12.	STOCK-BASED COMPENSATION

The following costs related to the Company’s stock compensation plans are included in the unaudited consolidated statements of income:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Cost of revenues	$	1,498	$	1,036	$	3,356	$	2,486
Selling, general and administrative expenses		1,867		1,010		6,435		2,883
Total	$	3,365	$	2,046	$	9,791	$	5,369

During the second quarter of 2013, the Company finalized the fair values of the net assets acquired from Empathy Lab (See Note 2). As a result, the Company issued an additional 1,483 shares of non-vested (“restricted”) common stock to the sellers of Empathy Lab on July 11, 2013 to settle the difference between the initial number of shares issued upon acquisition and the total number of shares due in connection with this transaction. The shares vest 33.33% on each of the first, second and third anniversaries of the closing date. Upon termination of the recipient’s services with the Company with Cause or without Good Reason (in each case, as defined in the escrow agreement), any unvested shares will be forfeited. The fair value of the restricted shares at the time of grant was $42.

2012 Non-Employee Directors Compensation Plan—On January 11, 2012, the Company approved the 2012 Non-Employee Directors Compensation Plan (“2012 Directors Plan”), which will be used to issue equity grants to its non-employee directors. The Company authorized 600,000 shares of common stock to be reserved for issuance under the plan. The 2012 Directors Plan will expire after 10 years and will be administered by the Company’s Board of Directors.

On January 8, 2013, the Company issued 5,257 shares of non-vested (“restricted”) stock to its new non-employee director under the 2012 Non-Employee Directors Compensation Plan. The shares will vest and become unforfeitable 25% on each of the first, second, third and fourth anniversaries of the grant date. Upon termination of service from the Board at any time, a portion of these shares shall vest as of the date of such termination on a pro

rata basis determined by the number of days that the participant served on the Board from the grant date through the date of such termination. The fair value of the restricted shares at the time of grant was $101.

On June 13, 2013, the Company issued 8,784 shares of non-vested (“restricted”) stock to its non-employee directors under the 2012 Non-Employee Directors Compensation Plan. The shares will vest and become unforfeitable on the first anniversary of the grant date. Upon termination of service from the Board at any time, a portion of these shares shall vest as of the date of such termination on a pro rata basis determined by the number of days that the participant served on the Board from the grant date through the date of such termination. The fair value of the restricted shares at the time of grant was $225.

2012 Long-Term Incentive Plan — On January 11, 2012, the Company approved the 2012 Long-Term Incentive Plan (“2012 Plan”), which will be used to issue equity grants to employees. As of September 30, 2013, 7,038,711 shares of common stock remained available for issuance under the 2012 Plan (this number includes shares that remained available for issuance under the 2006 Plan (as defined below) at the time of its discontinuance and any shares that were subject to an option that was previously granted under the 2006 Plan and that expired or terminated for any reason prior to exercise between the date of discontinuance of the 2006 Plan and September 30, 2013). In addition, up to 2,901,257 shares that are subject to outstanding awards as of September 30, 2013 under the 2006 Plan and that expire or terminate for any reason prior to exercise or that would otherwise have returned to the 2006 Plan’s share reserve under the terms of the 2006 Plan will be available for awards to be granted under the 2012 Plan.

During the nine months ended September 30, 2013, the Company issued a total of 1,931,500 stock options under its 2012 Long-Term Incentive Plan with an aggregate grant-date fair value of $18,530.

2006 Stock Option Plan — Effective May 31, 2006, the Board of Directors of the Company adopted the 2006 Stock Option Plan (the “2006 Plan”). The Company’s stock option plan permitted the granting of options to directors, employees, and certain independent contractors. The Compensation Committee of the Board of Directors generally had the authority to select individuals who were to receive options and to specify the terms and conditions of each option so granted, including the number of shares covered by the option, the exercise price, vesting provisions, and the overall option term. In January 2012, the 2006 Plan was discontinued; however, outstanding awards remain subject to the terms of the 2006 Plan and any shares that are subject to an option that was previously granted under the 2006 Plan and that will expire or terminate for any reason prior to exercise will become again available for issuance under the 2012 Plan. All of the options issued pursuant to the 2006 Plan expire 10 years from the date of grant.

Stock option activity under the Company’s plans is set forth below:

	Number of Options			Weighted Average Exercise Price		Aggregate Intrinsic Value
Options outstanding at January 1, 2013		6,296,709		$	7.51	$	66,682
Options granted		1,931,500			23.19		21,845
Options exercised		(1,917,134	)		4.07		(58,338	)
Options forfeited/cancelled		(243,918	)		10.74		(5,795	)
Options outstanding at September 30, 2013		6,067,157		$	13.47	$	127,592
Options vested and exercisable at September 30, 2013		2,384,193		$	6.03	$	67,878
Options expected to vest		3,392,301		$	18.14	$	55,498

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line method over the service period (generally the vesting period). Additionally, the Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses a combination of historical data and other factors to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards that are expected to vest. There were no material changes with respect to the assumptions used in the Black-Scholes option valuation model during the nine months ended September 30, 2013 as compared with the assumptions disclosed in Part II. Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Summary of restricted stock activity as of September 30, 2013, and changes during the nine months then ended is presented below:

	Number of Shares			Weighted Average Grant Date Fair Value Per Share
Unvested restricted stock outstanding at January 1, 2013		659,872		$	17.92
Restricted stock granted		15,524			23.69
Restricted stock vested		(172,987	)		(16.71	)
Unvested restricted stock outstanding at September 30, 2013		502,409		$	18.51

As of September 30, 2013, total unrecognized compensation cost related to non-vested share-based compensation awards was $32,177. That cost is expected to be recognized over the next 2 years using the weighted average method.