Note 7: Share-Based Payments
We recorded share-based compensation expense
for the three months ended December 31, 2012 and 2011 of
$1,526 and $1,089, respectively, with related tax benefits of
$549 and $392, respectively. We also recorded share-based
compensation expense for the six months ended December 31,
2012 and 2011 of $2,756 and $2,318, respectively, with
related tax benefits of $992 and $835, respectively.
Stock Options
We use the Black-Scholes option-pricing model to calculate
the fair value of stock option awards. The key assumptions
for this valuation method include the expected term of the
option, stock price volatility, risk-free interest rate,
dividend yield and exercise price. Many of these assumptions
are judgmental and highly sensitive in the determination of
compensation expense. Under the assumptions indicated below,
the weighted-average fair value of stock option grants for
the three months ended December 31, 2011 was $9.49. There
were no stock option grants for the three months ended
December 31, 2012. The weighted-average fair value of stock
option grants for the six months ended December 31, 2012 and
2011 was $11.49 and $7.11, respectively. During the three
months ended December 31, 2011, we issued stock options for
an aggregate of 2,000 shares of common stock. For the three
months ended December 31, 2012, no stock options were issued.
During the six months ended December 31, 2012 and 2011, we
issued stock options for an aggregate of 122,934 and 223,062
shares of common stock, respectively.
The table below indicates the key assumptions
used in the option valuation calculations for options granted
in the periods presented:
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Three Months Ended December 31,
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Six Months Ended December 31,
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2012
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2011
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2012
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2011
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Term
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n/a
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6.6 Years
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7.3 Years
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6.6 Years
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Volatility
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n/a
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59.5
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%
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59.2
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%
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59.5
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%
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Dividend yield
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n/a
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—
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—
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—
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Risk-free interest rate
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n/a
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1.5
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%
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1.2
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%
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1.5
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%
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Restricted Stock
Our share-based compensation expense also includes the
effects of the issuance of restricted stock units. The
compensation expense related to restricted stock awards is
determined based on the market price of our stock at the date
of grant applied to the total number of shares that are
anticipated to fully vest, which is then amortized over the
expected term. During the three months ended December 31,
2012 and 2011, an aggregate of 30,000 and 30,909 shares,
respectively, of restricted stock units were issued at a
weighted average stock price at date of grant of $14.52 and
$16.91, respectively. During the six months ended December
31, 2012 and 2011, an aggregate of 162,901 and 146,412
shares, respectively, of restricted stock units were issued
at a weighted average stock price at date of grant of $18.49
and $13.24, respectively. Generally, the restrictions on the
restricted stock units granted to employees prior to January
1, 2011 lapse at a rate of 50% after three years and the
remaining 50% after the fourth year. Restrictions on
restricted stock units granted to employees after January 1,
2011 lapse at a rate of 25% each year.
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