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SHARE-BASED EMPLOYEE COMPENSATION | 3 Months Ended
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Jun. 30, 2023
Share-Based Payment Arrangement [Abstract] |
SHARE-BASED EMPLOYEE COMPENSATION | (I) S hare-BASED EMPLOYEE COMPENSATION On August 7, 2013, our stockholders approved the Eagle Materials Inc. Amended and Restated Incentive Plan (the Plan), which increased the shares we are authorized to issue as awards by 3,000,000 (1,500,000 of which may be stock awards). Under the terms of the Plan, we can issue equity awards, including stock options, restricted stock units, restricted stock, and stock appreciation rights, to employees of the Company and members of the Board of Directors. The Compensation Committee of our Board of Directors specifies grant terms for awards under the Plan. Long-Term Compensation Plans OPTIONS In May 2023, the Compensation Committee of the Board of Directors approved the granting to certain officers and key employees an aggregate of 2,296 performance-vesting stock options that will be earned only if certain performance conditions are satisfied (the Fiscal 2024 Employee Performance Stock Option Grant). The performance criteria for the Fiscal 2024 Employee Performance Stock Option Grant are based upon the achievement of certain levels of return on equity (as defined in the option agreements), ranging from 10.0% to 20.0%, for the fiscal years ending March 31, 2024, through March 31, 2026. All stock options in each performance period will be earned if the return on equity is 20.0% or greater, and the percentage of stock options earned in such period will be reduced proportionately to approximately 66.7% if the return on equity is 10.0%. If the Company does not achieve a return on equity of at least 10.0% during the performance period, all stock option awards for that performance period will be forfeited. The stock option performance periods are as follows:
|  | Options |  |  | Performance Period |  | Vesting Date
One-Year Performance Shares |  |  | 574 |  |  | April 1, 2023 to March 31, 2024 |  | May 2024
Two-Year Performance Shares |  |  | 574 |  |  | April 1, 2023 to March 31, 2025 |  | May 2025
Three-Year Performance Shares |  |  | 1,148 |  |  | April 1, 2023 to March 31, 2026 |  | May 2026
The stock options have a term of 10 years from the grant date. The Compensation Committee also approved the granting of 1,914 time-vesting stock options to the same officers and key employees, which vest ratably over three years (the Fiscal 2024 Employee Time-Vesting Stock Option Grant). The Fiscal 2024 Employee Performance Stock Option Grant and the Fiscal 2024 Employee Time-Vesting Stock Option Grant were valued at their grant date using the Black-Scholes option pricing model. The weighted-average assumptions used in the Black-Scholes model to value the option awards for fiscal 2024 are as follows:
Dividend Yield |  |  | 0.8 | %
Expected Volatility |  |  | 38.8 | %
Risk-Free Interest Rate |  |  | 3.6 | %
Expected Life |  | 6.0 years |
In addition to the stock options described above, we issue stock options to certain employees from time to time. Any options issued are valued using the Black-Scholes options pricing model on the grant date, and expensed over the vesting period. Stock option expense for all outstanding stock option awards totaled approximately $0.5 million and $0.8 million for the three months ended June 30, 2023 and 2022, respectively. At June 30, 2023, there was approximately $3.1 million of unrecognized compensation cost related to outstanding stock options, which is expected to be recognized over a weighted-average period of 2.2 years. The following table represents stock option activity for the three months ended June 30, 2023:
|  | Number of Shares |  |  | Weighted- Average Exercise Price |
Outstanding Options at March 31, 2023 |  |  | 436,949 |  |  | $ | 89.69 |
Granted |  |  | 4,210 |  |  | $ | 166.75 |
Exercised |  |  | (117,715 | ) |  | $ | 166.25 |
Cancelled |  |  | (1,000 | ) |  | $ | 73.37 |
Outstanding Options at June 30, 2023 |  |  | 322,444 |  |  | $ | 91.28 |
Options Exercisable at June 30, 2023 |  |  | 228,808 |  |  |  |
Weighted-Average Fair Value of Options Granted During the Year |  | $ | 67.01 |  |  |  |
The following table summarizes information about stock options outstanding at June 30, 2023:
|  | Options Outstanding |  |  | Options Exercisable |
Range of Exercise Prices |  | Number of Shares Outstanding |  |  | Weighted- Average Remaining Contractual Life (in years) |  |  | Weighted- Average Exercise Price |  |  | Number of Shares Outstanding |  |  | Weighted- Average Exercise Price |
$59.32 - $81.28 |  |  | 118,049 |  |  |  | 6.28 |  |  | $ | 62.64 |  |  |  | 75,645 |  |  | $ | 63.83 |
$87.37 - $106.24 |  |  | 134,018 |  |  |  | 5.04 |  |  | $ | 95.87 |  |  |  | 130,302 |  |  | $ | 95.83 |
$118.27 - $166.75 |  |  | 70,377 |  |  |  | 8.82 |  |  | $ | 130.59 |  |  |  | 22,861 |  |  | $ | 130.82 |
|  |  | 322,444 |  |  |  | 6.32 |  |  | $ | 91.28 |  |  |  | 228,808 |  |  | $ | 88.74 |
At June 30, 2023, the aggregate intrinsic value for the outstanding and exercisable options was approximately $30.7 million and $22.3 million, respectively. The total intrinsic value of options exercised during the three months ended June 30, 2023, was approximately $9.2 million. RESTRICTED STOCK In May 2023, the Compensation Committee approved the granting to certain officers and key employees an aggregate of 45,693 shares of performance-vesting restricted stock that will be earned if certain performance conditions are satisfied (the Fiscal 2024 Employee Restricted Stock Performance Award). The performance criteria for the Fiscal 2024 Employee Restricted Stock Performance Award are based upon the achievement of certain levels of return on equity (as defined in the award agreement), ranging from 10.0% to 20.0%, for the fiscal years ending March 31, 2024, through March 31, 2026. All restricted shares in each performance period will be earned if the return on equity is 20.0% or greater, and the percentage of shares earned in such period will be reduced proportionately to approximately 66.7% if the return on equity is 10.0%. If the Company does not achieve a return on equity of at least 10.0% during the performance period, all awards for that performance period will be forfeited. The restricted share performance periods as follows:
|  | Shares |  |  | Performance Period |  | Vesting Date
One-Year Performance Shares |  |  | 11,424 |  |  | April 1, 2023 to March 31, 2024 |  | May 2024
Two-Year Performance Shares |  |  | 11,424 |  |  | April 1, 2023 to March 31, 2025 |  | May 2025
Three-Year Performance Shares |  |  | 22,845 |  |  | April 1, 2023 to March 31, 2026 |  | May 2026
The Compensation Committee also approved the granting of 38,072 shares of time-vesting restricted stock to the same officers and key employees, which vest ratably over four years (the Fiscal 2024 Employee Restricted Stock Time-Vesting Award). The Fiscal 2024 Employee Restricted Stock Performance Award and the Fiscal 2024 Employee Restricted Stock Time-Vesting Award were valued at the closing price of the stock on the grant date and are being expensed over a three year period. In addition to the restricted stock described above, from time to time we issue restricted stock to certain employees. These awards are valued at the closing price of the stock on the grant date, and expensed over the vesting period. The fair value of restricted stock is based on the stock price on the grant date. The following table summarizes the activity for nonvested restricted shares during the three months ended June 30, 2023:
|  | Number of Shares |  |  | Weighted-Average Grant Date Fair Value |
Nonvested Restricted Stock at March 31, 2023 |  |  | 219,084 |  |  | $ | 96.54 |
Granted |  |  | 85,415 |  |  | $ | 166.75 |
Vested |  |  | (22,257 | ) |  | $ | 160.48 |
Forfeited |  |  | (3,000 | ) |  | $ | 139.03 |
Nonvested Restricted Stock at June 30, 2023 |  |  | 279,242 |  |  | $ | 116.92 |
Expense related to restricted shares was approximately $6.0 million and $4.3 million for the three months ended June 30, 2023, and 2022, respectively. At June 30, 2023, there was approximately $27.1 million of unearned compensation from restricted stock, which will be recognized over a weighted-average period of 2.2 years. The number of shares available for future grants of stock options, restricted stock units, stock appreciation rights, and restricted stock under the Plan was 3,211,864 at June 30, 2023. The Plan expires on August 7, 2023. On May 17, 2023, the Board approved the Eagle Materials Inc. 2023 Equity Incentive Plan (2023 Plan), subject to stockholder approval at the annual meeting of stockholders, which is scheduled to occur on August 3, 2023. If approved, the 2023 Plan will reserve 1,425,000 shares for future grants of stock options, restricted stock units, stock appreciation rights, and restricted stock under the 2023 Plan.

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