8. Share-Based Compensation

Incentive Plan

Prior to June 2017, the University 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”) under which a maximum of 3,000 shares may be granted. All grants of equity incentives made after June 2017 will be made from the 2017 Plan.

Restricted Stock

During the three months ended March 31, 2018, the University granted 160 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%, 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 three months ended March 31, 2018, the University withheld 119 shares of common stock in lieu of taxes at a cost of $11,524 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, 2017 is as follows:


	Total Shares			Weighted Average Grant Date Fair Value per Share
Outstanding as of December 31, 2017		776		$	49.16
Granted		160		$	92.00
Vested		(298	)	$	41.53
Forfeited, canceled or expired		(3	)	$	54.55

Outstanding as of March 31, 2018		635		$	63.52

Stock Options

During the three months ended March 31, 2018, no options were granted. A summary of the activity since December 31, 2017 related to stock options granted under the University’s Incentive 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, 2017		694		$	17.31
Granted		—		$	—
Exercised		(59	)	$	15.44
Forfeited, canceled or expired		—		$	—

Outstanding as of March 31, 2018		635		$	17.49		2.55	$	55,464

Exercisable as of March 31, 2018		635		$	17.49		2.55	$	55,464

(1)	Aggregate intrinsic value represents the value of the University’s closing stock price on March 29, 2018 ($104.92) 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 three months ended March 31, 2018 and 2017 related to restricted stock and stock options granted:


	2018			2017
Instructional costs and services	$	2,181		$	1,863
Admissions advisory and related expenses		75			22
Marketing and promotional		16			32
General and administrative		1,197			1,014

Share-based compensation expense included in operating expenses		3,469			2,931
Tax effect of share-based compensation		(867	)		(1,172	)

Share-based compensation expense, net of tax	$	2,602		$	1,759