Share-based Payments

9 Months Ended

Dec. 31, 2022

15. Share-based Payments

Stock Options

During the nine months ended December 31, 2022 and 2021, no options to purchase shares of the Company’s common stock were granted.

The following is a summary of stock option transactions:

	Number of Shares			Weighted Average Exercise Price
Outstanding at March 31, 2022		1,695,499		$	17.53
Granted		-		$	-
Exercised		(323,249	)	$	6.68
Forfeited/Cancelled		(101,257	)	$	18.62
Expired		(3,000	)	$	9.85
Outstanding at December 31, 2022		1,267,993		$	20.22

At December 31, 2022, options to purchase 99,839 shares of common stock were unvested at a weighted average exercise price of $15.16.

At December 31, 2022, there was $295,000 of total unrecognized compensation expense related to unvested stock option awards, which will be recognized over the weighted average remaining vesting period of approximately six months.

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

During the nine months ended December 31, 2022 and 2021, the Company granted (i) performance-based restricted stock awards which had a threshold performance level of 33,333 shares, a target performance level of 66,667 shares, and a maximum performance level of 100,000 shares at the grant date for both periods and (ii) 229,121 and 163,703 of time-based vesting restricted stock units, respectively, based on the closing market price on the grant date.

The following is a summary of non-vested RSUs:

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at March 31, 2022		399,063		$	19.98
Granted		329,121		$	13.46
Vested		(228,519	)	$	20.08
Forfeited/Cancelled		(64,921	)	$	19.39
Outstanding at December 31, 2022		434,744		$	15.08

At December 31, 2022, there was $4,143,000 of unrecognized compensation expense related to RSUs, which will be recognized over the weighted average remaining vesting period of approximately 1.7 years.The Company’s unrecognized compensation expense includes restricted stock awards at the target performance level as deemed probable at quarter-end.

Performance Stock Units (“PSUs”)

During the nine months ended December 31, 2022 and 2021, the Company granted 126,028 and 84,593 PSUs (at target performance levels), respectively, 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 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:

	Nine Months Ended December 31,
	2022			2021
Risk free interest rate		3.35	%		0.47	%
Expected life in years		3			3
Expected volatility of MPA common stock		51.30	%		53.70	%
Expected average volatility of peer companies		62.70	%		59.30	%
Average correlation coefficient of peer companies		27.50	%		26.70
Expected dividend yield		-			-
Grant date fair value	$	16.02		$	26.89

The following is a summary of non-vested PSUs:

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at March 31, 2022		84,593		$	23.19
Granted		126,028		$	14.00
Vested		-		$	-
Forfeited		(15,482	)	$	20.01
Outstanding at December 31, 2022		195,139		$	17.51

At December 31, 2022, there was $2,231,000 of unrecognized compensation expense related to these awards, which will be recognized over the weighted average remaining vesting period of approximately 2.1 years.