XML 81 R14.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Stock Based Compensation | 12 Months Ended
--- | ---
Dec. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
STOCK BASED COMPENSATION | NOTE 8 — STOCK BASED AND DEFERRED COMPENSATION We have a stock compensation plan, the Meritage Stock Option Plan (the “Plan”), that was adopted in 2006, which superceded a prior stock compensation plan and which has been amended from time to time.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 8,950,000 shares of common stock, of which 965,404 shares remain available for grant at December 31, 2013. 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 are usually granted with either a three-year or five-year ratable vesting period, with a three-year cliff vesting for performance-based awards. We have not granted any stock options since 2009. A summary of remaining stock option activity from stock options granted prior to 2010 is provided below. Summary of Stock Option Activity:
|  | Year Ended December 31, 2013
|  | Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life |  | Aggregate Intrinsic Value
|  |  |  |  |  |  |  | (In thousands)
Options outstanding at beginning of year |  | 609,585 |  |  | $ | 27.44 |  |  |  |  |
Granted |  | — |  |  | N/A |  |  |  |  |
Exercised |  | (347,370 | ) |  | $ | 33.40 |  |  |  |  |
Cancelled |  | (3,400 | ) |  | $ | 14.00 |  |  |  |  |
Outstanding at end of year |  | 258,815 |  |  | $ | 19.63 |  |  | 1.35 |  | $ | 7,340 |
Vested and expected to vest at end of year |  | 258,815 |  |  | $ | 19.63 |  |  | 1.35 |  | $ | 7,340 |
Exercisable at end of year |  | 225,415 |  |  | $ | 20.36 |  |  | 1.22 |  | $ | 6,229 |
Price range of options exercised |  | $8.06-$44.44 |  |  |  |
Price range of options outstanding |  | $11.48-$42.82 |  |  |  |
Total shares reserved for existing or future grants at end of year |  | 2,283,114 |  |  |  |  |  |  |
|  | Years Ended December 31,
|  | 2012 |  | 2011
|  | Options |  | Weighted Average Exercise Price |  | Options |  | Weighted Average Exercise Price
Options outstanding at beginning of year: |  | 897,767 |  |  | $ | 23.56 |  |  | 1,332,767 |  |  | $ | 23.80 |
Granted |  | — |  |  | N/A |  |  | — |  |  | N/A |
Exercised |  | (282,082 | ) |  | $ | 15.12 |  |  | (171,800 | ) |  | $ | 15.21 |
Cancelled |  | (6,100 | ) |  | $ | 25.73 |  |  | (263,200 | ) |  | $ | 30.24 |
Outstanding at end of year |  | 609,585 |  |  | $ | 27.44 |  |  | 897,767 |  |  | $ | 23.56 |
Exercisable at end of year |  | 471,760 |  |  | $ | 30.93 |  |  | 550,359 |  |  | $ | 26.29 |
Price range of options exercised |  | $ 8.06 - $34.30 |  |  |  |  | $ 8.06 - $21.10 |  |  |
Price range of options outstanding |  | $ 8.06 - $44.44 |  |  |  |  | $ 8.06 - $44.44 |  |  |
Stock options Outstanding at December 31, 2013:
|  | Stock Options Outstanding |  | Stock Options Exercisable
Range of Exercise Prices |  | Number Outstanding |  | Weighted Average Contractual Life |  | Weighted Average Exercise Price |  | Number Exercisable |  | Weighted Average Exercise Price
$11.48 - $14.00 |  | 59,453 |  |  | 1.73 |  | $ | 13.80 |  |  | 29,953 |  |  | $ | 13.75 |
$15.98 - $19.80 |  | 35,142 |  |  | 0.99 |  | $ | 16.06 |  |  | 34,542 |  |  | $ | 16.02 |
$19.90 - $19.90 |  | 139,840 |  |  | 1.38 |  | $ | 19.90 |  |  | 139,840 |  |  | $ | 19.90 |
$22.11 - $22.11 |  | 6,300 |  |  | 2.61 |  | $ | 22.11 |  |  | 3,000 |  |  | $ | 22.11 |
$42.82 - $42.82 |  | 18,080 |  |  | 0.08 |  | $ | 42.82 |  |  | 18,080 |  |  | $ | 42.82 |
|  | 258,815 |  |  |  |  |  |  | 225,415 |  |  |
The total intrinsic value of option exercises for the years ended December 31, 2013, 2012 and 2011 was $4.8 million, $5.4 million and $1.4 million, respectively. 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 stock option. Summary of Nonvested (Restricted) Shares Activity: In addition to the stock options discussed above, we grant time-based and performance-based restricted shares. Performance-based restricted shares are only granted to our senior executive management group. All performance shares only vest upon the attainment of certain financial and operational criteria as established and approved by our Board of Directors.
|  | Nonvested Restricted Share Activity (time-based) |  | Weighted Average Grant Date Fair Value |  | Nonvested Restricted Share Activity (performance- Based) |  | Weighted Average Grant Date Fair Value
Outstanding at January 1, 2011 |  | 465,251 |  |  | $ | 19.01 |  |  | 202,500 |  |  | $ | 16.91 |
Granted |  | 357,000 |  |  | $ | 25.57 |  |  | 56,250 |  |  | $ | 25.65 |
Vested (Earned/Released) |  | (141,335 | ) |  | $ | 17.76 |  |  | (33,750 | ) |  | $ | 14.27 |
Forfeited (1) |  | (31,400 | ) |  | $ | 23.23 |  |  | (33,750 | ) |  | 14.27 |
Outstanding as of December 31, 2011 |  | 649,516 |  |  | $ | 22.68 |  |  | 191,250 |  |  | $ | 20.41 |
Granted |  | 386,500 |  |  | $ | 27.21 |  |  | 56,250 |  |  | $ | 20.72 |
Vested (Earned/Released) |  | (166,566 | ) |  | $ | 18.92 |  |  | (33,750 | ) |  | $ | 14.27 |
Forfeited (1) |  | (43,800 | ) |  | $ | 25.10 |  |  | (33,750 | ) |  | $ | 14.27 |
Outstanding at December 31, 2012 |  | 825,650 |  |  | $ | 25.43 |  |  | 180,000 |  |  | $ | 22.81 |
Granted |  | 355,795 |  |  | $ | 42.78 |  |  | 62,500 |  |  | $ | 42.56 |
Vested (Earned/Released) |  | (215,850 | ) |  | $ | 41.72 |  |  | (67,500 | ) |  | $ | 41.97 |
Forfeited (1) |  | (81,700 | ) |  | $ | 31.27 |  |  | — |  |  | N/A |
Outstanding at December 31, 2013 |  | 883,895 |  |  | $ | 32.22 |  |  | 175,000 |  |  | $ | 30.10 |
(1) | Forfeitures on time-based nonvested shares are a result of terminations of employment, while forfeitures on performance-based nonvested shares are a result of failing to attain certain goals as outlined in our executive management group's compensation agreements.
Compensation cost related to time-based restricted stock awards is measured as of the closing price on the date of grant and is expensed on a straight-line basis over the vesting period of the award. Compensation cost related to performance-based restricted stock awards is also measured as of the closing price on the date of grant but is expensed in accordance with ASC 718-10-25-20, Compensation – Stock Compensation, which requires an assessment of probability of attainment of the performance target. As our performance targets are annual in nature, once we determine that the performance target outcome is probable, the year-to-date expense is recorded and the remaining expense is recorded on a straight-line basis through the end of the award’s vesting period. Below is a summary of compensation expense and stock award activity (in thousands):
|  | Years Ended December 31,
|  | 2013 |  | 2012 |  | 2011
Stock-based compensation expense |  | $ | 9,483 |  |  | $ | 8,319 |  |  | $ | 7,410 |
Cash received by Company from exercises |  | $ | 11,601 |  |  | $ | 4,267 |  |  | $ | 2,613 |
The following table includes additional information regarding our Plan (dollars in thousands):
|  | As of
|  | December 31, 2013 |  | December 31, 2012
Unrecognized stock-based compensation cost |  | $ | 17,385 |  |  | $ | 13,072 |
Weighted average years remaining vesting period |  | 2.18 |  |  | 2.17 |
Total equity awards outstanding (1) |  | 1,318 |  |  | 1,615 |
(1) Includes vested and unvested options outstanding and unvested restricted stock awards. In 2013, we began to offer a non-qualified deferred compensation plan ("deferred compensation plan") to highly compensated employees in order to allow them additional pre-tax income deferrals above and beyond the limited caps that qualified plans, such as 401k plans, impose on highly compensated employees. We do not currently offer a contribution match on the deferred compensation plan. All contributions to the plan to date have been funded by the employees and, therefore, we have no associated expense related to the deferred compensation plan for the years ended December 31, 2013, 2012 and 2011.

X
- Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

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