Share-Based Compensation

12 Months Ended

Dec. 31, 2011

Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]

Share-Based Compensation

Share-Based Compensation

We adopted the QIAGEN N.V. Amended and Restated 2005 Stock Plan (the Plan) in 2005. The Plan allows for the granting of stock rights and incentive stock options, as well as non-qualified options, stock grants and stock-based awards, generally with terms of up to 10 years, subject to earlier termination in certain situations. Generally, options vest over a three-year period. The vesting and exercisability of certain stock rights will be accelerated in the event of a Change of Control, as defined in the Plan. To date, all option grants have been at the market value on the grant date or at a premium above the closing market price on the grant date. We issue new Common Shares to satisfy option exercises and had approximately 22.1 million Common Shares reserved and available for issuance under this plan at December 31, 2011.

In connection with the 2007 acquisition of Digene Corporation, we assumed three additional equity incentive plans. No new grants will be made under these plans. We had approximately 0.1 million common shares reserved and available for issuance under these plans at December 31, 2011.

Stock Options

During the years ended December 31, 2011 and 2010, we granted 601,897 and 570,282 stock options, respectively. The following are the weighted-average assumptions used in valuing the stock options granted to employees for the years ended December 31, 2011, 2010 and 2009:

	2011		2010		2009
Stock price volatility	34	%	31	%	40	%
Risk-free interest rate	1.88	%	2.12	%	2.13	%
Expected life (in years)	4.97		4.84		5.01
Dividend rate	0	%	0	%	0	%
Forfeiture rate	6.1	%	7.0	%	7.7	%

A summary of the status of employee stock options as of December 31, 2011 and changes during the year then ended is presented below:

All Employee Options	Number of Shares (in thousands)		Weighted Average Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2011	7,332		$	13.86
Granted	602		$	19.86
Exercised	(655	)	$	12.95
Forfeited	(62	)	$	19.56
Expired	(690	)	$	21.79
Outstanding at December 31, 2011	6,527		$	13.61	3.65	$	15,315
Exercisable at December 31, 2011	5,453		$	12.37	2.66	$	15,315
Vested and expected to vest at December 31, 2011	6,436		$	13.53	3.57	$	15,315

Generally, stock option grants are valued as a single award with a single average expected term and are amortized over the vesting period. The weighted-average grant-date fair value of options granted during the years ended December 31, 2011, 2010 and 2009 was $6.49, $6.42 and $6.33, respectively. The total intrinsic value of options exercised during the years ended December 31, 2011 and 2010 was $3.7 million and $7.7 million, respectively. At December 31, 2011, the unrecognized share-based compensation expense related to employee stock option awards including estimated forfeitures is approximately $4.0 million and will be recognized over a weighted average period of approximately 1.73 years.

At December 31, 2011, 2010 and 2009, options were exercisable with respect to 5.5 million, 6.4 million and 7.4 million Common Shares at a weighted average price of $12.37, $12.93 and $14.36 per share, respectively. The options outstanding at December 31, 2011 expire in various years through 2021.

Restricted Stock Units

Restricted stock units represent rights to receive Common Shares at a future date. There is no exercise price and the fair market value at the time of the grant is recognized ratably over the requisite vesting period, generally 10 years. The fair market value is determined based on the number of restricted stock units granted and the market value of our shares on the grant date. Pre-vesting forfeitures were estimated to be approximately 7.7%. At December 31, 2011, there was $61.1 million remaining in unrecognized compensation cost including estimated forfeitures related to these awards, which is expected to be recognized over a weighted average period of 8.0 years. The weighted average grant date fair value of restricted stock units granted during the year ended December 31, 2011 was $19.82. The total fair value of restricted stock units released during the years ended December 31, 2011 and 2010 was $8.8 million and $2.5 million, respectively.

A summary of restricted stock units as of December 31, 2011 and changes during the year are presented below:

Restricted Stock Units	Restricted Stock Units (in thousands)		Weighted Average Contractual Term	Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2011	4,417
Granted	1,929
Vested	(451	)
Forfeited	(244	)
Outstanding at December 31, 2011	5,651		2.91	$	78,030
Vested and expected to vest at December 31, 2011	4,597		2.78	$	63,488

Compensation Expense

Share-based compensation expense before taxes for the years ended December 31, 2011, 2010 and 2009 totaled approximately $19.5 million, $13.6 million and $9.7 million, respectively, as shown in the table below. No share-based compensation cost was capitalized in inventory in 2011, 2010 or 2009 as the amounts were not material. The excess tax benefit realized for the tax deductions of the share-based payment arrangements totaled $4.2 million, $2.0 million and $5.9 million, respectively, for the years ended December 31, 2011, 2010 and 2009.

Compensation Expense (in thousands)	2011		2010		2009
Cost of sales	$	1,672	$	932	$	799
Research and development	3,055		2,087		1,826
Sales and marketing	4,285		2,885		1,936
General and administrative	10,528		7,688		5,186
Share-based compensation expense before taxes	19,540		13,592		9,747
Income tax benefit	4,231		2,856		2,913
Net share-based compensation expense	$	15,309	$	10,736	$	6,834