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Equity-Based Compensation | 12 Months Ended
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Apr. 03, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Equity-Based Compensation |
1 2. | Equity-Based Compensation
The Company has equity incentive plans under which the Company has been authorized to grant share-based awards to key employees and non-employee directors. Equity-based compensation expense of $6.0 million, $8.3 million, and $102.0 million was recognized in fiscal 2021, 2020, and 2019, respectively. Included in equity-based compensation in fiscal 2019 is $6.0 million of expense related to former Skyline employees that vested in conjunction with the Exchange. Equity-based compensation expense was included in SG&A expenses in the accompanying consolidated statements of operations. The total associated income tax benefit recognized was $1.0 million, $1.3 million, $0.2 million in fiscal 2021, 2020, and 2019 respectively. Total unrecognized equity-based compensation for all share-based payment plans was $10.1 million at April 3, 2021, of which $5.3 million is expected to be recognized in fiscal 2022, $3.5 million in fiscal 2023 and $1.3 million thereafter, or a weighted-average period of 1.17 years. Time-Vesting and Performance-Vesting Restricted Share Awards Champion Holdings granted awards to its officers, management employees, and certain members of the Board of Managers under an equity-classified management incentive plan (the “MIP”). In accordance with the provisions of the MIP, as modified on June 1, 2018, unvested units Champion Holdings granted under the MIP were exchanged for unregistered, time-vesting restricted shares and performance-vesting restricted shares of the Company subject to stock restriction agreements (the “SRAs”). The exchange was accounted for as a modification. During fiscal 2019, a significant portion of the performance-vesting restricted shares vested in conjunction with certain follow-on public offerings. The incremental fair value of the modification of the awards was $95.1 million and was recognized as expense in fiscal 2019 as all vesting conditions were met during the period. The fair value of the awards that vested during fiscal both 2021 and 2020 was $4.2 million. A summary of the activity associated with these awards is as follows:
(amounts in thousands) |  |  |  | Management Incentive Plan Award Units |  |  | Time Based Restricted Share Awards |  |  | Performance Based Restricted Share Awards |
Outstanding at March 31, 2018 |  |  |  |  | 12,655 |  |  |  | — |  |  |  | — |
Granted |  |  |  |  | 1,000 |  |  |  | — |  |  |  | — |
Exchange of MIP awards for restricted share awards |  |  |  |  | (13,655 | ) |  |  | 290 |  |  |  | 3,686 |
Vested |  |  |  |  | — |  |  |  | — |  |  |  | (3,686 | )
Outstanding at March 30, 2019 |  |  |  |  | — |  |  |  | 290 |  |  |  | — |
Vested |  |  |  |  | — |  |  |  | (145 | ) |  |  | — |
Outstanding at March 28, 2020 |  |  |  |  | — |  |  |  | 145 |  |  |  | — |
Vested |  |  |  |  | — |  |  |  | (145 | ) |  |  | — |
Outstanding at April 3, 2021 |  |  |  |  | — |  |  |  | — |  |  |  | — |
On September 26, 2018, the Company’s shareholders approved the Company’s 2018 Equity Incentive Plan (the “Equity Plan”) which provides for grants of options, stock appreciation rights, restricted and unrestricted stock and stock units, performance awards, and other awards convertible into or otherwise based on shares of the Company’s common stock. Prior to the approval of the Equity Plan, the Company maintained the Skyline Corporation 2015 Stock Incentive Plan, which allowed for the grant of stock options and other equity awards. General terms and methods of valuation for the Company’s share-based awards granted under the Equity Plan are described below. Stock Options Stock options generally have terms of 10 years, with one-third of each grant vesting each year for three years, and are assigned an exercise price that is equal to or greater than the closing market price of a share of the Company’s common stock on the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. When determining expected volatility, the Company considered volatility of guideline public companies. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant, based on the options’ expected term. The expected term of the options is based on the time period to exercise for each vesting tranche, which is calculated based on the average of: (i) the full option contractual term; and (ii) the starting vest date. A summary of the activity associated with these awards is as follows:
|  | Shares (in thousands) |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Remaining Term (in years) |  |  | Aggregate Intrinsic Value (in thousands) |
Outstanding at March 31, 2018 |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |
Granted |  |  | 146 |  |  | $ | 15.00 |  |  |  |  |  |  |  |  |
Outstanding at March 30, 2019 |  |  | 146 |  |  | $ | 15.00 |  |  |  |  |  |  |  |  |
Granted |  |  | 266 |  |  | $ | 32.11 |  |  |  |  |  |  |  |  |
Exercised |  |  | (8 | ) |  | $ | 15.00 |  |  |  |  |  |  |  |  |
Forfeitures |  |  | (1 | ) |  | $ | 15.00 |  |  |  |  |  |  |  |  |
Outstanding at March 28, 2020 |  |  | 403 |  |  | $ | 26.29 |  |  |  |  |  |  |  |  |
Granted |  |  | 138 |  |  | $ | 31.21 |  |  |  |  |  |  |  |  |
Exercised |  |  | (5 | ) |  | $ | 32.04 |  |  |  |  |  |  |  |  |
Outstanding at April 3, 2021 |  |  | 536 |  |  | $ | 27.50 |  |  |  | 8.7 |  |  | $ | 10,680 |
Vested and expected to vest at April 3, 2021 |  |  | 536 |  |  | $ | 27.50 |  |  |  | 8.7 |  |  | $ | 10,680 |
Exercisable at April 3, 2021 |  |  | 199 |  |  | $ | 22.64 |  |  |  | 8.2 |  |  | $ | 4,921 |
The assumptions used in the Black-Scholes option-pricing model along with the weighted average grant date fair value for awards granted in the periods presented are as follows:
Option Award Assumptions |  | Fiscal 2021 |  |  | Fiscal 2020 |  |  | Fiscal 2019 |
Weighted-average assumptions used: |  |  |  |  |  |  |  |  |  |  |  |
Expected volatility |  |  | 45.0 | % |  |  | 30.0 | % |  |  | 25.8 | %
Dividend yield |  |  | — |  |  |  | — |  |  |  | — |
Risk-free interest rate |  |  | 0.5 | % |  |  | 1.7 | % |  |  | 2.4 | %
Expected term, in years |  |  | 6.00 |  |  |  | 5.88 |  |  |  | 5.75 |
Weighted average grant date fair value per share |  | $ | 12.48 |  |  | $ | 10.33 |  |  | $ | 3.93 |
Performance Share Units In fiscal 2021, 2020 and 2019, the Company issued performance share units that contain market vesting conditions and service conditions. The market condition is based on the Company’s total shareholder return (“TSR”) compared to the median TSR of certain companies over a three year performance period. The Company used a Monte-Carlo simulation to determine the grant date fair value for these awards, which takes into consideration the possible outcomes pertaining to the TSR market condition. Per the terms of the awards, 0% to 150% of the Company’s performance share units vest on the third anniversary of the vesting commencement date based upon achievement of the market condition as specified in the performance share unit agreement. A summary of the activity associated with these awards is as follows:
|  | Shares (in thousands) |  |  | Weighted Average Grant Date Fair Value Per Unit |
Outstanding at March 31, 2018 |  |  | — |  |  |  |  |
Granted |  |  | 146 |  |  | $ | 3.62 |
Outstanding at March 30, 2019 |  |  | 146 |  |  | $ | 3.62 |
Granted |  |  | 86 |  |  | $ | 29.05 |
Forfeitures |  |  | (2 | ) |  | $ | 3.62 |
Outstanding at March 28, 2020 |  |  | 230 |  |  | $ | 13.85 |
Granted |  |  | 61 |  |  | $ | 28.38 |
Outstanding at April 3, 2021 |  |  | 291 |  |  | $ | 16.90 |
The assumptions used in the Monte-Carlo simulation for performance share units along with the weighted-average grant date fair value for awards granted in the periods presented are as follows:
Performance Unit Assumptions |  | Fiscal 2021 |  |  | Fiscal 2020 |  |  | Fiscal 2019 |
Weighted-average assumptions used: |  |  |  |  |  |  |  |  |  |  |  |
Expected volatility |  |  | 50.0 | % |  |  | 30.0 | % |  |  | 29.5 | %
Dividend yield |  |  | — |  |  |  | — |  |  |  | — |
Risk-free interest rate |  |  | 0.2 | % |  |  | 1.6 | % |  |  | 2.4 | %
Expected term, in years |  |  | 3.00 |  |  |  | 2.84 |  |  |  | 2.49 |
Weighted average grant date fair value per share |  | $ | 28.38 |  |  | $ | 29.05 |  |  | $ | 3.62 |
Restricted Stock Units and Restricted Share Awards Restricted stock units and restricted share awards are valued at the market price of a share of the Company’s common stock on the date of grant. In general, these awards have graded vesting conditions in which a portion of awards vest ratably in three equal installments on the anniversary of the vesting commencement date. The total fair value of restricted stock which vested was approximately $2.5 million, $2.1 million, and $8.5 million during fiscal 2021, 2020, and 2019, respectively. The weighted average grant date fair value for restricted stock units granted in fiscal 2021, 2020, and 2019 was $28.33, $31.34, and $14.24, respectively. The weighted average grant date fair value for restricted share awards granted in fiscal 2019 was $29.77.
(units and shares in thousands) |  | Restricted Stock Units |  |  | Restricted Share Awards |
Outstanding at March 31, 2018 |  |  | — |  |  |  | — |
Granted |  |  | 158 |  |  |  | 349 |
Vested |  |  | — |  |  |  | (349 | )
Outstanding at March 30, 2019 |  |  | 158 |  |  |  | — |
Granted |  |  | 112 |  |  |  | — |
Vested |  |  | (75 | ) |  |  | — |
Forfeitures |  |  | (1 | ) |  |  |  |
Outstanding at March 28, 2020 |  |  | 194 |  |  |  | — |
Granted |  |  | 87 |  |  |  | — |
Vested |  |  | (98 | ) |  |  | — |
Outstanding at April 3, 2021 |  |  | 183 |  |  |  | — |

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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