On June 15, 2018, at the Company’s 2018 Annual Meeting of Stockholders, the Company's stockholders approved the 2018 Plan, which replaced and superseded the 2015 Plan, which was an amendment and restatement of the Company’s 2006 Omnibus Award Plan to, among other things, reserves 3,175,000 shares of the Company’s common stock for grants of awards under the 2018 Plan. As of December 31, 2019, the Company had 2,785,763 shares available for grant under the 2018 Plan (includes 99,378 shares against vested performance-based restricted stock units for which the underlying common stock was issued subsequent to December 31, 2019).

Under the 2018 Plan, the Compensation Committee (the “Committee”) may grant awards of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonus awards, performance based compensation awards (including cash bonus awards and market condition based awards) or any combination of the foregoing.

The Committee determines which employees are eligible to receive the equity awards, the number of equity awards to be granted, the exercise price, the vesting period and the exercise period. The vesting period for the equity award issued is determined on the date of the grant and is non-transferable during the life of the equity award. The majority of options expire ten years from the date of grant. The equity awards of the type restricted stock units generally vest proportionally over a period of four years from the date of grant, unless specified otherwise.

The Company applies the provisions of ASC 718, Compensation - Stock Compensation, to account for its stock based compensation, using the modified prospective method of transition. Under the provisions of this guidance, the estimated fair value of stock-based awards granted under stock incentive plans is recognized as compensation expense based on straight-line method over the vesting period.



	Year ended December 31,
	2019		2018		2017
Cost of revenues	$	5,895	$	4,924	$	4,600
General and administrative expenses	10,012		10,371		10,363
Selling and marketing expenses	10,163		8,606		8,078
Total	$	26,070	$	23,901	$	23,041

The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. All stock-based payment awards are amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. The Company accounts for the forfeitures as and when the actual forfeitures occur.



	Number of Options		Weighted- Average Exercise Price		Aggregate Intrinsic Value		Weighted- Average Remaining Contractual Life (Years)
Outstanding at December 31, 2018	162,475		$	20.21	$	5,267	2.24
Granted	—		—		—		—
Exercised	(64,314	)	15.33		3,187		—
Forfeited	—		—		—		—
Outstanding at December 31, 2019	98,161		$	23.39	$	4,522	1.86
Vested and exercisable at December 31, 2019	98,161		$	23.39	$	4,522	1.86

The unrecognized compensation cost for unvested options as of December 31, 2019 is $nil. The Company did not grant any options during the years ended December 31, 2019, 2018 and 2017. The aggregate intrinsic value of options exercised during the years ended December 31, 2019, 2018 and 2017 was $3,187, $4,446 and $23,027, respectively.



	Options Outstanding, Vested and Exercisable
Range of Exercise Prices	Shares	Weighted- Average Exercise Price
$15.00 to $21.00	14,893	$	18.89
$21.01 to $28.00	83,268	$	24.20
Total	98,161	$	23.39

An award of restricted stock is a grant of shares subject to conditions and restrictions set by the Committee. The grant or the vesting of an award of restricted stock may be conditioned upon service to the Company or its affiliates or upon the attainment of performance goals or other factors, as determined in the discretion of the Committee. The Committee may also, in its discretion, provide for the lapse of restrictions imposed upon an award of restricted stock. Holders of an award of restricted stock may have, with respect to the restricted stock granted, all of the rights of a stockholder, including the right to vote and to receive dividends.

The Committee is authorized to award restricted stock units to participants. The Committee establishes the terms, conditions and restrictions applicable to each award of restricted stock units, including the time or times at which restricted stock units will be granted or vested and the number of units to be covered by each award. The terms and conditions of each restricted stock award will be reflected in a restricted stock unit agreement.

Any cash or in-kind dividends paid with respect to unvested shares of restricted stock and restricted stock units are withheld by the Company and paid to the holder of such shares of restricted stock, without interest, only if and when such shares of restricted stock and restricted stock units vest. Any unvested shares of restricted stock and restricted stock units are immediately forfeited without consideration upon the termination of holder’s employment with the Company or its affiliates. Accordingly, the Company’s unvested restricted stock and restricted stock units do not include non-forfeitable rights to dividends or dividend equivalents and are therefore not considered as participating securities for purposes of earnings per share calculations pursuant to the two-class method.



	Restricted Stock				Restricted Stock Units
	Number		Weighted- Average Fair Value		Number		Weighted- Average Fair Value
Outstanding at December 31, 2018^**	103,623		$	42.68	953,578		$	51.81
Granted	—		—		512,598		64.29
Vested^*	(76,239	)	40.51		(400,497	)	47.43
Forfeited	—		—		(151,386	)	58.52
Outstanding at December 31, 2019^**	27,384		$	48.72	914,293		$	59.62

* Includes 10,318 and 9,641 restricted stock units vested during the years ended December 31, 2019 and 2018, respectively, for which the underlying common stock is yet to be issued.

** As of December 31, 2019 and 2018 restricted stock units vested for which the underlying common stock is yet to be issued are 166,071 and 155,753, respectively.

The fair value of restricted stock and restricted stock units is generally the market price of the Company’s shares on the date of grant. As of December 31, 2019, unrecognized compensation cost of $39,886 is expected to be expensed over a weighted average period of 2.56 years. The weighted-average fair value of restricted stock and restricted stock units granted during the years ended December 31, 2019, 2018 and 2017 was $64.29, $60.64 and $48.02, respectively. The total grant date fair value of restricted stock and restricted stock units vested during the years ended December 31, 2019, 2018 and 2017 was $22,084, $19,865 and $19,430, respectively.

Under the 2018 Plan, the Company grants performance-based restricted stock units (“PRSUs”) to executive officers and other specified employees. 50% of the PRSUs cliff vest at the end of a three-year period based on an aggregated revenue target for a three year period (“PUs”). The remaining 50% is based on a market condition (“MUs”) that is contingent on the Company's meeting the total shareholder return (“TSR”) relative to a group of peer companies specified under the program measured over a three-year performance period. The award recipient may earn up to two hundred percent (200%) of the PRSUs granted based on the actual achievement of targets.

The fair value of each PU is determined based on the market price of one common share on a day prior to the date of grant, and the associated stock compensation expense is calculated on the basis that performance targets at 100% are probable of being achieved. The stock compensation expense for the PUs is recognized on a straight-line basis over the service period, which is through the end of the third year. Over this period, the number of shares that will be issued are adjusted upward or downward based upon the probability of achievement of the performance targets. The final number of shares issued and the related compensation cost recognized as an expense is based on a comparison of the final performance metrics to the specified targets.

The grant date fair value for the MUs is determined using a Monte Carlo simulation model and the related stock compensation expense is expensed on a straight-line basis over the vesting period. The stock compensation expense related to the MUs is recognized once the requisite performance period is fulfilled regardless of the extent of the market condition achieved.

The Monte Carlo simulation model simulates a range of possible future stock prices and estimates the probabilities of the potential payouts. This model also incorporates the following ranges of assumptions:



	Year ended December 31,
	2019		2018		2017
Dividend yield	—		—		—
Expected life (years)	2.86		2.86		2.86
Risk free interest rate	2.46	%	2.38	%	1.40	%
Volatility	20.52	%	21.79	%	23.78	%



	Revenue Based PRSUs				Market Condition Based PRSUs
	Number		Weighted Avg Fair Value		Number		Weighted Avg Fair Value
Outstanding at December 31, 2018	100,353		$	54.07	100,336		$	62.43
Granted	54,062		64.33		54,053		92.13
Adjustment upon final determination of level of performance goal achievement*	11,285		47.73		1,759		54.10
Vested	(54,456	)	47.73		(44,922	)	54.10
Forfeited	(23,559	)	57.69		(23,556	)	72.65
Outstanding at December 31, 2019	87,685		$	62.54	87,670		$	82.10

* Represents adjustment of shares vested in respect of PUs and MUs granted in February 2017 upon achievement of the performance targets for such awards for which the underlying common stock was issued subsequent to December 31, 2019.