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STOCK BASED COMPENSATION

The Company measures compensation costs related to share-based transactions at the grant date, based on the fair value of the award, and recognizes them as expense over the requisite service period.

For the year ended March 31, 2012, the Company recorded pre-tax compensation expense for stock-based incentive awards of $1,062 which increased selling, general and administrative expenses by $707 and cost of revenues by $355 and had an associated tax benefit of $393. The impact on basic and diluted net income per share for the year ended March 31, 2012 was $0.05.

For the year ended March 31, 2011, the Company recorded pre-tax compensation expense for stock-based incentive awards of $2,345 which increased selling, general and administrative expenses by $2,144 and cost of revenues by $201 and had an associated tax benefit of $656. The impact on basic and diluted net income per share for the year ended March 31, 2011 was $0.13.

For the year ended March 31, 2010, the Company recorded pre-tax compensation expense for stock-based incentive awards of $2,253 which increased selling, general and administrative expenses by $2,104 and cost of revenues by $149 and had an associated tax benefit of $518. The impact on basic and diluted net income per share for the year ended March 31, 2010 was $0.14.

The Company calculates the value of each employee stock option, estimated on the grant date, using the Black-Scholes model and the following weighted average assumptions:


	2012			2011			2010
Expected life (years)		5			5			5
Risk-free interest rate		1.8	%		2.3	%		2.1	%
Expected volatility		56.7	%		52.2	%		49.3	%
Dividend yield		0.9	%		2.0	%		1.9	%

The Company estimated volatility based on the historical volatility of its common stock. The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the options in effect at the time of the grant. The dividend yield assumption is based on the Company's history and expectation of dividend payouts. The expected life of the options represents the weighted-average period the stock options are expected to remain outstanding and is based on review of historical exercise behavior of option grants with similar vesting periods. The Company uses an estimated forfeiture rate based on historical data. The forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Stock

Options

As of March 31, 2012, the Company reserved 238 shares for future issuance to key employees and directors under the Company's stock option plans. Stock options granted under the plans enable the holder to purchase common stock at an exercise price not less than the market value on the date of grant and will expire not more than ten years after the date of grant. The applicable options vest ratably over a three to five year period. A summary of the changes in the options outstanding for years ended March 31, 2012, 2011 and 2010 is shown below:


	Options			Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Aggregate Intrinsic Value
Outstanding at March 31, 2009		718		$	16.67
Granted		170		$	12.23
Exercised		(7	)	$	5.59			$	18
Forfeited		(34	)	$	21.31

Outstanding at March 31, 2010		847		$	15.68
Granted		157		$	12.37
Exercised		(49	)	$	7.02			$	159
Forfeited		(60	)	$	18.60

Outstanding at March 31, 2011		895		$	15.37
Granted		170		$	22.02
Exercised		(97	)	$	12.84			$	492
Forfeited		(10	)	$	13.43

Outstanding at March 31, 2012		958		$	16.83		5.9	$	6,445

Exercisable at March 31, 2012		537		$	16.38		4.1	$	3,308

Exercisable at March 31, 2011		536		$	15.73		4.5	$	3,178

As of March 31, 2012, the total compensation cost related to nonvested options not yet recognized and the weighted-average period over which it is expected to be recognized is $2,128 and 1.8 years, respectively.

The weighted average grant-date fair value of options granted during the year ended March 31, 2012, 2011 and 2010 was $10.23, $4.87 and $5.47, respectively. Cash received from options exercised during the year ended March 31, 2012 was $1,249, with a tax benefit of $316.

Restricted Stock

The Company's stock option plans also provide for the issuance of restricted stock to certain employees and directors. The Company has reserved 229 restricted shares of common stock for future issuance to non-employee directors under the 2006 Director Equity Compensation Plan (the 2006 Director Plan). Restricted stock grants under these plans typically vest over a three to five year period. The cost of these awards is determined using the fair value of the Company's common stock on the date of the grant and is recognized on a straight-line basis over the period the restrictions lapse. A summary of the changes in restricted shares for the year ended March 31, 2012, 2011 and 2010 is shown below:


	Restricted Shares			Weighted Average Grant Date Fair Value
Non-vested restricted shares at March 31, 2009		149		$	24.84
Granted		17		$	14.48
Vested		(26	)	$	23.43

Non-vested restricted shares at March 31, 2010		140		$	23.83
Granted		16		$	15.50
Vested		(122	)	$	24.73

Non-vested restricted shares at March 31, 2011		34		$	16.49
Granted		12		$	21.29
Vested		(16	)	$	17.39

Non-vested restricted shares at March 31, 2012		30		$	17.92

As of March 31, 2012, the total compensation cost related to nonvested restricted shares not yet recognized and the weighted-average period over which it is expected to be recognized was $375 and 1.10 years. During fiscal 2011, the Company accelerated the vesting of 100 restricted shares for certain executives who left the Company. The Company recorded a pre-tax charge of $1,065 related to the accelerated vesting of these restricted shares.