Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v2.4.0.6
Stock-Based Compensation
 3 Months Ended
Mar. 31, 2013
Stock-Based Compensation [Abstract]  
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, 2013, the maximum number of stock options and restricted stock available for future issuance under the Company’s plans is 1,381,852.

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

 

                 
    Three Months Ended  
    March 31,  
    2013     2012  

Employee stock-based compensation expense

   $ 2,306     $ 795  

Tax effect on employee stock-based compensation expense

     (969 )      (320 ) 
   

 

 

    

 

 

  

Net effect on income

   $ 1,337     $ 475  
   

 

 

    

 

 

  

Stock Options

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

 

                 
    Three Months Ended
March 31,		  
    2013     2012  

Grant date fair value of options

   $ 6.11     $ 4.92  

Volatility

     40.4 %      39.7 % 

Risk-free interest rate

     1.0 %      1.1 % 

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:

 

                                 
    Shares     Weighted-
Average
Exercise Price		     Weighted-Average
Remaining
Contractual Life
(Years)		     Aggregate
Intrinsic Value		  

Outstanding as of December 31, 2012

     5,277,412     $ 8.86                  

Granted

     190,413       15.34                  

Exercised

     (9,050 )      6.24                  

Forfeited

     (8,050 )      11.91                  
   

 

 

                          

Outstanding as of March 31, 2013

     5,450,725       9.08       6.2     $ 45,939  
   

 

 

                          

Options exercisable

     3,559,668       7.96       5.2       33,985  
   

 

 

                          

Exercise prices of stock options outstanding as of March 31, 2013 range from $0.11 to $15.34.

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:

 

 

                 
    Number  of
Shares 		    Weighted-
Average Grant
Date Fair Value
per Share		  

Balance at December 31, 2012

     758,990     $ 12.49  

Granted

     172,212       15.34  

Vested

     (70,964 )      —     

Forfeited

     (3,197 )      13.78  
   

 

 

          

Balance at March 31, 2013

     857,041     $ 13.07  
   

 

 

          

At March 31, 2013, there was $5,876 of unrecognized compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 1.6 years. At March 31, 2013, there was $3,726 of unrecognized compensation expense related to unvested restricted stock awards, which the Company expects to recognize over a weighted-average period of 2.6 years. At March 31, 2013, there was an additional $5,909 of potential unrecognized stock compensation expense related to unvested restricted stock granted under the 2012 Plan that vest based upon Tamarac meeting certain performance conditions and then a subsequent two-year service condition, which the Company expects to recognize over the remaining estimated vesting period of 2.0 to 4.0 years.

On March 31, 2013, 181,625 shares of restricted stock became performance vested under the first year performance condition. These shares will become fully vested upon employees meeting the subsequent two-year service condition.