STOCK-BASED EMPLOYEE COMPENSATION

6 Months Ended

Jun. 30, 2011

STOCK-BASED EMPLOYEE COMPENSATION

STOCK-BASED EMPLOYEE COMPENSATION

2. STOCK-BASED EMPLOYEE COMPENSATION

The Company has adopted stock compensation plans which provide for grants of share based compensation as incentives and rewards to encourage employees, officers, consultants and directors to contribute towards the long-term success of the Company.  Stock-based compensation cost included in personnel expenses in the Unaudited Consolidated Statements of Operations was approximately $13.1 million and $15.5 million, and $27.1 million and $27.4 million for the three and six months ended June 30, 2011 and 2010, respectively.

During the six months ended June 30, 2011, stock options were exercised for 139,187 shares of common stock with a weighted average exercise price per share of $27.80.  As of June 30, 2011, the aggregate number of stock options outstanding and exercisable was 216,281 shares, with a weighted average exercise price per share of $20.88 and a weighted average remaining term of 2.8 years.

The following table summarizes the activity of unvested restricted stock, restricted stock units and performance share units (“Share-Based Awards”) during the six months ended June 30, 2011.

Share-Based Awards	Shares		Weighted AverageGrant Date Fair Value
Unvested at December 31, 2010	1,530,647		$	130.93
Granted	117,183		$	464.89
Vested	(837,981	)	$	113.39
Performance Share Units Adjustment	(17,280	)	$	150.24
Forfeited	(68,866	)	$	176.55
Unvested at June 30, 2011	723,703		$	200.51

As of June 30, 2011, there was $87.0 million of total future compensation cost related to unvested share-based awards to be recognized over a weighted-average period of 2.1 years.

During the three months ended June 30, 2011, the Company made broad-based grants of 191 restricted stock units (“RSUs”) that generally vest over four years.  The share-based awards granted had a total grant date fair value of $0.1 million based upon the grant date fair value per share of $523.96.  During the three months ended March 31, 2011, the Company made broad-based grants of 39,848 RSUs that generally vest after three years.  The share based awards granted had a total grant date fair value of $18.5 million based upon the grant date fair value per share of $464.79.

In addition, during the three months ended March 31, 2011, the Company granted 77,144 performance share units to certain executives.  The performance share units had a total grant date fair value of $35.9 million based upon the grant date fair value per share of $464.79.  The performance share units are payable in shares of the Company’s common stock upon vesting.  Subject to certain exceptions for terminations related to a change in control and terminations other than for “cause,” for “good reason” or on account of death or disability, the executive officers must continue their service through March 1, 2014 in order to receive any shares.  Stock-based compensation for performance share units is recorded based on the estimated probable outcome at the end of the performance period.  The actual number of shares to be issued on the vesting date will be determined upon completion of the performance period which ends December 31, 2013.  As of June 30, 2011, the estimated number of probable shares to be issued under this 2011 grant is a total of 77,144 shares.  If the maximum performance thresholds are met at the end of the performance period, a maximum number of 164,508 total shares could be issued.  If the minimum performance thresholds are not met, 22,796 shares would be issued at the end of the performance period.

2010 Performance Shares Units

During the year ended December 31, 2010, the Company granted 110,430 performance shares units with a grant date fair value of $26.0 million, based on a weighted average grant date fair value per share of $235.34.  The actual number of shares will be determined upon completion of the performance period which ends December 31, 2012.

At June 30, 2011, there were 93,745 unvested performance share units outstanding, net of actual forfeitures and vesting.  As of June 30, 2011, the number of shares estimated to be issued at the end of the performance period is a total of 212,924 shares.  If the maximum performance thresholds are met at the end of the performance period, a maximum of 226,505 total shares could be issued.