Cost of sales service share based compensation

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Cost of sales-service . Share-based compensation expense in cost of sales . Research and development . Sales and marketing . General and administrative . Share-based compensation expense in operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,296 1,057 964 ----- ----- ----- Total share-based compensation expense. . . . . . . . . . . . $1,517 $1,231 $1,112 I...--- ...... -- Restricted Stock and Restricted Stock Units Many companies, including Aon, compensate employees with restricted stock instead of with s options. Increasingly, firms have moved away from stock options in favor of restricted stock as pensation for several reasons. First, stock options were seen as creating excess compensation duri _ recent stock-market booms. Second, stock options can create incentives for managers to take excessive firm risk because the value of an option increases with firm risk. Restricted stock does create such severe risk-taking incentives. Third, there are certain tax advantages to restricted vis-a-vis stock options. Under a restricted stock plan, the company transfers shares to the employ but the shares are restricted in that they cannot be sold until the end of a vesting period. Restri stock units differ from restricted stock in two key ways: first, the company does not distribute s of stock to employees until certain conditions are met; and second, the number of shares ultim given to employees is typically a function of their performance relative to specified targets . s describes its restricted stock unit plan as follows: Restricted stock unit awards Employees may either receive service-based restricted stock units ("RSUs") or performance-based awards, which ultimately result in the receipt of RSUs, if the employee achieves his or her objectives ... We account for service-based awards byexpensinq the total award value over the service period. We calculate the total award value by multiplying the estimated total number of shares to be delivered by the fair value on the date of grant .. _ Performance-based RSUs may be immediately vested at the end of the performance period or may have a future additional service period. Generally, our performance awards are fixed, which means we determine the fair value of the award at the grant date, estimate the number of shares to be delivered at the end of the performance period, and recognize the expense over the performance or vesting period, whichever is longer ... During 2010, the Company granted approximately 1.6 million shares in connection with the completion of the 2007 Leadership Performance Plan ("LPP cycle and 84,000 shares related to other performance plans. During 2010, 2009 and 2008, the Company granted approximately 3.5 million, 3.7 million and 4.2 million restricted shares, respec- tively, in connection with the Company's incentive compensation plans.
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A summary of the status of Aon's non-vested stock awards follows (shares in thousands).
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