2012 Annual Report - Stone Energy Corporation

A summary of the restricted stock activity under the 2009 Plan for the years ended December 31, 2012, 2011 and 2010 is asfollows (amounts in table represent actual values):Number ofRestrictedShares2012 2011 2010Wgtd.Wgtd.Avg.Number ofAvg.Number ofFair Value Restricted Fair Value RestrictedPer Share Shares Per Share SharesWgtd.Avg.Fair ValuePer ShareRestricted stock outstanding,beginning of period .... .............. 923,740 $20.08 783,606 $17.24 751,437 $20.68Issuances .......................................... 670,818 31.43 597,062 23.62 395,869 15.79Lapse of restrictions ......................... (462,141) 18.29 (419,543) 19.91 (343,657) 23.09Forfeitures ........................................ (23,543) 26.10 (37,385) 18.92 (20,043) 18.07Restricted stock outstanding,end of period ............................. 1,108,874 $27.56 923,740 $20.08 783,606 $17.24As of December 31, 2012, there was $18,547 of unrecognized compensation cost related to all non-vested share-basedcompensation arrangements under the 2009 Plan. That cost is being amortized on a straight-line basis over the vesting period andis expected to be recognized over a weighted-average period of 1.8 years.Under U.S. GAAP, if tax deductions exceed book compensation expense, then excess tax benefits are credited to additionalpaid-in capital to the extent realized. If book compensation expense exceeds tax deductions, the tax deficit results in either areduction in additional paid-in capital or an increase in income tax expense depending on the pool of available excess tax benefitsto offset such deficit. Adjustments to additional paid-in capital related to the net tax effect of stock option exercises and restrictedstock vesting were $814, $735 and ($2) in 2012, 2011 and 2010, respectively.NOTE 13SHARE REPURCHASE PROGRAM:On September 24, 2007, our board of directors authorized a share repurchase program for an aggregate amount of up to$100,000. The shares may be repurchased from time to time in the open market or through privately negotiated transactions. Therepurchase program is subject to business and market conditions, and may be suspended or discontinued at any time. ThroughDecember 31, 2012, 300,000 shares had been repurchased under this program at a total cost of $7,071, or an average price of$23.57 per share. No shares were repurchased during the years ended December 31, 2012, 2011 and 2010.NOTE 14 — COMMITMENTS AND CONTINGENCIES:Lease CommitmentsWe lease office facilities in Lafayette and New Orleans, Louisiana, Houston, Texas and Morgantown, West Virginia under theterms of long-term, non-cancelable leases expiring on various dates through 2018. We also lease certain equipment on our oil andgas properties typically on a month-to-month basis. The minimum net annual commitments under all leases, subleases andcontracts with non-cancelable terms in excess of 12 months at December 31, 2012 were as follows:2013 ............................... $6122014 ............................... 5402015 ............................... 5402016 ............................... 2602017 ............................... 2032018 ............................... 82Payments related to our lease obligations for the years ended December 31, 2012, 2011 and 2010 were approximately $894,$446 and $703, respectively.Other CommitmentsWe are contingently liable to surety insurance companies in the amount of $90,789 relative to bonds issued on our behalf to theBureau of Ocean Energy Management (“BOEM”), federal and state agencies and certain third parties from which we purchased oiland gas working interests. The bonds represent guarantees by the surety insurance companies that we will operate in accordanceF-26