Share-based Payments

12 Months Ended

Mar. 31, 2022

18. Share-based Payments

At March 31, 2022, there were 342,000 shares of the Company’s common stock reserved for grants to the Company’s non-employee directors under the 2014 Non-Employee Director Incentive Award Plan (the “2014 Plan”). Under the 2014 Plan, (i) 82,324 and 69,732 of restricted stock units were outstanding and (ii) 628 and 76,746 shares of common stock were available for grant under this plan at March 31, 2022 and 2021, respectively.

At March 31, 2022, there were 5,150,000 shares of common stock reserved for grant to all employees of the Company under the 2010 Incentive Award Plan (the “2010 Plan”). At March 31, 2022 and 2021, respectively, there was (i) 216,739 and 184,752 shares of restricted stock units were outstanding, (ii) options to purchase 1,674,499 and 1,714,885 shares of common stock were outstanding, (iii) 100,000 and 100,000 restricted shares were outstanding, and (iv) 84,593 and no shares of performance stock units were outstanding under the 2010 Plan. At March 31, 2022 and 2021, there were 682,160 and 1,267,802 shares of common stock were available for grant, respectively.

In addition, at March 31, 2022 and 2021, options to purchase 21,000 and 30,000 shares of common stock, respectively, were outstanding under the 2004 Non-Employee Director Stock Option Plan. No options remain available for grant under this plan.

Stock Options

The Company did not grant any stock options during the year ended March 31, 2022. The following summarizes the Black-Scholes option-pricing model assumptions used to derive the weighted average fair value of the stock options granted during the years ended March 31, 2021 and 2020.

	Years Ended March 31,
	2021			2020

Weighted average risk free interest rate		0.44	%		1.76	%
Weighted average expected holding period (years)		5.96			5.70
Weighted average expected volatility		44.90	%		42.50	%
Weighted average expected dividend yield		-			-
Weighted average fair value of options granted	$	6.43		$	8.27

The following is a summary of stock option transactions:

	Number of Shares			Weighted Average Exercise Price

Outstanding at March 31, 2021		1,744,885		$	17.51
Granted		-		$	-
Exercised		(35,429	)	$	15.07
Forfeited		(13,957	)	$	20.74
Outstanding at March 31, 2022		1,695,499		$	17.53

At March 31, 2022, options to purchase 314,359 shares of common stock were unvested at the weighted average exercise price of $16.52.

Based on the market value of the Company’s common stock at March 31, 2022, 2021, and 2020, the pre-tax intrinsic value of options exercised was $245,000, $546,000, and $508,000, respectively. The total fair value of stock options vested during the years ended March 31, 2022, 2021, and 2020 was $2,174,000, $2,184,000, and $2,189,000, respectively.

The following summarizes information about the options outstanding at March 31, 2022:

		Options Outstanding							Options Exercisable
Range of Exercise price		Shares		Weighted Average Exercise Price		Weighted Average Remaining Life In Years		Aggregate Intrinsic Value	Shares		Weighted Average Exercise Price		Weighted Average Remaining Life In Years		Aggregate Intrinsic Value
$	5.20 to $6.47		301,234	$	6.46		0.74			301,234	$	6.46		0.74
$	6.48 to $18.20		504,241		13.40		6.02			277,422		11.93		4.24
$	18.21 to $22.83		468,467		19.59		6.80			380,927		19.51		6.69
$	22.84 to $28.04		192,233		26.26		4.50			192,233		26.26		4.50
$	28.05 to $34.17		229,324		29.62		3.95			229,324		29.62		3.95
			1,695,499	$	17.53		4.84	$5,657,000		1,381,140	$	17.76		4.14	$5,061,000

The aggregate intrinsic values in the above table represent the pre-tax value of all in-the-money options if all such options had been exercised on March 31, 2022 based on the Company’s closing stock price of $17.83 as of that date.

At March 31, 2022, there was $1,065,000 of total unrecognized compensation expense from stock-based compensation granted under the plans, which is related to non-vested shares. The compensation expense is expected to be recognized over a weighted average vesting period of 1.0 year.

Restricted Stock Units and Restricted Stock (collectively “RSUs”)

During the years ended March 31, 2022 and 2021 the Company granted 263,703 and 251,801 shares of RSUs, respectively, with an estimated grant date fair value of $5,775,000 and $4,150,000, respectively, which was based on the closing market price on the date of grant. The fair value related to these awards is recognized as compensation expense over the vesting period. These awards generally vest in three equal installments beginning each anniversary from the grant date, subject to continued employment. Upon vesting, these awards may be net share settled to cover the required withholding tax with the remaining amount converted into an equivalent number of shares of common stock. Total shares withheld during the years ended March 31, 2022 and 2021 were 84,762 and 22,202, respectively, based on the value of these awards as determined by the Company’s closing stock price on the vesting date.

The following is a summary of non-vested RSUs:

	Number of Shares			Weighted Average Grant Date Fair Value

Outstanding at March 31, 2021		354,484		$	17.22
Granted		263,703		$	21.90
Vested		(216,617	)	$	17.78
Forfeited		(2,507	)	$	20.72
Outstanding at March 31, 2022		399,063		$	19.98

As of March 31, 2022, there was $4,080,000 of unrecognized compensation expense related to these awards, which will be recognized over the remaining vesting period of approximately 1.5 years.

Performance Stock Units (“PSUs”)

In June 2021, the Company granted performance-based PSUs to its executives, which typically cliff vest after three-years subject to continued employment. These awards are contingent and granted separately for each of the following metrics: adjusted EBITDA, net sales, and relative total shareholder return (“TSR”). Compensation cost is determined at the grant date and recognized on a straight-line basis over the requisite service period to the extent the conditions are deemed probable. The number of shares earned at the end of the three-year period will vary, based only on actual performance, from 0% to 150% of the target number of PSUs granted. PSUs are not considered issued or outstanding ordinary shares of the Company.

Adjusted EBITDA and net sales are considered performance conditions. The Company will reassess the probability of achieving each performance condition separately at each reporting period. TSR is considered a market condition because it measures the Company’s return against the performance of the Russell 3000, excluding companies classified as financials and real estate, over a given period of time. Compensation cost related to the TSR award will not be adjusted even if the market condition is not met.

The Company calculated the fair value of the PSUs for each component individually. The fair value of PSUs subject to performance conditions is equal to the closing stock price on the grant date. The fair value of PSUs subject to the market condition is determined using the Monte Carlo valuation model.

The following table summarizes the assumptions used in determining the fair value of the TSR awards:

	Year Ended March 31,
	2022
Risk free interest rate		0.47	%
Expected life in years		3
Expected volatility of MPA common stock		53.70	%
Expected average volatility of peer companies		59.30	%
Average correlation coefficient of peer companies		26.70	%
Expected dividend yield		-
Grant date fair value	$	26.89

The following is a summary of non-vested PSUs:

	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding at March 31, 2021		-	$	-
Granted		84,593	$	23.19
Vested		-	$	-
Forfeited		-	$	-
Outstanding at March 31, 2022		84,593	$	23.19

At March 31, 2022, there was $1,448,000 of unrecognized compensation expense related to these awards, which will be recognized over the weighted average remaining vesting period of approximately 2.2 years.