Transactions With Related Parties

12 Months Ended

Dec. 31, 2011

Transactions With Related Parties [Abstract]

Transactions With Related Parties

12. Transactions with Related Parties

Management Fees

The Company is externally managed by ACA pursuant to a management agreement (the "Management Agreement"). All of the Company's executive officers are also employees of ACA. ACA manages the Company's day-to-day operations, subject to the direction and oversight of the Company's board of directors which includes four independent directors. The original term of the Management Agreement ended on November 5, 2010. After that date the Management Agreement automatically renews annually for additional one-year terms unless otherwise terminated or renewed. ACA must be provided 180 days prior notice of any such termination and will be paid a termination fee equal to three times the average annual management fee earned by ACA during the two year period immediately preceding termination, calculated as of the end of the most recently completed fiscal quarter prior to the date of termination. Certain terminations involving the internalization of the Company's management, however, may result in lesser termination fee. Under the terms of the Management Agreement, the Company is responsible for all operating expenses of the Company other than those borne by ACA. ACA is generally responsible for costs incident to the performance of its duties, such as compensation of its employees and various overhead expenses.

ACA is entitled to receive a management fee payable monthly in arrears in an amount equal to 1/12th of an amount determined as follows:

• for the Company's equity up to $250 million, 1.50% (per annum) of equity; plus

• for the Company's equity in excess of $250 million and up to $500 million, 1.10% (per annum) of equity; plus

• for the Company's equity in excess of $500 million and up to $750 million, 0.80% (per annum) of equity; plus

• for the Company's equity in excess of $750 million, 0.50% (per annum) of equity.

For purposes of calculating the management fee, equity is defined as the value, computed in accordance with GAAP, of shareholders' equity, adjusted to exclude the effects of unrealized gains or losses. For the years ended December 31, 2011, 2010, and 2009, the Company incurred $13,787, $9,205 and $8,677 in management fees, respectively. In addition, the Company recognized share based compensation expense related to common share options and restricted common shares granted to management of $1,150, $1,432, and $1,296, respectively, for the years ended December 31, 2011, 2010 and 2009, respectively. At December 31, 2011 and 2010, the Company owed ACA $1,200 and $828, respectively, for the management fee, which is included in accounts payable and other liabilities.