Note 7. Share-Based Compensation Expense

Share-Based Compensation Expense

Total share-based compensation expense consisted of the following (shown in thousands):


	Three months ended June 30,		Six months ended June 30,
	2011	2010	2011	2010
Amortization of restricted stock awards and restricted stock units	$ 2,126	$ 1,682	$ 3,490	$ 2,416
Amortization of stock option awards	261	253	526	462
Fair value adjustment for variable stock option accounting awards	—	(11)	—	(44)
Discount given on employee stock purchase transactions through our Employee Stock Purchase Plan	46	39	117	104
Total share-based compensation expense	$ 2,433	$ 1,963	$ 4,133	$ 2,938

During the six months ended June 30, 2011 and 2010, share-based compensation expense attributable to consultant personnel was included in cost of services before reimbursable expenses, and share-based compensation expense attributable to corporate management and support personnel was included in general and administrative expenses. The following table shows the amounts attributable to each category (shown in thousands):


	Three months ended June 30,		Six months ended June 30,
	2011	2010	2011	2010
Cost of services before reimbursable expenses	$ 1,481	$ 1,040	$ 2,351	$ 1,841
General and administrative expenses	952	923	1,782	1,097
Total share-based compensation expense	$ 2,433	$ 1,963	$ 4,133	$ 2,938

During the six months ended June 30, 2010, share-based compensation expense was impacted by a modification of restricted stock terms (discussed below).

Restricted Stock and Restricted Stock Units Outstanding

The measurement price for our restricted stock and restricted stock units awards is the fair market value of our common stock at the date of grant. The restricted stock and restricted stock units are granted under the Navigant Consulting, Inc. 2005 Long-Term Incentive Plan, as amended.

The following table summarizes restricted stock and restricted stock unit activity for the six months ended June 30:


	2011		2010
	Number of shares (000s)	Weighted average measurement date price	Number of shares (000s)	Weighted average measurement date price
Restricted stock and restricted stock units outstanding at beginning of the period	1,449	$ 15.52	1,356	$ 17.25
Granted	777	9.66	277	12.22
Vested	(330)	15.91	(188)	16.74
Forfeited	(14)	18.04	(38)	18.74
Restricted stock and restricted stock units outstanding at end of the period	1,882	$ 13.01	1,407	$ 16.28

As of June 30, 2011, we had $18.8 million of total compensation costs related to our unvested restricted stock and restricted stock units that have not been recognized as share-based compensation expense. Those compensation costs will be recognized as expense over the remaining vesting periods. The weighted-average remaining vesting period is approximately 2 years. At June 30, 2011 and 2010, restricted stock units outstanding were 723,000 and 57,000, respectively.

During March 2010, we modified the terms of the restricted stock awards granted on March 13, 2007 and April 30, 2007 to provide for 25% annual vesting starting March 13, 2011 and April 30, 2011, respectively. These awards originally vested seven years from the grant date, with the vesting accelerating based upon the achievement of certain operating performance targets. We modified the vesting terms of the restricted stock awards in order to improve the visibility of the value the awards provide for certain key senior consultants and senior management. This modification resulted in a one-time cumulative credit of $0.4 million in the first quarter of 2010 to share-based compensation expense to align the expense recognition with the amended vesting terms. As of June 30, 2011, approximately 0.5 million of these restricted stock awards remain outstanding and 0.3 million have vested.

During the six months ended June 30, 2011, we granted 102,000 of restricted stock awards which had a fair value of $1.0 million at grant date to selected senior management and our board of directors. These restricted stock awards vest ratably over three years.

On April 15, 2011, we granted 611,000 of restricted stock units, with a fair value of $5.9 million at grant date, to selected senior level consultants. The restricted stock units cliff vest three years from the grant date. The restricted stock units are part of a program to provide performance incentives for select key senior practitioners and senior management as well as to retain such individuals.

Stock Options

During the six months ended June 30, 2011, we granted 120,000 stock options which had a fair value of $0.6 million at grant date to selected senior management and our board of directors. These options vest ratably over three years.