16.

STOCK BASED COMPENSATION

Share Based Compensation:

The Company originally established a Stock Option and Incentive Plan in 1997 (the “1997 Plan”). On June 1, 2006, the Company adopted the Amended and Restated Stock Option and Incentive Plan (the “Amended Plan”), which amended and extended the 1997 Plan. Under the plan, a total of sixteen million shares of Common Stock (adjusted for the effects of the 2014 stock split) were reserved for issuance. The dates on which options granted under the Amended Plan become first exercisable are determined by the Compensation Committee of the Board of Directors, but generally vest over a four-year period from the date of grant. The term of any option may not exceed ten years from the date of grant. No stock options were issued for the three months ended June 30, 2015 and 2014.

The Company accounts for share-based compensation based on the estimated fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s Statement of Comprehensive Income. Share-based compensation expense recognized as above for the three months ended June 30, 2015 and 2014 was $1.63 million and $1.59 million, respectively, including a charge for restricted stock units. Share-based compensation expense recognized as above for the six months ended June 30, 2015 and 2014 was $3.41 million and $3.01 million, respectively, including a charge for restricted stock.

The shares issued upon the exercise of the options are new share issues after taking into account the effects of the 2014 stock splits.

Restricted Stock Units:

Also under the Amended Plan, on different dates during the year ended December 31, 2011 and 2010, the Company issued restricted stock unit awards of 182,728 and 418,716 (adjusted to account for 2014 stock split), respectively, to its non-employee directors and some employees as well as to some employees of its subsidiaries. The restricted stock unit awards were granted to employees for their future services as a retention tool at a zero exercise price, and vest in shares with regards to 25% of the awards issued on or after the first, second, third and fourth anniversary of the grant dates.

On different dates during the year ended December 31, 2014, 2013 and 2012, and for the six months ended June 30, 2015 the Company issued restricted stock unit awards (adjusted to account for the 2014 stock split) of 293,904, 187,056, 217,656 and 13,840 respectively, to its non-employee directors and some employees as well as to some employees of its subsidiaries. The restricted stock unit awards were granted to employees for their future services as a retention tool at a zero exercise price and vest in shares with regards to 25% of the awards issued on or after the first, second, third and fourth anniversary of the grant dates.

The impact on the Company’s results of operations of recording stock-based compensation (including impact of restricted stock unit) for the three and six months ended June 30, 2015 and 2014 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	*(in thousands)*				*(in thousands)*
Cost of revenues	$	628	$	472	$	1,244	$	932
Selling, general and administrative expenses		997		1,115		2,170		2,081

	$	1,625	$	1,587	$	3,414	$	3,013

A summary of the activity for restricted stock unit awards (adjusted to reflect the stock split) granted under our stock-based compensation plans as of June 30, 2015 and changes during the period ended is presented below:


	Six Months Ended June 30, 2015					2014
	Number Of Awards			Weighted Average Grant Date Fair Value		Number Of Awards			Weighted Average Grant Date Fair Value
Unvested at January 1		564,314		$	37.37		501,292		$	28.64
Granted		13,840			47.04		293,904		$	42.79
Vested		(58,132	)		39.31		(227,882	)	$	25.03
Forfeited		(23,304	)		35.37		(3,000	)	$	44.90

Unvested at June 30		496,718		$	37.51		564,314		$	37.37

As of June 30, 2015, $14.2 million of total remaining unrecognized stock-based compensation cost related to restricted stock unit awards is expected to be recognized over the weighted-average remaining requisite service period of 2.2 years.