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Share-Based Payments

12 Months Ended

Mar. 31, 2016

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

9. Share-Based Payments

The Company has share awards outstanding under two 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 2006 Equity Incentive Plan (the “2006 Plan”) the Board of Directors was authorized to grant option awards for up to approximately 1.1 million common shares. On August 13, 2015, the Company’s shareholders approved the Nicholas Financial, Inc. Omnibus Incentive Plan (the “2015 Plan”) for employees and non-employee directors. Under the 2015 Plan, the Board of Directors is authorized to grant total share awards for up to 750,000 common shares. Awards under the 2006 Plan will continue to be governed by the terms of that plan. The 2015 Plan replaced the 2006 Plan; accordingly no additional option awards may be granted under the 2006 Plan. In addition to option awards, the 2015 Plan provides for restricted stock, performance share awards, and other equity based compensation.

Option awards previously granted to employees and directors under the 2006 Plan 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 2015 Plan are essentially the same as those of the 2006 Plan. 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 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:


	2016			2015
Risk-free interest rate		1.58	%		1.68	%
Weighted average expected original term		5 years			5 years
Expected volatility		23	%		23	%
Expected dividend yield		0.00	%		3.65	%

The Company did not grant any options during the year ended March 31, 2014.

A summary of option activity under the Equity Plans as of March 31, 2016, and changes during the year are presented below.


				(Shares in thousands)
Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at March 31, 2015		363		$	9.86
Granted		10		$	12.95		0		0
Exercised		(13	)	$	6.45		0		0
Forfeited		(3	)	$	10.07		0		0

Outstanding at March 31, 2016		357		$	10.07		5.75	$	725

Exercisable at March 31, 2016		198		$	7.75		4.04	$	725

The Company granted approximately 10,000 options with a weighted average fair value of $3.01 during the year ended March 31, 2016. The total intrinsic value of options exercised during the years ended March 31, 2016, 2015 and 2014 was approximately $82,000, $1,829,000, and $699,000 respectively.

During the fiscal year ended March 31, 2016, approximately 13,000 options were exercised at exercise prices ranging from $1.20 to $10.96 per share. During the same period approximately 3,000 options were forfeited at exercise prices ranging from $3.60 to $10.96 per share.

Cash received from options exercised during the fiscal years ended March 31, 2016, 2015 and 2014 totaled approximately $85,000, $389,000, and $329,000, respectively. Related income tax benefits during the same periods totaled approximately $31,000, $700,000, and $267,000, respectively. Such amounts are included in proceeds from exercise of stock options and excess tax benefit on share awards under cash flows from financing activities in the consolidated statements of cash flows. As of March 31, 2016, there was approximately $246,000 of total unrecognized compensation cost related to options granted. That cost is expected to be recognized over a weighted-average period of approximately 2.6 years.

A summary of the status of the Company’s non-vested restricted shares under the Equity Plan as of March 31, 2016, and changes during the year then ended is presented below.


				(Shares in thousands)
Restricted Share Awards	Shares			Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Non-vested at March 31, 2015		89		$	13.56
Granted		38		$	13.27		0		0
Vested		(45	)	$	12.93		0		0
Forfeited		0		$	0		0		0

Non-vested at March 31, 2016		82		$	13.78		1.75	$	879

The Company awarded approximately 38,000 restricted shares during the fiscal year ended March 31, 2016. During the same period no restricted shares were forfeited.

As of March 31, 2016, there was approximately $643,000 of total unrecognized compensation cost related to non-vested restricted share awards granted under the Equity Plans. That cost is expected to be recognized over a weighted-average period of approximately 1.75 years.

The Company did not award any performance shares during the fiscal year ended March 31, 2016 or March 31, 2015. As of March 31, 2016, under the Equity Plans, there were no non-vested performance shares and no unrecognized compensation related to performance shares.

- 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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