Note I - Stock Based Compensation

6 Months Ended

Oct. 31, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

I – Stock Based Compensation

The Company has stock based compensation plans available to grant non-qualified stock options, incentive stock options and restricted stock to employees, directors and certain advisors of the Company.  The stock based compensation plans currently being utilized are the 2007 Stock Option Plan (“2007 Plan”) and the Stock Incentive Plan (“Incentive Plan”).    The Company recorded total stock based compensation expense for all plans of $1.2 million ($747,000 after tax effects) and $1.6 million ($1.0 million after tax effects) for the six months ended October 31, 2011 and 2010, respectively.  Tax benefits were recognized for these costs at the Company’s overall effective tax rate.

Stock Options

The Company has options outstanding under two stock option plans approved by the shareholders, the 1997 Stock Option Plan (“1997 Plan”) and the 2007 Plan. While previously granted options remain outstanding, no additional option grants may be made under the 1997 Plan.  The shareholders of the Company approved an amendment to the Company’s 2007 Plan on October 13, 2010. The amendment increased from 1,000,000 to 1,500,000 the number of options to purchase our common stock that may be issued under the 2007 Plan.  The 2007 Plan provides for the grant of options to purchase shares of the Company’s common stock to employees, directors and certain advisors of the Company at a price not less than the fair market value of the stock on the date of grant and for periods not to exceed ten years. Options granted under the Company’s stock option plans expire in the calendar years 2012 through 2021.

	1997 Plan	2007 Plan
Minimum exercise price as a percentage of fair market value at date of grant	100%	100%
Last expiration date for outstanding options	July 2, 2017	June 13, 2021
Shares available for grant at October 31, 2011	-	457,500

The fair value of options granted is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions in the table below.

	October 31, 2011	October 31, 2010
Expected term (years)	5.0	5.0
Risk-free interest rate	1.77%	1.80%
Volatility	50%	50%
Dividend yield	—	—

The expected term of the options is based on evaluations of historical and expected future employee exercise behavior.  The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date.  Volatility is based on historical volatility of the Company’s common stock.  The Company has not historically issued any dividends and does not expect to do so in the foreseeable future.

The grant-date fair value of options granted during the six months ended October 31, 2011 and 2010 was $579,000 and $244,000, respectively. The options were granted at fair market value on date of grant.

Stock option compensation expense on a pre-tax basis was $1.1 million ($685,000 after tax effects) and $1.5 million ($945,000 after tax effects) for the six months ended October 31, 2011 and 2010, respectively.

The aggregate intrinsic value of outstanding options at October 31, 2011 and 2010 was $15.2 million and $8.3 million.

As of October 31, 2011, the Company had $2.7 million of total unrecognized compensation cost related to unvested options.  These unvested outstanding options have a weighted-average remaining vesting period of 1.52 years.

The Company received cash from options exercised during the first six months of fiscal 2012 of $513,000.  The impact of these cash receipts is included in financing activities in the accompanying Consolidated Statements of Cash Flows.  The intrinsic value for options exercised was $935,000.  There were no options exercised during the first six months of fiscal 2011.

Stock Incentive Plan

The shareholders of the Company approved an amendment to the Company’s Stock Incentive Plan on October 14, 2009. The amendment increased from 150,000 to 350,000 the number of shares of common stock that may be issued under the Stock Incentive Plan.  For shares issued under the Stock Incentive Plan, the associated compensation expense is generally recognized equally over the vesting periods established at the award date and is subject to the employee’s continued employment by the Company.  

There were no restricted shares granted during the first six months of fiscal 2012 or 2011.  A total of 187,027 shares remained available for award at October 31, 2011.The following is a summary of the activity in the Company’s Stock Incentive Plan during the quarter ended October 31, 2011:

	Number		Weighted Average
	of		Grant Date
	Shares		Fair Value
Unvested shares at April 30, 2011		29,000	$	22.79
Shares granted		-		-
Shares vested		-		-
Unvested shares at October 31, 2011		29,000	$	22.79

The Company recorded a compensation cost of $68,000 ($42,000 after tax effects) and $94,000 ($59,000 after tax effects) related to the Stock Incentive Plan during the six months ended October 31, 2011 and 2010, respectively.

As of October 31, 2011, the Company has $386,000 of total unrecognized compensation cost related to unvested awards granted under the Stock Incentive Plan, which the Company expects to recognize over a weighted-average remaining period of 2.88 years.

There were no modifications to any of the Company’s outstanding share-based payment awards during fiscal 2011 or during the first six months of fiscal 2012.