Stock-Based Compensation

We currently issue equity awards under the CoreLogic, Inc. 2011 Performance Incentive Plan (the “Plan”) which was approved by our stockholders at our Annual Meeting held on May 19, 2011. The Plan permits the grant of restricted stock units (“RSUs”), performance-based restricted stock units ("PBRSUs"), stock options, stock appreciation rights, stock bonuses and other forms of awards granted or denominated in our common stock, as well as cash bonus awards. The Plan was adopted, in part, to make an additional 18,000,000 shares of the Company's common stock available for award grants, so that the Company will have sufficient authority and flexibility to adequately provide for future incentives. Prior to the approval of the Plan, we issued share-based awards under the CoreLogic, Inc. 2006 Incentive Plan (the “2006 Plan”).

We primarily utilize RSUs, PBRSUs and stock options as our share-based compensation instruments for employees and directors. The fair value of any share-based compensation instrument grant is based on the market value of our shares on the date of grant and is recognized as compensation expense over the vesting period.

Restricted Stock Units

For the nine months ended September 30, 2012, we awarded 732,820 RSUs with an estimated grant date fair value of $12.2 million. The RSU awards will vest ratably over three years.

RSU activity for the nine months ended September 30, 2012, is as follows:



	Number of		Weighted Average Grant-Date
(in thousands, except weighted average fair value prices)	Shares		Fair Value
Unvested RSUs outstanding at December 31, 2011	1,193		$	17.74
RSUs granted	733		$	16.70
RSUs vested	(458	)	$	17.99
RSUs forfeited	(55	)	$	16.71
Unvested RSUs outstanding at September 30, 2012	1,413		$	17.16

As of September 30, 2012, there was $14.7 million of total unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted-average period of 2.2 years. The fair value of RSUs is based on the market value of the Company’s common stock on the date of grant.

Performance-Based Restricted Stock Units

For the nine months ended September 30, 2012, we awarded 345,348 PBRSUs with an estimated grant date fair value of $5.5 million. These awards are subject to both service-based and performance-based vesting. The performance period is from January 1, 2012 to December 31, 2012 and the performance metric is adjusted earnings per share. To the extent the performance criteria are satisfied, the awards vest on December 31, 2014.

PBRSU activity for the nine months ended September 30, 2012, is as follows:



	Number of		Weighted Average Grant-Date
(in thousands, except weighted average fair value prices)	Shares		Fair Value
Unvested PBRSUs outstanding at December 31, 2011	988		$	17.71
PBRSUs granted	345		$	16.05
PBRSUs vested	(103	)	$	17.76
PBRSUs forfeited	(78	)	$	17.95
Unvested PBRSUs outstanding at September 30, 2012	1,152		$	17.19

As of September 30, 2012, there was $15.2 million of total unrecognized compensation cost related to unvested PBRSUs that is expected to be recognized over a weighted-average period of 1.9 years. The fair value of PBRSUs is based on the market value of the Company's common stock on the date of grant.

Stock Options

In 2012 and 2011, we issued stock options as incentive compensation for certain key employees. The exercise price of each stock option is the closing market price of our common stock on the date of grant. The 2012 and 2011 options will vest in three equal annual installments on the first, second and third anniversaries of grant and expire ten years after the grant date. The fair values of these stock options were estimated using the Black-Scholes valuation model with the following weighted-average assumptions:



	For the Nine Months Ended
	September 30,
	2012		2011
Expected dividend yield	—	%	—	%
Risk-free interest rate ⁽¹⁾	1.00	%	1.85	%
Expected volatility ⁽²⁾	42.81	%	33.10	%
Expected life ⁽³⁾	5.5		5.5


(1)	The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.


(2)	The expected volatility is a measure of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.


(3)	The expected life is the period of time, on average, that participants are expected to hold their options before exercise based primarily on our historical data.

Option activity for the nine months ended September 30, 2012 is as follows:



(in thousands, except weighted average price)	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding at December 31, 2011	4,601		$	20.78
Options granted	581		$	16.00
Options exercised	(552	)	$	17.92
Options canceled	(667	)	$	21.49
Options outstanding at September 30, 2012	3,963		$	20.27	5.7	$	24,950
Options vested and expected to vest at September 30, 2012	3,915		$	20.32	5.6	$	24,462
Options exercisable at September 30, 2012	2,440		$	22.31	3.9	$	10,458

As of September 30, 2012, there was $6.7 million of total unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted-average period of 2.0 years.

The intrinsic value of options exercised was $2.7 million and $0.4 million for the nine months ended September 30, 2012 and 2011. This intrinsic value represents the difference between the fair market value of the Company’s common stock on the date of exercise and the exercise price of each option.

Employee Stock Purchase Plan

The 2001 employee stock purchase plan allowed eligible employees to purchase our common stock at 85.0% of the closing price on the last day of each quarter. The 2001 employee stock purchase plan expired in September 2011. Our 2012 employee stock purchase plan was approved by our stockholders at our 2012 annual meeting of stockholders and the first offering period commenced in October 2012. Similar to our 2001 employee stock purchase plan, the 2012 employee stock purchase plan allows eligible employees to purchase our common stock at 85.0% of the closing price on the last day of each quarter. We recognized an expense for the amount equal to the discount during the last offering period under our 2001 plan, which ended in September 2011.

The following table sets forth the stock-based compensation expense recognized for the three and nine months ended September 30, 2012 and 2011.



	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
(in thousands)	2012		2011		2012		2011
RSUs	$	2,108	$	1,592	6,896		5,333
PBRSUs	4,033		1,268		6,557		2,171
Stock options	1,039		578		2,758		1,719
Employee stock purchase plan	—		109		—		300
	$	7,180	$	3,547	$	16,211	$	9,523