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Stockholders' Equity
3 Months Ended
Mar. 31, 2016
Equity [Abstract]  
Stockholders' Equity
Stockholders’ Equity
Securities Convertible into Shares of Common Stock
The non-controlling interest holder of the Operating Partnership units, a wholly-owned Invesco subsidiary, has the right to cause the Operating Partnership to redeem their operating partnership ("OP Units") for cash equal to the market value of an equivalent number of shares of common stock, or at the Company’s option, the Company may purchase their OP Units by issuing one share of common stock for each OP Unit redeemed. The Company has also adopted an equity incentive plan which allows the Company to grant securities convertible into the Company’s common stock to its non-executive directors and employees of the Company's Manager and its affiliates.
Common Stock
During the three months ended March 31, 2016, the Company issued 3,201 shares of common stock at an average price of $11.08 under its dividend reinvestment and stock purchase plan (the "DRSPP"). The Company received total proceeds of approximately $35,000.
Preferred Stock
Holders of the Company’s Series A Preferred Stock are entitled to receive dividends at an annual rate of 7.75% of the liquidation preference of $25.00 per share or $1.9375 per share per annum. The dividends are cumulative and payable quarterly in arrears.
Holders of the Company’s Series B Preferred Stock are entitled to receive dividends at an annual rate of 7.75% of the liquidation preference of $25.00 per share or $1.9375 per share per annum until December 27, 2024. After December 27, 2024, holders are entitled to receive dividends at a floating rate equal to three-month LIBOR plus a spread of 5.18% of the $25.00 liquidation preference per annum. Dividends are cumulative and payable quarterly in arrears.
The Company may elect to redeem shares of preferred stock at its option after July 26, 2017 (with respect to the Series A Preferred Stock) and after December 27, 2024 (with respect to the Series B Preferred Stock) for $25.00 per share, plus any accumulated and unpaid dividends through the date of the redemption. These shares are not redeemable, convertible into or exchangeable for any other property or any other securities of the Company prior to those times, except under circumstances intended to preserve the Company's qualification as a REIT or upon the occurrence of a change in control.
Share Repurchase Program
In February 2016, the Company's board of directors authorized an additional share repurchase of up to 15,000,000 of its common shares with no expiration date. During the three months ended March 31, 2016, the Company repurchased and concurrently retired 2,063,451 shares of its common stock at an average repurchase price of $12.12 per share for a net cost of $25.0 million, including acquisition expenses. As of March 31, 2016, the Company had authority to purchase 18,239,082 additional shares of its common stock under its share repurchase program. The share repurchase program has no stated expiration date.
Share-Based Compensation
The Company has currently reserved 1,000,000 shares of common stock for issuance to its non-executive directors and officers and employees of the Manger and its affiliates under the terms of its 2009 Equity Incentive Plan (the "Incentive Plan"). Unless terminated earlier, the Incentive Plan will terminate in 2019, but will continue to govern the unexpired awards.
The Company recognized compensation expense of approximately $85,000 and $85,000 related to the Company's non-executive directors for the three months ended March 31, 2016 and 2015, respectively. During the three months ended March 31, 2016 and 2015, the Company issued 7,748 shares and 5,332 shares of stock, respectively, pursuant to the Incentive Plan to the Company’s non-executive directors. The fair market value of the shares granted was determined by the closing stock market price on the date of the grant. The grants vested immediately.
The Company recognized compensation expense of approximately $32,000 and $70,000 for the three months ended March 31, 2016 and 2015, respectively, related to awards to employees of the Manager and its affiliates which is reimbursed by the Manager under the management agreement. At March 31, 2016 there was approximately $541,000 of total unrecognized compensation cost related to certain share-based compensation awards that is expected to be recognized over a period of up to 47 months, with a weighted-average remaining vesting period of 23.5 months.
The following table summarizes the activity related to restricted stock units to employees of the Manager and its affiliates for the three months ended March 31, 2016.
 
Three Months Ended March 31,
 
2016
 
Restricted Stock Units
 
Weighted Average Grant Date Fair Value (1)
Unvested at the beginning of the period
40,814

 
$
17.29

Shares granted during the period
21,099

 
11.28

Shares forfeited during the period

 

Shares vested during the period
(15,913
)
 
(17.66
)
Unvested at the end of the period
46,000

 
$
14.40

(1)
The grant date fair value of restricted stock awards is based on the closing market price of the Company’s common stock at the grant date.
Dividends
On March 15, 2016, the Company declared the following dividends:
a dividend of $0.40 per share of common stock to be paid on April 26, 2016 to stockholders of record as of the close of business on March 28, 2016;
a dividend of $0.4844 per share of Series A Preferred Stock to be paid on April 25, 2016 to stockholders of record as of the close of business on April 1, 2016; and
a dividend of $0.4844 per share of Series B Preferred Stock to be paid on June 27, 2016 to stockholders of record as of the close of business on June 5, 2016.