We may grant incentive stock options, non-qualified stock options, SSARs, restricted shares, and performance shares under our shareholder-approved 2020 Stock Incentive Plan (the 2020 Plan) for up to 2.25 million common shares, plus 868,864 common shares, the number of shares that were remaining for grant under the 2016 Stock Incentive Plan (the 2016 Plan) as of the effective date of the 2020 Plan, plus the number of shares remaining for grant under the 2016 Plan that are forfeited, settled in cash, canceled or expired. The maximum aggregate number of restricted shares or restricted share units that may be granted under the 2020 Plan is 3.1 million.

We may distribute authorized but unissued shares or treasury shares to satisfy share option and SSAR exercises or restricted share and performance share grants.

For SSARs, the exercise price must be set at least equal to the closing market price of our common shares on the date of grant. The maximum term of SSARs is seven years from the date of grant. The Compensation Committee of the Board of Directors establishes the period over which SSARs subject to a service condition vest and the vesting criteria for SSARs subject to a market condition.

Restricted shares, whether time-vested or performance-based, may be issued at no cost or at a purchase price that may be below their fair market value, but are subject to forfeiture and restrictions on their sale or other transfer. Performance-based grants may be conditioned upon the attainment of specified performance objectives and other conditions, restrictions, and contingencies. Restricted shares have the right to receive dividends, if any, upon vesting, subject to the same forfeiture provisions that apply to the underlying grants.

We record compensation expense related to SSARs, restricted shares, and performance shares granted to certain employees and non-employee directors based on the fair value of the awards on the grant date. The fair value of restricted share grants subject only to a service condition is based on the closing price of our common shares on the grant date. For stock option and SSAR grants subject only to a service condition, we estimate the fair value on the grant date using the Black-Scholes-Merton option pricing model with inputs including the closing market price at grant date, exercise price and assumptions regarding the risk-free interest rate, expected volatility of our common shares based on historical volatility, and expected term as estimated using the simplified method. For restricted share and SSAR grants subject to a market condition, we estimate the fair value on the grant date through a lattice option pricing model that utilizes a Monte Carlo analysis with inputs including the closing market price at grant date, share price threshold and assumptions regarding the risk-free interest rate and expected volatility of our common shares based on historical volatility. Inputs for SSAR grants subject to a market condition also include exercise price, remaining contractual term, and suboptimal exercise factor.

We record compensation expense for restricted shares and SSAR grants subject to a service condition using the graded vesting method. We record compensation expense for SSAR grants subject only to a market condition over the derived service period, which is an output of the lattice option pricing model. Under the 2020 Plan, the fair value of performance shares is based on the closing price of our common shares on the settlement date of the performance award, for which we record compensation expense over the service period consistent with our annual bonus incentive plan as approved by the Compensation Committee of the Board of Directors.

The following table summarizes the share-based compensation expense for SSARs, restricted and performance awards included in the Consolidated Statements of Operations for fiscal 2022, 2021 and 2020:


	Year Ended March 31,
(In thousands)	2022		2021		2020
Product development		8,186		21,634		2,241
Sales and marketing		1,355		4,254		321
General and administrative		5,008		14,206		2,643
Total share-based compensation expense		14,549		40,093		5,205

SSARs are rights granted to an employee to receive value equal to the difference between the price of our common shares on the date of exercise and the exercise price. The value is settled in common shares of Agilysys, Inc.

We use a Black-Scholes-Merton option pricing model to estimate the fair value of service condition SSARs. There were no service condition SSARs granted in fiscal 2022. The following table summarizes the principal assumptions utilized in valuing service condition SSARs granted in fiscal 2021 and 2020:


	2021			2020
Risk-free interest rate		0.31	%	1.38%-1.74%
Expected life (in years)	4			4.5-5
Expected volatility		42.99	%	31.7%-32.42%
Weighted-average grant date fair value	$	22.57		$	10.01

The risk-free interest rate is based on the yield of a zero coupon U.S. Treasury bond whose maturity period approximates the expected life of the SSARs. The expected life is estimated using historical data representing the period of time the awards are expected to be

outstanding. The estimated fair value of the SSARs granted is recognized over the vesting period of the awards utilizing the graded vesting method. Under this method, the compensation cost related to unvested amounts begins to be recognized as of the grant date.

We use a Lattice option pricing model to estimate the fair value of market condition SSARs. There were no market condition SSARs granted in fiscal 2022. The following table summarizes the principal valuation assumptions utilized and the resulting fair value of market condition SSARs granted in fiscal 2021 and 2020:


	2021			2020
Risk-free interest rate over contractual term		0.60	%		1.40	%
Expected volatility		40.00	%		31.70	%
Suboptimal exercise factor	2.50x			3.0x
Weighted-average grant date fair value	$	19.55		$	9.60

The following table summarizes the activity during fiscal 2022 for SSARs awarded under the 2020 and 2016 Plans:


(In thousands, except share and per share data)	Number of Rights			Weighted- Average Exercise Price		Remaining Contractual Term		Aggregate Intrinsic Value
				(per right)		(in years)
Outstanding at April 1, 2021		3,068,253		$	20.90
Granted		—			—
Exercised		(839,068	)		12.86
Forfeited		(55,599	)		20.02
Cancelled/expired		(647	)		14.22
Outstanding at March 31, 2022		2,172,939		$	24.02		4.4	$	34,454
Exercisable at March 31, 2022		1,462,262		$	23.75		4.3	$	23,590
Vested and expected to vest at March 31, 2022		2,172,939		$	24.02		4.4	$	34,454

The following table presents additional information related to SSARs activity during fiscal 2022, 2021 and 2020:


(In thousands)	2022		2021		2020
Compensation expense	$	10,030	$	35,808	$	1,666
Total intrinsic value of SSARs exercised	$	34,437	$	25,153	$	519
Total fair value of SSARs vesting	$	6,439	$	31,380	$	1,328

As of March 31, 2022, total unrecognized share-based compensation expense related to non-vested service condition SSARs was $3.8 million, which is expected to be recognized over the weighted-average vesting period of 1.0 years.

A total of 636,238 shares, net of 31,513 shares withheld to cover the employee’s minimum applicable income taxes, were issued from treasury shares to settle SSARs exercised during the twelve months ended March 31, 2022. The shares withheld were returned to treasury shares.

We granted shares to certain of our Directors, executives and key employees, the vesting of which is service-based. Certain restricted shares are also subject to a market condition. The following table summarizes the activity during the twelve months ended March 31, 2022 for restricted shares awarded under the 2020 and 2016 Plans:


	Number of Shares			Weighted- Average Grant- Date Fair Value
				(per share)
Outstanding at April 1, 2021		132,198		$	37.67
Granted		123,543			43.69
Vested		(96,214	)		36.74
Forfeited		(10,614	)		38.92
Outstanding at March 31, 2022		148,913		$	43.56

The weighted-average grant date fair value of the restricted shares includes grants subject only to a service condition and certain grants subject to both a service condition and a market condition. During fiscal 2022, a total of 147,900 shares were issued from treasury.

The following table presents additional information related to restricted share activity during fiscal years 2022, 2021, and 2020:


(In thousands)	2022		2021		2020
Compensation expense	$	4,339	$	4,105	$	3,232
Total fair value of restricted share vesting	$	3,297	$	7,554	$	3,491

As of March 31, 2022, total unrecognized share-based compensation expense related to non-vested restricted shares was $4.5 million, which is expected to be recognized over a weighted-average vesting period of 2.2 years. We do not include restricted shares in the calculation of earnings per share until the shares are vested.

Upon approval of the Compensation Committee of our Board of Directors, after achieving the performance conditions associated with our annual bonus plan, we grant common shares to our Chief Executive Officer that vest immediately. Once attainment of the performance conditions becomes probable, we recognize compensation expense related to performance shares ratably over the performance period. The number of performance shares granted will be based on the closing price of our common shares on the grant date and settlement date, which are the same under the 2020 plan.

Based on the performance conditions achieved as they relate to our annual bonus plan, management estimates a liability of $0.2 million as of March 31, 2022, to be settled through the granting and vesting of performance shares after March 31, 2022. We recognized compensation expense related to performance shares of $0.2 million in each of the fiscal years ending March 31, 2022, 2021, and 2020, respectively.