Stock-Based Compensation and Stock Incentive Plans

9 Months Ended

Oct. 31, 2011

Stock-Based Compensation and Stock Incentive Plans

9. Stock-Based Compensation and Stock Incentive Plans

2011 Stock Plan.

On July 20, 2011 the stockholders of SeaChange approved the adoption of SeaChange’s 2011 Compensation and Incentive Plan under which 2.8 million shares of common stock were authorized and terminated the Amended and Restated 2005 Equity Compensation and Incentive Plan. The 2011 Compensation and Incentive Plan (the “2011 Plan”) provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, and other equity based non stock option awards as determined by the plan administrator for the purchase of up to an aggregate of 2,800,000 shares of SeaChange’s common stock by officers, employees, consultants and directors of SeaChange. The Company may satisfy awards upon the exercise of stock options or restricted stock units with newly issued shares or treasury shares. The Board of Directors is responsible for the administration of the 2011 Plan and determining the term of each award, award exercise price, number of shares for which each award is granted and the rate at which each award is exercisable.

Option awards may be granted to employees at an exercise price per share of not less than 100% of the fair market value per common share on the date of the grant. Restricted stock units and other equity-based non-stock option awards may be granted to any officer, employee, director or consultant at a purchase price per share as determined by the Board of Directors. Awards granted under the 2011 Plan generally vest over three years and expire seven years from the date of the grant.

Stock-based compensation cost is measured at the grant date at the fair value of the award and is recognized over the employee’s requisite service period. The following table presents total stock-based compensation included in the Consolidated Statement of Income:

	Three Months Ended				Nine Months Ended
	October 31,				October 31,
	2011		2010		2011		2010
	(in thousands)				(in thousands)
Cost of revenues	$	142	$	27	$	383	$	147
Research and development		107		108		427		339
Selling and marketing		292		72		1,005		270
General and administrative		612		206		1,785		502
Total stock-based compensation		1,153		413		3,600		1,258