The Company is externally managed and does not currently have any employees. On March 30, 2016, the Company adopted the 2016 Incentive Award Plan (the “Plan”) to promote the success and enhance the value of the Company by linking the individual interests of employees of the Manager and its affiliates to those of the Company’s stockholders. The maximum number of shares that may be issued under the Plan is equal 7.5% of the Company’s shares issued prior to an initial public offering.

On April 4, 2019, the Board granted 877,498 time-based RSUs which immediately became vested. Dividend equivalent payments accrued as if those shares were outstanding for all dividends declared during the period beginning August 25, 2015. The fair value of time-based RSUs was recognized immediately. The fair value of the 877,498 RSUs was determined to be $20.00 per share on the grant date based on the Company’s share issuances proximate to the grant date. During the year ended December 31, 2021, 292,731 time-based RSUs were forfeited prior to their delivery, resulting in the reversal of $5.9 million of previously recognized equity compensation expense which is included as other income in the consolidated statements of operations. On April 4, 2021, 584,767 fully vested RSUs were delivered and converted to common shares.

On April 4, 2019, the Board granted 1,622,499 performance-based RSUs of which 0% to 100% will vest at the conclusion of a three-year performance period commencing on January 1, 2019, at varying levels, if the Company achieves a minimum cumulative Total Stockholder Return Percentage in excess of 18% over that period. Total Stockholder Return Percentage is equal to the quotient of (i) the sum of (A) the tangible net book value per common share as of December 31, 2021 less $19.84 and (B) the aggregate amount of dividends paid with respect to common

stock during the performance period, (ii) and $19.84, calculated on a fully diluted basis. Dividend equivalents will accrue and be paid to participants at the conclusion of the performance period based on the number of RSUs that are vested. The fair value of the 1,622,499 performance-based RSUs was determined to be $20.00 per share on the grant date based on the Company’s share issuances proximate to the grant date. In the event that a change in control or an initial public offering (“IPO”) occurred prior to the completion of the performance period, the RSUs would immediately vest prior to such change in control or IPO and dividend equivalents will become payable. During the year ended December 31, 2021 525,206 performance based RSUs were forfeited. Upon completion of the Company’s IPO in November 2021, 1,097,293 RSUs became immediately vested and dividend equivalents of $4.9 million were paid.

The Company recognized equity compensation expense for the performance-based RSUs if and when the Company concludes that it is probable that the performance condition would be achieved. The Company reassessed the probability of vesting at each reporting period for these awards and adjusted compensation expense based on its probability assessment. The Company recognized a cumulative catch up adjustment to amounts previously recognized for changes in its probability assessment in connection with the IPO. The Company has elected to recognize the effect of forfeitures as they occur.

For the years ended December 31, 2021, 2020 and 2019, the Company recognized compensation expense of $8.8 million, $5.7 million and $7.9 million relating to the performance-based RSUs. For the year ended December 31, 2019, the Company recognized compensation expense of $21.5 million related to the time-based RSUs. Equity compensation expense is considered non-cash compensation expense for the years ended December 31, 2021 and 2020. For the year ended December 31, 2019, $25.5 million is considered non-cash compensation expense.

The following table details the RSU activity during the years ended December 31, 2021 and 2020:

	Time-based Restricted Stock Units				Performance-based Restricted Stock Units
			Weighted- Average					Weighted- Average
	Number of		Grant Date Fair		Number of			Grant Date Fair
	Restricted Shares		Value Per Share		Restricted Shares			Value Per Share
Unvested, December 31, 2020		—	$	—		1,622,499		$	20.00
Granted		—		—		—			—
Forfeited/cancelled		—				(525,206	)
Vested		—		—		(1,097,293	)	$	(20.00	)
Unvested, December 31, 2021		—	$	—		—		$	—

	Time-based Restricted Stock Units				Performance-based Restricted Stock Units
	Number of Restricted Shares		Weighted- Average Grant Date Fair Value Per Share		Number of Restricted Shares		Weighted- Average Grant Date Fair Value Per Share
Unvested, December 31, 2019		—	$	—		1,622,499	$	20.00
Granted		—		—		—		—
Vested		—		—		—		—
Unvested, December 31, 2020		—	$	—		1,622,499	$	20.00