[11] Stock-Based Compensation

(a) Tutor Perini Corporation Long-Term Incentive Plan

The Company is authorized to grant up to 6,900,000 stock-based compensation awards to key executives, employees and directors of the Company under the Tutor Perini Corporation Long-Term Incentive Plan (the “Plan”). The Plan allows stock-based compensation awards to be granted in a variety of forms, including stock options, stock appreciation rights, restricted stock awards, unrestricted stock awards, deferred stock awards and dividend equivalent rights. The terms and conditions of the awards granted are established by the Compensation Committee of the Company's Board of Directors who also administers the Plan.

The Company recognized total compensation expense of $8.8 million, $12.8 million and $12.5 million in 2011, 2010 and 2009, respectively, related to stock-based compensation awards which is included in general and administrative expenses in the Consolidated Statements of Operations. Income tax benefits of $3.3 million, $4.5 million and $4.2 million in 2011, 2010 and 2009, respectively, have been recognized relating to these awards. A total of 1,706,858 shares of common stock are available for future grant under the Plan at December 31, 2011.

Restricted Stock Awards

Restricted stock awards generally vest subject to the satisfaction of service requirements or the satisfaction of both service requirements and achievement of certain pre-established pre-tax income performance targets. Upon vesting, each award is exchanged for one share of the Company's common stock. The grant date fair values of these awards are determined based on the closing price of either the award date (if subject only to service conditions), or, if later, the date that the Compensation Committee establishes the applicable performance-target (if subject to performance conditions). The related compensation expense is amortized over the applicable requisite service period. As of December 31, 2011, the Compensation Committee has approved the award of an aggregate of 4,092,500 restricted stock awards to eligible participants. During 2011, the Compensation Committee approved the award of 102,500 restricted stock awards, cancelled 107,500 restricted stock awards and replaced these with 145,000 new restricted stock awards. Additionally, 186,666 restricted stock awards were forfeited during 2011. During 2010, the Compensation Committee approved the award of 210,000 restricted stock awards, and 45,000 restricted stock awards were forfeited. During 2009, the Compensation Committee approved the award of 975,000 restricted stock units, and 90,000 restricted stock awards were forfeited.

The awards granted in 2011, 2010, and 2009 had a weighted-average grant date fair value of $19.03, $20.44, and $20.71, respectively. The grant date fair value is determined based on the closing price of the Company's common stock on the date of grant.

The Company recognized compensation expense of $5.7 million, $9.5 million, and $9.8 million in 2011, 2010, and 2009, respectively, related to the restricted stock awards which is included in general and administrative expenses. As of December 31, 2011, there was $9.4 million of unrecognized compensation cost related to the unvested awards which, absent significant forfeitures in the future, is expected to be recognized over a weighted-average period of approximately 2.3 years.

(a) Tutor Perini Corporation Long-Term Incentive Plan (continued)

A summary of restricted stock awards activity during the year ended December 31, 2011 is as follows:

				Weighted Average		Aggregate
	Number			Grant Date		Intrinsic
	of Shares			Fair Value		Value
Total Awarded and Unvested - January 1, 2011		1,220,833		$	21.62	$	26,138,035
Vested		(258,333	)		20.72		4,805,492
Granted		517,498			19.03		6,385,925
Forfeited		(186,666	)		25.59		-
Cancelled		(107,500	)		26.19		-
Total Granted and Unvested		1,185,832			19.65		14,633,167
Approved for grant		431,669		(a)			5,326,795
Total Awarded and Unvested – December 31, 2011		1,617,501		n.a.			19,959,962

(a)

Grant date fair value cannot be determined currently because the related performance targets for future years have not yet been established by the Compensation Committee.

The outstanding unvested awards at December 31, 2011 are scheduled to vest as follows, subject where applicable to the achievement of performance targets. As described above, certain performance targets have not yet been established.

	Number
Vesting Date	of Awards

2012		208,332
2013		950,000
2014		459,169
Total		1,617,501

Approximately 238,750 of the unvested awards will vest based on the satisfaction of service requirements and 1,378,751 will vest based on the satisfaction of both service requirements and the achievement of pre-tax income performance targets.

Stock Options

Stock option awards generally vest subject to the satisfaction of service requirements or the satisfaction of both service requirements and achievement of certain pre-established pre-tax income performance targets. The grant date fair values of these awards are determined based on the Black-Scholes option price model on either the award date (if subject only to service conditions), or, if later, the date that the Compensation Committee establishes the applicable performance-target (if subject to performance conditions). The related compensation expense is amortized over the applicable service period. The exercise price of the options is equal to the closing price of the Company's common stock on the date the awards were approved by the Compensation Committee, and the awards expire ten years from the award date. As of December 31, 2011, the Compensation Committee has approved the award of an aggregate of 1,685,465 stock option awards to eligible participants. During 2011, the Compensation Committee approved the award of 70,465 stock option awards, and cancelled 95,000 stock option awards and replaced these with 140,000 stock option awards. Additionally, 80,000 stock option awards were forfeited during 2011. During 2010, there were no stock option awards approved. During 2009, the Compensation Committee approved the award of 750,000 stock options.

(a) Tutor Perini Corporation Long-Term Incentive Plan (continued)

The Company recognized compensation expense of $3.1 million, $3.3 million, and $2.7 million in 2011, 2010 and 2009, respectively, related to stock option grants which is included in general and administrative expenses. As of December 31, 2011, there was $3.9 million of unrecognized compensation cost related to the outstanding options which, absent significant forfeitures in the future, is expected to be recognized over a weighted-average period of approximately 2.3 years.

A summary of stock option activity under the Plan during the year ended December 31, 2011 is as follows:

				Weighted Average
	Number			Grant Date		Exercise
	of Shares			Fair Value		Price
Total Awarded and Outstanding - January 1, 2011		1,040,000		$	11.18	$	20.50
Granted		360,465			9.31		16.29
Forfeited		(80,000	)		14.84		26.19
Cancelled		(95,000	)		14.84		26.19
Total Granted and Outstanding		1,225,465			10.11		18.45
Approved for grant		300,000		(a)			20.33
Total Awarded and Outstanding - December 31, 2011		1,525,465		n.a.			18.82

(a)

Grant date fair value cannot be determined currently because the related performance targets for future years have not yet been established by the Compensation Committee.

There were 340,465 options that have vested and were exercisable at December 31, 2011 at a weighted average exercise price of $19.55 per share. Of the remaining options outstanding, approximately 650,000 of the outstanding options will vest based on the satisfaction of service requirements and 535,000 will vest based on the satisfaction of both service requirements and the achievement of pre-tax income performance targets.

The outstanding options had no intrinsic value and a weighted-average remaining contractual life of 7.5 years at December 31, 2011.

The following table details the key assumptions used in determining the fair values of awards granted during the past 3 years based on the Black-Scholes option pricing model:

	Grant dates established during:
	2011												2010			2009
Awarded during	2011			2011			2011			2009 (a)			2009 (a)			2009 (a)
Number of options		140,000			30,000			40,465			150,000			150,000			150,000
Risk-free interest rate		1.13	%		1.25	%		0.89	%		2.74	%		2.65	%		2.65	%
Expected life of options	6.0 yearss			6.5 yearss			5.0 yearss			6.5 yearss			5.7 years			5.5 years
Expected volatility of underlying stock		49.86	%		48.70	%		51.62	%		46.94	%		48.38	%		51.11	%
Expected quarterly dividends (per share)	$	0.00		$	0.00		$	0.00		$	0.00		$	0.00		$	0.00

(a)

During 2009, the Compensation Committee approved the award of 750,000 stock options that vest in five equal annual installments from 2010 to 2014 subject to the achievement of pre-tax income performance targets established by the Compensation Committee. The Compensation Committee has established the pre-tax performance target for fiscal years 2009, 2010 and 2011, and these tranches were deemed granted for accounting purposes.

(b) Special Equity Incentive Plan

The Company was authorized to grant up to 3,000,000 non-qualified stock options to key executives, employees and directors of the Company under the Special Equity Incentive Plan (the “Special Equity Plan”). No options were granted under the Special Equity Plan in 2011, 2010 or 2009. In accordance with its provisions, the Special Equity Plan terminated on May 25, 2010; however, it continued to govern any then outstanding unexercised and unexpired options. There were no options exercised in 2011. During 2010, 15,000 options were exercised with an intrinsic value of $0.2 million and a weighted average exercise price of $4.50 per share. During 2009, 7,500 stock options were exercised with an intrinsic value of $0.1 million and a weighted average exercise price of $4.50 per share. As of December 31, 2011, there were no outstanding options under the Special Equity Plan.