3. STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION PLANS

Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board of Directors (the “Board”), authorizing us to repurchase our common stock from time-to-time as market and business conditions warrant (the “Stock Repurchase Program”). During the nine months ended September 30, 2014 and 2013, we repurchased 0.2 million shares of our common stock for $5.2 million (weighted-average price of $27.26 per share) and 0.5 million shares of our common stock for $10.1 million (weighted-average price of $20.23 per share), respectively. As of September 30, 2014, the total remaining number of shares available for repurchase under the Stock Repurchase Program totaled 1.9 million shares.

Stock Repurchases for Tax Withholdings. In addition to the above mentioned stock repurchases, during the nine months ended September 30, 2014 and 2013, we repurchased and then cancelled 0.2 million shares of common stock for $6.7 million and 0.3 million shares of common stock for $5.0 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

Dividends. In June 2013, the Board approved the initiation of a quarterly cash dividend to be paid to our stockholders. During the third quarter of 2014, the Board approved a quarterly cash dividend of $0.1575 per share of common stock, totaling $5.5 million. During the third quarter of 2013, the Board approved a quarterly cash dividend of $0.15 per share of common stock, totaling $5.1 million. Dividends declared for the nine months ended September 30, 2014 and 2013, totaled $16.0 million and $10.2 million, respectively.

Warrants. On July 25, 2014, we entered into an amendment to our current agreement with Comcast Corporation (“Comcast”) (the “Amended Agreement”). The Amended Agreement provides the framework for Comcast to consolidate its residential customer accounts onto our Advanced Convergent Platform (“ACP”) customer care and billing solution. As an additional incentive for Comcast to migrate new customer accounts to ACP, the Amended Agreement includes the issuance of stock warrants (the “Warrant Agreement”) for the right to purchase up to approximately 2.9 million shares of our common stock (the “Stock Warrants”), 1.9 million warrants relate to Comcast’s existing residential business and the remaining 1.0 million warrants relate to additional residential customer accounts that Comcast may acquire and migrate onto ACP in the future. The Stock Warrants have a 10-year term and an exercise price of $26.68 per warrant.

Of the 1.9 million of Stock Warrants, 25% (0.5 million) vest in January 2015, with the remainder vesting at various points in time only after the successful migration of customer accounts based on predetermined threshold migration levels up to 10 million customer accounts. The remaining 1.0 million Stock Warrants that relate to additional residential accounts that Comcast may acquire and migrate onto ACP in the future only vest proportionately with acquired customer accounts migrated onto ACP from other providers’ billing platforms, with full vesting based on a target of 5 million newly migrated customer accounts. Fifty percent of the unvested Stock Warrants become fully vested upon a fundamental change (including a change in control) of the Company, as defined, proportionally reducing the number of Stock Warrants eligible for vesting based on future performance conditions.

Once vested, Comcast may exercise the Stock Warrants and elect either physical delivery of common shares or net share settlement (cashless exercise). Alternatively, the exercise of the Stock Warrants may be settled with cash based solely on our approval, or if Comcast were to beneficially own or control in excess of 19.99% of the common stock or voting of the Company.

The fair value of the 0.5 million Stock Warrants that vest in January 2015 was $3.7 million at the grant date, as determined using the Black-Sholes option-pricing model. This amount is being recorded ratably over the vesting period as a client incentive asset with the corresponding offset to additional paid-in capital. The client incentive asset is being amortized as a reduction in processing and related services revenues over the remaining term of the Comcast amended agreement. As of September 30, 2014, we recorded a client incentive asset related to these Stock Warrants of $1.2 million and have amortized $0.1 million as reduction in processing and related services revenues.

The remaining Stock Warrants will be accounted for as client incentive assets in the period the performance conditions necessary for vesting have been met. As of September 30, 2014, none of the performance conditions related to these Stock Warrants had been met.

Stock Incentive Plan. In May 2014, our stockholders approved an increase of 2.9 million shares authorized for issuance under the 2005 Stock Incentive Plan, from 15.8 million shares to 18.7 million shares.

Stock-Based Awards. A summary of our unvested restricted common stock activity during the third quarter and nine months ended September 30, 2014 is as follows (shares in thousands):

	Quarter Ended September 30, 2014					Nine Months Ended September 30, 2014
	Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value
Unvested awards, beginning		1,832		$	21.27		1,922			$	18.57
Awards granted		629			26.64		1,279				26.46
Awards forfeited/cancelled		(16	)		20.72		(67	)			20.43
Awards vested		(38	)		23.36		(727	)			18.78
Unvested awards, ending		2,407		$	22.64		2,407			$	22.64

Included in the awards granted during the nine months ended September 30, 2014, are performance-based awards for 0.1 million restricted common stock shares issued to members of executive management, which vest in equal installments over three years upon meeting either pre-established financial performance objectives or pre-established stock price objectives. The performance-based awards become fully vested upon a change in control, as defined, and the subsequent involuntary termination of employment.

All other restricted common stock shares granted during the quarter and nine months ended September 30, 2014 are time-based awards, which vest annually over primarily three or four years with no restrictions other than the passage of time. Certain shares of the restricted common stock become fully vested upon a change in control, as defined, and the subsequent involuntary termination of employment.

We recorded stock-based compensation expense for the third quarters of 2014 and 2013 of $4.5 million and $4.0 million, respectively, and for the nine months ended September 30, 2014 and 2013 of $12.3 million $11.5 million, respectively.