Employee Benefit and Equity Plans

9 Months Ended

Sep. 30, 2011

Employee Benefit and Equity Plans [Abstract]

EMPLOYEE BENEFIT AND EQUITY PLANS

(14) EMPLOYEE BENEFIT AND EQUITY PLANS

     We have two active equity-based stock compensation plans. Under these plans, incentive and non-qualified stock options, SARs, restricted stock, restricted stock units, phantom stock and various other awards may be issued to employees and directors pursuant to decisions of the Compensation Committee, which is made up of non-employee, independent directors from the Board of Directors.

SARs/Stock Option Awards

     All awards granted have been issued at prevailing market prices at the time of the grant. Information with respect to stock option/SARs activity is summarized below:

				Weighted
				Average
	Shares			Exercise Price
Outstanding at December 31, 2010		6,461,839		$	37.20
Granted		842,620			51.16
Exercised		(2,058,626	)		31.00
Expired/forfeited		(209,051	)		53.58
Outstanding at September 30, 2011		5,036,782		$	41.39

     The weighted average fair value of a SAR to purchase one share of common stock granted during 2011 was $18.21. The fair value of each SAR granted during 2011 was estimated as of the date of grant using the Black-Scholes-Merton option-pricing model based on the following average assumptions: risk-free interest rate of 1.4%; dividend yield of 0.3%; expected volatility of 47% and an expected life of 3.6 years. Of the 5.0 million stock option/SARs outstanding at September 30, 2011, 647,000 are stock options and 4.4 million are SARs.

Restricted Stock Awards

Equity Awards

     Beginning in first quarter 2011, the compensation committee began granting restricted stock units under our equity-based stock compensation plans. These restricted stock units vest over a three-year period. All awards granted have been issued at prevailing market prices at the time of grant and the vesting of these shares is based upon an employee’s continued employment with us.

Liability Awards

     These restricted stock shares are placed into our deferred compensation plan when granted. In the first nine months of 2011, 334,200 shares of restricted stock (or non-vested shares) were issued to certain employees at an average price of $51.11 with a three-year vesting period and 15,500 shares were granted to directors at an average price of $52.35 with immediate vesting. In the first nine months of 2010, we issued 392,000 shares of restricted stock as compensation to employees at an average price of $45.85 with a three-year vesting period and 21,000 shares were granted to our directors at an average price of $45.51 with immediate vesting. All restricted stock awards held in our deferred compensation plans are classified as a liability award and the vested shares are remeasured at fair value each reporting period. This mark-to-market is included in deferred compensation plan expense in our accompanying consolidated statements of operations (see deferred compensation plan discussion below). All awards granted have been issued at prevailing market prices at the time of the grant and the vesting of these shares is based upon an employee’s continued employment with us.

     A summary of the status of our non-vested restricted stock outstanding at September 30, 2011 is presented below:

	Equity Awards					Liability Awards
				Weighted					Weighted
				Average Grant					Average Grant
	Shares			Date Fair Value		Shares			Date Fair Value
Outstanding at December 31, 2010		—		$	—		582,751		$	44.81
Granted		329,599			49.47		349,674			51.16
Vested		(63,199	)		49.32		(313,388	)		45.94
Forfeited		(14,612	)		49.57		(26,874	)		45.08
Outstanding at September 30, 2011		251,788		$	49.50		592,163		$	47.95

Deferred Compensation Plan

     Our deferred compensation plan gives directors, officers and key employees the ability to defer all or a portion of their salaries and bonuses and invest such amounts in our common stock or make other investments at the individual’s discretion. The assets of the plan are held in a grantor trust, which we refer to as the Rabbi Trust, and are therefore available to satisfy the claims of our creditors in the event of bankruptcy. Our stock granted and held in the Rabbi Trust is treated as a liability award as employees are allowed to take withdrawals either in cash or in our stock. The liability associated with the vested portion of our stock is adjusted to fair value each reporting period by a charge or credit to deferred compensation plan expense on our consolidated statements of operations. The assets of the Rabbi Trust, other than our common stock, are invested in marketable securities and reported at market value in other assets in the accompanying consolidated balance sheets. Changes in the market value of the marketable securities are charged or credited to deferred compensation plan expense each quarter. The deferred compensation liability included in our consolidated balance sheets reflects the vested market value of the marketable securities and Range common stock held in the Rabbi Trust. We recorded non-cash, mark-to-market expense related to our deferred compensation plan of $8.7 million in the three months ended September 30, 2011, compared to income of $5.3 million in the same period of 2010. We recorded non-cash mark-to-market expense related to our deferred compensation plan of $33.6 million in the nine months ended September 30, 2011 compared to income of $25.2 million in the same period of 2010.