STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2012

STOCK-BASED COMPENSATION

11. STOCK-BASED COMPENSATION

For the third quarter and first nine months of 2012 and 2011, stock-based compensation expense was reflected in the Company’s unaudited condensed consolidated statements of income as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2012		2011		2012		2011
Cost of services	$	849	$	659	$	2,710	$	2,009
Operating expenses		1,935		1,663		5,912		4,713
Total stock-based compensation before tax	$	2,784	$	2,322	$	8,622	$	6,722
Income tax benefit		(915)		(676)		(2,781)		(2,175)

During the first nine months of 2012, the Company issued approximately 296,000 shares to its employees under the Company’s share-based compensation plans.

During the first nine months of 2012, the Company granted approximately 156,000 restricted stock units (“RSUs”) with a total fair value of $5.2 million. Approximately 52,000 RSUs were issued in connection with the election by employees to receive 50% of their 2012 target incentive compensation under the Company’s Corporate Incentive Compensation Plan (the “CICP”) in the form of RSUs instead of cash. Stock-based compensation of approximately $1.9 million associated with this RSU grant will be recognized over one year.

As of September 30, 2012, the Company had approximately $10.4 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to all unvested RSUs and unvested stock options that is expected to be recognized over a weighted-average period of 2.1 years.