SHARE-BASED COMPENSATION PLANS

Effective May 2, 2013, our non-employee directors and key employees are awarded share-based awards through our 2013 SICP. Prior to May 2, 2013, our non-employee directors and key employees were awarded share-based awards through our DSCP and our PIP, respectively. We record these share-based awards as compensation costs over the respective service period for which services are received in exchange for an award of equity or equity-based compensation. The compensation cost is based primarily on the fair value of the shares awarded, using the estimated fair value of each share on the date it was granted and the number of shares to be issued at the end of the service period. We have 441,241 shares reserved for issuance under the SICP, including the shares previously awarded through the DSCP and PIP that will be issued from this reserve.

The table below presents the amounts included in net income related to share-based compensation expense for the awards granted under the DSCP and the PIP for the years ended December 31, 2013, 2012 and 2011:



	For the Year Ended December 31,
	2013		2012		2011
(in thousands)
Directors Stock Compensation Plan	$	478	$	443	$	407
Performance Incentive Plan	1,153		976		1,043
Total compensation expense	1,631		1,419		1,450
Less: tax benefit	657		569		581
Share-Based Compensation amounts included in net income	$	974	$	850	$	869

Stock Options

We did not have any stock options outstanding at December 31, 2013 or 2012, nor were any stock options issued during 2013, 2012 and 2011.

Directors Stock Compensation Plan

Shares granted under the DSCP were issued in advance of the directors’ service periods and were fully vested as of the date of the grant. We record a prepaid expense equal to the fair value of the shares issued and amortize the expense equally over a service period of one year. In May 2013, each of our non-employee directors received an annual retainer of 857 shares of common stock under the DSCP. There were no shares granted under the SICP as of December 31, 2013.

A summary of stock activity under the DSCP for the years ended December 31, 2013, 2012 and 2011 is presented below.



	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding — December 31, 2011	—	$	—
Granted	10,800	$	41.06
Vested	10,800	$	41.06
Outstanding — December 31, 2012	—	$	—
Granted	9,427	$	52.49
Vested	9,427	$	52.49
Outstanding — December 31, 2013	—	$	—

The weighted average grant date fair value of DSCP shares awarded during 2013, 2012 and 2011 was $52.49, $41.06 and $41.02 per share, respectively. The intrinsic values of the DSCP awards are equal to the fair value of these awards on the date of grant. At December 31, 2013, there was $165,000 of unrecognized compensation expense related to DSCP awards that is expected to be recognized over the first four months of 2014.

Performance Incentive Plan

Our Compensation Committee is authorized to grant key employees of the Company the right to receive awards of shares of our common stock, contingent upon the achievement of established performance goals. These awards are subject to certain post-vesting transfer restrictions.

We currently have multi-year performance plans, which are based upon the successful achievement of long-term goals, growth and financial results, which comprised both market-based and performance-based conditions or targets. The fair value of each share of stock tied to a performance-based condition or target is equal to the market price of our common stock on the date of the grant. For the market-based conditions, we used the Black-Scholes pricing model to estimate the fair value of each share of market-based award granted.

In July 2012, we replaced a subsidiary officer’s multi-year cash-based incentive award with an award of up to 4,800 shares under the PIP. These shares will vest at the end of the service period ending December 31, 2014 and have terms and market/performance targets similar to other shares granted under the PIP in January 2012.

Effective February 24, 2012, one of our named executive officers, who was a participant in the PIP, resigned. Pursuant to a separation agreement entered into between the Company and the named executive officer, the named executive officer received a cash payment of $181,500 and other benefits in lieu of other performance-based compensation, which he might have been entitled to receive.

A summary of stock activity under the PIP is presented below:



	Number of Shares	Weighted Average Fair Value
Outstanding — December 31, 2011	87,414	$	34.47
Granted	35,706	$	39.62
Vested	13,837	$	29.19
Forfeited⁽¹⁾	21,600	$	36.57
Expired	3,038	$	26.29
Outstanding — December 31, 2012	84,645	$	37.86
Granted	23,491	$	44.85
Vested	24,332	$	33.26
Expired	3,043	$	39.12
Outstanding — December 31, 2013	80,761	$	42.30


⁽¹⁾	Includes shares settled with a cash payment pursuant to the terms of a separation agreement with a former named executive officer.

In 2013, 2012 and 2011, we withheld shares with value at least equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities with the executives receiving the net shares. The total number of shares withheld of 10,411 5,670 and 12,234 for 2013, 2012 and 2011, respectively, was based on the value of the PIP shares on their vesting date, determined by the average of high and low of our stock price. Total payments for the employees’ tax obligations to the taxing authorities were approximately $519,000, $238,000 and $496,000, in 2013, 2012 and 2011, respectively.

Tax benefit on PIP for 2013, 2012 and 2011 were $202,000, $172,000 and $13,000, respectively, and included in additional paid-in capital in the consolidated statements of stockholders' equity.

The weighted average grant-date fair value of PIP awards granted during 2013, 2012 and 2011 was $44.85, $39.62 and $40.16 per share, respectively. The intrinsic value of the PIP awards was $4.8 million, $3.8 million and $3.8 million for 2013, 2012 and 2011, respectively.