Share-Based Awards

Employee Stock Option Plans

In October 2005, the Company's shareholders approved a stock option and incentive plan (the “2005 Plan”) under which 4,800,000 shares of common stock were reserved for the issuance of awards, including incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, performance shares, performance units (including performance options) and other share-based awards. The 2005 Plan provides that employees and directors of the Company may, at the discretion of the Board of Directors or a duly designated compensation committee, be granted certain share-based awards. In the case of option awards granted under the 2005 Plan, the exercise price of each option is determined based on the date of grant and expires no later than 10 years from the date of grant. Awards granted pursuant to the 2005 Plan are subject to the vesting schedule or performance metrics set forth in the agreements pursuant to which they are granted. Upon a change of control of the Company, as such term is defined in the 2005 Plan, awards under the 2005 Plan will fully vest under certain circumstances. The 2005 Plan expires on May 25, 2015, unless terminated earlier by the Board of Directors. As of March 31, 2015, there were 1,636,176 outstanding options, 78,205 outstanding shares of restricted stock, restricted stock units and performance based restricted stock, and 2,298,488 shares available for future grant under the 2005 Plan. On May 20, 2015, the Board of Directors approved a stock option and incentive plan (the “2015 Plan”) subject to shareholder approval at the Company’s 2015 Annual Shareholders’ Meeting. The full text the 2015 Plan will be attached to the Company’s definitive proxy statement for the Company’s 2015 Annual Shareholders’ Meeting to be filed with the Securities and Exchange Commission.

A summary of stock option transactions during the years ended March 31, 2015, 2014 and 2013 is as follows:



	Number of Shares		Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in thousands)
Outstanding, March 31, 2012	988,337		$	32.09
Granted	556,500		27.78
Exercised	(56,366	)	16.81			$	82
Forfeited/Canceled	(329,288	)	31.42
Outstanding, March 31, 2013	1,159,183		$	30.54
Granted	469,000		18.78
Exercised	(111,272	)	19.78			$	264
Forfeited/Canceled	(146,810	)	30.28
Outstanding, March 31, 2014	1,370,101		$	27.85	5.8
Granted	469,650		15.97		7.2
Forfeited/Canceled	(203,575	)	24.85		4.9
Outstanding, March 31, 2015	1,636,176		$	24.82	5.5	$	8
Vested and expected to vest, March 31, 2015	1,533,192		$	25.03	5.5	$	8
Exercisable, March 31, 2015	567,886		$	30.81	4.1	$	—

The Company utilizes the Black-Scholes valuation model for estimating the fair value of stock options and related share-based compensation with the following assumptions:



	Year Ended	Year Ended	Year Ended
	March 31, 2015	March 31, 2014	March 31, 2013
Expected life	4.8 years	4.9 years	5.0 years
Expected volatility	36.1% - 36.6%	43.4% - 43.7%	41.3% - 45.1%
Expected dividends	4.3% - 4.4%	3.1% - 3.9%	2.4% - 4.0%
Risk-free rate	1.6% - 1.7%	1.0% - 1.5%	0.7% - 0.8%

The weighted-average grant date fair value of stock options granted during the years ended March 31, 2015, 2014 and 2013 was $3.50, $5.20 and $8.22 per share, respectively.

During the years ended March 31, 2015, 2014 and 2013, a total of 469,650, 469,000 and 556,500 options, respectively, were granted under the 2005 Plan at an exercise price equal to the market price of the Company’s common stock on the date of grant. A summary of stock options granted under the 2005 Plan during the years ended March 31, 2015, 2014 and 2013 is as follows:



Option Grant Date	Number of Shares	Exercise Price		Vesting Terms (1)	Expires
March 11, 2015	10,000	$	15.84	Five years	March 11, 2023
September 2, 2014	20,000	$	15.63	Five years	September 2, 2022
June 3, 2014	439,650	$	15.99	Five years	June 3, 2022
Fiscal year 2015 option grants	469,650

August 15, 2013	85,000	$	20.85	Five years	August 15, 2021
July 30, 2013	28,000	$	22.59	Five years	July 30, 2021
May 29, 2013	356,000	$	17.95	Five years	May 29, 2021
Fiscal year 2014 option grants	469,000

January 23, 2013	40,000	$	19.00	Five years	January 23, 2021
November 5, 2012	5,000	$	17.68	Five years	November 5, 2020
September 25, 2012	20,000	$	18.42	Five years	September 25, 2020
May 24, 2012	346,000	$	29.17	Five years	May 24, 2020
May 24, 2012	30,000	$	29.17	Four years	May 24, 2020
May 23, 2012	115,500	$	29.45	Five years	May 23, 2020
Fiscal year 2013 option grants	556,500

____________________


(1)	Options vest in equal annual installments on each grant anniversary date commencing one year following the date of grant.

Employee Share Purchase Plan

On August 11, 2014, the Company’s shareholders approved an Employee Share Purchase Plan (the “Purchase Plan”) under which 4,000,000 shares of common stock were reserved for future grant. The Purchase Plan allows eligible employees to purchase shares through payroll deductions of up to 15% of total base salary at a price equal to 90% of the lower of the fair market values of the shares as of the beginning or the end of the corresponding offering period. Any shares purchased under the Purchase Plan are subject to a six-month holding period. Employees are limited to purchasing no more than 1,500 shares on any single purchase date and no more than $25,000 in total fair market value of shares during any one calendar year. As of March 31, 2015, the Company has issued 33,609 shares under the Purchase Plan and 3,966,391 shares are available for future issuance. The amount of share-based compensation expense recorded for this plan was insignificant for the year ended March 31, 2015.

Performance-Based Awards

On May 27, 2014, the Compensation Committee of the Board of Directors approved the Company's fiscal year 2015 Executive Compensation Program (the "Program") under which the Company's named executive officers are eligible to receive cash bonuses based on meeting certain target increases in revenue and non-GAAP financial targets, as defined in the Program (i.e. non-GAAP earnings per share and a measure of free cash flow) for fiscal year 2015. Under the Program, the named executive officers also received certain equity incentive awards issued under the 2005 Plan. These equity awards included (i) an aggregate of 105,000 options to purchase the Company's common stock, which were granted on the first day of the next open trading window under the Company's Insider Trading Policy (June 3, 2014), have an exercise price equal to the closing price of the Company's shares on the date of grant, a term of eight years and a vesting schedule of five equal annual installments commencing one year following the date of grant; and (ii) a potential award of up to an aggregate of 170,000 restricted performance shares of the Company's common stock vesting over a three year period based on the achievement of target average daily share prices for the ninety calendar day period ending May 31st of each of the subsequent three fiscal years. In addition, under the Program, a target pool of up to 390,000 options is available for new hires, promotions, and certain for high-performing, non-executive employees based on achievement of performance targets.

Share-based compensation expense associated with the restricted performance shares with market conditions under the Program is based on the grant date fair value measured at the underlying closing share price on the date of grant using a Monte Carlo-based valuation model.

Share-based compensation expense associated with the options under the Program are initially based on the number of options expected to vest after assessing the probability that the performance targets will be met. Cumulative adjustments are recorded quarterly to reflect subsequent changes in the estimated outcome of performance-related conditions. The Company utilizes the Black-Scholes option valuation model with the assumptions in the table below to calculate the share-based compensation expense related to the options.

Share-based compensation expense recorded for these performance-based awards was $463 for the year ended March 31, 2015 and was insignificant for the years ended March 31, 2014 and 2013.



	Year Ended March 31, 2015	Year Ended March 31, 2014	Year Ended March 31, 2013
Expected life	4.8 years	4.9 years	5.0 years
Expected volatility	35.9% - 36.5%	36.9% - 43.5%	41.7% - 45.0%
Expected dividends	4.3% - 5.0%	3.2% - 4.1%	2.5% - 4.0%
Risk-free rate	1.4% - 1.8%	1.4% - 1.8%	0.6% - 0.7%

Non-vested stock option award activity, including employee stock options and performance-based awards, during the years ended March 31, 2015, 2014 and 2013 is summarized as follows:



	Non-Vested Number of Shares		Weighted- Average Grant-Date Fair Value per Share
Outstanding, March 31, 2012	778,319		$	10.76
Granted	556,500		8.22
Vested	(201,191	)	8.43
Forfeited/Canceled	(329,288	)	9.92
Outstanding, March 31, 2013	804,340		$	9.89
Granted	469,000		5.20
Vested	(134,970	)	9.30
Forfeited/Canceled	(146,810	)	9.33
Outstanding, March 31, 2014	991,560		$	7.73
Granted	469,650		3.50
Vested	(269,785	)	8.24
Forfeited/Canceled	(123,135	)	6.57
Outstanding, March 31, 2015	1,068,290		$	5.81

As of March 31, 2015, $4,293 of total unrecognized compensation costs related to stock options is expected to be recognized over a weighted-average period of 3.2 years. This amount does not include the cost of new options that may be granted in future periods or any changes in the Company’s forfeiture percentage. The total fair value of options vested during the years ended March 31, 2015, 2014 and 2013 was $2,224, $1,255 and $1,696, respectively.

Director Awards

On May 28, 2014, the Board of Directors approved its 2015 Director Compensation Program, pursuant to which each non-employee director is to be granted shares of restricted stock upon election or re-election to the Board of Directors. The shares of restricted stock are awarded under the 2005 Plan. Such shares of restricted stock vest in two equal, annual installments on the first and second anniversaries of the grant date and are nontransferable for one year following vesting. The weighted-average grant date fair value for the restricted stock was estimated using the market price of the common stock on the date of grant. The fair value of the restricted stock is amortized on a straight-line basis over the vesting period.

The Company recorded compensation expense related to restricted stock of approximately $877, $629 and $566 for the years ended March 31, 2015, 2014 and 2013, respectively. Restricted stock activity for the years ended March 31, 2015, 2014 and 2013 is summarized as follows:



	Number of Shares		Weighted- Average Grant-Date Fair Value per Share
Outstanding, March 31, 2012	30,001		$	36.32
Granted	18,939		19.32
Vested	(18,555	)	32.14
Outstanding, March 31, 2013	30,385		$	27.09
Granted	57,324		20.75
Vested	(16,302	)	30.64
Canceled	(6,836	)	$	22.59
Outstanding, March 31, 2014	64,571		$	20.74
Granted	48,414		15.77
Vested	(34,780	)	21.33
Outstanding, March 31, 2015	78,205		$	17.94

As of March 31, 2015, $760 of total unrecognized compensation costs related to restricted stock is expected to be recognized over a weighted-average period of 1.0 years. This amount does not include the cost of new restricted stock that may be granted in future periods.