On June 15, 2018, at the Company’s 2018 Annual Meeting of Stockholders, the Company's stockholders approved the 2018 Omnibus Incentive Plan, which among other things, reserves 3,175,000 shares of the Company’s common stock for grants of awards under the 2018 Omnibus Incentive Plan. As of December 31, 2021, the Company had 1,777,687 shares available for grant under the 2018 Omnibus Incentive Plan (includes 120,440 shares against vested performance-based restricted stock units for which the underlying common stock was issued subsequent to December 31, 2021).

Under the 2018 Omnibus Incentive 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 within ten years from the date of grant. 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. 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 requisite service period, which is generally the vesting period.

The following costs by nature of function related to the Company’s stock-based compensation plan are included in the consolidated statements of income:


	Year ended December 31,
	2021		2020		2019
Cost of revenues	$	7,871	$	6,300	$	5,895
General and administrative expenses	16,396		11,009		10,012
Selling and marketing expenses	14,354		10,926		10,163
Total	$	38,621	$	28,235	$	26,070

Income tax benefit related to share-based compensation, including excess tax benefits	$	9,424	$	8,330	$	7,986

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, 2020	31,265	$	25.43	$	1,866	1.9
Granted	—	—		—		—
Exercised	(28,172)	25.19		2,475		—
Forfeited	—	—		—		—
Outstanding at December 31, 2021	3,093	$	27.62	$	362	2.0
Vested and exercisable at December 31, 2021	3,093	$	27.62	$	362	2.0

The unrecognized compensation cost for unvested options as of December 31, 2021 was $nil. The Company did not grant any options during the years ended December 31, 2021, 2020 and 2019. The aggregate intrinsic value of options exercised during the years ended December 31, 2021, 2020 and 2019 was $2,475, $3,488 and $3,187, respectively.

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 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 units vest. Any unvested shares of 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 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 Units
	Number	Weighted- Average Fair Value
Outstanding at December 31, 2020**	903,666	$	67.84
Granted	550,690	91.23
Vested*	(372,519)	64.01
Forfeited	(99,650)	75.68
Outstanding at December 31, 2021**	982,187	$	81.61

* Includes 18,904 and 14,368 restricted stock units vested during the years ended December 31, 2021 and 2020, respectively, for which the underlying common stock is yet to be issued.

** As of December 31, 2021 and 2020, restricted stock units vested for which the underlying common stock is yet to be issued are 162,481 and 181,638, respectively.

The fair value of restricted stock units is generally the market price of the Company’s shares on the date of grant. As of December 31, 2021, unrecognized compensation cost of $57,897 is expected to be expensed over a weighted average period of 2.5 years.

Under the 2018 Plan, the Company grants performance-based restricted stock units (“PRSUs”) to executive officers and other specified employees. Generally the grants provide that 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 that is contingent on the Company's meeting the total shareholder return relative to a group of peer companies specified under the

program measured over a three-year performance period. During the year ended December 31, 2021, the Company granted PRSUs that cliff vest at the end of a three year period based only on a market condition stated above. The award recipient may earn up to two hundred percent (200%) of the PRSUs granted based on the actual achievement of targets. However, the features of the equity incentive compensation program are subject to change by the Compensation Committee of our Board of Directors.

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:

•Since the plan stipulates that the awards are based upon the TSR of the Company and the components of the peer group, it is assumed that the dividends get reinvested in the issuing entity on a continuous basis.

•The correlation coefficients are used to model the way in which each entity tends to move in relation to each other are based upon the price data used to calculate the historical volatilities.


	Year ended December 31,
	2021		2020		2019
Dividend yield	—		—		—
Expected life (years)	2.9		2.9		2.9
Risk free interest rate for expected life	0.53	%	3.85	%	2.46	%
Volatility for expected life	65.24	%	34.30	%	20.52	%


	Revenue Based PRSUs			Market Condition Based PRSUs
	Number	Weighted Average Fair Value		Number	Weighted Average Fair Value
Outstanding at December 31, 2020	105,891	$	72.33	105,869	$	97.84
Granted	—	—		121,180	119.80
Adjustment upon final determination of level of performance goal achievement*	(15,134)	64.33		45,189	92.13
Vested	(30,062)	64.33		(90,378)	92.13
Forfeited	(1,831)	78.34		(9,818)	116.50
Outstanding at December 31, 2021	58,864	$	78.29	172,042	$	113.74

* Represents adjustment of shares vested in respect of PUs and MUs granted in February 2019 upon achievement of the performance targets for such awards for which the underlying common stock was issued subsequent to December 31, 2021.

The impact of COVID-19 on the economic environment is uncertain and has caused variability in the estimation of number of performance based restricted stock units that will eventually vest and the related compensation cost to be recognized in the consolidated statements of income.