v2.3.0.15
Shareholders' Equity
9 Months Ended
Sep. 30, 2011
Shareholders' Equity 
Shareholders' Equity

Note 8. Shareholders' Equity

Stock-Based Compensation

The Company currently has one active equity compensation plan, the 2007 Equity Compensation Plan (the 2007 Plan), which provides for the grant of incentive stock options, non-qualified stock options and stock appreciation rights with respect to up to 20 million shares of common stock of the Company, subject to adjustment for stock splits, reclassifications, mergers and other events. Permitted grantees under the 2007 Plan include employees, non-employee directors and consultants who perform services for the Company. The plan is administered by the Compensation Committee of the Board of Directors of the Company. The Company has only granted non-qualified stock options under the plan. All outstanding stock options have performance-based vesting provisions specific to each option grant that tie the vesting of the applicable stock options to the Company's financial performance. The Company's stock options vest at a rate of 50 percent when specified diluted earnings per share targets are achieved, and the remaining 50 percent when secondary, higher specified diluted earnings per share targets are achieved. The amount of stock-based compensation expense is based upon management's estimate of when the earnings per share targets may be achieved.

The Company discontinued any further grants under the Company's 1998 Equity Compensation Plan (the 1998 Plan) as a result of the approval of the 2007 Plan. No options are available for grant from this plan. Grants made from the 1998 Plan continue in effect under the terms of the grant.

The Company recognized stock-based compensation expense in its Consolidated Financial Statements in the three months ended September 30, 2011 and 2010, respectively, as follows:

 

     Three Months Ended  
     September 30,  
     2011     2010  

Stock-based compensation expense

     $ 3,424      $ 3,468   

Less: Deferred tax benefit

      (1,289 )      (1,313 ) 
  

 

 

    

 

 

  

Stock-based compensation expense, net of tax

    $ 2,135      $ 2,155   
  

 

 

    

 

 

  

 

The Company recognized stock-based compensation expense in its Consolidated Financial Statements in the nine months ended September 30, 2011 and 2010, respectively, as follows:

 

     Nine Months Ended  
     September 30,  
     2011     2010  

Stock-based compensation expense

    $ 10,966      $ 16,403   

Less: Deferred tax benefit

      (4,114 )      (6,194 ) 
  

 

 

    

 

 

  

Stock-based compensation expense, net of tax

    $ 6,852      $ 10,209   
  

 

 

    

 

 

  

As of September 30, 2011, there was approximately $41,207 of unrecognized compensation cost remaining, adjusted for estimated forfeitures, related to unvested employee stock options that management expects will vest and is being amortized. The Company estimates that compensation cost will be recognized according to the following schedule:

 

     Stock-Based  
     Compensation  

Period

    Expense  

Remainder of 2011

    $ 3,664   

2012

      14,440   

2013

      12,588   

2014

      5,543   

2015

      3,279   

2016

      1,693   
  

 

 

  
   $ 41,207   
  

 

 

  

During the nine months ended September 30, 2010, the Company revised its estimates made as of December 31, 2009 of when some vesting targets are expected to be achieved. These changes in management's estimates resulted in an increase of $8,684 in stock-based compensation expense in the nine months ended September 30, 2010. Additionally, during the three months ended September 30, 2010, the Company reversed $6,267 of previously-recognized stock-based compensation costs pertaining to option grants which management does not expect to vest. There was no change in management's estimate for the achievement of vesting targets during the nine months ended September 30, 2011.

The Company issues new common shares associated with the exercise of stock options. The total intrinsic value of options exercised during the nine months ended September 30, 2011 and 2010 was $8,488 and $5,361, respectively. The total options exercisable as of September 30, 2011 had no intrinsic value due to the fact that the weighted average exercise price exceeded the market value of the Company's common stock. The total intrinsic value for options exercisable is calculated as the difference between the market value of the Company's common stock as of September 30, 2011 and the exercise price of the shares. The market value of the Company's common stock as of September 30, 2011 was $15.38 as reported by the Nasdaq Stock Market, LLC. The weighted average exercise price of the options exercisable as of September 30, 2011 was $17.63. Total options that were outstanding as of September 30, 2011 was 26,034,000.

Common Stock Buyback

The Company's Board of Directors has authorized the repurchase of the Company's common stock on the open market or through private transactions. The Company purchased 7,884,000 shares at a total cost of $158,682 during the nine months ended September 30, 2011. As of September 30, 2011, the Company has $48,759 of authorization remaining for the purchase of common stock under the program.

The Company immediately retires its common stock when purchased. Upon retirement, the Company reduces Capital in excess of par value for the average capital per share outstanding and the remainder is charged against Retained earnings. If the Company reduces its Retained earnings to zero, any subsequent purchases of common stock will be charged entirely to Capital in excess of par value.

 

Cash Dividend

On May 25, 2011, the Board of Directors declared a cash dividend of $.12 per share on the Company's common stock, which was paid on June 28, 2011, to shareholders of record on June 20, 2011. Cash dividends declared during the nine months ended September 30, 2011 and 2010 were $22,041 and $18,890, respectively.

Noncontrolling Interest

The following table provides a reconciliation of Noncontrolling interest on the Consolidated Balance Sheet for the period from January 1, 2011 to September 30, 2011:

 

     Noncontrolling
interest		  

Balance, January 1, 2011

    $ 15,155   

Net income attributable to noncontrolling interest

      1,234   

Foreign currency translation adjustments

      (1,099 ) 
  

 

 

  

Balance, September 30, 2011

    $ 15,290   
  

 

 

  

The following table provides a reconciliation of Noncontrolling interest on the Consolidated Balance Sheet for the period from January 1, 2010 to September 30, 2010:

 

     Noncontrolling
interest		  

Balance, January 1, 2010

    $ 121,895   

Net income attributable to noncontrolling interest

      1,131   

Foreign currency translation adjustments

      382   

Deconsolidation of LSV

      (65,522 ) 

Deconsolidation of LSV Employee Group

      (43,536 ) 
  

 

 

  

Balance, September 30, 2010

    $ 14,350