8. Share-Based Compensation

Incentive Plans

The University has made grants of restricted stock and stock options under its 2008 Equity Incentive Plan (the “2008 Plan”). In January 2017, the Board of Directors of the University approved, and at the University’s 2017 annual meeting of stockholders held on June 14, 2017, the University’s stockholders adopted, a 2017 Equity Incentive Plan (the “2017 Plan”). All future grants of equity incentives will be made from the 2017 Plan.

Restricted Stock

During the nine months ended September 30, 2017, the University granted 188 shares of common stock under the 2008 Plan 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%, with this first installment vesting in March of the calendar year following the date of grant (the “first vesting date”) and on each of the four anniversaries of the first vesting date. 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, 2017, the University withheld 149 shares of common stock in lieu of taxes at a cost of $9,657 on the restricted stock vesting dates. In June 2017, following the annual stockholders meeting, the University granted 4 shares of common stock under the 2017 Plan to 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 stockholders’ meeting.

A summary of the activity related to restricted stock granted under the 2008 Plan and the 2017 Plan since December 31, 2016 is as follows:


	Total Shares			Weighted Average Grant Date Fair Value per Share
Outstanding as of December 31, 2016		993		$	38.32
Granted		192		$	70.44
Vested		(371	)	$	32.38
Forfeited, canceled or expired		(19	)	$	41.77

Outstanding as of September 30, 2017		795		$	48.79

Stock Options

During the nine months ended September 30, 2017, no options were granted. A summary of the activity since December 31, 2016 related to stock options granted under the 2008 Plan 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, 2016		1,272		$	15.26
Granted		—		$	—
Exercised		(537	)	$	12.57
Forfeited, canceled or expired		(2	)	$	16.35

Outstanding as of September 30, 2017		733		$	17.23		2.92	$	53,939

Exercisable as of September 30, 2017		733		$	17.23		2.92	$	53,939

(1)	Aggregate intrinsic value represents the value of the University’s closing stock price on September 29, 2017 ($90.82) 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, 2017 and 2016 related to restricted stock and stock options granted:


	2017			2016
Instructional costs and services	$	5,992		$	5,462
Admissions advisory and related expenses		144			169
Marketing and promotional		123			92
General and administrative		3,303			3,311

Share-based compensation expense included in operating expenses		9,562			9,034
Tax effect of share-based compensation		(3,825	)		(3,614	)

Share-based compensation expense, net of tax	$	5,737		$	5,420