Share-Based and Long-Term Compensation Plans

The Company grants share-based awards under the 2013 Equity Plan. Effective May 16, 2013, the stockholders of the Company approved the 2013 Equity Plan. The 2013 Equity Plan replaced the 2010 Omnibus Equity Incentive Plan (the "2010 Equity Plan") that authorized the grant of up to 600,000 equity-based awards to employees and directors of the Company. Outstanding awards granted under the 2010 Equity Plan continue to be governed by the 2010 Equity Plan. All of the employees of the Company and the Operating Partnership, employees of certain subsidiaries of the Company, non-employee directors, and any consultants or advisors to the Company and the Operating Partnership are eligible to participate in the 2013 Equity Plan.

The 2013 Equity Plan authorizes the following types of awards: (1) stock options, including nonstatutory stock options and incentive stock options ("ISOs"); (2) stock appreciation rights; (3) restricted shares; (4) restricted share units; (5) profits interest units ("LTIPS units"); (6) dividend equivalent rights; and (7) other forms of awards payable in or denominated by reference to shares of common stock. Full value awards, i.e., awards other than options and stock appreciation rights, vest over a period of three years or longer, except that any full value awards subject to performance-based vesting must become vested over a period of one year or longer. The Compensation Committee may waive vesting requirements upon a participant’s death, disability, retirement or other specified termination of service or upon a change in control.

The aggregate number of shares of the Company's common stock available for awards pursuant to the Plan is 3,250,000, including a maximum of 2,000,000 shares that may be granted pursuant to stock options or stock appreciation rights and a maximum of 1,250,000 shares that may be granted pursuant to other awards.

If an award is canceled, forfeited or expires unvested or unexercised, or is settled in cash rather than in shares of common stock, then the shares covered by the portion of the award that is so canceled, forfeited, expired or settled will again become available for award under the plan. Shares repurchased by the Company at the same price paid by a participant will also become available for award under the plan, and the payment of dividend equivalents in cash in conjunction with any outstanding awards will not count against the Share Limit. Shares tendered in payment of an exercise or purchase price, tendered or retained to satisfy the Company’s tax withholding obligation, not issued upon exercise of a stock appreciation right to which they are subject and shares purchased in the open market with cash proceeds of option exercises will not be available for re-issuance under the plan. No shares may be made subject to a grant if that would cause an incentive stock option to fail to qualify as such under the tax code.

Through December 31, 2014, the Company has granted stock options, LTIP units and RSUs (including time-vesting RSUs and performance-vesting RSUs) under the 2013 Equity Plan. As of December 31, 2014, the Company has restricted shares and deferred incentive share units outstanding under the 2010 Equity Plan.

On May 12, 2011, the Board of Directors approved the Company's 2011 Employee Inducement Award Plan (the "2011 Inducement Plan") that authorized the grant of up to 149,573 restricted shares and/or deferred incentive share units to employees and directors of the Company in connection with the combination with Eola. The Plan shall continue in effect until the earlier of (a) its termination by the Board or (b) the date on which all of the shares of stock available for issuance under the Plan have been issued; provided that awards outstanding on that date shall survive in accordance with their terms. The Company no longer grants awards under the 2011 Inducement Plan.

Long-Term Equity Incentives

At December 31, 2014, a total of 1,293,750 shares underlying stock options had been granted to officers of the Company and remain outstanding under the 2013 Equity Plan. The stock options are valued at $5.4 million, which equates to an average price per share of $4.17. Each stock option will vest in increments of 25% per year on each of the first, second, third and fourth anniversaries of the grant date, subject to the grantee's continued service. At December 31, 2014, a total of 372,645 time-vesting RSUs had been granted to officers of the Company and remain outstanding. The time-vesting RSUs are valued at $6.9 million, which equates to an average price per share of $18.49. A total of 138,380 time-vesting RSU awards will vest in increments of 25% per year on each of the first, second, third and fourth anniversaries of the grant date and 234,265 time-vesting RSU awards will vest in increments of 33% per year on each of the first, second, and third anniversaries of the grant date, subject to the grantee's continued service.

At December 31, 2014, a total of 300,636 LTIP units had been granted to officers of the Company and remain outstanding under the 2013 Equity Plan. LTIP units are a form of limited partnership interest issued by the Operating Partnership, and will be considered earned if, and only to the extent to which applicable total shareholder return, ("TSR"), performance measures are achieved during the performance period. Grant date fair values of the LTIP units are estimated using a Monte Carlo simulation model and the resulting expense is recorded regardless of whether the TSR performance measures are achieved if the required service is delivered. The grant date fair values are being amortized over expense over the period from the grant date to the date at which the awards, if any, would become vested. The LTIP units are valued at $2.8 million, which equates to an average price per share of $9.26. At December 31, 2014, a total of 131,888 performance-vesting RSUs had been granted to officers of the Company and remain outstanding under the 2013 Equity Plan. The performance-vesting RSUs are valued at approximately $1.2 million, which equates to an average price per share of $9.08. Each LTIP unit and performance-vesting RSU will vest based on the attainment of total stockholder return targets during the applicable performance period, subject to the grantee's continued service.

At December 31, 2014, a total of 13,769 restricted shares had been granted to officers of the Company and remain outstanding under the 2010 Equity Plan. The restricted shares vest ratably over four years from the date of grant, with the last restricted shares vesting in January 2016. The restricted shares are valued at $201,000, which equates to an average price per share of $14.61. At December 31, 2013, a total of 6,855 deferred incentive share units had been granted to employees of the Company and remain outstanding under the 2010 Equity Plan. The deferred incentive share units are valued at $114,000, which equates to an average price per share of $16.63. The deferred incentive share units vest ratably over four years from the date of grant, with the last deferred incentive share units vesting in December 2015.

On December 24, 2014, the Company entered into a Separation and General Release Agreement (the "Separation Agreement") wherein Henry F. Pratt III resigned from his position as Executive Vice President of Asset Management and Third Party Services. Under the terms of the Separation Agreement, the vesting of certain of Mr. Pratt's outstanding equity and equity-based awards were accelerated as follows: 31,250 shares of company stock options, 13,777 shares of restricted stock units and 844 shares of restricted stock. Mr. Pratt's remaining equity and equity-based awards, including 62,500 shares of company stock options, 29,941 LTIP units, 21,267 restricted stock units and 533 shares of restricted stock, were forfeited. $274,000 of compensation expense was recognized in general and administrative expenses on the Company's consolidated statements of operations and comprehensive income (loss) during the year ended December 31, 2014 related to the separation.

Total compensation expense related to restricted shares, deferred incentive share units, stock options, RSUs, and LTIP units of $8.2 million and $5.7 million was recognized in general and administrative expenses on the Company's consolidated statements of operations and comprehensive income (loss) during the years ended December 31, 2014 and 2013, respectively. Total compensation expense related to non-vested awards not yet recognized was $7.6 million at December 31, 2014. The weighted average period over which this expense is expected to be recognized is approximately one year.



	Restricted Shares				Deferred Incentive Share Units				Stock Options				Restricted Stock Units				LTIP Units
	# of Shares		Weighted Average Grant-Date Fair Value		# of Share Units		Weighted Average Grant-Date Fair Value		# of Options		Weighted Average Grant-Date Fair Value		# of Stock Units		Weighted Average Grant-Date Fair Value		# of LTIP Units		Weighted Average Grant-Date Fair Value
Balance at 12/31/13	27,391		$	15.04	14,880		$	15.67	1,850,000		$	4.17	449,787		$	17.65	214,443		$	9.79
Granted	—		—		—		—		—		—		234,021		14.34		116,134		8.5
Vested	(12,477	)	15.28		(1,605	)	16.50		(493,750	)	4.17		(132,657	)	18.51		—		—
Forfeited	(1,145	)	17.56		(6,420	)	17.20		(62,500	)	4.17		(46,618	)	16.20		(29,941	)	9.55
Balance at 12/31/14	13,769		$	14.61	6,855		$	16.63	1,293,750		$	4.17	504,533		$	16.03	300,636		$	9.26
*N/M-Not meaningful

The following table presents the weighted-average assumptions used to estimate the fair values of the options granted in the periods presented:



	Year Ended
	December 31,
	2014	2013	2012
Risk-free interest rate	—	1.01%	—
Expected volatility	—	31.0%	—
Expected life (in years)	—	6	—
Dividend Yield	—	4%	—
Weighted-average estimated fair value of options granted during the year	—	$4.17	—

Defined Contribution Plan

The Company maintains a 401(k) plan for its employees. The Company makes matching contributions of 50% of the employee's contribution (limited to 10% of compensation as defined by the plan) and may also make annual discretionary contributions. The Company's total expense for this plan was $621,000, $601,000, and $554,000 for the years ended December 31, 2014, 2013 and 2012, respectively.