Share-Based Compensation

6 Months Ended

Jun. 30, 2011

9. Share-Based Compensation

On September 27, 2008 the University’s shareholders approved the adoption of the 2008 Equity Incentive Plan (“Incentive Plan”) and the 2008 Employee Stock Purchase (“ESPP”). A total of 4,200 shares of the University’s common stock was originally authorized for issuance under the Incentive Plan. On January 1 of each subsequent year in accordance with the terms of the Incentive Plan, the number of shares authorized for issuance under the Incentive Plan automatically increased by 2.5% of the number of shares of common stock issued and outstanding on the previous December 31, raising the total number of shares of common stock authorized for issuance under the Incentive Plan to 7,622 shares. Although the ESPP has not yet been implemented, a total of 1,050 shares of the University’s common stock has been authorized for sale under the ESPP.

A summary of the activity related to stock options granted under the University’s Incentive Plan since December 31, 2010 is as follows:


	Summary of Stock Options Outstanding
				Weighted		Weighted
				Average		Average
				Exercise		Remaining		Aggregate
	Total			Price per		Contractual		Intrinsic
	Shares			Share		Term (Years)		Value ($)(1)
Outstanding as of December 31, 2010		4,026			14.24

Granted		1,250			15.34
Exercised		(50	)		12.00
Forfeited, canceled or expired		(75	)		17.31

Outstanding as of June 30, 2011		5,151		$	14.48		8.17	$	—

Exercisable as of June 30, 2011		1,644		$	13.06		7.53	$	1,841

Available for issuance as of June 30, 2011		1,995


(1)		Aggregate intrinsic value represents the value of the University’s closing stock price on June 30, 2011 ($14.18) in excess of the exercise price multiplied by the number of options outstanding or exercisable.

Share-based Compensation Expense

The table below outlines share-based compensation expense for the six months ended June 30, 2011 and 2010 related to restricted stock and stock options granted:


	2011			2010
Instructional costs and services	$	1,409		$	918
Selling and promotional		149			100
General and administrative		1,572			1,320

Share-based compensation expense included in operating expenses		3,130			2,338
Tax effect of share-based compensation		(1,252	)		(935	)

Share-based compensation expense, net of tax	$	1,878		$	1,403