SHARE BASED COMPENSATION

Stock Options

At March 31, 2014, options exercisable for 2,983,569 common shares were outstanding under the Parent Company's shareholder approved equity incentive plan (referred to as the "Equity Incentive Plan"). The Company recognized a nominal amount of compensation expense related to unvested options during the three-month period ended March 31, 2014. During the three-month period ended March 31, 2013 the Company recognized $0.3 million of compensation expense related to unvested options.

Option activity as of March 31, 2014 and changes during the three months ended March 31, 2014 were as follows:



	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2014	2,983,569	$	15.50	4.92	$	—
Granted	—	$	—	—	—
Exercised	—	$	—	—
Canceled	—	$	—
Outstanding at March 31, 2014	2,983,569	$	15.50	4.92	$	—
Vested/Exercisable at March 31, 2014	2,983,569	$	15.50	4.92	$	—

Restricted Share Awards

As of March 31, 2014, 687,904 restricted shares were outstanding under the Equity Incentive Plan and vest over three years from the initial grant date. The remaining compensation expense to be recognized at March 31, 2014 was approximately $3.3 million, and is expected to be recognized over a weighted average remaining vesting period of 1.7 years. During the three-month periods ended March 31, 2014 and 2013 the Company recognized compensation expense related to outstanding restricted shares of $1.4 million and $0.9 million, of which $0.2 million was capitalized in each of these periods, consistent with the Company’s review of employee salaries eligible for capitalization.

The following table summarizes the Company’s restricted share activity for the three months ended March 31, 2014:



	Shares		Weighted Average Grant Date Fair value
Non-vested at January 1, 2014	563,713		$	12.56
Granted	201,435		14.37
Vested	(70,548	)	16.82
Forfeited	(6,696	)	11.84
Non-vested at March 31, 2014	687,904		$	12.66

On March 11, 2014 and March 12, 2014 the Compensation Committee of the Company’s Board of Trustees awarded restricted shares of which 131,641 cliff vest after three years from the grant date and 69,794 vest ratably over three years. Restricted shares that cliff vest are subject to acceleration upon a change in control or if the recipient of the award were to die, become disabled or, in certain cases, retire in a qualifying retirement. Qualifying retirement means the recipient’s voluntary termination of employment after reaching at least age 57 and accumulating at least 15 years of service with the Company. In accordance with the accounting standard for stock-based compensation, the Company amortizes stock-based compensation costs through the qualifying retirement dates for those executives who meet the conditions for qualifying retirement during the scheduled vesting period.

Restricted Performance Share Units Plan

The Compensation Committee of the Parent Company’s Board of Trustees granted share-based awards to the Parent Company's officers referred to as Restricted Performance Share Units , or RPSU's, in accordance with the following schedule;



Grant Date	Measurement Period Commencement Date	Measurement Period End Date	Fair Value of Units on Grant Date (in thousands)		Units Granted	Units Canceled		Units Vested ^(a)		Unvested Balance
3/1/2012	1/1/2012	12/31/2014	$	4,273	265,222	(38,959	)	(14,742	)	211,521
2/25/2013	1/1/2013	12/31/2015	4,137		231,093	(27,698	)			203,395
3/11/2014	1/1/2014	12/31/2016	2,624		134,284					134,284
3/12/2014	1/1/2014	12/31/2016	1,225		61,720					61,720

(a) Units were issued in accordance with our qualifying retirement provision, meaning the recipient’s voluntary termination of employment after reaching age 57 and accumulating at least 15 years of service with the Company. Of the 14,742 shares originally granted, 563 dividend equivalent rights were accrued at the time of retirement and 30,610 shares were issued based on our TSR (Total Shareholder Return) Percentile at October 31, 2012 of 200%.

The RPSUs represent the right to earn common shares. The number of common shares, if any, deliverable to award recipients depends on the Company’s performance based on its total return to shareholders during the three years measurement period, or, if earlier, the date of a change in control. The Company's performance is compared to the shareholder return of REITs within an index ("Index Companies") over the measurement period for 50% of the RPSUs awarded on that date, with the remaining 50% being compared to the total shareholder return of REITs within the Company's proxy peer group ("Peer Group") over such period. The vesting of RPSUs is contingent upon the continued employment of the participants through the performance periods (with exceptions for death, disability and qualifying retirement). If the Company's total return to shareholders over the measurement period places it below the 25th percentile of the Index Companies or the components in the Peer Group, as applicable, then no shares will be earned under the related RSPUs. If the Company's total return to shareholders over the measurement period places the Company at or above the 25th percentile of the Index Companies or the components of in the Peer Group, as applicable, then a percentage of the awards ranging from 50% to 200% will be earned. Dividends are deemed credited to the performance units accounts and are applied to “acquire” additional RPSUs for the account of the unit holder at the price per common share on the dividend payment date. If earned, RPSUs will be settled in common shares in an amount that reflects the number of RPSUs in the holder’s account at the end of the applicable measurement period.

On the date of each grant, the RPSUs were valued using a Monte Carlo simulation. The fair values of each award are being amortized over the three year cliff vesting period. The vesting of RPSUs is subject to acceleration upon a change in control or if the recipient of the award were to die, become disabled or retire in a qualifying retirement prior to the vesting date. In accordance with the accounting standard for stock-based compensation, the Company amortizes stock-based compensation costs through the qualifying retirement date for those executives who meet the conditions for qualifying retirement during the schedule vesting period.

For the three-month period ended March 31, 2014, the Company recognized total compensation expense for the 2014, 2013 and 2012 RPSU awards of $1.7 million, of which $0.4 million was capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation. For the three-month period ended March 31, 2013, the Company recognized total compensation expense for the 2013, 2012 and 2011 RPSU awards of $1.2 million, of which $0.3 million was capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation.

A total of 150,829 common shares vested on March 1, 2014 and were delivered to holders in settlement of the RPSUs awarded on March 2, 2011 (with a three-year measurement period ended December 31, 2013). Holders of these RPSUs also received a cash dividend for these common shares on February 7, 2014.