Stock Benefit Plans and Stock-Based Compensation

9 Months Ended

Dec. 31, 2011

Stock Benefit Plans and Stock [Abstract]

Stock Benefit Plans and Stock

Note 8 – Stock Benefit Plans and Stock-Based Compensation

Stock Benefit Plans

The Company has the following stock benefit plans: (1) the Amended and Restated 2007 Long Term Incentive Plan (“2007 LTIP”) allows the Company's Compensation Committee to grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based cash or restricted stock unit awards and cash incentive awards to employees and directors of the Company; (2) the Employee Stock Purchase Plan allows participating U.S. and Canadian employees the right to have up to 10% of their compensation withheld to purchase Company common stock at a 5% discount; and (3) the Employee Stock Ownership Plan and Trust (“ESOP”) allows the Company to make contributions to the ESOP for the benefit of substantially all U.S. employees.

During the 2011 annual meeting of shareholders, shareholders approved an increase of 13.5 million in the number of common shares authorized for issuance under the 2007 LTIP, which increased the aggregate number of common shares reserved by the Company for issuance under the 2007 LTIP to 41.5 million as of December 31, 2011 (less shares previously issued).

Covisint Corporation (“Covisint”), a subsidiary of the Company, maintains a stock benefit plan referred to as the 2009 Long-Term Incentive Plan (“2009 Covisint LTIP”) allowing the Board of Directors of Covisint to grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based cash or restricted stock unit awards and cash incentive awards to employees and directors of Covisint.

Stock Option Activity

A summary of option activity under the Company's stock-based compensation plans as of December 31, 2011, and changes during the nine months then ended is presented below (shares and intrinsic value in thousands):

	Nine Months Ended
	December 31, 2011
						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Options			Price		Term in Years		Value
Options outstanding as of March 31, 2011		16,868		$	8.18
Granted		7,806			8.06
Exercised		(872	)		7.82			$	1,854
Forfeited		(479	)		8.50
Cancelled/expired		(803	)		11.85
Options outstanding as of December 31, 2011		22,520		$	8.01		6.72	$	19,793
Options vested and expected to vest, net of estimated forfeitures, as of December 31, 2011		20,980		$	7.96		6.58	$	19,085
Options exercisable as of December 31, 2011		10,824		$	7.69		4.83	$	10,940

The weighted average fair value of stock options granted during the periods and the assumptions used to estimate those values using the Black-Scholes option pricing model were as follows:

	Nine Months Ended
	December 31,
	2011			2010
Expected volatility		39.87	%		42.12	%
Risk-free interest rate		1.72	%		2.42	%
Expected lives at date of grant (in years)		5.8			6.1
Weighted-average fair value of the options granted	$	4.04		$	4.10

The average fair value of stock options vested during the nine months ending December 31, 2011 and 2010 was $4.72 and $4.64 per share, respectively.

Restricted Stock Units and Performance-Based Stock Awards Activity

A summary of non-vested restricted stock units and performance-based stock awards (collectively “Non-vested RSU”) activity under the Company's 2007 LTIP as of December 31, 2011 and changes during the nine months then ended is presented below (shares and intrinsic value in thousands):

	Nine Months Ended
	December 31, 2011
				Weighted
				Average		Aggregate
				Grant-Date		Intrinsic
	Shares			Fair Value		Value
Non-vested RSU outstanding as of March 31, 2011		3,741
Granted		1,294		$	9.84
Released		(410	)			$	4,037
Forfeited		(91	)
Non-vested RSU outstanding as of December 31, 2011		4,534

Covisint Corporation 2009 Long-Term Incentive Plan

As of December 31, 2011, there were 119,000 stock options outstanding from the 2009 Covisint LTIP. These options will vest only if, prior to August 26, 2015, Covisint completes an initial public offering (“IPO”) or if there is a change of control of Covisint.

The individuals who received stock options from the 2009 Covisint LTIP were also awarded performance-based restricted stock unit awards (“PSAs”) from the Company's 2007 LTIP. There were 1.4 million PSAs outstanding as of December 31, 2011. These PSAs will vest only if Covisint does not complete an IPO or a change of control transaction by August 25, 2015, and the Covisint business meets a pre-defined revenue target for any four consecutive calendar quarters ending prior to August 26, 2015.

Stock Awards Compensation

Stock award compensation expense was allocated as follows (in thousands):

	Three Months Ended					Nine Months Ended
	December 31,					December 31,
	2011			2010		2011			2010
Stock-based compensation classified as:
Cost of maintenance fees	$	202		$	190	$	604		$	349
Cost of subscription fees		(68	)		33		(8	)		33
Cost of professional services		54			118		287			468
Cost of application services		254			140		1,196			282
Technology development and support		575			318		1,655			833
Sales and marketing		1,493			1,272		4,546			4,202
Administrative and general		3,062			2,121		9,275			7,220
Total stock-based compensation expense before income taxes	$	5,572		$	4,192	$	17,555		$	13,387

As of December 31, 2011, total unrecognized compensation cost of $45.1 million, net of estimated forfeitures, related to nonvested equity awards is expected to be recognized over a weighted-average period of approximately 2.58 years.