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MANAGEMENT AGREEMENT | 6 Months Ended
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Sep. 30, 2019
MANAGEMENT AGREEMENT |
MANAGEMENT AGREEMENT | MANAGEMENT AGREEMENT In November 2017, we entered into a new management agreement (the "2017 Management Agreement"), with ZelnickMedia Corporation ("ZelnickMedia") that replaces our previous agreement with ZelnickMedia and pursuant to which ZelnickMedia provides financial and management consulting services through March 31, 2024. The 2017 Management Agreement became effective January 1, 2018. As part of the 2017 Management Agreement, Strauss Zelnick, the President of ZelnickMedia, continues to serve as Executive Chairman and Chief Executive Officer of the Company, and Karl Slatoff, a partner of ZelnickMedia, continues to serve as President of the Company. The 2017 Management Agreement provides for an annual management fee of $3,100 over the term of the agreement and a maximum annual bonus opportunity of $7,440 over the term of the agreement, based on the Company achieving certain performance thresholds. In consideration for ZelnickMedia's services, we recorded consulting expense (a component of General and administrative expenses) of $1,705 and $1,705 during the three months ended September 30, 2019 and 2018, respectively, and $3,375 and $3,410 during the six months ended September 30, 2019 and 2018, respectively. We recorded stock-based compensation expense for restricted stock units granted to ZelnickMedia, which is included in General and administrative expenses, of $5,956 and $5,682 during the three months ended September 30, 2019 and 2018, respectively, and $11,501 and $10,199 during the six months ended September 30, 2019 and 2018, respectively. In connection with the 2017 Management Agreement, we have granted restricted stock units as follows:
| Six Months Ended September 30,
| 2019 |  | 2018
Time-based | 92 |  |  | 86 |
Market-based(1) | 168 |  |  | 158 |
Performance-based(1) |  |  |  |  |
IP | 28 |  |  | 27 |
Recurrent Consumer Spending ("RCS") | 28 |  |  | 26 |
Total—Performance-based | 56 |  |  | 53 |
Total Restricted Stock Units | 316 |  |  | 297 |
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(1) | Represents the maximum number of shares eligible to vest.
Time-based restricted stock units granted in fiscal year 2020 will vest on April 13, 2021, and those granted in fiscal year 2019 will vest on April 13, 2020, in each case provided that the 2017 Management Agreement has not been terminated prior to such vesting date. Market-based restricted stock units granted in fiscal year 2020 are eligible to vest on April 13, 2021, and those granted in fiscal year 2019 are eligible to vest on April 13, 2020, in each case provided that the 2017 Management Agreement has not been terminated prior to such vesting date. Market-based restricted stock units are eligible to vest based on the Company's Total Shareholder Return (as defined in the relevant grant agreement) relative to the Total Shareholder Return (as defined in the relevant grant agreement) of the companies that constitute the NASDAQ Composite Index as of the grant date measured over a two-year period. To earn the target number of market-based restricted stock units (which represents 50% of the number of the market-based restricted stock units set forth in the table above), the Company must perform at the 50th percentile, with the maximum number of market-based restricted stock units earned if the Company performs at the 75th percentile. Performance-based restricted stock units granted in fiscal year 2020 are eligible to vest on April 13, 2021, and those granted in fiscal year 2019 are eligible to vest on April 13, 2020, in each case provided that the 2017 Management Agreement has not been terminated prior to such vesting date. The performance-based restricted stock units, of which 50% are tied to "IP" and 50% to "RCS" (as defined in the relevant grant agreement), are eligible to vest based on the Company's achievement of certain performance metrics (as defined in the relevant grant agreement) of either individual product releases of "IP" or "RCS" measured over a two-year period. The target number of performance-based restricted stock units that may be earned pursuant to these grants is equal to 50% of the grant amounts set forth in the above table (the numbers in the table represent the maximum number of performance-based restricted stock units that may be earned). At the end of each reporting period, we assess the probability of each performance metric and upon determination that certain thresholds are probable, we record expense for the unvested portion of the shares of performance-based restricted stock units. The unvested portion of time-based, market-based and performance-based restricted stock units held by ZelnickMedia were 613 and 526 as of September 30, 2019 and March 31, 2019, respectively. 209 restricted stock units previously granted to ZelnickMedia vested and 20 restricted stock units were forfeited by ZelnickMedia during the six months ended September 30, 2019.

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