Note 5 - Incentive Plan

The Company’s Amended and Restated 2014 Equity Incentive Plan (the “Plan”) provides for the grant of stock options, share awards (including restricted common stock and restricted stock units), stock appreciation rights, dividend equivalent rights, performance awards, annual incentive cash awards and other equity-based awards, including Long Term Incentive Plan (“LTIP”) units, which are convertible on a one-for-one basis into units of limited partnership interest in the Company’s operating partnership. As of June 30, 2018, the Plan had 3,356,723 shares authorized for issuance with 1,934,394 shares available for future issuance, subject to certain adjustments set forth in the Plan.

Restricted Stock

Awards of restricted stock are awards of the Company’s common stock that are subject to restrictions on transferability and other restrictions as established by the Company’s compensation committee on the date of grant that are generally subject to forfeiture if employment terminates prior to vesting. Upon vesting, all restrictions would lapse. Except to the extent restricted under the award agreement, a participant awarded restricted stock will have all of the rights of a stockholder as to those shares, including, without limitation, the right to vote and the right to receive dividends on the shares. The awards generally cliff vest over three years or vest ratably over three years from the date of grant. The value of the awards is determined based on the market value of the Company’s common stock on the date of grant. The Company expenses the cost of restricted stock ratably over the vesting period.

Restricted Stock Units

The Company’s restricted stock unit (“RSU”) awards represent the right to receive unrestricted shares of common stock based on the achievement of Company performance objectives as determined by the Company’s compensation committee. Grants of RSUs prior to 2016 generally entitle recipients to shares of common stock equal to 0% up to 100% of the number of RSUs granted at the vesting date, based on two independent criteria measured over a three-year period: (i) the Company’s absolute total stockholder return (“TSR”) and (ii) the Company’s TSR relative to the MSCI US REIT Index (symbol: RMS). Grants of RSUs during and subsequent to 2016 generally entitle recipients to shares of common stock equal to 0% up to 150% of the number of RSUs granted at the vesting date, based on four independent criteria measured over a three-year period: (i) the Company’s growth in gross real estate investments, (ii) the Company’s growth in Adjusted Funds From Operations (“AFFO”) per share, (iii) the Company’s absolute TSR and (iv) the Company’s TSR relative to the FTSE NAREIT Equity Healthcare REIT Index.

RSUs are not eligible to vote or subject to receive dividend equivalents prior to vesting. Dividend equivalents are credited to the recipient and are paid only to the extent the applicable criteria are met, the RSUs vest, and the related common stock is issued.

The grant date fair value of RSUs subject to vesting based on the Company’s absolute TSR and TSR relative to a REIT index is estimated using a Monte Carlo simulation that utilizes inputs such as expected future volatility of the Company’s common stock, volatilities of certain peer companies included in the applicable indexes upon which the relative TSR performance is measured, estimated risk-free interest rate and the expected service periods of three years. The grant date fair value of RSUs subject to vesting based on the Company’s growth in gross real estate investments and the Company’s growth in AFFO per share is determined based on the market value of the Company’s common stock on the date of grant. The Company assesses the probability of achievement of the growth in gross real estate investments and growth in AFFO per share and records expense for the awards based on the probable achievement of these metrics. The Company recognizes the cost of RSUs ratably over the vesting period.

The following tables summarize the stock-based award activity for the six months ended June 30, 2018 and 2017:

	Restricted Stock Awards			Weighted-Average Grant Date Fair Value Per Restricted Stock Award		RSU Awards			Weighted-Average Grant Date Fair Value Per RSU
Outstanding as of December 31, 2017		313,819		$	13.42		660,598		$	9.52
Granted		46,788			11.14		937			11.13
Vested		(29,032	)		13.71		(8,312	)		9.35
Forfeited		-			-		(7,200	)		9.00
Outstanding as of June 30, 2018		331,575		$	13.07		646,023		$	9.53


	Restricted Stock Awards			Weighted-Average Grant Date Fair Value Per Restricted Stock Award		RSU Awards			Weighted-Average Grant Date Fair Value Per RSU
Outstanding as of December 31, 2016		352,793		$	14.57		575,775		$	8.51
Granted		33,780			11.10		-			-
Vested		(11,110	)		15.00		-			-
Cancelled		(5,368	)		15.00		-			-
Outstanding as of June 30, 2017		370,095		$	14.24		575,775		$	8.51

Of the restricted shares and RSUs that vested during the six months ended June 30, 2018, 5,249 shares were surrendered by certain employees to satisfy their tax obligations. RSUs are included in the preceding tables as if the participants earn shares equal to 100% of the units granted. The RSUs shown as granted during the six months ended June 30, 2018 represent the additional 50% of RSUs from the 2016 grant that vested for one former employee.

Subsequent to June 30, 2018, 124,932 restricted shares of common stock granted to certain employees of the Company vested. Of the restricted shares that vested, 22,743 shares were surrendered by employees to satisfy their tax obligations. In addition, 187,398 RSUs previously granted to employees in 2015 did not vest and were forfeited because the criteria for vesting were not achieved.

The table below summarizes compensation expense related to share-based payments, included in general and administrative expenses, for the three and six months ended June 30, 2018 and 2017 (in thousands):

	For the three months ended June 30,				For the six months ended June 30,
	2018		2017		2018		2017
Restricted stock	$	480	$	526	$	972	$	1,074
Restricted stock units		516		408		1,080		816
Stock-based compensation	$	996	$	934	$	2,052	$	1,890

The remaining unrecognized cost from stock-based awards at June 30, 2018 was approximately $4.4 million and will be recognized over a weighted-average period of 1.9 years.