SHARE-BASED COMPENSATION

6 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

On September 12, 2019, the Company's stockholders approved the 2019 Equity Incentive Plan (2019 Plan), which replaced the Company's 2007 Equity Incentive Plan, as amended (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 and restatement of the 2019 Plan (2019 Amended Plan) to increase 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.

On August 24, 2022, the Company's stockholders approved an amendment to the 2019 Amended Plan (2019 Second Amended Plan). This amendment increased the number of shares reserved for issuance by 7,000,000 shares and changed the factor used to calculate the increase or reduction in the number of shares available for issuance under the 2019 Second Amended Plan. At August 24, 2022, there was a total of 8,764,811 shares reserved for issuance under the 2019 Second Amended Plan, which consisted of 7,000,000 new shares plus 1,764,811 shares that remained available for grant under the 2019 Amended Plan as of August 24, 2022, the effective date of the 2019 Second Amended Plan. At September 30, 2022, an aggregate of 6,774,194 shares of unvested equity awards were outstanding under the 2019 Second Amended Plan.

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 ending in June 2024. 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, the 2019 Amended Plan, and the 2019 Second Amended Plan, and employee stock purchases made under the Company's 2011 Amended and Restated Employee Stock Purchase Plan (ESPP), based on estimated fair values within the applicable cost and expense lines identified below (in thousands):


	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Cost of product revenue	$	315	$	321	$	607	$	595
Cost of service revenue	2,080		1,907		3,825		3,520
Research and development	4,580		4,902		9,011		8,993
Sales and marketing	6,043		5,842		11,793		10,656
General and administrative	3,483		3,763		6,846		6,936
	$	16,501	$	16,735	$	32,082	$	30,700

Employee Stock Purchase Plan – The Company maintains the ESPP for all eligible employees as described in the Company's Annual Report on Form 10-K for the year ended March 31, 2022. 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 value on the last day of such offering period. The offering periods run from March 1st through August 31st and from September 1st through the last day of February each year. During the six months ended September 30, 2022, employees purchased 206,029 shares under the ESPP and the fair value per share was $31.74.

On August 24, 2022, the Company's stockholders approved an amendment to the ESPP that increased the number of shares available under the ESPP by an additional 2,000,000 shares.