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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Share-Based Compensation | SHARE-BASED COMPENSATION Share-Based Compensation Plan We have a stock option plan that provides for the grant of stock options to key employees, directors and non-employee consultants. Stock options generally vest after three to six years of continuous service from the date of grant and have a contractual term of 10 years. Once options become exercisable, the employee can purchase shares of our common stock at the market price on the date we granted the option. We account for share-based compensation utilizing the fair value recognition pursuant to ASC 718, Stock Compensation. During fourth quarter of 2016, we adopted ASU No. 2016-09 "Improvements to Employee Share-Based Payment Accounting," See Note 1 - "Summary of Significant Accounting Policies" for further information. As of December 31, 2016, there were 2.9 million shares available for future grants under the plan from the 20.0 million shares previously approved by the shareholders. Determining Fair Value of Stock Compensation Valuation and Amortization Method. We estimate the fair value of share-based awards granted using the Black-Scholes option valuation model. We amortize the fair value of all awards on a straight-line basis over the requisite service periods, which are generally the vesting periods. Expected Life. The expected life of awards granted represents the period of time that they are expected to be outstanding. The expected life represents the weighted-average period the stock options are expected to be outstanding based primarily on the options’ vesting terms, remaining contractual life and the employees’ expected exercise based on historical patterns. Expected Volatility. Using the Black-Scholes option valuation model, we estimate the volatility of our common stock at the date of grant based on the historical volatility of our common stock. Risk-Free Interest Rate. We base the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. Expected Dividend Yield. We have not paid any cash dividends on our common stock in more than ten years and we do not anticipate paying any cash dividends in the foreseeable future. Consequently, we use an expected dividend yield of zero in the Black-Scholes option valuation model. Expected Forfeitures. We use historical data to estimate pre-vesting option forfeitures. We record share-based compensation only for those awards that are expected to vest. The following weighted average assumptions were used for options granted:
| Years Ended December 31,
| 2016 |  | 2015 |  | 2014
Expected life (in years) | 6.0 |  |  | 6.0 |  |  | 6.0 |
Expected volatility | 29.3 | % |  | 28.3 | % |  | 30.9 | %
Risk-free interest rate | 1.8 | % |  | 1.7 | % |  | 1.8 | %
Expected forfeiture rate | — | % |  | 1.7 | % |  | 3.0 | %
The following table summarizes share-based compensation expense related to share-based awards which is recorded in the statements of comprehensive income:
| Years Ended December 31,
| 2016 |  | 2015 |  | 2014
Cost of software services, maintenance and subscriptions | $ | 6,548 |  |  | $ | 3,380 |  |  | $ | 2,177 |
Selling, general and administrative expenses | 23,199 |  |  | 16,802 |  |  | 12,642 |
Total share-based compensation expenses | 29,747 |  |  | 20,182 |  |  | 14,819 |
Tax benefit | (30,059 | ) |  | (5,986 | ) |  | (4,237 | )
Net (decrease) increase in net income | $ | (312 | ) |  | $ | 14,196 |  |  | $ | 10,582 |
Adoption of ASU 2016-09 resulted in the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital of $29.6 million for period ended December 31, 2016. Stock Option Activity Options granted, exercised, forfeited and expired are summarized as follows:
| Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (Years) |  | Aggregate Intrinsic Value
Outstanding at December 31, 2013 | 5,720 |  |  | $ | 34.66 |  |  |  |  |  |
Granted | 675 |  |  | 94.15 |  |  |  |  |  |
Exercised | (855 | ) |  | 17.17 |  |  |  |  |  |
Forfeited | (3 | ) |  | 37.44 |  |  |  |  |  |
Outstanding at December 31, 2014 | 5,537 |  |  | 44.61 |  |  |  |  |  |
Granted | 747 |  |  | 145.71 |  |  |  |  |  |
Exercised | (1,118 | ) |  | 20.71 |  |  |  |  |  |
Forfeited | (2 | ) |  | 19.61 |  |  |  |  |  |
Outstanding at December 31, 2015 | 5,164 |  |  | 64.43 |  |  |  |  |
Granted | 846 |  |  | 147.25 |  |  |  |  |
Exercised | (827 | ) |  | 28.43 |  |  |  |  |  |
Forfeited | (27 | ) |  | 95.33 |  |  |  |  |  |
Outstanding at December 31, 2016 | 5,156 |  |  | 83.64 |  |  | 7 |  | $ | 320,924 |
Exercisable at December 31, 2016 | 2,311 |  |  | 58.07 |  |  | 6 |  | $ | 198,460 |
We had unvested options to purchase 2.8 million shares with a weighted average grant date exercise price of $104.91 as of December 31, 2016 and unvested options to purchase 3.1 million shares with a weighted average grant date exercise price of $78.86 as of December 31, 2015. As of December 31, 2016, we had $80.1 million of total unrecognized compensation cost related to unvested options, net of expected forfeitures, which is expected to be amortized over a weighted average amortization period of 3.2 years. Other information pertaining to option activity was as follows during the twelve months ended December 31:
| 2016 |  | 2015 |  | 2014
Weighted average grant-date fair value of stock options granted | $ | 46.89 |  |  | $ | 45.17 |  |  | $ | 31.32 |
Total intrinsic value of stock options exercised | 103,703 |  |  | 149,542 |  |  | 69,768 |
Employee Stock Purchase Plan Under our Employee Stock Purchase Plan (“ESPP”) participants may contribute up to 15% of their annual compensation to purchase common shares of Tyler. The purchase price of the shares is equal to 85% of the closing price of Tyler shares on the last day of each quarterly offering period. As of December 31, 2016, there were 847,000 shares available for future grants under the ESPP from the 2.0 million shares previously approved by the stockholders.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51659978&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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