Stock Incentive Plans

We are authorized to issue up to 6,082,664 shares of our common stock under our 2016 Equity Incentive Plan (the “2016 Plan”), of which we have issued or committed to issue 1,203,677 shares as of March 31, 2019. In addition to these shares, additional shares of common stock could be issued in connection with the performance stock unit awards, as further described below.

Restricted Stock Awards

Restricted stock awards issued to our officers and employees generally vest over a three-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 consolidated statements of operations. A summary of our restricted stock awards from January 1, 2019 to March 31, 2019 is as follows:



	Number of Shares		Weighted- Average Grant Date Fair Value
Unvested balance at January 1, 2019	641,844		$	10.25
Granted	73,240		10.65
Vested	(300,575	)	10.07
Unvested balance at March 31, 2019	414,509		$	10.41

The remaining share awards are expected to vest as follows: 9,542 shares during 2019, 239,781 shares during 2020, 140,772 shares during 2021, and 24,414 during 2022. As of March 31, 2019, the unrecognized compensation cost related to restricted stock awards was $4.1 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 22 months. We recorded $0.7 million and $1.3 million of compensation expense related to restricted stock awards for the three months ended March 31, 2019 and 2018, respectively. The compensation expense for the three months ended March 31, 2018 includes $0.6 million related to the accelerated vesting of awards in connection with the departure of our former Chief Financial Officer.

Performance Stock Units

Performance stock units (“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”). For 75% of the PSUs issued in 2016 and vesting in 2019, 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 remaining 25% of PSUs issued in 2016 and vesting in 2019 is determined based on achieving improvement in market share for each of our hotels over the three-year performance period based on a report prepared for each hotel by STR Global, a well-recognized and universally accepted benchmarking service for the hospitality industry.

For the PSUs issued in 2017, 2018, and 2019, and vesting in 2020, 2021, and 2022, respectively, the calculation of total stockholder return relative to the total stockholder return of a peer group over a three-year performance period applies to 50% of the number of PSUs to be earned in the performance period. The remaining 50% is determined based on the achievement of improvement in market share for each of our hotels over the three-year performance period. For the PSUs tied to relative stockholder return issued in 2018 and 2019, the number of PSUs to be earned is limited to target if the Company's total stockholder return is negative for the performance period.

We measure compensation expense for the PSUs based upon the fair market value of the award at the grant date. Compensation expense is recognized on a straight-line basis over the three-year performance period and is included in corporate expenses in the accompanying consolidated statements of operations. The grant date fair value of the portion of the PSUs based on our relative total stockholder return is determined using a Monte Carlo simulation performed by a third-party valuation firm. The grant date fair value of the portion of the PSUs based on improvement in market share for each of our hotels is the closing price of our common stock on the grant date.

On March 1, 2019, our board of directors granted 296,050 PSUs to our executive officers. The grant date fair value of the portion of the PSUs based on our relative total stockholder return was $9.68 using the assumptions of volatility of 24.3% and a risk-free rate of 2.54%. The grant date fair value of the portion of the PSUs based on hotel market share was $10.65, the closing stock price of our common stock on such date.

A summary of our PSUs from January 1, 2019 to March 31, 2019 is as follows:



	Number of Target Units		Weighted- Average Grant Date Fair Value
Unvested balance at January 1, 2019	781,923		$	11.19
Granted	296,050		10.14
Additional units from dividends	10,801		9.05
Vested (1)	(251,375	)	8.80
Unvested balance at March 31, 2019	837,399		$	10.28

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(1)	The number of shares of common stock earned for the PSUs vested in 2019 was equal to 74.33% of the PSU Target Award.

The remaining unvested PSUs are expected to vest as follows: 234,414 units during 2020, 306,935 units during 2021 and 296,050 units during 2022. The number of shares earned upon vesting is subject to the attainment of the performance goals described above. As of March 31, 2019, the unrecognized compensation cost related to the PSUs was $6.7 million and is expected to be recognized on a straight-line basis over a weighted average period of 23 months. We recorded $0.6 million and $1.1 million,

respectively, of compensation expense related to the PSUs for the three months ended March 31, 2019, and 2018. The compensation expense for the three months ended March 31, 2018 includes $0.6 million related to the accelerated vesting of awards in connection with the departure of our former Chief Financial Officer.

LTIP Units

During the three months ended March 31, 2019, instead of granting restricted stock for the time-based portion of the annual long-term incentive award, we granted LTIP units to our executive officers. LTIP units are designed to offer executives a long-term incentive comparable to restricted stock, while allowing them to enjoy a more favorable income tax treatment. Each LTIP unit awarded is deemed equivalent to an award of one share of common stock reserved under the 2016 Plan. At the time of award, LTIP units do not have full economic parity with common OP units, but can achieve such parity over time upon the occurrence of specified events in accordance with partnership tax rules.

During the three months ended March 31, 2019, we granted 281,925 LTIP units to executive officers. These granted LTIP units had a weighted-average grant date fair value of $10.65 per unit. There are currently no vested LTIP units outstanding. The LTIP units are expected to vest ratably in 2020, 2021, and 2022. As of March 31, 2019, the unrecognized compensation cost related to LTIP unit awards was $2.9 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 35 months. We recorded $0.1 million of compensation expense related to LTIP unit awards for the three months ended March 31, 2019. We did not record any compensation expense related to LTIP unit awards during 2018.