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Stock-based Compensation | 12 Months Ended
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Mar. 31, 2013
Stock-based Compensation |
Stock-based Compensation | Note 9. Stock-based Compensation We adopted stock option plans for the benefit of our employees and outside directors. Under terms of the plans, stock options are granted at an amount not less than 100% of the quoted market price of the underlying shares at the date of grant. Stock options are exercisable for a term of five to ten years and vest ratably over a four year period. All of our stock option plans have been approved by our stockholders. On December 8, 2006, we adopted our current stock compensation plan (the “2006 Plan”). The purpose of the 2006 Plan is to encourage ownership of our common stock by certain officers, directors, employees and advisors in order to provide incentive to promote the success and business of the Company. A total of 400,000 shares of common stock were reserved for issuance under the 2006 Plan and are subject to terms as set by the Compensation Committee of the Board of Directors at the time of grant. On September 23, 2010, our stockholders approved an amendment to the 2006 Plan whereby the number of shares authorized for issuance was increased to 800,000. As of March 31, 2013, we have 382,750 stock options outstanding under the 2006 Plan. On February 27, 2013, we filed a Registration Statement on Form S-8 whereby we registered the additional 400,000 shares of common stock underlying stock options issuable under the 2006 Plan. Under the October 21, 1999 plan (the “1999 Plan”), a total of 300,000 shares of common stock were reserved for issuance and were subject to terms as set by the Compensation Committee of the Board of Directors at the time of grant. On October 18, 2004, our stockholders approved an amendment to the 1999 Plan to reserve an additional 200,000 shares of common stock for issuance under the plan. The 1999 Plan has expired and no new grants can be made under this plan. As of March 31, 2013, we have 33,375 stock options outstanding under the 1999 Plan. Amounts recognized in the financial statements related to stock-based compensation are as follows (in thousands, except per share data):
|  | Year ended March 31, |
|  | 2013 |  | 2012 |  | 2011 |
Total cost of stock based compensation charged against income before income tax |  | $ | 1,112 |  | $ | 464 |  | $ | 383 |
Amount of income tax benefit recognized in earnings |  | 77 |  | 81 |  | 21 |
Amount charged against net income |  | $ | 1,035 |  | $ | 383 |  | $ | 362 |
Impact on net income per common share: |  |  |  |  |  |  |
Basic |  | $ | 0.31 |  | $ | 0.12 |  | $ | 0.11 |
Diluted |  | 0.29 |  | 0.11 |  | 0.11 |
The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses assumptions noted in the following table. We use historical data to estimate volatility, expected option life and forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is calculated based upon the dividend payments made during the prior four quarters as a percent of the average stock price for that period.
|  | Year ended March 31, |
|  | 2013 |  | 2012 |  | 2011 |
Volatility |  | 27.5-31.1% |  | 33.4-33.7% |  | 34-36% |
Risk-free interest rate |  | 0.6-1.0% |  | 0.9-2.2% |  | 1.1-3.9% |
Expected option life (years) |  | 5-10 |  | 5-10 |  | 5-10 |
Dividend yield |  | 1.4% |  | 1.8% |  | 1.8% |
A summary of the option activity as of and for the years ended March 31, 2013, 2012 and 2011 is as follows:
|  | Number of Shares |  | Weighted- average Exercise Price |  | Weighted- average Remaining Contractual Term |  | Aggregate Intrinsic Value (000s) |
Outstanding at March 31, 2010 |  | 391,765 |  | $ | 17.37 |  | 4.2 |  |  |
Granted |  | 137,060 |  | 25.43 |  | 5.0 |  |  |
Forfeited |  | (22,315 | ) | 19.16 |  | — |  |  |
Expired |  | (150 | ) | 11.65 |  | — |  |  |
Exercised |  | (62,718 | ) | 15.02 |  | — |  |  |
Outstanding at March 31, 2011 |  | 443,642 |  | 20.10 |  | 4.0 |  | $ | 3,861 |
Granted |  | 103,780 |  | 29.87 |  | 5.4 |  |  |
Forfeited |  | (11,940 | ) | 26.06 |  | — |  |  |
Expired |  | (1,020 | ) | 14.50 |  | — |  |  |
Exercised |  | (100,677 | ) | 18.00 |  | — |  |  |
Outstanding at March 31, 2012 |  | 433,785 |  | 22.77 |  | 3.9 |  | 11,516 |
Granted |  | 116,080 |  | 49.97 |  | 5.9 |  |  |
Forfeited |  | (40,375 | ) | 32.87 |  | — |  |  |
Expired |  | (40 | ) | 18.98 |  | — |  |  |
Exercised |  | (93,325 | ) | 20.56 |  | — |  |  |
Outstanding at March 31, 2013 |  | 416,125 |  | 29.87 |  | 3.7 |  | 9,529 |
Exercisable at March 31, |  |  |  |  |  |  |  |  |
2013 |  | 158,320 |  | 21.00 |  | 3.0 |  | 5,031 |
2012 |  | 148,910 |  | 19.28 |  | 3.2 |  | 4,473 |
2011 |  | 152,217 |  | 17.36 |  | 3.2 |  | 1,742 |
A summary of the status of our unvested option shares as of and for the years ended March 31, 2013, 2012 and 2011 is as follows:
|  | Unvested Shares |  | Weighted-average Grant-date Fair Value |
Unvested at March 31, 2010 |  | 247,085 |  | $ | 5.51 |
Options granted |  | 137,060 |  | 7.53 |
Options forfeited |  | (13,540 | ) | 6.51 |
Options vested |  | (79,180 | ) | 5.34 |
Unvested at March 31, 2011 |  | 291,425 |  | 6.46 |
Options granted |  | 103,780 |  | 8.33 |
Options forfeited |  | (11,395 | ) | 7.31 |
Options vested |  | (98,935 | ) | 5.97 |
Unvested at March 31, 2012 |  | 284,875 |  | 7.28 |
Options granted |  | 116,065 |  | 12.43 |
Options forfeited |  | (38,720 | ) | 8.86 |
Options vested |  | (104,415 | ) | 6.69 |
Unvested at March 31, 2013 |  | 257,805 |  | 9.55 |
The total intrinsic value of options exercised was $2,742,000, $2,228,000 and $688,000 during the years ended March 31, 2013, 2012 and 2011, respectively. As of March 31, 2013, there was $1,889,000 of total unrecognized compensation expense related to unvested options. As of March 31, 2013, we have 310,820 shares available for future option grants. Effective November 30, 2012, as part of our Chief Financial Officer transition, 14,400 unvested options were modified to a) extend the expiration date to 10 years following the original grant date, b) allow them to be exercised through their expiration date, and c) accelerate the vesting such that all options will vest by November 30, 2014. This was a modification of the terms of an equity award and, accordingly, we treated this as an exchange of the original award for a new award. We recorded incremental compensation expense of approximately $240,000 for the year ended March 31, 2013, which is included in general and administrative expense on the accompanying statements of income.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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