Stock Based Compensation

9 Months Ended

Sep. 30, 2014

Note 13 - Stock Based Compensation

The Company’s 2012 Incentive Plan, approved by the Company’s stockholders in June 2012, permits the Company to grant, among other things, stock options, restricted stock, restricted stock units and performance share awards and any one or more of the foregoing to its employees, officers, directors and consultants. A maximum of 600,000 shares of the Company’s common stock is authorized for issuance pursuant to this Plan, of which 229,000 shares of restricted stock are outstanding as of September 30, 2014. An aggregate of 452,000 shares of restricted stock and restricted stock units outstanding under the Company’s 2003 and 2009 equity incentive plans (collectively, the “Prior Plans”) have not yet vested. No additional awards may be granted under the Prior Plans.

The restricted stock grants are charged to general and administrative expense over the respective vesting periods based on the market value of the common stock on the grant date. Substantially all the outstanding restricted stock awards provide for vesting upon the fifth anniversary of the date of grant and under certain circumstances may vest earlier. For accounting purposes, the restricted stock is not included in the shares shown as outstanding on the balance sheet until they vest; however dividends are paid on the unvested shares.

On September 14, 2010, the Board of Directors approved a Pay-for-Performance program under the Company’s 2009 Incentive Plan and awarded 200,000 performance share awards in the form of restricted stock units (the “Units”). The holders of Units are not entitled to dividends or to vote the underlying shares until the Units vest and shares are issued. Accordingly, for accounting purposes, the shares underlying the Units are not included in the shares shown as outstanding on the balance sheet. If the defined performance criteria are satisfied in full at June 30, 2017, one share of the Company’s common stock will vest and be issued for each Unit outstanding and a pro-rata portion of the Units will vest and be issued if the performance criteria fall between defined ranges. In the event that the performance criteria are not satisfied in whole or in part at June 30, 2017, the unvested Units will be forfeited and no shares of the Company’s common stock will be issued for those Units. No Units were forfeited or vested in the nine months ended September 30, 2014.

As of September 30, 2014 and December 31, 2013, there were no options outstanding under the Company’s equity incentive plans.

The following is a summary of the activity of the equity incentive plans (excluding, except as otherwise noted, the 200,000 Units):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014			2013		2014			2013
Restricted share grants	—			—		118,850			112,650
Per share grant price	—			—		$	20.54		$	21.59
Deferred compensation to be recognized over vesting period	—			—		$	2,441,000		$	2,432,000
Non-vested shares:
Non-vested beginning of period	481,045			470,015		470,015			407,460
Grants	—			—		118,850			112,650
Vested during period	—			—		(101,300		)	(50,095		)
Forfeitures	(50		)	—		(6,570		)	—
Non-vested end of period	480,995			470,015		480,995			470,015

Average per share value of non-vested shares (based on grant price)	$	14.55		$	14.22	$	14.55		$	14.22

Value of shares vested during the period (based on grant price)	$	—		$	—	$	621,000		$	876,000

The total charge to operations for all incentive plans, including the 200,000 Units, is as follows:
Outstanding restricted stock grants	$	419,000		$	335,000	$	1,281,000		$	1,037,000
Outstanding restricted stock units	29,000			31,000		87,000			95,000
Total charge to operations	$	448,000		$	366,000	$	1,368,000		$	1,132,000

As of September 30, 2014, there were approximately $5,293,000 of total compensation costs related to non-vested awards that have not yet been recognized, including $315,000 related to the Pay-for-Performance program (net of forfeiture and performance assumptions which are re-evaluated quarterly). These compensation costs will be charged to general and administrative expense over the remaining respective vesting periods. The weighted average vesting period is approximately 2.6 years.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References+ Details