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Stock-based Compensation
 3 Months Ended
Jun. 30, 2013
Stock-based Compensation  
Stock-based Compensation

Note 5 - Stock-based Compensation

 

Amounts recognized in the condensed financial statements related to stock-based compensation are as follows (in thousands, except per share data):

 

 

 

Three months ended
June 30,

 

 

 

2013

 

2012

 

Total cost of stock-based compensation charged against income before income taxes

 

$

149

 

$

149

 

Amount of income tax benefit recognized in earnings

 

57

 

51

 

Amount charged against net income

 

$

92

 

$

98

 

Impact on net income per common share:

 

 

 

 

 

Basic

 

$

0.03

 

$

0.03

 

Diluted

 

0.03

 

0.03

 

 

Stock-based compensation expense is included in cost of revenues, selling, and general and administrative expense in the accompanying condensed statements of income.

 

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model (“Black-Scholes”). We use historical data to estimate the expected price volatility, the expected stock option life and expected forfeiture rate. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of grant for the estimated life of the stock option. 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. The following summarizes the Black-Scholes assumptions used for stock option grants:

 

 

 

Three months ended June 30,

 

 

 

2013

 

2012

 

Volatility

 

28.7%

 

31.1%

 

Risk-free interest rate

 

0.8 – 1.2%

 

0.6 – 1.0%

 

Expected stock option life (years)

 

5 – 10

 

5 – 10

 

Dividend yield

 

1.1%

 

1.5%

 

 

The following is a summary of stock option activity:

 

 

 

Number of
Shares

 

Weighted-
average Exercise
Price per Share

 

Weighted-
average
Remaining
Contractual
Term

 

Aggregate
Intrinsic Value
(000s)

 

Outstanding at March 31, 2013

 

416,125

 

$

29.87

 

3.7

 

$

9,529

 

Stock options granted

 

101,124

 

51.85

 

6.2

 

 

 

Stock options forfeited

 

(6,569

)

42.84

 

 

 

 

 

Stock options expired

 

—

 

—

 

 

 

 

 

Stock options exercised

 

(11,320

)

22.43

 

 

 

 

 

Outstanding at June 30, 2013

 

499,360

 

34.31

 

4.3

 

9,893

 

 

 

 

 

 

 

 

 

 

 

Exercisable at June 30, 2013

 

237,215

 

24.26

 

3.2

 

7,086

 

 

The total intrinsic value of stock options exercised was $329,000 and $851,000 for the three months ended June 30, 2013 and 2012, respectively.

 

A summary of the status of our unvested stock option shares as of June 30, 2013 is as follows:

 

 

 

Number of
Shares

 

Weighted-
average
Grant-Date
Fair Value

 

Unvested at March 31, 2013

 

257,805

 

$

9.55

 

Stock options granted

 

101,124

 

11.93

 

Stock options forfeited

 

(6,199

)

9.91

 

Stock options vested

 

(90,585

)

6.92

 

Unvested at June 30, 2013

 

262,145

 

11.44

 

 

As of June 30, 2013, there was $2,747,000 of total unrecognized compensation expense related to unvested stock options.  As of June 30, 2013, we have 216,265 shares available for future stock option grants.