Stock-Based Compensation (Notes) |
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| Share-based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Payment Arrangement | Stock-based Compensation: Employee Stock Incentive Plans
The Westell Technologies, Inc. 2019 Omnibus Incentive Compensation Plan (the “2019 Plan”) was approved at the annual meeting of stockholders on September 17, 2019. The 2019 Plan replaced the Westell Technologies, Inc. 2015 Omnibus
Incentive Compensation Plan (the “2015 Plan”). If any award granted under the 2019 Plan or the 2015 Plan is canceled, terminates, expires, or lapses for any reason, any shares subject to such award will again be available for the grant of an award under the 2019 Plan. Shares subject to an award will not be made available again for issuance under the Plan if such shares are: (a) delivered to or withheld by the Company to pay the grant or purchase price of an award, or (b) delivered to or withheld by the Company to pay the withholding taxes related to an award. Any awards or portions thereof that are settled in cash and not in shares will not be counted against the share limit. There are a total of 1,250,418 shares available for issuance under the 2019 Plan as of March 31, 2021. The stock options, restricted stock awards, and RSU awards granted under the 2019 Plan typically vest in equal annual installments over 3 years for employees and 1 year for non-employee directors. PSUs earned generally vest over the performance period, as described below. Certain awards provide for accelerated vesting if there is a change in control (as defined in the 2019 Plan), or when provided within individual employment contracts. The Company accounts for forfeitures as they occur. The Company issues new shares of stock for awards under the 2019 Plan.
Stock-Based Compensation
Total stock-based compensation is reflected in the Consolidated Statements of Operations as follows:
Stock Options
Stock options that have been granted by the Company have an exercise price that is equal to the reported value of the Company’s stock on the grant date. The Company’s options have a contractual term of 7 years. Compensation expense is recognized on a straight-line basis over the vesting period for the award.
The Company uses the Black-Scholes model to estimate the fair value of employee stock options on the date of grant. That model employs parameters for which the Company has made estimates according to the assumptions noted below. Expected volatilities were based on historical volatilities of the Company’s stock. The expected option lives represent the period of time that options granted are expected to be outstanding based on historical trends. The risk-free interest rates were based on the United States Treasury yield curve for the expected term at the time of grant. The dividend yield was based on expected dividends at the time of grant, which has always been zero.
The Company recorded expense of $31,000 and $33,000 in the fiscal years ended March 31, 2021 and 2020, respectively, related to stock options. There were no options exercised in fiscal years 2021 and 2020.
Option activity for the fiscal year ended March 31, 2021 is as follows:
(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.
As of March 31, 2021, there was $44,000 of pre-tax stock option compensation expense related to non-vested awards not yet recognized, which is expected to be recognized over a weighted-average period of 1.4 years.
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:
Restricted Stock
Vesting of restricted stock is subject to continued employment with the Company. During fiscal years 2021 and 2020, non-employee directors received grants of 24,192 and 128,584 shares with a weighted-average grant date fair value of $1.24 and $1.39, respectively. The Company recognizes compensation expense restricted stock on a straight-line basis over the vesting periods for the award based on the market value of Westell Technologies stock on the date of grant.
The following table sets forth restricted stock activity for the fiscal year ended March 31, 2021:
The Company recorded $0.1 million and $0.2 million of expense in the fiscal years ended March 31, 2021 and 2020, respectively, related to restricted stock. As of March 31, 2021, there was $12,000 of pre-tax unrecognized compensation expense, 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 was $0.1 million during both fiscal years 2021 and 2020.
Restricted Stock Units (“RSUs”)
In fiscal years 2021 and 2020, there were 301,140 and 301,037 shares with a weighted-average grant date fair value of $0.80 and $1.73, 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 $0.4 million and $0.6 million for RSUs in fiscal years 2021 and 2020, respectively. As of March 31, 2021, there was approximately $0.3 million of pre-tax unrecognized compensation expense related to the RSUs, which is expected to be recognized over a weighted-average period of 1.7 years. The total intrinsic fair value of RSUs vested was $0.2 million and $0.6 million during fiscal years 2021 and 2020, respectively.
The following table sets forth the RSUs activity for the fiscal year ended March 31, 2021:
Performance-based RSUs (“PSUs”)
A total of 229,303 and 216,144 PSUs were granted during fiscal years 2021 and 2020, respectively. PSUs were earned based upon achievement of performance goals tied to growing revenue and to non-GAAP profitability targets for the respective fiscal year, but have a continued employment provision and will vest when all of the following have occurred: one year from the grant date and the Company's audited financial statements are public. Upon vesting, the PSUs convert into shares of Class A
Common Stock of the Company on a one-for-one basis. For the fiscal year 2021 and 2020 grants, all PSUs were forfeited prior to vesting.
The Company recorded no stock-based compensation expense for PSUs in fiscal years 2021 or 2020.
The following table sets forth the PSUs activity for the fiscal year ended March 31, 2021:
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