Stock-Based Compensation

9 Months Ended

Dec. 31, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

NOTE 3. Stock-Based Compensation

The Company records stock-based compensation using a fair-value method in its condensed consolidated financial statements. Currently, the Company’s stock-based compensation consists of restricted stock awards and stock options.

Net income for the three and nine month periods ended December 31, 2011, includes stock-based compensation expense of $121 net of tax, or $0.01 per diluted share, and $311 net of tax, or $0.03 per diluted share, respectively. Net income for the three and nine month periods ended December 31, 2010, includes stock-based compensation expense of $75 net of tax, or $0.01 per diluted share, and $188 net of tax, or $0.02 per diluted share, respectively. Stock based compensation expense is included in selling, general and administrative expenses.

The Company maintains the Amended and Restated 1992 Long-Term Incentive Plan (the “1992 Plan”), the 1999 Long-Term Incentive Plan (the “1999 Plan”), the 2004 Long-Term Incentive Plan (the “2004 Plan”), the 2006 Long-Term Incentive Plan (the “2006 Plan”), and the 2012 Long-Term Incentive Plan (the “2012 Plan”).

Under the terms of the 2012 Plan, 750,000 shares of the Company’s common stock may be granted as stock options or awarded as restricted stock to officers, non-employee directors, certain employees, and other key individuals of the Company through October 2022. Under the terms of the 2006 Plan, 500,000 shares of the Company’s common stock may be granted as stock options or awarded as restricted stock to officers, non-employee directors, and certain employees of the Company through July 2016. Under the terms of the 2004 Plan, 200,000 shares of the Company’s common stock may be granted as stock options or awarded as restricted stock to officers, non-employee directors, and certain employees of the Company through September 2014. The 1999 Plan expired in July 2009, and no further grants or awards may be made under this plan. Under the 1999 Plan, there remain outstanding unexercised options granted in Fiscal years 2004, 2006, 2007 and 2008. The 1992 Plan expired in September 2002, and no further grants or awards may be made under this plan. There remain outstanding unexercised options granted in Fiscal 2002 under the 1992 Plan.

Under each of the 1992, 1999, 2004, 2006, and 2012 Plans, option exercise prices equal the fair market value of the common shares at the respective grant dates. Prior to May 1999, options granted to officers and employees and all options granted to non-employee directors expired if not exercised on or before five years after the date of the grant. Beginning in May 1999, options granted to officers and employees expire no later than 10 years after the date of the grant. Options granted to directors, officers, and employees vest ratably over three years beginning one year after the date of the grant. In certain circumstances, including a change of control of the Company as defined in the various Plans, option vesting may be accelerated.

The Black-Scholes weighted-average value per option granted in Fiscal 2012 was $2.75, $2.58, $2.72, $2.81 and $2.13. In Fiscal 2011, the Black-Scholes weighted-average values per option granted were $2.21 and $2.41. The Black-Scholes option pricing model uses dividend yield, volatility, risk-free rate, expected term, and forfeiture assumptions to value options granted in Fiscal 2012 and Fiscal 2011. Expected volatilities are based on historical volatility of the Company’s common stock and other factors. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The Company uses historical data to estimate the expected option term. The Company assumed no forfeitures because of the limited number of employees at the executive and senior management levels who receive stock options, past employment history, and current stock price projections. The Company uses the following assumptions to estimate the fair value of option grants.

	2012 $2.75 value per option			2012 $2.58 value per option			2012 $2.72 value per option			2012 $2.81 value per option			2012 $2.13 value per option			2011 $2.21 value per option			2011 $2.41 value per option
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Volatility		25.6	%		25.8	%		25.8	%		25.4	%		25.3	%		25.7	%		30.2	%
Risk-free interest rate		1.5	%		1.6	%		1.6	%		1.9	%		1.9	%		2.1	%		3.2	%
Expected term of options (in years)		7.0			7.0			7.0			7.0			7.0			7.0			7.0

The following table summarizes stock option activity under all plans and other grants authorized by the Board of Directors.

	Number of Shares			Aggregate Intrinsic Value (in thousands)		Approximate Remaining Contractual Term (Years)		Weighted- Average Exercise Price
Outstanding at March 31, 2011		674,911		$	934		6	$	8.03
Granted		184,000			—		—		8.64
Exercised		(37,500	)		78		—		7.36
Canceled or expired		(10,334	)		—		—		8.95
Outstanding at December 31, 2011		811,077			724		7		8.19
Options exercisable at December 31, 2011		496,078			478		5		8.49
Unvested options expected to become exercisable after December 31, 2011		314,999			246		9		7.73
Shares available for future option grants at December 31, 2011		620,447

There were 184,000 options granted during the first nine months of Fiscal 2012 with a weighted average grant date fair value equal to $8.64.

Cash received from stock option exercises during the first nine months of Fiscal 2012 was approximately $194. In lieu of a cash payment for stock option exercises, the Company received 9,592 shares of common stock, which were retired into treasury, valued at the price of the common stock at the transaction date. There was no tax benefit generated to the Company from options granted prior to April 1, 2006 and exercised during the first nine months of fiscal 2012.

During the first nine months of Fiscal 2012 and Fiscal 2011, stock option compensation expense recorded in selling, general and administrative expenses was $237 and $193, respectively, before taxes of $99 and $81, respectively. As of December 31, 2011, there was $678 of unrecognized compensation cost related to stock options granted-but-not-yet-vested that are expected to become exercisable. This cost is expected to be recognized over a weighted-average period of approximately two years.

Except as otherwise authorized by the Board of Directors, it is the general policy of the Company that the stock underlying the option grants consists of authorized and unissued shares available for distribution under the applicable Plan. Under the 1992, 1999, 2004, 2006 and 2012 Plans, the Incentive and Compensation Committee of the Board of Directors (consisting solely of independent Directors) may at any time offer to repurchase a stock option that is exercisable and has not expired.

A summary of restricted stock award activity under all plans follows.

	Number of Shares			Weighted – Average Grant Date Fair Value
Non-vested at March 31, 2011		33,752		$	6.95
Granted		33,195			9.74
Vested		(44,874	)		8.19
Cancelled		—			—
Non-vested at December 31, 2011		22,073			8.62

Restricted stock awards are utilized both for director compensation and awards to officers and employees, and are distributed in a single grant of shares which are subject to forfeiture prior to vesting and have voting and dividend rights from the date of distribution. Other than the restricted stock granted in Fiscal 2012, outstanding restricted stock awards to officers and employees have forfeiture and transfer restrictions that lapse ratably over three years beginning one year after the date of the award. Restricted stock awards granted to officers and employees in Fiscal 2012 contain forfeiture and transfer restrictions that lapse after six months.

Other than the restricted stock granted in Fiscal 2011, outstanding restricted stock awards granted to non-employee directors contain forfeiture provisions that lapse after one year and transfer restrictions that lapse six months after the person ceases to be a director. In certain circumstances, including a change of control of the Company as defined in the various Plans, forfeiture lapses on restricted stock may be accelerated.

The fair value of restricted stock awards is based on the market price of the stock at the grant date, and compensation cost is expensed on a straight-line basis over the requisite service period as stated above. The Company expects no forfeitures during the vesting period with respect to unvested restricted stock awards granted. During the first nine months of Fiscal 2012 and Fiscal 2011, compensation expense related to restricted stock awards recorded in selling, general and administrative expenses was $299 and $132, respectively, before taxes of $125 and $56, respectively. As of December 31, 2011 there was approximately $143 of unrecognized compensation cost related to non-vested restricted stock awards, which is expected to be recognized over a period of less than one year.