SHARE-BASED COMPENSATION

6 Months Ended

Jun. 30, 2012

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

NOTE 5:   SHARE-BASED COMPENSATION

The fair value of the share-based awards is measured at grant date and the resulting compensation expense is recognized on a straight-line basis over the requisite service period.  The following table presents share-based compensation expense, which is a non-cash charge, included in the below noted captions within the Condensed Consolidated Statements of Income:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Direct cost of services	$	33		$	29		$	121		$	126
General and administrative	1,516			1,651			3,282			3,391
Share-based compensation expense	1,549			1,680			3,403			$	3,517
Income tax benefit	(679		)	(727		)	(1,487		)	(1,523		)
Total share-based compensation expense, net of tax	$	870		$	953		$	1,916		$	1,994

The 2004 Equity Incentive Plan, as amended (the “2004 Plan”), limits the grant of options to acquire shares of common stock, stock appreciation rights, and restricted stock awards under the 2004 Plan to an aggregate of 7,500,000 shares.  Any grant under the 2004 Plan that expires or terminates unexercised, becomes unexercisable, or is forfeited will be available for future grants. At June 30, 2012, there were approximately 348,000 shares of common stock available for future equity-related grants under the 2004 Plan.

During the six months ended June 30, 2012, we granted 430,000 nonvested share awards at a weighted-average grant date price of $11.85 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, 2012. As of June 30, 2012 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 110,000 stock options during the six months ended June 30, 2012, with a weighted-average exercise price of $11.55 per share, all of which vest 20% per year over five 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.

	Six months ended June 30,
	2012			2011
Expected life of stock option (years)	6.6			6.6
Expected volatility	37		%	30		%
Risk-free interest rate	1.3		%	2.5		%
Dividend yield	1.5		%	1.1		%
Weighted average grant-date fair value	$	3.73		$	4.49

As of June 30, 2012 there was $6.8 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 2.2 years.