FelCor Stock Based Compensation Plans

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

FelCor Stock Based Compensation Plans

FelCor Stock Based Compensation Plans

FelCor sponsors one restricted stock and stock option plan, or the Plan. FelCor is authorized to issue up to 6,100,000 shares of common stock under the Plan pursuant to awards granted in the form of incentive stock options, non-qualified stock options, and restricted stock. Stock grants vest either over three to five years in equal annual installments or over a four year schedule, subject to time-based and performance-based vesting. There were 6,003,250 shares available for grant under the Plan at December 31, 2014.

FelCor Restricted Stock and Restricted Stock Units

A summary of the status of FelCor’s restricted stock and restricted stock unit grants as of December 31, 2014, 2013 and 2012, and the changes during these years is presented below:

	2014				2013				2012
	Shares		Weighted Average Fair Market Value at Grant		Shares		Weighted Average Fair Market Value at Grant		Shares		Weighted Average Fair Market Value at Grant
Outstanding at beginning of the year	5,504,825		$	9.00	4,239,825		$	10.45	4,290,318		$	10.58
Granted:
With 5-year pro rata vesting	—		$	—	15,000		$	6.13	10,000		$	4.40
With up to 4-year pro rata vesting	1,036,252		$	6.70	1,250,000		$	4.09	—		$	—
Forfeited	(2,250	)	$	9.62	—		$	—	(60,493	)	$	18.60
Outstanding at end of year	6,538,827		$	8.64	5,504,825		$	9.00	4,239,825		$	10.45
Vested at end of year	(5,029,308	)	$	9.52	(4,234,825	)	$	10.46	(3,936,492	)	$	10.97
Unvested at end of year	1,509,519		$	5.70	1,270,000		$	4.12	303,333		$	3.71

Our executive officers were granted restricted stock units providing them with the potential to earn common shares, collectively, vesting in three increments over four years, based on total stockholder return relative to a group of 10 lodging REIT peers. The fixed cost of these grants is amortized over the vesting period. The unearned compensation cost of FelCor’s granted but unvested restricted stock and units was $5.1 million and $2.6 million, as of December 31, 2014 and 2013, respectively. The weighted average period over which the December 31, 2014 cost is to be amortized is approximately two years. Amortization expense for fixed stock compensation related to our restricted stock and units was $3.7 million, $2.2 million, and $786,000 for the years ended December 31, 2014, 2013 and 2012, respectively.

The restricted stock unit grant also provides that to the extent any of these executive officers earn more than 250,000 shares upon vesting of this grant, the excess is settled in cash. To the extent there is excess likely to settle in cash, these awards are accounted for as liability awards, the fair value of which is remeasured at the end of each reporting period. The liability accrued for these awards expected to be settled in cash was $3.6 million and $1.0 million as of December 31, 2014 and 2013, respectively. Amortization expense for our variable stock compensation was $2.7 million and $963,000 for the years ended December 31, 2014 and 2013, respectively. Fair value estimates are based on a Monte Carlo simulation.