Stock-Based Compensation

6 Months Ended

Jun. 30, 2014

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

STOCK-BASED COMPENSATION

For restricted stock awards and stock options, we had:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(In millions)
Recognized stock compensation expense	$	4.5	$	4.3	$	8.3	$	7.6
Capitalized stock compensation cost for our oil and natural gas properties	1.0		0.9		1.8		1.6
Tax benefit on stock based compensation	1.7		1.6		3.2		2.9

The remaining unrecognized compensation cost related to unvested awards at June 30, 2014 is approximately $27.4 million of which $4.5 million is anticipated to be capitalized. The weighted average period of time over which this cost will be recognized is 0.9 of a 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 or six month periods ending June 30, 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						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
Shares granted:
Employees	—			—			438,342			448,549
Non employee directors	13,768			21,128			13,768			21,128
	13,768			21,128			452,110			469,677
Estimated fair value (in millions):
Employees	$	—		$	—		$	22.4		$	21.0
Non employee directors	0.9			0.9			0.9			0.9
	$	0.9		$	0.9		$	23.3		$	21.9
Percentage of shares granted expected to be distributed:
Employees	N/A			N/A			95		%	94		%
Non employee directors	100		%	100		%	100		%	100		%

The restricted stock awards granted during the first three and six months of 2014 and 2013 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, 40% of the shares granted in 2014, or 71,674 shares, and 30% of the shares granted in 2013, or 57,405 shares, (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 certain 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 selected 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 six months of 2014 was $4.3 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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