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Share-based awards | 6 Months Ended
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Jun. 30, 2021
Share-based Payment Arrangement [Abstract] |
Share-based awards | Share-based awards Share Options On July 21, 2008, the Company adopted the Employee Share Option Plan 2008 (the “2008 Employee Plan”) pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may grant options to any employee, or any Director holding a salaried office or employment with the Company or a Subsidiary for the purchase of ordinary shares. On the same date, the Company also adopted the Consultants Share Option Plan 2008 (the “2008 Consultants Plan”), pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may grant options to any consultant, adviser or non-executive Director retained by the Company or any Subsidiary for the purchase of ordinary shares. On February 14, 2017, both the 2008 Employee Plan and the 2008 Consultants Plan (together the “2008 Option Plans”) were amended and restated in order to increase the number of options that can be issued under the 2008 Consultants Plan from 0.4 million to 1.0 million and to extend the date for options to be granted under the 2008 Option Plans. An aggregate of 6.0 million ordinary shares have been reserved under the 2008 Employee Plan, as reduced by any shares issued or to be issued pursuant to options granted under the 2008 Consultants Plan, under which a limit of 1.0 million shares applies. Further, the maximum number of ordinary shares with respect to which options may be granted under the 2008 Employee Option Plan, during any calendar year to any employee shall be 0.4 million ordinary shares. There is no individual limit under the 2008 Consultants Plan. No options may be granted under the 2008 Option Plans after February 14, 2027. Each option granted under the 2008 Option Plans will be an employee stock option, or NSO, as described in Section 422 or 423 of the Internal Revenue Code. Each grant of an option under the 2008 Options Plans will be evidenced by a Stock Option Agreement between the optionee and the Company. The exercise price will be specified in each Stock Option Agreement, however option prices will not be less than 100% of the fair market value of an ordinary share on the date the option is granted. On January 17, 2003, the Company adopted the Share Option Plan 2003 (the “2003 Share Option Plan”) pursuant to which the Compensation and Organization Committee of the Board could grant options to officers and other employees of the Company or its subsidiaries for the purchase of ordinary shares. An aggregate of 6.0 million ordinary shares were reserved under the 2003 Share Option Plan; and, in no event could the number of ordinary shares issued pursuant to options awarded under this plan exceed 10% of the outstanding shares, as defined in the 2003 Share Option Plan, at the time of the grant, unless the Board expressly determined otherwise. Further, the maximum number of ordinary shares with respect to which options could be granted under the 2003 Share Option Plan during any calendar year to any employee was 0.4 million ordinary shares. The 2003 Share Option Plan expired on January 17, 2013. No new options may be granted under this plan. Share option awards are granted with an exercise price equal to the market price of the Company’s shares at date of grant. Prior to 2018, share options typically vest over a period of five years from date of grant and expire eight years from date of grant. Share options granted to non-executive directors during 2018 vest over 12 months and expire eight years from the date of grant. The maximum contractual term of options outstanding at June 30, 2021 is eight years. The following table summarizes option activity for the six months ended June 30, 2021:
| Options Outstanding Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Grant Date Fair Value |  | Weighted Average Remaining Contractual Life
Outstanding at December 31, 2020 | 553,746 |  |  | $ | 108.53 |  |  | $ | 31.63 |  |  | 4.86
Granted | 100,299 |  |  | $ | 177.76 |  |  | $ | 49.15 |  |  |
Exercised | (4,020) |  |  | $ | 42.24 |  |  | $ | 14.07 |  |  |
Canceled/expired | — |  |  | $ | — |  |  | $ | — |  |  |
Outstanding at June 30, 2021 | 650,025 |  |  | $ | 119.62 |  |  | $ | 34.44 |  |  | 4.90
Exercisable at June 30, 2021 | 336,942 |  |  | $ | 92.71 |  |  | $ | 27.42 |  |  | 3.63
The Company has outstanding options with fair values ranging from $12.24 to $64.07 per option or a weighted average fair value of $25.97 per option. The Company issues ordinary shares for all options exercised. The total amount of fully vested share options which remained outstanding at June 30, 2021 was 336,942. Fully vested share options at June 30, 2021 have an average remaining contractual term of 3.63 years, an average exercise price of $92.71 and a total intrinsic value of $38.4 million. The total intrinsic value of options exercised during the six months ended June 30, 2021 was $0.7 million (June 30, 2020: $4.3 million). The following table summarizes the movement in non-vested share options for the six months ended June 30, 2021:
| Options Outstanding Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Grant Date Fair Value
Non-vested outstanding at December 31, 2020 | 328,901 |  |  | $ | 125.89 |  |  | $ | 36.24 |
Granted | 100,299 |  |  | $ | 177.76 |  |  | $ | 49.15 |
Vested | (116,117) |  |  | $ | 109.53 |  |  | $ | 31.84 |
Forfeited | — |  |  | $ | — |  |  | $ | — |
Non-vested outstanding at June 30, 2021 | 313,083 |  |  | $ | 148.58 |  |  | $ | 42.00 |
Fair value of Stock Options Assumptions The weighted average fair value of options granted during the six months ended June 30, 2021 and June 30, 2020 was calculated using the Black-Scholes option pricing model. The weighted average grant date fair values and assumptions used were as follows:
| Six Months Ended
| June 30, 2021 |  | June 30, 2020
Weighted average grant date fair value | $ | 49.15 |  |  | $ | 42.43 |
Assumptions: |  |  |
Expected volatility | 30 | % |  | 30 | %
Dividend yield | — | % |  | — | %
Risk-free interest rate | 0.78 | % |  | 0.57 | %
Expected life | 5 years |  | 5 years
Expected volatility is based on the historical volatility of our common stock over a period equal to the expected term of the options; the expected life represents the weighted average period of time that options granted are expected to be outstanding given consideration to vesting schedules and our historical experience of past vesting and termination patterns. The risk-free rate is based on the U.S. government zero-coupon bonds yield curve in effect at time of the grant for periods corresponding with the expected life of the option. Restricted Share Units and Performance Share Units On April 23, 2013, the Company adopted the 2013 Employees Restricted Share Unit and Performance Share Unit Plan (the “2013 RSU Plan”) pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may select any employee, or any Director holding a salaried office or employment with the Company, or a Subsidiary to receive an award under the plan. On May 11, 2015, the 2013 RSU Plan was amended and restated in order to increase the number of shares that can be issued under the RSU Plan by 2.5 million shares. Accordingly, an aggregate of 4.1 million ordinary shares have been reserved for issuance under the 2013 RSU Plan. The shares are awarded at par value and vest over a service period. Awards under the 2013 RSU Plan may be settled in cash or shares at the option of the Company. On April 30 2019, the Company approved the 2019 Consultants and Directors Restricted Share Unit Plan (the “2019 Consultants RSU Plan”), which was effective as of May 16, 2019, pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may select any consultant, adviser or non-executive Director retained by the Company, or a Subsidiary to receive an award under the plan. 250,000 ordinary shares have been reserved for issuance under the 2019 Consultants RSU Plan. The awards are at par value and vest over a service period. Awards granted to non-executive directors during 2019, 2020 and 2021 vest over twelve months. The Company has awarded RSUs and PSUs to certain key individuals of the Group. The following table summarizes RSU and PSU activity for the six months ended June 30, 2021:
| PSU Outstanding Number of Shares |  | PSU Weighted Average Grant Date Fair Value |  | PSU Weighted Average Remaining Contractual Life |  | RSU Outstanding Number of Shares |  | RSU Weighted Average Grant Date Fair Value |  | RSU Weighted Average Remaining Contractual Life
Outstanding at December 31, 2020 | 159,641 |  |  | $ | 137.64 |  |  | 1.14 |  | 341,424 |  |  | $ | 145.77 |  |  | 1.41
Granted | 55,444 |  |  | $ | 177.77 |  |  |  |  | 144,274 |  |  | $ | 207.29 |  |  |
Shares vested | (44,132) |  |  | $ | 115.61 |  |  |  |  | (122,331) |  |  | $ | 131.37 |  |  |
Forfeited | (3,159) |  |  | $ | 115.61 |  |  |  |  | (9,818) |  |  | $ | 146.64 |  |  |
Outstanding at June 30, 2021 | 167,794 |  |  | $ | 159.18 |  |  | 1.35 |  | 353,549 |  |  | $ | 175.83 |  |  | 1.87
The fair value of PSUs vested for the six months ended June 30, 2021 totaled $5.1 million (full year 2020: $5.3 million). The fair value of RSUs vested for the six months ended June 30, 2021 totaled $16.1 million (full year 2020: $14.3 million). The PSUs vest based on service and specified EPS targets over the periods 2019 – 2021, 2020 – 2022 and 2021 - 2023. Depending on the amount of EPS from 2019 to 2023, up to an additional 83,897 PSUs may also be granted. Non-cash stock compensation expense Non-cash stock compensation expense for the six months ended June 30, 2021 and June 30, 2020 has been allocated as follows:
| Three Months Ended |  | Six Months Ended
| June 30, 2021 |  | June 30, 2020 |  | June 30, 2021 |  | June 30, 2020
| (in thousands) |  | (in thousands)
Direct costs | $ | 3,101 |  |  | $ | 2,353 |  |  | $ | 5,156 |  |  | $ | 4,188 |
Selling, general and administrative | 5,379 |  |  | 4,764 |  |  | 9,718 |  |  | 8,998 |
| $ | 8,480 |  |  | $ | 7,117 |  |  | $ | 14,874 |  |  | $ | 13,186 |
Total non-cash stock compensation expense not yet recognized at June 30, 2021 amounted to $72.6 million. The weighted average period over which this is expected to be recognized is 2.42 years.

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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