NOTE 7 – STOCK-BASED COMPENSATION

Stock Option Plans

The Company has a 1994 Stock Option Plan, a 2002 Stock Option Plan, a 2005 Stock Option Plan, a 2008 Stock Option Plan and a 2011 Stock Option Plan for the benefit of certain directors, officers, and key employees. Under these plans, 6,350,000 shares of authorized common stock have been reserved for issuance pursuant to grants approved by the Compensation and Stock Option Committee of the Board of Directors. Stock options granted under these plans have a maximum duration of 10 years and may be subject to certain vesting requirements, which are generally five years. Restricted stock granted under these plans is generally for directors and certain key officers with vesting requirements of up to three years. Stock options and restricted stock granted under these plans are priced at the market value of the Company's common stock on the date of the grant. At December 31, 2011, there were 1,467,988 shares available for grant under the plans.

Stock based compensation is recognized as provided under FASB ASC Topic 718-10 and FASB ASC Topic 505-50. FASB ASC Topic 718-10 requires all share-based payments to employees, including grants of employee stock options, to be recognized as compensation expense over the requisite service period (generally the vesting period) in the financial statements based on their fair values. The impact of forfeitures that may occur prior to vesting is also estimated and considered in the amount recognized. Stock option compensation is recognized as an expense over the unvested portion of all stock option awards granted based on the fair values estimated at grant date in accordance with the provisions of FASB ASC Topic 718-10. The Company has applied the Black-Scholes valuation model in determining the fair value of the stock option awards. Compensation expense is recognized only for those options expected to vest, with forfeitures estimated based on historical experience and future expectations.

The weighted-average fair value at the grant date for options issued during the three and nine months ended December 31, 2011 was $36.15. The weighted-average fair value at the grant date for options issued during the three and nine months ended December 31, 2010 was $23.96. This fair value was estimated at grant date using the weighted-average assumptions listed below.

	Three months ended						Nine months ended
	December 31,						December 31,
	2011			2010			2011			2010

Dividend yield		0	%		0	%		0	%		0	%
Expected voliatility		56.85	%		57.41	%		56.85	%		57.41	%
Average risk-free interest rate		1.12	%		1.55	%		1.12	%		1.55	%
Expected life	6.0 years			6.4 years			6.0 years			6.4 years
Vesting period	5 years			5 years			5 years			5 years

The expected stock price volatility is based on the historical volatility of the Company's stock for a period approximating the expected life. The expected life represents the period of time that options are expected to be outstanding after their grant date. The risk-free rate reflects the interest rate at grant date on zero-coupon U.S. governmental bonds having a remaining life similar to the expected option term.

Option activity for the nine months ended December 31, 2011 was as follows:

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

Options outstanding, beginning of year		1,178,600		$	30.02
Granted		224,550			67.70
Exercised		(268,000	)		31.57
Forfeited		(22,810	)		33.39
Options outstanding, end of period		1,112,340		$	37.18		7.18	$	40,353,080
Options exercisable, end of period		347,230		$	26.31		4.35	$	16,373,662

The aggregate intrinsic value reflected in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price on December 31, 2011 and the exercise price, multiplied by the number of in-the-money options) that would have been received by option holders had all option holders exercised their options as of December 31, 2011. This amount will change as the stock's market price changes. The total intrinsic value of options exercised during the periods ended December 31, 2011 and 2010 was as follows:

	December 31,		December 31,
	2011		2010
Three months ended	$	7,051,893		3,861,220
Nine months ended	$	9,452,314		5,671,238

As of December 31, 2011, total unrecognized stock-based compensation expense related to non-vested stock options amounted to approximately $13.8 million, which is expected to be recognized over a weighted-average period of approximately 4.2 years.

Restricted Stock

On November 7, 2011, the Company granted 15,077 shares of restricted stock (which are equity classified), with a grant date fair value of $67.70 per share, to certain executive officers. One-third of the restricted stock vested immediately and one-third will vest on November 7, 2012 and 2013, respectively. On that same date, the Company granted an additional 24,200 shares of restricted stock (which are equity classified), with a grant date fair value of $67.70 per share, to certain officers. One-third of the restricted stock will vest on November 7, 2012, 2013 and 2014, respectively. On that same date, the Company granted an additional 11,139 shares of restricted stock (which are equity classified), with a grant date fair value of $67.70 per share, to certain executive officers. The 11,139 shares will vest on April 30, 2014 based on the Company's compounded annual EPS growth according to the following schedule:

	Compounded
Vesting	Annual
Percentage	EPS Growth
15% or higher	100%
67%	12% - 14.99%
33%	10% - 11.99%
0%	Below 10%

On April 29, 2011, the Company granted 10,000 shares of restricted stock (which are equity classified) with a grant date fair value of $67.95 per share to its independent directors. All of the shares granted vested immediately.

On November 8, 2010, the Company granted 29,080 shares of restricted stock (which are equity classified), with a grant date fair value of $43.04 per share, to certain officers. One-third of the restricted stock vested immediately and one-third vested on November 8, 2011 and the final third is scheduled to vest on November 8, 2012, respectively. On that same date, the Company granted an additional 15,871 shares of restricted stock (which are equity classified), with a grant date fair value of $43.04 per share, to certain executive officers. The 15,871 shares will vest on April 30, 2013 based on the Company's compounded annual EPS growth according to the following schedule:

	Compounded
Vesting	Annual
Percentage	EPS Growth
100%	15% or higher
67%	12% - 14.99%
33%	10% - 11.99%
0%	Below 10%

On April 30, 2010, the Company granted 10,000 shares of restricted stock (which are equity classified) with a grant date fair value of $35.28 per share to its independent directors. All of the shares granted vested immediately.

On November 9, 2009, the Company granted 41,346 shares of restricted stock (which are equity classified), with a grant date fair value of $26.73 per share, to certain officers. One-third of the restricted stock vested immediately, one-third vested on November 9, 2010 and the final third vested on November 9, 2011. On that same date, the Company granted an additional 23,159 shares of restricted stock (which are equity classified), with a grant date fair value of $26.73 per share, to certain executive officers. The 23,159 shares will vest on April 30, 2012 based on the Company's compounded annual EPS growth according to the following schedule:

	Compounded
Vesting	Annual
Percentage	EPS Growth
100%	15% or higher
67%	12% - 14.99%
33%	10% - 11.99%
0%	Below 10%

On November 10, 2008, the Company granted 50,000 shares of restricted stock (which are equity classified), with a grant date fair value of $16.85 per share, to certain officers. One-third of the restricted stock vested immediately, and one-third vested on November 10, 2009 and 2010, respectively. On that same date, the Company granted an additional 29,100 shares of restricted stock (which are equity classified), with a grant date fair value of $16.85 per share, to certain executive officers. All 29,100 shares vested on November 10, 2011 based on the Company's achievement of compounded annual EPS growth of 15% or higher during the award measurement period.

Compensation expense related to restricted stock is based on the number of shares expected to vest and the fair market value of the common stock on the grant date. The Company recognized $849,000 and $775,000, respectively, of compensation expense for the three months ended December 31, 2011 and 2010 and recognized $2.3 million and $1.8 million, respectively, for the nine months ended December 31, 2011 and 2010 related to restricted stock, which is included as a component of general and administrative expenses in the Company's Consolidated Statements of Operations. All shares are expected to vest.

As of December 31, 2011, there was approximately $3.5 million of unrecognized compensation cost related to unvested restricted stock awards granted, which is expected to be recognized over the next 2.3 years.

A summary of the status of the Company's restricted stock as of December 31, 2011, and changes during the nine months ended December 31, 2011, are presented below:

	Shares			Weighted Average Fair Value at Grant Date

Outstanding at March 31, 2011		59,836		$	22.62
Granted during the period		60,416			67.74
Vested during the period		(67,554	)		34.02
Cancelled during the period		(16,611	)		67.14
Outstanding at December 31, 2011		36,087		$	67.54

Total share-based compensation included as a component of net income during the three months and nine months ended December 31, 2011 and 2010 was as follows:

	Three months ended				Nine months ended
	December 31,				December 31,
	2011		2010		2011		2010
Share-based compensation related to equity classified units:
Share-based compensation related to stock options	$	2,050,346		1,063,397		3,716,308		2,812,981
Share-based compensation related to restricted stock		848,506		774,746		2,296,183		1,756,175

Total share-based compensation related to equity classified awards	$	2,898,852		1,838,143		6,012,491		4,569,156