SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

Stock Repurchase Plan

On February 28, 2014, our shareholders approved a new stock repurchase program, which replaced the previous stock repurchase program. Under the new program, we are authorized to purchase up to 3.4 million shares of our common stock, based on a limit of 15% of the outstanding shares of common stock on the date of approval, in the open market, at a minimum price of $1.00 per share and a maximum price of $500.00 per share. This is in addition to amounts previously purchased under the prior programs. From authorization of the previous programs through March 31, 2015, we have purchased approximately 6.4 million shares of our common stock in the open market at an average price of $77.69 per share. We purchased 0.2 million shares of common stock at an average price of $23.44 per share during the three months ended March 31, 2015 and 0.3 million shares at an average price of $109.97 per share during the three months ended March 31, 2014. As of March 31, 2015, approximately 1.0 million shares of common stock remain available for repurchase under the new program. Our senior secured term loan limits the amount we can spend on share repurchases in any year and may prevent repurchases in certain circumstances. As of March 31, 2015, approximately $285 million was available to repurchase our common stock under our senior secured term loan.

Share-Based Compensation

We issue share-based awards in the form of stock options and certain other equity-based awards for certain employees and officers. We recorded share-based compensation expense of $0.4 million and $0.7 million for the three months ended March 31, 2015 and 2014, respectively.

Outstanding share-based compensation currently consists primarily of stock option grants that are a combination of service-based and market-based options.

Service-Based Options. These options are granted at fair value on the date of grant. The options generally vest over four years with equal annual cliff-vesting and expire on the earlier of ten years after the date of grant or following termination of service. A total of 0.7 million service-based awards were outstanding at March 31, 2015.

Market-Based Options. These option grants have two components, each of which vests only upon the achievement of certain criteria. The first component, which we refer to internally as “ordinary performance” grants, consists of two-thirds of the market-based grant and begins to vest if the stock price is at least double the exercise price, as long as the stock price realizes a compounded annual gain of at least 20% over the exercise price. The remaining third of the market-based options, which we refer to internally as “extraordinary performance” grants, begins to vest if the stock price is at least triple the exercise price, as long as the stock price realizes a compounded annual gain of at least 25% over the exercise price. The vesting schedule for all market-based awards is 25% upon achievement of the criteria and the remaining 75% in three equal annual installments. A total of 1.9 million market-based awards were outstanding at March 31, 2015.

The Company granted less than 0.1 million stock options (at a weighted average exercise price of $26.42 per share) during the three months ended March 31, 2015. There were no options granted during the three months ended March 31, 2014.

The fair value of the service-based options was determined using the Black-Scholes option pricing model and the fair value of the market-based options was determined using a lattice (binomial) model. The following assumptions were used to determine the fair value as of the grant date:



	Three months ended March 31, 2015
	Black-Scholes		Binomial

Risk-free interest rate (%)	1.67	%	0.02% - 2.01%
Expected stock price volatility (%)	55.06	%	55.06	%
Expected dividend yield	—		—
Expected option life (in years)	6.25		—
Contractual life (in years)	—		14
Fair value	$11.69		$10.68 - $11.93

The following table summarizes the weighted average fair value of stock options granted, the total intrinsic value of stock options exercised and the grant date fair value of stock options vested during the period presented:



	Three months ended March 31,
(in thousands, except per share amounts)	2015		2014

Weighted average fair value at grant date per share	$	11.56	N/A
Intrinsic value of options exercised	176		2,690
Grant date fair value of options vested during the period	264		391

N/A - not applicable.

Share-based compensation expense is recorded net of estimated forfeiture rates ranging from 1% to 10%.

As of March 31, 2015, estimated unrecognized compensation costs related to share-based payments amounted to $3.2 million, which we expect to recognize over a weighted average remaining requisite service period of approximately 3.3 years.

The following table summarizes the activity related to our stock options:



	Number of options		Weighted average exercise price		Weighted average contractual term (in years)	Aggregate intrinsic value (in thousands)

Outstanding at December 31, 2014	2,601,892		$	21.21	4.44	$	47,805
Granted	30,000		26.42
Exercised	(21,984	)	9.19
Forfeited	(23,000	)	51.92

Outstanding at March 31, 2015	2,586,908		21.10		4.27	6,143

Exercisable at March 31, 2015	2,264,976		13.73		3.72	6,143