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STOCK-BASED COMPENSATION (Note)
6 Months Ended
Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
Non-cash compensation related to equity awards is included in the following line items in the accompanying consolidated statements of operations and comprehensive income (in thousands):
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Cost of revenue
$
29

 
$
24

 
$
70

 
$
44

Selling and marketing expense
655

 
385

 
1,381

 
655

General and administrative expense
1,129

 
1,125

 
2,439

 
2,731

Product development
616

 
385

 
1,172

 
825

Restructuring and severance

 
138

 

 
138

Total non-cash compensation
$
2,429

 
$
2,057

 
$
5,062

 
$
4,393


Stock Options
A summary of changes in outstanding stock options is as follows:
 
Number of Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value(a)
 
 
 
(per option)
 
(in years)
 
(in thousands)
Options outstanding at January 1, 2016
1,918,182

 
$
18.85

 
 
 
 

Granted (b)
73,159

 
75.07

 
 
 
 

Exercised
(1,244
)
 
33.59

 
 
 
 

Forfeited
(4,922
)
 
73.66

 
 
 
 

Expired

 

 
 
 
 

Options outstanding at June 30, 2016
1,985,175

 
20.77

 
5.60
 
$
134,344

Options exercisable at June 30, 2016
970,625

 
$
9.45

 
3.13
 
$
76,572

(a)
The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $88.33 on the last trading day of the quarter ended June 30, 2016 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2016. The intrinsic value changes based on the market value of the Company's common stock.
(b)
During the six months ended June 30, 2016, the Company granted stock options to certain employees and the board of directors with a weighted average grant date fair value per share of $37.69, which vesting periods include (a) three years from the grant date, (b) two years from the grant date and (c) 25% and 75% over a period of two years and three years, respectively.
For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the stock options was estimated using the Black-Scholes option pricing model, which requires the use of various key assumptions. The weighted average assumptions used are as follows:
Expected term (1)
5.75 - 6.38 years

Expected dividend (2)

Expected volatility (3)
48% - 53%

Risk-free interest rate (4)
1.24% - 1.90%

(1)
The expected term of stock options granted was calculated using the 'Simplified Method', which utilizes the midpoint between the weighted average time of vesting and the end of the contractual term. This method was utilized for the stock options due to a lack of historical exercise behavior by the Company's employees.
(2)
For all stock options granted in 2016, no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate.
(3)
The expected volatility rate is based on the historical volatility of the Company's common stock.
(4)
The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the awards, in effect at the grant date.
Restricted Stock Units and Restricted Stock
A summary of the changes in outstanding nonvested restricted stock units ("RSUs") and restricted stock is as follows:
 
RSUs
 
Number of Units
 
Weighted Average Grant Date Fair Value
 
 
 
(per unit)
Nonvested at January 1, 2016
237,377

 
$
43.13

Granted
64,666

 
72.32

Vested
(123,182
)
 
29.09

Forfeited
(12,695
)
 
55.26

Nonvested at June 30, 2016
166,166

 
$
63.98

 
 
Restricted Stock
 
Number of
Shares
 
Weighted Average Grant Date Fair Value
 
 
 
(per share)
Nonvested at January 1, 2016
68,762

 
$
23.60

Granted

 

Vested
(35,297
)
 
20.62

Forfeited

 

Nonvested at June 30, 2016
33,465

 
$
26.73



Restricted Stock Units with Performance Conditions
During the three months ended June 30, 2016, the Company granted RSUs with performance conditions to certain employees, of which vesting periods include: (a) 33.3% over a period of 0.33 years, 33.3% over a period of 1.33 years and 33.4% over a period of 2.33 years, each pending the attainment of certain performance targets set at the time of grant (b) 100% after 2.33 years from the grant date, pending the attainment of certain performance targets set at the time of grant and (c) 33.3% upon the completion of certain performance criteria, 33.3% on the first anniversary of the initial vesting and 33.4% on the second anniversary of the initial vesting.
A summary of the changes in outstanding nonvested RSUs with performance conditions is as follows:
 
RSUs with Performance Conditions
 
Number of Units
 
Weighted Average Grant Date Fair Value
 
 
 
(per unit)
Nonvested at January 1, 2016

 
$

Granted
44,052

 
83.92

Vested

 

Forfeited

 

Nonvested at June 30, 2016
44,052

 
$
83.92