COMMON STOCK

Sale of Equity Securities

In August 2013, we completed a public offering of 5,175,000 shares of our common stock, par value $0.01 per share, at a price to us of $53.37 per share. Net proceeds of the offering were approximately $275.8 million, after deducting offering expenses and underwriting discounts, of which $51,750 is included in common shares-par value and approximately $275.8 million is included in APIC on the consolidated balance sheet. The shares were issued pursuant to an effective shelf registration statement on Form S-3 filed with the SEC in January 2012.

In May 2012, we completed a public offering of 6,500,000 shares of our common stock at an offering price of $26.50 per share. Net proceeds of the offering were approximately $164.5 million, after deducting underwriting discounts and commissions and offering expenses, of which $65,000 is included in common shares-par value and $164.4 million is included in APIC on the consolidated balance sheet. The shares were issued pursuant to an effective shelf registration statement on Form S-3 filed with the SEC in January 2012.

Stock-Based Compensation Plans

2010 Long-Term Equity Compensation Plan. In June 2010, our shareholders approved a long-term equity compensation plan for our employees and non-employee directors (the "2010 Plan"). The plan was amended in June 2013. In accordance with the 2010 Plan, up to 3,000,000 new shares of our common stock are authorized for issuance. Shares issued may be either authorized but unissued shares, treasury shares or any combination of these shares. Additionally, the 2010 Plan permits the reuse or reissuance of shares of common stock which were canceled, expired, forfeited or, in the case of stock appreciation rights ("SARs"), paid out in the form of cash. Awards may be issued to our employees in the form of incentive or non-qualified stock options, SARs, restricted stock, restricted stock units ("RSUs"), performance shares and performance units, and to our non-employee directors in the form of non-qualified stock options, SARs, restricted stock and RSUs. Awards may vest over periods set at the discretion of the Compensation Committee of our Board of Directors (the "Compensation Committee") with certain minimum vesting periods. With regard to incentive or non-qualified stock options and SARs, awards have a maximum exercisable period of ten years. In no event may an award be granted under the 2010 Plan on or after April 1, 2020. As of December 31, 2013, 1,708,107 shares remain available for issuance pursuant to the 2010 Plan.

2004 Long-Term Equity Compensation Plan. As approved by the shareholders in June 2004, we maintain a long-term equity compensation plan for our officers and certain key employees (the "2004 Plan"). Awards pursuant to the plan vest over periods set at the discretion of the Compensation Committee and, with regard to options, have a maximum exercisable period of ten years. We no longer issue awards pursuant to the 2004 Plan. As of December 31, 2013, all awards granted pursuant to the 2004 Plan had vested and are exercisable through April 19, 2020.

The following table provides a summary of the impact of our outstanding stock-based compensation plans on the results of operations for the periods presented:



	Year Ended December 31,
	2013			2012			2011(1)
	(in thousands)

Stock-based compensation expense	$	12,880		$	8,495		$	8,781
Income tax benefit	(4,697		)	(3,245		)	(3,344		)
Net stock-based compensation expense	$	8,183		$	5,250		$	5,437

__________

(1) Includes a $2.5 million pre-tax charge related to a separation agreement with our former chief executive officer. See Note 16, Transactions with Affiliates, for additional information regarding the related separation agreement.

Stock Option Awards

We have granted stock options pursuant to various stock compensation plans. Outstanding options expire ten years from the date of grant and become exercisable ratably over a four year period. We have not issued any new stock option awards since 2006. As of December 31, 2013, all compensation cost related to stock options has been fully recognized in our consolidated statements of operations.

The following table presents the changes in our stock option awards. The aggregate intrinsic value of options outstanding for each period presented was immaterial:



	Year Ended December 31,
	2013							2012			2011
	Number of Shares Underlying Options		Weighted-Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)		Number of Shares Underlying Options	Weighted-Average Exercise Price Per Share		Number of Shares Underlying Options		Weighted-Average Exercise Price Per Share
Outstanding beginning of year, January 1,	6,973		$	41.09	2.6	$	—	6,973	$	41.09	10,306		$	41.90
Exercised	(3,450	)	37.15		—	77		—	—		—		—
Forfeited	—		—		—	—		—	—		(3,333	)	43.60
Outstanding end of year, December 31,	3,523		44.95		2.2	29		6,973	41.09		6,973		41.09
Exercisable at December 31,	3,523		44.95		2.2	29		6,973	41.09		6,973		41.09

SARs

The SARs vest ratably over a three-year period and may be exercised at any point after vesting through 10 years from the date of issuance. Pursuant to the terms of the awards, upon exercise, the executive officers will receive, in shares of common stock, the excess of the market price of the award on the date of exercise over the market price of the award on the date of issuance.

In January 2013, the Compensation Committee awarded 87,078 SARs to our executive officers. The fair value of each SAR award was estimated on the date of grant using a Black-Scholes pricing model using the following assumptions:



	Year Ended December 31,
	2013			2012			2011

Expected term of award	6 years			6 years			6 years
Risk-free interest rate	1.0		%	1.1		%	2.5		%
Expected volatility	65.5		%	64.3		%	60.2		%
Weighted-average grant date fair value per share	$	21.96		$	17.61		$	25.22

The expected life of the award was estimated using historical stock option exercise behavior data. The risk-free interest rate was based on the U.S. Treasury yields approximating the expected life of the award in effect at the time of grant. Expected volatilities were based on our historical volatility. We do not expect to pay or declare dividends in the foreseeable future.

The following table presents the changes in our SARs:



	Year Ended December 31,
	2013							2012					2011
	Number of SARs		Weighted-Average Exercise Price		Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)		Number of SARs	Weighted-Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Number of SARs		Weighted-Average Exercise Price		Aggregate Intrinsic Value (in thousands)
Outstanding beginning of year, January 1,	118,832		$	30.80	8.4	$	486	50,471	$	31.61	$	341	57,282		$	24.44	$	1,020
Awarded	87,078		37.18		—	—		68,361	30.19		—		31,552		43.95		—
Exercised	(15,147	)	30.06		—	425		—	—		—		(25,371	)	24.44		77
Forfeited	—		—		—	—		—	—		—		(12,992	)	43.95		—
Outstanding at December 31,	190,763		33.77		8.2	3,711		118,832	30.80		486		50,471		31.61		341
Exercisable at December 31,	51,922		29.97		7.1	1,207		27,458	28.84		187		10,636		24.44		114

Total compensation cost related to SARs granted, net of estimated forfeitures, and not yet recognized in our consolidated statement of operations as of December 31, 2013, was $1.7 million. The cost is expected to be recognized over a weighted-average period of 1.8 years.

Restricted Stock Awards

Time-Based Awards. The fair value of the time-based restricted shares is amortized ratably over the requisite service period, primarily three or four years. The time-based shares vest ratably on each annual anniversary following the grant date that a participant is continuously employed.

In January 2013, the Compensation Committee awarded a total of 103,050 time-based restricted shares to our executive officers that vest ratably over the three year period ending on January 16, 2016.

The following table presents the changes in non-vested time-based awards during 2013:



	Shares		Weighted-Average Grant-Date Fair Value

Non-vested at December 31, 2012	646,490		$	27.93
Granted	311,051		45.53
Vested	(282,787	)	27.57
Forfeited	(22,973	)	31.52
Non-vested at December 31, 2013	651,781		36.36



	As of/Year Ended December 31,
	2013		2012		2011
	(in thousands, except per share data)

Total intrinsic value of time-based awards vested	$	13,640	$	5,950	$	9,030
Total intrinsic value of time-based awards non-vested	34,688		21,470		18,531
Market price per common share as of December 31,	53.22		33.21		35.11
Weighted-average grant date fair value per share	45.53		26.59		33.71

Total compensation cost related to non-vested time-based awards, net of estimated forfeitures, and not yet recognized in our consolidated statements of operations as of December 31, 2013 was $15.7 million. This cost is expected to be recognized over a weighted-average period of 2.0 years.

Market-Based Awards. The fair value of the market-based restricted shares is amortized ratably over the requisite service period, primarily three years. The market-based shares vest if the participant is continuously employed throughout the performance period and the market-based performance measure is achieved, with a maximum vesting period of five years. All compensation cost related to the market-based awards will be recognized if the requisite service period is fulfilled, even if the market condition is not achieved.

In January 2013, the Compensation Committee awarded a total of 41,570 market-based restricted shares to our executive officers. In addition to continuous employment, the vesting of these shares is contingent on the Company's total shareholder return ("TSR"), which is essentially the Company’s stock price change including any dividends, as compared to the TSR of a set group of 15 peer companies. The shares are measured over a three-year period ending on December 31, 2014 and can result in a payout between 0% and 200% of the total shares awarded. The weighted-average grant date fair value per market-based share for these awards granted was computed using the Monte Carlo pricing model using the following assumptions:



	Year Ended December 31,
	2013			2012

Expected term of award	3 years			3 years
Risk-free interest rate	0.4		%	0.3		%
Expected volatility	56.6		%	65.3		%
Weighted-average grant date fair value per share	$	49.04		$	36.54

The expected term of the awards was based on the requisite service period. The risk-free interest rate was based on the U.S. Treasury yields in effect at the time of grant and extrapolated to approximate the life of the award. The expected volatility was based on our historical volatility.

The following table presents the change in non-vested market-based awards during 2013:



	Shares		Weighted-Average Grant-Date Fair Value per Share

Non-vested at December 31, 2012	40,696		$	39.22
Granted	41,570		49.04
Vested	(10,155	)	47.28
Non-vested at December 31, 2013	72,111		43.75



	As of/Year Ended December 31,
	2013		2012		2011
	(in thousands, except per share data)

Total intrinsic value of market-based awards vested	$	724	$	—	$	366
Total intrinsic value of market-based awards non-vested	3,838		1,352		1,513
Market price per common share as of December 31,	53.22		33.21		35.11
Weighted-average grant date fair value per share	49.04		36.54		58.53

Total compensation cost related to non-vested market-based awards, net of estimated forfeitures, and not yet recognized in our consolidated statement of operations as of December 31, 2013 was $1.7 million. This cost is expected to be recognized over a weighted-average period of 1.8 years.

Treasury Share Purchases

In accordance with our stock-based compensation plans, employees and directors may surrender shares of the Company's common stock to pay tax withholding obligations upon the vesting and exercise of share-based awards. Shares acquired that had been issued pursuant to the 2004 Plan are retired, while those issued pursuant to the 2010 Plan are reissued to service awards. For shares that are retired, we first charge any excess of cost over the par value to APIC to the extent we have amounts in APIC, with any remaining excess cost charged to retained earnings. For shares reissued to service awards under the 2010 Plan, shares are recorded at cost and upon reissuance we reduce the carrying value of shares acquired and held pursuant to the 2010 Plan by the weighted-average cost per share with an offsetting charge to APIC. During the year ended December 31, 2013, we acquired 84,642 shares pursuant to our stock-based compensation plans for payment of tax liabilities, of which 17,257 shares were retired, 67,334 shares were reissued and 51 shares are available for reissuance pursuant to our 2010 Plan.

Shareholders’ Rights Agreement

In 2007, we entered into a rights agreement. The rights agreement is designed to improve the ability of our Board to protect the interest of our shareholders in the event of an unsolicited takeover attempt. Our Board declared a dividend of one right for each outstanding share of our common stock. The right dividend was paid to shareholders of record in September 2007. A "distribution date," as defined in the rights agreement, can occur after any individual shareholder exceeds 15% ownership of our outstanding common stock. In certain circumstances, the right entitles each holder, other than an "acquiring person" (as defined in the agreement), to purchase shares of our common stock (or, in certain circumstances, cash, property or other securities) having a then-current value equal to two times the exercise price of the right (i.e., for the $240 exercise price, the rights holder receives $480 worth of common stock). The exercise price is subject to adjustment for various corporate actions which affect all shareholders, such as a stock split. The rights agreement and all rights will expire in September 2017.

Preferred stock

We are authorized, pursuant to shareholder approval in 2008, to issue 50,000,000 shares of preferred stock, par value $0.01, which may be issued in one or more series, with such rights, preferences, privileges and restrictions as shall be fixed by our Board from time to time. As of December 31, 2013, no preferred shares had been issued.