Share-Based Compensation

12 Months Ended

Dec. 31, 2011

Share-Based Compensation [Abstract]

Share-Based Compensation

9. Share-Based Compensation

Stock Incentive Plans

At December 31, 2011, there were stock options, non-vested shares and restricted stock units outstanding under our existing stock incentive plans. We maintain three plans: the 1996 Stock Incentive Plan; the 2001 Stock Incentive Plan; and the 2006 Equity Incentive Plan (“2006 Plan”). New options and other stock awards may only be granted under the 2006 Plan. At December 31, 2011, the sum of the shares previously issued pursuant to awards under the 2006 Plan and the shares of common stock remaining available for future issuance under the 2006 Plan to our employees, directors, consultants and those of our affiliates is 6,697,435 shares. The number of shares of common stock remaining available for future issuance under the 2006 Plan may increase by any shares of common stock underlying prior outstanding options that expire, are forfeited, cancelled or terminate for any reason without having been exercised in full. The number of shares available for issuance at December 31, 2011 was 2,646,923. Outstanding options and non-vested shares granted under our plans typically vest over periods that range from two to six years, and outstanding options typically expire between five and ten years from the date of grant.

Stock Option Activity

A summary of our stock option activity for 2011 is as follows (in thousands, except weighted-average exercise price and weighted-average remaining contractual term):

	Stock Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2010		3,323		$	16.45
Granted		894			15.98
Exercised		(395	)		10.12
Forfeited/Canceled		(46	)		23.25
Outstanding at December 31, 2011		3,776		$	16.92		2.3	$	10,699
Exercisable at December 31, 2011		2,543		$	17.23		1.1	$	6,409
Vested and expected to vest at December 31, 2011.		3,720		$	16.93		2.2	$	4,097

There were 894,000 stock options granted during 2011, which had an estimated weighted- average grant date fair value of approximately $5.21. There were no stock options granted during 2010 and 2009. The aggregate intrinsic value of our stock options exercised during 2011, 2010 and 2009 was $5.6 million, $3.3 million and $7.3 million, respectively. The actual tax benefit realized on options exercised during 2011, 2010 and 2009 was $2.2 million, $1.3 million and $2.8 million, respectively. The total fair value of options vested during 2011, 2010 and 2009 was $2.2 million, $2.1 million and $72,000, respectively.

The following table summarizes information about the options outstanding at December 31, 2011 (in thousands, except per share amounts and the weighted-average remaining contractual life):

Options Outstanding				Options Exercisable
Exercise Price	Number  Outstanding	Weighted-Avg. Remaining Contractual         Life	Weighted-Avg. Exercise Price	Number Exercisable	Weighted-Avg. Exercise Price
$6.26 - $7.97	706,928	1.0	$  7.01	706,928	$  7.01
$15.33 - $30.70	3,069,002	2.3	$19.20	1,835,694	$21.16
	3,775,930			2,542,622

At December 31, 2011, there was $4.2 million of total unrecognized compensation cost related to our stock options. This cost is expected to be recognized over a weighted-average period of over one year.

Calculation of Fair Value

The fair value of our options is estimated on the date of grant using the Black-Scholes option pricing model. We amortize the fair value of our options on a straight-line basis over the requisite service period. The following assumptions were used to determine the fair value of those options granted during 2011, there were no options granted during 2010 and 2009:

Expected volatility(1)	39.0	%
Weighted-average volatility(1)	39.0	%
Expected dividends	0.0	%
Expected term(2)	4.3 years
Risk-free rate(3)	0.79	%

(1) We estimated the volatility of our common stock on the date of grant based on both historical and implied volatility.

(2) The expected term represents the period of time that we expect options to be outstanding. In 2011, we estimated the expected term based upon the weighted-average of our historical experience.

(3) The risk-free interest rate is based on the implied yield in effect at the time of option grant on U.S. Treasury zero-coupon issues with equivalent remaining terms.

We use historical data to estimate pre-vesting option forfeitures. We recognize share-based compensation only for those awards that we expect to vest.

The compensation cost that has been charged against income for stock options was $1.6 million, $2.6 million and $1.9 million for 2011, 2010 and 2009, respectively. The corresponding income tax benefit recognized in the income statement was $0.6 million, $1.0 million and $0.8 million for 2011, 2010 and 2009, respectively.

Non-Vested Shares

Additionally, under our 2006 Plan, we have issued non-vested stock awards in our common stock to certain employees and members of our Board of Directors. The non-vested stock awards to employees and executives generally vest as follows: 25% on the second anniversary of the grant date; 50% on the third anniversary of the grant date; and 25% on the fourth anniversary of the grant date. The non-vested stock awards to members of our Board of Directors generally vest in equal annual installments over three years from the date of grant. Total compensation expense related to non-vested stock awards was $9.1 million, $6.7 million and $6.0 million in 2011, 2010 and 2009, respectively. The corresponding income tax benefit recognized in the income statement was $3.6 million, $2.6 million and $2.3 million for 2011, 2010 and 2009, respectively. As of December 31, 2011 there was $22.4 million of unrecognized compensation cost related to these non-vested shares that will be recognized over a weighted-average period of three years. A summary of our non-vested stock activity for 2011 is as follows (in thousands, except weighted-average fair value per share:

	Shares			Grant Date Weighted- Average Fair Value Per Share
Outstanding at December 31, 2010		687		$	26.16
Granted		1,248		$	19.99
Vested		(336	)	$	28.81
Forfeited/Canceled		(83	)	$	21.33
Outstanding at December 31, 2011		1,516		$	20.76

During 2011, we granted 1,248,046 shares of non-vested common stock. Of these awards 1,234,470 shares were granted to employees and 13,576 shares were granted to our non-employee directors. The awards to employees will vest as follows: 1,157,470 shares will vest in equal annual installments over four years, while 77,000 shares will vest in equal annual installments over six years. The shares awarded to our non-employee directors will vest in three equal annual installments.

Restricted Stock Unit Activity

Pursuant to the terms of the 2006 Equity Incentive Plan, on April 17, 2009, we awarded 84,757 restricted stock units in lieu of cash bonuses to our four senior executive officers for services performed in fiscal year 2008. Restricted stock units differ from the non-vested stock awards mentioned above in that the restricted stock units were fully vested or earned by the employee on the grant date however are restricted such that the participant will not have any right, title, or interest in, or otherwise be considered the owner of, any of the shares of common stock covered by the restricted stock units until such shares of common stock are settled. The restricted stock units will be settled upon the first to occur of the following: May 1, 2012, the date of the senior executive’s separation from service, death or disability, or the date of a change in control. The restricted stock units had a grant date fair value of $22.90 per share resulting in a total value of $1.9 million and the grant was considered a non-cash financing activity in the prior year. There were no restricted stock grants during 2011 or 2010.