

11.	Incentive Plans

The Insperity, Inc. 2001 Incentive Plan, as amended, and the 2012 Incentive Plan, as amended, (collectively, the “Incentive Plans”) provide for options and other stock-based awards that have been and may be granted to eligible employees and non-employee directors of Insperity or its subsidiaries. The 2012 Incentive Plan is currently the only plan under which new stock-based awards may be granted. The Incentive Plans are administered by the Compensation Committee of the Board of Directors (the “Committee”). The Committee has the power to determine which eligible employees will receive awards, the timing and manner of the grant of such awards, the exercise price of stock options (which may not be less than market value on the date of grant), the number of shares and all of the terms of the awards. The Board may at any time amend or terminate the Incentive Plans. However, no amendment that would impair the rights of any participant, with respect to outstanding grants, can be made without the participant’s prior consent. Stockholder approval of amendments to the Incentive Plans is necessary only when required by applicable law or stock exchange rules. At December 31, 2014, 1,299,470 shares of common stock were available for future grants under the 2012 Incentive Plan. The Incentive Plans permit stock options, including nonqualified stock options and options intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code, stock awards, phantom stock awards, stock appreciation rights, performance units, and other stock-based awards and cash awards, all of which may or may not be subject to the achievement of one or more performance objectives. The purposes of the Incentive Plans generally are to retain and attract persons of training, experience and ability to serve as employees of Insperity and its subsidiaries and to serve as non-employee directors of Insperity, to encourage the sense of proprietorship of such persons and to stimulate the active interest of such persons in the development and financial success of Insperity and its subsidiaries.

The Insperity Nonqualified Stock Option Plan (the “Nonqualified Plan”) provided for options to purchase shares of Insperity’s common stock that were granted to employees who were not officers. An aggregate of 3,600,000 shares of common stock of Insperity were authorized to be issued under the Nonqualified Plan. As of December 31, 2014, there were no outstanding unexercised shares under the Nonqualified Plan, and although there are unissued shares remaining, no new awards may be granted under the Nonqualified Plan. The Committee may at any time terminate or amend the Nonqualified Plan.

We recognized $11.1 million, $11.1 million and $9.8 million of compensation expense associated with the restricted stock awards in 2014, 2013 and 2012, respectively. We recognized $4.6 million, $4.5 million and $4.0 million of tax benefits associated with stock-based compensation in 2014, 2013 and 2012, respectively.

Stock Option Awards

The following is a summary of stock option award activity for 2014:



	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(in thousands)				(in years)	(in thousands)
Outstanding - December 31, 2013	61		$	24.24
Granted	—		—
Exercised	(18	)	15.28
Canceled	—		—
Outstanding - December 31, 2014	43		28.04		5.3	$	253
Exercisable - December 31, 2014	43		28.04		5.3	$	253

The intrinsic value of options exercised during the year was $0.3 million in 2014, $1.5 million in 2013 and $2.5 million in 2012.

Restricted Stock Awards

Restricted common shares, under equity plan accounting, are generally measured at fair value on the date of grant based on the number of shares granted, estimated forfeitures and the quoted price of the common stock. Such value is recognized as compensation expense over the corresponding vesting period, three to five years for our shares currently outstanding. The total fair value of shares vested during the years ended December 31, 2014, 2013, and 2012 was $10.8 million, $12.3 million and $11.7 million, respectively. The weighted average grant date fair value of restricted stock awards during the years ended December 31, 2014, 2013 and 2012 was $28.22, $29.25 and $30.47, respectively. As of December 31, 2014, unrecognized compensation expense associated with the unvested shares outstanding was $12.7 million and is expected to be recognized over a weighted average period of 21 months.

The following is a summary of restricted stock award activity for 2014:



	Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Non-vested - December 31, 2013	740		$	29.66
Granted	410		28.22
Vested	(382	)	29.79
Canceled/Forfeited	(28	)	28.45
Non-vested - December 31, 2014	740		28.84

Employee Stock Purchase Plan

Our employee stock purchase plan (the “ESPP”) enables employees to purchase shares of Insperity stock at a 5% discount. The ESPP is a non-compensatory plan under generally accepted accounting principles of stock-based compensation. As a result, no compensation expense is recognized in conjunction with this plan. Approximately 37,000, 34,000 and 37,000 shares were issued under the ESPP during fiscal years 2014, 2013 and 2012, respectively.