Stock compensation plans

We maintain a stock award plan for both employees and for non-employee directors. The plan provides for the grant of a variety of equity awards, including options (generally non-qualified options), restricted stock, performance shares, and restricted stock units ("RSUs") to key employees (as determined by the Compensation and Management Development Committee of the Board of Directors) for periods not exceeding ten years. Options granted to employees generally vest incrementally over four years. Restricted stock generally cliff vests after three years. Performance shares vest upon attainment of the stated performance targets and minimum service requirements and are converted into shares of common stock upon distribution. RSUs represent the right to receive an equal number of shares of common stock and are converted into shares of common stock upon distribution. As of December 31, 2013, there were 22.0 million shares that remained available for grant under the plan.

Non-employee directors are entitled to an annual distribution of stock options, common stock, or restricted stock units. All options and RSUs granted to non-employee directors vest immediately and are exercisable on the grant date for ten years.

Our stock compensation expense for the three years ended December 31, 2013 is presented below ($000's omitted):



	2013		2012		2011
Stock options	$	1,056	$	2,617	$	5,228
Restricted stock (including RSUs and performance shares)	13,418		10,077		11,231
Long-term incentive plans	16,006		10,203		511
	$	30,480	$	22,897	$	16,970

Stock options

A summary of stock option activity for the three years ended December 31, 2013 is presented below (000’s omitted except per share data):



	2013					2012					2011
	Shares			Weighted- Average Per Share Exercise Price		Shares			Weighted- Average Per Share Exercise Price		Shares			Weighted- Average Per Share Exercise Price
Outstanding, beginning of year	17,148			$	22	21,641			$	21	24,004			$	21
Granted	—			—		—			—		441			8
Exercised	(1,432		)	14		(2,877		)	11		—			—
Forfeited	(2,829		)	25		(1,616		)	27		(2,804		)	15
Outstanding, end of year	12,887			$	23	17,148			$	22	21,641			$	21
Options exercisable at year end	12,402			$	23	15,719			$	23	18,845			$	23
Weighted-average per share fair value of options granted during the year	$	—				$	—				$	4.46

The following table summarizes information about the weighted-average remaining contractual lives of stock options outstanding and exercisable at December 31, 2013:



	Options Outstanding				Options Exercisable
	Number Outstanding (000's omitted)	Weighted- Average Remaining Contract Life (in years)	Weighted- Average Per Share Exercise Price		Number Exercisable (000's omitted)	Weighted- Average Per Share Exercise Price
$0.01 to $11.00	1,665	4.8	$	10	1,444	$	10
$11.01 to $18.00	4,659	5.5	12		4,395	12
$18.01 to $25.00	480	1.2	23		480	23
$25.01 to $35.00	3,894	2.0	31		3,893	31
$35.01 to $60.00	2,189	1.8	41		2,190	41
	12,887	3.6	$	23	12,402	$	23

We did not issue any stock options during 2013 or 2012. The fair value of each option grant issued in 2011 was estimated on the date of grant using primarily the Black-Scholes option pricing model with the following weighted-average assumptions:



	Weighted-Average Assumptions Year Ended December 31,
	2013	2012	2011
Expected life of options in years	N/A	N/A	6.2
Expected stock price volatility	N/A	N/A	58	%
Expected dividend yield	N/A	N/A	0.0	%
Risk-free interest rate	N/A	N/A	2.7	%

We estimate the expected life of stock options using employees’ historical exercise behavior and the contractual terms of the instruments. Volatility is estimated using historical volatility with consideration for implied volatility.

Total compensation cost related to unvested stock option awards not yet recognized was $0.2 million at December 31, 2013. These costs will be expensed over a weighted-average vesting period of approximately one year. The stock option participant agreements provide continued vesting for certain eligible employees who have achieved a predetermined level of service based on their combined age and years of service. We record the related compensation cost for these awards over the period through the date the employee first achieves the minimum level of service that would no longer require them to provide services to earn the award, which is reflected in the weighted-average vesting period.

The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The aggregate intrinsic value of stock options that were exercised during 2013, 2012, and 2011 was $10.8 million, $8.6 million, and $0.0 million, respectively. As of December 31, 2013, options outstanding had an intrinsic value of $56.7 million, of which $51.6 million related to options exercisable.

Restricted stock (including RSUs and performance shares)

A summary of restricted stock activity, including RSUs and performance shares, for the three years ended December 31, 2013 is presented below (000’s omitted, except per share data):



	2013				2012				2011
	Shares		Weighted- Average Per Share Grant Date Fair Value		Shares		Weighted- Average Per Share Grant Date Fair Value		Shares		Weighted- Average Per Share Grant Date Fair Value
Unvested at beginning of year	3,822		$	9	3,042		$	9	2,915		$	12
Granted	806		$	21	1,461		$	10	1,804		$	7
Vested	(1,391	)	$	11	(544	)	$	11	(1,434	)	$	12
Forfeited	(26	)	$	15	(137	)	$	10	(243	)	$	11
Unvested at end of year	3,211		$	11	3,822		$	9	3,042		$	9
Vested, end of year	60		$	12	51		$	10	120		$	11

During 2013, 2012, and 2011, the total fair value of shares vested during the year was $12.7 million, $3.7 million, and $15.9 million, respectively. Unamortized compensation cost related to restricted stock awards was $12.1 million at December 31, 2013. These costs will be expensed over a weighted-average period of approximately 2 years.

During 2013, 2012, and 2011, we granted performance shares to certain individuals. The fair value of each performance share was calculated using the stock price on the grant date. We recognize expense when it becomes probable that the stated performance targets will be achieved. Unamortized compensation cost related to performance shares considered probable was $1.3 million at December 31, 2013 and will be expensed over a weighted-average period of approximately one year. Additionally, there were 59,708 RSUs outstanding that had vested but had not yet been paid out because the payout date had been deferred by the holder.

Long-term incentive plans

We maintain a long-term incentive plan for certain of our field employees that provides awards based on the achievement of stated performance targets over a three-year period. Awards are earned each year in the form of share units that are paid out in cash at the end of the performance period based upon the number of share units earned times the stock price at the end of the performance period. Accordingly, the liability associated with the awards is adjusted each reporting period based on movements in the stock price and totaled $12.6 million and $5.9 million at December 31, 2013 and 2012, respectively.

During 2012, we implemented a long-term performance award plan for senior management that provides awards based on the achievement of stated performance targets over a three-year period. Awards are earned based on our cumulative performance over the performance period and are stated in dollars but settled in common shares based on the stock price at the end of the performance period. If the stock price falls below a floor of $5.00 per share at the end of the performance period or we do not have a sufficient number of shares available under our stock incentive plans at the time of settlement, then a portion of each award will be paid in cash. We recognize expense for these awards based on the probability of achievement of the stated performance targets. The liability for these awards totaled $14.3 million at December 31, 2013.