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Employee Stock-Based Compensation
12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Employee Stock-Based Compensation
Employee Stock-Based Compensation
Employee Stock-Based Compensation
In June 2010, our board of directors adopted, and in July 2010 our stockholders approved, the 2010 Equity Incentive Plan, which replaced our 2001 Stock Plan, and the 2010 Employee Stock Purchase Plan. The 2010 Equity Incentive Plan authorizes the award of stock options, restricted stock awards, stock appreciation rights, restricted stock units, performance shares and stock bonuses. Options granted under the 2010 Equity Incentive Plan generally vest over four years and expire five years or ten years from the date of grant. The 2010 Employee Stock Purchase Plan enables eligible employees to purchase shares of our Class A common stock periodically at a discount. Our 2010 Employee Stock Purchase Plan is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code. At our 2017 Annual Meeting of Stockholders, our stockholders approved amendments to our 2010 Equity Incentive Plan to increase the number of shares reserved for issuance by 2.8 million. Approximately 2.6 million shares are available for grant under the 2010 Equity Incentive Plan as of December 31, 2018.
Stock-based compensation for the years ended December 31, 2018, 2017, and 2016 includes expense related to awards of stock options, performance and service based restricted stock units and purchases under the 2010 Employee Stock Purchase Plan. Total stock-based compensation expense and the related income tax benefit were as follows:
Note 13—Employee Stock-Based Compensation (continued)
 
Year Ended December 31,
 
2018
 
2017
 
2016
 
(In thousands)
Total stock-based compensation expense
$
50,093

 
$
40,734

 
$
28,321

Related income tax benefit
3,783

 
9,440

 
9,167


Restricted Stock Units
The following table summarizes restricted stock units with only service conditions granted under our 2010 Equity Incentive Plan:
 
Year Ended December 31,
 
2018
 
2017
 
2016
 
(In thousands, except per share data)
Restricted stock units granted
452

 
656

 
1,416

Weighted-average grant-date fair value
$
74.33

 
$
48.72

 
$
22.59


Restricted stock unit activity for the year ended December 31, 2018 was as follows:
 
Shares
 
Weighted-Average Grant-Date Fair Value
 
(In thousands, except per share data)
Outstanding at December 31, 2017
2,223

 
$
28.64

Restricted stock units granted
452

 
$
74.33

Restricted stock units vested
(906
)
 
$
25.74

Restricted stock units canceled
(215
)
 
$
22.77

Outstanding at December 31, 2018
1,554

 
$
44.38


The total fair value of restricted stock vested for the years ended December 31, 2018, 2017 and 2016 was $67.5 million, $41.5 million and $23.2 million, respectively, based on the price of our Class A common stock on the vesting date.
Performance Based Restricted Stock Units
We grant performance-based restricted stock units to certain employees which are subject to the attainment of minimum pre-established annual performance targets. The majority of these awards are tied to the achievement of an annual non-GAAP earnings per share target for the grant year. The actual number of shares subject to the award is determined at the end of the annual performance period and may range from zero to 150% percent of the target shares granted. These awards contain an additional service component after each annual performance period is concluded and the unvested balance of the shares determined at the end of the annual performance period will vest over the remaining requisite service period. Compensation expense related to these awards is recognized using the accelerated attribution method over the four-year vesting period based on the fair value of the closing market price of our Class A common stock on the date of the grant and the estimated performance that is expected to be achieved. In the case of our Chief Executive Officer, vesting of performance awards is based on the achievement of a total shareholder return ("TSR") relative to the S&P 600 index over a three-year performance period. Compensation expense related to these awards is recognized over the performance period based on the grant date fair value through the use of a Monte Carlo simulation and are not subsequently re-measured.
The following table summarizes the performance-based restricted stock units granted under our 2010 Equity Incentive Plan:
Note 13—Employee Stock-Based Compensation (continued)
 
Year Ended December 31,
 
2018
 
2017
 
2016
 
(In thousands, except per share data)
Performance based restricted stock units granted
276

 
616

 
287

Weighted-average grant-date fair value
$
71.70

 
$
36.13

 
$
25.24


Performance based restricted stock unit activity for the year ended December 31, 2018 was as follows:
 
Shares
 
Weighted-Average Grant-Date Fair Value
 
(In thousands, except per share data)
Outstanding at December 31, 2017
924

 
$
30.20

Performance restricted stock units granted (at target)
276

 
$
71.70

Performance restricted stock units vested
(632
)
 
$
28.23

Performance restricted stock units canceled
(67
)
 
$
40.22

Actual adjustment for certified performance periods
336

 
$
30.42

Outstanding at December 31, 2018
837

 
$
45.41


The total fair value of performance based restricted stock vested for the years ended December 31, 2018, 2017 and 2016 was $45.1 million, $4.4 million and $0 million, respectively, based on the price of our Class A common stock on the vesting date.
Stock Options
Stock option activity for the year ended December 31, 2018 was as follows:
 
Options
 
Weighted-Average Exercise Price
 
Weighted-Average Remaining Contractual Life
(in Years)
 
Aggregate Intrinsic Value
 
(In thousands, except per share data and years)
Outstanding at December 31, 2017
1,023

 
$
21.05

 
 
 
 
Options exercised
(771
)
 
21.19

 
 
 
 
Options canceled
(1
)
 
23.54

 
 
 
 
Outstanding at December 31, 2018
251

 
$
20.63

 
3.38
 
$
14,759

Exercisable at December 31, 2018
251

 
20.63

 
3.38
 
$
14,759


The total intrinsic value of options exercised was $36.2 million, $24.1 million and $6.4 million for the years ended December 31, 2018, 2017, and 2016, respectively.
We have not issued any new stock option awards from our equity plan since the year ended December 31, 2014. Accordingly, any additional required disclosures with respect to fair value assumptions of our stock options have been omitted for the periods presented on these consolidated financial statements.
As of December 31, 2018, there was $76.1 million of aggregate unrecognized compensation cost related to unvested restricted stock units (including performance based awards) expected to be recognized in compensation expense in future periods, with a weighted-average period of 2.67 years. As of December 31, 2018, we had no unvested stock options and thus, no remaining unrecognized compensation cost.