Share-Based Compensation

9 Months Ended

Sep. 30, 2013

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 1, 2013, the shareholders approved the 2013 Stock Option Plan ("2013 Plan"), which made available 3,000,000 shares of the Company's common stock for purchase upon exercise of options granted under the 2013 Plan. The Company's annual grant of option awards generally takes place during the second quarter of each fiscal year. For the nine months ended September 30, 2013 and 2012, 2,779,700 and 2,822,990 options were granted, respectively. The grant of employee stock purchase rights and the issuance of shares under the employee stock purchase plan are made in the third quarter of each fiscal year and 800,461 and 773,661 shares were issued in the three-month periods ended September 30, 2013 and 2012, respectively.

The Company recognizes stock compensation expense based on an estimate of the 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 model with the following assumptions:




	Nine months ended September 30,
	2013			2012
Dividend yield	1.50 - 1.53%			1.30 - 1.35%
Volatility - stock option plans	38		%	38 - 39%
Volatility - stock purchase rights plans	21		%	34		%
Risk free interest rates	.12 - 1.40%			.19 - 1.43%
Expected life (years) - stock option plans	5.91 - 7.43			5.79 - 7.26
Expected life (years) - stock purchase rights plans	1			1
Weighted average fair value of stock options granted during the period	$	11.17		$	13.53
Weighted average fair value of stock purchase rights granted during the period	$	9.43		$	9.70

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



	Three months ended				Nine months ended
	September 30,				September 30,
	2013		2012		2013		2012
Stock compensation expense	$	11,015	$	11,320	$	33,060	$	32,846
Recognized tax benefit	$	943	$	996	$	2,492	$	1,371

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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