Share-Based Compensation

6 Months Ended

Jun. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation

Effective May 2, 2013, our non-employee directors and key employees are awarded share-based awards through our 2013 stock and incentive compensation plan. Prior to May 2, 2013, our non-employee directors and key employees were awarded share-based awards through our Directors Stock Compensation Plan (“DSCP”) and our Performance Incentive Plan (“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 each award on the date it was granted.

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 three and six months ended June 30, 2013 and 2012:

	Three Months						Six Months
For the Periods Ended June 30,	2013			2012			2013			2012
(in thousands)
Directors Stock Compensation Plan	$	120		$	111		$	231		$	222
Performance Incentive Plan	341			240			630			475
Total compensation expense	461			351			861			697
Less: tax benefit	(186		)	(141		)	(347		)	(280		)
Share-Based Compensation amounts included in net income	$	275		$	210		$	514		$	417

Directors Stock Compensation Plan

Shares granted under the DSCP are issued in advance of the directors’ service periods and are 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. A summary of the stock activity under the DSCP during the six months ended June 30, 2013 is presented below.

	Number of Shares	Weighted Average Grant date Fair Value
Outstanding - December 31, 2012	—	—
Granted	9,427	$	52.49
Vested	9,427	$	52.49
Forfeited	—	—
Outstanding - June 30, 2013	—	—

At June 30, 2013, there was $412,000 of unrecognized compensation expense related to the DSCP awards. This expense will be recognized over the directors’ remaining service periods ending April 30, 2014.

Performance Incentive Plan

The table below presents the summary of the stock activity for the PIP for the six months ended June 30, 2013:

	Number of Shares	Weighted Average Fair Value
Outstanding—December 31, 2012	84,645	$	37.86
Granted	23,491	$	44.85
Vested	24,332	$	33.26
Expired	3,043	$	39.12
Outstanding—June 30, 2013	80,761	$	42.39

In January 2013, the Board of Directors granted awards of 23,491 shares under the PIP, which are multi-year awards that will vest at the end of the three-year service period, or December 31, 2015. These awards are earned based upon the successful achievement of long-term goals, growth and financial results, which are comprised of both market-based and performance-based conditions or targets. The fair value of each performance-based condition or target is equal to the market price of our common stock on the date each award is granted. For the market-based conditions, we used the Black-Scholes pricing model to estimate the fair value of each market-based award granted.

At June 30, 2013, the aggregate intrinsic value of the PIP awards was $4.2 million.