10.

Stockholders’ Equity

The 2011 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 canceled or forfeited on or after the date of termination of the 2002 Plan, the shares allocable to the expired, canceled or forfeited portion of such 2002 Plan award shall be available for issuance under the 2011 Plan.

The 2011 Employee Stock Purchase Plan (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 was the first offering period shares were 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 offering period ending June 30, 2011 was the final offering period shares were issued under the previous ESPP (the “2002 ESPP”).

Stock Options and Stock Appreciation Rights

There were no stock options and stock appreciation rights granted (collectively known as “Options”), excluding those granted under the ESPP, during fiscal years 2012 and 2011. The Company applied a lattice valuation model for the Options granted during fiscal year 2010. The weighted-average grant-date fair value per share of Options granted during fiscal year 2010 was $6.36. The total intrinsic value of Options exercised during fiscal year 2012, 2011 and 2010 was $8.0 million, $7.5 million and $0.3 million, respectively. As of August 31, 2012, there was $0.1 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 2012, 2011 and 2010 was $1.3 million, $7.5 million and $17.6 million, respectively.

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

Fiscal Year Ended August 31,

2012

2011

2010

Expected dividend yield

1.9

Risk-free interest rate

0.1% to 3.4

Expected volatility

60.2

Expected life

5.6 years

*	The Company did not grant Options during fiscal years 2012 and 2011.

The following table summarizes option activity from September 1, 2011 through August 31, 2012:


	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, 2011		9,164,425			10,473,033		$	4,029	$	24.76		3.70
Options canceled		542,135			(542,135	)			$	26.59
Options expired		(53,754	)		—				$	15.27
Restricted stock awards granted⁽¹⁾		(4,768,887	)		—
Options exercised		—			(1,252,957	)			$	16.68

Balance at August 31, 2012		4,883,919			8,677,941		$	4,719	$	25.88		2.90

Exercisable at August 31, 2012					8,664,592		$	4,602	$	25.90		2.90

⁽¹⁾	Represents the maximum number of shares that can be issued based on the achievement of certain performance criteria.

Restricted Stock Awards

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 of up to a maximum of 150% or 200%, depending on the specified performance condition and the level of achievement obtained. 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”) 500 index.

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, 2012, there was $61.3 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, 2011 through August 31, 2012:


	Shares			Weighted - Average Grant-Date Fair Value
Non-vested balance at August 31, 2011		14,097,278		$	12.91
Changes during the period
Shares granted⁽¹⁾		5,233,078		$	19.43
Shares vested		(5,920,301	)	$	10.39
Shares forfeited		(464,191	)	$	15.77

Non-vested balance at August 31, 2012		12,945,864		$	16.33

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

Employee Stock Purchase Plan

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. There were 754,598, 824,913 and 1,127,017 shares purchased under the ESPP during fiscal years 2012, 2011 and 2010, respectively. At August 31, 2012, a total of 7,371,230 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:


	Fiscal Year Ended August 31,
	2012			2011			2010
Expected dividend yield		0.7	%		0.9	%		1.5	%
Risk-free interest rate		0.1	%		0.2	%		0.3	%
Expected volatility		48.4	%		47.3	%		79.7	%
Expected life		0.5 years			0.5 years			0.5 years

Dividends

The following table sets forth certain information relating to the Company’s cash dividends declared to common stockholders of the Company during fiscal years 2012 and 2011:


	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 2012:	October 20, 2011	$	0.08	$	17,379	November 15, 2011	December 1, 2011
	January 25, 2012	$	0.08	$	17,323	February 16, 2012	March 1, 2012
	April 19, 2012	$	0.08	$	17,281	May 15, 2012	June 1, 2012
	July 19, 2012	$	0.08	$	17,230	August 15, 2012	September 4, 2012

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