Stockholder's Equity

9 Months Ended

Sep. 30, 2013

Equity [Abstract]

Stockholder's Equity

7. Stockholder’s Equity

Equity Based Awards

The 2010 Long Term Incentive Plan (the “2010 Incentive Plan”) is administered by the Compensation Committee of the Company’s Board of Directors. A total of 1,500,000 shares of the Company’s common stock is reserved and available for issuance pursuant to awards granted under the 2010 Incentive Plan. A variety of discretionary awards for employees, officers, directors and consultants are authorized under the 2010 Incentive Plan, including incentive or non-qualified statutory stock options and nonvested stock. All awards must be evidenced by a written award certificate which will include the provisions specified by the Compensation Committee of the Board of Directors. The Compensation Committee determines the exercise price for non-statutory stock options. The exercise price for any option cannot be less than the fair market value of the Company’s common stock as of the date of grant.

Share Based Compensation

Nonvested Stock

During the nine months ended September 30, 2013, the Company’s independent directors were granted 24,300 nonvested shares of common stock under the 2005 Director Compensation Plan. The shares were drawn from the 1,500,000 shares of common stock reserved and available for issuance under the 2010 Incentive Plan. The shares vest 100% on the one year anniversary date. During the nine months ended September 30, 2013, employees were granted 181,648 nonvested shares of common stock pursuant to the 2010 Incentive Plan. The shares generally vest over a five year period, conditioned on continued employment for the full incentive period. The fair value of nonvested shares of common stock is determined based on the closing trading price of the Company’s common stock on the grant date. The weighted average grant date fair value of nonvested shares of common stock granted during the nine months ended September 30, 2013 was $21.21.

The following table represents the nonvested stock activity for the nine months ended September 30, 2013:

	Number of Shares			Weighted average grant date fair value
Nonvested shares outstanding as of December 31, 2012		486,061		$	22.33
Granted		205,948		$	21.21
Vested		(175,721	)	$	21.82
Nonvested shares outstanding as of September 30, 2013		516,288		$	22.05

During the nine months ended September 30, 2013, an independent director of the Company received a share based award, which will be settled in cash at March 1, 2014. The amount of such cash payment will equal the fair market value of 2,700 shares on the settlement date.

As of September 30, 2013, there was $8.5 million of total unrecognized compensation cost related to nonvested shares of common stock granted. That cost is expected to be recognized over the weighted average period of 3.28 years. The total fair value of shares of common stock vested during the nine months ended September 30, 2013 and 2012 was $3.8 million and $3.5 million, respectively. The Company records compensation expense related to nonvested stock awards at the grant date for shares of common stock that are awarded fully vested, and over the vesting term on a straight line basis for shares of common stock that vest over time. The Company recorded $2.9 million and $3.4 million of compensation expense related to nonvested stock grants in the nine months ended September 30, 2013 and 2012, respectively.

Employee Stock Purchase Plan

In 2006, the Company adopted the Employee Stock Purchase Plan whereby eligible employees may purchase the Company’s common stock at 95% of the market price on the last day of the calendar quarter. There were 250,000 shares of common stock initially reserved for the plan.

On June 20, 2013, the Amended and Restated Employee Stock Purchase Plan was approved by the Company’s stockholders.

As a result of the amendment, the Employee Stock Purchase Plan was modified as follows:

• An additional 250,000 shares of common stock were authorized for issuance over the term of the Employee Stock Purchase Plan.

• The term of the Employee Stock Purchase Plan was extended from January 1, 2016 to January 1, 2023.

The table below details the shares of common stock issued during 2013:

	Number of Shares		Per share price
Shares available as of December 31, 2012		61,247
Additional shares authorized for issuance		250,000
Shares issued during three months ended March 31, 2013		8,845	$	20.24
Shares issued during three months ended June 30, 2013		10,385	$	20.43
Shares issued during three months ended September 30, 2013		9,600	$	18.60
Shares available as of September 30, 2013		282,417

Stock Options

As of September 30, 2013, 15,000 options were issued and exercisable. During the nine months ended September 30, 2013, no options were exercised or forfeited and no options were granted.

Treasury Stock

In conjunction with the vesting of the nonvested shares of common stock, recipients incur personal income tax obligations. The Company allows the recipients to turn in shares of common stock to satisfy minimum tax obligations. During the nine months ended September 30, 2013, the Company redeemed 37,353 shares of common stock valued at $794,000, related to these tax obligations.

Stock Repurchase Program

In October 2010, the Company’s Board of Directors authorized a share repurchase program to repurchase shares of the Company’s common stock, from time to time, in an amount not to exceed $50.0 million (“the Stock Repurchase Program”). The Company anticipates that it will finance any future such repurchases made under the Stock Repurchase Program with cash from general corporate funds or draws under its credit facility. The Company may repurchase shares of common stock in open market purchases or in privately negotiated transactions in accordance with applicable securities laws, rules and regulations. The timing and extent to which the Company repurchases its shares will depend upon market conditions and other corporate considerations.

The Company uses the cost method to account for the repurchase of common stock and the average cost method to account for reissuance of treasury shares. During the nine months ended September 30, 2013, no shares have been repurchased or reissued from treasury shares. The remaining dollar value of shares authorized to be purchased under the Stock Repurchase Program was $22.5 million as of September 30, 2013.