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Share-Based Compensation
 9 Months Ended
Sep. 28, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-Based Compensation and Equity
Share-Based Compensation and Equity

Stock Options

Options activity for the nine months ended September 28, 2013 was as follows:
(In thousands, except per share data)
Number of
Shares
 
Weighted-
Average
Exercise 
Price
 
Aggregate
Intrinsic 
Value
 
Weighted-Average      
Remaining      
Contractual
 Term (Yrs)      
Outstanding at beginning of year
24,072

 
$
16.99

 
 
 
 
Granted
3,596

 
47.66

 
 
 
 
Exercised
(2,472
)
 
10.11

 
 
 
 
Forfeited and expired
(239
)
 
37.77

 
 
 
 
Outstanding as of September 28, 2013
24,957

 
21.89

 
$
766,741

 
6.40
 
 
 
 
 
 
 
 
Exercisable as of September 28, 2013
14,255

 
$
10.40

 
$
601,743

 
4.92

The weighted-average assumptions used to estimate the fair value of stock options granted in 2013 were as follows: 
Expected volatility (%)
 
30.4
%
Expected term (yrs)
 
9.1

Risk-free rate (%)
 
1.9
%
Fair value per option
 
$
19.46


As of September 28, 2013, there was $130.2 million of total unrecognized compensation cost related to stock options granted under all plans. That cost is expected to be recognized over a weighted-average period of 3.37 years.
Non-vested Shares

Non-vested share activity for the nine months ended September 28, 2013 was as follows:
(In thousands, except per share data)
Number of Shares
 
Weighted-Average
Grant Date Fair Value
 
 
 
 
Outstanding at beginning of year
602

 
$
28.41

Granted
238

 
46.66

Vested
(276
)
 
24.00

Forfeited
(10
)
 
22.73

 
 
 
 
Outstanding as of September 28, 2013
554

 
$
38.54


As of September 28, 2013, there was $13.6 million of total unrecognized compensation cost related to non-vested share awards granted under all plans. That cost is expected to be recognized over a weighted-average period of 1.74 years.

The following table presents total compensation expense recognized with respect to stock options, non-vested shares and our associate stock purchase plan:
 
Three Months Ended
 
Nine Months Ended
(In thousands)
2013
 
2012
 
2013
 
2012
 
 
 
 
 
 
 
 
Stock option and non-vested share compensation expense
$
12,527

 
$
9,721

 
$
33,650

 
$
26,304

Associate stock purchase plan expense
1,168

 
719

 
2,867

 
2,064

Amounts capitalized in software development costs, net of amortization
(237
)
 
(218
)
 
(900
)
 
(600
)
 
 
 
 
 
 
 
 
Amounts charged against earnings, before income tax benefit
$
13,458

 
$
10,222

 
$
35,617

 
$
27,768

 
 
 
 
 
 
 
 
Amount of related income tax benefit recognized in earnings
$
5,221

 
$
3,910

 
$
13,819

 
$
10,621



Treasury Stock

In December 2012, our Board of Directors authorized a stock repurchase program of up to $170.0 million, excluding transaction costs, of our common stock. The repurchases were to be effectuated in the open market, by block purchase, or possibly through other transactions managed by broker-dealers.

During the nine months ended September 28, 2013, we repurchased 3.6 million shares for total consideration of $170.0 million. These shares were recorded as treasury stock and accounted for under the cost method. Repurchased shares at the time of the stock split were utilized to settle a portion of the stock split distribution, as further described in Note 1 of these notes to condensed consolidated financial statements. As of September 28, 2013, the program is complete.

Authorized Shares

Effective May 24, 2013, we amended our Second Restated Certificate of Incorporation of Cerner Corporation to increase the number of authorized shares of our common stock from 250,000,000 to 500,000,000 shares.