Stock Plans And Stock-Based Compensation

6 Months Ended

Sep. 30, 2013

Notes

Stock Plans And Stock-Based Compensation

3.      STOCK PLANS AND STOCK-BASED COMPENSATION

In July 1998, shareholders of the Company approved the adoption of the 1998 Stock Option Plan (“1998 Plan”). The 1998 Plan was effective October 1998 and expired in October 2008. Accordingly, no further option awards may be granted under the 1998 Plan; however, any awards granted prior to its expiration remain outstanding subject to their terms. 

In July 2003, shareholders of the Company approved the adoption of the 2003 Stock Option Plan (“2003 Plan”). The 2003 Plan was effective July 2003 and expired in July 2013. Accordingly, no further option awards may be granted under the 2003 Plan; however, any awards granted prior to its expiration remain outstanding subject to their terms.

The following table presents information on stock options outstanding for the period shown.

	Six Months Ended September 30, 2013				Six Months Ended September 30, 2012
	Number of Shares			Weighted Average Exercise Price	Number of Shares			Weighted Average Exercise Price
Balance, beginning of period	407,500		$	9.05	440,500		$	8.87
Grants	87,154			2.78	-			-
Options exercised	-			-	-			-
Forfeited	-			-	-			-
Expired	(20,000	)		8.98	(20,000	)		6.76
Balance, end of period	474,654		$	7.91	420,500		$	8.97

The following table presents information on stock options outstanding for the periods shown, less estimated forfeitures.

	Six Months Ended September 30, 2013		Six Months Ended September 30, 2012
Stock options fully vested and expected to vest:
Number		469,896		419,950
Weighted average exercise price	$	7.96	$	8.97
Aggregate intrinsic value (1)	$	3,000	$	-
Weighted average contractual term of options (years)		5.06		4.75
Stock options fully vested and currently exercisable:
Number		385,300		414,900
Weighted average exercise price	$	9.10	$	9.06
Aggregate intrinsic value (1)	$	3,000	$	-
Weighted average contractual term of options (years)		4.04		4.71
(1)  The aggregate intrinsic value of a stock options represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price) that would have been received by the option holders had all option holders exercised.  This amount changes based on changes in the market value of the Company’s common stock.

Stock-based compensation expense related to stock options for the six months ended September 30, 2013 and 2012 was $26,000 and $1,000, respectively. As of September 30, 2013, there was $79,000 of unrecognized compensation expense related to unvested stock options, which will be recognized over the remaining vesting periods of the underlying stock options through December 2014.

The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes based stock option valuation model. The fair value of all awards is amortized on a straight-line basis over the requisite service periods, which are generally the vesting periods. The expected life of options granted represents the period of time that they are expected to be outstanding. The expected life is determined based on historical experience with similar options, giving consideration to the contractual terms and vesting schedules. Expected volatility was estimated at the date of grant based on the historical volatility of the Company’s common stock. Expected dividends are based on dividend trends and the market value of the Company’s common stock at the time of grant. The risk-free interest rate for periods within the contractual life of the options is based on the U.S. Treasury yield curve in effect at the time of the grant. During the six months ended September 30, 2013, the Company granted 87,154 stock options. The weighted average fair value of stock options granted during the six months ended September 30, 2013 was $1.18.

The Black-Scholes model uses the assumptions listed in the following table:

	Risk Free Interest Rate	Expected Life (years)	Expected Volatility	Expected Dividends
Fiscal 2014	1.95 %	6.25	51.87 %	2.04 %