The Company’s 2019 Incentive Plan (“Plan”), approved by the Company’s stockholders in June 2019, permits the Company to grant, among other things, stock options, restricted stock, RSUs, performance share awards and dividend equivalent rights and any one or more of the foregoing to its employees, officers, directors and consultants. A maximum of 750,000 shares of the Company’s common stock is authorized for issuance pursuant to this Plan. As of December 31, 2021, an aggregate of 524,952 shares subject to awards in the form of restricted stock (294,200 shares) and RSUs (230,752 shares) are outstanding under the Plan. On January 12, 2022, 153,575 restricted shares were issued pursuant to this Plan, having an aggregate value of approximately $5,183,000 and are scheduled to vest in January 2027.

Under the Company’s 2016 equity incentive plan (the “Prior Plan”), as of December 31, 2021, (i) an aggregate of 412,250 shares in the form of restricted stock are outstanding and have not yet vested, and (ii) with respect to 76,250 shares of common stock underlying RSUs that had been granted in each of 2018 and 2017, 73,750 and 24,343 shares were deemed to have vested in 2021 and 2020, respectively, and such shares were issued after the Compensation Committee determined that the metrics with respect to such shares had been satisfied. RSUs with respect to the 2,500 and 51,907 share balances under the 2018 and 2017 RSU grants were forfeited in 2019 and 2020, respectively. No additional awards may be granted under the Prior Plan.

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. 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. Unless earlier forfeited because the participant’s relationship with the Company terminated, unvested restricted stock awards vest five years from the grant date, and under certain circumstances may vest earlier.

In 2021, 2020 and 2019, the Company granted RSUs exchangeable for up to 80,700, 75,026 and 77,776 shares, respectively, of common stock upon satisfaction, through June 30, 2024, June 30, 2023 and June 30, 2022, respectively, of metrics related to average annual total stockholder return (the “TSR Metric”) and average annual return on capital (the “ROC Metric”; together with the TSR Metric, the “Metrics”). Up to 50% of the RSUs vest upon satisfaction of the TSR Metric (the “TSR Awards”) and up to 50% of the RSUs vest upon satisfaction of the ROC Metric (the “ROC Awards”). The RSUs vest only if the recipient maintains a relationship with the Company during the applicable three-year performance cycle. RSUs are not entitled to voting or dividends rights; however, upon vesting, the holders of the RSUs granted in 2021 are entitled to receive an amount equal to the dividends that would have been paid on the underlying shares had such shares been outstanding during the three-year performance cycle. The Company accrued $27,000 for such dividend equivalent rights based on the number of shares underlying the 2021 RSUs that would be issued based on performance and market assumptions determined as of December 31, 2021.

The TSR Metrics and ROC Metrics meet the definition of a market condition and performance condition, respectively. The shares underlying the RSUs are excluded from the shares shown as outstanding on the balance sheet. For the TSR Awards, a third party appraiser prepared a Monte Carlo simulation pricing model to determine the fair value of such awards, which is recognized ratably over the service period. The Monte Carlo valuation consisted of computing the grant date fair value of the awards using the Company’s simulated stock price. For these TSR awards, the per unit or share fair value was estimated using the following assumptions:

(a)	Calculated based on the historical and implied volatility.

NOTE 12—STOCKHOLDERS’ EQUITY (Continued)

For the ROC Awards, the fair value is based on the market value on the date of grant and the performance assumptions are re-evaluated quarterly. The Company does not recognize expense on ROC Awards which it does not expect the performance and/or market conditions to be met.

As of December 31, 2021, based on performance and market assumptions, the fair value of the RSUs granted in 2021, 2020 and 2019 is $1,808,000, $962,000 and $1,446,000, respectively. Recognition of such deferred compensation will be charged to General and administrative expense over the respective three-year performance cycle. None of these RSUs were forfeited or vested during the year ended December 31, 2021.

The following is a summary of the activity of the equity incentive plans:



	Year Ended December 31,
	2021		2020		2019
Restricted stock grants:
Number of shares		151,500		149,550		150,050
Average per share grant price	$	20.34	$	28.10	$	25.70
Deferred compensation to be recognized over vesting period	$	3,082,000	$	4,202,000	$	3,856,000

Number of non-vested shares:
Non-vested beginning of year		701,675		674,250		651,250
Grants		151,500		149,550		150,050
Vested during year		(145,725)		(122,125)		(114,650)
Forfeitures		(1,000)		—		(12,400)
Non-vested end of year		706,450		701,675		674,250

RSU grants:
Number of underlying shares		80,700		75,026		77,776
Average per share grant price	$	30.46	$	17.31	$	28.96
Deferred compensation to be recognized over vesting period	$	1,808,000	$	850,000	$	865,000

Number of non-vested shares:
Non-vested beginning of year		223,802		225,026		152,500
Grants		80,700		75,026		77,776
Vested during year		(73,750)		(24,343)		—
Forfeitures		—		(51,907)		(5,250)
Non-vested end of year		230,752		223,802		225,026

Restricted stock and RSU grants (based on grant price):
Weighted average per share value of non-vested shares	$	25.04	$	24.98	$	24.96
Value of stock vested during the year	$	5,165,000	$	3,589,000	$	2,365,000
Weighted average per share value of shares forfeited during the year	$	24.62	$	24.03	$	25.40

Total charge to operations:
Outstanding restricted stock grants	$	3,734,000	$	3,529,000	$	3,229,000
Outstanding RSUs		1,699,000		1,157,000		641,000
Total charge to operations	$	5,433,000	$	4,686,000	$	3,870,000

NOTE 12—STOCKHOLDERS’ EQUITY (Continued)

As of December 31, 2021, total compensation costs of $7,137,000 and $2,292,000 related to non-vested restricted stock awards and RSUs, respectively, have not yet been recognized. These compensation costs will be charged to General and administrative expense over the remaining respective vesting periods. The weighted average vesting period is 2.1 years for the restricted stock and 1.5 years for the RSUs.

Common Stock Dividend Distributions

In each of 2021 and 2019, the Board of Directors declared an aggregate $1.80 per share in cash distributions. The following table details the Company’s dividend activity for the year ended December 31, 2020 (amounts in thousands, except per share data):


		Total	Dividend Paid			Cash	Stock		Value
Declaration Date (a)		Dividend	Cash %	Stock %		Distributed	Issued		per Share
March 13, 2020	$	9,037	100.0	—	$	9,037	—		—
June 10, 2020 (b)	$	9,068	50.0	50.0	$	4,537	263	$	17.22
September 9, 2020 (b)	$	9,198	75.0	25.0	$	6,901	141	$	16.27
December 2, 2020	$	9,261	100.0	—	$	9,261	—		—

(a)	A dividend of $0.45 per share was declared in each period indicated.

(b)	Stockholders were entitled to elect whether the dividend payable to them would be paid in cash or shares of the Company’s common stock at the percentages indicated, subject to certain limitations.

On March 10, 2022, the Board of Directors declared a quarterly cash dividend of $0.45 per share on the Company’s common stock, totaling approximately $9,504,000. The quarterly dividend is payable on April 7, 2022 to stockholders of record on March 24, 2022.

Change in Authorized Capital

In 2020, the Company filed an amended and restated charter with the Maryland State Department of Assessments and Taxation, which, among other things, increased the number of shares of common stock the Company is authorized to issue from 25,000,000 shares to 50,000,000 shares.

Dividend Reinvestment Plan

The Dividend Reinvestment Plan (the “DRP”), among other things, 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 (as such price is calculated pursuant to the DRP). In June 2020, the Company suspended, and in June 2021, the Company reinstated, the dividend reinvestment feature of its DRP. The discount from the market price is determined in the Company’s sole discretion; prior to the suspension, the shares were offered at a 5% discount and after the reinstatement shares were offered at a 3% discount. Under the DRP, the Company issued 35,000, 77,000 and 220,000 shares of common stock during 2021, 2020 and 2019, respectively.

Shares Issued through the At-the-Market Equity Offering Program

During 2021, the Company sold 106,290 shares for proceeds of $3,379,000, net of commissions of $69,000, and incurred offering costs of $65,000 for professional fees. During 2019, the Company sold 180,120 shares for proceeds of $5,392,000, net of commissions of $54,000, and incurred offering costs of $192,000 for professional fees. The Company did not sell any shares during the year ended December 31, 2020. Subsequent to December 31, 2021 and through March 1, 2022, the Company sold 17,259 shares for proceeds of $604,000, net of commissions of $12,000.