Stockholders’ Equity

Stock Repurchase Program

In January 2006, our Board of Directors authorized the repurchase of up to 1.0 million shares of our common stock. As of March 31, 2015, 276,633 shares remained available for repurchase under this plan at a per share price not to exceed $12.75. This plan does not have an expiration date. Common stock repurchases may be made from time to time in the open market at prevailing market prices or through privately negotiated transactions. The amount and timing of all repurchase transactions are contingent upon market conditions, regulatory requirements and alternative investment opportunities.

Stock-Based Compensation

Certain information regarding our stock-based compensation was as follows (in thousands, except per share amounts):



	Year Ended March 31,
	2015		2014		2013
Weighted average grant-date per share fair value of stock options granted	$	18.99	$	8.60	$	9.27
Weighted average grant-date per share fair value of RSUs and DSUs	52.82		36.72		17.64
Total intrinsic value of stock options exercised	29,507		6,227		662
Stock-based compensation recognized in results of continuing operations as a component of operating expenses⁽¹⁾	7,625		8,058		21,408
Stock-based compensation recognized in results of operations as a component of income from discontinued operations, net of income taxes	283		397		384
Stock-based compensation capitalized as a component of property and equipment	754		1,614		512
Cash received from options exercised and shares purchased under all share-based arrangements⁽²⁾	5,839		2,965		259
Tax deduction related to stock options exercised	—		—		(10		)


(1)	For the year ended March 31, 2015 and 2014, we recognized a credit of $0.2 million and expense of $2.7 million, respectively, in stock-based compensation related to the contingent consideration associated with the acquisition of iTVX (see Note 4). For the year ended March 31, 2013 we recognized $15.9 million, in expense related to our stock-based compensation agreement with DISH (see Note 17).


(2)	During Fiscal 2015, 2014 and 2013, we withheld $5.6 million, $1.1 million and $0.1 million, respectively, in shares to satisfy employment taxes on stock option exercises as well as the payment of the exercise price of stock options.

We use the Black-Scholes model to measure the grant-date fair value of employee stock options and shares associated with our Employee Stock Purchase Plan. We also use the Black-Scholes model to determine the fair value of our non-employee option grants on a periodic basis. Those calculations used the following assumptions for the years ended March 31:



	Employee Stock Options
Year Ended March 31,	2015		2014		2013
	Low	High	Low	High	Low	High
Risk-free interest rate	1.28%	1.28%	1.12%	1.12%	0.49%	1.77%
Expected dividend yield	—%	—%	—%	—%	—%	—%
Expected lives (in years)	4.1	4.1	4.0	4.0	3.8	7.8
Expected volatility	49.98%	49.98%	46.44%	46.44%	40.41%	49.36%



	Employee Stock Purchase Plan
Year Ended March 31,	2015		2014		2013
	Low	High	Low	High	Low	High
Risk-free interest rate	0.06%	0.12%	0.09%	0.09%	0.12%	0.15%
Expected dividend yield	—%	—%	—%	—%	—%	—%
Expected lives (in years)	0.5	0.5	0.5	0.5	0.5	0.5
Expected volatility	49.49%	60.43%	36.72%	46.58%	34.75%	46.42%



	Non-Employee Options
Year Ended March 31,	2015		2014		2013
	Low	High	Low	High	Low	High
Risk-free interest rate	1.38%	2.27%	1.32%	2.56%	0.17%	1.77%
Expected dividend yield	—%	—%	—%	—%	—%	—%
Expected lives (in years)	6.1	7.1	7.2	8.2	0.6	9.1
Expected volatility	45.04%	50.71%	40.64%	49.48%	39.06%	47.52%

The risk-free rate used is based on the United States Treasury yield over the estimated term of the options granted. The expected term for each grant is estimated based on our historical experience with similar awards. The expected volatility for options granted is calculated based on our historical volatility for a period matching the term of the grant. We have not paid dividends in the past and we do not expect to pay dividends in the future and, therefore, the expected dividend yield is 0%.

We amortize stock-based compensation for stock options and RSUs on a straight-line basis over the vesting period or requisite service period of the individual award, whichever is longer. For RSUs with market-based vesting provisions, we amortize stock-based compensation over the requisite service periods for each tranche, which is determined based on the median time horizon over which the tranche is estimated to vest. We have not reduced the stock-based compensation for estimated forfeitures as there is no basis for estimating future forfeitures as most unvested awards are held by members of senior management and the non-employee directors.

Shares to be issued under stock-based awards will come from authorized but unissued shares.

2011 Incentive Plan

As of March 31, 2015, 1,223,512 shares of our common stock remained available for grant under our 2011 Incentive Plan (“2011 Plan”) and 4,295,075 shares of our common stock were reserved for issuance pursuant to awards granted under the 2011 Plan and the Prior Incentive Plan combined.

Fiscal 2015 Stock Option Activity

Stock option activity for Fiscal 2015 was as follows:



	Options Outstanding		Weighted Average Exercise Price
Outstanding at March 31, 2014	2,393,565		$	20.68
Granted	5,267		46.92
Exercised	(547,526	)	18.82
Forfeited	(22,000	)	22.03
Outstanding at March 31, 2015	1,829,306		$	21.37

Certain information regarding options outstanding as of March 31, 2015 was as follows:



	Options Outstanding	Options Exercisable
Number	1,829,306	1,142,607
Weighted average exercise price	$21.37	$22.58
Aggregate intrinsic value	$39.1 million	$25.8 million
Weighted average remaining contractual term (in years)	6.1	5.7

Deferred Stock Units

Deferred Stock Units (“DSUs”) are used to compensate our Board of Directors and are typically awarded with one year vesting terms. When a director with vested DSUs retires from the Board, the DSUs are settled in shares of common stock issued to the director. DSU activity for Fiscal 2015 was as follows:



	DSUs Outstanding		Weighted Average Grant Date Fair Value
Outstanding at March 31, 2014	208,895		$	16.54
Granted	14,917		46.92
Issued	(30,581	)	55.90
Forfeited	—		—
Outstanding at March 31, 2015⁽¹⁾	193,231		$	18.72


(1)	Of the 193,231 DSUs outstanding at March 31, 2015, 187,806 were vested but not issued.

Restricted Stock Units

RSU activity for Fiscal 2015 was as follows:



	RSUs Outstanding		Weighted Average Grant Date Fair Value per RSU
Outstanding at March 31, 2014	223,276		$	26.78
Granted	620,883		52.96
Vested and issued	(113,693	)	53.56
Forfeited	(7,360	)	38.71
Outstanding at March 31, 2015	723,106		$	51.20

The outstanding RSUs vest based either on meeting certain performance conditions or based on the satisfaction of service requirements (typically five years). In Fiscal 2015 and 2014, 80,188 and 158,628, respectively, RSUs vested upon achieving one of the conditions related to the trading price of our common stock. In Fiscal 2014, we recognized $30,000 of additional compensation expense included in research, technology and innovation costs in our Consolidated Statements of Operations and capitalized $19,000 included in property, plant and equipment, net, in accordance with our policies relating to Capitalized Software as described in Note 2, as the awards vested prior to the completion of the initially estimated requisite service period. In conjunction with the issuance of shares in settlement of these RSUs, we withheld 38,500 and 64,590 shares in Fiscal 2015 and 2014, respectively, to pay the associated withholding taxes on behalf of the employees.

Stock-Settled Stock Appreciation Rights

SSARs activity for Fiscal 2015 was as follows:



	SSARs Outstanding	Weighted Average Base Price		Weighted Average Grant Date per SSAR Fair Value
Outstanding at March 31, 2014	75,000	$	14.50	$	5.33
Granted	—	—		—
Issued	—	—		—
Forfeited	—	—		—
Outstanding at March 31, 2015	75,000	$	14.50	$	5.33

Stock-Based Compensation Agreement with Non-Employees

In the first quarter of Fiscal 2012, we granted options to purchase 40,000 shares of our common stock to non-employees in connection with internal software development services related to our Essentials^® products. The options were granted at the fair market value of our common stock on the dates of grant, which ranged from $17.43 to $22.20 per share, and expire 10 years from the date of grant. The options vest annually from the date of grant in four equal installments and are revalued at the end of each reporting period until they vest. The value recognized is capitalized and included in property, plant and equipment, net, in accordance with our policies relating to Capitalized Software as described in Note 2. On a cumulative basis, we capitalized $1.0 million and $1.1 million in the years ended March 31, 2015 and 2014, respectively, related to these awards.

Unrecognized Stock-Based Compensation Expense

As of March 31, 2015, the unrecognized compensation expense related to unvested stock-based awards was $38.2 million, and will be recognized over the weighted average remaining vesting period of 7.2 years.

2011 Employee Stock Purchase Plan

Our 2011 Employee Stock Purchase Plan (the “ESPP”) provides a means by which eligible employees are provided an opportunity to purchase shares of our common stock at a discount using payroll deductions, and, for employees in the United States, is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code of 1986, as amended. The ESPP authorizes the issuance of up to 200,000 shares of our common stock, subject to adjustment as provided in the ESPP for stock splits, stock dividends, recapitalizations and other similar events. For the year ended March 31, 2015, we received $0.6 million for the purchase of 16,183 ESPP shares under the ESPP at a weighted average purchase price of $37.26 per share. As of March 31, 2015, 117,266 shares were available for issuance under the ESPP. We have received a total of $0.3 million in cash for the purchase of shares in the current purchase period ending in Fiscal 2015 and have recorded this amount as a component of accrued compensation in our Consolidated Balance Sheets.

Stockholders’ Rights Plan

In May 2005, our Board of Directors approved a replacement stockholders’ rights plan designed to ensure that all of our stockholders receive fair and equal treatment in the event of certain proposals to acquire control of Rentrak. Under the rights plan, each stockholder received a dividend of one right for each share of our outstanding common stock, entitling the holders to purchase common stock having a market value equal to twice the exercise price. The rights become exercisable after any person or group acquires 15% or more of our outstanding common stock, or announces a tender offer which would result in the offeror becoming the beneficial owner of 15% or more of our outstanding common stock. Prior to the time that a person or group acquires beneficial ownership of 15% or more of our outstanding common stock, the Board of Directors, at their discretion, may amend the rights plan, redeem the rights for $0.001 per right or waive application of the rights plan with respect to a merger or other acquisition of Rentrak.

On October 8, 2014, we amended the stockholders’ rights plan in connection with the issuance of unregistered shares of our common stock to affiliates of WPP in connection with our acquisition of the U.S. television measurement business related to television tuning analytics utilizing return path data of WPP’s Kantar business unit. The amendment excludes certain affiliates of WPP from the definition of “Acquiring Person” under the stockholders’ rights plan. This rights plan expired May 18, 2015.