(11) Share-based Compensation

In September 2013, the Board of Directors approved the Company’s 2013 Stock Incentive Plan (the “original 2013 Equity Plan”, and, as amended, the “2013 Equity Plan”), under which the Company’s employees, officers, directors, and other eligible participants may be awarded various types of share-based compensation, and authorized 600,000 shares of the Company’s class A common stock for issuance under the original 2013 Equity Plan. In April 2014, the Company’s stockholders approved the original 2013 Equity Plan.

In April 2014, following stockholder approval of the original 2013 Equity Plan, the Board of Directors authorized, subject to stockholder approval, an amendment to the original 2013 Equity Plan to increase the total number of shares of the Company’s class A common stock authorized for issuance under the 2013 Equity Plan from 600,000 to 1,500,000 shares (“Amendment No. 1”). Also in April 2014, the Compensation Committee of the Board of Directors (the “Compensation Committee”) authorized, subject to stockholder approval, an additional amendment to the original 2013 Equity Plan to provide for automatic annual stock option grants to each of the Company’s non-employee directors with respect to 5,000 shares of the Company’s class A common stock, beginning in May 2015 (“Amendment No. 2”).

During 2014 and the first quarter of 2015, the Compensation Committee approved, in each case subject to stockholder approval of Amendment No. 1, the grant of stock options to purchase an aggregate of 745,000 and 200,000 shares of class A common stock, respectively, to certain Company employees, officers, and directors pursuant to the 2013 Equity Plan. In April 2015, the Company’s stockholders approved Amendments No. 1 and 2 at the Company’s annual meeting. As of March 31, 2015, and taking into account the shares authorized and options granted subject to approval of Amendments No. 1 and 2, there were options to purchase 1,335,000 shares of class A common stock outstanding under the 2013 Equity Plan and 140,000 remaining shares of class A common stock authorized for issuance and not subject to outstanding awards under the 2013 Equity Plan.

The following table summarizes the Company’s stock option activity (in thousands, except per share data and years) for the three months ended March 31, 2015:


	Stock Options Outstanding
	Shares			Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (Years)
Balance as of January 1, 2015		1,201		$	111.77
Granted		200			165.01
Exercised		(16	)		92.84	$	1,170
Forfeited/Expired		(50	)		127.39

Balance as of March 31, 2015		1,335		$	119.39

Exercisable as of March 31, 2015		125		$	92.84	$	9,544		7.0
Expected to vest as of March 31, 2015		1,130		$	122.29	$	53,001		8.9

Total		1,255		$	119.35	$	62,545		8.7

Stock options outstanding as of March 31, 2015 are comprised of the following range of exercise prices per share (in thousands, except per share data and years):


	Stock Options Outstanding at March 31, 2015
Range of Exercise Prices per Share	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)
$92.84 - $120.00		540	$	94.76		7.0
$120.01 - $150.00		520	$	121.43		9.1
$150.01 - $165.01		275	$	163.88		8.7

Total		1,335	$	119.39		8.2

No stock options vested during the three months ended March 31, 2015. The Company expects the majority of unvested options at March 31, 2015 to fully vest in future years in accordance with their vesting schedules. Share-based compensation expense has been adjusted, where applicable, for any expected forfeitures. The weighted average grant date fair value of stock option awards using the Black-Scholes pricing model was $68.19 for each share subject to a stock option granted during the three months ended March 31, 2015, based on the following assumptions:


	Three months ended
	March 31,
	2015
Expected term of options in years		6.3
Expected volatility		40.2	%
Risk-free interest rate		1.5	%
Expected dividend yield		0.0	%

No stock option awards were granted during the three months ended March 31, 2014.

For the three months ended March 31, 2015 and 2014, the Company recognized approximately $3.6 million and $1.6 million, respectively, in share-based compensation expense from stock options granted under the 2013 Equity Plan. As of March 31, 2015, there was approximately $49.7 million of total unrecognized share-based compensation expense related to unvested stock options. The Company expects to recognize this remaining share-based compensation expense over a weighted average vesting period of approximately 3.1 years.

During the three months ended March 31, 2015, the Company was able to recognize and utilize net operating loss carryforwards arising directly from tax deductions related to equity compensation in excess of compensation recognized for financial reporting that was generated under the 2013 Equity Plan. Accordingly, stockholders’ equity increased by $0.5 million during the three months ended March 31, 2015. During the three months ended March 31, 2014, no windfall tax benefits were realized from the exercise of stock options.