NOTE 6. STOCKHOLDERS’ EQUITY

During the quarter ended March 31, 2012 the Company paid $11.7 million or $0.08 per share in cash dividends compared to $10.3 million or $0.07 per share during the quarter ended March 31, 2011.  During the first quarter ended March 31, 2012, the Company repurchased 68,000 shares of its $1 par value common stock at a weighted average price of $19.58 per share compared to 256,284 shares purchased at a weighted average price of $18.90 per share for the same period in 2011.  Rollins, Inc. has had a buyback program in place for a number of years and has routinely purchased shares when it felt the opportunity was desirable. The Board authorized the purchase of 7.5 million additional shares of the Company’s common stock in October 2008.  This authorization enables the Company to continue the purchase of Rollins, Inc. common stock when appropriate, which is an important benefit, resulting from the Company’s strong cash flows.  The stock buy-back program has no expiration date.  In total, 1.0 million additional shares may be purchased under its share repurchase program.

As more fully discussed in Note 13 of the Company’s notes to the consolidated financial statements in its 2011 Annual Report on Form 10-K stock options, time lapse restricted shares (TLRS’s) and restricted stock units have been issued to officers and other management employees under the Company’s Employee Stock Incentive Plans.  The stock options generally vest over a five-year period and expire ten years from the issuance date.

During the first quarter ended March 31, 2012, approximately 13,000 shares of common stock were issued upon exercise of stock options by employees compared to approximately 10,000 shares for the prior year quarter.  The Company issues new shares from its authorized but unissued share pool.  At March 31, 2012 approximately 4.4 million shares of the Company’s common stock were reserved for issuance.

The following table summarizes the components of the Company’s stock-based compensation programs recorded as expense:

Options activity outstanding under the Company’s stock option plan as of March 31, 2012 and changes during the three months ended March 31, 2012, were as follows:

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on that day. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s stock.

The aggregate intrinsic value of options exercised during the three months ended March 31, 2012 and March 31, 2011 was $217 thousand and $34 thousand, respectively. Exercise of options through the first quarter ended March 31, 2012 and 2011 resulted in cash receipts of less than $10 thousand for each year, respectively.  The Company recognized a tax benefit of approximately $2.6 million and $70 thousand during the first quarters ended March 31, 2012 and 2011, respectively, which were recorded as an increase to paid-in capital.

The following table summarizes information on unvested restricted stock outstanding as of March 31, 2012:

At March 31, 2012 and December 31, 2011, the Company had $39.4 million and $24.4 million of total unrecognized compensation cost, respectively, related to time-lapse restricted shares that are expected to be recognized over weighted average periods of approximately 4.3 years and 4.1 years, respectively.