Stock-based Compensation

3 Months Ended

Mar. 31, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-based Compensation

7. Stock-based Compensation

The Company has an Omnibus Incentive and Equity Plan (the “Plan”) under which officers, employees and directors may be granted equity-based awards, including restricted stock units (“RSUs”), stock options and unrestricted shares of common stock. At March 31, 2014, 451,855 shares of common stock remain available for issuance of the 1,800,000 shares that were reserved for issuance under the Plan. Each RSU entitles the holder to one share of Virtus common stock when the restriction expires. RSUs generally have a term of one to three years and may be time-vested or performance-contingent. Stock options generally cliff vest after three years and have a contractual life of ten years. Stock options are granted with an exercise price equal to the fair market value of the shares at the date of grant. The fair value of each RSU is estimated using the intrinsic value method, which is based on the fair market value price on the date of grant unless it contains a performance metric that is considered a market condition. RSUs that contain a market condition are valued using a simulation valuation model. Shares that are issued upon exercise of stock options and vesting of RSUs are newly issued shares from the Plan and are not issued from treasury stock.

Restricted Stock Units

RSU activity for the three months ended March 31, 2014 is summarized as follows:

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2013		233,763		$	87.97
Granted		43,803		$	183.95
Forfeited		—		$	—
Settled		(95,997	)	$	61.99
Outstanding at March 31, 2014		181,569		$	124.86

For the three months ended March 31, 2014 and 2013, a total of 42,021 and 27,747 RSUs, respectively, were withheld by the Company as a result of net share settlements to satisfy employee tax withholding obligations. During the three months ended March 31, 2014 and 2013, the Company paid $7.4 million and $5.2 million, respectively, in employee tax withholding obligations related to RSUs that vested during each period. These net share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have been otherwise issued as a result of the vesting.

Stock Options

Stock option activity for the three months ended March 31, 2014 is summarized as follows:

	Number of Shares			Weighted Average Exercise Price
Outstanding at December 31, 2013		190,160		$	20.11
Granted		—		$	—
Exercised		(3,643	)	$	32.50
Forfeited		—		$	—
Outstanding at March 31, 2014		186,517		$	19.87

During the three months ended March 31, 2014 and 2013, the Company recognized $1.6 million and $1.4 million, respectively, in total stock-based compensation expense. As of March 31, 2014, unamortized stock-based compensation expense for unvested RSUs was $13.4 million, with a weighted-average remaining amortization period of 1.4 years. As of March 31, 2013, unamortized stock-based compensation expense for unvested RSUs was $12.1 million, with a weighted-average remaining amortization period of 1.6 years. Unamortized stock-based compensation expense related to stock options for both periods was immaterial.