STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2017

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

STOCK-BASED COMPENSATION

NOTE 12 – STOCK-BASED COMPENSATION

Stock-based compensation expense was $3.7 million and $2.8 million for the three months ended March 31, 2017 and 2016, respectively:

Restricted Stock and Restricted Stock Units

Restricted stock and restricted stock units (“RSUs”) are subject to forfeiture if the holder’s service to us terminates prior to vesting, subject to certain exceptions for certain qualifying terminations of employment or a change in control of the Company. Prior to vesting, ownership of the shares/units cannot be transferred. Restricted stock has the same dividend and voting rights as our common stock. RSUs accrue dividend equivalents but have no voting rights. Restricted stock and RSUs are valued at the price of our common stock on the date of grant. We expense the cost of these awards ratably over their vesting period. We awarded 140,416 RSUs to employees on January 1, 2017.

Performance Restricted Stock Units and LTIP Units

Performance restricted stock units (“PRSUs”) and long term incentive plan units (“LTIP Units”) are subject to forfeiture if the performance requirements are not achieved or if the holder’s service to us terminates prior to vesting, subject to certain exceptions for certain qualifying terminations of employment or a change in control of the Company. The PRSUs and the LTIP Units have varying degrees of performance requirements to be earned and vested, and each PRSU and LTIP Units award represents the right to a variable number of shares of common stock or partnership units. Each LTIP Unit once earned and vested is convertible into one Omega OP Unit in Omega OP, subject to certain conditions. The earning requirements are based on either the (i) total shareholder return (“TSR”) of Omega or (ii) Omega’s TSR relative to other real estate investment trusts in the MSCI U.S. REIT Index or FTSE NAREIT Equity Health Care Index TSR (both “Relative TSR”). Vesting in general requires that the employee remain employed by us until the date specified in the applicable PRSU or LTIP agreement, which may be later than the date that the TSR or Relative TSR requirements are satisfied. We expense the cost of these awards ratably over their service period.

Prior to vesting and the distribution of shares, ownership of the PRSUs cannot be transferred. Dividend equivalents on the PRSUs accumulate and with respect to PRSUs granted before 2015 are paid when the PRSUs vest and with respect to PRSUs granted in 2015 or later are paid once the PRSUs are earned. While each LTIP Unit is unearned, the employee receives a partnership distribution equal to 10% of the quarterly approved regular periodic distributions per Omega OP Unit. The remaining partnership distributions (which in the case of normal periodic distributions is equal to the total approved quarterly dividend on Omega’s common stock) on the LTIP Units accumulate, and if the LTIP Units are earned, the accumulated distributions are paid.

The number of shares or units earned under the TSR PRSUs or LTIP Units depends generally on the level of achievement of Omega’s TSR over the indicated performance period. We awarded 399,726 LTIP Units to employees on January 1, 2017.

The number of shares earned under the Relative TSR PRSUs depends generally on the level of achievement of Omega’s TSR relative to other real estate investment trusts in the MSCI U.S. REIT Index or FTSE NAREIT Equity Health Care Index TSR over the performance period indicated. We awarded 285,338 Relative TSR PRSUs to employees on January 1, 2017.

The following table summarizes our total unrecognized compensation cost as of March 31, 2017 associated with restricted stock, restricted stock units, PRSU awards, and LTIP Unit awards to employees:

	Grant   Year		Shares/ Units		Grant Date  Average  Fair Value  Per Unit/  Share		Total  Compensation  Cost (in millions)  (1)		Weighted   Average  Period of  Expense  Recognition  (in months)		Unrecognized   Compensation  Cost (in  millions)		Performance   Period	Vesting  Dates
RSUs
3/31/15 RSU		2015		109,985	$	40.57	$	4.5		33	$	1.2	N/A	12/31/2017
4/1/15 RSU		2015		40,464		40.74		1.6		33		0.5	N/A	12/31/2017
Assumed Aviv RSU		2015		7,799		35.08		0.3		33		0.1	N/A	11/1/2017
3/17/16 RSU		2016		130,006		34.78		4.6		33		2.8	N/A	12/31/2018
1/1/2017 RSU		2017		140,416		31.26		4.3		36		4.0	N/A	12/31/2019
Restricted Stock Units Total				428,670	$	35.68	$	15.3			$	8.6
TSR PRSUs and LTIP Units
2016 TSR		2014		135,634	$	8.67	$	1.2		48	$	0.2	1/1/2014-12/31/2016	Quarterly in 2017
3/31/15 2017 LTIP Units		2015		137,249		14.66		2.0		45		0.9	1/1/2015-12/31/2017	Quarterly in 2018
4/1/2015 2017 LTIP Units		2015		54,151		14.80		0.8		45		0.4	1/1/2015-12/31/2017	Quarterly in 2018
3/17/2016 2018 LTIP Units		2016		372,069		13.21		4.9		45		3.6	1/1/2016-12/31/2018	Quarterly in 2019
1/1/2017 2019 LTIP Units		2017		399,726		12.61		5.0		48		4.7	1/1/2017-12/31/2019	Quarterly in 2020
TSR PRSUs & LTIP Total				1,098,829	$	12.69	$	13.9			$	9.8
Relative TSR PRSUs
2016 Relative TSR		2014		135,634	$	14.24	$	1.9		48	$	0.4	1/1/2014-12/31/2016	Quarterly in 2017
3/31/15 2017 Relative TSR		2015		137,249		22.50		3.1		45		1.4	1/1/2015-12/31/2017	Quarterly in 2018
4/1/2015 2017 Relative TSR		2015		54,151		22.91		1.2		45		0.6	1/1/2015-12/31/2017	Quarterly in 2018
3/17/2016 2018 Relative TSR		2016		307,480		16.45		5.1		45		3.7	1/1/2016-12/31/2018	Quarterly in 2019
1/1/2017 2019 Relative TSR		2017		285,338		18.04		5.1		48		4.8	1/1/2017-12/31/2019	Quarterly in 2020
Relative TSR PRSUs Total				919,852	$	17.78	$	16.4			$	10.9
Grand Total				2,447,351	$	18.63	$	45.6			$	29.3

(1) Total compensation costs are net of shares cancelled.

Director Restricted Stock Grants

As of March 31, 2017, we had 51,999 shares of restricted stock outstanding to directors. The directors’ restricted shares are scheduled to vest over the next three years. As of March 31, 2017, the unrecognized compensation cost associated with outstanding director restricted stock grants is approximately $1.1 million.