Annual report pursuant to Section 13 and 15(d)

Stock-Based Compensation (Tables)

Stock-Based Compensation (Tables)

12 Months Ended

Mar. 31, 2016

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Stock-Based Compensation

Total stock-based compensation is reflected in the Consolidated Statements of Operations as follows:



	Fiscal Year Ended March 31,
(in thousands)	2016			2015		2014
Cost (benefit) of revenue	$	(5	)	$	89	$	53
Sales and marketing	221			170		337
Research and development	310			452		338
General and administrative	739			1,894		1,143
Stock-based compensation	1,265			2,605		1,871
Income tax benefit	—			—		—
Total stock-based compensation, after taxes	$	1,265		$	2,605	$	1,871

Stock option activity

Option activity for the fiscal year ended March 31, 2016 is as follows:



	Shares		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value⁽¹⁾ (in thousands)
Outstanding on March 31, 2015	1,170,515		$	2.20
Granted	1,567,500		$	1.21
Exercised	—		$	—
Forfeited	(302,500	)	$	1.52
Expired	(588,015	)	$	2.37
Outstanding on March 31, 2016	1,847,500		$	1.42	5.6	$	9
Exercisable on March 31, 2016	244,667		$	2.18	2.8	$	0

(1) The intrinsic value for the stock options is calculated based on the difference between the exercise price of the underlying awards and the Westell Technologies’ closing stock price as of the reporting date.

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The fair value of each option was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:



	Fiscal Year Ended March 31,
	2016			2015			2014
Input assumptions:
Expected volatility	48		%	45		%	42		%
Risk-free interest rate	1.3		%	1.2		%	1.1		%
Expected life	4 years			4 years			5 years
Expected dividend yield	0		%	0		%	0		%
Output weighted-average grant date fair value	$	0.46		$	0.63		$	0.91

Restricted stock activity

The following table sets forth restricted stock activity for the fiscal year ended March 31, 2016:



	Shares		Weighted-Average Grant Date Fair Value
Non-vested as of March 31, 2015	170,000		$	2.98
Granted	110,000		$	1.18
Vested	(62,500	)	$	2.94
Forfeited	—		$	—
Non-vested as of March 31, 2016	217,500		$	2.07

The Company recorded $0.2 million, $0.5 million, and $0.5 million of expense in the fiscal years ended March 31, 2016, 2015 and 2014, respectively, related to restricted stock. As of March 31, 2016, there was $0.1 million of pre-tax unrecognized compensation expense, including estimated forfeitures, related to non-vested restricted stock, which is expected to be recognized over a weighted-average period of 0.5 years. The total intrinsic fair value of shares vested during the fiscal years ended March 31, 2016, 2015, and 2014, was $0.1 million, $1.2 million, and $0.7 million, respectively.

Restricted Stock Units (RSUs)

In fiscal years 2016, 2015 and 2014, there were 1,502,500, 780,500 and 1,182,000 shares, respectively, of RSUs awarded to certain key employees. These awards convert into shares of Class A Common Stock on a one-for-one basis upon vesting. The Company recognizes compensation expense on a straight-line basis over the vesting for the award based on the market value of Westell Technologies stock on the date of grant.

The Company recorded stock-based compensation expense of $0.9 million, $1.7 million and $0.9 million for RSUs in fiscal years 2016, 2015 and 2014, respectively. As of March 31, 2016, there was approximately $2.3 million of pre-tax unrecognized compensation expense related to the RSUs, which is expected to be recognized over a weighted-average period of 2.5 years. The total intrinsic fair value of RSUs vested during the fiscal years ended March 31, 2016, 2015, and 2014, was $0.3 million, $1.5 million, and $0.5 million, respectively.

The following table sets forth the RSUs activity for the fiscal year ended March 31, 2016:



	Shares		Weighted-Average Grant Date Fair Value
Non-vested as of March 31, 2015	1,409,750		$	2.72
Granted	1,502,500		$	1.21
Vested	(303,500	)	$	2.72
Forfeited	(765,375	)	$	2.46
Non-vested as of March 31, 2016	1,843,375		$	1.59

Performance-based RSUs (PSUs)

The PSUs vest in annual increments based on the achievement of pre-established Company performance goals and continued employment. The number of PSUs earned, if any, can range from 0% to 200% of the target amount, depending on actual performance for four fiscal years following the grant date. Upon vesting, the PSUs convert into shares of Class A Common Stock on a one-for-one basis. The Company recognizes compensation expense using the accelerated attribution model based on the market value of Westell Technologies stock on the date of grant.

In fiscal year 2016, there were no PSUs granted.

In fiscal year 2015, certain executives were granted a total of 217,500 PSUs at target. The performance targets in fiscal years 2016 and 2015 for the fiscal year 2015 grants were not achieved and therefore no shares were earned in the first or second measurement periods.

In fiscal year 2014, certain executives were granted a total of 285,000 PSUs at target. The performance in fiscal year 2014 measured against the first performance target resulted in the executives earning 94% of the PSUs. The targets in the second and third performance measurement period in fiscal years 2015 and 2016, respectively, were not achieved and therefore no additional PSUs were earned in those periods.

The Company recorded stock-based compensation expense of $0.0 million and $0.1 million and $0.3 million for PSUs in fiscal years 2016, 2015 and 2014, respectively. As of March 31, 2016, there was approximately $10,000 of pre-tax unrecognized compensation expense related to the PSUs, which is expected to be recognized over a weighted-average period of 1.0 year. The total intrinsic fair value of PSUs vested during fiscal years 2016 and 2015 was $31,000 and $0.3 million. There were no PSUs that vested in fiscal year 2014.

The following table sets forth the PSUs activity for the fiscal year ended March 31, 2016:



	Shares		Weighted-Average Grant Date Fair Value
Non-vested as of March 31, 2015	181,888		$	3.14
Granted	—		$	—
Vested	(25,767	)	$	2.47
Forfeited	(92,046	)	$	3.22
Non-vested as of March 31, 2016	64,075		$	3.29