11. Equity

Dividends and Distributions

Our board of directors declared the following dividends in 2013 and 2014:

Equity Incentive Plan

We recorded compensation expense for stock awards in accordance with ASC 718, Compensation—Stock Compensation, which requires that all equity-based payments to employees be recognized in the condensed consolidated statements of operations, based on their grant date fair values with the expense being recognized over the requisite service period.

At the time of completion of our IPO, we adopted our 2013 Plan, which provides for grants of stock options, stock appreciation rights, restricted stock units, shares of restricted common stock, phantom shares, dividend equivalent rights, LTIP units and other restricted limited partnership units issued by our Operating Partnership and other equity-based awards. From time to time, we may award non-vested restricted shares as compensation to members of our senior management team, our independent directors, advisors, consultants and other personnel under our 2013 Plan. The shares issued under this plan vest over a period of time as determined by the board of directors at the date of grant. We recognize compensation expense for non-vested shares that vest solely based on service conditions on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of grant, adjusted for forfeitures.

Reallocation of the Predecessor’s Membership Units

Concurrently with the IPO, the existing owners of the Predecessor reallocated and distributed a portion of their equity ownership to the employees of the Predecessor and the employees received 202,826 shares of common stock, 128,348 restricted stock units and 135,938 OP units. This reallocation is accounted for as equity-based compensation in accordance with ASC 718, Compensation — Stock Compensation, with equity award valuations based on the IPO price of $12.50 per share. As the shares of common stock, restricted stock units and OP units were immediately vested, we recorded compensation expense related to these awards of $5.8 million on April 23, 2013. No tax benefits have been recorded related to this reallocation. The restricted stock units, net of applicable federal and state taxes withheld, were converted to common shares in November 2013.

Awards of Shares of Restricted Common Stock

On April 23, 2013, we granted, under the 2013 Plan, 606,415 shares of restricted common stock at a grant-date fair value of $12.50 per share, which vest each anniversary in equal annual installments over a four-year period. The board of directors determines the vesting period for such shares at the date of grant. For shares issued, we recognize compensation expense for non-vested shares of restricted common stock on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of issuance, adjusted for forfeitures. The calculation of the compensation expense assumes a forfeiture rate up to 5%.

For the three months ended March 31, 2014, we recorded $0.5 million of equity-based compensation expense. The total unrecognized compensation expense related to awards of shares of restricted common stock subject to a vesting schedule, considering estimated forfeitures, is $5.9 million as of March 31, 2014, which is expected to be recognized over a weighted-average term of approximately two years. No equity-based compensation awards vested as of March 31, 2014.

A summary of the non-vested shares of restricted common stock as of March 31, 2014, is as follows:

In April 2014, in accordance with our 2013 Plan, our board of directors awarded Long-term Incentive Plan awards (“LTIP” awards) of 336,272 restricted common shares to certain members of management. Vesting of the LTIP awards is contingent upon the later of the achievement of certain dividend growth targets and December 31, 2015. Our board of directors also awarded employees and directors 142,359 restricted common shares in accordance with our 2013 Plan, which vest in 2015 and 2016.