Stockholders' Equity

9 Months Ended

Sep. 30, 2013

Stockholders' Equity

6. Stockholders’ Equity

Stock Repurchase Program

On February 15, 2013, the Company’s Board of Directors authorized a program to repurchase up to $300 million of its common stock over a three year period (the “February 2013 Program”). This program was in addition to the 2011 Program the Company announced in October 2011 to repurchase $200 million over a period of approximately three years, which was fully expended as of February 27, 2013. On July 22, 2013, the Company’s Board of Directors authorized a program to repurchase up to $300 million of the Company’s common stock over a period ending July 22, 2016 (“July 2013 Program” and together with the 2011 Program and the February 2013 Program, the “Repurchase Programs”) . This program was in addition to the February 2013 Program, which was fully expended on August 15, 2013. During the Current Nine Months, the Company repurchased 15.0 million shares under the Repurchase Programs for approximately $406.3 million. During the Prior Year Nine Months, the Company repurchased 5.4 million shares under the 2011 Program for approximately $88.3 million. As of September 30, 2013, $248.2 million remained available for repurchase under the July 2013 Program.

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 3.0 million 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.

On August 15, 2012, the Company’s stockholders approved the Company’s Amended and Restated 2009 Plan (“Amended and Restated 2009 Plan”), which, among other items and matters, increased the shares available under the 2009 Plan by an additional 4.0 million shares to a total of 7.0 million shares issuable under the Amended and Restated 2009 Plan and extended the 2009 Plan termination date through August 15, 2022.

Shares Reserved for Issuance

At September 30, 2013, 3,307,035 common shares were reserved for issuance under the Amended and Restated 2009 Plan. At September 30, 2013 there were no common shares available for issuance under any previous Company plan.

Stock Options and Warrants

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.

There was no compensation expense related to stock option grants or warrant grants for the Current Nine Months or Prior Year Nine Months.

Summaries of the Company’s stock options, warrants (other than warrants issued related to our 1.50% Convertible Notes and 2.50% Convertible Notes) and performance related options activity, and related information for the Current Quarter are as follows:

Options	Options			Weighted-Average Exercise Price
Outstanding at January 1, 2013		1,444,150		$	5.90
Granted		—			—
Canceled		—			—
Exercised		(121,073	)		2.72
Expired/Forfeited		—			—
Outstanding and Exercisable at September 30, 2013		1,323,077		$	6.19

Warrants	Warrants		Weighted-Average Exercise Price
Outstanding at January 1, 2013		190,000	$	19.80
Granted		—		—
Canceled		—		—
Exercised		—		—
Expired/Forfeited		—		—
Outstanding and Exercisable at September 30, 2013		190,000	$	19.80

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:

	Shares			Weighted-Average Grant Date Fair Value
Non-vested, January 1, 2013		2,612,000		$	18.56
Granted		523,565			23.62
Vested		(114,001	)		20.74
Forfeited/Canceled		(150,050	)		16.70
Non-vested, September 30, 2013		2,871,514		$	19.49

Compensation expense related to restricted stock grants for the Current Quarter and the Prior Year Quarter was approximately $4.6 million and $2.3 million, respectively. Compensation expense related to restricted stock grants for the Current Nine Months and the Prior Year Nine Months was approximately $12.5 million and $7.5 million, respectively. Included in compensation expense related to restricted stock grants in the Current Quarter and Current Nine Months is approximately $3.3 million and $8.0 million, respectively, related to certain performance-based stock grants, the recognition of which, based on certain full year 2013 performance criteria, the Company has deemed probable or earned as of September 30, 2013. An additional amount of $13.6 million is expected to be expensed over a period of approximately three years. During the Current Quarter and the Prior Year Quarter, the Company withheld shares valued at $0.2 million, and $0.2 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 $2.7 million, and $0.6 million, respectively, of its restricted common stock in connection with net shares settlement of restricted stock grants and option exercises.