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Capital Stock | 12 Months Ended
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Dec. 31, 2013
Capital Stock |
18. | CAPITAL STOCK
Common Stock — Common stockholders are entitled to vote on all matters submitted to a vote of the Company’s stockholders. Subject to the rights of holders of any then outstanding shares of the Company’s preferred stock, the Company’s common stockholders are entitled to any dividends that may be declared by the board of directors. The shares of the Company’s common stock are not subject to any redemption provisions. The Company has no issued and outstanding shares of preferred stock. The Company’s ability to pay dividends is effectively limited by its status as a holding company and the terms of its subsidiary’s indentures and amended senior secured credit facility, which also significantly restricts the ability of certain of the Company’s subsidiaries to pay dividends directly or indirectly to the Company. See Note 12. Furthermore, certain of the Company’s foreign subsidiaries currently have a deficit in retained earnings which prevents the Company from declaring and paying dividends from those subsidiaries. Treasury Stock — Treasury stock represents shares of common stock repurchased by the Company and not yet retired. The Company has applied the cost method in recording its treasury shares. Below is a summary of the Company’s treasury stock activity for the years ended December 31, 2012 and 2013:
|  | Number of Treasury Shares |  |  | Cost |
Balance at January 1, 2012 |  |  | 3,391,592 |  |  | $ | 45,219 |
Restricted stock forfeitures (1) |  |  | 14,423 |  |  |  | — |
Restricted stock withholdings (2) |  |  | 147,070 |  |  |  | 3,263 |
Balance at December 31, 2012 |  |  | 3,553,085 |  |  | $ | 48,482 |
Restricted stock forfeitures (1) |  |  | 22,653 |  |  |  | — |
Restricted stock withholdings (2) |  |  | 119,197 |  |  |  | 3,464 |
Balance at December 31, 2013 |  |  | 3,694,935 |  |  | $ | 51,946 |
(1) | The Company repurchased forfeited and canceled restricted shares at a cost of $0.001 per share in accordance with the Company’s Amended and Restated 2006 Long Term Incentive Plan.
(2) | The Company withheld restricted shares as a result of the election by certain employees to satisfy their tax liabilities upon vesting in restricted stock. The Company determined the number of shares to be withheld based upon market values that ranged from $22.40 to $30.23 per share.
As of December 31, 2013, the Company had no plans to retire any shares of treasury stock. Stock Options — Below is a summary of stock option activity and related information for the years ended December 31, 2011, 2012 and 2013:
|  | Year Ended December 31, 2011 |  |  | Year Ended December 31, 2012 |  |  | Year Ended December 31, 2013 |  |  |  |
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Shares |  |  | Weighted Average Exercise Price |  |  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Aggregate Intrinsic Value |
Outstanding at January 1 |  |  | 140,356 |  |  | $ | 7.63 |  |  |  | 82,166 |  |  | $ | 7.63 |  |  |  | 22,022 |  |  | $ | 7.63 |  |  |  |  |
Exercised |  |  | (58,190 | ) |  | $ | 7.63 |  |  |  | (60,144 | ) |  | $ | 7.63 |  |  |  | (7,438 | ) |  | $ | 7.63 |  |  |  |  |
Outstanding at December 31 |  |  | 82,166 |  |  | $ | 7.63 |  |  |  | 22,022 |  |  | $ | 7.63 |  |  |  | 14,584 |  |  | $ | 7.63 |  |  | $ | 375 |
Vested options at December 31 |  |  | 82,166 |  |  | $ | 7.63 |  |  |  | 22,022 |  |  | $ | 7.63 |  |  |  | 14,584 |  |  | $ | 7.63 |  |  | $ | 375 |
All outstanding stock options were fully vested as of April 2, 2009. There were no options granted or forfeited during any of the periods presented. The total intrinsic value of options exercised during the years ended December 31, 2011, 2012 and 2013, was $699, $1,070 and $168, respectively. The Company recognized tax benefits of approximately $238, $449 and $71 related to the options exercised during the year ended December 31, 2011, 2012 and 2013, respectively. All options outstanding at December 31, 2013 have a remaining contractual life of approximately nine months. Restricted Stock — Below is a summary of restricted stock activity for the years ended December 31, 2011, 2012 and 2013:
|  | Year Ended December 31, 2011 |  |  | Year Ended December 31, 2012 |  |  | Year Ended December 31, 2013 |
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Shares |  |  | Weighted Average Exercise Price |  |  | Shares of Restricted Stock |  |  | Weighted Average Grant Date Fair Value |
Outstanding at January 1 |  |  | 1,254,691 |  |  | $ | 14.60 |  |  |  | 1,384,390 |  |  | $ | 16.85 |  |  |  | 1,534,163 |  |  | $ | 18.85 |
Granted |  |  | 424,436 |  |  | $ | 19.45 |  |  |  | 653,229 |  |  | $ | 21.70 |  |  |  | 271,532 |  |  | $ | 30.09 |
Vested |  |  | (288,204 | ) |  | $ | 10.84 |  |  |  | (489,033 | ) |  | $ | 17.00 |  |  |  | (522,129 | ) |  | $ | 17.27 |
Canceled |  |  | (4,613 | ) |  | $ | 18.35 |  |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | — |
Forfeited |  |  | (1,920 | ) |  | $ | 14.34 |  |  |  | (14,423 | ) |  | $ | 18.58 |  |  |  | (22,653 | ) |  | $ | 22.92 |
Outstanding at December 31 |  |  | 1,384,390 |  |  | $ | 16.85 |  |  |  | 1,534,163 |  |  | $ | 18.85 |  |  |  | 1,260,913 |  |  | $ | 21.86 |
During the year ended December 31, 2013, the Company granted 271,532 shares of restricted stock to directors and employees of the Company. The fair value of the restricted stock granted was determined based on the market value of the Company’s common stock on the date of grant, which ranged from $27.92 to $33.74 per share. The Company assumed forfeiture rates ranging from 0% to 5% for the restricted stock awards. Restricted stock granted to directors vests over a one-year period. Certain of the restricted stock granted to employees vests over three years based on continued service and certain of the restricted stock granted to employees vests over four years based on continued service. Certain awards were granted during November 2013 in conjunction with the sale of the Company’s Mexico theatres and vested immediately upon closing of the transaction. The recipients of restricted stock are entitled to receive dividends and to vote their respective shares, however, the sale and transfer of the restricted shares is prohibited during the restriction period. The Company recorded total compensation expense of $6,591, $10,637 and $12,738 related to restricted stock awards during the years ended December 31, 2011, 2012 and 2013, respectively. Upon vesting of certain of the awards to employees, the Company receives an income tax deduction. The total fair value of shares vested during the years ended December 31, 2011, 2012 and 2013 was $5,658, $9,702 and $10,161, respectively. The Company recognized tax benefits of approximately $2,188, $4,075 and $4,268, related to shares that vested during the years ended December 2011, 2012 and 2013, respectively. As of December 31, 2013, the remaining unrecognized compensation expense related to these restricted stock awards was approximately $14,395. The weighted average period over which this remaining compensation expense will be recognized is approximately two years. Restricted Stock Units — During the years ended December 31, 2011, 2012 and 2013, the Company granted restricted stock units representing 153,727, 152,955 and 115,107 hypothetical shares of common stock, respectively, to employees. The restricted stock units vest based on a combination of financial performance factors and continued service. The financial performance factors are based on an implied equity value concept that determines an internal rate of return (“IRR”) during a three fiscal year period based on a formula utilizing a multiple of Adjusted EBITDA subject to certain specified adjustments (as defined in the restricted stock unit award agreement). The financial performance factors for the restricted stock units have a threshold, target and maximum level of payment opportunity and vest on a prorata basis according to the IRR achieved by the Company during the performance period. If the IRR for the three year period is at least 8.5%, which is the threshold, at least one-third of the restricted stock units vest. If the IRR for the three year period is at least 10.5%, which is the target, at least two-thirds of the restricted stock units vest. If the IRR for the three year period is at least 12.5%, which is the maximum, at least 100% of the restricted stock units vest. Further, as an example, if the Company achieves an IRR equal to 11.5%, the number of restricted stock units that shall vest will be greater than the target but less than the maximum number that would have vested had the Company achieved the highest IRR. All payouts of restricted stock units that vest will be subject to an additional one year service requirement and will be paid in the form of common stock if the participant continues to provide services through the fourth anniversary of the grant date. At the time of each of the restricted stock unit grants, the Company was not able to determine which IRR level would be reached for the respective three year performance period, therefore the Company assumed the mid-point IRR level for these grants in determining the amount of compensation expense to record for such grants. The fair values of the restricted stock unit awards granted were determined based on the market values of the Company’s common stock on the dates of grant, which ranged from $19.35 to $29.44 per share. The Company assumed forfeiture rates ranging from 0% to 5% for the restricted stock unit awards. Restricted stock unit award participants are eligible to receive dividend equivalent payments if and at the time the restricted stock unit awards vest. Below is a table summarizing the potential number of shares that could vest under restricted stock unit awards granted during the years ended December 31, 2011, 2012 and 2013 at each of the three levels of financial performance (excluding forfeitures):
|  | Granted During the Year Ended December 31, |
|  | 2011 |  |  | 2012 |  |  | 2013 |
|  | Number of Shares Vesting |  |  | Value at Grant |  |  | Number of Shares Vesting |  |  | Value at Grant |  |  | Number of Shares Vesting |  |  | Value at Grant |
at IRR of at least 8.5% |  |  | 51,239 |  |  | $ | 991 |  |  |  | 50,981 |  |  | $ | 1,103 |  |  |  | 38,366 |  |  | $ | 1,129 |
at IRR of at least 10.5% |  |  | 102,488 |  |  | $ | 1,983 |  |  |  | 101,974 |  |  | $ | 2,206 |  |  |  | 76,741 |  |  | $ | 2,259 |
at IRR of at least 12.5% |  |  | 153,727 |  |  | $ | 2,975 |  |  |  | 152,955 |  |  | $ | 3,308 |  |  |  | 115,107 |  |  | $ | 3,389 |
During the year ended December 31, 2012, 196,051 restricted stock unit awards vested. Upon vesting, each restricted stock unit was converted into one share of the Company’s common stock. In addition, the Company paid approximately $600 in dividends on the vested restricted stock units, which represented dividends that had accumulated on the awards since they were granted in 2008. The fair value of the restricted stock unit awards that vested during the year ended December 31, 2012 was approximately $4,400. The Company recognized a tax benefit of approximately $1,848 during the year ended December 31, 2012 related to these vested awards. There were no forfeitures of restricted stock unit awards during the year ended December 31, 2012. During the year ended December 31, 2013, 11,498 restricted stock unit awards were forfeited. During the year ended December 31, 2013, 295,751 restricted stock unit awards vested. Upon vesting, each restricted stock unit was converted into one share of the Company’s common stock. In addition, the Company paid approximately $939 in dividends on the vested restricted stock units, which represented dividends that had accumulated on the awards since they were granted. The fair value of the restricted stock unit awards that vested during the year ended December 31, 2013 was approximately $8,723. The Company recognized a tax benefit of approximately $3,663 during the year ended December 31, 2013 related to these vested awards. The Company recorded total compensation expense of $3,101, $4,433 and $4,148 related to these restricted stock unit awards during the years ended December 31, 2011, 2012 and 2013, respectively. As of December 31, 2013, the Company had restricted stock units outstanding that represented a total of 802,529 hypothetical shares of common stock, net of actual cumulative forfeitures of 11,498 units, assuming the maximum IRR of at least 12.5% is achieved for all of the outstanding restricted stock unit awards. As of December 31, 2013, the remaining unrecognized compensation expense related to the outstanding restricted stock unit awards was $4,048, which assumes the high-point IRR level will be achieved for the 2010 and 2011 grants and the mid-point IRR level will be achieved for the 2012 and 2013 grants. The weighted average period over which this remaining compensation expense will be recognized is approximately one year.

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- Definition The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income, and compensation-related costs for equity-based compensation. Includes, but is not limited to, disclosure of policies, compensation plan details, equity-based arrangements to obtain goods and services, deferred compensation arrangements, and employee stock purchase plan details. + References No definition available. + Details
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