Shareholders' Equity and Share-Based Compensation (Notes)

6 Months Ended

Jun. 30, 2023

Shareholders' Equity and Share-based Compensation

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

Preferred Stock. The Company’s Board of Directors has designated 6,600,000 shares of the Company’s preferred stock for issuance as Series C Preferred Stock, of which the Company has 4,460,000 of such shares outstanding as of June 30, 2023. The Series C Preferred Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption, and will remain outstanding indefinitely unless redeemed, repurchased or converted into common stock pursuant to the terms of the Series C Preferred Stock. Except under certain limited circumstances described in Article IIIC of the Company’s Restated Articles of Incorporation, the Company may not redeem the Series C Preferred Stock prior to April 15, 2025. On or after that date, the Series C Preferred Stock may be redeemed at any time and from time to time at the Company's option at a cash redemption price of $25.00 per share plus any accumulated and unpaid dividends. Because the Series C Preferred Stock is redeemable only at the option of the issuer, it is classified as equity on the Company’s consolidated balance sheet.

The Series C Preferred Stock pays a cumulative cash dividend equivalent to 6.900% of the $25.00 liquidation preference per share each year until April 15, 2025. The terms of the Series C Preferred Stock state that upon April 15, 2025 and thereafter, the Company will pay cumulative cash dividends at a percentage of the $25.00 liquidation value per share equal to an annual floating rate of 3-month LIBOR plus a spread of 5.461%. When 3-month LIBOR ceases

to be a published, the fallback provision provided in the terms of the Series C Preferred Stock will allow for the Company to appoint a third-party independent financial institution of national standing to select an industry accepted alternative base rate. The Company paid its regular quarterly dividend of $0.43125 per share of Series C Preferred Stock on July 17, 2023 to shareholders of record as of July 1, 2023.

Common Stock. During the six months ended June 30, 2023, the Company issued 495,874 shares of its common stock through its at-the-market (“ATM”) program at an aggregate value of $6,313, net of broker commissions and fees. The Company currently pays a monthly dividend on its common stock. The Company’s timing, frequency, and amount of dividends declared on its common stock are determined by its Board of Directors. When declaring dividends, the Board of Directors considers the Company’s taxable income, the REIT distribution requirements of the Tax Code, and maintaining compliance with dividend requirements of the Series C Preferred Stock, along with other factors that the Board of Directors may deem relevant from time to time.

Share-Based Compensation. Total share-based compensation expense recognized by the Company was $1,129 and $2,140 for the three and six months ended June 30, 2023 compared to $1,026 and $1,873 for the three and six months ended June 30, 2022.

The following tables present a rollforward of share-based awards for the periods indicated:


	Six Months Ended
	June 30,
	2023			2022
Type of Award	Shares	Weighted Average Grant Date Fair Value Per Share		Shares	Weighted Average Grant Date Fair Value Per Share
Restricted stock:
Awards outstanding, beginning of period	133,951	$	15.22	197,804	$	15.27
Granted	74,017	11.27		71,216	15.60
Vested	(36,573)	16.75		(116,234)	15.78

Awards outstanding, end of period	171,395	$	13.19	152,786	$	15.04

RSUs:
Awards outstanding, beginning of period	86,666	$	16.57	55,019	$	19.40
Granted	106,850	11.97		73,767	15.19
Vested	(33,213)	16.96		(18,157)	19.40
Awards outstanding, end of period	160,303	$	13.42	110,629	$	16.59

PSUs:
Awards outstanding, beginning of period	201,284	$	16.60	110,040	$	19.40
Granted	160,277	11.97		147,542	15.19
Vested	—	—		—	—
Awards outstanding, end of period	361,561	$	16.60	257,582	$	16.99

The number of RSUs that will potentially settle may range from 0% if the recipient’s service-based vesting condition is not met to 100% if the service-based vesting condition is met. The number of PSUs that will potentially settle may range from 0% to 200% based on the achievement of the performance goals defined in the grant award. As of June 30, 2023, the Company expects 80% of the PSUs outstanding will be settled on their vesting dates. The Company has DERs accrued for RSUs and PSUs of $190 and $579, respectively, as of June 30, 2023 compared to

$152 and $354, respectively, as of December 31, 2022, which is included on the Company’s consolidated balance sheet within “accrued dividends payable.”

The following table discloses the grant date fair value of the Company’s remaining unvested awards as of June 30, 2023, which will be amortized into compensation expense over the period disclosed:


	June 30, 2023
	Remaining Compensation Cost		WAVG Period of Recognition
Restricted stock	$	1,122	1.6 years
RSUs	1,828		2.2 years
PSUs	3,187		1.9 years
Total	$	6,137	1.9 years