Stock Options and Restricted Stock

12 Months Ended

Mar. 31, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Stock Options and Restricted Stock

(8)          Stock Options and Restricted Stock

The PetMed Express, Inc. 1998 Stock Option Plan (the “Plan”), which expired on July 31, 2008, provided for the issuance of qualified options to officers and key employees, and nonqualified options to directors, consultants, and other service providers, to purchase the Company’s common stock.  The Company had reserved 5.0 million shares of common stock for issuance under the Plan.  The exercise prices of options issued under the Plan must be equal to or greater than the market price of the Company’s common stock as of the date of issuance.  Options generally vest ratably over a three-year period commencing on the first anniversary of the grant with respect to options granted to employees/directors under the Plan.  The Company had no options outstanding at March 31, 2012 and 2011.  No options have been issued since May 2005.  Cash received from stock options exercised for the fiscal years ended March 31, 2012, 2011, and 2010 was approximately $0, $340,000 and $735,000, respectively.  The income tax benefits from stock options exercised totaled approximately $0, $0, and $299,000, for the fiscal years ended March 31, 2012, 2011, and 2010, respectively.  At March 31, 2012 and 2011, there were no exercisable stock options.  As of March 31, 2012 and 2011 the Company had no non-vested stock options.  As of March 31, 2012 and 2011, there was no unrecognized compensation expense, aggregate intrinsic value, or weighted average remaining term, related to vested stock option awards.

On July 28, 2006, the Company received shareholder approval for the adoption of the 2006 Employee Equity Compensation Restricted Stock Plan (the “Employee Plan”) and the 2006 Outside Director Equity Compensation Restricted Stock Plan (the “Director Plan”).  The purpose of the plans is to promote the interests of the Company by securing and retaining both employees and outside directors.  The Company has reserved 1.0 million shares of common stock for issuance under the Employee Plan, and 200,000 shares of common stock for issuance under the Director Plan.  The value of the restricted stock is determined based on the market value of the stock at the issuance date.  The restriction period or forfeiture period is determined by the Company’s Board and is to be no less than 1 year and no more than ten years.  The Company had 542,377 restricted common shares issued under the Employee Plan and 152,000 restricted common shares issued under the Director Plan at March 31, 2012, all shares of which were issued subject to a restriction or forfeiture period which will lapse ratably on the first, second, and third anniversaries of the date of grant, and the fair value of which is being amortized over the three-year restriction period.  For each of the years ended March 31, 2012 and 2011, the Company recognized $2.2 million of compensation expense related to the Employee and Director Plans.

A summary of the Company’s non-vested restricted stock as of March 31, 2012 is as follows:

	Employee Plan Number of Shares (In thousands)			Director Plan Number of Shares (In thousands)			Total Plans Number of Shares (In thousands)
Non-vested restricted stock outstanding at March 31, 2011		196			54			250
Restricted stock granted		61			30			91
Restricted stock vested		(96	)		(26	)		(122	)
Restricted stock forfeited or expired		-			-			-
Non-vested Restricted stock outstanding at March 31, 2012		161			58			219

At March 31, 2012 and 2011, there were 218,757 and 249,755 non-vested restricted stock shares outstanding, respectively. During the fiscal years ended March 31, 2012 and 2011, the Company issued, net of forfeitures, 91,150 and 86,584 restricted shares, respectively.  At March 31, 2012 and 2011, there were $2.5 million and $3.7 million of unrecognized compensation cost related to the non-vested restricted stock awards, respectively, which is expected to be recognized over the remaining weighted average vesting period of 1.6 years for both fiscal 2012 and 2011.