Share-based Incentive

12 Months Ended

Dec. 31, 2014

10. SHARE-BASED INCENTIVE PLAN

The Company established a Restricted Stock plan (“Restricted Stock”) in December 2006 for the purpose of attracting and retaining officers, key employees and non-employee board members. Share awards vest in equal annual instalments over a three or five year period from date of issuance. Non-vested shares have voting rights and are eligible for any dividends paid to common shares. The Company recognized compensation cost for these fixed awards over the service vesting period, which represents the requisite service period, using the straight-line method. The value of non-vested shares was calculated based on the offering price of the shares in the most recent private placement offering of $10.00, adjusted for stock dividends since granted and assumed selling costs (currently $8.60), which management believes approximates fair market value as of the date of grant.

A summary of the activity for the Company’s restricted shares was as follows:

	Common Shares
Balance, December 31, 2013	80,495
Granted	81,604
Vested	(51,115)
Cancelled	(9,094)
Balance, December 31, 2014	101,890

The non-vested restricted shares outstanding as of December 31, 2014 will vest over the next two to nine years.

The value of non-vested Restricted Stock granted during the years ended December 31, 2014 and 2013 was approximately $876,000 and $656,000, respectively.

Share-based compensation expense for the years ended December 31, 2014 and 2013 was approximately $456,000 and $482,000, respectively.

- 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.

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