(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”). In April 2015, the Company’s stockholders approved Amendments No. 1 and 2 at the Company’s annual meeting.

During the second quarter of 2015, additional stock options to purchase an aggregate of 40,000 shares of class A common stock were granted to certain Company employees and directors pursuant to the 2013 Equity Plan, including options to purchase shares of class A common stock that were granted to the Company’s non-employee directors pursuant to the automatic annual grant provisions of the 2013 Equity Plan. As of June 30, 2015, there were options to purchase 1,306,250 shares of class A common stock outstanding under the 2013 Equity Plan and 130,000 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 June 30, 2015:


	Stock Options Outstanding
	Shares			Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (Years)
Balance as of April 1, 2015		1,335		$	119.39
Granted		40			177.39
Exercised		(39	)		102.52	$	3,049
Forfeited/Expired		(30	)		165.01

Balance as of June 30, 2015		1,306		$	120.62


Exercisable as of June 30, 2015		226		$	108.75	$	13,875		8.5
Expected to vest as of June 30, 2015		1,030		$	124.57	$	47,169		8.7

Total		1,256		$	121.72	$	61,044		8.6

Stock options outstanding as of June 30, 2015 are comprised of the following range of exercise prices per share (in thousands, except per share data and years):


	Stock Options Outstanding at June 30, 2015
Range of Exercise Prices per Share	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)
$ 92.84 - $120.00		507	$	94.49		7.1
$120.01 - $150.00		514	$	121.43		8.8
$150.01 - $178.80		285	$	165.66		9.6

Total		1,306	$	120.62		8.3

An aggregate of 140,000 stock options with an aggregate fair value of $7.6 million vested during the three months ended June 30, 2015. The Company expects the majority of unvested options at June 30, 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 $73.23 and $54.01 for each share subject to a stock option granted during the three months ended June 30, 2015 and 2014, respectively, based on the following assumptions:


	Three months ended June 30,
	2015			2014

Expected term of options in years		6.3			6.3
Expected volatility		39.2 - 39.3	%		42.4 - 42.5	%
Risk-free interest rate		1.9	%		2.2 - 2.3	%
Expected dividend yield		0.0	%		0.0	%

For the three and six months ended June 30, 2015, the Company recognized approximately $4.4 million and $8.0 million, respectively, in share-based compensation expense from stock options granted under the 2013 Equity Plan. For the three and six months ended June 30, 2014, the Company recognized approximately $3.1 million and $4.7 million, respectively, in share-based compensation expense from stock options granted under the 2013 Equity Plan. As of June 30, 2015, there was approximately $48.3 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 3.0 years.

During the six months ended June 30, 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 $1.0 million during the six months ended June 30, 2015. During the six months ended June 30, 2014, no windfall tax benefits were realized from the exercise of stock options.