NOTE 11—STOCKHOLDERS' EQUITY

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, 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 358,475 shares of restricted stock are outstanding at December 31, 2015. An aggregate of 380,280 shares of restricted stock and restricted stock units outstanding under the Company's 2009 Equity Incentive Plan have not yet vested and no additional awards may be granted under this plan.

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. All unvested 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 consolidated balance sheets 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"), half of which were awarded to full time employees of the Company. The other half were awarded to part time officers of the Company who are compensated through the compensation and services agreement, some of whom are also officers of Majestic. 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 financial statement purposes, the shares underlying the Units are not included in the shares shown as outstanding on the consolidated balance sheets. 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. For the awards which vest based on total stockholder return, a third party appraiser prepared a Monte Carlo simulation pricing model to determine the fair value. For the awards which vest based on return on capital, the fair value is based on the market value on the date of grant. Expense is not recognized on the Units which the Company does not expect to vest as a result of service conditions or the Company's performance expectations. The average grant price for each of the 200,000 Units granted is $11.74. The total amount recorded as deferred compensation is $822,000 and is being charged to General and administrative expense over the approximate seven year vesting period. The deferred compensation expense to be recognized is net of certain forfeiture and performance assumptions (which are re-evaluated quarterly). No Units were forfeited or vested during 2015, 2014 and 2013.

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

	Years Ended December 31,
	2015			2014			2013
Restricted stock grants		129,975			118,850			112,650
Per share grant price	$	24.60		$	20.54		$	21.59
Deferred compensation to be recognized over vesting period	$	3,197,000		$	2,441,000		$	2,432,000
Number of non-vested shares:
Non-vested beginning of year		480,995			470,015			407,460
Grants		129,975			118,850			112,650
Vested during year		(72,215	)		(101,300	)		(50,095	)
Forfeitures		—			(6,570	)		—

Non-vested end of year		538,755			480,995			470,015


The following information includes the 200,000 Units:
Average per share value of non-vested shares (based on grant price)	$	17.12		$	14.55		$	14.22


Value of stock vested during the year (based on grant price)	$	612,000		$	621,000		$	876,000


Average value of shares forfeited (based on grant price)	$	—		$	15.49		$	—


The total charge to operations for all incentive plans is as follows:
Outstanding restricted stock grants	$	2,204,000		$	1,701,000		$	1,341,000
Outstanding restricted stock units		130,000			132,000			99,000

Total charge to operations	$	2,334,000		$	1,833,000		$	1,440,000

As of December 31, 2015, there were approximately $5,719,000 of total compensation costs related to non-vested awards that have not yet been recognized, including $167,000 related to the Units (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 2.1 years.

Common Stock Dividend Distributions

In 2015, 2014 and 2013, the Board of Directors declared an aggregate $1.58, $1.50 and $1.42 per share in cash distributions, respectively.

Distribution Reinvestment Plan

The Company's Dividend Reinvestment Plan (the "DRP") provides stockholders with the opportunity to reinvest all, or a portion of, their cash dividends paid on the Company's common stock in additional shares of its common stock, at a discount of up to 5% from the market price. The discount is determined in the Company's sole discretion. The Company is currently offering up to a 5% discount from market. The Company issued 197,000, 227,000 and 210,000 common shares under the DRP during 2015, 2014 and 2013, respectively.

Shares Issued Through Equity Offering Program

On March 20, 2014, the Company entered into an amended and restated equity offering sales agreement to sell shares of the Company's common stock from time to time with an aggregate sales price of up to approximately $38,360,000, through an "at the market" equity offering program. During 2015, the Company sold 295,190 shares for proceeds of $6,581,000, net of commissions of $66,000, and incurred offering costs of $124,000 for professional fees. During 2014, the Company sold 179,051 shares for proceeds of $3,890,000, net of commissions of $39,000, and incurred offering costs, primarily professional fees, of $122,000.