4. Stock-based Compensation

The Company’s stock-based compensation plans consist of the 2006 Long-Term Incentives Plan (the “2006 LTIP”), under which there were 1,930,825 shares available for grant as of March 31, 2016.

Total stock-based compensation recorded by the Company for the three months ended March 31, 2016 and 2015 was $1,386 and $1,131, respectively. Total capitalized stock-based compensation for the three months ended March 31, 2016 and 2015 was $66 and $28, respectively.

The following table summarizes the components of stock-based compensation expense in the condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015:

	Three Months Ended
	March 31,
	2016		2015
Cost of services	$	175	$	114
Cost of product sales		12		14
Selling, general and administrative		1,078		929
Product development		121		74
Total	$	1,386	$	1,131

As of March 31, 2016, the Company had unrecognized compensation costs for stock appreciation rights and restricted stock units totaling $4,525.

2006 LTIP

Time-Based Stock Appreciation Rights

A summary of the Company’s time-based Stock Appreciation Rights (“SARs”) for the three months ended March 31, 2016 is as follows:

						Weighted-
						Average		Aggregate
				Weighted-		Remaining		Intrinsic
	Number of			Average		Contractual		Value
	Shares			Exercise Price		Term (years)		(In thousands)
Outstanding at January 1, 2016		4,109,184		$	5.22
Granted		—			—
Exercised		(44,600	)		4.72
Forfeited or expired		—			—
Outstanding at March 31, 2016		4,064,584		$	5.28		5.39	$	22,031
Exercisable at March 31, 2016		3,855,317		$	5.26		5.15	$	21,376
Vested and expected to vest at March 31, 2016		4,064,584		$	5.28		5.39	$	22,031

For the three months ended March 31, 2016 and 2015, the Company recorded stock-based compensation expense of $94 and $429 relating to these SARs, respectively. As of March 31, 2016, $861 of total unrecognized compensation cost related to these SARs is expected to be recognized through August 2018.

The intrinsic value of the time-based SARs exercised during the three months ended March 31, 2016 was $177.

Performance-Based Stock Appreciation Rights

A summary of the Company’s performance-based SARs for the three months ended March 31, 2016 is as follows:

						Weighted-
						Average		Aggregate
				Weighted-		Remaining		Intrinsic
	Number of			Average		Contractual		Value
	Shares			Exercise Price		Term (years)		(In thousands)
Outstanding at January 1, 2016		778,774		$	6.33
Granted		—			—
Exercised		(400	)		2.87
Forfeited or expired		(1,000	)		5.65
Outstanding at March 31, 2016		777,374		$	6.33		4.12	$	3,752
Exercisable at March 31, 2016		777,374		$	6.33		4.12	$	3,752
Vested and expected to vest at March 31, 2016		777,374		$	6.33		4.12	$	3,752

For the three months ended March 31, 2016 and 2015, the Company recorded stock-based compensation expense of $2 and $13 relating to these SARs, respectively. As of March 31, 2016, there is no unrecognized compensation cost related to these SARs expected to be recognized.

The intrinsic value of the performance-based SARs exercised during the three months ended March 31, 2016 was $3.

The fair value of each time-based and performance-based SAR award is estimated on the date of grant using the Black-Scholes option pricing model with the assumptions described below. For the periods indicated, the expected volatility was based on the Company’s historical volatility over the expected terms of the SAR awards. Estimated forfeitures were based on voluntary and involuntary termination behavior, as well as analysis of actual forfeitures. The risk-free interest rate was based on the U.S. Treasury yield curve at the time of the grant over the expected term of the SAR grants. The Company did not grant time-based or performance-based SARs during the three months ended March 31, 2016.

		Three Months Ended March 31,
		2015
Risk-free interest rate		1.35% and 1.82%
Expected life (years)		6.0
Estimated volatility factor		64.0% to 64.6%
Expected dividends		None

Time-based Restricted Stock Units

A summary of the Company’s time-based Restricted Stock Units (“RSUs”) for the three months ended March 31, 2016 is as follows:

	Shares			Weighted- Average Grant Date Fair Value
Balance at January 1, 2016		366,004		$	6.63
Granted		132,945			7.64
Vested		(75,470	)		6.41
Forfeited or expired		(4,055	)		6.78
Balance at March 31, 2016		419,424		$	6.99

For the three months ended March 31, 2016 and 2015, the Company recorded stock-based compensation expense of $562 and $171 related to these RSUs, respectively. As of March 31, 2016, $2,318 of total unrecognized compensation cost related to these RSUs is expected to be recognized through March 2019.

Performance-based Restricted Stock Units

A summary of the Company’s performance-based RSUs for the three months ended March 31, 2016 is as follows:

	Shares			Weighted- Average Grant Date Fair Value
Balance at January 1, 2016		499,369		$	6.66
Granted		—			—
Vested		(175,389	)		6.53
Forfeited or expired		(64,315	)		6.55
Balance at March 31, 2016		259,665		$	6.66

For the three months ended March 31, 2016 and 2015, the Company recorded stock-based compensation expense of $525 and $442 related to these RSUs, respectively. As of March 31, 2016, $1,346 of total unrecognized compensation cost related to these RSUs is expected to be recognized through March 2017.

The fair values of the time-based and performance-based RSU awards are based upon the closing stock price of the Company’s common stock on the date of grant.

Performance Units

The Company grants Market Performance Units (“MPUs”) to its senior executives based on stock price performance over a three-year period measured on December 31 of each year in the performance period. The MPUs will vest at the end of each year in the performance period only if the Company satisfies the stock price performance targets and continued employment by the senior executives through the dates the Compensation Committee has determined that the targets have been achieved. The value of the MPUs that will be earned each year ranges up to 15% of each of the senior executives’ annual base salaries depending on the Company’s stock price performance target for that year. The value of the MPUs can be paid in either cash or common stock or a combination of cash and stock at the Company’s option. The MPUs are classified as a liability and are revalued at the end of each reporting period based on the fair value of the awards over a three-year period.

As the MPUs contain both a performance and service condition, the MPUs have been treated as a series of three separate awards, or tranches, for purposes of recognizing stock-based compensation expense. The Company recognizes stock-based compensation expense on a tranche-by-tranche basis over the requisite service period for that specific tranche. The Company estimated the fair value of the MPUs using a Monte Carlo Simulation Model that used the following assumptions:

	Three Months Ended March 31,
	2016	2015
Risk-free interest rate	0.51% to 0.83%	0.21% to 0.81%
Estimated volatility factor	35.0% to 37.0%	35.0% to 39.0%
Expected dividends	None	None

For the three months ended March 31, 2016 and 2015, the Company recorded stock-based compensation expense of $203 and $76 relating to these MPUs, respectively.

In January 2015, the Company issued 54,801 shares of its common stock as payment of MPUs in connection with achieving the fiscal year 2013 and 2014 stock performance target.