(5) Stockholders' Equity

In May 2006, the Company adopted the 2006 Equity Incentive Plan (the 2006 Plan), which was amended May 9, 2007. The primary purpose of the 2006 Plan is to encourage ownership in the Company by key personnel, whose long-term service is considered essential to the Company's continued success. The 2006 Plan provides for 6,000,000 shares of the Company's common stock that are reserved for issuance to employees, directors, or consultants. The maximum aggregate number of shares that may be issued under the 2006 Plan through the exercise of incentive stock options is 4,500,000. Pursuant to the Deferred Stock Unit Compensation Plan, a Sub Plan under the 2006 Plan, a participant may elect to defer settlement of their outstanding unvested awards until such time as elected by the participant.

The Company grants NSUs annually to key personnel. The NSUs granted entitle the employee recipients to receive shares of common stock in the Company upon vesting of the NSUs. The vesting of most NSUs is subject to achievement of certain performance targets, with the remaining NSUs subject only to time restrictions. For NSUs granted prior to 2011, these awards vest in quarterly increments between the third and fourth anniversary of the grant. For the majority of NSUs granted in 2011 and after, if the performance goals are achieved, these awards vest in equal one-third installments at the end of each of the three years after the performance goals are achieved. For NSUs granted in 2012, the performance target was not met and, therefore, the awards will not vest.

The Company also has long-term incentive award agreements under the 2006 Plan for issuance of SAR awards and RSU awards to the Company's current and future executive officers. These awards vest subject to certain long-term performance objectives and certain long-term service conditions. One-half of the SAR and RSU awards vested 80% on December 31, 2010 and 20% on December 31, 2011, and, provided that the conditions are met, one-half of the SAR and RSU awards vest 80% on December 31, 2015 and 20% on December 31, 2016. The Company considers achievement of the remaining performance conditions as probable and is recognizing such compensation cost over the service period.

In June 2011, the Board of Directors of the Company adopted a long-term incentive award under its 2006 Equity Incentive Plan (Level III Awards). The shares under these awards will be available for issuance to current and future members of the Company's management team, including the Company's named executive officers. Each recipient will receive a specified maximum number of RSUs, each of which will represent the right to receive one share of the Company's common stock. These awards vest subject to certain long-term performance objectives and certain long-term service conditions. The awards will vest on December 31, 2014 only if the Company meets certain revenue targets ranging between $1,850,000 and $2,500,000 and certain diluted earnings per share targets ranging between $7.00 and $9.60 for the year ended December 31, 2014. No vesting of any Level III Award will occur if either of the threshold performance criteria is not met for the year ending December 31, 2014. To the extent financial performance is achieved above the threshold levels, the number of RSUs that will vest will increase up to the maximum number of units granted under the award. Under this program, the Company granted a maximum amount of 275,000 RSUs during the year ended December 31, 2011. The grant date fair value of these RSUs was $82.09 per share. As of December 31, 2013, 2012 and 2011, the Company did not believe that the achievement of the performance objectives for the Level III Awards was probable, and therefore the Company did not recognize compensation expense for these awards. If the performance objectives become probable, the Company will then begin recording an expense for the Level III Awards and would recognize a cumulative catch-up adjustment in the period they become probable. As of December 31, 2013, the cumulative amount would be approximately $14,000 based on the maximum number of units if the performance objectives were probable.

In May 2012, the Board of Directors of the Company adopted a long-term incentive award under its 2006 Equity Incentive Plan (2012 LTIP Awards). The shares under these awards will be available for issuance to current and future members of the Company's management team, including the Company's named executive officers. Each recipient will receive a specified maximum number of RSUs, each of which will represent the right to receive one share of the Company's common stock. These awards vest subject to certain long-term performance objectives and certain long-term service conditions. The awards will vest on December 31, 2015 only if the Company meets certain revenue targets ranging between $2,200,000 and $2,900,000 and certain diluted earnings per share targets ranging between $7.00 and $10.50 for the year ended December 31, 2015. No vesting of any 2012 LTIP Awards will occur if either of the threshold performance criteria is not met for the year ending December 31, 2015. To the extent financial performance is achieved above the threshold levels, the number of RSUs that will vest will increase up to the maximum number of units granted under the award. Under this program, the Company granted awards that contain a maximum amount of 352,000 RSUs during the year ended December 31, 2012. The grant date fair value of these RSUs was $56.12 per share. As of December 31, 2013 and 2012, the Company did not believe that the achievement of the performance objectives of these awards was probable, and therefore the Company did not recognize compensation expense for these awards. If the performance objectives become probable, the Company will then begin recording an expense for the 2012 LTIP Awards and would recognize a cumulative catch-up adjustment in the period they become probable. As of December 31, 2013, the cumulative amount would be approximately $8,000 based on the maximum number of units if the performance objectives were probable.

In December 2013, the Board of Directors of the Company adopted a long-term incentive award under its 2006 Equity Incentive Plan (2013 LTIP Awards). The shares under these awards will be available for issuance to current and future members of the Company's management team, including the Company's named executive officers. Each recipient will receive a specified maximum number of RSUs, each of which will represent the right to receive one share of the Company's common stock. These awards vest subject to certain long-term performance objectives and certain long-term service conditions. The recipients of these awards are divided into two participant groups, revenue generating and non-revenue generating. The awards for the non-revenue generating participants will vest on March 31, 2016 only if the Company meets certain revenue targets ranging between $2,290,000 and $2,558,000 and certain EBITDA targets ranging between $372,000 and $415,000 for the fiscal year ending March 31, 2016. The awards for the revenue generating participants will vest on March 31, 2016 only if the Company achieves EBITDA of $350,000 and the respective revenue by brand and channel managed by each participant meets certain revenue targets that are tailored to each brand and channel for the fiscal year ending March 31, 2016. No vesting of any 2013 LTIP Awards will occur if either of the threshold performance criteria is not met for the year ending March 31, 2016. To the extent financial performance is achieved above the threshold levels, the number of RSUs that will vest will increase up to the maximum number of units granted under the award. Under this new program, the Company granted awards that contain a maximum amount of 156,000 RSUs during the year ended December 31, 2013. The grant date fair value of these RSUs was $84.52 per share. As of December 31, 2013, as a result of the Company's current long-range forecast, the Company believed that the achievement of at least the threshold performance objectives of these awards was probable, and therefore the Company recognized compensation expense accordingly. The amount recognized was immaterial to the Company's consolidated financial statements.

In February 2012, the Company approved a stock repurchase program to repurchase up to $100,000 of the Company's common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors. The program did not obligate the Company to acquire any particular amount of common stock and the program could have been suspended at any time at the Company's discretion. During the six months ended June 30, 2012, the Company repurchased approximately 1,749,000 shares under this program, for approximately $100,000, or an average price of $57.16. As of June 30, 2012, the Company had repurchased the full amount authorized under this program. The purchases were funded from available working capital.

In June 2012, the Company approved a new stock repurchase program to repurchase up to $200,000 of the Company's common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors. The program does not obligate the Company to acquire any particular amount of common stock and the program may be suspended at any time at the Company's discretion. As of December 31, 2013 and 2012, the Company had repurchased approximately 2,765,000 shares under this program, for approximately $120,700, or an average price of $43.66, leaving the remaining approved amount at $79,300.

On a quarterly basis, the Company grants fully-vested shares of its common stock to each of its outside directors. The fair value of such shares is expensed on the date of issuance.

The table below summarizes stock compensation amounts recognized in the consolidated statements of comprehensive income:



	Year Ended December 31,
	2013			2012			2011
Compensation expense recorded for:
NSUs	$	10,545		$	11,849		$	11,719
SARs	1,302			1,501			1,813
RSUs	287			231			305
Directors' shares	1,002			1,080			966
Total compensation expense	13,136			14,661			14,803
Income tax benefit recognized	(4,950		)	(5,573		)	(5,788		)
Net compensation expense	$	8,186		$	9,088		$	9,015

The table below summarizes the total remaining unrecognized compensation cost related to nonvested awards that are considered probable of vesting as of December 31, 2013, and the weighted-average period over which the cost is expected to be recognized as of December 31, 2013:



	Unrecognized Compensation Cost		Weighted-Average Remaining Vesting Period (Years)
NSUs	$	12,427	1.8
SARs	3,582		2.2
RSUs	4,859		2.2
Total	$	20,868

The unrecognized compensation cost excludes a maximum of $19,825 and $18,445 of compensation cost on the Level III Awards and 2012 LTIP Awards, respectively, as achievement of the performance conditions are not considered probable.

Nonvested Stock Units Issued Under the 2006 Plan



	Number of Shares		Weighted- Average Grant-Date Fair Value
Nonvested at January 1, 2011	798,000		$	35.61
Granted	199,000		87.50
Vested	(263,000	)	40.31
Forfeited	(57,000	)	46.61
Nonvested at December 31, 2011	677,000		$	48.14
Granted	209,000		63.18
Vested	(297,000	)	35.90
Forfeited	(18,000	)	63.68
Cancelled*	(200,000	)	62.17
Nonvested at December 31, 2012	371,000		$	58.51
Granted	304,000		57.30
Vested	(315,000	)	53.19
Forfeited	(20,000	)	61.08
Nonvested at December 31, 2013	340,000		$	62.23

_______________________________________________________________________________

* Nonvested Stock Units cancelled during the period represent awards granted whose performance criteria were not met.

Stock Appreciation Rights Issued Under the 2006 Plan



	Number of SARs		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2011	1,125,000		$	26.73	8.7	$	59,636
Granted	—		—
Exercised	(365,000	)	26.73
Forfeited	—		—
Outstanding at December 31, 2011	760,000		$	26.73	8.8	$	37,118
Granted	—		—
Exercised	(15,000	)	26.73
Forfeited	—		—
Outstanding at December 31, 2012	745,000		$	26.73	7.9	$	10,087
Granted	—		—
Exercised	(15,000	)	26.73
Forfeited	—		—
Outstanding at December 31, 2013	730,000		$	26.73	6.9	$	42,143
Exercisable at December 31, 2013	205,000		$	26.73	3.4	$	11,835
Expected to vest and exercisable at December 31, 2013	694,817		$	26.73	6.9	$	40,112

The maximum contractual term is 10 and 15 years from the date of grant for those SARs with final vesting dates of December 31, 2011 and December 31, 2016, respectively. The number of SARs expected to vest is based on the probability of achieving certain performance conditions and is also reduced by estimated forfeitures. The difference between the amount outstanding and the amount expected to vest and exercisable at December 31, 2013 was estimated forfeitures for estimated failure to meet the long-term service conditions. On February 29, 2012, 120,000 SARs that vested on December 31, 2011 became exercisable.

Restricted Stock Units Issued Under the 2006 Plan



	Number of Shares		Weighted- Average Grant-Date Fair Value
Nonvested at January 1, 2011	85,000		$	26.73
Granted	275,000		82.09
Vested	(16,000	)	26.73
Forfeited	(25,000	)	82.09
Nonvested at December 31, 2011	319,000		$	70.15
Granted	352,000		56.12
Vested	—		—
Forfeited	—		—
Nonvested at December 31, 2012	671,000		$	62.80
Granted	156,000		84.52
Vested	—		—
Forfeited	(32,000	)	63.69
Nonvested at December 31, 2013	795,000		$	67.03

The amounts granted in 2011, 2012 and 2013 are the maximum amount under the Level III Awards, 2012 LTIP Awards and 2013 LTIP Awards, respectively.