Annual report pursuant to Section 13 and 15(d)

Stock-Based Compensation (Tables)

Stock-Based Compensation (Tables)

12 Months Ended

Mar. 31, 2014

Stock-Based Compensation Expense

Total stock-based compensation, excluding the impact of discontinued operations, is reflected in the Consolidated Statements of Operations as follows:



	Fiscal Year Ended March 31,
(in thousands)	2014		2013		2012
Cost of revenue	$	53	$	27	$	55
Sales and marketing	337		190		173
Research and development	338		115		58
General and administrative	1,143		1,075		915
Stock-based compensation expense	1,871		1,407		1,201
Income tax benefit	—		—		(61		)
Total stock-based compensation expense after taxes	$	1,871	$	1,407	$	1,140

Stock option activity

Option activity for the twelve months ended March 31, 2014 is as follows:



	Shares		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value(a) (in thousands)
Outstanding on March 31, 2013	2,114,446		$	2.07
Granted	630,000		$	2.45
Exercised	(807,568	)	$	2.08
Forfeited	(7,333	)	$	1.57
Expired	(94,100	)	$	5.62
Outstanding on March 31, 2014	1,835,445		$	2.02	3.7	$	3,110
Vested or expected to vest as of March 31, 2014	1,791,580		$	2.01	3.7	$	3,052
Exercisable on March 31, 2014	974,695		$	1.71	1.8	$	1,969

(a) 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’ close 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
	2014			2013			2012
Input assumptions:
Expected volatility	42		%	49		%	70		%
Risk-free interest rate	1.1		%	0.7		%	1.4		%
Expected life	5 years			5 years			5 years
Expected dividend yield	—		%	—		%	—		%
Output weighted-average grant-date fair value	$	0.91		$	0.89		$	1.93

Restricted stock activity

The following table sets forth restricted stock activity for the twelve months ended March 31, 2014:



	Shares		Weighted-Average Grant Date Fair Value
Non-vested as of March 31, 2013	738,500		$	1.65
Granted	90,000		$	2.33
Vested	(358,000	)	$	1.53
Forfeited	(63,000	)	$	1.43
Non-vested as of March 31, 2014	407,500		$	1.94

The Company recorded $0.5 million, $0.6 million, and $0.5 million of expense in the twelve months ended March 31, 2014, 2013 and 2012, respectively, related to restricted stock. As of March 31, 2014, there was $0.3 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 2.3 years. The total intrinsic fair value of shares vested during the years ended March 31, 2014, 2013, and 2012, was $0.7 million, $0.8 million, and $0.1 million, respectively.

Restricted Stock Units (RSUs)

In fiscal years 2014, 2013 and 2012, 1,182,000, 530,000 and 500,000 shares, respectively, of RSUs were awarded to certain key employees. These awards convert into shares of Class A Common Stock on a one-for-one basis upon vesting and vest in equal annual installments over 4 years from the grant dates. 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 adjusted for estimated forfeitures.

The Company recorded stock-based compensation expense of $0.9 million, $0.6 million and $0.3 million for RSUs in fiscal years 2014, 2013 and 2012, respectively. As of March 31, 2014, there was approximately $4.0 million of pre-tax unrecognized compensation expense, including estimated forfeitures, related to the RSUs, which is expected to be recognized over a weighted-average period of 3.2 years. The total intrinsic fair value of RSUs vested during the years ended March 31, 2014, 2013, and 2012, was $0.5 million, $0.3 million, and $0.5 million, respectively.

The following table sets forth the RSUs activity for the twelve months ended March 31, 2014:



	Shares		Weighted-Average Grant Date Fair Value
Non-vested as of March 31, 2013	875,000		$	2.68
Granted	1,182,000		$	3.30
Vested	(210,000	)	$	2.85
Forfeited	(168,000	)	$	2.72
Non-vested as of March 31, 2014	1,679,000		$	3.09

Performance-based RSUs (PSUs)

In fiscal year 2014, certain executives were granted a total of 285,000 PSUs. The PSUs vest in annual increments based on the achievement of pre-established Company performance goals measured over a four year period and continued employment. The number of PSUs earned, can range from 0% to 200% of the target amount, depending on actual performance for fiscal years 2014 through 2017. In May 2014, the first measurement occurred resulting in achievement of 94% of the target amount and 25% vesting. Upon vesting, the PSUs convert into shares of Class A Common Stock on a one-for-one basis. The Company recognizes compensation expense on a straight-line basis for each annual performance measurement vesting period of the awards based on the market value of Westell Technologies stock on the date of grant adjusted for estimated forfeitures.

The Company recorded stock-based compensation expense of $0.3 million for PSUs in fiscal years 2014. There was no PSU expense in fiscal years 2013 and 2012. As of March 31, 2014, there was approximately $0.4 million of pre-tax unrecognized compensation expense, including estimated forfeitures, related to the PSUs, which is expected to be recognized over a weighted-average period of 2.1 years . The total intrinsic fair value of PSUs vested during the year ended March 31, 2012, was $0.7 million. There were no PSUs that vested in fiscal years 2014 or 2013.

The following table sets forth the PSUs activity for the twelve months ended March 31, 2014:



	Shares	Weighted-Average Grant Date Fair Value
Non-vested as of March 31, 2013	—	$	—
Granted	285,000	$	2.45
Vested	—	$	—
Forfeited	—	$	—
Non-vested as of March 31, 2014	285,000	$	2.45