Shareholders' Equity

9 Months Ended

Sep. 30, 2011

Shareholders' Equity

Shareholders' Equity

(10) Shareholders' Equity

a. Common Stock

On October 20, 2010, the Company's board of directors approved a stock repurchase program for up to $40,000,000 of the Company's shares of common stock over the following 18 months. During the nine months ended September 30, 2011, the Company purchased 248,100 shares of the Company's common stock for approximately $6,185,000, at an average price of $25 per share, in order to mitigate the dilutive effect of shares issued upon the exercise of stock options pursuant to the Company's stock incentive plans. In addition, we repurchased 22,802 shares of common stock to cover payroll withholding taxes in connection with the vesting of restricted stock awards in accordance with the restricted stock agreements.

b. Stock Incentive Plans

In May 2006, the Company adopted the AmSurg Corp. 2006 Stock Incentive Plan. The Company also has options outstanding under the AmSurg Corp. 1997 Stock Incentive Plan, under which no additional options may be granted. Under these plans, the Company has granted restricted stock and non-qualified options to purchase shares of common stock to employees and outside directors from its authorized but unissued common stock. At September 30, 2011, 2,760,250 shares were authorized for grant under the 2006 Stock Incentive Plan and 1,547,732 shares were available for future equity grants, including 498,059 shares available for issuance as restricted stock. Restricted stock granted to outside directors in 2010 and 2011 vests over a two year period. Restricted stock granted to outside directors prior to 2010 vests one-third on the date of grant, with the remaining shares vesting over a two-year term and is restricted from trading for five years from the date of grant. Restricted stock granted to employees during 2009 and thereafter vests over four years in three equal installments beginning on the second anniversary of the date of grant. Restricted stock granted to employees prior to 2009 vests at the end of four years from the date of grant. The fair value of restricted stock is determined based on the closing bid price of the Company's common stock on the grant date.

Options are granted at market value on the date of the grant. Prior to 2007, granted options vested in four equal annual installments, commencing on the date of grant. Options granted in 2007 and 2008 vest at the end of four years from the grant date. No options were issued in 2011 and 2010. Outstanding options have a term of ten years from the date of grant.

Other information pertaining to share-based activity during the three and nine months ended September 30, 2011and 2010 was as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
Share-based compensation expense	$	1,591	$	885	$	4,762	$	3,425
Fair value of shares vested		227		242		2,589		2,809
Cash received from option exercises		132		141		4,760		683
Tax benefit from option exercises		26		12		489		81

As of September 30, 2011, the Company had total unrecognized compensation cost of approximately $7,239,000 related to non-vested awards, which the Company expects to recognize through 2015 and over a weighted average period of 1.1 years.

Average outstanding share-based awards to purchase approximately 1,023,000 and 2,347,000 shares of common stock that had an exercise price in excess of the average market price of the common stock during the periods ended September 30, 2011 and 2010, respectively, were not included in the calculation of diluted securities options under the treasury method for purposes of determining diluted earnings per share due to their anti-dilutive impact.

A summary of the status of non-vested restricted shares at September 30, 2011 and changes during the nine months ended September 30, 2011 is as follows:

			Weighted
		Number	Average
		of	Grant
		Shares	Price
Non-vested shares at December 31, 2010		664,909	$	22.16
	Shares granted	276,869		21.78
	Shares vested, net of shares repurchased to fund tax withholding requirements	(88,755)		22.57
	Shares forfeited	(248)		24.75
Non-vested shares at September 30, 2011		852,775	$	21.99

A summary of stock option activity for the nine months ended September 30, 2011 is summarized as follows:

					Weighted
					Average
			Weighted		Remaining
		Number	Average		Contractual
		of	Exercise		Term
		Shares	Price		(in years)
Outstanding at December 31, 2010		2,901,989	$	22.49	4.5
	Options exercised with total intrinsic value of $1,234,000	(244,125)		19.50
	Options terminated	(17,585)		25.42
Outstanding at September 30, 2011 with aggregate intrinsic value of $3,133,000		2,640,279	$	22.75	3.5
Vested or expected to vest at September 30, 2011 with aggregate intrinsic value
	of $3,133,000	2,640,279	$	22.75	3.5
Exercisable at September 30, 2011 with aggregate intrinsic value of $3,133,000		2,425,069	$	22.65	3.3

The aggregate intrinsic value represents the total pre-tax intrinsic value received by the option holders on the exercise date or that would have been received by the option holders had all holders of in-the-money outstanding options at September 30, 2011 exercised their options at the Company's closing stock price on September 30, 2011.

c. Earnings per Share

The following is a reconciliation of the numerator and denominators of basic and diluted earnings per share (in thousands, except per share amounts):

		Three Months Ended September 30,					Nine Months Ended September 30,
					Per					Per
		Earnings		Shares	Share		Earnings		Shares	Share
		(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
2011:
Net earnings from continuing
	operations attributable to
	AmSurg Corp. per common
	share (basic)	$	13,069	30,436	$	0.43	$	37,502	30,424	$	1.23
Effect of dilutive securities
	options and non-vested shares		-	726				-	750
Net earnings from continuing
	operations attributable to
	AmSurg Corp. per common
	share (diluted)	$	13,069	31,162	$	0.42	$	37,502	31,174	$	1.20
Net earnings attributable
	to AmSurg Corp. per common	$	13,126	30,436	$	0.43	$	36,449	30,424	$	1.20
	share (basic)
Effect of dilutive securities
	options and non-vested shares		-	726				-	750
Net earnings attributable
	to AmSurg Corp. per common
	share (diluted)	$	13,126	31,162	$	0.42	$	36,449	31,174	$	1.17
2010:
Net earnings from continuing
	operations attributable to
	AmSurg Corp. per common
	share (basic)	$	12,844	30,251	$	0.42	$	37,961	30,234	$	1.26
Effect of dilutive securities
	options and non-vested shares		-	369				-	430
Net earnings from continuing
	operations attributable to
	AmSurg Corp. per common
	share (diluted)	$	12,844	30,620	$	0.42	$	37,961	30,664	$	1.24
Net earnings attributable
	to AmSurg Corp. per common	$	13,118	30,251	$	0.42	$	38,957	30,234	$	1.29
	share (basic)
Effect of dilutive securities
	options and non-vested shares		-	369				-	430
Net earnings attributable
	to AmSurg Corp. per common
	share (diluted)	$	13,118	30,620	$	0.43	$	38,957	30,664	$	1.27