STOCKHOLDERS' EQUITY

In May 2006, the Company's board of directors approved the 2006 Stock Plan ("2006 Plan"). The Company's stockholders subsequently adopted the 2006 Plan in September 2006, and became effective in October 2006. The Company reserved 7,000,000 shares of the Company's common stock for issuance under this plan. The 2006 Plan provides for granting incentive stock options to employees and non-statutory stock options to employees, directors or consultants. The stock option price of incentive stock options granted may not be less than the fair market value on the effective date of the grant. Other types of options and awards under the 2006 Plan may be granted at any price approved by the administrator, which generally will be the compensation committee of the board of directors. Options generally vest over four years and expire ten years after grant. In 2009, the 2006 Plan was amended to provide for the granting of stock purchase rights. The 2006 Plan expired in May 2016. As of March 31, 2019, there are no shares available for future grants under the 2006 Plan.

2012 Equity Incentive Plan

In June 2012, the Company's board of directors approved the 2012 Equity Incentive Plan ("2012 Plan"). The Company's stockholders subsequently adopted the 2012 Plan in July 2012, and became effective in August 2012. The Company reserved 4,100,000 shares of the Company's common stock for issuance under this plan. In August 2014, 2016 and 2018, the 2012 Plan was amended to allow for an additional 6,800,000 , 4,500,000 and 16,300,000 shares reserved for issuance, respectively. The 2012 Plan provides for granting incentive stock options to employees and non-statutory stock options to employees, directors or consultants, and granting of stock appreciation rights, restricted stock, restricted stock units and performance units, qualified performance-based awards and stock grants. The stock option price of incentive stock options granted may not be less than the fair market value on the effective date of the grant. Other types of options and awards under the 2012 Plan may be granted at any price approved by the administrator, which generally will be the compensation committee of the board of directors. Options, restricted stock and restricted stock units generally vest over four years and expire ten years after grant. The 2012 Plan expires in June 2022. As of March 31, 2019, 10.7 million shares remained available under the 2012 Plan.

2013 New Employee Inducement Incentive Plan

In September 2013, the Company's board of directors approved the 2013 New Employee Inducement Incentive Plan ("2013 Plan"). The Company reserved 1,000,000 shares of the Company's common stock for issuance under this plan. In November 2014, the 2013 Plan was amended to allow for an additional 1,200,000 shares reserved for issuance. In July 2015, the Plan was amended to allow for an additional 1,200,000 shares reserved for issuance. In connection with its approval of the August 2016 amendments to the 2012 Plan, the Board of Directors has approved the suspension of future grants under the 2013 Plan, which became effective immediately upon stockholder approval of the proposed 2012 Plan amendments in August 2016. In addition, the 2013 Plan was amended to reduce the number of shares reserved for issuance under the 2013 Plan to the number of shares that are then subject to outstanding awards under the 2013 Plan, leaving no shares available for future grant. The 2013 Plan provided for granting non-statutory stock options, stock appreciation rights, restricted stock, restricted stock and performance units and stock grants solely to newly hired employees as a material inducement to accepting employment with the Company. Options were granted at market value on the grant date under the 2013 Plan, unless determined otherwise at the time of grant by the administrator, which generally will be the compensation committee of the board of directors. Grants generally vest over four years and expire ten years after grant.

2017 New Employee Inducement Incentive Plan

In October 2017, the Company's board of directors approved the 2017 New Employee Inducement Incentive Plan ("2017 Plan"). The Company reserved 1,000,000 shares of the Company's common stock for issuance under this plan. In January and June 2018 , the 2017 Plan was amended to allow for an additional 1,500,000 and 1,500,000 shares reserved for issuance, respectively. The 2017 Plan provides for granting non-statutory stock options, stock appreciation rights, restricted stock, and performance units and stock grants solely to newly hired employees as a material inducement to accepting employment with the Company. Options are granted at market value on the grant date under the 2017 Plan, unless determined otherwise at the time of grant by the administrator, which generally will be the compensation committee of the board of directors. Grants generally vest over three years and expire ten years after grant. As of March 31, 2019, 0.6 million shares remained available under the 2017 plan.

Stock-Based Compensation

The following table summarizes stock-based compensation expense (as reclassified, see Note 14, in thousands):



	Years Ended March 31,
	2019		2018		2017
Cost of service revenue	$	5,527	$	3,977	$	3,308
Cost of product revenue	—		—		—
Research and development	12,313		6,625		3,762
Sales and marketing	11,951		6,630		5,334
General and administrative	14,717		11,944		9,058
Total	$	44,508	$	29,176	$	21,462

Stock Options, Stock Purchase Right and Restricted Stock Unit Activity

Stock option activity under all the Company's stock option plans since March 31, 2016, is summarized as follows:



	Number of Shares		Weighted Average Exercise Price Per Share
Outstanding at March 31, 2016	4,793,266		$	6.29
Granted	407,392		14.63
Exercised	(603,998	)	2.34
Canceled/Forfeited	(134,248	)	8.41
Outstanding at March 31, 2017	4,462,412		7.52
Granted	609,135		14.95
Exercised	(773,897	)	3.95
Canceled/Forfeited	(299,365	)	13.05
Outstanding at March 31, 2018	3,998,285		8.93
Granted	236,799		21.65
Exercised	(759,884	)	7.70
Canceled/Forfeited	(361,129	)	15.41
Outstanding at March 31, 2019	3,114,071		$	9.45

Vested and expected to vest March 31, 2019	3,114,071		$	9.45
Exercisable at March 31, 2019	2,737,032		$	8.33

Stock Purchase Right activity since March 31, 2016 is summarized as follows:



	Number of Shares		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in Years)
Balance at March 31, 2016	82,171		$	6.30	0.76
Granted	—		—
Vested and released	(69,426	)	6.00
Forfeited	(1,375	)	6.72
Balance at March 31, 2017	11,370		8.10		1.09
Granted	—		—
Vested and released	(6,395	)	8.26
Forfeited	—		—
Balance at March 31, 2018	4,975		8.10		1.09
Granted	—		—
Vested and released	(4,625	)	7.88
Forfeited	(350	)	7.88
Balance at March 31, 2019	—		$	—

Restricted stock unit activity since March 31, 2016 is summarized as follows:



	Number of Shares		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in Years)
Balance at March 31, 2016	4,544,799		$	8.08	1.67
Granted	2,491,877		15.15
Vested and released	(1,600,831	)	7.89
Forfeited	(496,795	)	9.56
Balance at March 31, 2017	4,939,050		11.57		1.55
Granted	3,481,870		14.41
Vested and released	(1,833,038	)	10.27
Forfeited	(652,339	)	12.73
Balance at March 31, 2018	5,935,543		13.51		1.60
Granted	5,726,787		19.77
Vested and released	(2,399,371	)	12.87
Forfeited	(1,442,471	)	16.85
Balance at March 31, 2019	7,820,488		$	17.68	1.35

The total intrinsic value of options exercised in the years ended March 31, 2019, 2018 and 2017 was $10.0 million, $9.0 million and $7.2 million, respectively. As of March 31, 2019, there was $107 million of unamortized stock-based compensation expense related to unvested stock options and awards which is expected to be recognized over a weighted average period of approximately 2.3 years.

1996 Employee Stock Purchase Plan

The Company's 1996 Stock Purchase Plan ("Employee Stock Purchase Plan") was adopted in June 1996 and became effective upon the closing of the Company's initial public offering in July 1997. Under the Employee Stock Purchase Plan, 500,000 shares of common stock were initially reserved for issuance. At the start of each fiscal year, the number of shares of common stock subject to the Employee Stock Purchase Plan increases so that 500,000 shares remain available for issuance. In May 2006, the Company's board of directors approved a ten-year extension of the Employee Stock Purchase Plan. Stockholders approved a ten-year extension of the Employee Stock Purchase Plan at the 2006 Annual Meeting of Stockholders held September 18, 2006. The Board of Directors approved a second ten-year extension in May 2017. Stockholders approved the second ten-year extension in August 2017. As a result of these extensions, the Employee Stock Purchase Plan is effective until August 2027. During fiscal 2019, 2018 and 2017, approximately $0.5 million, $0.4 million and $0.3 million shares, respectively, were issued under the Employee Stock Purchase Plan.

The Employee Stock Purchase Plan permits eligible employees to purchase common stock through payroll deductions at a price equal to 85% of the fair market value of the common stock at the beginning of each two-year offering period or the end of a six month purchase period, whichever is lower. When the Employee Stock Purchase Plan was reinstated in fiscal 2005, the offering period was reduced from two years to one year. The contribution amount may not exceed ten percent of an employee's base compensation, including commissions, but not including bonuses and overtime. In the event of a merger of the Company with or into another corporation or the sale of all or substantially all of the assets of the Company, the Employee Stock Purchase Plan provides that a new exercise date will be set for each purchase right under the plan which exercise date will occur before the date of the merger or asset sale.

As of March 31, 2019, there was approximately $1.8 million of total unrecognized compensation cost related to employee stock purchases. This cost is expected to be recognized over a weighted average period of 0.6 years.

Assumptions Used to Calculate Stock-Based Compensation Expense

The fair value of each of the Company's option grants has been estimated on the date of grant using the Black-Scholes pricing model with the following assumptions:



	Years Ended March 31,
	2019			2018			2017
Expected volatility	41		%	41		%	44		%
Expected dividend yield	—			—			—
Risk-free interest rate	2.5% to 3.0%			1.8% to 2.4%			1.1% to 2.2%
Weighted average expected term (in years)	4.5 years			4.8 years			4.9 years

Weighted average fair value of options granted	$	8.19		$	5.70		$	5.74

The estimated fair value of stock purchase rights granted under the Employee Stock Purchase Plan was estimated using the Black-Scholes pricing model with the following weighted-average assumptions:



	Years Ended March 31,
	2019			2018			2017
Expected volatility	41		%	40		%	37		%
Expected dividend yield	—			—			—
Risk-free interest rate	2.43		%	1.33		%	0.65		%
Weighted average expected term (in years)	0.8 years			0.8 years			0.8 years

Weighted average fair value of rights granted	$	5.74		$	4.10		$	4.19

Stock Repurchases

In October 2015, the Company's board of directors authorized the Company to purchase an additional $15.0 million of its common stock from time to time until October 20, 2016 under the 2015 Repurchase Plan. The plan expired in October 2016 with an unused authorized repurchase amount of $15.0 million.

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 March 31, 2019 was approximately $7.1 million.