Stock-Based Compensation Plans

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation Plans

Stock-Based Compensation Plans

8.  Stock-Based Compensation Plans

Information with respect to stock options granted under the Company’s 1994 Stock Option and Incentive Plan (the “1994 Plan”) and its 2009 Stock Option and Incentive Plan (the “2009 Plan”) is as follows:

			Weighted				Weighted
			average				average
	2009 Plan		exercise price		1994 Plan		exercise price
	shares		per share		shares		per share
Options Outstanding, December 31, 2011	247,403		$	98.42	1,112,959		$	94.10
Exercised	(42,204	)	84.67		(349,183	)	68.28
Granted	115,303		133.16		—		—
Forfeited	(11,887	)	115.15		(6,779	)	127.48
Options Outstanding, September 30, 2012	308,615		$	112.64	756,997		$	105.71
Options Exercisable September 30, 2012	75,679		$	97.53	756,997		$	105.71

The weighted average fair value of the options granted under the 2009 Plan during the nine months ended September 30, 2012 is estimated at $29.11 per share on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: dividend yield of 3.5% over the expected life of the option, volatility of 35.00%, risk-free interest rate of 0.9% and an expected life of approximately 5 years.

At September 30, 2012, the Company had 203,308 outstanding unvested shares granted under restricted stock awards. Restricted stock vesting during the nine months ended September 30, 2012 totaled 317,685 shares and had fair values at the grant date ranging from $48.60 to $149.05 per share.  The total grant date fair value of shares vested was $36,232,000 and $34,899,000 for the nine months ended September 30, 2012 and 2011, respectively.

Total employee stock-based compensation cost recognized in income was $8,394,000 and $7,614,000 for the nine months ended September 30, 2012 and 2011, respectively, and total capitalized stock-based compensation cost was $3,877,000 and $4,118,000 for the nine months ended September 30, 2012 and 2011, respectively.  At September 30, 2012, there was a total of $2,730,000 and $8,144,000 in unrecognized compensation cost for unvested stock options and unvested restricted stock, respectively, which does not include estimated forfeitures. The unrecognized compensation cost for unvested stock options and restricted stock is expected to be recognized over a weighted average period of 1.92 years and 2.50 years, respectively.