STOCK INCENTIVE PLANS AND SHARE-BASED COMPENSATION |
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| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| STOCK INCENTIVE PLANS AND SHARE-BASED COMPENSATION |
STOCK INCENTIVE PLANS AND SHARE-BASED COMPENSATION
On April 19, 2017 all restricted stock awards, restricted stock units and options to purchase our common stock outstanding under the Company's Stock Incentive Plans were adjusted to reflect the impact of the Reverse Stock Split. The Reverse Stock Split also reduced the number of shares of common stock issuable under the Company's 2012 Long Term Incentive Plan and Employee Stock Purchase Plan, as amended. The per share exercise price of all outstanding awards was increased and the number of shares of common stock issuable upon the exercise or settlement of all outstanding awards was reduced proportionately to the reverse split ratio. The following share and per share data has been adjusted to reflect the Reverse Stock Split.
Description of Stock Incentive Plans
2012 Long-Term Incentive Plan
We have a stockholder-approved 2012 Long-Term Incentive Plan (the “Plan”) which has 4.9 million shares authorized at March 31, 2017. There were 3.0 million shares available for grant and 1.9 million stock options and restricted shares that were outstanding under the Plan as of March 31, 2017, which expire at various times through April 2018.
Stock options under the Plan are granted at prices determined by the Board of Directors, but at not less than the fair market value of our common stock on the date of grant. The majority of restricted stock units and stock options granted to employees vest over three to four years. Stock option and restricted stock grants to nonemployee directors typically vest over one year. Both stock options and restricted stock units granted under the Plan are subject to forfeiture if employment terminates.
Other Stock Incentive Plans
In addition to the Plan, we have other stock incentive plans which are inactive for future share grant purposes, including plans assumed in acquisitions, under which stock options, stock appreciation rights, stock purchase rights, restricted stock awards and long-term performance awards to employees, consultants, officers and affiliates were authorized (“Other Plans”).
Stock options granted and assumed under the Other Plans generally vest over one to four years and expire seven to ten years after the grant date, and restricted stock granted under the Other Plans generally vests over one to four years. The Other Plans have been terminated, and outstanding stock options and restricted stock units granted and assumed remain outstanding and continue to be governed by the terms and conditions of the respective Other Plan. Stock options and restricted stock granted under the Other Plans are subject to forfeiture if employment terminates. Stock options under the Other Plans were granted at prices determined by the Board of Directors, but at not less than the fair market value, and stock options assumed were governed by the respective acquisition agreement. Stock options under the Other Plans expire at various times through June 2021.
Employee Stock Purchase Plan
We have an employee stock purchase plan (the “Purchase Plan”) that allows for the purchase of stock at a 15% discount to fair market value at the date of grant or the exercise date, whichever value is less. The Purchase Plan is qualified under Section 423 of the Internal Revenue Code. The maximum number of shares that may be issued under the Purchase Plan is 8.8 million shares. As of March 31, 2017, 8.0 million shares had been issued. Under the Purchase Plan, rights to purchase shares are granted during the second and fourth quarter of each fiscal year. The Purchase Plan allows a maximum amount of 0.3 million shares to be purchased in any six month offering period. Employees purchased 0.3 million shares, 0.4 million shares and 0.4 million shares of common stock under the Purchase Plan in fiscal 2017, 2016 and 2015, respectively. The weighted-average price of stock purchased under the Purchase Plan was $3.48, $5.36 and $8.32 per share in fiscal 2017, 2016 and 2015, respectively. There were 0.8 million shares available for issuance under the Purchase Plan as of March 31, 2017.
Determining Fair Value
We use the Black-Scholes stock option valuation model for estimating fair value of stock options granted under our plans and rights to acquire stock granted under our Purchase Plan. We amortize the fair value of stock options on a ratable basis over the requisite service periods, which are generally the vesting periods. The expected life of awards granted represents the period of time that they are expected to be outstanding. We determine the expected life based on historical experience with similar awards, giving consideration to the contractual terms, exercise patterns and post-vesting forfeitures. We estimate volatility based on the historical volatility of our common stock over the most recent period corresponding with the estimated expected life of the award. We base the risk-free interest rate used in the Black-Scholes stock option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent term equal to the expected life of the award. We have not paid any cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future. We use historical data to estimate forfeitures and record share-based compensation for those awards that are expected to vest. We adjust share-based compensation for actual forfeitures.
We granted 0.1 million RSUs with market conditions (“market RSUs”) in fiscal 2014 and estimated the fair value of these market RSUs using a Monte Carlo simulation model. The number of market RSUs is dependent on Quantum’s common stock achieving certain 60-day average stock price targets as of specified dates, which vest immediately to two years after the specified dates. The Monte Carlo model requires the input of assumptions including expected volatility, risk-free interest rate and expected term in order to simulate a large number of possible outcomes to provide an estimated fair value of the market RSUs. We used an expected volatility of 66%, a risk free interest rate of 0.5% and expected terms of ten months, 22 months and 34 months that mirrors the various vesting dates of the awards. The estimated grant date fair value of the market RSUs was $0.7 million which is being recognized over the respective vesting periods of the awards.
We granted 0.4 million, 0.2 million and 0.3 million of RSUs with performance conditions (“performance RSUs”) in fiscal 2017, 2016 and 2015, respectively, and the fair values of the performance RSUs at the grant date were $1.4 million, $2.6 million and $3.0 million, respectively. Performance RSUs become eligible for vesting based on Quantum achieving certain revenue and operating income targets through the end of the fiscal year when the performance RSUs were granted. Share-based compensation expense for performance RSUs is recognized when it is probable that the performance conditions will be achieved. The revenue and operating income targets of the fiscal 2015 and fiscal 2017 performance RSUs were achieved and $0.4 million and $0.3 million of share-based compensation expense was recognized during fiscal 2017 and 2016, respectively. The performance RSUs granted in fiscal 2016 were canceled in accordance with the grant agreement as the fiscal 2016 targets were not met; and, therefore no share-based compensation expense was recognized.
Stock Options
No stock options were granted in fiscal 2017, 2016 or 2015.
Restricted Stock
The fair value of our restricted stock is the intrinsic value as of the grant date.
Employee Stock Purchase Plan
The weighted-average fair values and the assumptions used in calculating fair values during each fiscal period are as follows:
Share-Based Compensation Expense
The following tables summarize share-based compensation expense (in thousands):
During fiscal 2017, 2016 and 2015, no tax benefit was realized for the tax deduction from stock option exercises and other awards due to tax benefit carryforwards and tax ordering requirements.
As of March 31, 2016, there was no unrecognized compensation cost related to stock options granted under our plans and therefore, no compensation expense related to stock options was recognized in fiscal 2017. Total intrinsic value of stock options exercised for the years ended March 31, 2017, 2016 and 2015 was $0.0 million, $0.3 million and $0.4 million, respectively. We settle stock option exercises by issuing additional common shares.
As of March 31, 2017, there was $7.4 million of total unrecognized compensation cost related to nonvested restricted stock. The unrecognized compensation cost for restricted stock is expected to be recognized over a weighted-average period of 1.73 years. Total fair value of awards vested during the years ended March 31, 2017, 2016 and 2015 was $2.8 million, $9.9 million and $7.7 million, respectively, based on the fair value of our common stock on the awards' vest date.
Stock Activity
Stock Options
A summary of activity relating to all of our stock option plans is as follows (stock options in thousands):
The following table summarizes information about stock options outstanding and exercisable as of March 31, 2017 (stock options in thousands):
Expiration dates ranged from April 2017 to June 2021 for stock options outstanding at March 31, 2017. Prices for stock options exercised during the three-year period ended March 31, 2017, ranged from $0.88 to $14.48.
Restricted Stock
A summary of activity relating to our restricted stock is as follows (shares in thousands):
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