Long-Term Incentive Plan

12 Months Ended

Dec. 31, 2015

12. Long-Term Incentive Plan

Stock Grants

The Company’s Long-Term Incentive Plan (“LTIP”) provides for the granting to directors, officers and eligible employees incentive or nonqualified share options, restricted shares, deferred shares, share purchase rights and share appreciation rights in tandem with options, or any combination thereof. The Company has reserved 12,050,000 common shares for issuance under the LTIP, and 6,191,380 shares remain available for future issuance as of December 31, 2015.

Restricted shares granted pursuant to the Company’s LTIP generally vest over periods from three to five years from the date of grant.

Compensation expense related to awards of restricted shares and performance shares are measured at fair value on the date of grant and amortized over the relevant requisite service period or derived service period.

The Company’s compensation expense and forfeitures related to restricted shares and performance awards for the years ended December 31, 2015, 2014 and 2013 were as follows (in thousands):


	2015		2014		2013
Compensation expense, including forfeitures	$	9,695	$	9,063	$	7,189

The Company’s total compensation expense differs from the vesting of restricted common stock amount presented in the Company’s consolidated statements of equity due to the Company withholding and using a portion of its restricted shares granted pursuant to its LTIP for purposes of remitting statutory minimum withholding and payroll taxes in connection with the release of restricted common shares to plan participants (“net-settle”). In addition, the Company capitalizes compensation costs related to 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 statements of equity for the years ended December 31, 2015, 2014 and 2013 is as follows (in thousands):


	2015		2014		2013
Compensation expense, including forfeitures	$	9,695	$	9,063	$	7,189
Net-settle adjustment		(7,428)		(2,842)		(2,331)
Amortization related to shares issued to design and construction employees		580		474		393
Vesting of restricted stock presented on statement of equity	$	2,847	$	6,695	$	5,251

In January 2015, the Company recognized a total of $2.5 million in stock compensation and amortization expense related to the departure of its former Chief Executive Officer, including $1.6 million in deferred stock amortization.

The following is a summary of non-vested stock grant activity:


	2015			2014			2013
		Weighted			Weighted			Weighted
		Average			Average			Average
	Shares	Price		Shares	Price		Shares	Price
Outstanding at beginning of year	1,883,296	$	11.24	2,009,412	$	10.23	1,539,992	$	9.11
Granted	499,787	$	17.33	691,182	$	13.48	975,711	$	11.82
Vested	(1,225,443)	$	10.75	(799,845)	$	10.61	(497,199)	$	9.89
Forfeited	(171,295)	$	14.76	(17,453)	$	11.90	(9,092)	$	10.89
Outstanding at end of year	986,345	$	14.33	1,883,296	$	11.24	2,009,412	$	10.23

At December 31, 2015, there were no deferred shares, share purchase rights, or share appreciation rights issued or outstanding under the LTIP.

Stock Options

In April 2008, the Compensation Committee of the Company’s board of directors approved a grant of 200,000 non-qualified stock options (the “Options”) to one of the Company’s former associates. The Options fully vested in April 2009, and will expire in April 2018. The exercise price of the Options is $17.71 per share.