XML 78 R22.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Stock-Based Compensation Plans | 12 Months Ended
--- | ---
Dec. 31, 2013
Stock-Based Compensation Plans |
(13) | STOCK-BASED COMPENSATION PLANS
Description of the Plans The 2005 Equity Based Compensation Plan (the “2005 Plan”) authorizes the compensation committee of the board of directors to grant, among other things, stock options, stock appreciation rights (“SARs”) and restricted stock awards to employees and directors. The 2004 Non-Employee Director Stock Option Plan (the “Director Plan”) allows such grants to our non-employee directors of our board of directors. The 2005 Plan was approved by stockholders in May 2005 and replaced our 1999 Stock Option Plan. No new grants have been made from the 1999 Stock Option Plan. The number of shares that may be issued under the 2005 Plan is equal to (i) 5.6 million shares (15.0 million less the 2.2 million shares issued under the 1999 Stock Option Plan before May 18, 2005, the effective date of the 2005 Plan and less the 7.2 million shares issuable pursuant to awards under the 1999 Stock Option Plan outstanding as of the effective date of the 2005 Plan) plus (ii) the number of shares subject to 1999 Stock Option Plan awards outstanding at May 18, 2005 that subsequently lapse or terminate without the underlying shares being issued plus (iii) subsequent shares approved by the shareholders. The Director Plan was approved by stockholders in May 2004 and no more than 450,000 shares of common stock may be issued under the Director Plan. Stock-Based Awards Stock options represent the right to purchase shares of stock in the future at the fair value of the stock on the date of grant. Most stock options granted under our stock option plans vest over a three-year period and expire five years from the date they were granted. Beginning in 2005, we began granting SARs to reduce the dilutive impact of our equity plans. Similar to stock options, SARs represent the right to receive a payment equal to the excess of the fair market value of shares of common stock on the date the right is exercised over the value of the stock on the date of grant. All SARs granted under the 2005 Plan will be settled in shares of stock, vest over a three-year period and have a maximum term of five years from the date they are granted. Beginning in first quarter 2011, the Compensation Committee also began granting restricted stock units under our equity-based stock compensation plans. These restricted stock units, which we refer to as restricted stock Equity Awards, vest over a three-year period. All awards granted have been issued at prevailing market prices at the time of grant and the vesting of these shares is based upon an employee’s continued employment with us. The compensation committee also grants restricted stock to certain employees and non-employee directors of the board of directors as part of their compensation. Compensation expense is recognized over the balance of the vesting period, which is typically three years for employee grants and immediate vesting for non-employee directors. All restricted stock awards are issued at prevailing market prices at the time of the grant and the vesting is based upon an employee’s continued employment with us. Prior to vesting, all restricted stock awards have the right to vote such stock (by the trustee) and receive dividends thereon. Upon grant of these restricted shares, which we refer to as restricted stock Liability Awards, the shares are placed in our deferred compensation plan and, upon vesting, employees are allowed to take withdrawals either in cash or in stock. These Liability Awards are classified as a liability and are remeasured at fair value each reporting period. This mark-to-market amount is reported in deferred compensation plan expense in the accompanying consolidated statements of operations. Historically, we have used authorized but unissued shares of stock when restricted stock is granted. However, we also utilize treasury shares when available. Total Stock-Based Compensation Expense Stock-based compensation represents amortization of restricted stock, restricted stock units and SARs expense. The following table details the amount of stock-based compensation that is allocated to functional expense categories (in thousands):
| 2013 |  |  | 2012 |  |  | 2011 |
Operating expense | $ | 2,755 |  |  | $ | 2,415 |  |  | $ | 1,987 |
Brokered natural gas and marketing expense |  | 1,852 |  |  |  | 1,765 |  |  |  | 1,455 |
Exploration expense |  | 4,025 |  |  |  | 4,049 |  |  |  | 4,108 |
General and administrative expense |  | 55,737 |  |  |  | 44,541 |  |  |  | 36,244 |
Total | $ | 64,369 |  |  | $ | 52,770 |  |  | $ | 43,794 |
Unlike the other forms of stock-based compensation mentioned above, the mark-to-market of the liability related to the vested restricted stock held in our deferred compensation plans is directly tied to the change in our stock price and not directly related to the functional expenses and therefore, is not allocated to the functional categories. The increase in 2013 stock-based compensation is primarily due to additional expense of $10.0 million related to the acceleration of stock-based compensation for our executive chairman who became a non-employee director on January 1, 2014. For the year ended December 31, 2013, cash received upon exercise of stock options/SARs awards was $343,000. For the year ended December 31, 2013 and 2012, tax benefits realized for deductions that were in excess of the stock-based compensation expense were not recognized due to our net operating loss position. In 2011, as a result of realizing federal taxable income, a tax benefit of $11.7 million has been recognized in our net operating loss carryforward for the excess tax deduction over our stock-based compensation expense. Stock Options and Stock Appreciation Right Awards We have two active equity-based stock plans, the 2005 Plan and the Director Plan. Under these plans, incentive and non-qualified stock options, stock appreciation rights, restricted stock units and various other awards may be issued to directors and employees pursuant to decisions of the compensation committee, which is made up of non-employee, independent directors from the board of directors. All awards granted under these plans have been issued at prevailing market prices at the time of the grant. Of the 2.6 million grants outstanding at December 31, 2013, all grants relate to SARs. Information with respect to stock option and SARs activities is summarized below.
| Shares |  |  | Weighted Average Exercise Price |
Outstanding at December 31, 2010 |  | 6,461,839 |  |  | $ | 37.20 |
Granted |  | 843,485 |  |  |  | 51.17 |
Exercised |  | (2,511,989 | ) |  |  | 32.69 |
Expired/forfeited |  | (234,726 | ) |  |  | 52.65 |
Outstanding at December 31, 2011 |  | 4,558,609 |  |  |  | 41.47 |
Granted |  | 754,471 |  |  |  | 64.14 |
Exercised |  | (1,860,367 | ) |  |  | 30.20 |
Expired/forfeited |  | (19,351 | ) |  |  | 48.00 |
Outstanding at December 31, 2012 |  | 3,433,362 |  |  |  | 52.52 |
Granted |  | 470,617 |  |  |  | 75.82 |
Exercised |  | (1,269,323 | ) |  |  | 53.24 |
Expired/forfeited |  | (52,582 | ) |  |  | 53.56 |
Outstanding at December 31, 2013 |  | 2,582,074 |  |  | $ | 56.36 |
The following table shows information with respect to stock options and SARs outstanding and exercisable at December 31, 2013:
|  | Outstanding |  |  | Exercisable |
Range of Exercise Prices |  | Shares |  |  | Weighted Average Remaining Contractual Life (in years) |  |  | Weighted Average Exercise Price |  |  | Shares |  |  | Weighted Average Exercise Price |
$ 31.13–$ 39.99 |  |  | 44,980 |  |  |  | 0.24 |  |  | $ | 34.48 |  |  |  | 44,980 |  |  | $ | 34.48 |
40.00–49.99 |  |  | 1,007,979 |  |  |  | 1.10 |  |  |  | 44.82 |  |  |  | 917,558 |  |  |  | 44.39 |
50.00–59.99 |  |  | 404,799 |  |  |  | 2.38 |  |  |  | 52.35 |  |  |  | 227,838 |  |  |  | 52.35 |
60.00–69.99 |  |  | 657,040 |  |  |  | 3.34 |  |  |  | 64.17 |  |  |  | 208,043 |  |  |  | 64.22 |
70.00–79.99 |  |  | 466,480 |  |  |  | 4.33 |  |  |  | 75.85 |  |  |  | 22,141 |  |  |  | 77.26 |
80.00–80.34 |  |  | 796 |  |  |  | 4.25 |  |  |  | 80.34 |  |  |  | 796 |  |  |  | 80.34 |
Total |  |  | 2,582,074 |  |  |  | 2.44 |  |  | $ | 56.36 |  |  |  | 1,421,356 |  |  | $ | 48.79 |
During 2013, 2012 and 2011, we granted SARs to officers, non-officer employees and directors. The weighted average grant date fair value of these SARs, based on our Black-Scholes-Merton assumptions, is shown below:
| 2013 |  |  | 2012 |  |  | 2011 |
Weighted average exercise price per share | $ | 75.82 |  |  | $ | 64.14 |  |  | $ | 51.17 |
Expected annual dividends per share |  | 0.21 | % |  |  | 0.25 | % |  |  | 0.31 | %
Expected life in years |  | 3.7 |  |  |  | 3.7 |  |  |  | 3.7 |
Expected volatility |  | 35 | % |  |  | 45 | % |  |  | 47 | %
Risk-free interest rate |  | 0.6 | % |  |  | 0.5 | % |  |  | 1.4 | %
Weighted average grant date fair value | $ | 20.20 |  |  | $ | 21.32 |  |  | $ | 18.22 |
The expected dividend yield is based on the current annual dividend at the time of grant. The expected life was based on the historical exercise activity. The expected volatility factors are based on a combination of both the historical volatilities of the stock and implied volatility of traded options on our common stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods commensurate with the expected terms of the options. The total intrinsic value (the difference in value between exercise and market price) of stock options and SARs exercised during the years ended December 31, 2013 was $30.3 million compared to $61.0 million in 2012 and $62.5 million in 2011. As of December 31, 2013, the aggregate intrinsic value of the awards outstanding was $72.2 million. The aggregate intrinsic value and weighted average remaining contractual life of stock option/SARs awards exercisable as of December 31, 2013 was $50.5 million and 1.6 years. As of December 31, 2013, the number of fully vested awards and awards expected to vest was 2.5 million shares. The weighted average exercise price and weighted average remaining contractual life of these awards were $56.12 and 2.4 years and the aggregate intrinsic value was $71.5 million. As of December 31, 2013, unrecognized compensation cost related to the awards was $10.3 million, which is expected to be recognized over a weighted average period of 1.7 years. Restricted Stock Awards Equity Awards In 2013, we granted 402,000 restricted stock Equity Awards to employees which generally vest over a three-year period. We recorded compensation expense for these awards of $19.7 million in the year ended December 31, 2013. In 2012, we granted 364,000 restricted stock Equity Awards to employees which generally vest over a three-year period. We recorded compensation expense for these awards of $11.8 million in the year ended December 31, 2012. In 2011, we granted 331,000 restricted stock Equity Awards to employees and recorded compensation expense of $4.2 million. As of December 31, 2013, there was $24.8 million of unrecognized compensation related to Equity Awards expected to be recognized over a weighted average period of 1.8 years. Equity Awards are not issued to employees until such time they are vested and the employees do not have the option to receive cash. Liability Awards In 2013, we granted 425,000 shares of restricted stock Liability Awards as compensation to directors and employees at an average price of $75.53. This grant included 18,000 issued to non-employee directors, which vest immediately, and 407,000 to employees with vesting generally over a three-year period. In 2012, we granted 381,000 shares of restricted stock Liability Awards as compensation to directors and employees at an average price of $64.06. This grant included 14,700 issued to non-employee directors, which vest immediately, and 366,300 to employees with vesting generally over a three-year period. In 2011, we granted 352,000 shares of Liability Awards as compensation to directors and employees at an average price of $51.17. This grant included 18,000 issued to non-employee directors, which vest immediately, and 334,000 to employees with vesting generally over a three-year period. We recorded compensation expense for these Liability Awards of $27.4 million in the year ended December 31, 2013 compared to $21.5 million in 2012 and $19.1 million in 2011. As of December 31, 2013, there was $24.8 million of unrecognized compensation related to Liability Awards expected to be recognized over a weighted average period of 1.9 years. Substantially all of these awards are held in our deferred compensation plan, are classified as a liability and are remeasured at fair value each reporting period. This mark-to-market is reported as deferred compensation expense in our consolidated statements of operations (see additional discussion below). The proceeds received from the sale of stock held in our deferred compensation plan was $20.7 million in 2013. A summary of the status of our non-vested restricted stock outstanding at December 31, 2013 is summarized below:
| Equity Awards |  |  | Liability Awards |
| Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Shares |  |  | Weighted Average Grant Date Fair Value |
Outstanding at December 31, 2010 |  | — |  |  | $ | — |  |  |  | 582,751 |  |  | $ | 44.81 |
Granted |  | 331,209 |  |  |  | 49.56 |  |  |  | 352,419 |  |  |  | 51.17 |
Vested |  | (88,854 | ) |  |  | 49.37 |  |  |  | (418,634 | ) |  |  | 45.55 |
Forfeited |  | (20,746 | ) |  |  | 49.45 |  |  |  | (29,292 | ) |  |  | 45.04 |
Outstanding at December 31, 2011 |  | 221,609 |  |  |  | 49.64 |  |  |  | 487,244 |  |  |  | 48.76 |
Granted |  | 364,082 |  |  |  | 63.44 |  |  |  | 380,808 |  |  |  | 64.06 |
Vested |  | (208,802 | ) |  |  | 56.73 |  |  |  | (438,283 | ) |  |  | 52.17 |
Forfeited |  | (27,733 | ) |  |  | 58.65 |  |  |  | (6,291 | ) |  |  | 54.54 |
Outstanding at December 31, 2012 |  | 349,156 |  |  |  | 59.08 |  |  |  | 423,478 |  |  |  | 58.91 |
Granted |  | 402,053 |  |  |  | 71.26 |  |  |  | 424,809 |  |  |  | 75.53 |
Vested |  | (315,535 | ) |  |  | 62.43 |  |  |  | (437,570 | ) |  |  | 64.36 |
Forfeited |  | (50,611 | ) |  |  | 65.29 |  |  |  | (21,704 | ) |  |  | 57.31 |
Outstanding at December 31, 2013 |  | 385,063 |  |  | $ | 68.24 |  |  |  | 389,013 |  |  | $ | 71.02 |
401(k) Plan We maintain a 401(k) benefit plan that allows employees to contribute up to 75% of their salary (subject to Internal Revenue Service limitations) on a pretax basis. Beginning in 2008, we began matching up to 6% of salary in cash. All our contributions become fully vested after the individual employee has two years of service with us. Beginning in 2013, vesting of our contributions was immediate. In 2013, we contributed $5.1 million to the 401(k) Plan compared to $4.0 million in 2012. Employees have a variety of investment options in the 401(k) benefit plan. Deferred Compensation Plan Our deferred compensation plan gives directors, officers and key employees the ability to defer all or a portion of their salaries and bonuses and invest in Range common stock or make other investments at the individual’s discretion. Range provides a partial matching contribution which vests over three years. The assets of the plans are held in a grantor trust, which we refer to as the Rabbi Trust, and are therefore available to satisfy the claims of our creditors in the event of bankruptcy or insolvency. Our stock held in the Rabbi Trust is treated as a liability award as employees are allowed to take withdrawals from the Rabbi Trust either in cash or in Range stock. The liability for the vested portion of the stock held in the Rabbi Trust is reflected in the deferred compensation liability in the accompanying consolidated balance sheets and is adjusted to fair value each reporting period by a charge or credit to deferred compensation plan expense on our consolidated statements of operations. The assets of the Rabbi Trust, other than our common stock, are invested in marketable securities and reported at their market value in other assets in the accompanying consolidated balance sheets. The deferred compensation liability reflects the vested market value of the marketable securities and Range stock held in the Rabbi Trust. Changes in the market value of the marketable securities and changes in the fair value of the deferred compensation plan liability are charged or credited to deferred compensation plan expense each quarter. We recorded a mark-to-market loss of $55.3 million in 2013 compared to $7.2 million loss in 2012 and $43.2 million loss in 2011. The Rabbi Trust held 2.8 million shares (2.4 million of vested shares) of Range stock at December 31, 2013 compared to 2.7 million shares (2.3 million of vested shares) at December 31, 2012.

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration