SHARE-BASED COMPENSATION

3 Months Ended

Mar. 31, 2013

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

NOTE 5:   SHARE-BASED COMPENSATION

The fair value of the share-based awards is measured at grant date and the resulting compensation expense is recognized on a straight-line basis over the requisite service period.  The following table presents share-based compensation expense, which is a non-cash charge, included in the below noted captions within the Condensed Consolidated Statements of Income:

	Three Months Ended March 31,
	2013			2012
Direct cost of services	$	19		$	89
Selling, general and administrative	1,520			1,765
Share-based compensation expense	1,539			1,854
Income tax benefit	(654		)	(809		)
Total share-based compensation expense, net of tax	$	885		$	1,045

The 2004 Equity Incentive Plan, as amended (the “2004 Plan”), limits the grant of options to acquire shares of common stock, stock appreciation rights, and restricted stock awards under the 2004 Plan to an aggregate of 7,500,000 shares.  Any grant under the 2004 Plan that expires or terminates unexercised, becomes unexercisable, or is forfeited will be available for future grants. At March 31, 2013, there were approximately 231,000 shares of common stock available for future equity-related grants under the 2004 Plan.

During the three months ended March 31, 2013, we granted 375,000 nonvested share awards at a weighted-average grant date price of $12.44 per share of which 330,000 shares vest upon certification by the compensation committee of the company’s board of directors of achievement of certain financial performance criteria for the calendar year ending December 31, 2013 and 20,000 shares vested upon issuance.  The remainder of the nonvested share awards vests one year after the grant date. As of March 31, 2013 we have assessed the likelihood that the performance condition will be met and have recorded the related expense based on the estimated outcome.

We settle stock option exercises and nonvested share awards with newly issued common shares or treasury stock.

The fair value of each stock option grant was estimated at the date of grant using a Black-Scholes option pricing model. The following table presents the weighted-average assumptions used and the weighted-average fair value per option granted for the three months ended March 31, 2012.  There were no options granted during the three months ended March 31, 2013.

	Three Months Ended March 31, 2012
Expected life of stock option (years)	6.6
Expected volatility	38		%
Risk-free interest rate	1.2		%
Dividend yield	1.5		%
Weighted average grant-date fair value	$	3.97

As of March 31, 2013 there was $6.7 million of unrecognized compensation cost, net of estimated forfeitures, related to nonvested share-based awards, which will be recognized over a weighted-average period of two years.