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SHARE BASED COMPENSATION ,401(K) PLAN AND DEFERRED COMPENSATION | 12 Months Ended
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Dec. 31, 2019
Share-based Payment Arrangement [Abstract] |
SHARE BASED COMPENSATION, 401(k) PLAN AND DEFERRED COMPENSATION | 14. SHARE BASED COMPENSATION, 401(K) PLAN AND DEFERRED COMPENSATION Stock Options On December 31, 2019, options exercisable for 334,561 common shares were outstanding under the Parent Company’s shareholder approved equity incentive plan (referred to as the “Equity Incentive Plan”). During the years ended December 31, 2019, 2018 and 2017, the Company did not recognize any compensation expense related to unvested options. During the years ended December 31, 2019, 2018 and 2017, the Company did not capitalize any compensation expense related to stock options as part of the Company’s review of employee salaries eligible for capitalization. Options outstanding as of December 31, 2019 and changes during the year-ended December 31, 2019 were as follows:
|  | Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2019 |  | 964,359 |  |  | $ | 9.13 |  |  | 1.3 |  |  |
Exercised |  | (629,798 | ) |  | $ | 7.67 |  |  |  |  | $ | 4,967.7 |
Outstanding at December 31, 2019 |  | 334,561 |  |  | $ | 11.88 |  |  | 1.0 |  | $ | 1,295.9 |
Vested/Exercisable at December 31, 2019 |  | 334,561 |  |  | $ | 11.88 |  |  | 1.0 |  | $ | 1,295.9 |
401(k) Plan The Company sponsors a 401(k) defined contribution plan for its employees. Each employee may contribute up to 100% of annual compensation, subject to specific limitations under the Internal Revenue Code. At its discretion, the Company can make matching contributions equal to a percentage of the employee’s elective contribution and profit sharing contributions. The Company funds its 401(k) contributions annually and plan participants must be employed as of December 31 in order to receive employer contributions, except for employees eligible for qualifying retirement, as defined under the Internal Revenue Code. The Company contributions were $0.4 million, $0.5 million, and $0.4 million in 2019, 2018, and 2017, respectively. Restricted Share Rights Awards As of December 31, 2019, 479,144 restricted share rights were outstanding under the Equity Incentive Plan. These Restricted Share Rights vest over two to three years from the initial grant dates. The remaining compensation expense to be recognized with respect to these awards at December 31, 2019 was $2.2 million and is expected to be recognized over a weighted average remaining vesting period of 1.05 years. For the years ended December 31, 2019, 2018, and 2017, the amortization related to outstanding restricted shares was $3.9 million (of which $0.3 million was capitalized), $3.6 million (of which $0.6 million was capitalized), and $2.8 million (of which $0.4 million was capitalized), respectively. Compensation expense related to outstanding restricted shares is included in general and administrative expense. The following table summarizes the Company’s restricted share activity during the year-ended December 31, 2019:
|  | Shares |  | Weighted Average Grant Date Fair Value |  | Aggregate Intrinsic Value (in thousands)
Non-vested at January 1, 2019 |  | 466,439 |  |  | $ | 14.93 |  |  | $ | 70.7 |
Granted |  | 278,442 |  |  | $ | 15.51 |  |  | $ | 65.6 |
Vested |  | (248,607 | ) |  | $ | 13.68 |  |  | $ | 538.3 |
Forfeited |  | (17,130 | ) |  | $ | 15.66 |  |  | $ | 1.6 |
Non-vested at December 31, 2019 |  | 479,144 |  |  | $ | 15.90 |  |  | $ | 44.7 |
On February 21, 2019, the Compensation Committee of the Parent Company’s Board of Trustees awarded to officers of the Company an aggregate of 196,667 Restricted Share Rights, which generally vest over two to three years from the grant date. Each Restricted Share Right entitles the holder to one common share upon settlement. The Parent Company pays dividend equivalents on the Restricted Share Rights prior to the settlement date. Vesting and/or settlement would accelerate if the recipient of the award were to die, become disabled or, in the case of certain of such Restricted Share Rights, retire in a qualifying retirement prior to the vesting or settlement date. Qualifying retirement generally means the recipient’s voluntary termination of employment after reaching at least age 57 and accumulating at least 15 years of service with the Company. In addition, vesting would also accelerate if the Parent Company were to undergo a change of control and, on or before the first anniversary of the change of control, the recipient’s employment were to cease due to a termination without cause or resignation with good reason. The Restricted Share Rights granted in 2019 to certain senior executives and that vest over three years include an “outperformance feature” whereby additional shares may be earned, up to 200% of the shares subject to the basic award, based on the Company’s achievement of targets for same-store net operating cash income growth and development activity provided certain operating and balance sheet metrics are also achieved during the three-year period ending December 31, 2021. Half of any additional shares earned will vest based on continued service through each of January 1, 2022 and January 1, 2023, provided that this additional service requirement will be waived in the event of a death, disability or qualifying retirement. In addition to the basic award, up to 233,890 shares may be awarded under the outperformance feature. These shares have a $3.7 million intrinsic value using a $15.61 grant date fair value. As of December 31, 2019, the Company has not recognized any compensation expense for these awards as it has been determined that it is not probable that the performance metrics will be achieved. The Company will evaluate progression towards achievement of the performance metrics on a quarterly basis and recognize compensation expense for these awards should it be determined that achievement of these metrics is probable. In addition, on February 21, 2019, the Compensation Committee awarded non-officer employees an aggregate of 37,472 Restricted Share Rights that vest in three equal installments on April 15, 2020, 2021, and 2022. Vesting of these awards is subject to acceleration upon death, disability or termination without cause within one year following a change of control. In accordance with the accounting standard for share-based compensation, the Company amortizes share-based compensation costs through the qualifying retirement dates for those executives who meet the conditions for qualifying retirement during the scheduled vesting period and whose award agreements provide for vesting upon a qualifying retirement. Restricted Performance Share Units Plan The Compensation Committee of the Parent Company’s Board of Trustees has granted performance share-based awards (referred to as Restricted Performance Share Units, or RPSUs) to officers of the Parent Company. The RPSUs are settled in common shares, with the number of common shares issuable in settlement determined based on the Company’s total shareholder return over specified measurement periods compared to total shareholder returns of comparative groups over the measurement periods. The table below presents certain information as to unvested RPSU awards.
|  | RPSU Grant
|  | 3/1/2017 |  | 2/28/2018 |  | 2/21/2019 |  |  | Total
(Amounts below in shares, unless otherwise noted) |  |  |  |  |  |  |  |
Non-vested at January 1, 2019 |  | 169,525 |  |  | 206,025 |  |  | — |  |  | 375,550 |
Units Granted |  | — |  |  | — |  |  | 213,728 |  |  | 213,728 |
Units Vested |  | (8,420 | ) |  | — |  |  | — |  |  | (8,420 | )
Units Cancelled |  | (1,935 | ) |  | (15,729 | ) |  | (7,659 | ) |  | (25,323 | )
Non-vested at December 31, 2019 |  | 159,170 |  |  | 190,296 |  |  | 206,069 |  |  | 555,535 |
Measurement Period Commencement Date |  | 1/1/2017 |  |  | 1/1/2018 |  |  | 1/1/2019 |  |  |
Measurement Period End Date |  | 12/31/2019 |  |  | 12/31/2020 |  |  | 12/31/2021 |  |  |
Units Granted |  | 174,854 |  |  | 209,193 |  |  | 213,728 |  |  |
Fair Value of Units on Grant Date (in thousands) |  | $ | 3,735 |  |  | $ | 4,276 |  |  | $ | 4,627 |  |  |  |
The Company values each RPSU on its grant date using a Monte Carlo simulation. The fair values of each award are being amortized over the three year performance period. During the performance period, dividend equivalents are credited as additional RPSU's, subject to the same terms and conditions as the original RPSU's. The performance period will be abbreviated and the delivery of earned shares will be accelerated in the event of a change in control or if the recipient of the award were to die, become disabled or retire in a qualifying retirement prior to the end of the otherwise applicable three year performance period. In accordance with the accounting standard for share-based compensation, the Company amortizes stock-based compensation costs through the qualifying retirement date for those executives who meet the conditions for qualifying retirement during the scheduled vesting period. For the year ended December 31, 2019, the Company recognized amortization of the 2019, 2018 and 2017 RPSU awards of $4.2 million, of which $0.6 million was capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation. For the year ended December 31, 2018, amortization for the 2018, 2017 and 2016 RPSU awards was $3.9 million, of which $1.1 million was capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation. For the year ended December 31, 2017, amortization for the 2017, 2016, and 2015 RPSU awards was $3.4 million, of which $0.8 million was capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation. The remaining compensation expense to be recognized with respect to the non-vested RPSU's at December 31, 2019 was approximately $2.0 million and is expected to be recognized over a weighted average remaining vesting period of 1.7 years. The Company issued 147,111 common shares on February 1, 2019 in settlement of RPSUs that had been awarded on February 22, 2016 (with a three-year measurement period ended December 31, 2018). Holders of these RPSUs also received a cash dividend of $0.19 per share for these common shares on January 22, 2019. Employee Share Purchase Plan The Parent Company’s shareholders approved the 2007 Non-Qualified Employee Share Purchase Plan (the “ESPP”), which is intended to provide eligible employees with a convenient means to purchase common shares of the Parent Company through payroll deductions and voluntary cash purchases at an amount equal to 85% of the average closing price per share for a specified period. Under the plan document, the maximum participant contribution for the 2019 plan year is limited to the lesser of 20% of compensation or $50,000. The ESPP allows the Parent Company to make open market purchases, which reflects all purchases made under the plan to date. In addition, the number of shares separately reserved for issuance under the ESPP is 1.25 million. Employees made purchases under the ESPP of $0.5 million in each of the years ended December 31, 2019 and 2018 and $0.4 million during the year ended December 31, 2017. The Company recognized $0.1 million of compensation expense related to the ESPP during each of the years ended December 31, 2019, 2018, and 2017. Compensation expense represents the 15% discount on the purchase price. The Board of Trustees of the Parent Company may terminate the ESPP at its sole discretion at any time. Deferred Compensation In January 2005, the Parent Company adopted a Deferred Compensation Plan (the “Plan”) that allows trustees and certain key employees to defer compensation voluntarily. Compensation expense is recorded for the deferred compensation and a related liability is recognized. Participants may elect designated benchmark investment options for the notional investment of their deferred compensation. The deferred compensation obligation is adjusted for deemed income or loss related to the investments selected. At the time the participants defer compensation, the Company records a liability, which is included in the Company’s consolidated balance sheets. The liability is adjusted for changes in the market value of the participant-selected investments at the end of each accounting period, and the impact of adjusting the liability is recorded as an increase or decrease to compensation cost. The Company has purchased mutual funds which can be utilized as a funding source for the Company’s obligations under the Plan. Participants in the Plan have no interest in any assets set aside by the Company to meet its obligations under the Plan. For each of the years ended December 31, 2019, December 31, 2018 and December 31, 2017, the Company recorded a nominal amount of deferred compensation costs, net of investments in the company-owned policies and mutual funds. Participants in the Plan may elect to have all, or a portion of their deferred compensation invested in the Company’s common shares. The Company holds these shares in a rabbi trust, which is subject to the claims of the Company’s creditors in the event of the Company’s bankruptcy or insolvency. The Plan does not permit diversification of a participant’s deferral allocated to the Company common shares and deferrals allocated to Company common shares can only be settled with a fixed number of shares. In accordance with the accounting standard for deferred compensation arrangements where amounts earned are held in a rabbi trust and invested, the deferred compensation obligation associated with the Company’s common shares is classified as a component of shareholder’s equity and the related shares are treated as shares to be issued and are included in total shares outstanding. At December 31, 2019 and 2018, 1.1 million and 1.0 million of such shares were included in total shares outstanding, respectively. Subsequent changes in the fair value of the common shares are not reflected in operations or shareholders’ equity of the Company.

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