Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v2.4.0.8
Stock-Based Compensation
3 Months Ended
Mar. 31, 2014
Stock-Based Compensation  
Stock-Based Compensation

11.                 Stock-Based Compensation

 

The Company has stock options and restricted stock outstanding under the 2004 Stock Incentive Plan (the “2004 Plan”), the 2010 Long-Term Incentive Plan (the “2010 Plan”) and the Envestnet, Inc. Management Incentive Plan for Envestnet | Tamarac Management Employees (the “2012 Plan”). As of March 31, 2014, the maximum number of stock options and restricted stock available for future issuance under the Company’s plans is 914,257.

 

Employee stock-based compensation expense under the Company’s plans was as follows:

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Employee stock-based compensation expense

 

$

2,568

 

$

2,306

 

Tax effect on employee stock-based compensation expense

 

(1,027

)

(969

)

Net effect on income

 

$

1,541

 

$

1,337

 

 

Stock Options

 

The following weighted average assumptions were used to value options granted during the periods indicated:

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Grant date fair value of options

 

$

16.81

 

$

6.11

 

Volatility

 

38.7

%

40.4

%

Risk-free interest rate

 

1.8

%

1.0

%

Dividend yield

 

0.0

%

0.0

%

Expected term (in years)

 

6.0

 

6.0

 

 

The following table summarizes option activity under the Company’s plans:

 

 

 

Options

 

Weighted-
Average
Exercise Price

 

Weighted-
Average
Remaining

Contractual
Life (Years)

 

Aggregate
Intrinsic Value

 

 

 

 

 

 

 

 

 

 

 

Outstanding as of December 31, 2013

 

4,637,471

 

$

9.04

 

 

 

 

 

Granted

 

155,753

 

41.84

 

 

 

 

 

Exercised

 

(95,609

)

8.77

 

 

 

 

 

Forfeited

 

(4,150

)

9.00

 

 

 

 

 

Outstanding as of March 31, 2014

 

4,693,465

 

10.13

 

5.3

 

$

141,293

 

Options exercisable

 

3,554,956

 

8.40

 

4.5

 

112,980

 

 

Exercise prices of stock options outstanding as of March 31, 2014 range from $0.11 to $41.84.

 

Restricted Stock

 

Periodically, the Company grants restricted stock awards to employees that vest one-third on each of the first three anniversaries of the grant date. The following is a summary of the activity for unvested restricted stock awards granted under the Company’s plans:

 

 

 

 

 

Weighted-

 

 

 

 

 

Average Grant

 

 

 

Number of

 

Date Fair Value

 

 

 

Shares

 

per Share

 

 

 

 

 

 

 

Balance at December 31, 2013

 

901,551

 

$

16.50

 

Granted

 

240,626

 

41.83

 

Vested

 

(116,706

)

14.22

 

Forfeited

 

(10,324

)

26.94

 

Balance at March 31, 2014

 

1,015,147

 

22.69

 

 

At March 31, 2014, there was $4,541 of unrecognized compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 2.3 years. At March 31, 2014, there was $12,571 of unrecognized compensation expense related to unvested restricted stock awards, which the Company expects to recognize over a weighted-average period of 2.7 years. At March 31, 2014, there was an additional $4,971 of potential unrecognized stock compensation expense related to unvested restricted stock granted under the 2012 Plan that vests based upon Tamarac meeting certain performance conditions and then a subsequent two-year service condition, which the Company expects to recognize, if earned, over the remaining estimated vesting period of 1.0 to 3.0 years.

 

On March 31, 2014, 290,544 shares of restricted stock granted under the 2012 Plan became performance vested under the year two performance condition. These shares will become fully vested upon employees meeting the subsequent two-year service condition.