Stockholders' Equity

9 Months Ended

Sep. 30, 2011

Stockholders' Equity

6. Stockholders’ Equity

Public Offering

On June 9, 2009, the Company completed a public offering of common stock pursuant to a registration statement that had been declared effective by the Securities and Exchange Commission (“SEC”).  All 10,700,000 shares of common stock offered by the Company in the final prospectus were sold at $15.00 per share.  Net proceeds to the Company from the offering amounted to approximately $152.8 million.

2009 Equity Incentive Plan

On August 13, 2009, the Company's stockholders approved the Company's 2009 Equity Incentive Plan ("2009 Plan”). The 2009 Plan authorizes the granting of common stock options or other stock-based awards covering up to 3,000,000 shares of the Company’s common stock.  All employees, directors, consultants and advisors of the Company, including those of the Company's subsidiaries, are eligible to be granted non-qualified stock options and other stock-based awards (as defined) under the 2009 Plan, and employees are also eligible to be granted incentive stock options (as defined) under the 2009 Plan. No new awards may be granted under the Plan after August 13, 2019.

Stockholder Rights Plan

In January 2000, the Company's Board of Directors adopted a stockholder rights plan. Under the plan, each stockholder of common stock received a dividend of one right for each share of the Company's outstanding common stock, entitling the holder to purchase one thousandth of a share of Series A Junior Participating Preferred Stock, par value, $0.01 per share of the Company, at an initial exercise price of $6.00. The rights become exercisable and will trade separately from the common stock ten business days after any person or group acquires 15% or more of the common stock, or ten business days after any person or group announces a tender offer for 15% or more of the outstanding common stock.  This plan expired by its terms on January 26, 2010.

Stock Repurchase Program

On November 3, 2008, the Company announced that its Board of Directors had authorized the repurchase of up to $75 million of the Company's common stock over a period of approximately three years (the “Program”). The Program replaced any prior plan or authorization. The Program did not obligate the Company to repurchase any specific number of shares and could be suspended at any time at management's discretion.  During 2009, the Company repurchased 200,000 shares under the Program for approximately $1.5 million.   No shares were repurchased under the Program by the Company during the Current Nine Months or during 2010.  The Program expired by its terms on October 30, 2011. 

Stock Options

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

The fair value for these options and warrants for all years was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions:

Expected Volatility		30 - 50	%
Expected Dividend Yield		0	%
Expected Life (Term)	3 - 7 years
Risk-Free Interest Rate		3.00 - 4.75	%

The options that the Company granted under its plans expire at various times, either five, seven or ten years from the date of grant, depending on the particular grant.

Summaries of the Company's stock options, warrants (other than warrants issued related to our 1.875% Convertible Notes and 2.50% Convertible Notes) and performance related options activity, and related information for the Current Nine Months are as follows:

Options				Weighted-Average
	Options			Exercise Price
Outstanding at January 1, 2011		2,592,535		$	4.61
Granted		15,000			22.51
Canceled		-			-
Exercised		(563,385	)		4.14
Expired/Forfeited		-			-
Outstanding at September 30, 2011		2,044,150		$	4.87
Exercisable at September 30, 2011		2,042,483		$	4.87

Compensation expense related to stock option grants for the Current Quarter and the Prior Year Quarter was zero and $0.1 million, respectively.  Compensation expense related to stock option grants for both the Current Nine Months and the Prior Year Nine Months was $0.2 million and $0.1 million, respectively.

Warrants

				Weighted-Average
	Warrants			Exercise Price
Outstanding at January 1, 2011		253,900		$	17.01
Granted		-			-
Canceled		-			-
Exercised		(3,600	)		8.72
Expired/Forfeited		-			-
Outstanding at September 30, 2011		250,300		$	17.13
Exercisable at September 30, 2011		250,300		$	17.13

 All warrants issued in connection with acquisitions are recorded at fair market value using the Black-Scholes model and are recorded as part of purchase accounting. Certain warrants are exercised using the cashless method.

The Company values other warrants issued to non-employees at the commitment date at the fair market value of the instruments issued, a measure which is more readily available than the fair market value of services rendered, using the Black-Scholes model. The fair market value of the instruments issued is expensed over the vesting period.

Restricted stock

Compensation cost for restricted stock is measured as the excess, if any, of the quoted market price of the Company’s stock at the date the common stock is issued over the amount the employee must pay to acquire the stock (which is generally zero). The compensation cost, net of projected forfeitures, is recognized over the period between the issue date and the date any restrictions lapse, with compensation cost for grants with a graded vesting schedule recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. The restrictions do not affect voting and dividend rights.

The following tables summarize information about unvested restricted stock transactions:

				Weighted-Average
	Shares			Grant Date Fair Value
Non-vested, January 1, 2011		1,442,610		$	15.34
Granted		354,340			22.01
Vested		(217,619	)		18.76
Forfeited/Canceled		-			-
Non-vested, September 30, 2011		1,579,331		$	16.37

Compensation expense related to restricted stock grants for the Current Quarter and the Prior Year Quarter was approximately $2.4 million and $1.9 million, respectively. Compensation expense related to restricted stock grants for the Current Nine Months and the Prior Year Nine Months was approximately $7.2 million and $6.5 million, respectively.  An additional amount of $15.9 million is expected to be expensed evenly over a period of approximately four years. During the Current Quarter and the Prior Year Quarter, the Company withheld shares valued at $0.2 million, and $1.7 million, respectively, of its restricted common stock in connection with net share settlement of restricted stock grants and option exercises.   During the Current Nine Months and the Prior Year Nine Months, the Company withheld shares valued at $2.4 million, and $2.2 million, respectively, of its restricted common stock in connection with net share settlement of restricted stock grants and option exercises.

Shares Reserved for Issuance

At September 30, 2011, 335,384 common shares were reserved for issuance under the 2009 Plan.   At September 30, 2011 there were no common shares available for issuance under the Company’s 2006, 2002, and 2001Stock Plans.