SHARE BASED COMPENSATION

Stock Options

At June 30, 2014, options exercisable for 2,808,784 common shares were outstanding under the Parent Company's shareholder approved equity incentive plan (referred to as the "Equity Incentive Plan"). During the six-month period ended June 30, 2014 the Company recognized a nominal amount of compensation expense related to unvested options. During the three and six-month periods ended June 30, 2013 the Company recognized compensation expense related to unvested options of $0.2 million and $0.4 million, of which a nominal amount and $0.1 million, respectively, were capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation.

Option activity as of June 30, 2014 and changes during the six months ended June 30, 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	5.15	$	—
Granted	—		$	—	—	—
Exercised	(60,127	)	$	11.80	—	$	182,101
Canceled	(114,658	)	$	20.61
Outstanding at June 30, 2014	2,808,784		$	15.37	4.67	$	632,239
Vested/Exercisable at June 30, 2014	2,808,784		$	15.37	4.67	$	632,239

Restricted Share Awards

As of June 30, 2014, 550,222 restricted shares were outstanding under the Equity Incentive Plan and vest over three years from the initial grant dates. The remaining compensation expense to be recognized at June 30, 2014 was approximately $2.9 million, and is expected to be recognized over a weighted average remaining vesting period of 1.9 years. During the three and six-month periods ended June 30, 2014, the Company recognized compensation expense related to outstanding restricted shares of $0.5 million and $1.9 million, of which $0.1 million and $0.4 million, respectively, were capitalized as part of the Company’s review of employee salaries eligible for capitalization. During the three and six-month periods ended June 30, 2013, the Company recognized compensation expense related to outstanding restricted shares of $0.9 million and $1.8 million, of which $0.1 million and $0.3 million, respectively, were capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation.

The following table summarizes the Company’s restricted share activity for the six months ended June 30, 2014:



	Shares		Weighted Average Grant Date Fair value
Non-vested at January 1, 2014	563,713		$	12.56
Granted	229,119		14.47
Vested	(234,169	)	13.44
Forfeited	(8,441	)	12.36
Non-vested at June 30, 2014	550,222		$	12.22

On March 11, 2014 and March 12, 2014 the Compensation Committee of the Parent 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, of which 1,745 were canceled, leaving 68,049 unvested. In addition, on May 29, 2014, 27,684 restricted shares were granted and will 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 generally 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 has granted performance share-based awards (referred to as Restricted Performance Share Units, or RPSUs) to officers of the Parent Company. The RPSUs are settled in common shares, with the number of common shares issuable in settlement determined based on the Company’s total shareholder return over specified measurement periods compared to total shareholder returns of comparative groups over the measurement periods. The table below presents certain information as to RPSU awards.



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) These RPSUs were settled upon the holder’s qualifying retirement in October 2012 after reaching age 57 and accumulating at least 15 years of service with the Company. Of the 14,742 RPSU's originally granted, 563 dividend equivalent rights were accrued at the time of qualifying retirement and the Company issued 30,610 shares in settlement of the RPSU's based on the Company’s total shareholder return-based performance achievement, as computed under the award agreement, on October 31, 2012 of 200%.

The Company values each RPSU on its grant date 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 and six-month periods ended June 30, 2014, the Company recognized total compensation expense for the 2014, 2013 and 2012 RPSU awards of $0.5 million and $2.3 million, of which $0.2 million and 0.7 million, respectively, were capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation. For the three and six-month periods ended June 30, 2013, the Company recognized total compensation expense for the 2013, 2012 and 2011 RPSU awards of $1.3 million and $2.5 million, of which $0.2 million and $0.4 million, respectively, were capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation.

A total of 150,829 common shares were issued on March 1, 2014 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 of $0.15 per share for these common shares on February 7, 2014.