STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2014

STOCK-BASED COMPENSATION

12.    STOCK-BASED COMPENSATION

For the second quarter and first six 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 June 30,				Six Months Ended June 30,
(in thousands)	2014		2013		2014		2013
Cost of services	$	1,387	$	1,014	$	2,398	$	2,187
Operating expenses		3,771		2,267		6,055		4,526
Total stock-based compensation before tax	$	5,158	$	3,281	$	8,453	$	6,713
Income tax benefit		(1,591)		(944)		(2,582)		(2,047)

On April 1, 2014, the Company effected a two-for-one stock split of the Company’s common stock in the form of a stock dividend. 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 six months of 2014, the Company issued approximately 422,000 shares to its employees and 22,000 shares to its non-employee directors under the Company’s share-based compensation plans.

During the first six months of 2014, the Company granted approximately 1,049,000 restricted stock units (“RSUs”) and 1,070,000 non-qualified stock options to its employees with total fair values of approximately $20.7 million and $8.2 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 million associated with this RSU grant will be recognized over a one-year period beginning on the grant date.

The Company recognizes stock based compensation on the accelerated recognition method, while treating each vesting tranche as if it were an individual grant. As of June 30, 2014, the Company had approximately $25.6 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 2.2 years.