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Share-Based Payments
 12 Months Ended
Mar. 31, 2014
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]  
Share-Based Payments

9. Share-Based Payments

The Company has share awards outstanding under three share-based compensation plans (the “Equity Plans”). The Company believes that such awards better align the interests of its employees with those of its shareholders. Under the shareholder-approved 1998 Employee Stock Option Plan and Non-Employee Director Stock Option Plan (collectively the “1998 Plans”) the Board of Directors was authorized to grant option awards for up to 1,551,000 common shares to employees and directors. On August 9, 2006, the Company’s shareholders approved the Nicholas Financial, Inc. Equity Incentive Plan (the “2006 Plan”) for employees and non-employee directors. Under the 2006 Plan, the Board of Directors is authorized to grant total share awards for up to 1,072,500 common shares. The 2006 Plan replaced the 1998 Plans; accordingly no additional option awards may be granted under the 1998 Plans. In addition to option awards, the 2006 Plan provides for restricted stock and performance share awards.

 

Option awards previously granted to employees and directors under the 1998 Plans generally vest ratably based on service over a five- and three-year period, respectively, and generally have a contractual term of ten years. Vesting and contractual terms for option awards under the 2006 Plan are essentially the same as those of the 1998 Plans. Restricted stock awards generally cliff vest over a three-year period based on service conditions. The annual vesting of performance share awards is contingent upon the attainment of company-wide performance goals including annual revenue growth and operating income targets. There are no post-vesting restrictions for share awards.

The Company funds share awards from authorized but unissued shares and does not purchase shares to fulfill the obligations of the plans. Cash dividends, if any, are not paid on unvested performance shares or unexercised options, but are paid on unvested restricted stock awards.

The Company did not grant any options during the year ended March 31, 2014. The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

 

     2013     2012  

Risk-free interest rate

      0.71 %      1.84 % 

Weighted average expected original term

      5 years        5 years   

Expected volatility

      48 %      49 % 

Expected dividend yield

      3.20 %      0.00 % 

A summary of option activity under the Equity Plans as of March 31, 2014, and changes during the year are presented below.

 

Options

    Shares     Weighted
Average
Exercise
Price		      Weighted
Average
Remaining
Contractual
Term		      Aggregate
Intrinsic
Value		  

Outstanding at March 31, 2013

      473,446      $ 5.63         

Granted

      —          —           

Exercised

      (66,805 )    $ 4.87         

Forfeited

      (33,760 )    $ 9.11         
  

 

 

    

 

 

        

Outstanding at March 31, 2014

      372,881      $ 5.45         5.06       $ 3,834,916   
  

 

 

    

 

 

     

 

 

     

 

 

  

Exercisable at March 31, 2014

      294,010      $ 4.14         4.59       $ 3,407,753   
  

 

 

    

 

 

     

 

 

     

 

 

  

The Company granted 96,000 and 45,000 options with a weighted average fair value of $4.15 and $5.73 during the years ended March 31, 2013 and 2012, respectively. The total intrinsic value of options exercised during the years ended March 31, 2014, 2013 and 2012 was approximately $699,000, $685,000 and $1,335,000, respectively.

During the fiscal year ended March 31, 2014, 66,805 options were exercised at exercise prices ranging from $0.77 to $10.96 per share. During the same period 33,760 options were forfeited at exercise prices ranging from $0.77 to $10.96 per share.

Cash received from options exercised during the fiscal years ended March 31, 2014, 2013 and 2012 totaled approximately $329,000, $612,000 and $830,000, respectively. Related income tax benefits during the same periods totaled approximately $267,000, $262,000 and $511,000, respectively. Such amounts are included in proceeds from exercise of stock options and income tax benefit related thereto under cash flows from financing activities in the consolidated statements of cash flows. As of March 31, 2014, there was approximately $272,000 of total unrecognized compensation cost related to options granted. That cost is expected to be recognized over a weighted-average period of approximately 2.5 years.

 

A summary of the status of the Company’s non-vested restricted shares under the 2006 Plan as of March 31, 2014, and changes during the year then ended is presented below.

 

Restricted Share Awards

    Shares     Weighted
Average
Grant Date
Fair Value		      Weighted
Average
Remaining
Contractual
Term		      Aggregate
Intrinsic
Value		  

Non-vested at March 31, 2013

      96,000      $ 12.90         

Granted

      —        $ —           

Vested

      (46,000 )    $ 12.87         

Forfeited

      —       $  —           
  

 

 

    

 

 

        

Non-vested at March 31, 2014

      50,000      $ 12.92         1.96       $ 786,500   
  

 

 

    

 

 

     

 

 

     

 

 

  

The Company did not award any restricted shares during the fiscal year ended March 31, 2014. During the same period no restricted shares were forfeited.

As of March 31, 2014, there was approximately $332,000 of total unrecognized compensation cost related to non-vested restricted share awards granted under the 2006 Plan. That cost is expected to be recognized over a weighted-average period of approximately 1.96 years.

The Company did not award any performance shares during the fiscal year ended March 31, 2014 and no awards vested or were forfeited. The Company awarded 33,500 performance shares with a weighted average grant date fair value of $13.11 during the fiscal year ended March 31, 2013. During the same period 23,000 performance shares were forfeited with a weighted average grant date fair value of $13.04.

As of March 31, 2014, there was no unrecognized compensation cost related to non-vested performance share awards granted under the 2006 Plan.