Quantum Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

STOCK INCENTIVE PLANS AND SHARE-BASED COMPENSATION

STOCK INCENTIVE PLANS AND SHARE-BASED COMPENSATION

9 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK INCENTIVE PLANS AND SHARE-BASED COMPENSATION

Share-Based Compensation

The following table summarizes share-based compensation (in thousands):



	Three Months Ended				Nine Months Ended
	December 31, 2015		December 31, 2014		December 31, 2015		December 31, 2014
Share-based compensation:
Cost of revenue	$	313	$	362	$	1,006	$	1,109
Research and development	488		600		1,529		1,983
Sales and marketing	658		830		2,367		2,627
General and administrative	780		1,126		2,437		2,936
	$	2,239	$	2,918	$	7,339	$	8,655
Share-based compensation by type of award:
Stock options	$	—	$	153	$	2	$	464
Restricted stock	1,955		2,584		6,552		7,597
Stock purchase plan	284		181		785		594
	$	2,239	$	2,918	$	7,339	$	8,655

Stock Incentive Plans - Grants and Fair Value

Stock Options

No stock options were granted during the third quarter or first nine months of fiscal 2016 or 2015. The Black-Scholes option pricing model is used to estimate the fair value of stock options.

Restricted Stock Units

The fair value of restricted stock units (“RSUs”) granted is the intrinsic value as of the respective grant date since the RSUs are granted at no cost to the employee. The weighted-average grant date fair values of RSUs granted during the third quarter and first nine months of 2016 were $0.82 and $1.64 per share, respectively. The weighted-average grant date fair values of RSUs granted during the third quarter and first nine months of fiscal 2015 were $1.13 and $1.24 per share, respectively.

During the second quarter of fiscal 2015, we granted 2.4 million RSUs with performance conditions (“2015 performance RSUs”) and the total fair value of 2015 performance RSUs at the grant date was $3.0 million. These RSUs became eligible for vesting based on Quantum achieving certain revenue and operating income targets through the end of fiscal 2015. During the third quarter and first nine months of fiscal 2016, shared-based compensation expense of less than $0.1 million and $0.2 million, respectively, was recognized for 2015 performance RSUs. During the third quarter and first nine months of fiscal 2015, share-based compensation expense of $0.2 million was recognized for these RSUs.

During the second quarter of fiscal 2016, we granted 1.5 million RSUs with performance conditions (“2016 performance RSUs”) and the total fair value of 2016 performance RSUs at the grant date was $2.6 million. These RSUs will become eligible for vesting based on Quantum achieving certain revenue and operating income targets through the end of fiscal 2016. Share-based compensation expense for 2016 performance RSUs is recognized when it is probable that the performance conditions will be achieved. As of December 31, 2015, no share-based compensation expense was recognized for these performance RSUs.

Stock Purchase Plan

Under the Stock Purchase Plan, rights to purchase shares are typically granted during the second and fourth quarter of each fiscal year. The value of rights to purchase shares granted in the first nine months of fiscal 2016 and fiscal 2015, respectively, was estimated at the date of grant using the Black-Scholes option pricing model. The weighted-average grant date fair values and the assumptions used in calculating fair values for the nine month periods ended December 31, 2015 and 2014 were as follows:




	Nine Months Ended
	December 31, 2015			December 31, 2014
Option life (in years)	0.5			0.5
Risk-free interest rate	0.09		%	0.06		%
Stock price volatility	64.61		%	32.19		%
Weighted-average grant date fair value per share	$	0.38		$	0.30

Stock Incentive Plans - Activity

Stock Options

A summary of activity relating to our stock options follows (options and aggregate intrinsic value in thousands):



	Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding as of March 31, 2015	4,944		$	1.47
Exercised	(294	)	1.01
Forfeited	(45	)	0.94
Expired	(188	)	1.74
Outstanding as of December 31, 2015	4,417		$	1.49	1.04	$	13
Vested and expected to vest at December 31, 2015	4,417		$	1.49	1.04	$	13
Exercisable as of December 31, 2015	4,417		$	1.49	1.04	$	13

Restricted Stock Units

A summary of activity relating to our restricted stock units follows (shares in thousands):



	Shares		Weighted-Average Grant Date Fair Value Per Share
Nonvested at March 31, 2015	13,791		$	1.34
Granted	6,574		1.64
Vested	(6,033	)	1.45
Forfeited	(983	)	1.37
Nonvested at December 31, 2015	13,349		$	1.44