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Share-Based Compensation
 3 Months Ended
Mar. 31, 2012
Share-Based Compensation [Abstract]  
Share-Based Compensation
9. Share-Based Compensation

Our non-employee directors and key employees are 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 the grant on the date it was awarded.

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 months ended March 31, 2012 and 2011:

 

                 

For the Three Months Ended March 31,

   2012     2011  
(in thousands)            

Directors Stock Compensation Plan

   $ 111     $ 84  

Performance Incentive Plan

     234       245  
   

 

 

    

 

 

  

Total compensation expense

     345       329  

Less: tax benefit

     138       132  
   

 

 

    

 

 

  

Share-Based Compensation amounts included in net income

   $ 207     $ 197  
   

 

 

    

 

 

  

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 of the shares issued and amortize the expense equally over a service period of one year.

At March 31, 2012, there was $37,000 of unrecognized compensation expense related to the DSCP awards. This expense is expected to be recognized over the directors’ remaining service period ending April 30, 2012.

Performance Incentive Plan

The table below presents the summary of the stock activity for the PIP for the three months ended March 31, 2012:

 

                 
          Weighted Average  
    Number of Shares     Fair Value  

Outstanding — December 31, 2011

     87,414     $ 34.47  

Granted

     30,906       40.16  

Vested

     13,837       27.63  

Forfeited (1)

     24,638       29.31  

Expired

     —         —    
   

 

 

    

 

 

  

Outstanding — March 31, 2012

     79,845     $ 34.47  
   

 

 

    

 

 

  

 

(1) 

Includes shares settled with a cash payment pursuant to a separation agreement with a former named executive officer.

In January 2012, the Board of Directors granted awards under the PIP for 30,906 shares. The shares granted in January 2012 are multi-year awards that will vest at the end of the three-year service period, or December 31, 2014. These awards are earned 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 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 market-based award granted.

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

At March 31, 2012, the aggregate intrinsic value of the PIP awards was $1.9 million.