STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2012

STOCK-BASED COMPENSATION

12. STOCK-BASED COMPENSATION

Stock Options

The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model with the assumptions included in the table below. The Company uses a combination of historical data and historical volatility to establish the expected volatility. Historical data is used to estimate the expected option life and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. The following assumptions were used to estimate the fair value of options granted using the Black-Scholes option-pricing model:

	For the six months ended June 30,
	2012	2011
Risk free interest rate	0.58% - 0.83%	1.17% - 2.17%
Dividend yield	0.0%	0.0%
Expected volatility	53.0%	53.9%
Expected lives	3.8 - 4.6 years	3.5 - 4.5 years

The following table summarizes the Company’s activities with respect to its stock options for the six months ended June 30, 2012:

	Number of Shares			Weighted- Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (in years)
	(in thousands)
Outstanding at December 31, 2011		3,608		$	28.06
Granted		613			47.58
Exercised		(504	)		27.68
Canceled		(7	)		41.93
Outstanding at June 30, 2012		3,710		$	31.31		4.19
Exercisable at June 30, 2012		2,150		$	25.44		3.15
Unvested at June 30, 2012		1,560		$	39.39		5.63

The weighted-average fair value of options granted during the six months ended June 30, 2012 and 2011 was $20.31 and $18.55, respectively. The total intrinsic value for options exercised during the six months ended June 30, 2012 and 2011 was $11.9 million and $6.9 million, respectively.

Restricted Stock Units

The following table summarizes the Company’s restricted stock unit activity for the six months ended June 30, 2012:

	Number of Units			Weighted-Average Grant  Date Fair Value per share
	(in thousands)
Outstanding at December 31, 2011		225		$	39.22
Granted		138			47.71
Restriction Lapse		(64	)		38.67
Forfeited/Canceled		(1	)		44.19
Outstanding at June 30, 2012		298		$	43.24

The Company records compensation expense for restricted stock units based on the fair market value of the units awarded at the date of the grant times the number of shares subject to the units awarded. The Company typically recognizes the expense associated with the units on a straight-line basis over the vesting term.