Stock Based Compensation

3 Months Ended

Mar. 31, 2012

Share-based Compensation [Abstract]

Stock Based Compensation

Note 2 - Stock-Based Compensation

Stock Option Activity

A summary of the Company's stock option activity for the three months ended March 31, 2012 is as follows (share numbers and aggregate intrinsic values in thousands):

	Number ofOptionsOutstanding			WeightedAverageExercisePrice		WeightedAverageContractualTerm (Years)		AggregateIntrinsicValue
Balances, December 31, 2011		2,768		$	15.71
Granted		43			27.00
Exercised		(190	)		17.63
Forfeited, cancelled or expired		(23	)		20.38
Balances, March 31, 2012		2,598		$	15.71		6.1	$	43,498
Options vested and expected to vest at March 31, 2012		2,500		$	15.41		6.0	$	42,310
Options vested at March 31, 2012		2,093		$	13.28		5.5	$	38,053

  During the three months ended March 31, 2012, the Company granted options to purchase an aggregate of 43,000 shares of common stock with an estimated weighted-average grant-date fair value of $12.66 per share. The total intrinsic value of options exercised during the three months ended March 31, 2012, was $2,411,000.  Net cash proceeds from the exercise of stock options were $3,345,000 for the three months ended March 31, 2012.

Valuation of Stock Options

The Company estimated the fair value of each option award on the date of grant using the Black-Scholes option-pricing model and the assumptions noted in the following table.  In the three months ended March 31, 2012 and 2011, the Company calculated volatility using an average of its historical and implied volatilities.  The expected term of options gave consideration to historical exercises, post-vesting cancellations and the options' contractual term. The risk-free rate for the expected term of the option is based on the U.S. Treasury Constant Maturity at the time of grant. The assumptions used to value options granted during the three months ended March 31, 2012 and 2011 were as follows:

	Three Months Ended March 31,
	2012			2011
Dividend yield		-			-
Annual risk free rate of return		0.9	%		2.1	%
Expected volatility		58.7	%		48.1	%
Expected term (years)		4.3			4.5

Employee stock-based compensation expense recognized in the three months ended March 31, 2012 and 2011, was calculated based on awards ultimately expected to vest and has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Restricted Stock Units

The Company grants restricted stock units (“RSUs”) to its employees under the provisions of the 2006 Equity Incentive Plan. The cost of RSUs is determined using the fair value of the Company's common stock on the date of grant.  RSUs typically vest and become exercisable annually, based on a three or four year total vesting term.  Compensation cost is amortized on a straight-line basis over the requisite service period.

Restricted Stock Unit Activity

A summary of the Company's restricted stock unit activity for the three months ended March 31, 2012, is as follows (share numbers in thousands):

	Number of UnitsOutstanding			WeightedAverageGrant Date Fair Value
Awarded and unvested, December 31, 2011		1,969		$	31.33
Granted		1,395			27.60
Vested		(609	)		21.13
Forfeited		(72	)		34.80
Awarded and unvested, March 31, 2012		2,683		$	31.61
Restricted stock units expected to vest, March 31, 2012		2,211

Included in the RSU grants for the three months ended March 31, 2012, are 445,000 RSUs that have both performance and service vesting criteria (“PBRSU”).  The performance criteria are tied to the Company's 2012 financial performance and the service criteria are consistent with vesting described in the Company's 2006 Equity Incentive Plan.  Compensation cost associated with these PBRSUs is recognized on an accelerated attribution model and ultimately based on whether or not satisfaction of the performance criteria is probable.  If in the future, situations indicate that the performance criteria are not probable, then no further compensation cost will be recorded and any previous costs will be reversed.

At March 31, 2012, the Company had $80,081,000 of total unrecognized compensation expense, net of estimated forfeitures, related to stock options and RSUs that will be recognized over a weighted-average period of approximately three years.