Stock Incentive Plans

We are authorized to issue up to 8 million shares of our common stock under our 2004 Stock Option and Incentive Plan, as amended (the “Incentive Plan”), of which we have issued or committed to issue 3,625,877 shares as of March 31, 2014. In addition to these shares, additional shares of common stock could be issued in connection with the market stock unit awards and performance stock unit awards as further described below.

Restricted Stock Awards

Restricted stock awards issued to our officers and employees generally vest over a 3-year period from the date of the grant based on continued employment. We measure compensation expense for the restricted stock awards based upon the fair market value of our common stock at the date of grant. Compensation expense is recognized on a straight-line basis over the vesting period and is included in corporate expenses in the accompanying condensed consolidated statements of operations. A summary of our restricted stock awards from January 1, 2014 to March 31, 2014 is as follows:



	Number of Shares		Weighted- Average Grant Date Fair Value
Unvested balance at January 1, 2014	583,021		$	9.80
Granted	221,240		12.43
Additional shares from dividends	—		—
Forfeited	—		—
Vested	(270,440	)	10.10
Unvested balance at March 31, 2014	533,821		$	10.74

The remaining share awards are expected to vest as follows: 274,187 during 2015, 178,648 during 2016, and 80,986 during 2017. As of March 31, 2014, the unrecognized compensation cost related to restricted stock awards was $5.5 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 28 months. We recorded $0.7 million and $1.4 million, respectively, of compensation expense related to restricted stock awards for each of the three months ended March 31, 2014 and March 31, 2013. The compensation expense for the three months ended March 31, 2013 includes $0.7 million related to the accelerated vesting of awards in connection with the departure of our former Chief Operating Officer in 2013.

Market Stock Units

From 2010 to 2012, we awarded our executive officers market stock units (“MSUs”). MSUs are restricted stock units that vest three years from the date of grant. As of March 31, 2014, there are 95,915 MSUs outstanding, which represent awards granted in 2012. The unrecognized compensation cost related to the MSUs was $0.2 million as of March 31, 2014 and is expected to be recognized on a straight-line basis over a weighted average period of 11 months. For the three months ended March 31, 2014 and March 31, 2013, we recorded approximately $0.1 million and $0.4 million, respectively, of compensation expense related to the MSUs. The compensation expense for the three months ended March 31, 2013 includes $0.2 million related to the accelerated vesting of awards in connection with the departure of our former Chief Operating Officer in 2013.

Performance Stock Units

Beginning in 2013, we have awarded our executive officers performance stock units (“PSUs”). PSUs are restricted stock units that vest three years from the date of grant. Each executive officer is granted a target number of PSUs (the “PSU Target Award”). The actual number of shares of common stock issued to each executive officer is subject to the achievement of certain levels of total stockholder return relative to the total stockholder return of a peer group of publicly-traded lodging REITs over a three-year performance period. There will be no payout of shares of our common stock if our total stockholder return falls below the 30th percentile of the total stockholder returns of the peer group. The maximum number of shares of common stock issued to an executive officer is equal to 150% of the PSU Target Award and is earned if our total stockholder return is equal to or greater than the 75th percentile of the total stockholder returns of the peer group.

The fair values of the PSU awards are determined using a Monte Carlo simulation performed by a third-party valuation firm. The determination of the grant-date fair values of the awards included the following assumptions:



Award Grant Date	Volatility		Risk-Free Rate		Fair Value at Grant Date
March 3, 2013	39.2	%	0.36	%	$	9.55
May 15, 2013	37.9	%	0.40	%	$	10.41
March 3, 2014	33.5	%	0.66	%	$	12.77

The simulations also considered the share performance of the Company and the peer group. A summary of our PSUs from January 1, 2014 to March 31, 2014 is as follows:



	Number of Units	Weighted- Average Grant Date Fair Value
Unvested balance at January 1, 2014	223,176	$	9.66
Granted	170,321	12.77
Additional units from dividends	1,636	11.60
Unvested balance at March 31, 2014	395,133	$	11.00

As of March 31, 2014, the unrecognized compensation cost related to the PSUs was $3.5 million and is expected to be recognized on a straight-line basis over a period of 30 months. For the three months ended March 31, 2014 and March 31, 2013, we recorded approximately $0.2 million and $0.1 million, respectively, of compensation expense related to the PSUs.