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Stock based payments and director fees
 6 Months Ended
Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock based payments and director fees

Note 10 — Stock-based payments and director fees

 

Pursuant to the terms of the Management Agreement, the Company pays 50% of the base fee to the Manager in shares of its common stock with the number of shares determined based on the higher of the most recently reported book value or the average of the closing prices of our common stock on the NYSE on the five business days after the date on which the most recent regular quarterly dividend to holders of our common stock is paid. The Company paid the Manager a base fee for the quarter ended June 30, 2015 of $0.9 million of which the Company paid half, or $0.4 million, in 29,790 shares of its common stock. The shares issued to the Manager are restricted securities subject to transfer restrictions, and were issued in a private placement transaction on July 28, 2015.

 

In addition, each of the Company’s independent directors receives an annual retainer of $50,000, payable quarterly, half of which is paid in shares of the Company’s common stock on the same basis as the stock portion of the management fee payable to the Manager and half in cash. The following table sets forth the Company’s stock-based management fees and independent director fees ($ in thousands except share amounts):

 

Management fees and director fees

 

   

For the three months ended
June 30, 2015

    

For the six months ended
June 30, 2015

  
   

Number of
shares

    

Amount of
expense
recognized(1)

    

Number of
shares

    

Amount of
expense
recognized(1)

  
Management fees     29,790     $ 441       55,877     $ 814  
Independent director fees     1,740       25       3,488       50  
      31,530     $ 466       59,365     $ 864  

 

 

(1) All management fees and independent director fees are fully expensed in the period in which they are incurred.

 

The Director Plan is designed to promote the Company’s interests by attracting and retaining qualified and experienced individuals for service as non-employee directors. The Director Plan is administered by the Company’s board of directors. The total number of shares of common stock or other stock-based award, including grants of long term incentive plan (“LTIP”) units from the operating partnership, available for issuance under the Director Plan is 100,000 shares. At the closing of the Original Private Placement, the Company issued to each of its three independent directors restricted stock awards of 2,000 shares of its common stock, which are subject to a one-year vesting period. At the time of the IPO in February 2015, the Company added an additional independent director who was also granted a restricted stock award of 2,000 shares of its common stock, subject to a one-year vesting period.

 

The following table sets forth the activity in its restricted stock plan ($ in thousands, except share and per share amounts):

 

Restricted Stock

 

   

Number
of shares

    

Per share
value

    

Total cost
of grant

    

Grant expense
recognized for the
three months ended
June 30, 2015

    

Grant expense
recognized for the
six months ended
June 30, 2015

  
July 8, 2014, Directors’ Grants(1)     6,000     $ 15.00     $ 90     $ 23     $ 45  
February 19, 2015 Director Grant(1)     2,000       14.25       29       7       12  
      8,000             $ 119     $ 30     $ 57  

 

 

(1) Vesting period is one year from grant date.