NOTE K—ACCOUNTING FOR STOCK-BASED COMPENSATION

Stock Incentive Plans

On June 4, 2010, the Company's stockholders ratified the ICF International, Inc. 2010 Omnibus Incentive Plan (the "Omnibus Plan"), which was adopted by the Company on March 8, 2010. The Omnibus Plan replaced the 2006 Long-Term Equity Incentive Plan (the "2006 Plan"), which the Company had used for equity and incentive awards since becoming a publicly traded company in 2006. The Omnibus Plan provides for the granting of options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), performance shares, performance units, cash-based awards, and other stock-based awards to all officers, key employees of the Company, and non-employee directors. The Omnibus Plan, upon adoption by the Company on March 8, 2010, allowed for the Company to grant an additional 1.8 million shares in addition to the remaining shares from the 2006 Plan, for a total of approximately 2.7 million shares. Shares awarded that are not stock options or stock appreciation rights are counted as 1.9 shares deducted from the Omnibus Plan for every one share delivered under those awards. Shares awarded that are stock options or stock appreciation rights are counted as a single share deducted from the Omnibus Plan for every one share delivered under those awards. As of December 31, 2011, the Company had 1.8 million shares available to grant under the Omnibus Plan.

Total compensation expense relating to stock-based compensation was approximately $6.7 million, $7.5 million, and $7.2 million for the years ended December 31, 2011, 2010, and 2009, respectively.

As of December 31, 2011, the total unrecognized compensation expense related to non-vested stock awards totaled approximately $16.5 million. These amounts are expected to be recognized over a weighted-average period of 2.5 years.

The assumptions of post-vesting employment termination forfeiture rates used in the determination of fair value of stock awards issued during calendar year 2011 were based on the Company's historical ten-year average. The expected annualized forfeiture rates used varied from 3.6 percent to 6.3 percent, and the Company does not expect these termination rates to vary significantly in the future.

Stock Options

Option awards are granted with an exercise price equal to the fair value of the Company's common stock on the date of grant. All options outstanding as of December 31, 2011, have a 10-year contractual term. The Company expenses the value of these option grants over the requisite service period, generally, the vesting period. The Company recorded approximately $1.1 million, $0.6 million, and $0.5 million of compensation expense related to stock options for the years ended December 31, 2011, 2010, and 2009, respectively. The fair value of the options is estimated on the date of grant using the Black-Scholes-Merton pricing model. The fair value assumptions for awards in 2011 were 5.6 years for the expected life, 42.3% for historical volatility, and 2.2% for the risk-free rate. The fair value assumptions for awards in 2010 were a range of 5.1 to 5.5 years for the expected life, a range of 45.0 percent to 45.7 percent for historical volatility, and a range of 2.3% to 2.6% for the risk-free rate. No options were granted during the year ended December 31, 2009. At December 31, 2011, unrecognized expense related to stock options totaled approximately $2.0 million, and these costs are expected to be recognized through 2014.

The following table summarizes the changes in outstanding stock options:


	Shares			Weighted-Average Exercise Price		Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2009		658,832		$	10.19	$	9,474
Exercised		(336,956	)	$	8.40	$	(6,200	)
Forfeited/Expired		(8,903	)	$	9.98	$	(150	)

Outstanding at December 31, 2009		312,973		$	12.12	$	4,594
Exercised		(110,237	)	$	8.76	$	(1,870	)
Granted		196,133		$	24.44	$	251
Forfeited/Expired		(6,500	)	$	6.16	$	(127	)

Outstanding at December 31, 2010		392,369		$	19.32	$	2,511
Exercised		(39,487	)	$	12.11	$	(500	)
Granted		190,552		$	21.77	$	574
Forfeited/Expired		(82,781	)	$	21.85	$	(243	)

Outstanding at December 31, 2011		460,653		$	20.50	$	1,972

Vested plus expected to vest at December 31, 2011		451,573		$	20.46	$	1,951

Exercisable at December 31, 2011		206,538		$	17.67	$	1,468

The aggregate intrinsic value in the preceding table is based on the Company's closing stock price of $24.78 as of December 31, 2011. The weighted average grant date fair value of options granted was $9.18 and $10.64 per share for the years ended December 31, 2011, and 2010, respectively. As of December 31, 2011, the weighted-average remaining contractual term for options vested and expected to vest was 7.3 years, and 5.5 years for exercisable options.

Information regarding stock options outstanding as of the dates indicated is summarized below:


	OPTIONS OUTSTANDING						OPTIONS EXERCISABLE
Range of Exercise Prices	Number Outstanding As of 12/31/11		Weighted Average Remaining Contractual Term		Weighted Average Exercise Price		Number Exercisable As of 12/31/11		Weighted Average Exercise Price
$ 5.00 - $ 7.00		7,021		0.35	$	6.10		7,021	$	6.10
$ 7.01 - $10.00		32,000		3.41	$	8.17		32,000	$	8.17
$18.01 - $23.00		294,094		7.54	$	20.30		125,000	$	18.31
$23.01 - $25.00		127,538		8.25	$	24.84		42,517	$	24.84

$5.00 to $25.00		460,653		7.34	$	20.50		206,538	$	17.67

Restricted Stock Awards

Pursuant to the Omnibus Plan, the Company issued 48,356 shares of restricted stock awards to its directors in the year ended December 31, 2011. The average grant date fair value of these restricted stock awards was $24.32 per share.

Compensation expense related to restricted stock awards computed under the fair value method for the years ended December 31, 2011, 2010, and 2009, was approximately $0.8 million, $0.6 million, and $0.7 million, respectively. Unrecognized expense related to restricted stock awards was approximately $0.4 million for the year ended December 31, 2011, and is expected to be recognized over a weighted-average period of 0.4 years.

A summary of the Company's restricted stock awards is presented below.


	Number of Shares			Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)
Non-vested restricted stock awards at January 1, 2009		58,025		$	13.62	$	1,555
Granted		7,615		$	25.99	$	204
Vested		(54,346	)	$	14.54	$	(1,456	)
Cancelled		(4,500	)	$	12.00	$	(121	)

Non-vested restricted stock awards at December 31, 2009		6,794		$	21.20	$	182
Granted		20,002		$	24.38	$	514
Vested		(23,400	)	$	23.92	$	(601	)
Cancelled		—		$	—	$	—

Non-vested restricted stock awards at December 31, 2010		3,396		$	21.19	$	87
Granted		48,356		$	24.32	$	1,198
Vested		(17,088	)	$	23.87	$	(423	)
Cancelled		—		$	—	$	—

Non-vested restricted stock awards at December 31, 2011		34,664		$	24.23	$	859

The aggregate intrinsic value in the preceding table is based on the Company's closing stock price of $24.78 as of December 31, 2011.

Restricted Stock Units

During the year ended December 31, 2011, the Company awarded 350,375 restricted stock units to employees that vest over four years. Upon vesting, the employee is issued one share of stock for each restricted stock unit he or she holds. Restricted stock units were valued based on the grant date value of a share of common stock and are expensed on a straight-line basis over the vesting period of the award. The weighted-average grant date fair value of restricted stock units granted during the year ended December 31, 2011 was $21.69 per share.

Compensation expense related to restricted stock units computed under the fair value method for the years ended December 31, 2011, 2010, and 2009, was approximately $4.8 million, $6.3 million, and $6.0 million, respectively.

At December 31, 2011, unrecognized expense related to restricted stock units totaled approximately $14.1 million. These costs are expected to be recognized over a weighted-average period of 2.7 years. The aggregate intrinsic value of restricted stock units at December 31, 2011 that are expected to vest was approximately $18.1 million.

A summary of the Company's restricted stock units is presented below.


	Number of Shares			Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)
Non-vested restricted stock units at January 1, 2009		623,671		$	19.16	$	16,714
Granted		306,883		$	25.78	$	8,244
Vested		(409,084	)	$	28.33	$	(10,963	)
Cancelled		(35,453	)	$	21.13	$	(950	)

Non-vested restricted stock units at December 31, 2009		486,017		$	15.48	$	13,025
Granted		423,092		$	24.90	$	10,882
Vested		(206,400	)	$	24.62	$	(5,298	)
Cancelled		(50,385	)	$	25.64	$	(1,296	)

Non-vested restricted stock units at December 31, 2010		653,324		$	25.05	$	16,803
Granted		350,375		$	21.69	$	8,682
Vested		(176,251	)	$	22.56	$	(4,367	)
Cancelled		(58,429	)	$	24.01	$	(1,448	)

Non-vested restricted stock units at December 31, 2011		769,019		$	23.67	$	19,056
Restricted stock units expected to vest in the future		730,354		$	24.78	$	18,098

The aggregate intrinsic value in the preceding table is based on the Company's closing stock price of $24.78 per share as of December 31, 2011.