We may grant incentive stock options, non-qualified stock options, SSARs, restricted shares, restricted stock units, 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 stock 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 grants of restricted shares, restricted stock units or performance shares.

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 and restricted stock units, 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, restricted stock units, 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 stock unit and 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. For restricted stock unit, 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, performance period term 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 stock units, restricted shares, and SSAR grants subject to a service condition using the graded vesting method. 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 restricted and performance grants included in the condensed consolidated statements of operations:


	Three Months Ended June 30,
(In thousands)	2023		2022
Product development		1,625		1,521
Sales and marketing		166		275
General and administrative		1,376		692
Total share-based compensation expense		3,167		2,488

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.

The following table summarizes the activity during the three months ended June 30, 2023 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, 2023		1,572,460		$	26.04
Granted		—			—
Exercised		(63,153	)		16.10
Forfeited		—			—
Expired		—			—
Outstanding at June 30, 2023		1,509,307		$	26.45		3.0	$	63,676
Exercisable at June 30, 2023		1,509,307		$	26.45		3.0	$	63,676
Vested and expected to vest at June 30, 2023		1,509,307		$	26.45		3.0	$	63,676

As of June 30, 2023, there was no unrecognized share-based compensation expense related to SSARs.

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 three months ended June 30, 2023 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, 2023		407,324		$	47.53
Granted		23,574			70.08
Vested		(79,087	)		44.79
Forfeited		(11,855	)		44.75
Outstanding at June 30, 2023		339,956		$	49.84

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. As of June 30, 2023, total unrecognized share-based compensation expense related to unvested restricted shares was $9.6 million, which is expected to be recognized over a weighted-average vesting period of 2.0 years.

We granted restricted stock units to our Chief Executive Officer, the vesting of which is service-based. Certain restricted stock units are also subject to a market condition. The following table summarizes the activity during three months ended June 30, 2023 for restricted stock units awarded under the 2020 Plan:


	Number of Shares		Weighted-Average Grant-Date Fair Value
			(per share)
Outstanding at April 1, 2023		67,856	$	71.62
Granted		—		—
Vested		—		—
Forfeited		—		—
Outstanding at June 30, 2023		67,856	$	71.62

As of June 30, 2023, total unrecognized share-based compensation expense related to non-vested restricted stock units was $4.1 million, which is expected to be recognized over the weighted-average vesting period of 2.8 years.

Upon approval of the Compensation Committee of our Board of Directors, after achieving the performance conditions associated with our annual bonus plan, we granted 5,168 common shares to our Chief Executive Officer in May 2023 that vested immediately for a total value of $0.4 million.