Equity Incentive Plan

6 Months Ended

Jun. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity Incentive Plan

Equity Incentive Plan

The Company maintains its Equity Incentive Plan to attract and retain independent trustees, executive officers and other key employees and service providers. The plan provides for the grant of options to purchase common shares, share awards, share appreciation rights, performance units and other equity-based awards. The plan was amended and restated as of May 17, 2013 to increase the maximum number of shares available under the plan to 3,000,000 shares. Share awards under this plan generally vest over three to five years, though compensation for the Company’s independent trustees includes shares granted that vest immediately. The Company pays dividends on unvested shares and units, except for performance based shares, for which dividends on unvested performance based shares are not paid until those shares are vested. Certain awards may provide for accelerated vesting if there is a change in control. In January 2013 and 2012, the Company issued 22,536 and 27,592 common shares, respectively, to its independent trustees as compensation for services performed in 2012 and 2011. The quantity of shares was calculated based on the average of the closing prices for the Company’s common shares on the New York Stock Exchange for the last ten trading days preceding the reporting date. The Company would have distributed 10,172 common shares had this liability classified award been satisfied as of June 30, 2013. As of June 30, 2013, there were 2,400,018 common shares available for issuance under the Equity Incentive Plan.

Restricted Share Awards

On February 23, 2012, the Company granted 114,567 restricted common shares to the Company’s executive officers pursuant to the Equity Incentive Plan, consisting of time-based awards of 61,376 shares that will vest over a three-year period and 53,191 shares granted as performance-based equity awards. The performance-based shares will be issued and vest over a three-year period only if and to the extent that long-term performance criteria established by the Board of Trustees are met and the recipient remains employed by the Company on the vesting date. The Company met its criteria for 2012, therefore, on January 15, 2013 the Company issued an aggregate of 17,731 shares to its executive officers as performance based equity compensation under the 2012 awards. Included in the grant of 61,376 time-based shares in 2012 are 8,184 shares granted to certain employees not subject to employment agreements. On January 29, 2013, the Company granted 40,829 shares as time-based awards and, effective as of May 17, 2013 upon shareholder approval of the Amended and Restated Equity Incentive Plan, 40,829 shares of performance-base equity awards. The 2013 time-based equity awards will vest over a three-year period. The 2013 awards of performance-based shares will be issued and vest over a three-year period only if and to the extent that long-term performance criteria established by the board of trustees are met and the recipient remains employed by the Company on the vesting date.

The Company measures compensation expense for time-based vesting restricted share awards based upon the fair market value of its common shares at the date of grant. For the performance-based shares granted in 2012, compensation expense is based on a valuation of $10.20 per performance share granted, which takes into account that some or all of the awards may not vest if long-term performance criteria are not met during the vesting period. For the performance-based shares granted in 2013, compensation expense is based on a valuation of $10.93 per performance share granted. Compensation expense is recognized on a straight-line basis over the vesting period and is included in general and administrative expense in the accompanying consolidated statements of operations. The Company pays dividends on non-vested time-based restricted shares. Dividends for performance-based shares are accrued and paid annually only if and to the extent that long-term performance criteria established by the Board are met and the recipient remains employed by the Company.

A summary of the Company’s restricted share awards for the six months ended June 30, 2013 and year ended December 31, 2012 is as follows:

	June 30, 2013				December 31, 2012
	Number of Shares		Weighted - Average  Grant Date Fair Value		Number of Shares		Weighted - Average  Grant Date Fair Value
Non-vested at beginning of the period	140,077		$	12.70	51,029		$	19.04
Granted	81,658		13.43		114,567		11.28
Vested	(60,217	)	15.26		(25,519	)	19.04
Non-vested at end of the period	161,518		$	12.49	140,077		$	12.70

As of June 30, 2013 and December 31, 2012, there were $1.7 million and $1.1 million, respectively, of unrecognized compensation costs related to restricted share awards. As of June 30, 2013, these costs were expected to be recognized over a weighted–average period of approximately 1.7 years. For the three months ended June 30, 2013 and 2012, the Company recognized approximately $0.2 million and $0.2 million, respectively and for the six months ended June 30, 2013, and 2012, the Company recognized approximately $0.5 million and $0.4 million, respectively of expense related to the restricted share awards. This expense is included in general and administrative expenses in the accompanying consolidated statements of operations.

Long-Term Incentive Plan Units

The Company recorded $0.2 million and $0.2 million in compensation expense related to the LTIP Units for the three months ended June 30, 2013 and 2012, respectively and $0.4 million and $0.4 million in compensation expense related to the LTIP units for six months ended June 30, 2013 and 2012, respectively. As of June 30, 2013 and December 31, 2012, there was $1.4 million and $1.8 million, respectively, of total unrecognized compensation cost related to LTIP Units. This cost is expected to be recognized over approximately 1.8 years, which represents the weighted average remaining vesting period of the LTIP Units. As of June 30, 2013, none of the LTIP Units had reached parity.