Stock Based Compensation

Amended and Restated Long-Term Incentive Plan

On October 24, 2013, CatchMark Timber Trust’s board of directors approved the Amended and Restated 2005 Long-Term Incentive Plan (the “LTIP”), effective on October 25, 2013, to (i) increase the number of shares of common stock available for issuance thereunder to 1,150,000 shares of Class A common stock and 50,000 shares of each of the Class B-1, Class B-2 and Class B-3 common stock, (ii) extend the term of the LTIP to October 25, 2023, (iii) incorporate into the plan document previously-approved, stand-alone amendments, and (iv) make certain additional ministerial changes.

Equity Compensation for Independent Directors

Prior to January 1, 2014, each independent director elected or appointed to CatchMark Timber Trust's board on or after November 13, 2009 received a grant of 1,000 shares of restricted stock upon his initial election or appointment. Upon each subsequent re-election to the board, each independent director received a subsequent grant of 400 shares of restricted stock. The shares of restricted stock vest in thirds on each of the first three anniversaries of the date of grant. Effective January 1, 2014, each of the independent directors receives, on the day following an annual stockholders meeting, a number of restricted shares having a value of $30,000 on the grant date. The number of restricted shares granted to each independent director will be determined by dividing $30,000 by the fair market value per share of CatchMark Timber Trust's common stock on the grant date. The restricted shares will vest in thirds on each of the first three anniversaries of the grant, subject to the independent director’s continued service on the board on each such date, or on the earlier occurrence of a change in control of our company or the independent director’s death, disability or termination with cause.

During 2014 and 2013, 10,875 and 3,200 shares of restricted stock were granted to the independent directors, respectively. Life-to-date as of December 31, 2014, CatchMark Timber Trust had granted 20,475 shares of restricted stock to its independent directors, 5,400 shares of which had vested and 1,467 shares of which were forfeited upon the resignation of two independent directors. As of December 31, 2014, 13,608 restricted shares to directors remained unvested. Deferred compensation costs of approximately $0.2 million is expected to be recognized over a weighted average period of 2.2 years.

One of the independent directors elected to receive a portion of his compensation in CatchMark Timber Trust's common stock in lieu of cash. According, CatchMark Timber Trust granted 2,529 shares to this independent director during 2014. These shares vested immediately upon issuance.

Stock Ownership Guidelines for Independent Directors

On October 24, 2013, the board of directors adopted stock ownership guidelines for independent directors which require that each independent director own shares of CatchMark Timber Trust. CatchMark Timber Trust's common stock having a value of four times his or her annual cash retainer. Each director must meet the stock ownership guidelines by the later of October 25, 2018, or the fifth anniversary of his or her election to the board. Until the ownership guidelines are met, or at any time the director is not in compliance with the guidelines, he or she must retain 100% of any shares received from our company for service on the board, with an exception for shares sold for the limited purposes of paying the exercise price, in the case of stock options, or satisfying any applicable tax liability related to the award.

Equity Compensation for Employees

Pursuant to the LTIP, CatchMark Timber Trust issued the following restricted stock grants to its employees during 2013:



	Time-Based Restricted Shares ⁽¹⁾		Performance-Based Restricted Shares ⁽²⁾		IPO RSUs⁽³⁾
Executives	34,000		51,000		91,000
Non-executives	20,000		—		39,400
Total	54,000		51,000		130,400
Weighted average price of restricted shares granted ⁽⁴⁾	$	13.57	$	13.55	$	13.57

⁽¹⁾

The restricted shares vest in equal annual installments on each of December 31, 2014, December 31, 2015, December 31, 2016, and December 31, 2017, subject to the an employee’ continued employment with CatchMark Timber Trust on each vesting date, or on the earlier occurrence of a change in control or the employee’s termination of employment (i) by CatchMark Timber Trust without cause, (ii) by the employee for good reason, or (iii) by reason of the executive’s death or disability.

⁽²⁾

The number of restricted shares earned will be based upon achievement of performance goals for 2014 as established by the compensation committee of the board of directors, and the earned shares will vest December 31, 2017, subject to the executive's continued employment with CatchMark Timber Trust on that date. In the event of a change in control, these shares will vest as of the date of the change in control.


⁽³⁾	The restricted stock units vested and converted to shares of Class A common stock upon Listing, 84,261 shares were issued net of shares surrendered upon vesting to satisfy required minimum tax withholding obligations.


⁽⁴⁾	The fair value of each share granted is equal to the share price of CatchMark Timber Trust's common stock on the date of grant.

During the year ended December 31, 2014, 13,500 time-based restricted shares became vested to both executives and non-executives, with a fair value of approximately $0.2 million. CatchMark Timber Trust withheld 3,710 shares to satisfy minimum tax withholding obligations for vested time-based restricted shares. As of December 31, 2014, 40,500 time-based restricted shares remained unvested, representing deferred compensation costs of approximately $0.5 million. This cost is expected to be recognized over 3 years.

As of December 31, 2014, 51,000 performance shares remained unvested, resulting in deferred compensation costs of approximately $0.4 million. This cost is expected to be recognized over 3 years.

CatchMark Timber Trust recognized compensation expenses over the period from the date of grant to the vesting date. During the year ended December 31, 2014 and 2013, CatchMark Timber Trust recorded $0.3 million and $1.5 million of stock-based compensation cost in General and Administrative Expenses, and $0.1 million and $0.4 million of stock-based compensation expense in Forestry Management Expenses, respectively.