Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v2.4.0.6
Stock-Based Compensation
 3 Months Ended
Mar. 31, 2012
Stock-Based Compensation [Abstract]  
STOCK-BASED COMPENSATION

NOTE 7 — STOCK-BASED COMPENSATION

We have a stock compensation plan, the Meritage Stock Option Plan (the “Plan”), that was adopted in 2006, and superceded a prior stock compensation plan that has been amended from time to time. The Plan was approved by our stockholders and is administered by our Board of Directors. The provisions of the Plan allow for the grant of stock appreciation rights, restricted stock awards, performance share awards and performance-based awards in addition to non-qualified and incentive stock options. The Plan authorizes awards to officers, key employees, non-employee directors and consultants for up to 7,750,000 shares of common stock, of which 240,572 shares remain available for grant at March 31, 2012. In addition, our Board of Directors approved an amendment to the Plan to increase the number of available shares by 1,200,000. This amendment is subject to stockholder approval at our 2012 annual meeting of stockholders on May 25, 2012. 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 or with a three-year cliff vesting for performance-based awards.

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 March 31,  
    2012     2011  

Stock-based compensation expense

   $ 1,653     $ 1,713  

Non-vested shares granted

     349,250       343,750  

Performance-based non-vested shares granted

     56,250       56,250  

Stock options exercised

     68,700       97,050  

Restricted stock awards vested (includes performance-based awards)

     193,616       152,067  

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 months ended March 31, 2012 or March 31, 2011. The following table includes additional information regarding our Plans (dollars in thousands):

 

                 
    As of  
    March 31, 2012     December 31, 2011  

Unrecognized stock-based compensation cost

   $ 15,203     $ 9,058  

Weighted average years remaining vesting period

     2.73       2.05  

Total equity awards outstanding

     1,825,867 (1)      1,738,533  

 

(1) Includes vested and unvested options outstanding and unvested restricted stock awards