Stock-Based Compensation

9 Months Ended

Sep. 30, 2013

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

STOCK-BASED COMPENSATION

For the three and nine months ended September 30, 2013, we recognized stock compensation expense for restricted stock awards of $4.4 million and $12.0 million, respectively. For the same period we also capitalized stock compensation cost for oil and natural gas properties of $1.0 million and $2.6 million, respectively. For these same periods, the tax benefit related to this stock based compensation was $1.8 million and $4.7 million, respectively. The remaining unrecognized compensation cost related to unvested awards at September 30, 2013 is approximately $20.7 million of which $3.3 million is anticipated to be capitalized. The weighted average period of time over which this cost will be recognized is 0.8 of a year.

For the three and nine months ended September 30, 2012, we recognized stock compensation expense for restricted stock awards of $2.9 million and $8.2 million, respectively. For the same period we also capitalized stock compensation cost for oil and natural gas properties of $0.7 million and $2.0 million, respectively. For these same periods, the tax benefit related to this stock based compensation was $1.2 million and $3.2 million, respectively.

We grant stock-based and cash-based compensation to our employees (including employees of subsidiaries) as well as to non-employee directors under our Unit Corporation Stock and Incentive Compensation Plan Amended and Restated May 2, 2012 (the amended plan). A total of 3,300,000 shares of the company's common stock is authorized for issuance to eligible participants under the amended plan. The amended plan succeeds our previous Non-employee Directors' 2000 Stock Option Plan (the option plan).

We did not grant any SARs or stock options during either of the three or nine month periods ending September 30, 2013 and 2012. The following table shows the fair value of the restricted stock awards granted to employees and non-employee directors:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2013		2012			2013			2012
Shares granted:
Employees	—		2,509			448,549			370,445
Non employee directors	—		—			21,128			24,606
	—		2,509			469,677			395,051
Estimated fair value (in millions):
Employees	$	—	$	0.1		$	21.0		$	15.7
Non employee directors	—		—			0.9			1.0
	$	—	$	0.1		$	21.9		$	16.7
Percentage of shares granted expected to be distributed:
Employees	N/A		95		%	94		%	94		%
Non employee directors	N/A		—		%	100		%	100		%

The restricted stock awards granted during the three and nine months ended September 30, 2013 and 2012 are being recognized over a three year vesting period, except for a portion of those awards made to certain executive officers. As to those executive officers, 30% of the shares granted, or 57,405 shares in 2013 and 46,441 shares in 2012 (the performance shares), will cliff vest in the first half of 2016 and 2015, respectively. The actual number of performance shares that vest in 2015 and 2016 will be based on the company’s achievement of certain performance criteria over a three-year period, and will range from 50% to 150% of the restricted shares granted as performance shares. Based on the performance criteria, the participants could receive more than 100% of the performance based shares. The total aggregate stock compensation expense and capitalized cost related to oil and natural gas properties for 2013 awards for the first nine months of 2013 was $7.1 million.

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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