Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2011
Stock-Based Compensation [Abstract]  
STOCK-BASED COMPENSATION
NOTE 7 — STOCK-BASED COMPENSATION
We have two stock compensation plans, the Meritage Stock Option Plan, which was adopted in 1997 and amended from time to time (the “1997 Plan”), and the 2006 Stock Incentive Plan that was adopted in 2006 and amended from time to time (the “2006 Plan” and together with the 1997 Plan, the “Plans”). The Plans were approved by our stockholders and are administered by our Board of Directors. The provisions of the Plans are generally consistent with the exception that the 2006 Plan allows for the grant of stock appreciation rights, restricted stock awards, performance share awards and performance-based awards in addition to the non-qualified and incentive stock options allowed under the 1997 Plan.
Compensation cost related to stock-based compensation arrangements granted under the Plans are recognized on a straight-line basis over the remaining respective vesting periods. Below is a summary of compensation expense and stock award activity (dollars in thousands):
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2011     2010     2011     2010  
 
Stock-based compensation expense
  $ 2,114     $ 1,566     $ 5,215     $ 4,062  
Non-vested shares granted
    0       1,500       357,000       315,000  
Performance-based non-vested shares granted
    0       0       56,250       67,500  
The expense associated with the performance-based non-vested shares will only be recognized when it is determined to be probable that the target performance thresholds will be met and the shares will vest. We did not grant any stock option awards during the three and nine months ended September 30, 2011 or September 30, 2010. The following table includes additional information regarding our Plans (dollars in thousands):
                 
    As of  
    September 30, 2011     December 31, 2010  
Unrecognized stock-based compensation cost
  $ 10,418     $ 7,816  
Weighted average years remaining vesting period
    2.21       2.16  
Total equity awards outstanding (vested and unvested shares)
    1,803,167       2,000,518  
The Plans authorize awards to officers, key employees, non-employee directors and consultants for up to 7,750,000 shares of common stock, of which 719,673 shares remain available for grant at September 30, 2011. We believe that such awards provide a means of performance-based compensation to attract and retain qualified employees and better align the interests of our employees with those of our stockholders. Non-vested stock awards and stock options granted in previous years are usually granted with either a three-year or five-year ratable vesting period.