A new stock award and incentive plan (the "2011 Plan") was adopted by the Board of Directors during the first quarter of fiscal year 2011 and approved by the stockholders during the second quarter of fiscal year 2011. The 2011 Plan provides for the granting of restricted stock awards, restricted stock unit awards and other stock-based awards. The maximum aggregate number of shares that may be subject to awards under the 2011 Plan is 8,850,000. If any portion of an outstanding award that was granted under the 2002 Stock Incentive Plan (the "2002 Plan"), which was terminated immediately upon the effectiveness of the 2011 Plan, for any reason expires or is terminated or canceled or forfeited on or after the date of termination of the 2002 Plan, the shares allocable to the expired, terminated, canceled, or forfeited portion of such 2002 Plan award shall be available for issuance under the 2011 Plan.

A new ESPP (the "2011 ESPP") was adopted by the Company's Board of Directors during the first quarter of fiscal year 2011 and approved by the shareholders during the second quarter of fiscal year 2011 with 6,000,000 shares authorized for issuance. The offering period beginning July 1, 2011 is the first offering period shares are issued under the 2011 ESPP. The Company also adopted a tax advantaged sub-plan under the 2011 ESPP for its Indian employees. Shares are issued under the Indian sub-plan from the authorized shares under the 2011 ESPP. The previous ESPP (the "2002 ESPP") was adopted by the Company's Board of Directors during the first quarter of fiscal year 2002 and approved by the shareholders during the second quarter of fiscal year 2002. Initially there were 2,000,000 shares reserved under the 2002 ESPP. An additional 2,000,000 shares and 3,000,000 shares were authorized for issuance under the 2002 ESPP and approved by stockholders during the second quarter of fiscal years 2006 and 2009, respectively. The offering period ending June 30, 2011 was the final offering period shares were issued under the 2002 ESPP.

The Company applies a lattice valuation model for stock options and stock appreciation rights granted (collectively known as "Options"), excluding those granted under the ESPP. The lattice valuation model is a more flexible analysis to value employee Options, as compared to a Black-Scholes model, because of its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of Option holders.

There were no Options granted during fiscal year 2011. The weighted-average grant-date fair value per share of Options granted during fiscal years 2010 and 2009 was $6.36 and $3.52, respectively. The total intrinsic value of Options exercised during fiscal years 2011, 2010 and 2009 was $7.5 million, $0.3 million and $3.6 thousand, respectively. As of August 31, 2011, there was $0.8 million of unrecognized compensation costs related to non-vested Options that is expected to be recognized over a weighted-average period of 1.1 years. The total fair value of Options vested during fiscal years 2011, 2010 and 2009 was $7.5 million, $17.6 million and $24.9 million, respectively.

Following are the grant date weighted-average and range assumptions, where applicable, used for each respective period:


	Fiscal Year Ended August 31,
	2011	2010			2009
Expected dividend yield	*		1.9	%		3.6	%
Risk-free interest rate	*		0.1% to 3.4	%		0% to 3.6	%
Expected volatility	*		60.2	%		67.3	%
Expected life	*		5.6 years			5.8 years

*	The Company did not grant Options during fiscal year 2011.

The following table summarizes option activity from September 1, 2010 through August 31, 2011:


	Shares Available for Grant			Options Outstanding			Aggregate Intrinsic Value (in thousands)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (years)
Balance at September 1, 2010		10,480,001			13,154,272		$	95	$	24.10		4.09

Shares no longer available for grant due to terminated 2002 Stock Plan		(5,896,748	)
Options authorized		8,850,000			—
Options expired		(829,611	)		—				$	31.62
Options cancelled		1,243,764			(1,243,764	)			$	25.56
Restricted stock awards⁽ ¹ ⁾		(4,682,981	)		—
Options exercised		—			(1,437,475	)			$	14.45

Balance at August 31, 2011		9,164,425			10,473,033		$	4,029	$	24.76		3.70

Exercisable at August 31, 2011					10,345,387		$	3,832	$	24.85		3.70

⁽ ¹ ⁾

Represents the maximum number of shares that can be issued based on the achievement of certain performance criteria.

Certain key employees have been granted time-based, performance-based, and market-based restricted stock awards. The time-based restricted awards granted generally vest on a graded vesting schedule over three years. The performance-based restricted awards generally vest on a cliff vesting schedule over three years and provide a range of vesting possibilities from 0% to 200%, depending on the level of achievement of the specified performance condition. The market-based restricted awards have a vesting condition that is tied to the Company's stock performance in relation to the Standard and Poor's ("S&P").

The stock-based compensation expense for these restricted stock awards (including restricted stock and restricted stock units) is measured at fair value on the date of grant based on the number of shares expected to vest and the quoted market price of the Company's common stock. For restricted stock awards with performance conditions, stock-based compensation expense is originally based on the number of shares that would vest if the Company achieved 100% of the performance goal, which was the probable outcome at the grant date. Throughout the requisite service period, management monitors the probability of achievement of the performance condition. If it becomes probable, based on the Company's performance, that more or less than the current estimate of the awarded shares will vest, an adjustment to stock-based compensation expense will be recognized as a change in accounting estimate. For restricted stock awards with market conditions, the market conditions are considered in the grant date fair value of the award using a lattice model, which utilizes multiple input variables to determine the probability of the Company achieving the specified market conditions. Stock-based compensation expense related to an award with a market condition will be recognized over the requisite service period regardless of whether the market condition is satisfied, provided that the requisite service period has been completed.

At August 31, 2011, there was $63.4 million of total unrecognized stock-based compensation expense related to restricted stock awards granted under the 2002 Plan and 2011 Plan. This expense is expected to be recognized over a weighted-average period of 1.4 years.

The following table summarizes restricted stock activity from August 31, 2010 through August 31, 2011:


	Shares			Weighted - Average Grant-Date Fair Value
Non-vested balance at August 31, 2010		12,189,271		$	13.13

Changes during the period
Shares granted⁽¹⁾		6,176,068		$	14.29
Shares vested		(2,774,974	)	$	16.89
Shares forfeited		(1,493,087	)	$	13.05

Non-vested balance at August 31, 2011		14,097,278		$	12.91

⁽¹⁾	For those shares granted that are based on the achievement of certain performance criteria, represents the maximum number of shares that can vest.

Employees are eligible to participate in the ESPP after 90 days of employment with the Company. The ESPP permits eligible employees to purchase common stock through payroll deductions, which may not exceed 10% of an employee's compensation, as defined in the ESPP, at a price equal to 85% of the fair value of the common stock at the beginning or end of the offering period, whichever is lower. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code.

The maximum number of shares that a participant may purchase in an offering period is determined in June and December. As such, there were 824,913, 1,127,017 and 1,248,314 shares purchased under the ESPP during fiscal years 2011, 2010 and 2009, respectively. At August 31, 2011, a total of 6,616,632 shares had been issued under the ESPP.

The fair value of shares issued under the ESPP was estimated on the commencement date of each offering period using the Black-Scholes option pricing model. The following weighted-average assumptions were used in the model for each respective period:

The following table sets forth certain information relating to the Company's cash dividends declared to common stockholders of the Company during fiscal years 2011 and 2010:


	Dividend Declaration Date		Dividend per Share		Total Cash Dividends Declared			Date of Record for Dividend Payment	Dividend Cash Payment Date
			(in thousands, except for per share data)
Fiscal year 2011:		October 21, 2010	$	0.07	$	15,563		November 15, 2010	December 1, 2010
		January 19, 2011	$	0.07	$	15,634		February 15, 2011	March 1, 2011
		April 13, 2011	$	0.07	$	15,647		May 16, 2011	June 1, 2011
		July 21, 2011	$	0.07	$	15,233		August 15, 2011	September 1, 2011

Fiscal year 2010:		October 22, 2009	$	0.07	$	15,186	⁽¹⁾	November 16, 2009	December 1, 2009
		January 22, 2010	$	0.07	$	15,238		February 16, 2010	March 1, 2010
		April 14, 2010	$	0.07	$	15,221		May 17, 2010	June 1, 2010
		July 22, 2010	$	0.07	$	15,247		August 16, 2010	September 1, 2010

⁽¹⁾

Of the $15.2 million in total dividends declared during the first quarter of fiscal year 2010, $14.4 million was paid out of additional paid-in capital (which represents the amount of dividends declared in excess of the Company's retained earnings balance as of the date that the dividend was declared).