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Stock Option Plan

12 Months Ended

Dec. 31, 2011

(11)

Stock Option Plan

In May 2009, the Company’s shareholders adopted and approved the Company’s 2009 Equity Incentive Plan (the “2009 Plan”), which provides for the granting of stock options, restricted stock, restricted stock units, stock appreciation rights, stock bonuses and other stock-based awards to employees and directors. The Company reserved for issuance a maximum of 3,635,000 shares of common stock under the 2009 Plan. In addition, shares remaining available for issuance under previous plans are available under the 2009 Plan. Under all plans, an option’s maximum term is ten years. As of December 31, 2011, the Company had a total 2,218,021 shares available for issuance under the 2009 Plan.

Stock option activity during the year ended December 31, 2011 was as follows:


	Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (Years)




Outstanding at December 31, 2010		4,166,994		$	29.09
Granted		148,920			55.27
Exercised		(1,756,274	)		28.41
Expired		(858	)		41.60
Forfeited		(1,173	)		33.57

Outstanding at December 31, 2011		2,557,609		$	31.08	$	74,700		3.66

Exercisable as of December 31, 2011		1,555,223		$	31.64	$	44,372		3.21

The fair value of each option grant is estimated on the date of grant using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions for the year ended December 31, 2011, 2010 and 2009:


	Years Ended December 31,
	2011	2010	2009
Expected volatility	45.79%-46.68%	46.88%-47.65%	47.28% -48.94%
Weighted average stock price volatility	46.41%	47.53%	48.89%
Expected option life	4.42 -4.75 years	1.63-5.50 years	2.42 - 5.56 years
Risk-free interest rate	0.81%-2.18%	0.64%-2.45%	0.60% - 2.73%
Dividend yield	None	None	None

Assumptions used in estimating the fair value at date of grant were based on the following:

the expected life of each award granted was calculated using historical exercise patterns;

ii.

expected volatility is based on historical volatility levels, which the Company believes is indicative of future levels; and

iii.

the risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected life.

The weighted average fair value per share of options granted during the years ended December 31, 2011, 2010 and 2009 was $22.55, $16.13 and $13.80, respectively. The total fair value of options vested during the years ended December 31, 2011, 2010 and 2009 was $4,981, $7,674 and $8,148, respectively. The following table provides information related to options exercised during the years ended December 31, 2011, 2010, and 2009:


	Years Ended December 31,
	2011		2010		2009
Cash received upon exercise of options	$	52,544	$	26,466	$	10,698
Related tax benefit realized		18,593		3,097		842

Total intrinsic value of options exercised was $57,304, $16,817 and $5,036, for the years ended December 31, 2011, 2010 and 2009, respectively.

Non-vested restricted stock for the twelve months ended December 31, 2011 is summarized below:


	Shares			Weighted Average Grant Date Fair Value



Non-vested balance at December 31, 2010		1,228,982		$	29.89
Granted		408,131			63.21
Vested		(330,086	)		31.81
Forfeited		(17,894	)		46.41

Non-vested balance at December 31, 2011		1,289,133		$	40.29

Non-vested restricted stock includes grants conditioned upon service and/or performance based vesting. Service-based awards generally vest annually over a period of four years contingent only on the employees’ continued employment. Performance based awards contain a vesting condition based upon the extent of achievement of certain goals relating to the Company’s earnings per share in the grant year. The total number of shares that may vest is determined upon the earnings per share for the grant year with the determined number of shares then vesting annually over the following three and a third years. Performance based awards represent 41,774 shares of outstanding non-vested restricted stock awards.

As of December 31, 2011, there was $46,713 of total unrecognized compensation cost related to non-vested share-based compensation arrangements, which is expected to be recognized over a weighted average period of 1.36 years.