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STOCK PLANS | 12 Months Ended
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Mar. 31, 2022
Share-based Payment Arrangement [Abstract] |
STOCK PLANS | STOCK PLANS 2011 Employee Stock Purchase Plan On September 7, 2011, the Company's stockholders approved the 2011 Employee Stock Purchase Plan (the ESPP), under which 2,500,000 shares of the Company's common stock have been reserved for issuance. On November 8, 2018, the Company increased the number of shares available under the ESPP by an additional 3,000,000 shares. The Company implemented the ESPP on March 1, 2012. Eligible employees may purchase shares of the Company's common stock through regular payroll deductions of up to 20% of their eligible compensation. Under the terms of the offering under the ESPP, the number of shares of the Company's common stock which a participant could purchase during any purchase period is limited to 2,000. In addition, the fair market value of shares purchased by an individual participant in the plan may not exceed $25,000 if the contribution period is within any calendar year. However, if contribution periods overlap calendar years, an individual participant is eligible to utilize the unused portion of the $25,000 limit from the subsequent purchase in the current purchase up to $50,000. Under the ESPP, shares of the Company's common stock may be purchased on the last day of each bi-annual offering period at 85% of the fair market value on the last day of such offering period. The offering periods run from March 1 through August 31 and from September 1 through the last day of February of each year. During the fiscal year ended March 31, 2022, employees purchased 498,415 shares under the ESPP with a weighted average purchase price per share of $29.26. At March 31, 2022, 1,253,398 shares were available for future issuance under the ESPP. 2019 Equity Incentive Plan On September 12, 2019, the Company's stockholders approved the 2019 Equity Incentive Plan (2019 Plan), which replaced the Company's Amended 2007 Plan. The 2019 Plan permits the granting of incentive and nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock awards, collectively referred to as "share-based awards." On September 10, 2020, the Company's stockholders approved an amendment to the 2019 Equity Incentive Plan (2019 Amended Plan). The amendment increased the number of shares reserved for issuance by 4,700,000 shares, established a one-year minimum vesting requirement for awards granted on or after September 10, 2020, and changed the factor used to calculate the increase or reduction in the number of shares available for issuance under the 2019 Amended Plan. The aggregate number of shares available for issuance under the 2019 Amended Plan will increase by 1.00 share for each share of common stock returned to the 2019 Amended Plan pursuant to a stock option or stock appreciation right and increase for each share: (i) subject to an award granted under the Amended 2007 Plan or 2019 Amended Plan that are not issued because such award expires or otherwise terminates without all of the shares covered by such award having been issued; (ii) any shares subject to an award under the Amended 2007 Plan or 2019 Amended Plan that are not issued because such award is settled in cash; (iii) any shares issued pursuant to an award granted under the Amended 2007 Plan or 2019 Amended Plan that are forfeited back to or repurchased by the Company because of failure to vest; and (iv) any shares that are reacquired or withheld by the Company to satisfy tax withholding obligations in connection with common stock issued pursuant to restricted stock, restricted stock units, performance stock awards, or other stock awards granted under the Amended 2007 Plan and 2019 Amended Plan by 2.76 for awards that are returned to the 2019 Amended Plan prior to September 10, 2020 and by 2.32 shares for awards that are returned to the 2019 Amended Plan on or after September 10, 2020. Furthermore, the share reserve under the 2019 Amended Plan is reduced by one share for each share of common stock issued pursuant to a stock option or stock appreciation right, 2.76 shares for each share of common stock issued pursuant to restricted stock, restricted stock units, performance stock awards, or other stock awards granted under the 2019 Amended Plan on or after September 12, 2019 but prior to September 10, 2020 and 2.32 shares for each share of common stock issued pursuant to restricted stock, restricted stock units, performance stock awards, or other stock awards after September 10, 2020. At March 31, 2022, an aggregate of 4,627,934 shares of unvested equity awards were outstanding under the 2019 Amended Plan. The 2019 Amended Plan is administered by the Compensation Committee of the Board of Directors. The Compensation Committee operates under guidelines established by the Board of Directors. The Compensation Committee has the authority to select the employees and consultants to whom awards are granted (except for directors and executive officers) and determine the terms of each award, including the number of shares of common stock subject to the award. Share-based awards generally vest over four years. The exercise price of stock options shall not be less than 100% of the fair market value of the common stock at the date of grant (110% for incentive stock options granted to holders of more than 10% of the voting stock of NetScout). The term of stock options granted cannot exceed seven years (five years for incentive stock options granted to holders of more than 10% of the voting stock of NetScout). Based on historical experience, the Company assumed an annualized forfeiture rate of 0% for awards granted to its independent directors, approximately 2% for awards granted to its senior executives, and approximately 5% granted to all remaining employees during the fiscal years ended March 31, 2022, 2021 and 2020. Periodically, the Company grants share-based awards to employees, officers, and directors of the Company and its subsidiaries. During the fiscal year ended March 31, 2022, the Company granted performance-based restricted stock units to certain executive officers that vest based upon the Company's total shareholder return as compared to the Russell 2000 Index over a three-year period. The performance-based restricted stock units were valued using the Monte Carlo Simulation model. The measurement and recognition of compensation expense is based on estimated fair values for all share-based payment awards made to its employees and directors. Share-based award grants are generally measured at fair value on the date of grant based on the number of shares granted and the quoted price of the Company's common stock. Such value is recognized as a cost of revenue or an operating expense over the corresponding vesting period. The following is a summary of share-based compensation expense including restricted stock units and performance-based restricted stock units granted pursuant to the Company's Amended 2007 Plan, the 2019 Plan, and the 2019 Amended Plan and employee stock purchases made under the Company's 2011 Employee Stock Purchase Plan, as amended, (ESPP), based on estimated fair values within the applicable cost and expense lines identified below (in thousands):
| Fiscal Year Ended March 31,
| 2022 |  | 2021 |  | 2020
Cost of product revenue | $ | 1,022 |  |  | $ | 1,038 |  |  | $ | 1,069 |
Cost of service revenue | 6,020 |  |  | 5,823 |  |  | 5,774 |
Research and development | 15,505 |  |  | 16,138 |  |  | 15,511 |
Sales and marketing | 19,684 |  |  | 17,328 |  |  | 17,085 |
General and administrative | 13,843 |  |  | 11,565 |  |  | 11,422 |
| $ | 56,074 |  |  | $ | 51,892 |  |  | $ | 50,861 |
Transactions under the Amended 2007, 2019 Plan and 2019 Amended Plan during the fiscal years ended March 31, 2022, 2021 and 2020 are summarized in the table below.
|  |  | Restricted Stock Units
|  |  |  |  | Number of Awards |  | Weighted Average Fair Value
Outstanding – March 31, 2019 |  |  |  |  | 4,210,655 |  |  | $ | 30.84 |
Granted |  |  |  |  | 2,062,110 |  |  | 26.32 |
Vested |  |  |  |  | (1,651,284) |  |  | 31.03 |
Canceled |  |  |  |  | (347,008) |  |  | 29.74 |
Outstanding – March 31, 2020 |  |  |  |  | 4,274,473 |  |  | $ | 28.68 |
Granted |  |  |  |  | 2,038,681 |  |  | 27.42 |
Vested |  |  |  |  | (1,630,228) |  |  | 28.63 |
Canceled |  |  |  |  | (187,313) |  |  | 28.28 |
Outstanding – March 31, 2021 |  |  |  |  | 4,495,613 |  |  | $ | 28.14 |
Granted |  |  |  |  | 2,121,937 |  |  | 29.06 |
Vested |  |  |  |  | (1,728,994) |  |  | 29.04 |
Canceled |  |  |  |  | (260,622) |  |  | 28.07 |
Outstanding – March 31, 2022 |  |  |  |  | 4,627,934 |  |  | $ | 28.23 |
At March 31, 2022, there were 4,779,939 shares of common stock available for grant under the 2019 Amended Plan. The Company does not currently expect to repurchase shares from any source to satisfy its obligations under the 2019 Amended Plan. The aggregate intrinsic value of stock options exercised and the fair value of restricted stock units vested at March 31, 2022, 2021 and 2020 were as follows (in thousands):
| Fiscal Year Ended March 31,
| 2022 |  | 2021 |  | 2020
Total fair value of restricted stock unit awards vested | $ | 49,593 |  |  | $ | 42,510 |  |  | $ | 37,783 |
At March 31, 2022, the total unrecognized compensation cost related to restricted stock unit awards was $95.9 million, which is expected to be amortized over a weighted-average period of 1.3 years.

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