XML 19 R14.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Stock-based Compensation
 6 Months Ended
Jun. 30, 2011
Stock-based Compensation  
Stock-based Compensation
9. Stock-based Compensation

The Company has an Omnibus Incentive and Equity Plan (the "Plan") under which officers, employees, directors and consultants may be granted equity-based awards, including restricted stock units ("RSUs"), stock options and unrestricted shares of common stock. At June 30, 2011, 1,800,000 shares of common stock were authorized for issuance under the Plan, of which 644,958 remain available for issuance. Each RSU entitles the holder to one share of Virtus common stock when the restriction expires. RSUs generally have a term of two to three years and may be time-vested, performance-contingent or have a combination of both time and performance vesting features. Stock options generally vest over 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.

Board of Director Grants

During the six months ended June 30, 2011 and 2010, 6,988 shares and 16,719 shares, respectively, of common stock were granted to those non-employee members of the Company's Board of Directors who receive compensation for his or her Board services as part of their annual retainer. The Company recognized $0.4 million and $0.4 million in stock-based compensation expense for the six months ended June 30, 2011 and 2010 in connection with these grants.

Restricted Stock Units

RSU activity for the six months ended June 30, 2011 is summarized as follows:

 

     Number
of shares		     Weighted
Average
Grant Date
Fair Value		  

Outstanding at December 31, 2010

      460,633      $ 13.39   

Granted

      159,255      $ 52.07   

Forfeited

      (540 )    $ 20.53   

Settled

      (35,255 )    $ 24.84   
  

 

 

    

Outstanding at June 30, 2011

      584,093      $ 22.38   
  

 

 

    

Stock Options

Stock option activity for the six months ended June 30, 2011 is summarized as follows:

 

     Number
of shares		     Weighted
Average
Exercise Price		  

Outstanding at December 31, 2010

      386,190      $ 20.83   

Granted

      10,454      $ 55.30   

Exercised

      (9,623 )    $ 42.60   

Forfeited

      (360 )    $ 20.53   
  

 

 

    

Outstanding at June 30, 2011

      386,661      $ 21.22   
  

 

 

    

Vested and exercisable at June 30, 2011

      143,475      $ 36.18   
  

 

 

    

Options expected to vest at June 30, 2011

      231,027      $ 12.40   
  

 

 

    

 

The weighted-average fair value of options granted during the six months ended June 30, 2011 estimated as of the grant date using the Black-Scholes option valuation model was $27.56 per common share. At June 30, 2011, outstanding stock options have an intrinsic value of $15.3 million.

The fair value of stock options granted under the Company's stock plan was estimated on the grant date using the Black-Scholes option valuation model with the following assumptions:

 

     2011     2010  

Expected dividend yield

      0.0 %      0.0 % 

Expected volatility

      47.2 %      53.6 % 

Risk-free interest rate

      2.5 %      3.0 % 

Expected life

      6.5 years        6.5 years   

The Company estimates volatility based on the historical volatility of a peer group of publicly traded companies, which includes companies that are in the same industry or are competitors, because of the Company's limited history as an independent public company. The Company determines the expected life using the "simplified method" as allowed under generally accepted accounting principles.

During the three months ended June 30, 2011 and 2010, the Company recognized $1.7 million and $1.2 million, respectively, in total stock-based compensation expense. During the six months ended June 30, 2011 and 2010, the Company recognized $2.5 million and $2.0 million, respectively, in total stock-based compensation expense. As of June 30, 2011, unamortized stock-based compensation expense for unvested RSUs and stock options was $8.1 million and $0.7 million, respectively, with weighted average remaining amortization periods of 1.3 years and 1.0 years, respectively.

The Company granted 73,310 performance contingent RSUs during the six months ended June 30, 2011. During the three months ended June 30, 2011 and 2010, total stock-based compensation expense includes $0.3 million and $0.1 million, respectively, for performance-based awards earned by employees as part of annual and long-term incentive compensation plans. During the six months ended June 30, 2011 and 2010, total stock-based compensation expense includes $0.4 million and $0.3 million, respectively, for performance-based awards earned by employees as part of annual and long-term incentive compensation plans.