17. Equity and 7% Preferred Stock

Common Stock

The Company is authorized to issue up to 190,000,000 shares of common stock, par value $0.001 per share. As of December 31, 2013, an aggregate of 18,226,223 shares of its common stock were issued and 16,676,539 were outstanding.

Holders of shares of common stock are entitled to one vote for each share on each matter on which holders of common stock are entitled to vote. Holders of common stock are entitled to receive ratably dividends and other distributions when, as and if declared by the Company’s board of directors out of assets or funds legally available therefore. The Senior Notes, the Senior PIK Toggle Notes and the Senior ABL Facility each contain covenants that restrict the Company’s ability to pay dividends or make distributions on the common stock, subject to certain exceptions.

In the event of the liquidation, dissolution or winding up of the Company, holders of common stock are entitled to share ratably in the Company assets, if any, remaining after the payment of all the Company’s debts and liabilities.

Warrants

An aggregate of 2,419,753 warrants have been issued and 2,419,753 shares of common stock are issuable upon exercise of the warrants. The warrants are exercisable into shares of common stock at an exercise price of $27.33 per share or on a cashless (net share settlement) basis and are subject to certain customary anti-dilution protections. The warrants may be exercised at any time prior to the close of business on November 27, 2017. The warrants are not redeemable. Warrant holders do not have any rights or privileges of holders of common stock until they exercise their warrants and receive shares of common stock. As of December 31, 2013, 419,124 warrants had been exercised.

7% Preferred Stock

On October 18, 2013, the Company gave notice to the holders of its 7% preferred stock that the Company had elected to cause the mandatory conversion of all 810,382 shares of issued and outstanding shares of 7% preferred stock on November 15, 2013. The 7% preferred stock was converted at the rate of 4.34164 shares of the Company’s common stock for each share of 7% preferred stock, or into an aggregate of 3,518,366 shares of common stock. On the conversion date, the shares of common stock were issued and the shares of 7% preferred stock were cancelled and all rights of holders of 7% preferred stock were terminated. Shares of 7% preferred stock that were converted and cancelled were restored to the status of authorized but unissued preferred stock of the Company.

The following table summarizes the Company’s 7% preferred stock activity for the years ended December 31, 2012 and 2013:


	Preferred Shares			Preferred Stock
Balance at December 31, 2011		1,003,108		$	125,916
Stock-based compensation		-			1,464
Converted preferred stock shares		(531	)		(68	)
Repurchased preferred stock shares		(44,244	)		(5,663	)

Balance at December 31, 2012		958,333		$	121,649
Stock-based compensation		-			824
Converted preferred stock shares		(952,972	)		(121,912	)
Repurchased preferred stock shares		(4,363	)		(561	)
Forfeited shares		(998	)		-

Balance at December 31, 2013		-		$	-

Equity Tender Offer

On May 2, 2013, the Company purchased 4,651,162 shares of its common stock pursuant to the Equity Tender Offer at a purchase price of $43.00 per share for an aggregate purchase price of approximately $200,000. The Company used the proceeds from the issuance of the Senior PIK Toggle Notes (see Note 7. “Debt”), together with cash on hand, to finance the purchase of shares of common stock pursuant to the Equity Tender Offer.