STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2014

11. STOCK-BASED COMPENSATION

For the first three months of 2014 and 2013, stock-based compensation expense was reflected in the Company’s unaudited condensed consolidated statements of operations as follows:


	Three Months Ended March 31,
(in thousands)	2014		2013
Cost of services	$	1,011	$	1,173

Operating expenses		2,284		2,259


Total stock-based compensation before tax	$	3,295	$	3,432

Income tax benefit		(991)		(1,103)

On April 1, 2014, the Company effected a two-for-one (2:1) stock split of the Company’s common stock. All shares of common stock and per share amounts in the Company’s unaudited condensed consolidated financial statements and in the accompanying notes for all prior periods presented have been restated to reflect the stock split, except for the number of authorized shares of common stock. See Note 1 “Accounting Policies” for further discussion.

During the first three months of 2014, the Company issued approximately 192,000 shares to its employees under the Company’s share-based compensation plans.

During the first three months of 2014, the Company granted approximately 885,000 restricted stock units (“RSUs”) and 908,000 non-qualified stock options to its employees with total fair values of approximately $17.7 million and $7.1 million, respectively. Approximately 100,000 RSUs were issued in connection with the election by employees to receive 50% of their 2014 target incentive compensation under the Company’s Corporate Incentive Compensation Plan (the “CICP”) in the form of RSUs instead of cash. Stock-based compensation of approximately $2.0 million associated with this RSU grant will be recognized over a one-year period beginning on the grant date.

As of March 31, 2014, the Company had approximately $27.6 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to all unvested RSUs and unvested stock options that is expected to be recognized over a weighted-average period of 2.3 years.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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