18. Stock Options

In January 1994, the Company adopted the 1994 Stock Option Plan (the "1994 Plan"), under which it was authorized to issue non-qualified stock options and incentive stock options to key employees, directors and consultants. After a number of shareholder-approved increases to this plan, at March 31, 2002 the aggregate number of stock options approved was 960,000 shares of the Company's common stock. The term and vesting period of options granted is determined by a committee of the Board of Directors with a term not to exceed ten years. At the Company's Annual Meeting of Shareholders held on November 8, 2002, the 1994 Plan was amended to increase the authorized number of shares issued to 1,155,000. As of March 31, 2013 and 2012, options to purchase 95,750 and 223,750 shares of common stock, respectively, were outstanding under the 1994 Plan and no options were available for grant.

At the Company's Annual Meeting of Shareholders held on December 17, 2003, the shareholders approved the Company's 2003 Long-Term Incentive Plan ("Incentive Plan") which had been adopted by the Company's Board of Directors on October 31, 2003. Under the Incentive Plan, a total of 1,200,000 shares of the Company's common stock were reserved for grants of Incentive Awards and all of the Company's employees are eligible to participate. The 2003 Incentive Plan will terminate on October 31, 2013, unless terminated earlier by the Company's Board of Directors. As of March 31, 2013 and 2012, options to purchase 1,035,534 shares of common stock were outstanding under the Incentive Plan. As of March 31, 2013 and 2012 no options were available for grant. In January 2011, this Incentive Plan was replaced and the Company will not make any further grants of awards under this plan.

In November 2004, the Company's shareholders approved the 2004 Non-Employee Director Stock Option Plan (the "2004 Plan") which provides for the granting of options to non-employee directors. At the Company's Annual Meeting of Shareholders held on February 25, 2010, the Company's shareholders approved an amendment to the 2004 Plan that increased the number of shares of common stock reserved for grant under the 2004 Plan from 175,000 to 275,000. As of March 31, 2013 and 2012, options to purchase 218,000 and 203,000 shares of common stock, respectively, were issued, and 57,000 and 72,000 shares of common stock were available for grant.

In January 2011, the Company's shareholders approved the 2010 Incentive Award Plan (the" 2010 Plan") which replaced the 2003 Long-term Incentive Plan. At the Company's Annual Meeting of Shareholders held on March 28, 2013, the Company's shareholders approved an amendment to the 2010 Plan that increased the number of shares of common stock reserved for grant under the 2010 Plan from 750,000 to 1,750,000. Under the 2010 Plan, shares of the Company's common stock were reserved for grants of incentive awards and all of the Company's employees are eligible to participate. As of March 31, 2013, options to purchase 620,800 shares of common stock were issued and 1,078,033 shares of common stock were available for grant. No awards were issued under the 2010 Plan as of March 31, 2012.

The shares of common stock issued upon exercise of a previously granted stock option are considered new issuances from shares reserved for issuance upon adoption of the various plans. The Company requires that the option holders provide a written notice of exercise to the stock plan administrator and payment for the shares prior to issuance of the shares.

A summary of stock option transactions follows:

	Number of			Weighted Average
	Shares			Exercise Price

Outstanding at March 31, 2010		1,628,334		$	8.45
Granted		18,000		$	9.61
Exercised		(52,250	)	$	3.83
Cancelled		(3,000	)	$	11.00
Outstanding at March 31, 2011		1,591,084		$	8.61
Granted		15,000		$	10.04
Exercised		(95,550	)	$	3.36
Cancelled		(48,250	)	$	3.15
Outstanding at March 31, 2012		1,462,284		$	9.15
Granted		635,800		$	6.47
Exercised		(128,000	)	$	2.28
Cancelled		-		$	-
Outstanding at March 31, 2013		1,970,084		$	8.73

Based on the market value of the Company's common stock at March 31, 2013, 2012 and 2011, the pre-tax intrinsic value of options exercised was $493,000, $598,000 and $530,000 respectively.

The followings table summarizes information about the options outstanding at March 31, 2013:

		Options Outstanding								Options Exercisable
						Weighted
				Weighted		Average						Weighted
				Average		Remaining		Aggregate				Average		Aggregate
Range of				Exercise		Life		Intrinsic				Exercise		Intrinsic
Exercise price		Shares		Price		In Years		Value		Shares		Price		Value
$	1.800 to $6.345		178,750	$	5.82		3.00	$	55,412		176,750	$	5.84	$	51,258
$	6.460 to $7.450		716,800		6.57		8.99		-		302,399		6.71		-
$	8.700 to $9.900		300,200		9.12		1.35		-		298,200		9.11		-
$	10.010 to $11.900		359,334		10.21		2.82		-		359,334		10.21		-
$	12.000 to $15.060		415,000	$	12.14		3.53		-		413,000	$	12.13		-

			1,970,084					$	55,412		1,549,683			$	51,258

The aggregate intrinsic values in the above table represent the pre-tax value of all in-the-money options if all such options had been exercised on March 31, 2013 based on the Company's closing stock price of $6.13 as of that date.

Options to purchase 1,549,683, 1,447,284 and 1,576,084 shares of common stock were exercisable as of March 31, 2013, 2012 and 2011, respectively. The weighted average exercise price of options exercisable was $9.33, $9.14 and $8.61 as of March 31, 2013, 2012 and 2011, respectively.

A summary of changes in the status of non-vested stock options during the fiscal year ended March 31, 2013 is presented below.

	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested at March 31, 2012		15,000		$	4.18
Granted		635,800		$	2.92
Vested		(230,399	)	$	2.98
Non-vested at March 31, 2013		420,401		$	2.93

Effective April 1, 2006, the Company began using the modified prospective application method of transition for all its stock-based compensation plans. The Company did not modify the terms of any previously granted options in anticipation of the adoption of this guidance. At March 31, 2013, there was $1,059,000 of total unrecognized compensation expense from stock-based compensation granted under the plans, which is related to non-vested shares. The compensation expense is expected to be recognized over a weighted average vesting period of 2.1 years.