STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION

Share Repurchase Plan

In February 2014, the Company’s Board of Directors authorized the open market repurchase of up to $20.0 million of the Company’s common stock to be made during 2014. Once a repurchase is complete, the Company promptly retires the shares. 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 quarter ended March 31, 2014, the Company acquired 142,700 shares of the Company’s common stock for $3.4 million ($23.70 average price per share) through the open market repurchase program discussed above and 96,375 shares of the Company’s common stock for $2.1 million ($21.71 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 March 31, 2014, 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 March 31, 2014, 2,069,721 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 March 31, 2014, 168,300 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.

The following table summarizes all stock award activity during the quarter ended March 31, 2014:



	Stock Awards		Weighted Average Award Date Fair Value
Outstanding at January 1, 2014	555,025		$	22.79
Restricted shares awarded	216,880		24.20
Restricted stock units awarded	226,140		24.21
Restricted shares distributed	(112,483	)	23.81
Restricted stock units distributed	(15,277	)	21.25
Restricted shares forfeited	(8,921	)	21.69
Outstanding at March 31, 2014	861,364		$	23.42

Expense associated with stock awards was $0.9 million and $1.2 million in the quarters ended March 31, 2014 and 2013, respectively. Unrecognized pre-tax expense of $17.1 million related to stock awards is expected to be recognized over the weighted average remaining service period of 2.5 years for awards outstanding at March 31, 2014.

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.

The following table summaries all deferred stock unit activity during the quarter ended March 31, 2014:



	Deferred Stock Units		Weighted Average Award Date Fair Value
Outstanding at January 1, 2014	214,455		$	19.56
Shares distributed	(4,171	)	22.71
Outstanding at March 31, 2014	210,284		$	19.47

There was no expense associated with awards of deferred stock units in the quarters ended March 31, 2014 or 2013.

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.

The following table summarizes all stock option activity during the quarter ended March 31, 2014:



	Shares		Weighted Average Exercise Price
Outstanding at January 1, 2014	1,208,824		$	18.54
Granted	38,820		24.21
Exercised	(75,657	)	15.72
Canceled/Expired	(27,664	)	25.60
Outstanding at March 31, 2014	1,144,323		$	18.75
Exercisable at March 31, 2014	988,402		$	18.46

Expense associated with stock option grants was $0.4 million and $0.6 million in the quarters ended March 31, 2014 and 2013, respectively. Unrecognized pre-tax expense of $1.3 million related to stock option grants is expected to be recognized over the weighted average remaining contractual term of 1.8 years for awards outstanding at March 31, 2014.

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



	Quarters Ended March 31,
	2014		2013
Amount collected from stock option exercises	$	1,633	$	738
Total intrinsic value of stock option exercises	444		143
Tax benefit of stock option exercises recorded in additional paid-in-capital	34		55
Aggregate intrinsic value of outstanding stock options	7,835		6,434
Aggregate intrinsic value of exercisable stock options	7,095		5,500

The intrinsic value calculations are based on the Company’s closing stock price of $25.31 and $23.15 on March 31, 2014 and 2013, 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 quarters ended March 31, 2014 and 2013 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.



	Quarters Ended March 31,
	2014		2013
	Range	Weighted Average	Range	Weighted Average
Grant-date fair value	$11.27	$11.27	$12.92	$12.92
Volatility	41.6%	41.6%	49.8%	49.8%
Expected term (years)	7.0	7.0	7.0	7.0
Dividend yield	—%	—%	—%	—%
Risk-free rate	2.3%	2.3%	1.1%	1.1%