14.STOCK-BASED COMPENSATION

The Company has two equity participation plans (the 2001 Equity Participation Plan and the 2010 Performance and Equity Incentive Plan, the “2010 Plan”) whereby options (both non-qualified and incentive stock options), restricted stock units, stock appreciation rights, and other equity and performance based instruments may be granted to directors, employees, and consultants. The options and restricted stock units generally vest from the date of grant on a straight-line basis over the vesting term and generally have a seven-year or a ten-year contractual life.

Upon the adoption of the 2010 Plan by the Company’s shareholders on May 6, 2010, the 2001 Equity Participation Plan was terminated and the Company is no longer eligible to issue shares pursuant to the plan. The 2010 Plan provides for the issuance of a maximum of 15.0 million shares of the Company’s Class A common stock; however, the aggregate number of shares that may be issued pursuant to restricted stock awards, restricted stock unit awards, stock bonus awards, performance awards, other stock-based awards, or other awards granted under the 2010 Plan will not exceed 7.5 million shares. As of December 31, 2015, the Company had 10.2 million shares remaining available for future issuance under the 2010 Plan.

Stock Options

The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model with the assumptions included in the table below. The Company uses a combination of historical data and historical volatility to establish the expected volatility. Historical data is used to estimate the expected option life and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. The following assumptions were used to estimate the fair value of options granted using the Black-Scholes option-pricing model:



	For the year ended December 31,
	2015	2014	2013

Risk free interest rate	1.21% - 1.46%	1.15% - 1.37%	0.51% - 1.38%
Dividend yield	0.0%	0.0%	0.0%
Expected volatility	20.0%	22.0%	25.0% - 29.0%
Expected lives	4.6 years	4.4 years	3.9 - 4.8 years

The following table summarizes the Company’s activities with respect to its stock option plans for the years ended December 31, 2015, 2014 and 2013 as follows (dollars and number of shares in thousands, except for per share data):



				Weighted-
		Weighted-		Average
		Average		Remaining
	Number	Exercise Price		Contractual	Aggregate
	of Shares	Per Share		Life (in years)	Intrinsic Value
Outstanding at December 31, 2012	2,831	$	34.06
Granted	984	$	73.17
Exercised	(776)	$	27.57
Canceled	(60)	$	52.54
Outstanding at December 31, 2013	2,979	$	48.30
Granted	1,121	$	95.51
Exercised	(780)	$	36.34
Canceled	(44)	$	81.21
Outstanding at December 31, 2014	3,276	$	66.85
Granted	1,076	$	124.24
Exercised	(495)	$	51.58
Canceled	(63)	$	93.74
Outstanding at December 31, 2015	3,794	$	84.66	4.5	$	97,731
Exercisable at December 31, 2015	1,349	$	54.85	3.0	$	67,721
Unvested at December 31, 2015	2,445	$	101.10	5.3	$	30,010

The weighted-average fair value of options granted during the years ended December 31, 2015, 2014 and 2013 was $24.75, $19.49, and $17.38, respectively.

The total intrinsic value for options exercised during the years ended December 31, 2015, 2014 and 2013 was $33.0 million, $49.2 million and $39.3 million, respectively. Cash received from option exercises under all plans for the years ended December 31, 2015, 2014 and 2013 was approximately $25.4 million, $28.3 million, and $21.4 million, respectively. No tax benefit was realized for the tax deductions from option exercises under all plans for the years ended December 31, 2015, 2014 and 2013, respectively.

The aggregate intrinsic value for stock options in the preceding table represents the total intrinsic value based on the Company’s closing stock price of $105.07 as of December 31, 2015. The amount represents the total intrinsic value that would have been received by the holders of the stock-based awards had these awards been exercised and sold as of that date.

Additional information regarding options outstanding and exercisable at December 31, 2015 is as follows:



	Options Outstanding				Options Exercisable
		Weighted Average	Weighted			Weighted
		Remaining	Average			Average
Range	Outstanding	Contractual Life	Exercise Price		Exercisable	Exercise Price
	(in thousands)	(in years)			(in thousands)
$0.00 - $30.00	141	0.6	$	21.74	141	$	21.74
$30.01 - $50.00	840	2.4	$	42.84	704	$	41.93
$50.01 - $90.00	754	4.2	$	72.96	295	$	72.53
$90.01 - $129.00	2,059	5.7	$	110.32	209	$	95.58
	3,794				1,349

The following table summarizes the activity of options outstanding that had not yet vested:



		Weighted-
		Average
	Number	Fair Value
	of Shares	Per Share
	(in thousands)
Unvested as of December 31, 2014	2,221	$	18.89
Shares granted	1,076	$	24.75
Vesting during period	(796)	$	18.98
Forfeited	(56)	$	20.68
Unvested as of December 31, 2015	2,445	$	21.43

As of December 31, 2015, the total unrecognized compensation expense related to unvested stock options outstanding under the Plans is $35.2 million. That cost is expected to be recognized over a weighted average period of 2.6 years.

The total fair value of shares vested during 2015, 2014, and 2013 was $15.1 million, $11.5 million, and $9.8 million, respectively.

Restricted Stock Units

The following table summarized the Company’s restricted stock unit activity for the year ended December 31, 2015:



		Weighted-
		Average
		Grant Date
	Number of	Fair Value per
	Units	Share
	(in thousands)
Outstanding at December 31, 2014	295	$	73.55
Granted	110	$	123.93
Vested	(122)	$	64.35
Forfeited/canceled	(6)	$	95.19
Outstanding at December 31, 2015	277	$	97.14

As of December 31, 2015, total unrecognized compensation expense related to unvested restricted stock units granted under the 2010 Plan was $18.5 million and is expected to be recognized over a weighted-average period of 2.6 years.

Employee Stock Purchase Plan

In 2008, the Board of Directors of the Company adopted the 2008 Employee Stock Purchase Plan (“2008 Purchase Plan”) which reserved 500,000 shares of Class A common stock for purchase. The 2008 Purchase Plan permits eligible employee participants to purchase Class A common stock at a price per share which is equal to 85% of the fair market value of Class A common stock on the last day of an offering period.

For the year ended December 31, 2015, 26,898 shares of Class A common stock were issued under the 2008 Purchase Plan, which resulted in cash proceeds to the Company of approximately $2.6 million, compared to the year ended December 31, 2014 when 23,204 shares of Class A common stock were issued under the 2008 Purchase Plan which resulted in cash proceeds to the Company of $2.1 million. At December 31, 2015, 304,339 shares remained available for issuance under the 2008 Purchase Plan. In addition, the Company recorded $0.5 million, $0.4 million, and $0.3 million of non-cash compensation expense relating to the shares issued under the 2008 Purchase Plans for each of the years ended December 31, 2015, 2014, and 2013.

Non-Cash Compensation Expense

The table below reflects a break out by category of the non-cash compensation expense amounts recognized on the Company’s Statements of Operations for the years ended December 31, 2015, 2014, and 2013, respectively:



		For the year ended December 31,
	2015		2014		2013
	(in thousands)
Cost of revenues	$	405	$	386	$	230
Selling, general and administrative		28,342		22,285		16,975
Total cost of non-cash compensation included
in loss before provision for income taxes		28,747		22,671		17,205
Amount of income tax recognized in earnings		—		—		—
Amount charged against loss	$	28,747	$	22,671	$	17,205

In addition, the Company capitalized $0.5 million, $0.3 million and $0.2 million of non-cash compensation for the years ended December 31, 2015, 2014 and 2013, respectively, to fixed assets.