Share-Based Compensation

9 Months Ended

Sep. 30, 2011

Share-Based Compensation

Share-Based Compensation

The Company provides compensation benefits by granting stock options and employee stock purchase rights to its employees and restricted shares to its directors. On May 4, 2011, the shareholders approved the 2011 Stock Option Plan ("2011 Plan"), which made available 3,000,000 shares of the Company's common stock for purchase upon exercise of options granted under the 2011 Plan. The Company's annual grant of option awards generally takes place during the second quarter of each fiscal year. For the nine months endedSeptember 30, 2011 and 2010, 2,998,390 and 2,634,885 options were granted, respectively. Also, for the three and nine-month periods ended September 30, 2011 and 2010, 663,386 and 694,329 shares were issued upon exercise of employee stock purchase rights, respectively.

The Company recognizes stock compensation expense based on the estimated fair value of awards granted to employees and directors under the Company’s stock option, director restricted stock and employee stock purchase rights plans. The expense, adjusted for expected forfeitures, is recognized on a straight-line basis over the stock awards' vesting period. The forfeiture assumption used to calculate compensation expense is primarily based on historical pre-vesting employee forfeiture patterns. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing with the following assumptions:

	Nine months ended September 30,
	2011			2010
Dividend yield	.97 - .98%			1.07 - 1.08%
Volatility - stock option plans	38 - 40%			38 - 40%
Volatility - stock purchase rights plans	26		%	29		%
Risk free interest rates	.19 - 2.84%			.29 - 2.86%
Expected life (years) - stock option plans	5.50 - 7.11			5.44 - 6.90
Expected life (years) - stock purchase rights plans	1			1
Weighted average fair value of stock options granted during the period	$	19.35		$	14.51
Weighted average fair value of stock purchase rights granted during the period	$	11.70		$	11.16

Total stock compensation expense and the total related tax benefit recognized are as follows:

	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Stock compensation expense	$	12,738	$	10,846	$	33,446	$	33,047
Recognized tax benefit	$	40	$	39	$	117	$	148