Long-Term Incentive Plan

9 Months Ended

Sep. 30, 2013

Long-Term Incentive Plan

Long-Term Incentive Plan

11. Long-Term Incentive Plan

Stock Grants

Restricted shares granted pursuant to the Company’s Long-Term Incentive Plan (“LTIP”) generally vest over periods from three to five years from the date of grant. In August 2011, the Company granted both time-based and performance-based shares to Kenneth E. Cruse upon Mr. Cruse’s appointment as the Company’s Chief Executive Officer. The time-based shares, representing 60.0% of the total shares granted, will vest on a pro-rata basis commencing on the third anniversary of the grant date, and will vest in equal amounts on each of the third, fourth and fifth anniversary of the grant date. The remaining 40.0% of the total shares granted to Mr. Cruse are subject to performance- or market-based, cliff vesting on the fifth anniversary of the grant date, depending on the satisfaction of the following measures: the Company’s total stockholder return (“TSR”); the Company’s TSR relative to companies in the NAREIT Equity Index; and the ratio of the Company’s total net debt to the Company’s adjusted EBITDA.

The Company’s compensation expense related to restricted shares and performance awards for the three and nine months ended September 30, 2013 and 2012 were as follows (in thousands):

	Three Months Ended September 30, 2013		Three Months Ended September 30, 2012		Nine Months Ended September 30, 2013		Nine Months Ended September 30, 2012
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Compensation expense, including forfeitures	$	1,861	$	1,195	$	5,301	$	3,946

The Company’s total compensation expense differs from the vesting of restricted common stock amount presented in the Company’s consolidated statement of equity due to the fact that the Company withholds and uses a portion of its restricted shares granted pursuant to its LTIP for purposes of remitting minimum withholding and payroll taxes in connection with the release of restricted common shares to plan participants (“net-settle”). In addition, the Company capitalizes all restricted shares granted to certain of those employees who work on the design and construction of its hotels. The Company’s total compensation expense in relation to its vesting of restricted common stock presented in the Company’s consolidated statement of equity for the nine months ended September 30, 2013 is as follows (in thousands):

	Nine Months Ended September 30, 2013
	(unaudited)
Total compensation expense, including forfeitures	$	5,301
Net-settle adjustment	(1,723		)
Amortization related to shares issued to design and construction employees	293
Vesting of restricted stock presented on statement of equity	$	3,871