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STOCK-BASED COMPENSATION - Note 6

9 Months Ended

Dec. 31, 2017

Equity [Abstract]

STOCK-BASED COMPENSATION - Note 6

6. STOCK-BASED COMPENSATION

The following table summarizes information pertaining to the stock-based compensation expense from stock options and stock awards (in thousands, except weighted-average grant-date fair value and recognition period):

			Three Months Ended						Nine Months Ended
			December 31,						December 31,
			2017			2016			2017			2016
Cost of service revenue		$	455		$	538		$	1,319		$	1,338
Cost of product revenue			-			-			-			-
Research and development			1,794			1,061			4,445			2,811
Sales and marketing			3,362			2,452			8,577			6,118
General and administrative			2,519			2,020			6,797			5,363
Total		$	8,130		$	6,071		$	21,138		$	15,630

			Nine Months Ended
			December 31,
			2017			2016
Stock options outstanding at the beginning of the period:			4,462			4,793
Options granted			427			359
Options exercised			(421)			(339)
Options canceled and forfeited			(176)			(42)
Options outstanding at the end of the period:			4,292			4,771
Weighted-average fair value of grants during the period		$	5.30		$	5.47
Total intrinsic value of options exercised during the period		$	4,312		$	3,704
Weighted-average remaining recognition period at period-end (in years)			2.14			2.12

Stock awards outstanding at the beginning of the period:			4,950			4,627
Stock awards granted			2,884			2,116
Stock awards vested			(1,615)			(1,419)
Stock awards canceled and forfeited			(447)			(286)
Stock awards outstanding at the end of the period:			5,772			5,038
Weighted-average fair value of grants during the period		$	13.89		$	15.07
Weighted-average remaining recognition period at period-end (in years)			2.67			2.56

Total unrecognized compensation expense at period-end		$	64,625		$	51,372

Performance Stock Units

During the nine months ended December 31, 2017, the Company issued restricted performance stock units (PSUs) to a group of executives with vesting that is contingent on both market performance and continued service. These PSUs vest (1) 50% on September 19, 2019 and (2) 50% on September 19, 2020, in each case subject to the performance of the Company's common stock relative to the Russell 2000 Index (the benchmark) during the period from grant date through such vesting date. A 2x multiplier will be applied to the total shareholder returns (TSR) for each 1% of positive or negative relative TSR, and the number of shares earned will increase or decrease at the end of each respective performance measurement period by 2% of the target numbers. In the event the Company's common stock performance is below negative 30% relative to the benchmark, no shares will be issued. These PSU grants are included in the restricted stock unit activity disclosure for the nine months ended December 31, 2017.

To value these market-based PSUs under the Equity Compensation Plans, the Company used a Monte Carlo simulation model on the date of grant. Fair value determined using the Monte Carlo simulation model varies based on the assumptions used for the expected stock price volatility, the correlation coefficient between the Company and the NASDAQ Composite Index, risk free interest rates, and future dividend payments.

Stock Repurchases

In May 2017, the Company's board of directors authorized the Company to purchase $25.0 million of its common stock from time to time under the 2017 Repurchase Plan (the "2017 Plan"). The 2017 Plan expires when the maximum purchase amount is reached, or upon the earlier revocation or termination by the board of directors. The remaining amount available under the 2017 Plan at December 31, 2017 was approximately $7.1 million.

The stock repurchase activity as of December 31, 2017 is summarized as follows (in thousands):

						Weighted Average
			Shares			Price			Amount
			Repurchased			Per Share			Repurchased (1)
Balance as of September 30, 2017			1,064		$	13.23		$	14,081
Purchase of common stock under 2017 Repurchase Plan			299			12.81			3,826
			1,363		$	13.14		$	17,907

(1) Amount excludes commission fees.

The total purchase price of the common stock repurchased and retired was reflected as a reduction to consolidated stockholders' equity during the period of repurchase.