Long-Term Incentive Plan

12 Months Ended

Dec. 31, 2016

Long-Term Incentive Plan

Long-Term Incentive Plan

11. 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 5,445,554 shares remain available for future issuance as of December 31, 2016.

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 are measured at fair value on the date of grant and amortized over the relevant requisite service period or derived service period.

As discussed in Note 2, the Company chose to early adopt ASU No. 2016-09 effective January 1, 2016. Upon adoption of ASU No. 2016-09, the Company elected to account for forfeitures as they occur. The Company’s compensation expense and forfeitures related to restricted shares for the years ended December 31, 2016, 2015 and 2014 were as follows (in thousands):

	2016		2015		2014
Amortization expense, including forfeitures	$	7,157	$	9,695	$	9,063

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.

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. During both 2016 and 2015, these capitalized costs totaled $0.6 million. During 2014, these capitalized costs totaled $0.5 million.

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

	2016			2015			2014
		Weighted			Weighted			Weighted
		Average			Average			Average
	Shares	Price		Shares	Price		Shares	Price
Outstanding at beginning of year	986,345	$	14.33	1,883,296	$	11.24	2,009,412	$	10.23
Granted	816,880	$	12.33	499,787	$	17.33	691,182	$	13.48
Vested	(605,641)	$	13.39	(1,225,443)	$	10.75	(799,845)	$	10.61
Forfeited	(101,676)	$	14.32	(171,295)	$	14.76	(17,453)	$	11.90
Outstanding at end of year	1,095,908	$	13.36	986,345	$	14.33	1,883,296	$	11.24

At December 31, 2016, 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 a former Company associate. The Options fully vested in April 2009, and will expire in April 2018. The exercise price of the Options is $17.71 per share.