Share-Based Compensation

9 Months Ended

Sep. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

8. Share-Based Compensation

Incentive Plan

Restricted Stock

During the nine months ended September 30, 2013, the University granted 575 shares of common stock with a service vesting condition to certain of its executives, officers, faculty and employees. The restricted shares have voting rights and vest in five annual installments of 20% starting on March 1, 2014 and each of the four anniversaries of the vesting date following the date of grant. In May 2013, the University granted 10 shares of common stock to certain of the non-employee members of the University’s board of directors. The restricted shares granted to these directors have voting rights and vest on the earlier of (a) the one year anniversary of the date of grant or (b) immediately prior to the following year’s annual meeting of stockholders, subject to acceleration in the event of a change in control. Upon vesting, shares will be held in lieu of taxes equivalent to the minimum statutory tax withholding required to be paid when the restricted stock vests. During the nine months ended September 30, 2013, the University withheld 40 shares of common stock in lieu of taxes at a cost of $973 on the restricted stock vesting dates.

A summary of the activity related to restricted stock granted under the University’s Incentive Plan since December 31, 2012 is as follows:


	Total Shares			Weighted Average Grant Date Fair Value per Share
Outstanding as of December 31, 2012		553		$	17.04
Granted		585		$	24.16
Vested		(119	)	$	17.13
Forfeited, canceled or expired		(17	)	$	19.88

Outstanding as of September 30, 2013		1,002		$	21.14

Stock Options

During the nine months ended September 30, 2013, the University granted time vested options to purchase shares of common stock with an exercise price equal to the fair market value on the date of grant to an employee. The time vested options vest ratably over a period of four years and expire ten years from the date of grant. No options were granted in 2012. A summary of the activity related to stock options granted under the University’s Incentive Plan since December 31, 2012 is as follows:


	Summary of Stock Options Outstanding
	Total Shares			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value ($)(1)
Outstanding as of December 31, 2012		4,229		$	14.57
Granted		25		$	24.97
Exercised		(1,070	)	$	13.85
Forfeited, canceled or expired		(33	)	$	16.37

Outstanding as of September 30, 2013		3,151		$	14.88		6.10	$	79,918

Exercisable as of September 30, 2013		1,673		$	14.17		5.73	$	43,616

Available for issuance as of September 30, 2013		2,251

(1)	Aggregate intrinsic value represents the value of the University’s closing stock price on September 30, 2013 ($40.24) in excess of the exercise price multiplied by the number of shares underlying options outstanding or exercisable, as applicable.

Share-based Compensation Expense

The table below outlines share-based compensation expense for the nine months ended September 30, 2013 and 2012 related to restricted stock and stock options granted:


	2013			2012
Instructional costs and services	$	3,988		$	2,807
Admissions advisory and related expenses		100			121
Marketing and promotional		170			160
General and administrative		3,410			2,660

Share-based compensation expense included in operating expenses		7,668			5,748
Tax effect of share-based compensation		(3,067	)		(2,299	)

Share-based compensation expense, net of tax	$	4,601		$	3,449

- 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.

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