SHARE-BASED COMPENSATION

9 Months Ended

Sep. 30, 2011

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

NOTE 5:   SHARE-BASED COMPENSATION

Share-based compensation is measured at grant date, based on the fair value of the award, and is recognized on a straight-line basis over the requisite service period.  The following table presents total share-based compensation expense included in the Condensed Consolidated Statements of Income (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Direct cost of services	$	103		$	101		$	229		$	266
General and administrative	1,969			2,064			5,360			5,726
Pre-tax share-based compensation expense	2,072			2,165			5,589			5,992
Income tax benefit	(897		)	(694		)	(2,420		)	(1,781		)
Total share-based compensation expense, net of tax	$	1,175		$	1,471		$	3,169		$	4,211

The 2004 Equity Incentive Plan, as amended (the “2004 Plan”), limits the combined grant of options to acquire shares of common stock, stock appreciation rights, and restricted stock awards under the 2004 Plan to 7,500,000 shares.  Any grant under the 2004 Plan that expires or terminates unexercised, becomes unexercisable, or is forfeited will generally be available for future grants. At September 30, 2011, there were approximately 637,000 shares of common stock available for future equity-related grants under the 2004 Plan.

During the nine months ended September 30, 2011, we granted 430,000 nonvested share awards at a weighted-average grant date price of $13.39 per share.  These awards vest 12 months after the date of grant upon achievement of a performance condition for the calendar year ending December 31, 2011. As of September 30, 2011, we have assessed the likelihood that the performance condition will be met and have recorded the related expense based on the estimated outcome. We also granted 557,500 stock options with a weighted-average exercise price of $14.60 per share, which vest over periods ranging from five to seven years.

We settle stock option exercises and nonvested share awards with newly issued common shares or treasury stock.

The fair value of each stock option grant was estimated at the date of grant using a Black-Scholes option pricing model. The following table presents the weighted-average assumptions used and the weighted-average fair value per option granted.

	Nine months ended September 30,
	2011			2010
Expected life of stock option (years)	6.6			6.5
Expected volatility	30		%	37		%
Risk-free interest rate	2.5		%	2.7		%
Dividend yield	1.1		%	0.63		%
Weighted average grant-date fair value	$	4.49		$	4.68

As of September 30, 2011, there was $7.0 million of unrecognized compensation cost, net of estimated forfeitures, related to nonvested share-based awards, which will be recognized over a weighted-average period of 2.7 years.