10. Incentive Plans

The Insperity, Inc. 1997 Incentive Plan, as amended, the 2001 Incentive Plan, as amended, and the 2012 Incentive Plan (collectively, the "Incentive Plans") provide for options and other stock-based awards that may be granted to eligible employees and non-employee directors of Insperity or its subsidiaries. At the 2012 Annual Meeting, stockholders approved the 2012 Incentive Plan, which is currently the only plan under which new stock-based awards may be granted. There are no longer any awards outstanding under the 1997 Incentive Plan, and no new grants may be made under that Plan. 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, 2012, 1,770,329 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. 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, provided that no such amendment may adversely affect the rights of optionees with regard to outstanding options.

We recognized $9.8 million, $8.6 million and $8.1 million of compensation expense associated with the restricted stock awards in 2012, 2011 and 2010, respectively. We recognized $4.0 million, $3.4 million and $3.3 million of tax benefits associated with stock-based compensation in 2012, 2011 and 2010, respectively.

Stock Option Awards

The following is a summary of stock option award activity for 2012:

	Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
	(in thousands)					(in years)		(in thousands)

Outstanding – December 31, 2011		315		$	16.67
Granted		—			—
Exercised		(160	)		14.05
Cancelled		(3	)		25.99
Outstanding – December 31, 2012		152			19.30		3.3		2,019
Exercisable – December 31, 2012		152			19.30		3.3		2,019

The intrinsic value of options exercised during the year was $2.5 million in 2012, $2.2 million in 2011 and $2.0 million in 2010.

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, 2012, 2011, and 2010 was $11.7 million, $11.1 million and $6.7 million, respectively. The weighted average grant date fair value of restricted stock awards during the years ended December 31, 2012, 2011 and 2010 was $30.47, $29.47 and $17.55, respectively. As of December 31, 2012, unrecognized compensation expense associated with the unvested shares outstanding was $12.2 million and is expected to be recognized over a weighted average period of 22 months.

The following is a summary of restricted stock award activity for 2012:

				Weighted Average
				Grant Date
	Shares			Fair Value
	(in thousands)

Non-vested – December 31, 2011		778		$	23.91
Granted		375			30.47
Vested		(383	)		22.65
Cancelled/Forfeited		(19	)		28.51
Non-vested – December 31, 2012		751			27.70