Notes to Consolidated Financial Statements

8. STOCKHOLDERS' EQUITY AND EMPLOYEE/DIRECTOR STOCK OPTIONS

The Company maintains the amended and restated 1992 long-term incentive plan (the "1992 Plan"), the 1998 non-employee directors stock option plan (the "1998 Plan") and the 1999 long-term incentive plan (the "1999 Plan").

Under the terms of the 1992 Plan, 800,000 of the Company's common shares may be granted as stock options or awarded as restricted stock to officers, directors and certain employees of the Company through September 2002. Under the terms of the 1999 plan, 300,000 of the Company's common shares may be granted as stock options or awarded as restricted stock to officers, directors and certain employees of the Company through July 2009. Under both plans, option exercise prices equal the fair market value of the common shares at their grant dates. For grants made prior to May 1999, options expire not later than five years after the date of the grant. Options granted beginning in May 1999 expire not later than 10 years after the date of the grant; options granted to officers and employees, awarded as part of a three-year bonus plan, expire not later than 5 years after the date of the grant. Options granted to directors and to officers and employees with the annual cash bonus vest ratably over three years beginning one year after the date of the grant; options granted to officers and employees awarded as part of a three-year long term bonus plan vest at the end of the three-year plan period. Restricted stock is payable in equivalent number of common shares. The shares are distributable in a single installment and, with respect to officers and employees, restrictions lapse ratably over a three-year period from the date of the award, and with respect to directors, the restrictions lapse after one year.

Under the terms of the 1998 Plan, non-employee directors are entitled to receive matching options for each share of the Company's common stock which they hold at the end of a 60-day period following initial election as a director, but not to exceed 25,000 shares with the strike price of the option being the fair market value of the shares at their grant dates, and thereafter, for each share of the Company's common stock that they purchase on the open market, with the strike price of the option being the purchase price of the share, up to a maximum of 5,000 options in any twelve month period or 15,000 options over a three-year period. Options granted under the 1998 Plan vest on the first anniversary of the grant, provided that, exclusive of the options granted to match shares held at the end of the 60-day period, the optionee may not acquire by exercise of the options more than 5,000 shares in any one year. Options expire not later than five years after the date of the grant.

The Company continues to apply the accounting standards set forth in APB No. 25. However, disclosures are required of pro forma net income and earnings per share as if the Company had adopted the accounting provisions of SFAS No. 123, "Accounting for Stock-Based Compensation". Based on Black-Scholes values, pro forma net income for 2001, 2000 and 1999 would be ($73.3) million, $6.2 million and $13.4 million, respectively; pro forma earnings per common share for 2001, 2000 and 1999 would be ($11.89), $1.00 and $2.11, respectively.

The following table summarizes stock option activity over the past three years under the plan:

Number
of Shares		 Weighted
Average
Exercise
Price
Outstanding at March 31, 1998 373,798 $15.63
Granted 181,156 26.92
Exercised (84,714 ) 13.03
Canceled or expired (32,194 ) 23.81
Outstanding at March 31, 1999 438,046 17.66
Granted 155,715 18.90
Exercised (29,200 ) 14.53
Canceled or expired (75,521 ) 15.47
Outstanding at March 31, 2000 489,040 19.56
Granted 151,737 9.74
Exercised (15,000 ) 11.38
Canceled or expired (83,606 ) 20.19
Outstanding at March 31, 2001 542,171 18.25
Options exercisable at March 31, 1999 197,417 14.74
Options exercisable at March 31, 2000 183,829 19.13
Options exercisable at March 31, 2001 247,119 20.92


In 2001, 2000 and 1999 the Company awarded restricted stock totaling 12,382 shares, 8,177 shares and 5,062 shares, respectively. The weighted-average fair value of this restricted stock was $9.63, $18.60 and $25.33 in 2001, 2000 and 1999, respectively. The expense recorded in 2001, 2000 and 1999 for restricted stock was $133,000, $124,000 and $107,000, respectively.

The weighted-average Black-Scholes value per option granted in 2001, 2000 and 1999 was $3.00, $4.74 and $6.62, respectively. The following weighted-average assumptions were used in the Black-Scholes option pricing model for options granted in 2001, 2000 and 1999:

2001 2000 1999
Dividend yield 0.9 % 1.3 % 1.4 %
Volatility 38.4 % 25.0 % 24.0 %
Risk-free interest rate 6.3 % 5.5 % 5.5 %
Expected term of options
(in years)		 4.0 4.0 4.0


For options outstanding and exercisable at March 31, 2001, the exercise price ranges and average remaining lives were:

Options Outstanding Options Exercisable
Range of Number Outstanding Weighted Average Weighted Average Number Exercisable Weighted Average
Exercise Prices at March 31, 2001 Remaining Life Exercise Price at March 31, 2001 Exercise Price
$ 3-10 119,960 4 $ 7.87 - -
10-15 9,905 4 11.87 - -
15-21 274,015 2 18.57 175,632 $18.47
21-28 138,291 2 27.07 71,487 26.91
542,171 2 $ 18.25 247,119 $20.92


Notes Receivable from Officers - Notes receivable from officers result from the exercise of stock options in exchange for notes. The notes are full recourse promissory notes bearing interest at 5% and are collateralized by the stock issued upon exercise of the stock options. Principal and interest are due in May 2002.