Stock-Based Compensation

6 Months Ended

Sep. 30, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 4: Stock-Based Compensation

Stock-based compensation consists of stock options, restricted stock granted for retention and performance and discretionary unrestricted stock.  Compensation cost is calculated based on the fair value of the instrument at the time of grant, and is recognized as expense over the vesting period of the stock-based instrument.  Modine recognized stock-based compensation cost of $1,738 and $944 for the three months ended September 30, 2011 and 2010, respectively.  Modine recognized stock-based compensation costs of $2,578 and $2,516 for the six months ended September 30, 2011 and 2010, respectively.  The performance component of awards granted under the long-term incentive plan during the second quarter of fiscal 2012 is based on a target return on average capital employed (ROACE) and a target improvement in economic profit at the end of the three year performance period.  The Company currently considers the attainment of these performance targets to be probable.  ROACE is defined as net earnings, adding back after-tax interest expense and adjusted to exclude unusual, non-recurring or extraordinary non-cash charges and cash restructuring and repositioning charges in excess of $4,000; divided by the average total debt plus shareholders' equity.  Economic profit is defined as ROACE minus a fixed weighted average cost of capital, multiplied by total debt plus shareholders' equity.

The following tables present, by type, the fair market value of stock-based compensation awards granted during the three and six months ended September 30, 2011 and 2010:

	Three months ended September 30,
	2011				2010
Type of award	Shares		Fair Value Per Award		Shares		Fair Value Per Award
Common stock options		112.9	$	10.45		-	$	-
Unrestricted common stock		27.9	$	14.93		40.8	$	8.91
Restricted common stock - retention		63.2	$	14.93		-	$	-
Restricted common stock - performance based		189.5	$	14.93		-	$	-

	Six months ended September 30,
	2011				2010
Type of award	Shares		Fair Value Per Award		Shares		Fair Value Per Award
Common stock options		112.9	$	10.45		303.4	$	5.96
Unrestricted common stock		27.9	$	14.93		60.3	$	8.43
Restricted common stock - retention		63.2	$	14.93		97.2	$	9.26
Restricted common stock - performance based		189.5	$	14.93		291.6	$	9.26

The accompanying table sets forth the assumptions used in determining the fair value for the options:

	Six months ended September 30,
	2011			2010
Expected life of awards in years		6.3			6.3
Risk-free interest rate		1.93	%		2.36	%
Expected volatility of the Company's stock		79.56	%		77.99	%
Expected dividend yield on the Company's stock		0.00	%		0.00	%
Expected forfeiture rate		2.50	%		2.50	%

As of September 30, 2011, the total remaining unrecognized compensation cost related to the non-vested stock-based compensation awards, which will be amortized over the weighted average remaining service periods, is as follows:

Type of award	Unrecognized Compenstion Costs		Weighted Average Remaining Service Period in Years
Common stock options	$	1,674		2.1
Restricted common stock - retention		1,666		3.0
Restricted common stock - performance		3,990		2.1
Total	$	7,330		2.4