Under the Company’s Restated Omnibus Incentive Plan (formerly the Restated 1988 Executive Stock Option Plan) (“the Plan”) as in effect at December 31, 2020, options exercisable for up to 20,615,000 shares of the Company’s common stock may be granted over the life of the Plan to key employees, non-employee directors, and consultants at exercise prices not less than the fair market value of the common stock on the date of grant. Options granted under the Plan are non-statutory stock options and generally vest 25% one year from the date of grant with the remaining 75% vesting ratably each month for the next 36 months. The options granted to employees and the Company’s Board of Directors expire at the end of five years and ten years from the date of grant, respectively. All options granted in the nine months ended December 31, 2020 and 2019 were granted with an exercise price equal to the fair value of the Company’s common stock on the grant date and are non-statutory stock options.

The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model with the assumptions included in the table below. The Company uses historical data, among other factors, to estimate the expected volatility, the expected dividend yield and the expected option life. The Company accounts for forfeitures as they occur, rather than estimating expected forfeitures. The risk-free rate is based on the interest rate paid on a U.S. Treasury issue with a term similar to the estimated life of the option. The following assumptions were used to estimate the fair value of options granted during the three months ended December 31, 2020 and 2019 using the Black-Scholes option-pricing model:

	Three Months Ended
	December 31, 2020		December 31, 2019
Risk-free interest rate	0.33%		1.66%
Expected volatility	34%		31%
Expected dividend yield		0.00%		0.00%
Expected weighted average life of option in years	4.5 years		4.5 years

For the three months ended December 31, 2020 and 2019, the Company recorded share-based compensation expense of $1,251,000 and $1,143,000, respectively. For the nine months ended December 31, 2020 and 2019, the Company recorded share-based compensation expenses of $3,484,000 and $3,566,000, respectively. The table below shows the amounts recognized in the unaudited consolidated financial statements for stock compensation expense for time-based options and performance-based options during the three and nine months ended December 31, 2020 and 2019, respectively.

	Three Months Ended
	December 31, 2020			December 31, 2019
Cost of revenues	$	516,000		$	529,000
General and administrative		735,000			614,000
Total cost of stock-based compensation included in income before income tax provision		1,251,000			1,143,000
Amount of income tax benefit recognized		(231,000	)		(271,000	)
Amount charged against net income	$	1,020,000		$	872,000
Effect on basic earnings per share	$	(0.06	)	$	(0.05	)
Effect on diluted earnings per share	$	(0.06	)	$	(0.05	)

	Nine Months Ended
	December 31, 2020			December 31, 2019
Cost of revenues	$	1,510,000		$	1,531,000
General and administrative		1,974,000			2,035,000
Total cost of stock-based compensation included in income before income tax provision		3,484,000			3,566,000
Amount of income tax benefit recognized		(724,000	)		(797,000	)
Amount charged against net income	$	2,760,000		$	2,769,000
Effect on basic earnings per share	$	(0.15	)	$	(0.15	)
Effect on diluted earnings per share	$	(0.15	)	$	(0.15	)

The following table summarizes information for all stock options for the three and nine months ended December 31, 2020 and 2019:

	Three Months Ended December 31, 2020					Three Months Ended December 31, 2019
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Options outstanding, beginning		975,917		$	57.97		990,064		$	49.84
Options granted		122,750			87.69		144,650			77.93
Options exercised		(62,997	)		44.83		(28,225	)		44.28
Options cancelled/forfeited		(2,234	)		59.31		(6,975	)		48.55
Options outstanding, ending		1,033,436		$	62.30		1,099,514		$	53.66

	Nine Months Ended December 31, 2020					Nine Months Ended December 31, 2019
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Options outstanding, beginning		1,029,103		$	54.87		1,058,411		$	45.17
Options granted		209,575			78.52		242,125			78.43
Options exercised		(187,815	)		40.13		(185,173	)		37.67
Options cancelled/forfeited		(17,427	)		57.37		(15,849	)		52.13
Options outstanding, ending		1,033,436		$	62.30		1,099,514		$	53.66

The following table summarizes the status of stock options outstanding and exercisable at December 31, 2020:

Range of Exercise Price	Number of Outstanding Options		Weighted Average Remaining Contractual Life		Outstanding Options – Weighted Average Exercise Price		Exercisable Options – Number of Exercisable Options		Exercisable Options – Weighted Average Exercise Price
$21.87 to $49.40		287,621		2.26	$	39.58		249,975	$	38.29
$49.41 to $59.32		316,197		2.90		57.32		105,756		57.70
$59.33 to $87.49		278,943		4.32		77.60		39,169		75.48
$87.50 to $88.22		150,675		4.71		87.79		—		—
Total		1,033,436		3.37	$	62.30		394,900	$	47.18

The following table summarizes the status of all outstanding options at December 31, 2020, and changes during the three months then ended:

	Number of Options			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value as of December 31, 2020
Options outstanding at October 1, 2020		975,917		$	57.97
Granted		122,750			87.69
Exercised		(62,997	)		44.83
Cancelled – forfeited		(1,905	)		63.54
Cancelled – expired		(329	)		34.78
Ending outstanding		1,033,436		$	62.30		3.37	$	45,161,613
Ending vested and expected to vest		808,294		$	53.51		3.41	$	22,224,930
Ending exercisable at December 31, 2020		394,900		$	47.18		2.50	$	23,230,004

The weighted-average grant-date fair value of options granted during the three months ended December 31, 2020 and 2019, was $25.20 and $22.23, respectively.

Included in the above-noted stock option grants and stock compensation expense are performance-based stock options that vest only upon the Company’s achievement of certain earnings per share targets on a calendar year basis, as determined by the Company’s Board of Directors. These options were valued in the same manner as the time-based options. However, the Company only recognizes stock compensation expense to the extent that the targets are determined to be probable of being achieved, which triggers the vesting of the performance options. The Company recognized $513,000 and $400,000 of stock compensation expense for the three months ended December 31, 2020 and 2019, respectively, for performance-based stock options. The Company recognized $1,316,000 and $1,413,000 of stock compensation expense for the nine months ended December 31, 2020 and 2019, respectively, for performance-based stock options.