Share-Based Compensation

On May 3, 2012, the Company's shareholders approved the CDI Corp. Amended and Restated 2004 Omnibus Stock Plan (the "Restated Omnibus Plan") for the benefit of employees, consultants and non-employee directors. The Restated Omnibus Plan amended and restated the CDI Corp. 2004 Omnibus Stock Plan and eliminated prospective participation in the CDI Corp. Stock Purchase Plan. The Restated Omnibus Plan provides for the grant of share-based awards including, but not limited to, stock options, stock appreciation rights, restricted stock, time-vested deferred stock and performance-based share awards. Vesting and other terms of share-based awards are set forth in individual agreements with the participant. The Company's share-based awards generally vest ratably over three to five years and generally expire in seven years from the date of grant.

As of December 31, 2012, the Company is authorized to issue an additional number of shares of the Company's common stock under the Restated Omnibus Plan of approximately 2.3 million shares. The Company may settle share-based awards by delivering shares of the Company's common stock that are authorized but unissued or that are held in treasury. When an award is granted, the number of shares of common stock subject to such award are reserved for issuance. Shares of Company stock tendered in payment of the exercise price or withholding taxes in respect of an award shall again be available for issuance under the Restated Omnibus Plan.

Stock-based compensation expense is included in “Operating and administrative expenses” in the consolidated statements of operations and amounted to $3.4 million ($2.1 million, net of tax), $3.4 million ($2.1 million, net of tax) and $3.0 million ($1.8 million, net of tax) for the years ended December 31, 2012, 2011 and 2010, respectively.

The table below summarizes the components of stock-based compensation expense for all of the Company’s stock-based plans by award type for the indicated periods:



	Year ended December 31,
	2012		2011		2010

Time-vested deferred stock	$	1,920	$	1,625	$	1,751
Stock appreciation rights	647		850		988
Performance-based share awards	631		721		—
Stock purchase plan	126		162		240
Stock options	90		—		—
Total stock-based compensation	$	3,414	$	3,358	$	2,979

Time-Vested Deferred Stock (“TVDS”)

TVDS awards entitle each recipient to receive a number of shares of the Company’s common stock upon vesting. The shares of TVDS generally vest ratably over five years on each of the anniversaries of the date of grant, except for those granted to the non-employee directors and certain current members of senior management, whose vesting periods vary from two to five years. TVDS will generally be forfeited prior to vesting if the holder’s employment with the Company ends, or for a certain award, if the Company’s stock price on the date of vesting is below the price on the date of grant. Upon vesting, a holder of TVDS receives the number of originally awarded shares plus additional shares of CDI common stock having a fair market value equal to the sum of the dividends that would have been paid on the original awarded shares during the vesting period had they been issued and outstanding throughout the vesting period. Compensation cost on TVDS is based on the fair value of the Company’s common stock on the date of grant and is charged to earnings on a straight-line basis over the vesting period.

The following table summarizes the Company’s TVDS activity and related information for the indicated periods:



	Time Vested Deferred Stock		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Life (In Years)

Outstanding non-vested as of December 31, 2009	182		$	18.50
Granted	116		15.44
Vested	(78	)	19.36
Canceled	(2	)	18.63
Outstanding non-vested as of December 31, 2010	218		16.57
Granted	305		14.74
Vested	(70	)	20.59
Canceled	(37	)	15.16
Outstanding non-vested as of December 31, 2011	416		14.68
Granted	104		17.14
Vested	(95	)	12.89
Canceled	(25	)	13.43
Outstanding non-vested as of December 31, 2012	400		15.82		2.9

The following table shows for TVDS awards the calculation of the equivalent number of shares equal to the sum of the dividends that would have been paid on the original awarded shares during the vesting period had they been issued and outstanding throughout the vesting period for the indicated periods:



	December 31,
	2012		2011		2010

Dividend Participation	$	370	$	241	$	174
Closing market price per share	$	17.13	$	13.81	$	18.59
Equivalent shares at closing market price	22		17		9

As of December 31, 2012, total unrecognized compensation cost related to non-vested TVDS awards was $3.0 million, which is expected to be recognized over a weighted-average period of 2.9 years.

Stock Appreciation Rights (“SARs”)

SARs represent the right to receive, upon exercise, shares of the Company’s common stock having a value equal to the difference between the market price of the common stock and the exercise price, net of withholding taxes, as determined by the terms of the individual awards. SARs generally vest between three to five years and expire in seven years from the date of grant. In estimating the expected term of SARs granted in 2012, 2011 and 2010, the Company utilized actual historical experience. The expected stock price volatility is based on the historical volatility of the Company’s common stock.

The following table summarizes the range of assumptions used to estimate the fair values of SARs granted for the indicated periods:



	Year ended December 31,
	2012	2011	2010

Risk-free interest rate	0.72%	0.87-2.37%	1.44-2.33%
Expected life of SARs	4.3 years	4.5 years	4.9 years
Expected stock price volatility	56%	54-60%	52-53%
Expected dividend yield	3.47%	2.71-4.97%	3.23-3.92%
Weighted-average fair value at grant date	$5.20	$3.22-8.13	$4.39-5.75

The following table summarizes the Company’s SARs activity and related information for the indicated periods:



	SARs		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value

Outstanding as of December 31, 2009	586		$	20.66
Granted	159		14.80
Exercised	(7	)	9.61
Canceled	(38	)	19.43
Expired	(5	)	25.49
Outstanding as of December 31, 2010	695		19.47
Granted	429		13.15
Exercised	(22	)	10.06
Canceled	(136	)	15.70
Expired	(109	)	24.49
Outstanding as of December 31, 2011	857		16.51
Granted	18		14.99
Exercised	(79	)	10.88
Canceled	(69	)	13.38
Expired	(99	)	22.99
Outstanding as of December 31, 2012	628		16.53		3.8	$	1,968
Exercisable as of December 31, 2012	265		20.63		2.4	438
Exercisable and expected to vest as of December 31, 2012	527		17.34		3.5	1,448

Aggregate intrinsic value represents the difference between the exercise prices and the closing stock price on December 31, 2012. The total intrinsic value of SARs exercised during the years ended December 31, 2012, 2011 and 2010 was $0.5 million, $0.1 million and $0.1 million, respectively. As of December 31, 2012, total unrecognized compensation cost related to non-vested SARs was $1.2 million, which is expected to be recognized over a weighted-average period of 3.1 years.

Performance-Based Share Awards

Performance-based share awards represent a number of shares of common stock to be awarded based on the achievement of certain performance criteria and generally vest over a two to five year period from the date of grant. The fair value of a performance-based share award is determined and the number of shares of common stock to be awarded is fixed on the date of grant. The Company periodically assesses the probability of achievement of the performance criteria and adjusts the amount of compensation expense recognized accordingly. Compensation expense is recognized over the vesting period and adjusted for the probability of achievement of the performance criteria.

The following table summarizes the Company’s performance-based share awards activity and related information for the indicated periods:



	Performance-based Awards		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Life (in Years)

Outstanding as of December 31, 2009	—		$	—
Granted	46		14.78
Canceled	(46	)	14.78
Outstanding as of December 31, 2010	—		—
Granted	133		13.67
Canceled	(26	)	13.64
Outstanding as of December 31, 2011	107		13.67
Granted	82		17.36
Vested	(50	)	13.67
Canceled	(32	)	16.02
Outstanding as of December 31, 2012	107		15.78		4.0

As of December 31, 2012, total unrecognized compensation cost related to non-vested performance-based share awards was $1.2 million, which is expected to be recognized over a weighted-average period of 4 years.

Stock Purchase Plan (“SPP”)

On May 3, 2012, the Restated Omnibus Plan terminated the SPP and provided that any shares that were available for issuance under the SPP as of that date with respect to new awards were made available for issuance under the Restated Omnibus Plan.

Under the terms of the SPP, designated employees and non-employee directors had the opportunity to purchase shares of the Company’s common stock on a pre-tax basis and the Company matched participant contributions on a one for three basis. Vesting of SPP units occurs over a period of three to ten years as chosen by the participant. As of December 31, 2012, there were 56 thousand SPP units accumulated based upon participating employee and Company matching contributions and using a weighted-average market price of $13.79. In addition, SPP units that vest will receive additional shares of the Company’s common stock in lieu of dividends declared from the date of grant to the date of vesting.

Stock Options

Options are granted at a price equal to the quoted market price per share of the Company’s common stock on the date of grant. Employee stock options generally vest ratably over a five year period and expire seven years from the date of grant for awards that do not immediately settle upon vesting.

The following table summarizes the Company’s stock option activity and related information for the indicated periods:



	Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value

Outstanding as of December 31, 2009	341		$	23.50
Exercised	(28	)	15.26
Canceled	(13	)	27.38
Expired	(145	)	24.69
Outstanding as of December 31, 2010	155		23.57
Canceled	(50	)	16.05
Expired	(105	)	27.15
Outstanding as of December 31, 2011	—		—
Granted	154		17.36
Canceled	(10	)	17.36
Outstanding as of December 31, 2012	144		17.36		6.8	$	—

At December 31, 2012, there were no exercisable options outstanding. The total intrinsic value of stock options exercised during the year ended December 31, 2010 was $0.1 million. As of December 31, 2012, total unrecognized compensation cost related to non-vested stock options was $0.8 million, which is expected to be recognized over a weighted-average period of 4.2 years.