8. Stockholders’ Equity

Stock Repurchase Program

In October 2011, the Company’s Board of Directors authorized a program to repurchase up to $200 million of the Company’s common stock over a period of approximately three years (the “2011 Program”). In February 2013, the Company’s Board of Directors authorized another program to repurchase up to $300 million of the Company’s common stock over a three year period (the “February 2013 Program”). This program was in addition to the 2011 Program, which was fully expended as of February 27, 2013. In July 2013, the Company’s Board of Directors authorized a program to repurchase up to $300 million of the Company’s common stock over a period of approximately three years (“July 2013 Program”). The July 2013 Program was in addition to the February 2013 Program, which was fully expended on August 15, 2013. In February 2014, the Company’s Board of Directors authorized another program to repurchase up to $500 million of the Company’s common stock over a three year period (the “February 2014 Program” and together with the 2011 Program and the February 2013 Program, the “Repurchase Programs”). The February 2014 Program is in addition to the July 2013 Program. The July 2013 Program expired on July 22, 2016. The February 2014 Program expired in February 2017.

The following table illustrates the activity under the Repurchase Programs, in the aggregate, for FY 2017, FY 2016, FY 2015, FY 2014, FY 2013 and FY 2012:

	# of shares repurchased as part of stock repurchase programs		Cost of shares repurchased (in 000’s)		Weighted Average Price
FY 2017		—	$	—	$	—
FY 2016		—		—		—
FY 2015		360,000		12,391		34.42
FY 2014		4,994,578		193,434		38.73
FY 2013		15,812,566		436,419		27.60
FY 2012		7,185,257		125,341		17.44
FY 2011		1,150,000		19,138		16.64
Total, FY 2011 through FY 2016		29,502,401	$	786,723	$	26.67

As of December 31, 2017, no amounts were available for repurchase under any of the share repurchase programs.

2009 Equity Incentive Plan

On August 13, 2009, the Company’s stockholders approved the Company’s 2009 Equity Incentive Plan (“2009 Plan”). The 2009 Plan authorizes the granting of common stock options or other stock-based awards covering up to 3.0 million shares of the Company’s common stock. All employees, directors, consultants and advisors of the Company, including those of the Company’s subsidiaries, are eligible to be granted non-qualified stock options and other stock-based awards (as defined) under the 2009 Plan, and employees are also eligible to be granted incentive stock options (as defined) under the 2009 Plan. No new awards may be granted under the Plan after August 13, 2019.

On August 15, 2012, the Company’s stockholders approved the Company’s Amended and Restated 2009 Plan (“Amended and Restated 2009 Plan”), which, among other items and matters, increased the shares available under the 2009 Plan by an additional 4.0 million shares to a total of 7.0 million shares issuable under the Amended and Restated 2009 Plan and extended the 2009 Plan termination date through August 15, 2022.

2015 Executive Incentive Plan

On December 4, 2015, the Company’s stockholders approved the Company’s 2015 Executive Incentive Plan (“2015 Plan”). Under the 2015 Plan, the Company’s officers and other key employees designated by the Compensation Committee are eligible to receive awards of cash, common stock or stock units issuable under the Amended and Restated 2009 Plan, or any combination thereof. Awards under the 2015 Plan are based on the achievement of certain pre-determined, non-discretionary performance goals established by the Compensation Committee and are further subject to, among other things, the 2015 Plan participant’s continuous employment with the Company until the applicable payment date.

2016 Omnibus Incentive Plan

On November 4, 2016, the Company’s stockholders approved the Company’s 2016 Omnibus Incentive Plan (“2016 Plan”). The 2016 Plan replaced and superseded the Amended and Restated 2009 Plan. Under the 2016 Plan, all employees, directors, officers, consultants and advisors of the Company, including those of the Company’s subsidiaries, are eligible to be granted common stock, options or other stock-based awards. At inception, there are 2.4 million shares of the Company’s common stock available for issuance under the 2016 Plan. The 2016 Plan was amended at the 2017 Annual Meeting of Stockholders to increase the number of shares available under the plan by 1.9 million shares.

Shares Reserved for Issuance

At December 31, 2017, 1,786,128 common shares were reserved for issuance under the 2016 Plan. At December 31, 2017 there were no common shares available for issuance under any of the Company’s prior plans.

Stock Options and Warrants

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

There was no compensation expense related to stock option grants or warrant grants during FY 2017, FY 2016 or FY 2015 as all prior awards have been fully expensed.

Summaries of the Company’s stock options, warrants (other than warrants issued related to our 1.50% Convertible Notes) and performance related options activity, and related information for FY 2017, FY 2016 and FY 2015 are as follows:

Stock Options

Options	Options			Weighted Average Exercise Price
Outstanding at January 1, 2015		141,077		$	11.87
Granted		—			—
Canceled		—			—
Exercised		(75,000	)		9.84
Expired/Forfeited		(16,077	)		4.82
Outstanding at December 31, 2015		50,000		$	17.18
Granted		—			—
Canceled		—			—
Exercised		—			—
Expired/Forfeited		(30,000	)		20.44
Outstanding at December 31, 2016		20,000		$	12.29
Granted		—			—
Canceled		—			—
Exercised		—			—
Expired/Forfeited		—			—
Outstanding at December 31, 2017		20,000		$	12.29
Exercisable at December 31, 2017		20,000		$	12.29

The weighted average contractual term (in years) of options outstanding and exercisable as of December 31, 2017, 2016 and 2015 were 1.50, 2.50, and 1.74 respectively.

No options vested during FY 2017, FY 2016 and FY 2015. There were no options granted during FY 2017, FY 2016 and FY 2015.

There was no exercise of stock options and accordingly, no cash received from option exercise for both FY 2017 and FY 2016 as compared to cash received from option exercise under all share-based payment arrangements for FY 2015 of $0.3 million. Accordingly, there was no tax benefit for both FY 2017 and FY 2016 as compared to a tax benefit of approximately $0.1 million for FY 2015, for share-based payment arrangements.

The aggregate intrinsic value is calculated as the difference between the market price of the Company’s common stock as of December 31, 2017 and the exercise price of the underlying options. At December 31, 2017, 2016 and 2015, the aggregate intrinsic value of options exercised was $0, $0 and $0, respectively. At December 31, 2017, 2016 and 2015 the aggregate intrinsic value of options outstanding and exercisable was $0, $0 and $0, respectively. There were no unamortized options as of December 31, 2017.

Warrants

Warrants	Warrants		Weighted Average Exercise Price
Outstanding at January 1, 2015		20,000	$	6.64
Granted		—		—
Canceled		—		—
Exercised		—		—
Expired/Forfeited		—		—
Outstanding at December 31, 2015		20,000	$	6.64
Granted		—		—
Canceled		—		—
Exercised		—		—
Expired/Forfeited		—		—
Outstanding at December 31, 2016		20,000	$	6.64
Granted		—		—
Canceled		—		—
Exercised		—		—
Expired/Forfeited		—		—
Outstanding at December 31, 2017		20,000	$	6.64
Exercisable at December 31, 2017		20,000	$	6.64

All warrants issued in connection with acquisitions were recorded at fair market value using the Black Scholes model and are recorded as part of purchase accounting. Certain warrants are exercised using the cashless method.

The Company values other warrants issued to non-employees at the commitment date at the fair market value of the instruments issued, a measure which is more readily available than the fair market value of services rendered, using the Black Scholes model. The fair market value of the instruments issued is expensed over the vesting period.

The weighted average contractual term (in years) of warrants outstanding and exercisable as of December 31, 2017, 2016 and 2015 were 0.76, 1.76 and 2.76, respectively.

In FY 2017, FY 2016 and FY 2015, 0, 0 and 0 warrants, respectively, were exercised.

Restricted stock

Compensation cost for restricted stock is measured as the excess, if any, of the quoted market price of the Company’s stock at the date the common stock is issued over the amount the employee must pay to acquire the stock (which is generally zero). The compensation cost, net of projected forfeitures, is recognized over the period between the issue date and the date any restrictions lapse, with compensation cost for grants with a graded vesting schedule recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. The restrictions do not affect voting and dividend rights.

The following tables summarize information about unvested restricted stock transactions:

	FY 2017					FY 2016					FY 2015
	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Non-vested, January 1,		1,280,500		$	26.32		2,222,508		$	20.06		2,699,732		$	22.40
Granted		487,736			8.04		659,821			7.41		355,588		20.34
Vested		(318,923	)		10.64		(1,573,817	)		9.65		(806,508	)	27.72
Forfeited/Canceled		(141,229	)		8.14		(28,012	)		20.63		(26,304	)	28.94
Non-vested, December 31,		1,308,084		$	25.29		1,280,500		$	26.32		2,222,508		$	20.06

The Company has awarded time-based restricted shares of common stock to certain employees. The awards have restriction periods tied to employment and vest over a maximum period of 5 years. The cost of the time-based restricted stock awards, which is the fair market value on the date of grant net of estimated forfeitures, is expensed ratably over the vesting period. During FY 2017, FY 2016 and FY 2015, the Company awarded approximately 0.5 million, 0.7 million and 0.4 million restricted shares, respectively, with a fair market value of approximately $3.9 million, $11.4 million and $7.2 million, respectively.

The Company has awarded performance-based restricted shares of common stock to certain employees. The awards have restriction periods tied to certain performance measures. The cost of the performance-based restricted stock awards, which is the fair market value on the date of grant net of estimated forfeitures, is expensed when the likelihood of those shares being earned is deemed probable.

Compensation expense related to restricted stock grants for FY 2017, FY 2016 and FY 2015 was approximately $8.7 million (including approximately $1.0 million related to retention stock discussed below and expense related to performance based awards of approximately $4.3 million), $6.6 million (including approximately $1.7 million related to retention stock discussed below and expense related to performance based awards of approximately $1.7 million) and $10.8 million (including $5.7 million of expense related to performance based awards), respectively. An additional amount of $10.7 million (including $1.3 million related to retention stock discussed below and expense related to performance based awards of approximately $6.5 million) of compensation expense is expected to be expensed evenly over a period of approximately two years. During FY 2017, FY 2016 and FY 2015, the Company repurchased shares valued at $1.2 million, $0.6 million and $15.5 million, respectively, of its common stock in connection with net share settlement of restricted stock grants and option exercises.

Retention Stock

On January 7, 2016, the Company awarded to certain employees a retention stock grant of approximately 1.3 million shares with a then current value of approximately $7.5 million. The awards cliff vest in three years based on the Company’s total shareholder return measured against a peer group as described in the Company’s Form 10-K/A filed on April 29, 2016. The measurement period began on the grant date and the beginning measurement amount was calculated based on the 20 day average closing stock price leading up to the grant date. The measurement period ends on December 31, 2018 and the ending measurement amount is based on the 20 day average closing stock price leading up to December 31, 2018. The award will vest on a scaled pay out based on the Company’s total shareholder return versus the peer group.

In accordance with ASC 718, the Company valued these shares utilizing a Monte Carlo simulation as the awards are based on market conditions.

The grant date fair value of the awards issued on January 7, 2016 was $4.25 and was based on the following range of assumptions for the Company and the peer group:

	January 7. 2016
Valuation Assumptions:
Beginning average stock price (20 trading days prior to January 7, 2016)	$4.85 - $63.41
Valuation date stock price (closing values on January 7, 2016)	$4.53 - $59.08
Risk free interest rate		1.21	%
Expected dividend yield used when simulating the total shareholder return		0.00	%
Expected dividend yield used when simulating the Company's stock price		0.00	%
Stock price volatility (based on historical stock price over the last 2.98 years)	21.09% - 72.17%
Correlation coefficients	0.04 - 0.47

For Mr. Haugh, the Company’s Chief Executive Officer, the grant date fair value of this award issued on February 23, 2016 was $5.75 and was based on the following range of assumptions for the Company and the peer group:

	February 23. 2016
Valuation Assumptions:
Beginning average stock price (20 trading days prior to February 23, 2016)	$4.86 - $66.71
Valuation date stock price (closing values on February 23, 2016)	$5.52 - $69.92
Risk free interest rate		0.90	%
Expected dividend yield used when simulating the total shareholder return		0.00	%
Expected dividend yield used when simulating the Company's stock price		0.00	%
Stock price volatility (based on historical stock price over the last 3.00 years)	24.23% - 74.33%
Correlation coefficients	0.06 - 0.50

Short-term Shareholder Rights Plan

On January 27, 2016, the Company announced that its Board of Directors adopted a short-term shareholder rights plan (the “Rights Plan”). The Board of Directors adopted the Rights Plan in light of activity in the Company’s shares occurring prior to the adoption of the Rights Plan, including the accumulation of meaningful positions by holders of derivatives securities, and what the Iconix Board of Directors and management believed was a currently depressed share price for the Company’s common stock. The Rights Plan expired following the 2016 annual meeting of shareholders. The Rights Plan had no impact on the Company’s financial reporting for FY 2017 and will not impact any future periods.

Long-Term Incentive Compensation

On March 31, 2016, the Company approved a new plan for long-term incentive compensation (the “2016 LTIP”) for key employees and granted equity awards under the 2016 LTIP in the aggregate amount of 707,028 shares at a weighted average share price of $7.31 with a then current value of approximately $5.2 million. For each grantee other than Mr. Haugh, the Company’s Chief Executive Officer, 33% of the award was in the form of restricted stock units (“RSUs”) and 67% of the award was in the form of target level performance stock units (“PSUs”). Mr. Haugh’s award under the 2016 LTIP consisted of 25% RSUs and 75% PSUs. The RSUs for each grantee vest in three equal installments annually over a three-year period. Other than for Mr. Haugh, the PSUs cliff vest over three years based on the achievement of operating income performance targets established by the Compensation Committee. One-third of Mr. Haugh’s PSUs shall be converted to time-based awards on December 31, 2016, December 31, 2017 and December 31, 2018, based on the achievement of operating income performance targets established by the Compensation Committee, and such time-based awards shall vest and be settled on December 31, 2018. For FY 2017 and FY 2016, approximately 0.2 million shares and less than 0.1 million shares, respectively, were forfeited in respect of the 2016 LTIP.

On March 7, 2017, the Company approved a new plan for long-term incentive compensation (the “2017 LTIP”) for certain employees and granted equity awards under the 2017 LTIP in the aggregate amount of 871,011 shares at a weighted average share price of $7.52 with a then current value of $6.6 million. For each grantee, 33% of the award was in the form of RSUs and 67% of the award was in the form of target level PSUs. The material terms of the PSUs and RSUs are substantially similar to those set forth in the 2016 LTIP. Specifically, the RSUs vest one third annually on each of March 30, 2018, March 30, 2019 and March 30, 2020. The PSUs vest based on performance metrics approved by the Compensation Committee, which, for the performance period commencing January 1, 2017 and ending on December 31, 2019, are based on the Company’s achievement of an aggregated adjusted operating income performance target as set forth in the applicable award agreements, and continued employment through December 31, 2019. In FY 2017, approximately 0.2 million shares were forfeited in respect of the 2017 LTIP.