STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION

Share Repurchase Plan

Under the terms of the amended Credit Facility, the Company is authorized to purchase up to $30.0 million of shares of its common stock in open market purchases during 2018. In October 2017, the Company’s board of directors authorized the open market repurchase of up to $40.0 million of the Company’s common stock to be made during 2018, which authorization was reduced to $30 million in 2018 in connection with the execution of the amended Credit Facility. The Company began repurchasing shares under this program in January 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. With regard to stock option awards, 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 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 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 common stock surrendered for taxes due on the exercise of the option are deemed repurchased by the Company.

During the first quarter of 2018, the Company acquired 353,831 shares of the Company’s common stock for $8.4 million ($23.78 average price per share) through the open market repurchase program discussed above and 217,749 shares of the Company’s common stock for $5.3 million ($24.14 average price per share) in connection with the satisfaction of tax obligations in connection with the vesting of restricted stock units and performance units. Once repurchased, the Company immediately retired all such shares.

During the first quarter of 2017, the Company acquired 366,914 shares of the Company’s common stock for $8.4 million ($22.82 average price per share) through the open market repurchase program discussed above and 95,403 shares of the Company’s common stock for $2.1 million ($22.37 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.

Equity-Based Compensation Plans

In April 2016, the Company’s stockholders approved the 2016 Employee Equity Incentive Plan, which was amended in 2017 by the First Amendment to the 2016 Employee Equity Incentive Plan (as amended, the “2016 Employee Plan”). The 2016 Employee Plan, which replaced the 2013 Employee Equity Incentive 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. As of March 31, 2018, 796,023 shares of the Company’s common stock were available for issuance under the 2016 Employee Plan.

In April 2016, the Company’s stockholders also 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 March 31, 2018, 115,361 shares of the Company’s 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:



	Quarter Ended March 31, 2018
	Stock Awards		Weighted Average Award Date Fair Value
Outstanding at December 31, 2017	1,428,878		$	21.53
Restricted stock units awarded	245,886		24.12
Performance stock units awarded	219,943		23.25
Restricted stock units distributed	(275,384	)	17.29
Performance stock units distributed	(296,909	)	21.55
Restricted stock units forfeited	(12,207	)	19.73
Performance stock units forfeited	(11,801	)	25.83
Outstanding at March 31, 2018	1,298,406		$	23.19

Expense associated with stock awards was $2.1 million and $3.0 million for the quarters ended March 31, 2018 and 2017, respectively. Unrecognized pre-tax expense of $18.1 million related to stock awards is expected to be recognized over the weighted average remaining service period of 2.23 years for awards outstanding at March 31, 2018.

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:



	Quarter Ended March 31, 2018
	Deferred Stock Units		Weighted Average Award Date Fair Value
Outstanding at December 31, 2017	269,977		$	20.14
Awarded	1,900		25.40
Distributed	(4,568	)	22.33
Outstanding at March 31, 2018	267,309		$	20.14

Expense associated with deferred stock unit awards was less than $0.1 million for each of the quarters ended March 31, 2018 and 2017.

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 were 73,897 stock options forfeited during the quarter ended March 31, 2018 with a weighted average exercise price of $26.60 per share. Stock options outstanding and exercisable at March 31, 2018 were 52,783, with a weighted average exercise price of $18.11 per share.

There was no expense associated with stock option grants for both quarters ended March 31, 2018 and 2017 and no unrecognized pre-tax expense related to stock option grants at March 31, 2018.

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



	Quarter Ended March 31,
	2018		2017
Aggregate intrinsic value of outstanding stock options	$	253	$	444
Aggregate intrinsic value of exercisable stock options	253		444

The intrinsic value calculations are based on the Company’s closing stock price of $22.91 on both March 31, 2018 and 2017.

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 2018 or 2017.