Share-Based Compensation

12 Months Ended

Dec. 31, 2012

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

Share-Based Compensation

Share-Based Compensation

Equity Plan

The Company has adopted the American Realty Capital Properties, Inc. Equity Plan (the "Equity Plan"), which provides for the grant of stock options, restricted shares of common stock, restricted stock units, dividend equivalent rights and other equity-based awards to the Manager, non-executive directors, officers and other employees and independent contractors, including employees or directors of the Manager and its affiliates who are providing services to the Company.

The Company authorized and reserved a total number of shares equal to 10.0% of the total number of issued and outstanding shares of common stock (on a fully diluted basis assuming the redemption of all OP Units for shares of common stock) to be issued at any time under the Equity Plan for equity incentive awards excluding an initial grant of 167,400 shares to the Manager at the IPO. All such awards of shares will vest ratably on a quarterly or annual basis over a three-year period beginning on the first anniversary of the date of grant and shall provide for “distribution equivalents” with respect to this restricted stock, whether or not vested, at the same time and in the same amounts as dividends are paid to the stockholders.

In February 2013, the Company granted 325,000 restricted shares of common stock to the Manager and certain employees. These shares will not vest upon the consummation of the merger but will vest ratably over a three-year period and shall provide for “distribution equivalents” with respect to this restricted stock, whether or not vested, at the same time and in the same amounts as dividends are paid to the stockholders.

Director Stock Plan

The Company has adopted the American Realty Capital Properties, Inc. Non-Executive Director Stock Plan (the Director Stock Plan), which provides for the grant of restricted shares of common stock to each of the Company's three independent directors, each of whom is a non-executive director. Awards of restricted stock will vest ratably over a five-year period following the first anniversary of the date of grant in increments of 20.0% per annum, subject to the director’s continued service on the board of directors, and shall provide for “distribution equivalents” with respect to this restricted stock, whether or not vested, at the same time and in the same amounts as distributions are paid to the stockholders. At December 31, 2012, a total of 99,000 shares of common stock are reserved for issuance under the Director Stock Plan.

The fair value of restricted common stock awards under the Equity Plan and Director Stock Plan is determined on the grant date using the closing stock price on NASDAQ that day. The fair value of restricted common stock under the Equity Plan is updated at the end of each quarter based on the quarter end closing stock price through the final vesting date.

    For the years ended December 31, 2012 and 2011, compensation expense for restricted shares was $1.2 million and $0.2 million, respectively. There was $0.1 million compensation expense for restricted shares for the year ended December 31, 2010.

The following tables detail the restricted shares activity within the Equity Plan and Director Stock Plan during the years ended December 31, 2012 and 2011:

Restricted Share Awards

	Equity Plan				Director Stock Plan
	Number of Restricted Common Shares		Weighted-Average Issue Price		Number of Restricted Common Shares		Weighted-Average Issue Price
Awarded, January 1, 2011	—		$	—	—		$	—
Granted	167,400		12.50		9,000		12.50
Awarded December 31, 2011	167,400		12.50		9,000		12.50
Granted	93,683		10.65		9,000		12.21
Forfeited	(1,174	)	10.65		(4,800	)	12.50
Awarded December 31, 2012	259,909		$	11.84	13,200		$	12.30

Unvested Restricted Shares

	Equity Plan				Director Stock Plan
	Number of Restricted Common Shares		Weighted-Average Issue Price		Number of Restricted Common Shares		Weighted-Average Issue Price
Unvested, January 1, 2011	—		$	—	—		$	—
Granted	167,400		12.50		9,000		12.50
Vested	(13,950	)	12.50		—		—
Unvested, December 31, 2011	153,450		12.50		9,000		12.50
Granted	93,683		10.65		9,000		12.21
Vested	(59,556	)	12.42		(1,800	)	12.50
Forfeited	(1,174	)	10.65		(4,800	)	12.50
Unvested, December 31, 2012	186,403		$	11.62	11,400		$	12.27

Pursuant to, and as further described in the Merger agreement, each share of restricted stock outstanding as of immediately prior to the effective date of the Merger will become fully vested.