Share and Unit-based Plans:

The Company has established share and unit-based compensation plans for the purpose of attracting and retaining executive officers, directors and key employees.

2003 Equity Incentive Plan:

The 2003 Equity Incentive Plan ("2003 Plan") authorizes the grant of stock awards, stock options, stock appreciation rights, stock units, stock bonuses, performance-based awards, dividend equivalent rights and OP Units or other convertible or exchangeable units. As of December 31, 2013, stock awards, stock units, LTIP Units (as defined below), stock appreciation rights ("SARs") and stock options have been granted under the 2003 Plan. All stock options or other rights to acquire common stock granted under the 2003 Plan have a term of 10 years or less. These awards were generally granted based on the performance of the Company and the employees. None of the awards have performance requirements other than a service condition of continued employment unless otherwise provided. All awards are subject to restrictions determined by the Company's compensation committee. The aggregate number of shares of common stock that may be issued under the 2003 Plan is 13,825,428 shares. As of December 31, 2013, there were 5,701,863 shares available for issuance under the 2003 Plan.

Stock Awards:

The value of the stock awards was determined by the market price of the Company's common stock on the date of the grant. The following table summarizes the activity of non-vested stock awards during the years ended December 31, 2013, 2012 and 2011:



	2013				2012				2011
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Balance at beginning of year	20,924		$	49.36	21,130		$	40.68	63,351		$	53.69
Granted	8,963		61.84		9,639		54.43		11,350		48.47
Vested	(10,886	)	46.70		(9,845	)	35.69		(53,571	)	57.36
Forfeited	—		—		—		—		—		—
Balance at end of year	19,001		$	56.77	20,924		$	49.36	21,130		$	40.68

Stock Units:

The stock units represent the right to receive upon vesting one share of the Company's common stock for one stock unit. The value of the outstanding stock units was determined by the market price of the Company's common stock on the date of the grant. The following table summarizes the activity of non-vested stock units during the years ended December 31, 2013, 2012 and 2011:



	2013				2012				2011
	Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value
Balance at beginning of year	114,677		$	52.19	576,340		$	11.71	1,038,549		$	7.17
Granted	67,920		62.01		72,322		54.43		64,463		48.36
Vested	(45,279	)	51.59		(533,985	)	8.80		(519,272	)	7.17
Forfeited	—		—		—		—		(7,400	)	12.35
Balance at end of year	137,318		$	57.24	114,677		$	52.19	576,340		$	11.71

SARs:

The executives have up to 10 years from the grant date to exercise the SARs. Upon exercise, the executives will receive unrestricted common shares for the appreciation in value of the SARs from the grant date to the exercise date.

The Company determined the value of each SAR awarded during the year ended December 31, 2012 to be $9.67 using the Black‑Scholes Option Pricing Model based upon the following assumptions: volatility of 25.85%, dividend yield of 3.69%, risk free rate of 1.20%, current value of $59.57 and an expected term of 8 years. The value of each of the other outstanding SARs was determined at the grant date to be $7.68 based upon the following assumptions: volatility of 22.52%, dividend yield of 5.23%, risk free rate of 3.15%, current value of $61.17 and an expected term of 8 years. The assumptions for volatility and dividend yield were based on the Company's historical experience as a publicly traded company, the current value was based on the closing price on the date of grant and the risk free rate was based upon the interest rate of the 10-year Treasury bond on the date of grant. The following table summarizes the activity of SARs awards during the years ended December 31, 2013, 2012 and 2011:



	2013				2012				2011
	Units		Weighted Average Exercise Price		Units		Weighted Average Exercise Price		Units		Weighted Average Exercise Price
Balance at beginning of year	1,164,185		$	56.66	1,156,985		$	56.55	1,242,314		$	56.56
Granted	—		—		39,932		59.57		—		—
Exercised	(93,194	)	56.63		(32,732	)	56.63		—		—
Forfeited	—		—		—		—		(85,329	)	56.63
Balance at end of year	1,070,991		$	56.66	1,164,185		$	56.66	1,156,985		$	56.55

Long-Term Incentive Plan Units:

Under the Long-Term Incentive Plan ("LTIP"), each award recipient is issued a form of operating partnership units ("LTIP Units") in the Operating Partnership. Upon the occurrence of specified events and subject to the satisfaction of applicable vesting conditions, LTIP Units (after conversion into OP Units) are ultimately redeemable for common stock of the Company, or cash at the Company's option, on a one-unit for one-share basis. LTIP Units receive cash dividends based on the dividend amount paid on the common stock of the Company. The LTIP may include both market-indexed awards and service-based awards.

The market-indexed LTIP units vest over the service period of the award based on the percentile ranking of the Company in terms of total return to stockholders (the "Total Return") per common stock share relative to the Total Return of a group of peer REITs, as measured at the end of the measurement period.

On February 28, 2011, the Company granted 190,000 market-indexed LTIP Units to four executive officers at a weighted average grant date fair value of $43.30 per LTIP Unit. The grants vested over a service period ending January 31, 2012. On February 7, 2012, the compensation committee determined that the LTIP Units granted under the LTIP on February 28, 2011 had vested at the 150% level based on the Company's percentile ranking in terms of Total Return per common stock share compared to the Total Return of a group of peer REITs during the period of February 1, 2011 to January 31, 2012. As a result, the compensation committee granted an additional 95,000 LTIP Units, which vested as of January 31, 2012.

On February 23, 2012, the Company granted 190,000 market-indexed LTIP Units to four executive officers at a weighted average grant date fair value of $37.77 per LTIP Unit. On April 16, 2012, the Company granted 10,000 market-indexed LTIP Units to a new executive officer at a weighted average grant date fair value of $54.97 per LTIP Unit. The market-indexed LTIP Unit grants vested over a service period ending January 31, 2013. On September 1, 2012, the Company granted 20,000 LTIP Units to a new executive officer at a weighted average fair value of $59.57 per LTIP Unit that were fully vested on the grant date. On February 11, 2013, the compensation committee determined that the market-indexed LTIP Units granted under the LTIP in 2012 had vested at the 100% level, based on the Company's percentile ranking in terms of Total Return per common stock share compared to the Total Return of a group of peer REITs during the period of February 1, 2012 to January 31, 2013. As a result, the 200,000 market-indexed LTIP Units vested as of January 31, 2013.

On February 15, 2013, the Company granted 332,189 market-indexed LTIP Units ("2013 LTIP Units") to seven executive officers at a weighted average grant date fair value of $66.58 per LTIP Unit. The grants vested over a service period ending December 31, 2013. On January 16, 2014, the compensation committee determined that the 2013 LTIP Units had vested at the 96% level, based on the Company's percentile ranking in terms of Total Return per common stock share compared to the Total Return of a group of peer REITs during the January 1, 2013 to December 31, 2013. As a result, 318,900 LTIP Units vested and 13,289 LTIP Units were forfeited as of December 31, 2013.

The fair value of the market-indexed LTIP Units was estimated on the date of grant using a Monte Carlo Simulation model. The stock price of the Company, along with the stock prices of the group of peer REITs (for market-indexed awards), is assumed to follow the Multivariate Geometric Brownian Motion Process. Multivariate Geometric Brownian Motion is a common assumption when modeling in financial markets, as it allows the modeled quantity (in this case, the stock price) to vary randomly from its current value and take any value greater than zero. The volatilities of the returns on the share price of the Company and the peer group REITs were estimated based on a look-back period. The expected growth rate of the stock prices over the "derived service period" is determined with consideration of the risk free rate as of the grant date.

The following table summarizes the activity of non-vested LTIP Units during the years ended December 31, 2013, 2012 and 2011:



	2013				2012				2011
	Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value
Balance at beginning of year	200,000		$	38.63	190,000		$	43.30	272,226		$	50.68
Granted	332,189		66.58		315,000		40.53		422,631		46.48
Vested	(518,900	)	55.81		(305,000	)	44.85		(504,857	)	49.85
Forfeited	(13,289	)	66.58		—		—		—		—
Balance at end of year	—		$	—	200,000		$	38.63	190,000		$	43.30

Stock Options:

The Company measured the value of each option awarded during the year ended December 31, 2012 to be $9.67 using the Black-Scholes Option Pricing Model based upon the following assumptions: volatility of 25.85%, dividend yield of 3.69%, risk free rate of 1.20%, current value of $59.57 and an expected term of 8 years. The assumptions for volatility and dividend yield were based on the Company's historical experience as a publicly traded company, the current value was based on the closing price on the date of grant and the risk free rate was based upon the interest rate of the 10-year Treasury bond on the date of grant.

The following table summarizes the activity of stock options for the years ended December 31, 2013, 2012 and 2011:



	2013				2012			2011
	Options		Weighted Average Exercise Price		Options	Weighted Average Exercise Price		Options		Weighted Average Exercise Price
Balance at beginning of year	12,768		$	54.69	2,700	$	36.51	110,711		$	75.08
Granted	—		—		10,068	59.57		—		—
Exercised	(2,700	)	36.51		—	—		—		—
Forfeited	—		—		—	—		(108,011	)	76.05
Balance at end of year	10,068		$	59.57	12,768	$	54.69	2,700		$	36.51

Directors' Phantom Stock Plan:

The Directors' Phantom Stock Plan offers non-employee members of the board of directors ("Directors") the opportunity to defer their cash compensation and to receive that compensation in common stock rather than in cash after termination of service or a predetermined period. Compensation generally includes the annual retainers payable by the Company to the Directors. Deferred amounts are generally credited as units of phantom stock at the beginning of each three-year deferral period by dividing the present value of the deferred compensation by the average fair market value of the Company's common stock at the date of award. Compensation expense related to the phantom stock awards was determined by the amortization of the value of the stock units on a straight-line basis over the applicable service period. The stock units (including dividend equivalents) vest as the Directors' services (to which the fees relate) are rendered. Vested phantom stock units are ultimately paid out in common stock on a one-unit for one-share basis. To the extent elected by a Director, stock units receive dividend equivalents in the form of additional stock units based on the dividend amount paid on the common stock. The aggregate number of phantom stock units that may be granted under the Directors' Phantom Stock Plan is 500,000. As of December 31, 2013, there were 223,694 units available for grant under the Directors' Phantom Stock Plan.

The following table summarizes the activity of the non-vested phantom stock units for the years ended December 31, 2013, 2012 and 2011:



	2013				2012				2011
	Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value
Balance at beginning of year	—		$	—	15,745		$	34.84	29,783		$	34.18
Granted	34,266		59.04		7,896		57.29		10,534		48.51
Vested	(16,691	)	59.44		(22,179	)	45.24		(24,572	)	39.89
Forfeited	—		—		(1,462	)	33.74		—		—
Balance at end of year	17,575		$	58.66	—		$	—	15,745		$	34.84

Employee Stock Purchase Plan ("ESPP"):

The ESPP authorizes eligible employees to purchase the Company's common stock through voluntary payroll deductions made during periodic offering periods. Under the ESPP common stock is purchased at a 15% discount from the lesser of the fair value of common stock at the beginning and end of the offering period. A maximum of 750,000 shares of common stock is available for purchase under the ESPP. The number of shares available for future purchase under the plan at December 31, 2013 was 565,325.

Compensation:

The following summarizes the compensation cost under the share and unit-based plans for the years ended December 31, 2013, 2012 and 2011:



	2013		2012		2011
Stock awards	$	497	$	598	$	749
Stock units	3,839		3,379		7,526
LTIP units	22,778		9,436		8,955
SARs	—		583		626
Stock options	16		21		—
Phantom stock units	992		953		980
	$	28,122	$	14,970	$	18,836

During the year ended December 31, 2011, as part of the separation agreements with six former employees, the Company modified the terms of 61,570 stock units, 2,281 stock awards and 43,204 SARs. As a result of these modifications, the Company recognized additional compensation cost of $3,333 during the year ended December 31, 2011.

During the year ended December 31, 2012, the Company modified the terms of 20,000 LTIP units and 54,405 SARs of a former executive officer. As a result of this modification, the Company recognized an additional compensation cost of $1,214 during the year ended December 31, 2012.

The Company capitalized share and unit-based compensation costs of $3,915, $2,646 and $6,231 for the years ended December 31, 2013, 2012 and 2011, respectively.

The fair value of the stock awards and stock units that vested during the years ended December 31, 2013, 2012 and 2011 was $3,516, $30,454 and $27,160, respectively. Unrecognized compensation costs of share and unit-based plans at December 31, 2013 consisted of $765 from stock awards, $2,976 from stock units, $59 from stock options and $1,031 from phantom stock units.