STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION

Share Repurchase Plan

In December 2012, the Company’s Board of Directors authorized the repurchase of up to $5.0 million of the Company’s common stock to be made during 2013. This amount represented the then maximum open market repurchases authorized in any calendar year under the terms of the Old Credit Facility. In May 2013, prior to the Company entering into the New Credit Facility, the Company’s Board of Directors authorized the repurchase of up to an additional $10.0 million of the Company’s common stock to be made during the balance of the 2013 calendar year. The Company simultaneously executed an amendment to the Old Credit Facility to allow for this additional repurchase. In September 2013, after the Company entered into the New Credit Facility, the Company’s Board of Directors authorized the repurchase of up to an additional $10.0 million of the Company’s common stock to be made during the balance of the 2013 calendar year. This amount represented half of the potential maximum open market repurchases authorized in any calendar year under the terms of the New Credit Facility given the covenants currently applicable to the Company. Once repurchased, the Company immediately retires the shares.

In addition to the open market repurchases, the Company also is authorized to purchase up to $10.0 million of the Company’s common stock in each calendar year in connection with the Company’s equity compensation programs for employees and directors. The participants in the Company’s equity plans may surrender shares of previously issued common stock in satisfaction of tax obligations arising from the vesting of restricted stock awards under such plans, in connection with the exercise of stock option awards and with the lapse of restricted periods of deferred stock unit awards. The deemed price paid is the closing price of the Company’s common stock on the Nasdaq Global Select Market on the date that the restricted stock vests, the shares of the Company’s common stock are surrendered in exchange for stock option exercises or the lapse of the restricted periods of deferred stock unit awards.

During the first nine months of 2013, the Company acquired 782,260 shares of the Company’s common stock for $17.8 million ($22.79 average price per share) through the three open market repurchase programs discussed above and 51,292 shares of the Company’s common stock for $1.2 million ($23.32 average price per share) in connection with the satisfaction of tax obligations in connection with the vesting of restricted stock, exercise of stock options and distribution of deferred stock units. Once repurchased, the Company immediately retired all such shares.

Equity-Based Compensation Plans

At September 30, 2013, the Company had two active equity-based compensation plans under which awards may be made, including stock appreciation rights, restricted shares of common stock, performance awards, stock options and stock units. The Company’s 2013 Employee Equity Incentive Plan (the “2013 Employee Plan”) has 2,895,000 shares of the Company’s common stock reserved for issuance and, at September 30, 2013, 2,840,257 shares of common stock were available for issuance. The Company’s 2011 Non-Employee Director Equity Incentive Plan (“2011 Director Plan”) has 250,000 shares of the Company’s common stock registered for issuance and, at September 30, 2013, 168,390 shares of common stock were available for issuance.

Stock Awards

Stock awards, which include shares of restricted stock, restricted stock units and restricted performance units, are awarded from time to time to executive officers and certain key employees of the Company. Stock award compensation is recorded based on the award date fair value and charged to expense ratably through the requisite service period. The forfeiture of unvested restricted stock, restricted stock units and restricted performance units causes the reversal of all previous expense recorded as a reduction of current period expense.

A summary of stock award activity during the nine-month period ended September 30, 2013 follows:



	Stock Awards		Weighted Average Award Date Fair Value
Outstanding at January 1, 2013	701,918		$	19.42
Restricted shares awarded	431,877		24.09
Restricted stock units awarded	112,401		25.11
Restricted shares distributed	(274,028	)	19.03
Restricted stock units distributed	(11,112	)	20.70
Restricted shares forfeited	(20,704	)	21.41
Restricted stock units forfeited	(54,481	)	20.38
Outstanding at September 30, 2013	885,871		$	22.42

Expense associated with stock awards was $2.8 million and $3.0 million in the nine months ended September 30, 2013 and 2012, respectively. Unrecognized pre-tax expense of $10.1 million related to stock awards is expected to be recognized over the weighted average remaining service period of 2.1 years for awards outstanding at September 30, 2013.

Expense associated with stock awards was $0.8 million for each of the quarters ended September 30, 2013 and 2012.

Deferred Stock Unit Awards

Deferred stock units generally are awarded to directors of the Company and represent the Company’s obligation to transfer one share of the Company’s common stock to the grantee at a future date and generally are fully vested on the date of grant. The expense related to the issuance of deferred stock units is recorded as of the date of the award.

A summary of deferred stock unit activity during the nine-month period ended September 30, 2013 follows:



	Deferred Stock Units		Weighted Average Award Date Fair Value
Outstanding at January 1, 2013	181,518		$	19.06
Awarded	39,876		22.33
Shares distributed	(5,313	)	22.67
Forfeited	(714	)	24.00
Outstanding at September 30, 2013	215,367		$	19.56

There was no expense associated with awards of deferred stock units for the quarters ended September 30, 2013 and 2012. Expense associated with awards of deferred stock units for the nine months ended September 30, 2013 and 2012 was $0.9 million and $0.7 million, respectively.

Stock Options

Stock options on the Company’s common stock are awarded from time to time to executive officers and certain key employees of the Company. Stock options granted generally have a term of seven to ten years and an exercise price equal to the market value of the underlying common stock on the date of grant.

A summary of stock option activity during the nine-month period ended September 30, 2013 follows:



	Shares		Weighted Average Exercise Price
Outstanding at January 1, 2013	1,223,618		$	18.49
Granted	29,025		25.11
Exercised	(29,511	)	20.14
Canceled/Expired	(7,729	)	24.52
Outstanding at September 30, 2013	1,215,403		$	18.57
Exercisable at September 30, 2013	940,317		$	17.89

Expense associated with stock option grants was $0.4 million and $0.5 million in the quarters ended September 30, 2013 and 2012, respectively. In the nine months ended September 30, 2013 and 2012, the Company recorded expense of $1.4 million and $1.6 million, respectively, related to stock option grants. Unrecognized pre-tax expense of $1.5 million related to stock option grants is expected to be recognized over the weighted average remaining contractual term of 1.5 years for awards outstanding at September 30, 2013.

Financial data for stock option exercises are summarized in the following table (in thousands):



	Nine Months Ended September 30,
	2013		2012
Amount collected from stock option exercises	$	738	$	480
Total intrinsic value of stock option exercises	131		106
Tax benefit of stock option exercises recorded in additional paid-in-capital	55		17
Aggregate intrinsic value of outstanding stock options	6,983		3,263
Aggregate intrinsic value of exercisable stock options	5,962		2,966

The intrinsic value calculations are based on the Company’s closing stock price of $23.72 and $19.16 on September 30, 2013 and 2012, respectively.

The Company uses a binomial option-pricing model for valuation purposes to reflect the features of stock options granted. The fair value of stock options awarded during the nine-month periods ended September 30, 2013 and 2012 were estimated at the date of grant based on the assumptions presented in the table below. Volatility, expected term and dividend yield assumptions were based on the Company’s historical experience. The risk-free rate was based on a U.S. treasury note with a maturity similar to the option grant’s expected term.



	Nine Months Ended September 30,
	2013		2012
	Range	Weighted Average	Range	Weighted Average
Grant-date fair value	$12.92	$12.92	$8.14 - $8.19	$8.19
Volatility	49.8%	49.8%	43.0% - 45.2%	45.1%
Expected term (years)	7.0	7.0	7.0	7.0
Dividend yield	—%	—%	—%	—%
Risk-free rate	1.1%	1.1%	1.0% - 1.5%	1.5%