Stock Based Compensation

12 Months Ended

Dec. 31, 2011

Stock Based Compensation

14. Stock Based Compensation

The Company adopted a stock incentive plan for its employees and directors during March 2004 in connection with its initial public offering. 5,123,000 shares of common stock are authorized for issuance under the stock plan. As of December 31, 2011, the Company had awarded 3,751,575 shares of common stock under the stock plan, all in the form of restricted stock awards to executive officers, other employees and directors of the Company. The Company has not awarded any options, stock appreciation rights or other stock based compensation under the stock plan.

A summary of the Company’s activity under the stock plan from January 1, 2010 through December 31, 2011, is presented below:

	Number of Shares
Stock Awards at January 1, 2010		2,890,455
Granted During the Year Ended December 31, 2010		479,500	(1)
Stock Awards at January 1, 2011		3,369,955
Granted During the Year Ended December 31, 2011		392,500	(2)
Forfeited During the Year Ended December 31, 2011		(10,880	)
Stock Awards at December 31, 2011		3,751,575

⁽¹⁾ Shares are scheduled to vest between March 2011 and March 2015, but will generally be forfeited if the recipient either terminates his employment with the Company or ceases to be a member of CapLease’s Board of Directors at any time prior to the vesting date. Vesting of an aggregate of 241,125 shares is also subject to satisfaction of objective and subjective performance criteria, to be determined by CapLease’s Compensation Committee.

⁽²⁾ Shares are scheduled to vest between March 2012 and March 2014, but will generally be forfeited if the recipient either terminates his employment with the Company or ceases to be a member of CapLease’s Board of Directors at any time prior to the vesting date. Vesting of an aggregate of 196,425 shares is also subject to satisfaction of objective and subjective performance criteria, to be determined by CapLease’s Compensation Committee.

A summary of the status of unvested shares from January 1, 2010 through December 31, 2011, is presented below:

	Shares Awarded Under Plan			Shares Priced  Under GAAP			Weighted Average Fair Value
Nonvested at January 1, 2010		1,801,016			1,177,865		$	4.17
Current period awards		479,500			286,600			4.84
Prior period awards		N/A			198,966			4.84
Vested		(541,149	)		(541,149	)		3.84
Nonvested at January 1, 2011		1,739,367			1,122,282			4.62
Current period awards		392,500			261,550			5.80
Prior period awards		N/A			223,635			5.80
Vested		(514,970	)		(514,970	)		5.14
Forfeited		(10,880	)		(10,880	)		3.43
Nonvested at December 31, 2011		1,606,017			1,081,617			4.91

The Company uses the closing stock price on the grant date as its estimate of the fair value of the award.

The Company has made certain of the restricted stock awards with vesting dependent upon satisfaction of performance criteria to be determined in the future. For such awards, applicable accounting guidance provides that despite the award having been granted, it is not valued for financial accounting purposes and expense related thereto does not commence until performance criteria have been established. “Prior period awards” in the above table represent restricted share awards made in a prior period but which have been valued for financial accounting purposes in the current period when the CapLease Compensation Committee determined the performance criteria.

As of December 31, 2011, $3,144 of unvested shares (fair value at the grant dates) is expected to be charged to the Company’s Consolidated Statement of Operations ratably over the remaining vesting period (through March 2015) assuming vesting criteria are satisfied. In addition, as of December 31, 2011, the Company has not yet commenced expense accrual related to the following number of share awards because the applicable performance criteria have not yet been determined: 39,345 restricted shares made in 2008, 209,430 restricted shares made in 2009, 144,675 restricted shares made in 2010 and 130,950 restricted shares made in 2011.