STOCK-BASED COMPENSATION

The following costs related to the Company’s stock compensation plans were included in the condensed consolidated statements of income and comprehensive income:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Cost of revenues	$	4,913	$	4,518	$	14,452	$	12,600
Selling, general and administrative expenses - Acquisition related	216		3,890		8,067		9,870
Selling, general and administrative expenses - All other	6,088		5,418		17,401		15,050
Total	$	11,217	$	13,826	$	39,920	$	37,520

Equity Plans

2015 Long-Term Incentive Plan — On June 11, 2015, the Company's stockholders approved the 2015 Long Term Incentive Plan (“2015 Plan”) to be used to issue equity awards to Company personnel. As of September 30, 2017, 5,727,607 shares remained available for issuance under the 2015 Plan. All of the stock option awards issued pursuant to the 2015 Plan expire 10 years from the date of grant.

2012 Non-Employee Directors Compensation Plan — On January 11, 2012, the Company approved the 2012 Non-Employee Directors Compensation Plan (“2012 Directors Plan”) to be used to issue equity awards 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 is administered by the Company’s Board of Directors. As of September 30, 2017, 539,772 shares remained available for issuance under the 2012 Directors Plan.

2012 Long-Term Incentive Plan — On January 11, 2012, the Company approved the 2012 Long-Term Incentive Plan (“2012 Plan”) to be used to issue equity awards to company personnel. In June 2015, the 2012 Plan was discontinued; however, outstanding awards remain subject to the terms of the 2012 Plan and any shares that are subject to an award that was previously granted under the 2012 Plan and that expire or terminate for any reason prior to exercise will become available for issuance under the 2015 Plan. All of the stock option awards issued pursuant to the 2012 Plan expire 10 years from the date of grant.

2006 Stock Option Plan — Effective May 31, 2006, the Board of Directors of the Company adopted the 2006 Stock Option Plan (the “2006 Plan”) to grant stock options to directors, employees, and certain independent contractors. 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 award that was previously granted under the 2006 Plan and that expire or terminate for any reason prior to exercise will become available for issuance under the 2015 Plan. All of the awards issued pursuant to the 2006 Plan expire 10 years from the date of grant.

Stock Options

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



	Number of Options		Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding at January 1, 2017	6,637,239		$	37.20
Options granted	261,373		$	73.40
Options exercised	(1,537,182	)	$	29.80
Options forfeited/cancelled	(142,491	)	$	54.50
Options outstanding at September 30, 2017	5,218,939		$	40.72	$	246,386	6.5

Options vested and exercisable at September 30, 2017	3,303,812		$	31.32	$	187,029	5.8
Options expected to vest at September 30, 2017	1,838,657		$	56.64	$	57,532	7.6

As of September 30, 2017, $31,090 of total remaining unrecognized stock-based compensation cost related to unvested stock options, net of forfeitures, is expected to be recognized over the weighted-average remaining requisite service period of 1.5 years.

As of September 30, 2017, a total of 44,423 shares underlying options exercised through September 30, 2017, were in transfer with the Company’s transfer agent.

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, 2017, as compared with the assumptions disclosed in Note 14 to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

Restricted Stock and Restricted Stock Units

Under the Company’s 2012 Directors Plan, the Company granted awards of restricted stock until April 2017, and thereafter, grants restricted stock units (“RSUs”), to non-employee directors. Under the Company’s 2015 Plan (and prior to its approval, the 2012 Plan), the Company grants awards of RSUs to Company personnel. In addition, the Company has issued in the past, and may issue in the future its equity securities to compensate employees of acquired businesses for future services. Equity-based awards granted in connection with acquisitions of businesses are generally issued in the form of service-based awards with vesting dependent only on continuing employment and performance-based awards with vesting occurring only if certain specified performance conditions are met. The awards issued in connection with acquisitions of businesses are subject to the terms and conditions contained in the applicable award agreement and acquisition documents with a typical vesting period of three years, with 33.3% of the awards granted vesting in equal installments on the first, second and third anniversaries of the grant.

Service-Based Awards

The table below summarizes activity related to the Company’s equity-classified and liability-classified service-based awards for the nine months ended September 30, 2017.



	Equity-Classified Restricted Stock				Equity-Classified Equity-Settled Restricted Stock Units				Liability-Classified Cash-Settled Restricted Stock Units
	Number of Shares		Weighted Average Grant Date Fair Value Per Share		Number of Shares		Weighted Average Grant Date Fair Value Per Share		Number of Shares		Weighted Average Grant Date Fair Value Per Share
Unvested service-based awards outstanding at January 1, 2017	154,125		$	40.89	485,188		$	67.69	204,501		$	70.53
Awards granted	—		$	—	422,684		$	73.79	168,544		$	73.92
Awards modified	—		$	—	(2,570	)	$	48.49	2,570		$	73.27
Awards vested	(137,320	)	$	42.92	(135,023	)	$	66.01	(52,004	)	$	70.56
Awards forfeited/cancelled	—		$	—	(53,505	)	$	70.38	(7,659	)	$	71.65
Unvested service-based awards outstanding at September 30, 2017	16,805		$	48.47	716,774		$	71.47	315,952		$	72.33

As of September 30, 2017, $158 of total remaining unrecognized stock-based compensation cost related to service-based restricted stock is expected to be recognized over the weighted-average remaining requisite service period of 1.4 years.

As of September 30, 2017, $36,377 of total remaining unrecognized stock-based compensation cost related to service-based equity-classified RSUs is expected to be recognized over the weighted-average remaining requisite service period of 2.0 years.

As of September 30, 2017, $17,746 of total remaining unrecognized stock-based compensation cost related to service-based liability-classified RSUs is expected to be recognized over the weighted-average remaining requisite service period of 2.0 years.

Performance -Based Awards

The table below summarizes activity related to the Company’s equity-classified and liability-classified performance-based awards for the nine months ended September 30, 2017.



	Equity-Classified Restricted Stock				Liability-Classified Restricted Stock				Equity-Classified Equity-Settled Restricted Stock Units
	Number of Shares		Weighted Average Grant Date Fair Value Per Share		Number of Shares		Weighted Average Grant Date Fair Value Per Share		Number of Shares		Weighted Average Grant Date Fair Value Per Share
Unvested performance-based awards outstanding at January 1, 2017	5,573		$	33.47	105,602		$	38.86	4,667		$	70.22
Awards granted	—		$	—	—		$	—	—		$	—
Awards vested	(3,956	)	$	27.64	(105,602	)	$	38.86	—		$	—
Awards forfeited/cancelled	—		$	—	—		$	—	(2,333	)	$	70.22
Unvested performance-based awards outstanding at September 30, 2017	1,617		$	47.74	—		$	—	2,334		$	70.22

As of September 30, 2017, $7 of total remaining unrecognized stock-based compensation cost related to performance-based equity-classified restricted stock is expected to be recognized over the weighted-average remaining requisite service period of 0.1 years.

As of September 30, 2017, the Company determined that there is a remote probability of achieving the performance conditions underlying the unvested and outstanding performance-based equity-classified RSUs and therefore is not recognizing any compensation costs for these RSUs. The Company will continue to reassess the probability of achieving the performance criteria throughout the remaining performance period and will recognize compensation expense if the performance conditions become probable of being achieved.

Modifications

During the three months ended March 31, 2017, the Company modified certain awards held by a then named executive officer of the Company in connection with the execution of a separation agreement on February 28, 2017. Fair value of the modified awards immediately before and after modification was $0 and $563, respectively. As a result of this modification, the Company recorded incremental share-based compensation expense of $78 and $563 for the three and nine months ended September 30, 2017, respectively.