Stock-based Compensation

6 Months Ended

Sep. 30, 2013

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 September 30,				Six months ended September 30,
	2013		2012		2013		2012
Total cost of stock-based compensation charged against income before income taxes	$	208	$	289	$	357	$	438
Amount of income tax benefit recognized in earnings	71		101		130		151
Amount charged against net income	$	137	$	188	227		287
Impact on net income per common share:
Basic	$	0.04	$	0.06	$	0.07	$	0.09
Diluted	0.04		0.05		0.06		0.08

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 is a summary of stock option activity for the six months ended September 30, 2013:

	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	103,124		52.09		6.0
Stock options forfeited	(12,670	)	45.19
Stock options expired	—		—
Stock options exercised	(42,155	)	19.98
Outstanding at September 30, 2013	464,424		35.29		4.3	15,009

Exercisable at September 30, 2013	210,730		25.16		3.3	8,946

The total intrinsic value of stock options exercised was $1,710,000 and $1,300,000 for the six months ended September 30, 2013 and 2012, respectively.

A summary of the status of our unvested stock option shares as of September 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	103,124		12.27
Stock options forfeited	(12,260	)	10.84
Stock options vested	(94,975	)	8.45
Unvested at September 30, 2013	253,694		11.11

As of September 30, 2013, there was $1,908,000 of total unrecognized compensation expense related to unvested stock options. As of September 30, 2013, we have 220,366 shares available for future stock option grants.

- 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.

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