STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION

Share Repurchase Plan

In December 2018, the Company’s board of directors authorized the open market repurchase of up to two million shares of the Company’s common stock. The program did not establish a time period in which the repurchases had to be made. In December 2018, the Company amended its Credit Facility, which limits the open market share repurchases to $32.0 million for 2019. 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 2019, the Company acquired 622,043 shares of the Company’s common stock for $11.1 million ($17.82 average price per share) through the open market repurchase program discussed above, 152,946 shares of the Company’s common stock for $3.1 million ($20.48 average price per share) in connection with the satisfaction of tax obligations in connection with the vesting of restricted stock units and performance units, and 48,409 shares of the Company’s common stock in connection with “net, net” exercises of employee stock options. Once repurchased, the Company immediately retired all such shares.

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, restricted stock units and performance units. Once repurchased, the Company immediately retired all such shares. The Company did not acquire any of the Company’s common stock in connection with “net, net” exercises of employee stock options.

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”). In April 2018, the Company’s stockholders approved the Second Amendment to the 2016 Employee Equity Incentive Plan, which increased by 1,700,000 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. 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, 2019, 1,944,014 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, 2019, 68,689 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, 2019
	Stock Awards		Weighted Average Award Date Fair Value
Outstanding at December 31, 2018	1,143,205		$	23.26
Restricted stock units awarded	283,472		20.24
Performance stock units awarded	146,367		22.78
Restricted stock units distributed	(171,073	)	18.21
Performance stock units distributed	(111,155	)	25.85
Restricted stock units forfeited	(6,655	)	23.13
Performance stock units forfeited	(42,939	)	25.90
Outstanding at March 31, 2019	1,241,222		$	22.88

Expense associated with stock awards was $2.0 million and $2.1 million for the quarters ended March 31, 2019 and 2018, respectively. Unrecognized pre-tax expense of $16.7 million related to stock awards is expected to be recognized over the weighted average remaining service period of 2.96 years for awards outstanding at March 31, 2019.

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. Historically, awards were fully vested, and fully expensed, on the date of grant. Beginning in April 2019, as a result of a recent amendment of the 2016 Director Plan, the expense related to the issuance of deferred stock units is based on the award date fair value and charged to expense ratably through the requisite service period, which is generally one year. The forfeiture of unvested deferred stock units causes the reversal of all previous expense to be recorded as a reduction of current period expense.

A summary of deferred stock unit activity is as follows:



	Quarter Ended March 31, 2019
	Deferred Stock Units		Weighted Average Award Date Fair Value
Outstanding at December 31, 2018	287,350		$	22.80
Awarded	2,891		16.69
Distributed	(9,438	)	18.69
Outstanding at March 31, 2019	280,803		$	20.83

Expense associated with deferred stock unit awards was less than $0.1 million for each of the quarters ended March 31, 2019 and 2018.

Stock Options

Stock options on the Company’s common stock were awarded from time to time to executive officers and certain key employees of the Company. Stock options granted generally had 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 52,783 stock options exercised during the quarter ended March 31, 2019 with a weighted average exercise price of $18.11 per share. There were no stock options outstanding at March 31, 2019.