(11) Equity-Based Compensation

Stock Option Awards

The following table presents a summary of the Company’s stock option awards activity for the nine months ended September 30, 2014:

	Plan Options		Weighted Average Exercise Price
Options outstanding at December 31, 2013	1,861,761		$	26.09
Options granted	542,750		74.52
Options exercised	(338,549	)	19.72
Options cancelled or forfeited	(108,204	)	44.57
Options outstanding at September 30, 2014	1,957,758		$	39.62
Vested and exercisable at September 30, 2014	632,994		$	20.56

The intrinsic value of the total stock options outstanding at September 30, 2014 and at December 31, 2013 was approximately $62,200 and $107,100, respectively. The intrinsic value of the total stock options vested and exercisable at September 30, 2014 and at December 31, 2013 was approximately $32,200 and $38,900, respectively.

There were no stock options granted during the three months ended September 30, 2014. The following weighted average assumptions were used in the fair value calculation of stock options granted during the three and nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Expected term (in years)	—		6.3		6.3-10		6.3
Volatility	—	%	49	%	49	%	49	%
Risk-free interest rate	—	%	1.0-1.5	%	2.1-2.8	%	1.0-1.5	%
Dividend yield	—	%	0	%	0	%	0	%

On April 24, 2014, the Company granted 500,000 stock options with a market-based condition to its Chief Executive Officer (“CEO”). The stock options have an exercise price of $80.94 per share and will not vest or become exercisable unless (i) the CEO remains continuously employed by the Company until the fifth anniversary of the date of grant and (ii) the average 90-day closing price of the Company’s common stock equals or exceeds $161.88 for any 90 consecutive calendar days during the period commencing on the fifth anniversary of the date of grant and ending on the tenth anniversary of the date of grant, inclusive provided that the CEO remains continuously employed by the Company until the date of satisfaction of such condition. The derived requisite service period was determined to be six years based on a valuation technique. The total fair value of the grant is $21,630 and is being recognized over the derived requisite service period. In the event that the market condition remains unsatisfied upon completion of the requisite service period, no charge will be reversed.

The Company recognized non-cash equity-based compensation expense of $2,197 and $1,425, net of forfeitures, in connection with the vesting of stock options during the three months ended September 30, 2014 and 2013, respectively. The Company recognized non-cash equity-based compensation expense of $5,925 and $3,169, net of forfeitures, in connection with the vesting of stock options during the nine months ended September 30, 2014 and 2013, respectively. As of September 30, 2014, the total unrecognized compensation charge related to 2012 Plan non-vested options is approximately $31,700, which is expected to be recognized through fiscal year 2020.

Restricted Stock Unit and Restricted Stock Awards

The following table presents a summary of the Company’s RSUs activity for the nine months ended September 30, 2014:

	Plan Options		Weighted Average Fair Value
Non-vested balance at December 31, 2013	10,000		$	47.17
Units granted	640,975		83.19
Units vested	(3,125	)	47.17
Units cancelled or forfeited	(18,850	)	81.36
Non-vested balance at September 30, 2014	629,000		$	82.85

The Company recognized non-cash stock-based compensation expense of $3,234 and $30, net of estimated forfeitures, in connection with the vesting of RSUs during the three months ended September 30, 2014 and 2013, respectively. The Company recognized non-cash stock-based compensation expense of $7,518 and $48, net of estimated forfeitures, in connection with the vesting of RSUs during the nine months ended September 30, 2014 and 2013, respectively.

In connection with the Reorganization, membership interest in the LLC was exchanged for restricted and unrestricted shares of the Company’s stock. The Amended and Restated Restricted Stock Agreement entered into by the Company with an executive governs the terms of the restricted stock inclusive of service vesting terms. As the restricted shares vest, the award’s restrictions will be removed. The Company recognized non-cash equity-based compensation expense of $259, which is included in general and administrative expense, during the three months ended September 30, 2014 and 2013, in connection with the normal vesting of restricted stock. The Company recognized non-cash equity-based compensation expense of $777, which is included in general and administrative expense, during the nine months ended September 30, 2014 and 2013, in connection with the normal vesting of restricted stock.

In connection with the WebDAM acquisition, in order to retain the services of certain former WebDAM employees, the Company granted non-vested RSUs that will vest over two years from the date of acquisition. As these equity awards are subject to post-acquisition employment, the Company accounts for them as compensation expense. A portion of these equity awards are accounted for as liability-classified awards, because the obligations are based on fixed monetary amounts that are known at the inception of the obligation, to be settled with a variable number of shares of the Company’s common stock when the equity awards vest. The Company recognized non-cash stock-based compensation expense of $419 and $910, respectively, in connection with the vesting of these obligations during the three and nine months ended September 30, 2014, respectively. There was no non-cash stock-based compensation expense related to these obligations during the three and nine months ended September 30, 2013.

On April 24, 2014, the Company granted 100,000 RSUs with a market-based condition to its Chief Executive Officer (“CEO”). The RSUs will not vest or become exercisable unless (i) the CEO remains continuously employed by the Company until the fifth anniversary of the date of grant and (ii) the average 90-day closing price of the Company’s common stock equals or exceeds $161.88 for any 90 consecutive calendar days during the period commencing on the fifth anniversary of the date of grant and ending on the tenth anniversary of the date of grant, inclusive provided that the CEO remains continuously employed by the Company until the date of satisfaction of such condition. The derived requisite service period was determined to be six years based on a valuation technique. The total fair value of the grant is $5,870 and is being recognized over the derived requisite service period. In the event that the market condition remains unsatisfied upon completion of the requisite service period, no charge will be reversed.

As of September 30, 2014, the total unrecognized non-cash stock-based compensation charge related to the 2012 Plan non-vested restricted stock and RSUs is approximately $47,300, which is expected to be recognized through fiscal year 2020.

Employee Stock Purchase Plan

On October 10, 2012, the Company’s 2012 ESPP became effective. The Company recognized non-cash stock-based compensation expense of $225 and $138, net of estimated forfeitures, for the three months ended September 30, 2014 and 2013, respectively. The Company recognized non-cash stock-based compensation expense of $598 and $428, net of estimated forfeitures, for the nine months ended September 30, 2014 and 2013. As of September 30, 2014, 112,030 shares of the Company’s common stock have been issued under the 2012 ESPP.

The following table summarizes non-cash equity-based compensation expense included in the Company’s statement of operations for the three and nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Cost of revenue	$	336	$	126	$	953	$	291
Sales and marketing	819		358		2,689		865
Product development	1,805		406		4,529		990
General and administrative	3,374		962		7,557		2,276
Total	$	6,334	$	1,852	$	15,728	$	4,422