CAPITAL STOCK AND SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

CAPITAL SOCK AND SHARE-BASED COMPENSATION

9. CAPITAL STOCK AND SHARE-BASED COMPENSATION

We are authorized by our Certificate of Incorporation to issue 60,000,000 shares of common stock, $0.001 par value and 5,000,000 shares of preferred stock, $0.001 par value. As of December 31, 2013, 33,413,970 shares and32,538,971 shares of common stock and no shares of preferred stock were issued and outstanding, respectively. Our Board of Directors is authorized to fix the dividend rights and terms, conversion and voting rights, redemption rights and other privileges and restrictions applicable to our preferred stock.

Share-Based Awards

Our 2008 Omnibus Incentive Compensation Plan (the “Plan”) authorizes the grant of various types of equity-based awards, such as stock awards, restricted stock units, stock appreciation rights and stock options to eligible participants, which include all of our employees and all employees of our 50% or more owned subsidiaries, our non-employee directors and certain consultants. The vesting terms of the awards may be tied to continued employment (or, for our non-employee directors, continued service on the Board of Directors) and/or achievement of certain pre-determined performance goals. We refer to stock awards subject to service-based vesting conditions as “non-vested stock” and restricted stock units subject to service-based and performance-based or market-based vesting conditions as “non-vested stock units.” The Plan is administered by the Compensation Committee of our Board of Directors, which determines, within the provisions of the Plan, those eligible employees to whom, and the times at which, awards shall be granted. The Compensation Committee, in its discretion, may delegate its authority and duties under the Plan to specified officers; however, only the Compensation Committee may approve the terms of awards to our executive officers.

Equity-based awards may be granted for a number of shares not to exceed, in the aggregate, approximately 4.0 million shares of common stock, and we had approximately 1.7 million shares available at December 31, 2013. The price per share for stock options shall be of no less than the greater of (a) 100% of the fair value of a share of common stock on the date the option is granted or (b) the aggregate par value of the shares of our common stock on the date the option is granted. If a stock option is granted to any owner of 10% or more of our total combined voting power of us and our subsidiaries, the price is to be at least 110% of the fair value of a share of our common stock on the date the award is granted. Each equity-based award vests ratably over a 12 month-to-five year period, with the exception of those issued under contractual arrangements that specify otherwise, that may be exercised during a period as determined by our Compensation Committee or as otherwise approved by our Compensation Committee. The contractual terms of stock options exercised shall not exceed ten years from the date such option is granted.

Employee Stock Purchase Plan (“ESPP”)

We have a plan whereby our eligible employees may purchase our common stock at 85% of the market price at the time of purchase. On June 7, 2012, our stockholders ratified an amendment adopted by our Board of Directors to increase the total number of shares of our common stock authorized for the issuance under our ESPP from 2,500,000 shares to 4,500,000 shares, and as of December 31, 2013, there were 1,744,663 shares available for future issuance. The following is a detail of the purchases that were made or pending Board of Director approval under the plan:

Employee Stock Purchase Plan Period	Shares Issued	Price
2011 and Prior	2,142,223	$	14.41
January 1, 2012 to March 31, 2012	82,619		12.29
April 1, 2012 to June 30, 2012	90,411		10.58
July 1, 2012 to September 30, 2012	83,269		11.75
October 1, 2012 to December 31, 2012	87,082		9.61
January 1, 2013 to March 31, 2013	90,799		9.45
April 1, 2013 to June 30, 2013	75,126		9.86
July 1, 2013 to September 30, 2013	50,982		14.63
October 1, 2013 to December 31, 2013	52,826		12.44
	2,755,337

ESPP expense included in general and administrative expense in our accompanying consolidated income statements was $0.5 million, $0.7 million and $0.8 million for 2013, 2012 and 2011, respectively.

Stock Options
We use the Black-Scholes option pricing model to estimate the fair value of our stock options; however there have been no stock options granted during 2013, 2012 or 2011.
The following table presents our stock option activity for 2013:
		Number of Shares	Weighted Average Exercise Price		Weighted Average Contractual Life (Years)
Outstanding options at January 1, 2013		243,886	$	20.08	1.66
	Exercised	(37,558)		6.95
	Canceled, forfeited or expired	(11,835)		20.02
Outstanding options at December 31, 2013		194,493	$	22.62	0.83
Exercisable options at December 31, 2013		194,493	$	22.62	0.83
The aggregate intrinsic value of our outstanding options and exerciseable options at December 31, 2013 was less than $0.1 million. Total intrinsic value of options exercised was $0.2 million, $0.1 million and $0.7 million for 2013, 2012 and 2011, respectively.
All of our outstanding options were vested as of October 2008; therefore there was no non-vested stock option activity for 2013.

Non-Vested Stock
We issue shares of non-vested stock with vesting terms ranging from one to five years. The compensation expense is determined based on the market price of our common stock at the date of grant applied to the total number of shares that are anticipated to fully vest. Non-vested stock compensation expense included in general and administrative expenses in our accompanying consolidated income statements was $5.2 million, $6.4 million and $7.2 million for 2013, 2012 and 2011, respectively.
The following table presents our non-vested stock award activity for 2013:
		Number of Shares	Weighted Average Grant Date Fair Value
Non-vested stock at January 1, 2013		643,353	$	20.76
	Granted	499,049		10.91
	Vested	(296,597)		24.29
	Canceled, forfeited or expired	(72,314)		15.23
Non-vested stock at December 31, 2013		773,491	$	13.56
The weighted average grant date fair value of non-vested stock granted was $10.91, $14.01 and $27.05 in 2013, 2012, and 2011, respectively. At December 31, 2013, there was $4.0 million of unrecognized compensation cost related to non-vested stock award payments that we expect to be recognized over a weighted average period of 1.3 years.

Non-Vested Stock Units – Service-Based and Performance-Based Awards

We issue non-vested stock unit awards that are service-based, performance-based or a combination of both with vesting terms ranging from three to four years. Based on the terms and conditions of these awards, we determine if the awards should be recorded as either equity or liability instruments. The compensation expense is determined based on the market price of our common stock at the date of grant, applied to the total number of units that are anticipated to vest, unless the award specifies differently. We did not recognize any compensation expense related to performance-based non-vested stock units during 2013. Non-vested stock unitscompensation expense included in general and administrative expenses in our accompanying consolidated income statements was $0.1 million and $0.3 million for 2012 and 2011 respectively. We account for such awards similar to our non-vested stock awards; however, no shares of stock are issued to the recipient until the stock unit awards have vested and after the pre-determined delivery date has occurred.

The weighted average grant date fair value of non-vested stock units granted was $56.99 and $27.40 in 2012 and 2011, respectively. These non-vested stock units were granted as the result of the achievement of the performance-based objectives established by the 2010 and 2009 performance-based awards. The performance-based objectives established by the 2013, 2012 and 2011 awards were not satisfied and as a result, there were no stock units awarded. At December 31, 2013, there was no unrecognized compensation cost related to our performance-based non-vested stock units.

Non-Vested Stock Units – Service-Based and Market-Based Awards

During the second quarter of 2013, we awarded market-based awards to certain employees. The target level established by the award, which is based on our average December 2015 stock price, provides for the recipients to receive 417,330 non-vested stock units if the target is achieved. If the target objective is surpassed to the point of achieving the projected maximum payout, the recipients will receive 667,728 non-vested stock units.

For market-based awards, the effect of the market condition is reflected in the fair value of the awards at the date of grant using a Monte-Carlo simulation model. A Monte-Carlo simulation model estimates the fair value of the market-based award based upon the expected term, risk-free interest rate and expected volatility. Compensation expense for market-based awards is recognized over the vesting period regardless of whether the market conditions are expected to be achieved. Non-vested stock units compensation expense included in general and administrative expenses in our accompanying consolidated income statements was $0.8 million for 2013.The fair value of the 2013 award was estimated using the following assumptions:

Forward Interest Rate	0.327 % - 1.460%
Expected Volatility	54.38%
Requisite Service Period	3 years
Fair Value	$ 10.51

The following table presents our non-vested stock units activity for 2013:
		Number of Shares	Weighted Average Grant Date Fair Value
Non-vested stock at January 1, 2013		-	$	-
	Granted	417,330		10.51
	Vested	-		-
	Canceled, forfeited or expired	(27,514)		10.51
Non-vested stock units at December 31, 2013		389,816	$	10.51

The weighted average grant date fair value of non-vested stock units granted was $10.51 in 2013.

At December 31, 2013, there were $3.3 million inunrecognized compensation costs related to our market-based non-vested stock units that we expect to be recognized over a weighted average period of 2.3 years.