 closing share price of the Company's common stock to satisfy tax obligations.

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

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

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(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 September 30, 2011 is presented below:

	Nonvested RSUs				Vested RSUs		Total RSUs
	Amount		Weighted-Average Grant Date  Fair Value Per Share
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)					20,790		20,790
Canceled (2)					(8,497	)	(8,497	)
Outstanding as of September 30, 2011	210,392		$	33.93	623,396		833,788

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(1) RSUs issued as dividend equivalents are vested upon issuance.

(2) We accept the return of RSUs, at the current quoted closing share 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 nine months ended September 30, 2011 and 2010 is presented below:

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

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(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 September 30, 2011 and 2010, respectively, and $4.2 million and $6.4 million for the nine months ended September 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 September 30, 2011 and 2010, and $0.8 million and $1.1 million was capitalized as part of real estate assets for the nine months ended September 30, 2011 and 2010, respectively. As of September 30, 2011, there was approximately $5.7 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 September 30, 2011.