Stock-Based Compensation

3 Months Ended

Mar. 31, 2014

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

STOCK-BASED COMPENSATION

For the three months ended March 31, 2014 and 2013, we recognized stock compensation expense for restricted stock awards of $3.8 million and $3.3 million, respectively. For the same period we also capitalized stock compensation cost for oil and natural gas properties of $0.8 million and $0.7 million, respectively. For these same periods, the tax benefit related to this stock based compensation was $1.5 million and $1.3 million, respectively. The remaining unrecognized compensation cost related to unvested awards at March 31, 2014 is approximately $31.8 million of which $5.4 million is anticipated to be capitalized. The weighted average period of time over which this cost will be recognized is one year.

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

We did not grant any SARs or stock options during either of the three month periods ending March 31, 2014 and 2013. The following table shows the fair value of any restricted stock awards granted to employees and non-employee directors during the periods indicated:



	Three Months Ended March 31,
	2014			2013
Shares granted:
Employees	438,342			448,549
Non employee directors	—			—
	438,342			448,549
Estimated fair value (in millions):
Employees	$	22.3		$	21.0
Non employee directors	—			—
	$	22.3		$	21.0
Percentage of shares granted expected to be distributed:
Employees	95		%	94		%
Non employee directors	N/A			N/A

The restricted stock awards granted during the first three months of 2014 and 2013 are being recognized over a three year vesting period, except for a portion of those granted to certain executive officers. As to those executive officers, 40% of the shares granted, or 71,674 shares in 2014 and 30% of the shares granted or 57,405 shares in 2013 (the performance shares), will cliff vest in the first half of 2017 and 2016, respectively. The actual number of performance shares that vest in 2016 and 2017 will be based on the company’s achievement of stock performance measures at the end of the term, and will range from 0% to 150% of the restricted shares granted as performance shares. Based on the performance criteria, the participants are estimated to receive the targeted amount (or approximately 100%) of the 2014 and 2013 performance based shares. The total aggregate stock compensation expense and capitalized cost related to oil and natural gas properties for 2014 awards for the first three months of 2014 was $1.0 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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