Long-Term Incentive Plan Units

6 Months Ended

Jun. 30, 2011

Long-Term Incentive Plan Units

Long-Term Incentive Plan Units

6. Long-Term Incentive Plan Units

In connection with its initial offering in 2007, the Company established the Manager Long-Term Incentive Plan (the "Manager LTIP") and the Individual Long-Term Incentive Plan (the "Individual LTIP"). Pursuant to the terms of the Manager LTIP, the Company issued 375,000 long-term incentive plan units to its Manager. Pursuant to the terms of the Individual LTIP, each year since inception the Company has issued annual awards to its independent directors and, beginning in 2010, issued awards to certain of its dedicated officers.

As of August 17, 2010, LTIP units awarded to the Manager were fully vested and fully expensed. LTIP units held pursuant to the Manager LTIP are generally exercisable by the holder at any time after vesting. Each LTIP unit is convertible into one common share. During the three month period ended June 30, 2010, expense recognized related to the Manager LTIP was approximately $0.8 million and during the six month period ended June 30, 2010, expense recognized related to the Manager LTIP was approximately $1.5 million. There is no cash flow effect from the issuance of the Manager LTIP units. Since inception, the aggregate expense associated with the Manager LTIP was $8.6 million.

Individual LTIP units in the amount of 3,750 units were granted to the Company's independent directors on each of August 17, 2007, December 31, 2008, October 1, 2009 and October 1, 2010. Excluding the October 1, 2010 award, these grants have fully vested. The vesting period for awards issued to directors under the Individual LTIP has generally been one year from the date of grant. In addition, on December 15, 2010, the Company issued a total of 2,500 LTIP units to certain of its dedicated officers. The vesting period for this grant is also one year from the date of grant. LTIP units held pursuant to the Individual LTIP are generally exercisable by the holder at any time after vesting. Each LTIP unit is convertible into one common share. Costs associated with the Individual LTIP are measured as of the grant date and expensed ratably over the vesting period. The total expenses associated with the Individual LTIP units awarded to the independent directors for the three month periods ended June 30, 2011 and 2010, were $0.02 million and $0.02 million, respectively. The total expenses associated with the Individual LTIP units awarded to the independent directors for the six month periods ended June 30, 2011 and 2010, were $0.05 million and $0.05 million, respectively. The total expense associated with the Individual LTIP units awarded to the Company's dedicated officers for the three month period ended June 30, 2011 was approximately $0.01 million and the total expense associated with the Individual LTIP units awarded to the Company's dedicated officers for the six month period ended June 30, 2011 was approximately $0.02 million. Unrecognized expense related to unvested Individual LTIP units awarded to independent directors was $0.02 million at June 30, 2011 and $0.07 million at December 31, 2010. Unrecognized expense related to unvested Individual LTIP units awarded to certain of the Company's dedicated officers was $0.03 million at June 30, 2011 and $0.05 million at December 31, 2010. Since inception, 7,500 common shares were issued in connection with the conversion of Individual LTIP units awarded to independent directors at the direction of the three award holders and $0.2 million was transferred from the share-based LTIP awards to common shares in shareholders' equity.

If all of the LTIP units that have previously been issued were to be fully vested and exchanged for common shares as of June 30, 2011 and December 31, 2010, the Company's issued and outstanding common shares would increase to 16,892,381 and 16,883,342 shares, respectively, resulting in shareholders' equity per share of $22.78 and $23.91 at June 30, 2011 and December 31, 2010, respectively.

Detailed below is a roll-forward of the Company's LTIP units outstanding for the three month periods ended June 30, 2011 and 2010, respectively.

Three Month Periods Ended June 30, 2011 and June 30, 2010:

	Three Month Period Ended June 30, 2011						Three Month Period Ended June 30, 2010
	Manager		Director/ Employee		Total		Manager		Director/ Employee		Total
LTIP Units Outstanding (3/31/2011, 3/31/2010, respectively)		375,000		10,000		385,000		375,000		5,000		380,000
Granted		—		—		—		—		—		—
Exercised		—		—		—		—		—		—
LTIP Units Outstanding (6/30/2011, 6/30/2010, respectively)		375,000		10,000		385,000		375,000		5,000		380,000
LTIP Units Vested and Outstanding (6/30/2011, 6/30/2010, respectively)		375,000		3,750		378,750		250,000		1,250		251,250

Detailed below is a roll-forward of the Company's LTIP units outstanding for the six month periods ended June 30, 2011 and 2010, respectively.

Six Month Periods Ended June 30, 2011 and June 30, 2010:

	Six Month Period  Ended June 30, 2011						Six Month Period  Ended June 30, 2010
	Manager		Director/ Employee		Total		Manager		Director/ Employee			Total
LTIP Units Outstanding (12/31/2010, 12/31/2009, respectively)		375,000		10,000		385,000		375,000		7,500			382,500
Granted		—		—		—		—		—			—
Exercised		—		—		—		—		(2,500	)		(2,500	)
LTIP Units Outstanding (6/30/2011, 6/30/2010, respectively)		375,000		10,000		385,000		375,000		5,000			380,000
LTIP Units Vested and Outstanding (6/30/2011, 6/30/2010, respectively)		375,000		3,750		378,750		250,000		1,250			251,250