Share-Based Compensation

6 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

In connection with our initial public offering, the Board of Directors adopted the 2005 Long-Term Equity Incentive Plan (the “2005 Plan”), which provided for grants of up to a maximum of 5.0 million shares of restricted stock, stock options, RSUs and other equity-based awards. In June 2014, the Board of Directors approved, and in July 2014, our stockholders ratified, an increase of an additional 1.8 million shares of our common stock for issuance under the 2005 Plan, an increase of the maximum number of shares subject to stock options that could be awarded to any one participant under the 2005 Plan during any fiscal 12-month period from 1.0 million to 2.5 million shares, and an extension of the term of the 2005 Plan by ten years, to February 2025. Directors, officers and other employees of the Company and its subsidiaries, as well as others performing services for the Company, were eligible for grants under the 2005 Plan.

On June 23, 2020, the Board of Directors adopted the Prestige Consumer Healthcare Inc. 2020 Long-Term Incentive Plan (the “2020 Plan”). The 2020 Plan became effective on August 4, 2020, upon the approval of the 2020 Plan by our stockholders. A total of 2,827,210 shares are available for issuance under the 2020 Plan (comprised of 2,000,000 new shares plus 827,210 shares that were unissued under the 2005 Plan). All future equity awards will be made from the 2020 Plan, and the Company will not grant any additional awards under the 2005 Plan.

The following table provides information regarding our stock-based compensation:


	Three Months Ended September 30,				Six Months Ended September 30,
(In thousands)	2020		2019		2020		2019
Pre-tax share-based compensation costs charged against income	$	2,892	$	2,521	$	4,356	$	3,902
Income tax benefit recognized on compensation costs	$	451	$	401	$	563	$	611
Total fair value of options and RSUs vested during the period	$	1,015	$	1,266	$	6,796	$	7,365
Cash received from the exercise of stock options	$	69	$	269	$	1,285	$	544
Tax benefits realized from tax deductions resulting from RSU issuances and stock option exercises	$	4	$	48	$	948	$	482

At September 30, 2020, there were $9.8 million of unrecognized compensation costs related to unvested share-based compensation arrangements under the 2005 Plan, based on management's estimate of the shares that will ultimately vest. We expect to recognize such costs over a weighted average period of 1 year. At September 30, 2020, there were 2.8 million shares available for issuance under the 2020 Plan.

On May 4, 2020, the Compensation and Talent Management Committee (the "Committee") of our Board of Directors granted 79,070 performance stock units, 73,636 RSUs and stock options to acquire 249,875 shares of our common stock under the 2005 Plan to certain executive officers and employees. Performance units are earned based on achievement of the performance objectives set by the Committee and, if earned, vest in their entirety on the three-year anniversary of the date of grant. In light of the uncertain economic environment, the Committee elected to set the performance objectives applicable to these awards at a later date. The stock options were granted at an exercise price of $39.98 per share, which was equal to the closing price for our common stock on the date of the grant.

A newly appointed independent member of the Board of Directors received a grant under the 2005 Plan of 907 RSUs on May 4, 2020.

On August 4, 2020, each of the independent members of the Board of Directors received a grant of 3,732 RSUs under the 2020 Plan. The RSUs are fully vested upon receipt of the award and will be settled by delivery to each director of one share of our common stock for each vested RSU promptly following the earliest of (i) such director's death, (ii) such director's separation from service or (iii) a change in control of the Company.

Restricted Stock Units

The fair value of the RSUs is determined using the closing price of our common stock on the date of the grant.

A summary of the RSUs granted under the 2005 Plan and the 2020 Plan is presented below:


RSUs	Shares (in thousands)	Weighted Average Grant-Date Fair Value
Six Months Ended September 30, 2019
Vested and unvested at March 31, 2019	413.0	$	36.58
Granted	220.3	31.02
Vested and issued	(66.8)	47.99
Forfeited	(27.8)	36.71
Vested and unvested at September 30, 2019	538.7	32.88
Vested at September 30, 2019	138.3	31.71

Six Months Ended September 30, 2020
Vested and unvested at March 31, 2020	512.1	$	32.49
Granted	179.7	39.82
Vested and issued	(74.0)	44.38
Forfeited	(4.7)	56.11
Vested and unvested at September 30, 2020	613.1	33.02
Vested at September 30, 2020	150.4	31.98

Options

The fair value of each award is estimated on the date of grant using the Black-Scholes Option Pricing Model that uses the assumptions presented below:


	Six Months Ended September 30,
	2020			2019
Expected volatility	32.1% - 32.2%			30.9% - 31.3%
Expected dividends	$	—		$	—
Expected term in years	6.0 to 7.0			6.0 to 7.0
Risk-free rate	0.5		%	2.3% to 2.4%
Weighted average grant date fair value of options granted	12.91			10.83

A summary of option activity under the 2005 Plan and the 2020 Plan is as follows:


Options	Shares (in thousands)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Six Months Ended September 30, 2019
Outstanding at March 31, 2019	944.6	$	38.45
Granted	302.7	30.53
Exercised	(18.4)	29.57
Forfeited or expired	(124.7)	43.08
Outstanding at September 30, 2019	1,104.2	35.90		7.2	$	3,959
Vested at September 30, 2019	610.2	38.56		5.7	$	2,772

Six Months Ended September 30, 2020
Outstanding at March 31, 2020	1,020.2	$	35.90
Granted	249.9	39.98
Exercised	(62.8)	20.46
Forfeited or expired	—	—
Outstanding at September 30, 2020	1,207.3	37.55		7.0	$	5,032
Vested at September 30, 2020	699.1	39.39		5.6	$	3,430

The aggregate intrinsic value of options exercised during the six months ended September 30, 2020 was $1.3 million.