SHARE-BASED COMPENSATION

12 Months Ended

Mar. 31, 2022

12. SHARE-BASED COMPENSATION

SHARE-BASED PLANS

In each of the years ended March 31, 2022, 2021 and 2020, we issued share-based payment awards and had outstanding share-based payment awards under the following plans: (1) the 2012 Employee Long-Term Incentive Plan (“2012 Employee LTIP”), and (2) the 2017 Non-Employee Director Long-Term Incentive Plan (“2017 Director LTIP”). On September 16, 2021, our shareholders approved the 2021 Employee Long-Term Incentive Plan (“2021 Employee LTIP”). The 2021 Employee LTIP is effective October 1, 2021 and replaces the 2012 Employee LTIP. Beginning September 16, 2021, we permanently ceased issuing any additional shares under the 2012 Employee LTIP.

2012 Employee LTIP and 2021 Employee LTIP

On September 16, 2021, our stockholders approved the 2021 Employee LTIP that was adopted by the Board on July 21, 2021. Under the 2021 Employee LTIP, 3,000,000 shares, retroactively adjusted for the stock split, were authorized for grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, or other share-based awards to ePlus employees.

On September 13, 2012, our stockholders approved the 2012 Employee LTIP that was adopted by the Board on July 10, 2012. Under the 2012 Employee LTIP, 3,000,000 shares, retroactively adjusted to reflect the stock split, were authorized for grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, or other share-based awards to ePlus employees.

The purpose of these plans is to encourage our employees to acquire a proprietary interest in the growth and performance of ePlus, thus enhancing the value of ePlus for the benefit of its stockholders, and to enhance our ability to attract and retain exceptionally qualified individuals. These plans are administered by the Compensation Committee. Shares issuable under these plans may consist of authorized but unissued shares or shares held in our treasury. Under these plans, the Compensation Committee will determine the time and method of exercise or vesting of the awards. Shares under these plans will not be used to compensate our outside directors, who may be compensated under the separate 2017 Director LTIP, as discussed below.

2017 Director LTIP

On September 12, 2017, our stockholders approved the 2017 Director LTIP that was adopted by the Board on July 24, 2017. Under the 2017 Director LTIP, 300,000 shares, retroactively adjusted for the stock split, were authorized for grant to non-employee directors. The purpose of the 2017 Director LTIP is to align the economic interests of the directors with the interests of stockholders by including equity as a component of pay and to attract, motivate and retain experienced and knowledgeable directors. Each director receives an annual grant of restricted stock having a grant-date fair value equal to the cash compensation earned by an outside director during our fiscal year ended immediately before the respective annual grant-date. These restricted shares are prohibited from being sold, transferred, assigned, pledged, or otherwise encumbered or disposed of. The shares vest half on the one-year anniversary and half on the second-year anniversary from the date of the grant. In addition, each director may also elect to receive stock in lieu of their cash compensation. Stock received in lieu of cash vests immediately.

STOCK OPTION ACTIVITY

During the years ended March 31, 2022, 2021, and 2020, we did not grant any stock options, nor did we have any outstanding stock options.

RESTRICTED STOCK ACTIVITY

During the year ended March 31, 2022, we granted 14,316 restricted shares, adjusted for the stock split, under the 2017 Director LTIP and 155,722 restricted shares, adjusted for the stock split, under the 2012 Employee LTIP, and no shares were granted under the 2021 Employee LTIP.

Cumulatively, as of March 31, 2022, we granted a total of 81,476 restricted shares, adjusted for the stock split, under the 2017 Director LTIP and 2,144,578 restricted shares, adjusted for the stock split, under the 2012 Employee LTIP.

A summary of the non-vested restricted shares for year ended March 31, 2022, reflecting the stock split, is as follows:

	Number of Shares			Weighted Average Grant-date Fair Value

Nonvested April 1, 2021		366,756		$	37.49
Granted		170,038		$	46.56
Vested		(185,716	)	$	39.19
Forfeited		(7,272	)	$	34.07
Nonvested March 31, 2022		343,806		$	41.01

In each of the years ended March 31, 2022, 2021 and 2020, we used the closing stock price on the grant date or, if the grant date falls on a date the stock was not traded, the previous day’s closing stock price for the fair value of the award.

The weighted-average grant date fair value of restricted shares granted during the years ended March 31, 2022, 2021, and 2020 was $46.56, $35.95, and $36.47, respectively.

The aggregated fair value of restricted shares that vested during the years ended March 31, 2022, 2021, and 2020 was $7.1 million, $7.7 million, and $7.6 million, respectively.

Upon each vesting period of the restricted stock awards to employees, participants are subject to minimum tax withholding obligations. The 2012 Employee LTIP, the 2021 Employee LTIP, and the 2017 Director LTIP allows us to withhold a sufficient number of shares due to the participant to satisfy their minimum tax withholding obligations. For the year ended March 31, 2022, we withheld 55,430 shares of common stock, adjusted for the stock split, at a value of $2.6 million, which was included in treasury stock. For the year ended March 31, 2021, we withheld 75,280 shares of common stock, adjusted for the stock split, at a value of $2.7 million, which was included in treasury stock.

COMPENSATION EXPENSE

We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period. We account for forfeitures when they occur. There are no additional conditions for vesting other than service conditions.

During the years ended March 31, 2022, 2021 and 2020, we recognized $7.1 million, $7.2 million, and $8.0 million, respectively, of total share-based compensation expense. We recognized tax benefits related to share-based compensation of $2.0 million, $2.2 million, and $2.2 million for the years ended March 31, 2022, 2021, and 2020, respectively, which were included as a reduction to our provision for income taxes. As of March 31, 2022, the total unrecognized compensation expense related to non-vested restricted stock was $8.7 million, which is expected to be recognized over a weighted-average period of 27 months.

We also provide our employees with a contributory 401(k) profit sharing plan. We may make contributions, which are fully vested when they are made, to the plan. These contributions are not required. The decision whether to make contributions is entirely within our discretion. For the years ended March 31, 2022, 2021, and 2020, we recognized expense for employer contributions to the plan of $3.4 million, $3.0 million, and $2.8 million, respectively.