STOCK BASED COMPENSATION

3 Months Ended

Mar. 31, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

STOCK BASED COMPENSATION

NOTE 6 – STOCK BASED COMPENSATION

At March 31, 2016, we had the following active stock option and stock purchase plans:

· the 2014 Incentive Stock Plan, which our stockholders approved in May 2014;

· the 2011 Incentive Stock Plan, which our stockholders approved in May 2011;

· the 2008 Incentive Stock Plan, which our stockholders approved in May 2008;

· the 2005 Incentive Stock Plan, which our stockholders approved in April 2005;

· the 2000 Non-statutory Stock Option Plan, which expired in February 2010;

· the Employee Stock Purchase Plan (“ESPP”), which our stockholders approved in May 2001.

Stock-Based Compensation Expense:

The following table presents the total stock-based compensation expense resulting from stock option awards, restricted stock units (“RSUs”), and the ESPP included in the Condensed Consolidated Statements of Income:

In thousands
	Three Months Ended March 31,
	2016		2015
Cost of revenues – stock option plan	$	15	$	23
Selling, general and administrative – stock option plan		4,752		4,729
Selling, general and administrative – RSUs		559		346
Selling, general and administrative – ESPP		779		389
Total pre-tax expense	$	6,105	$	5,487

Stock Options:

Stock option activity for the three months ended March 31, 2016, is summarized as follows:

	Number of Options			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life		Total Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding at beginning of year		5,334,803		$	92.02
Granted		1,008,569			111.29
Exercised		(306,088	)		73.22
Forfeited		(28,412	)		118.19
Canceled or expired		(1,939	)		86.92
Outstanding at March 31, 2016		6,006,933			96.10		5.92	$	185,247
Exercisable at March 31, 2016		3,225,121			80.59		4.93	$	147,947

As of March 31, 2016, there was $38.7 million of total unrecognized compensation expense related to non-vested option awards, which is expected to be recognized over a weighted average period of 3.58 years.

The following table sets forth the total intrinsic value of options exercised:

	Three Months Ended March 31,
	2016		2015
Total intrinsic value of options exercised	$	13,229	$	29,525

The total intrinsic value of options exercised represents the total pre-tax value (the difference between the sales price on that trading day the option was exercised and the exercise price associated with the respective option).

The Company uses historical data to estimate expected life and volatility. The estimated fair value of stock options at the time of the grant using the Black-Scholes option pricing model was as follows:

	Three Months Ended March 31,
	2016			2015
Stock options granted (shares)		1,008,569			860,534
Weighted average fair value at grant date (per share)	$	20.19		$	22.84
Assumptions:
Expected term (in years)		4.76			4.79
Expected volatility		18.02	%		16.62	%
Expected dividend yield		—	%		—	%
Risk free interest rate		1.26	%		1.48	%

Restricted Stock Units:

Restricted stock units (“RSUs”) vest annually, or at the end of three and five years. Our 2008, 2011 and 2014 Plans include a share reserve related to RSUs granted at a 2 -1 ratio. A summary of the status of our non-vested RSUs and changes during the three months ended March 31, 2016, are as follows:

	Number of Options		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Life		Total Aggregate Intrinsic Value
					(in years)		(in thousands)
Non-vested at beginning of year		71,451	$	101.29
Granted		53,267		111.12
Non-vested at March 31, 2016		124,718		105.57		2.34	$	15,738

As of March 31, 2016, there was $8.9 million of total unrecognized compensation expense related to RSUs, which is expected to be recognized over a weighted average period of 3.15 years.