STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION

Share Repurchase Plan

Under the terms of its Credit Facility, the Company is authorized to purchase up to $40.0 million of shares of its common stock in open market purchases on an annual basis, subject to board of director authorization. In October 2016, the Company’s board of directors authorized the open market repurchase of up to $40.0 million of our common stock to be made during 2017. The Company began repurchasing shares under this program in January 2017. In October 2017, the Company’s board of directors authorized a similar $40.0 million program for 2018. Once repurchased, the Company promptly retires such shares.

The Company is also authorized to repurchase 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. The participants in the Company’s equity plans may surrender shares of common stock in satisfaction of tax obligations arising from the vesting of restricted stock, restricted stock unit awards and performance unit awards under such plans and in connection with the exercise of stock option 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, restricted stock unit or performance unit vests or the shares of the Company’s common stock are surrendered in exchange for stock option exercises. The option holder may elect a “net, net” exercise in connection with the exercise of employee stock options such that the option holder receives a number of shares equal to (1) the built-in gain in the option shares divided by the market price of the Company’s common stock on the date of exercise, less (2) a number of shares equal to the taxes due upon the exercise of the option divided by the market price of the Company’s common stock on the date of exercise. The shares of Company common stock surrendered to the Company for taxes due on the exercise of the option are deemed repurchased by the Company.

During the nine months ended September 30, 2017, the Company acquired 1,346,132 shares of the Company’s common stock for $29.4 million ($21.81 average price per share) through the open market repurchase program discussed above and 106,164 shares of the Company’s common stock for $2.4 million ($22.25 average price per share) in connection with the satisfaction of tax obligations in connection with the vesting of restricted stock, restricted stock units and performance units. Once repurchased, the Company immediately retired all such shares.

During the nine months ended September 30, 2016, the Company acquired 1,908,380 shares of the Company’s common stock for $35.4 million ($18.57 average price per share) through the open market repurchase program discussed above and 58,967 shares of the Company’s common stock for $1.2 million ($19.67 average price per share) in connection with the vesting of restricted stock and restricted stock units and the exercise of stock options. Once repurchased, the Company immediately retired all such shares.

Equity-Based Compensation Plans

In April 2016, the Company’s stockholders approved the 2016 Employee Equity Incentive Plan (the “2016 Employee Plan”), which replaced the 2013 Employee Equity Incentive Plan. The 2016 Employee Plan provides for equity-based compensation awards, including restricted shares of common stock, performance awards, stock options, stock units and stock appreciation rights. The 2016 Employee Plan is administered by the Compensation Committee of the board of directors, which determines eligibility, timing, pricing, amount and other terms or conditions of awards. In April 2017, the Company’s stockholders approved the First Amendment to the 2016 Employee Equity Incentive Plan, which increased by 1,000,000 the number of shares of the Company’s common stock reserved and available for issuance in connection with awards issued under the 2016 Employee Plan. As of September 30, 2017, 1,391,711 shares of common stock were available for issuance under the 2016 Employee Plan.

In April 2016, the Company’s stockholders approved the 2016 Non-Employee Director Equity Incentive Plan (the “2016 Director Plan”), which replaced the 2011 Non-Employee Director Equity Incentive Plan. The 2016 Director Plan provides for equity-based compensation awards, including non-qualified stock options and stock units. The board of directors administers the 2016 Director Plan and has the authority to establish, amend and rescind any rules and regulations related to the 2016 Director Plan. As of September 30, 2017, 119,310 shares of common stock were available for issuance under the 2016 Director Plan.

Stock Awards

Stock awards, which include shares of restricted stock, restricted stock units and performance stock 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 performance stock units causes the reversal of all previous expense to be recorded as a reduction of current period expense.

A summary of the stock award activity is as follows:



	Nine Months Ended September 30, 2017
	Stock Awards		Weighted Average Award Date Fair Value
Outstanding at January 1, 2017	1,501,021		$	18.78
Restricted stock units awarded	248,547		22.96
Performance stock units awarded	213,436		23.04
Restricted shares distributed	(167,130	)	22.77
Restricted stock units distributed	(90,663	)	20.87
Performance stock units distributed	(49,672	)	21.95
Restricted shares forfeited	(1,084	)	23.01
Restricted stock units forfeited	(54,548	)	19.84
Performance stock units forfeited	(100,896	)	19.17
Outstanding at September 30, 2017	1,499,011		$	19.34

Expense associated with stock awards was $2.5 million and $2.1 million for the quarters ended September 30, 2017 and 2016, respectively, and $8.1 million and $6.7 million for the nine months ended September 30, 2017 and 2016, respectively. Unrecognized pre-tax expense of $14.1 million related to stock awards is expected to be recognized over the weighted average remaining service period of 1.87 years for awards outstanding at September 30, 2017.

Deferred Stock Unit Awards

Deferred stock units are generally 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 are generally 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 is as follows:



	Nine Months Ended September 30, 2017
	Deferred Stock Units		Weighted Average Award Date Fair Value
Outstanding at January 1, 2017	253,445		$	19.93
Awarded	45,042		23.53
Distributed	(30,559	)	23.57
Outstanding at September 30, 2017	267,928		$	20.12

Expense associated with awards of deferred stock units was less than $0.1 million for the quarters ended September 30, 2017 and 2016, respectively, and $1.1 million and $1.0 million for the nine months ended September 30, 2017 and 2016, 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.

There was no stock option activity during the nine months ended September 30, 2017. Stock option shares outstanding and exercisable at September 30, 2017 were 170,253, with a weighted average exercise price of $21.99 per share.

Expense associated with stock option grants was zero for both the nine months ended September 30, 2017 and 2016. There was no unrecognized pre-tax expense related to stock option grants at September 30, 2017.

Financial data for stock option exercises are summarized as follows (in thousands):



	Nine Months Ended September 30,
	2017		2016
Amount collected from stock option exercises	$	—	$	306
Total intrinsic value of stock option exercises	—		47
Tax shortfall of stock option exercises recorded in additional paid-in-capital	—		315
Aggregate intrinsic value of outstanding stock options	478		102
Aggregate intrinsic value of exercisable stock options	478		102

The intrinsic value calculations are based on the Company’s closing stock price of $23.28 and $19.07 on September 30, 2017 and 2016, respectively.

The Company uses a binomial option-pricing model for valuation purposes to reflect the features of stock options granted. Volatility, expected term and dividend yield assumptions are based on the Company’s historical experience. The risk-free rate is based on a U.S. treasury note with a maturity similar to the option grant’s expected term. There were no stock options awarded during 2017 or 2016.