Stock-Based Compensation

12 Months Ended

Dec. 31, 2013

Stock-Based Compensation

Stock-Based Compensation

(9) Stock-Based Compensation

        The Company is authorized to grant up to 16,906,500 stock-based compensation awards to employees and directors of the Company under the Antero Resources Corporation Long-Term Incentive Plan (the Plan). The Plan allows stock-based compensation awards to be granted in a variety of forms, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, dividend equivalent awards, and other types of awards. The terms and conditions of the awards granted are established by the Compensation Committee of the Company's Board of Directors. A total of 16,791,068 shares are available for future grant under the Plan as of December 31, 2013.

        Our stock-based compensation expense is as follows for the year ended December 31, 2013 (in thousands):

Profits interests awards (see note 8)	$	364,957
Restricted stock		219
Stock options		104
Total expense	$	365,280

Restricted Stock Awards

        Restricted stock awards vest subject to the satisfaction of service requirements. The grant date fair value of these awards are determined based on the price of the Company's common stock on the date of the grant. A summary of restricted stock awards activity during the year ended December 31, 2013 is as follows:

	Number of shares		Weighted average grant date fair value		Aggregate intrinsic value (in thousands)
Total granted and unvested, January 1, 2013		—		—		—
Granted		45,093	$	54.27
Vested		—
Forfeited		—
Total awarded and unvested—December 31, 2013		45,093	$	54.27	$	2,861

        The outstanding unvested restricted stock awards at December 31, 2013 are scheduled to vest as follows:

Vesting date	Number of awards
2014		20,818
2015		8,092
2016		8,092
2017		8,091

Stock Options

        Stock options granted under the Plan to date vest over periods from one to four years and have a maximum contractual life of 10 years. We recognize expense related to stock options on a straight-line basis over the requisite service period, less awards expected to be forfeited. Stock options are granted with an exercise price equal to the market price of our common stock on the date of grant. A summary of stock option activity for the year ended December 31, 2013 is as follows:

	Stock options		Weighted average exercise price		Weighted average remaining contractual life		Intrinsic value (in thousands)
Outstanding at January 1, 2013		—		—		—		—
Options granted		70,339	$	54.15
Options exercised		—		—
Options cancelled		—		—
Options expired		—		—
Outstanding at December 31, 2013		70,339	$	54.15
Vested or expected to vest as of December 31, 2013		70,339	$	54.15		9.79	$	653
Exercisable at December 31, 2013		—				9.79	$	653

        We use a Black-Scholes option-pricing model to determine the fair value of our stock options. Expected volatility was derived from the volatility of the historical stock prices of a peer group of similar publicly traded companies' stock prices. The risk-free interest rate was determined using the implied yield currently available for zero-coupon U.S. government issues with a remaining term approximating the expected life of the options. We assumed no dividend yield.

        The following table presents information regarding the weighted average fair value for options granted during 2013 and the assumptions used to determine fair value. There were no options exercised during 2013.

Dividend yield		—	%
Volatility		35	%
Risk-free interest rate		1.48	%
Expected life (years)		6.17
Weighted average fair value of options granted	$	20.20

        As of December 31, 2013, there was $1.3 million of unrecognized stock-based compensation expense related to nonvested stock options. That expense is expected to be recognized over a weighted average period of 4 years.