Stock Incentive Plan

In May 2010, the Company’s stockholders approved the Company’s 2010 Stock Incentive Plan (the “2010 Plan”), with such stockholder action resulting in the termination of the Company’s 2005 Stock Incentive Plan (the “2005 Plan”). The terms of the 2010 Plan are substantially the same as the 2005 Plan. Pursuant to the 2010 Plan, eligible employees, officers and directors of the Company have the opportunity to acquire the Company's common stock through the award of restricted stock and other equity awards under the 2010 Plan. The maximum number of shares that may be issued under the 2010 Plan is 1,190,000.

Of the common stock authorized at December 31, 2015 and 2014, 551,609 shares and 862,512 shares, respectively, were reserved for issuance under the Company’s 2010 Stock Incentive Plan. At December 31, 2015 and 2014, there were 280,457 and 162,171 shares of non-vested restricted stock outstanding under the 2010 Plan. The Company’s directors have been issued 146,935 and 111,311 shares under the 2010 Plan as of December 31, 2015 and 2014, respectively. The Company’s employees have been issued 401,827 and 216,177 shares under the 2010 Plan as of December 31, 2015 and 2014, respectively.


(a)	Restricted Common Stock Awards

During the years ended December 31, 2015, 2014 and 2013, the Company recognized non-cash compensation expense of $0.9 million, $0.4 million and $0.2 million, respectively. Dividends are paid on all restricted stock issued, whether those shares have vested or not. In general, non-vested restricted stock is forfeited upon the recipient's termination of employment. There were no forfeitures during the years ended December 31, 2015, 2014 and 2013.

A summary of the activity of the Company's non-vested restricted stock under the 2010 Plan for the years ended December 31, 2015, 2014 and 2013, respectively, is presented below:



	2015				2014				2013
	Number of Non-vested Restricted Shares		Weighted Average Per Share Grant Date Fair Value(1)		Number of Non-vested Restricted Shares		Weighted Average Per Share Grant Date Fair Value(1)		Number of Non-vested Restricted Shares		Weighted Average Per Share Grant Date Fair Value(1)
Non-vested shares at January 1	162,171		$	7.26	94,873		$	7.01	31,580		$	6.58
Granted	185,650		7.79		104,517		7.39		75,385		7.13
Vested	(67,364	)	7.18		(37,219	)	6.97		(12,092	)	6.65
Non-vested shares as of December 31	280,457		$	7.63	162,171		$	7.26	94,873		$	7.01
Weighted-average restricted stock granted during the period	185,650		$	7.79	104,517		$	7.39	75,385		$	7.13


(1)	The grant date fair value of restricted stock awards is based on the closing market price of the Company’s common stock at the grant date.

At each of December 31, 2015 and 2014, the Company had unrecognized compensation expense of $1.3 million and $0.8 million, respectively, related to the non-vested shares of restricted common stock under the 2010 Plan. The unrecognized compensation expense at December 31, 2015 is expected to be recognized over a weighted average period of 1.9 years. The total fair value of restricted shares vested during the years ended December 31, 2015, 2014 and 2013 was $0.5 million, $0.3 million and $0.1 million, respectively. The requisite service period for restricted shares at issuance is three years.


(b)	Performance Share Awards

In May 2015, the Compensation Committee of the Board of Directors approved a performance share award (“PSA”) pursuant to the 2010 Plan to the Company’s Chairman, Chief Executive Officer and President. The PSA granted consisted of 89,629 shares of common stock and had a grant date fair value of approximately $0.4 million. The PSA are awards under which the number of underlying shares of Company common stock that vest and that the recipient becomes entitled to receive at the time of vesting will generally range from 0% to 200% of the target number of PSAs granted, with the target number of PSAs granted being adjusted to reflect the value of the reinvestment of any dividends declared on Company common stock during the vesting period. Vesting of these PSAs will occur at the end of three years based on three-year total stockholder return, or TSR, as follows:


•	If three-year TSR is less than 33%, then 0% of the PSUs will vest;


•	If three-year TSR is greater than or equal to 33% and the TSR is not in the bottom quartile of an identified peer group, then 100% of the PSAs will vest;


•	If three-year TSR is greater than or equal to 33% and the TSR is in the top quartile of an identified peer group, then 200% of the PSAs will vest;


•	If three-year TSR is greater than or equal to 33% and the TSR is in the bottom quartile of an identified peer group, then 50% of the PSAs will vest.

TSR is defined, with respect to the Company and each member of the identified peer group, as applicable, as the average annual total shareholder return based on common stock price appreciation/depreciation during the applicable measurement period or until the date of a change of control, whichever first occurs, plus the value on the last day of the applicable measurement period or the date of a change of control of common shares if all cash dividends declared on a common share during such period were reinvested in additional common shares.

The grant date fair values of PSAs were determined through a Monte-Carlo simulation of the Company’s common stock total shareholder return and the common stock total shareholder return of its peer companies to determine the TSR of the Company’s common stock relative to its peer companies over a future period of three years. For the 2015 PSA grant, the inputs used by the model to determine the fair value are (i) historical stock return volatilities of the Company and its peer companies over the most recent three year period, (ii) a risk free rate based on the three year U.S. Treasury rate on grant date, and (iii) historical pairwise stock return correlations between the Company and its peer companies over the most recent three year period.

Compensation expense related to PSAs was $0.1 million for the year ended December 31, 2015. As of December 31, 2015, there was $0.3 million of unrecognized compensation cost related to unvested PSAs.