SHARE-BASED COMPENSATION:

Share-based Compensation Plans

The Company has stock option and equity compensation plans for which a total of 34.5 million shares of the Company’s common stock have been reserved for issuance since the inception of the plans. At June 30, 2018, there were a total of 5.1 million shares available for future grants under the plans.

Stock Option Activity

Stock option activity for the three months ended June 30, 2018 was:



					Weighted-average
			Weighted-average		remaining	Aggregate
	Number of		exercise price		contractual term	Intrinsic value
	shares		per share		(in years)	(in thousands)
Outstanding at March 31, 2018	2,565,287		$	13.61
Exercised	(125,437	)	$	8.80		$	2,426
Forfeited or canceled	(25,831	)	$	14.25
Outstanding at June 30, 2018	2,414,019		$	13.86	5.1	$	38,910
Exercisable at June 30, 2018	2,169,170		$	14.58	4.8	$	33,397

The aggregate intrinsic value at period end represents the total pre-tax intrinsic value (the difference between Acxiom’s closing stock price on the last trading day of the period and the exercise price for each in-the-money option) that would have been received by the option holders had option holders exercised their options on June 30, 2018. This amount changes based upon changes in the fair market value of Acxiom’s common stock.

A summary of stock options outstanding and exercisable as of June 30, 2018 was:



					Options outstanding				Options exercisable
Range of						Weighted-average	Weighted-average			Weighted-average
exercise price					Options	remaining	exercise price		Options	exercise price
per share					outstanding	contractual life	per share		exercisable	per share
$	0.61	—	$	9.99	545,583	5.2 years	$	1.62	390,000	$	1.71
$	10.00	—	$	19.99	1,176,361	4.4 years	$	14.95	1,092,595	$	14.74
$	20.00	—	$	24.99	672,523	6.2 years	$	21.30	667,023	$	21.30
$	25.00	—	$	32.85	19,552	5.4 years	$	32.85	19,552	$	32.85
					2,414,019	5.1 years	$	13.86	2,169,170	$	14.58

Total expense related to stock options for the three months ended June 30, 2018 and 2017 was approximately $1.0 million and $1.4 million, respectively. Future expense for these options is expected to be approximately $6.3 million in total over the next three years.

Performance Stock Option Unit Activity

Performance stock option unit activity for the three months ended June 30, 2018 was:



					Weighted-average
			Weighted-average		remaining	Aggregate
	Number		exercise price		contractual term	intrinsic value
	of shares		per share		(in years)	(in thousands)
Outstanding at March 31, 2018	329,404		$	21.42
Forfeited or canceled	(186,538	)	$	21.41
Outstanding at June 30, 2018	142,866		$	21.43	1.9	$	1,217
Exercisable at June 30, 2018	—		$	—	—	$	—

Of the performance stock option units outstanding at March 31, 2018, 164,702 reached maturity of the relevant performance period at March 31, 2018. The units attained a 0% attainment level. As a result, they were cancelled in the current fiscal quarter.

Total expense related to performance stock option units for the three months ended June 30, 2018 and 2017 was $0.3 million and $0.5 million, respectively. Future expense for these performance stock option units is expected to be approximately $1.1 million in total over the next three years.

Restricted Stock Unit Activity

During the three months ended June 30, 2018, the Company granted time-vesting restricted stock units covering 1,703,482 shares of common stock with a fair value at the date of grant of $46.6 million. Of the restricted stock units granted in the current period, 98,156 vest in equal annual increments over four years, 1,586,724 vest 25% at the one-year anniversary and 75% in equal quarterly increments over the subsequent three years, and 18,602 vest in one year. Grant date fair value of these units is equal to the quoted market price for the shares on the date of grant.

Time-vesting restricted stock unit activity for the three months ended June 30, 2018 was:



			Weighted-average
			fair value per		Weighted-average
	Number		share at grant		remaining contractual
	of shares		date		term (in years)
Outstanding at March 31, 2018	3,449,001		$	24.35	2.32
Granted	1,703,482		$	27.34
Vested	(692,206	)	$	23.14
Forfeited or canceled	(227,978	)	$	24.98
Outstanding at June 30, 2018	4,232,299		$	25.72	2.82

During the three months ended June 30, 2018, the Company granted performance-based restricted stock units covering 216,727 shares of common stock having a fair value at the date of grant of $6.7 million, determined using a Monte Carlo simulation model. The units vest subject to attainment of market conditions established by the compensation committee of the board of directors (“compensation committee”) and continuous employment through the vesting date. The 216,727 units may vest in a number of shares from 25% to 200% of the award, based on the total shareholder return of Acxiom common stock compared to total shareholder return of a group of peer companies established by the compensation committee for the period from April 1, 2018 to March 31, 2021.

Non-vested performance-based restricted stock unit activity for the three months ended June 30, 2018 was:



			Weighted-average
			fair value per		Weighted-average
	Number		share at grant		remaining contractual
	of shares		date		term (in years)
Outstanding at March 31, 2018	682,763		$	25.23	1.54
Granted	216,727		$	31.07
Vested	(20,965	)	$	19.07
Forfeited or canceled	(129,123	)	$	24.13
Outstanding at June 30, 2018	749,402		$	27.28	1.78

Total expense related to restricted stock for the three months ended June 30, 2018 and 2017 was approximately $10.9 million and $8.8 million, respectively. Future expense for restricted stock units is expected to be approximately $33.5 million for the nine months ending March 31, 2019, $35.9 million in fiscal 2020, $25.0 million in fiscal 2021, $13.6 million in fiscal 2022, and $1.4 million in fiscal 2023.

Other Performance Unit Activity

Other performance-based stock unit activity for the three months ended June 30, 2018 was:



			Weighted-average
			fair value per		Weighted-average
	Number		share at grant		remaining contractual
	of shares		date		term (in years)
Outstanding at March 31, 2018	111,111		$	5.33	-
Vested	(45,364	)	$	5.33
Forfeited or canceled	(65,747	)	$	5.33
Outstanding at June 30, 2018	—		$	—	-

The 111,111 performance-based units outstanding at March 31, 2018 reached maturity of the relevant performance period on March 31, 2018. The units achieved a 100% performance attainment level. However, application of the share price adjustment factor resulted in a 59% reduction in shares vested in the current fiscal quarter.

During the quarter ended June 30, 2018, the Company withheld approximately $10.0 million related to employee tax withholding for stock-based compensation awards.

Consideration Holdback

As part of the Company’s acquisition of Arbor in fiscal 2017, $38.3 million of the acquisition consideration otherwise payable with respect to shares of restricted Arbor common stock held by certain key employees was subject to holdback by the Company pursuant to agreements with those employees (each, a “Holdback Agreement”). Total expense related to the Holdback Agreements for the three months ended June 30, 2018 and 2017 was $3.8 million in each period. Through June 30, 2018, the Company had recognized a total of $24.3 million expense related to the Holdback Agreements. Future expense related to the Holdback Agreements is expected to be approximately $14.0 million over the next two fiscal years.

Pacific Data Partners ("PDP") Assumed Performance Plan

In connection with the fiscal 2018 acquisition of PDP, the Company assumed the outstanding performance compensation plan under the 2018 Equity Compensation Plan of Pacific Data Partners, LLC ("PDP PSU plan"). Total expense related to the PDP PSU plan for the three months ended June 30, 2018 was $3.9 million. Through June 30, 2018, the Company had recognized a total of $5.9 million related to the PDP PSU plan. Future expense is expected to be approximately $11.9 million in fiscal 2019, $15.7 million in fiscal 2020, $15.8 million in fiscal 2021, and $15.7 million in fiscal 2022, based on expectations of full attainment. At March 31, 2018, the recognized, but unpaid, portion balance related to the PDP PSU plan in other accrued expenses in the condensed consolidated balance sheet was $5.3 million.