Share-Based Awards

Employee Stock Option and Incentive Plans

In October 2005, our 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 our employees and directors may, at the discretion of the Board of Directors ("Board") 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 expire 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 our Company, as such term is defined in the 2005 Plan, awards under the 2005 Plan will fully vest under certain circumstances. The 2005 Plan expired on May 25, 2015. As of December 31, 2016, there were 969,565 outstanding options and 567 outstanding shares of restricted stock awards under the 2005 Plan.

In August 2015, our shareholders approved a stock option and incentive plan (the “2015 Plan”) under which 11,500,000 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 awards and restricted stock unit awards, performance stock awards and other share-based awards. The 2015 Plan provides that our employees and directors 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 2015 Plan, the exercise price of each option is determined based on the date of grant and expire no later than 10 years from the date of grant. Awards granted pursuant to the 2015 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 our Company, as such term is defined in the 2015 Plan, awards under the 2015 Plan will fully vest under certain circumstances. As of December 31, 2016, there were 1,994,750 outstanding options, 933,165 outstanding shares of restricted stock awards, 123,082 outstanding shares of performance stock awards, and 8,079,983 shares available for future grant under the 2015 Plan.

The following table summarizes the stock option transactions during the nine months ended December 31, 2016:



	Number of Shares		Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in thousands)
Outstanding, April 1, 2016	2,447,286		$	19.55	6.3	$	574
Granted	1,056,500		12.82		7.4
Forfeited/Canceled	(539,471	)	22.13		4.7
Outstanding, December 31, 2016	2,964,315		$	16.68	6.4	$	377
Vested and expected to vest, September 30, 2016	2,652,038		$	16.93	6.3	$	329
Exercisable, December 31, 2016	586,120		$	25.05	3.9	$	11

We utilize the Black-Scholes valuation model for estimating the fair value of share-based compensation with the following assumptions:



	Three Months Ended December 31,		Nine Months Ended December 31,
	2016	2015	2016	2015
Expected term	6.3 years	3.9 years	6.0 - 6.6 years	3.8 - 3.9 years
Expected volatility	37.1%	38.9%	36.9% - 37.4%	38.3% - 38.9%
Expected dividends	—%	5.3%	—%	4.1% - 5.3%
Risk-free rate	1.5%	1.3%	1.2% - 1.5%	1.3% - 1.6%

The weighted-average grant date fair value of stock options granted during the nine months ended December 31, 2016 and 2015 was $4.92 and $3.33 per share, respectively.

During the nine months ended December 31, 2016, a total of 1,056,500 options to purchase shares of common stock were granted under the 2015 Plan at an exercise price equal to the market price of our common stock on the date of grant, as summarized below:



Option Grant Date	Number of Shares	Exercise Price		Vesting Terms ⁽¹⁾	Expiration
November 1, 2016	50,000	$	12.71	Four years	November 1, 2024
July 11, 2016	150,000	$	12.60	Four years	July 11, 2024
May 31, 2016	100,000	$	12.71	Five years	May 31, 2024
May 25, 2016	216,500	$	12.78	Four years	May 25, 2024
May 24, 2016	540,000	$	12.93	Four years	May 24, 2024
Fiscal year 2017 grants	1,056,500

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

Non-vested stock option award activity during the nine months ended December 31, 2016 is summarized as follows:



	Non-Vested Number of Shares		Weighted- Average Grant-Date Fair Value per Share
Outstanding, April 1, 2016	1,859,750		$	4.67
Granted	1,056,500		4.92
Vested	(276,595	)	4.30
Forfeited/Canceled	(261,460	)	4.38
Outstanding, December 31, 2016	2,378,195		$	4.72

As of December 31, 2016, $8,662 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 our forfeiture percentage. The total fair value of options vested during the nine months ended December 31, 2016 and 2015 was $1,189 and $1,564, respectively.

Restricted stock awards activity during the nine months ended December 31, 2016 is summarized as follows:



	Number of Shares		Weighted- Average Grant-Date Fair Value per Share
Outstanding, April 1, 2016	191,247		$	14.44
Granted	857,456		12.81
Vested	(68,309	)	14.29
Canceled	(46,662	)	12.78
Outstanding, December 31, 2016	933,732		$	12.80

Share-based compensation expense related to restricted stock awards was $1,054 and $249 for the three months ended December 31, 2016 and 2015, respectively. Share-based compensation expense related to restricted stock awards was $2,571 and $664 for the nine months ended December 31, 2016 and 2015, respectively.

The weighted-average grant date fair value for the restricted stock awards was estimated using the market price of the common stock on the date of grant. The fair value of the restricted stock awards is amortized on a straight-line basis over the vesting period, which is generally two years.

As of December 31, 2016, $9,930 of total unrecognized compensation costs related to restricted stock awards is expected to be recognized over a weighted-average period of 2.2 years. This amount does not include the cost of new restricted stock awards that may be granted in future periods.

On December 29, 2016, the Compensation Committee of the Board granted 123,082 performance stock awards to certain executive officers. The performance stock awards vest in four equal increments on each of the first four anniversaries of the grant date, subject in each case to the executive officer’s continued service and achievement of certain Company performance goals, including strong Company stock price performance. Share-based compensation expense related to the performance stock awards was not significant for the three and nine months ended December 31, 2016.

Employee Share Purchase Plan

On August 11, 2014, our 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 December 31, 2016, we have issued 209,876 shares under the Purchase Plan and 3,790,124 shares are available for future issuance.

Share-based compensation expense recorded for the employee share purchase plan was $70 and $70 for the three months ended December 31, 2016 and 2015, respectively. Share-based compensation expense recorded for the employee share purchase plan was $277 and $216 for the nine months ended December 31, 2016 and 2015, respectively.