5. Stock-Based Compensation

In October 1999, the Company adopted a long-term equity incentive plan, which allows for grants of stock options, stock appreciation rights, restricted stock and performance awards to directors, officers and employees of PCA, as well as others who engage in services for PCA. The Company has not granted any option awards since 2007. The plan, which was scheduled to terminate on October 19, 2014, was amended effective with the approval by the Company’s stockholders on May 1, 2013. The amendment extended the plan’s term by ten years to May 1, 2023 and increased the number of shares that may be granted under the plan by 2,000,000 shares to a total issuance of up to 10,550,000 shares of common stock over the life of the plan (including prior awards). As of September 30, 2013, share-based awards for 8,313,735 shares have been granted, net of forfeitures. Forfeitures are added back to the pool of shares of common stock available to be granted at a future date.

A summary of the Company’s restricted stock activity follows:


	2013						2012
	Shares			Fair Market Value at Date of Grant			Shares			Fair Market Value at Date of Grant
(Dollars in thousands)
Restricted stock outstanding at January 1		1,771,664		$	41,522			1,817,745		$	40,655
Granted		234,537			11,211			394,928			10,846
Vested		(600,088	)		(11,686	)		(405,309	)		(9,185	)
Cancellations		(32,360	)		(795	)		(8,945	)		(188	)

Restricted stock outstanding at September 30		1,373,753		$	40,252			1,798,419		$	42,128

Restricted stock awards granted to officers and employees generally vest at the end of a four-year period, and restricted stock awards granted to directors vest immediately. The fair value of restricted stock is determined based on the closing price of the Company’s stock on the grant date.

The Company granted performance unit awards to certain key employees on June 24, 2013. The number of units that vest at the end of a four-year period are based on the Company’s performance compared to a peer group. The performance units are paid out entirely in shares of the Company’s common stock. The award is valued at the closing price of the Company’s stock on the grant date and is expensed over the requisite service period based on the most probable number of awards expected to vest. A summary of the Company’s performance unit activity follows:


	2013
(Dollars in thousands)	Units		Fair Market Value at Date of Grant
Performance units at January 1		—	$	—
Granted		70,600		3,377

Performance units at September 30		70,600	$	3,377

Compensation expense for share-based awards recognized in the condensed consolidated statements of income for the three- and nine-month periods ended September 30, 2013 and 2012 was as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
(In thousands)
Impact on income before income taxes	$	(3,182	)	$	(2,746	)	$	(9,956	)	$	(8,477	)
Income tax benefit		1,237			1,068			3,868			3,296

Impact on net income	$	(1,945	)	$	(1,678	)	$	(6,088	)	$	(5,181	)

The Company generally recognizes compensation expense associated with share-based awards ratably over their vesting periods. As PCA’s Board of Directors has the ability to accelerate vesting of share-based awards upon an employee’s retirement, the Company accelerates the recognition of compensation expense for certain employees approaching normal retirement age. As of September 30, 2013, there was $22.9 million and $3.2 million of total unrecognized compensation costs related to restricted stock awards and performance unit awards, respectively. The Company expects to recognize the cost of these awards over a weighted-average period of 2.8 years for restricted stock and 3.8 years for performance units. There is no unrecognized compensation cost related to stock option awards granted under the Company’s equity incentive plan as all outstanding awards have vested.