Share-Based Compensation

3 Months Ended

Jun. 30, 2021

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. On June 23, 2020, a total of 2,827,210 shares were 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 June 30,
(In thousands)		2021		2020
Pre-tax share-based compensation costs charged against income		$	1,878	$	1,464
Income tax benefit recognized on compensation costs		$	143	$	112
Total fair value of options and RSUs vested during the period		$	7,006	$	5,781
Cash received from the exercise of stock options		$	2,204	$	1,216
Tax benefits realized from tax deductions resulting from RSU issuances and stock option exercises		$	1,721	$	944

At June 30, 2021, there were $13.1 million of unrecognized compensation costs related to unvested share-based compensation arrangements under the 2005 Plan and the 2020 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 1.1 years. At June 30, 2021, there were 2.5 million shares available for issuance under the 2020 Plan.

On May 3, 2021, the Compensation and Talent Management Committee (the "Committee") of our Board of Directors granted 77,345 performance stock units, 73,108 RSUs and stock options to acquire 222,660 shares of our common stock under the 2020 Plan to certain executive officers and employees. The stock options were granted at an exercise price of $44.33 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 2020 Plan of 1,636 RSUs on May 3, 2021.

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
Three Months Ended June 30, 2020
Vested and unvested at March 31, 2020	512.1	$	32.49
Granted	153.6	39.98
Vested and issued	(74.0)	44.38
Forfeited	(4.7)	56.11
Vested and unvested at June 30, 2020	587.0	32.76
Vested at June 30, 2020	124.2	30.54

Three Months Ended June 30, 2021
Vested and unvested at March 31, 2021	607.4	$	33.02
Granted	152.1	44.33
Vested and issued	(144.5)	30.57
Forfeited	(23.1)	30.17
Vested and unvested at June 30, 2021	591.9	36.64
Vested at June 30, 2021	151.3	32.03

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:


	Three Months Ended June 30,
	2021			2020
Expected volatility	31.2% - 31.9%			32.1% - 32.2%
Expected dividends	$	—		$	—
Expected term in years	6.0 to 7.0			6.0 to 7.0
Risk-free rate	1.3		%	0.5%
Weighted average grant date fair value of options granted	$	14.77		$	12.91

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)
Three Months Ended June 30, 2020
Outstanding at March 31, 2020	1,020.2	$	35.90
Granted	249.9	39.98
Exercised	(60.5)	20.10
Forfeited or expired	—	—
Outstanding at June 30, 2020	1,209.6	37.53		7.3	$	5,770
Vested at June 30, 2020	701.5	39.36		5.9	$	3,874

Three Months Ended June 30, 2021
Outstanding at March 31, 2021	1,114.9	$	37.92
Granted	222.7	44.33
Exercised	(67.9)	32.49
Forfeited or expired	(17.6)	46.09
Outstanding at June 30, 2021	1,252.1	39.24		6.9	$	17,068
Vested at June 30, 2021	779.5	38.72		5.6	$	11,399

The aggregate intrinsic value of options exercised during the three months ended June 30, 2021 was $1.1 million.