Quarterly report pursuant to Section 13 or 15(d)

Equity Incentive Plan (Notes)

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Equity Incentive Plan (Notes)
 6 Months Ended
Jun. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Equity Incentive Plan
The Company’s Restated 2009 Equity Incentive Plan, or the Plan, provides incentive compensation to attract and retain qualified directors, officers, advisors, consultants and other personnel, including PRCM Advisers and affiliates and employees of PRCM Advisers and its affiliates, and any joint venture affiliates of the Company. The Plan provides for grants of equity-based compensation to the Company’s executive officers and other key employees of PRCM Advisers or its affiliates, subject to a ceiling of 3,000,000 shares available for issuance under the Plan. Grants are made upon determination by the compensation committee utilizing best practices of equity-based compensation.
The Plan is administered by the compensation committee of the Company’s board of directors. The compensation committee has the full authority to administer and interpret the Plan, to authorize the granting of awards, to determine the eligibility of directors, officers, advisors, consultants and other personnel, including PRCM Advisers and affiliates and employees of PRCM Advisers and its affiliates, and any joint venture affiliates of the Company, to receive an award, to determine the number of shares of common stock to be covered by each award (subject to the individual participant limitations provided in the Plan), to determine the terms, provisions and conditions of each award (which may not be inconsistent with the terms of the Plan), to prescribe the form of instruments evidencing awards and to take any other actions and make all other determinations that it deems necessary or appropriate in connection with the Plan or the administration or interpretation thereof. In connection with this authority, the compensation committee may, among other things, establish performance goals that must be met in order for awards to be granted or to vest, or for the restrictions on any such awards to lapse.
The Company’s Plan provides for grants of restricted common stock, phantom shares, dividend equivalent rights and other equity-based awards, subject to a ceiling of 3,000,000 shares available for issuance under the Plan. The Plan allows for the Company’s board of directors to expand the types of awards available under the Plan to include long-term incentive plan units in the future. If an award granted under the Plan expires or terminates, the shares subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will again become available for the issuance of additional awards. Unless earlier terminated by the Company’s board of directors, no new award may be granted under the Plan after the tenth anniversary of the date that such Plan was initially approved by the Company’s board of directors. No award may be granted under the Plan to any person who, assuming payment of all awards held by such person, would own or be deemed to own more than 9.8% of the outstanding shares of the Company’s common stock.
On May 21, 2013 and May 20, 2014, the Company granted 36,335 and 54,799 shares of restricted common stock, respectively, to its independent directors pursuant to the Plan. The estimated fair value of these awards was $11.56 and $10.31 per share, respectively, based on the closing price of the Company’s common stock on such date. The grants vested immediately.
On May 29, 2013 and February 5, 2014, the Company granted 1,020,969 and 1,103,162 shares of restricted common stock, respectively, to its executive officers and other key employees of PRCM Advisers pursuant to the Plan. The estimated fair value of these awards was $11.23 and $9.79 per share on grant date, based on the closing market price of the Company’s common stock on the NYSE on such date. However, as the cost of these awards is measured at fair value at each reporting date based on the price of the Company’s stock as of period end in accordance with ASC 505, Equity, or ASC 505, the fair value of these awards as of June 30, 2014 was $10.48 per share based on the closing market price of the Company’s common stock on the NYSE on such date. The grants vest in three equal annual installments commencing on the date of the grant, as long as such grantee complies with the terms and conditions of his or her applicable restricted stock award agreement.
The following table summarizes the activity related to restricted common stock for the six months ended June 30, 2014 and 2013:
 
Six Months Ended June 30,
 
2014
 
2013
(in thousands)
Shares
 
Weighted Average Grant Date Fair Market Value
 
Shares
 
Weighted Average Grant Date Fair Market Value
Outstanding at Beginning of Period
1,024,454

 
$
11.22

 
25,325

 
$
9.69

Granted
1,157,961

 
9.81

 
1,057,304

 
11.24

Vested
(395,981
)
 
(10.43
)
 
(56,621
)
 
(10.92
)
Forfeited
(5,684
)
 
(10.46
)
 
—

 
—

Outstanding at End of Period
1,780,750

 
$
10.55

 
1,026,008

 
$
11.22



For the three and six months ended June 30, 2014, the Company recognized compensation costs related to restricted common stock of $3.7 million and $6.8 million, respectively. For the three and six months ended June 30, 2013, the Company recognized compensation costs related to restricted common stock of $975,331 and $998,768, respectively.