(10) Share-based Compensation

The Company’s 2013 Stock Incentive Plan (as amended, the “2013 Equity Plan”) authorizes the issuance of various types of share-based awards to the Company’s employees, officers, directors, and other eligible participants. In October 2015, the Board of Directors authorized, and in May 2016 the Company’s stockholders approved, an increase in the total number of shares of the Company’s class A common stock authorized for issuance under the 2013 Equity Plan from 1,500,000 shares to 1,700,000 shares.

During the second quarter of 2016, stock options to purchase an aggregate of 45,000 shares of class A common stock were granted to certain Company directors and employees pursuant to the 2013 Equity Plan. As of June 30, 2016, there were options to purchase 935,000 shares of class A common stock outstanding under the 2013 Equity Plan. As of June 30, 2016, there were 557,500 remaining shares of class A common stock authorized for future issuance 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, 2016:


	Stock Options Outstanding
	Shares			Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (Years)
Balance as of April 1, 2016		896		$	144.13
Granted		45			189.62
Exercised		(6	)		146.61	$	241
Forfeited/Expired		0			0.00

Balance as of June 30, 2016		935		$	146.31

Exercisable as of June 30, 2016		312		$	128.45	$	14,578		8.0
Expected to vest as of June 30, 2016		623		$	155.27		16,430		8.5

Total		935		$	146.31	$	31,008		8.3

Stock options outstanding as of June 30, 2016 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, 2016
Range of Exercise Prices per Share	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)
$117.85 - $120.00		30	$	118.63		7.8
$120.01 - $150.00		514	$	121.43		7.8
$150.01 - $180.00		216	$	167.21		8.7
$180.01 - $201.25		175	$	198.26		9.4

Total		935	$	146.31		8.3

An aggregate of 150,000 stock options with an aggregate fair value of $8.3 million vested during the three months ended June 30, 2016. The Company expects all unvested options at June 30, 2016 to fully vest in future years in accordance with their vesting schedules. Therefore, share-based compensation expense has not been adjusted for any expected forfeitures. The weighted average grant date fair value of stock option awards using the Black-Scholes pricing model was $75.54 and $73.23 for each share subject to a stock option granted during the three months ended June 30, 2016 and 2015, respectively, based on the following assumptions:


	Three months ended
	June 30,
	2016			2015
Expected term of options in years		6.3			6.3
Expected volatility		38.5	%		39.2 - 39.3	%
Risk-free interest rate		1.4 - 1.6	%		1.9	%
Expected dividend yield		0.0	%		0.0	%

For the three and six months ended June 30, 2016, the Company recognized approximately $3.6 million and $5.1 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, 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. As of June 30, 2016, there was approximately $36.0 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 2.6 years.

During the six months ended June 30, 2016 and 2015, the Company was able to recognize and utilize tax deductions related to equity compensation in excess of compensation recognized for financial reporting that was generated under the 2013 Equity Plan. Accordingly, additional paid-in capital increased by $1.2 million and $1.0 million during the six months ended June 30, 2016 and 2015, respectively.

During the six months ended June 30, 2016, the Company wrote off $1.7 million of deferred tax assets related to certain vested stock options that were no longer exercisable. Accordingly, additional paid-in capital decreased by $1.7 million during the six months ended June 30, 2016. No such adjustment was made during the six months ended June 30, 2015.

During the six months ended June 30, 2016, the Company paid $3.7 million to tax authorities related to the net exercise of a stock option under the 2013 Equity Plan. This payment resulted in a $3.7 million reduction to additional paid-in capital during the six months ended June 30, 2016. No net exercises of stock options were made during the six months ended June 30, 2015.