Stock Incentive Plans

9 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Equity Plans

The Compensation Committee of the Board of Directors (the "Board") has broad authority to grant awards and otherwise administer the DXC Employee Equity Plan. The plan became effective March 30, 2017 and will continue in effect for a period of 10 years thereafter, unless earlier terminated by the Board. The Board has the authority to amend the plan in such respects as it deems desirable, subject to approval of DXC’s stockholders for material modifications.

Restricted stock units ("RSUs") represent the right to receive one share of DXC common stock upon a future settlement date, subject to vesting and other terms and conditions of the award, plus any dividend equivalents accrued during the award period. In general, if the employee’s status as a full-time employee is terminated prior to the vesting of the RSU grant in full, then the RSU grant is automatically canceled on the termination date and any unvested shares and dividend equivalents are forfeited. Certain executives were awarded service-based "career share" RSUs for which the shares are settled over the 10 anniversaries following the executive's separation from service as a full-time employee, provided the executive complies with certain non-competition covenants during that period. The Company also grants Performance-based restricted stock units ("PSUs"), which generally vest over a period of three years. The number of PSUs that ultimately vest is dependent upon the Company’s achievement of certain specified financial performance criteria over a three-year period. If the specified performance criteria are met, awards are settled for shares of DXC common stock and dividend equivalents upon the filing with the SEC of the Annual Report on Form 10-K for the last fiscal year of the performance period. PSU awards include the potential for up to 25% of the shares granted to be earned after the first and second fiscal years if certain of the Company's performance targets are met early, subject to vesting based on the participant's continued employment through the end of the three-year performance period.

In fiscal 2021, DXC issued awards that are considered to have a market condition. A Monte Carlo simulation model was used for the valuation of the grants. Settlement of shares for the fiscal 2021 PSU awards will be made at the end of the third fiscal year subject to certain compounded annual growth rates of the stock price and continued employment through the last day of the third fiscal year.

The terms of the DXC Director Equity Plan allow DXC to grant RSU awards to non-employee directors of DXC. Such RSU awards vest in full at the earlier of (i) the first anniversary of the grant date or (ii) the next annual meeting date, and are automatically redeemed for DXC common stock and dividend equivalents either at that time or, if an RSU deferral election form is submitted, upon the date or event elected by the director. Distributions made upon a director’s separation from the Board may occur in either a lump sum or in annual installments over periods of 5, 10, or 15 years, per the director’s election. In addition, RSUs vest in full upon a change in control of DXC.

The DXC Share Purchase Plan allows DXC’s employees located in the United Kingdom to purchase shares of DXC’s common stock at the fair market value of such shares on the applicable purchase date. There were 12,232 and 41,425 shares purchased under this plan during the three and nine months ended December 31, 2020.

The Board has reserved for issuance shares of DXC common stock, par value $0.01 per share, under each of the plans as detailed below:


	As of December 31, 2020
	Reserved for Issuance	Available for Future Grants
DXC Employee Equity Plan	51,200,000	32,794,274
DXC Director Equity Plan	745,000	435,951
DXC Share Purchase Plan	250,000	165,185
Total	52,195,000	33,395,410

Stock Options


	Number of Option Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (in millions)
Outstanding as of March 31, 2020	1,869,815	$	29.92	4.27	$	—
Granted	—	$	—

Exercised	(39,601)	$	17.43		$	—
Canceled/Forfeited	—	$	—
Expired	(82,614)	$	31.24
Outstanding as of December 31, 2020	1,747,600	$	30.11	3.73	$	3
Vested and exercisable as of December 31, 2020	1,747,600	$	30.11	3.73	$	3

Restricted Stocks


	Employee Equity Plan			Director Equity Plan
	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Outstanding as of March 31, 2020	4,174,476	$	55.45	114,615	$	37.69
Granted	7,576,602	$	18.67	118,500	$	18.82

Settled	(1,045,190)	$	50.65	(48,455)	$	26.90
Canceled/Forfeited	(2,042,804)	$	36.14	—	$	—
Outstanding as of December 31, 2020	8,663,084	$	28.43	184,660	$	28.42

Share-Based Compensation


	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019


Total share-based compensation cost	$	6	$	9	$	42	$	57
Related income tax benefit	$	2	$	(3)	$	7	$	8
Total intrinsic value of options exercised	$	—	$	1	$	—	$	8
Tax benefits from exercised stock options and awards	$	1	$	3	$	5	$	13

As of December 31, 2020, total unrecognized compensation expense related to unvested DXC stock options and unvested DXC RSUs, net of expected forfeitures was $0 million and $146 million, respectively. The unrecognized compensation expense for unvested RSUs is expected to be recognized over a weighted-average period of 2.06 years.