STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2014

Stock-Based Compensation Expense Included in Consolidated Statements of Operations

The following table presents the stock-based compensation expense included in the Company’s consolidated statements of operations:

	Year ended December 31,
(in thousands)	2014			2013			2012
Stock-based compensation expense:
Cost of revenues	$	5,335		$	4,085		$	3,655
Operating expenses		13,870			8,784			7,851
Total stock-based compensation before tax		19,205			12,869			11,506
Income tax benefit		(5,563	)		(3,918	)		(3,699	)

Weighted-Average Assumptions Used in Black-Scholes Option Valuation Model

The weighted-average assumptions used in the Black-Scholes option valuation model are as follows:

	Year ended December 31,
	2014			2013			2012
Expected volatility (1)		47	%		49	%		54	%
Expected term in years (2)		4.4			4.5			4.3
Risk-free interest rate (3)		1.33	%		1.02	%		0.63	%
Expected annual dividend yield (4)		0.44	%		0.42	%		0.52	%

(1) The expected volatility for each grant is determined based on the average of historical daily price changes of the Company’s common stock over a period of time which approximates the expected option term.

(2) The expected option term for each grant is determined based on the historical exercise behavior of employees and post-vesting employment termination behavior.

(3) The risk-free interest rate is based on the yield of zero-coupon U.S. Treasury securities for a period that is commensurate with the expected option term at the time of grant.

(4) The expected annual dividend yield is based on the weighted-average of the dividend yield assumptions used for options granted during the applicable period. The expected annual dividend has historically been based on the expected dividend of $0.06 per share, per year ($0.015 per share, per quarter times 4 quarters), on a post-split basis, divided by the average stock price. On May 27, 2014, the Company announced an increase in its quarterly cash dividend from $0.015 to $0.03 per share. Thus, for grants made after this date, the expected annual dividend is based on the expected dividend of $0.12 per share, per year ($0.03 per share, per quarter times 4 quarters), divided by the average stock price.

Combined Stock Option Activity

The following table summarizes the combined stock option activity under the Company’s stock option plans for the year ended December 31, 2014:

	Shares (in thousands)			Weighted-average exercise price		Weighted- average remaining contractual term (in years)		Aggregate intrinsic value (in thousands)
Options outstanding as of January 1, 2014		5,996		$	10.48
Granted		1,361			20.05
Exercised		(954	)		7.17
Forfeited/Cancelled		(303	)		13.49
Options outstanding as of December 31, 2014		6,100		$	12.99
Vested and expected to vest as December 31, 2014		5,103		$	12.67		6.8	$	41,449
Exercisable as of December 31, 2014		2,558		$	10.03		5.1	$	27,477

Combined Restricted Stock Units Activity

The following table summarizes the combined RSU activity for periodic grants and the CICP under the Restated 2004 Plan for the year ended December 31, 2014:

	Shares     (in thousands)			Weighted- Average Grant-Date     Fair Value		Aggregate Intrinsic Value     (in thousands)
Nonvested as of January 1, 2014		928		$	16.02
Granted		1,301			19.88
Vested		(389	)		15.60
Forfeited		(122	)		18.00
Nonvested as of December 31, 2014		1,718		$	18.90	$	35,678
Expected to vest as of December 31, 2014		1,294		$	19.00	$	26,881