Stockholders' Equity

Equity Incentive Plans

In May 2006, the Company adopted the 2006 Equity Incentive Plan (the 2006 Plan), which was amended on May 9, 2007. In September 2015, the Company's stockholders approved the 2015 Stock Incentive Plan (2015 SIP), which replaced the Company's 2006 Plan. As with the 2006 Plan, the primary purpose of the 2015 SIP is to encourage ownership in the Company by key personnel, whose long-term service is considered essential to the Company’s continued success. The 2015 SIP reserves 1,275,000 shares of the Company’s common stock for issuance to employees, directors, consultants, independent contractors and advisors, plus any additional shares that are forfeited, or are otherwise terminated under the 2006 Plan. The maximum aggregate number of shares that may be issued to employees under the 2015 SIP through the exercise of incentive stock options is 750,000.

Nonvested Stock Unit Grants. The Company has elected to grant NSUs annually to key personnel. The NSUs granted entitle the employee recipients to receive shares of common stock of the Company upon vesting. The vesting of most NSUs is subject to achievement of certain performance targets, with the remaining NSUs subject only to time-based vesting restrictions. For the majority of NSUs granted in 2013 and after, the performance-based NSUs vest in equal one-third installments at the end of each of the three years after the performance goals are achieved, and the time-based NSUs vest in equal annual installments over a three-year period following the date of grant.

Long-Term Incentive Plans. In May 2007, the Company adopted long-term incentive award agreements under the 2006 Plan for issuance of SARs and RSUs, which were awarded to certain executive officers of the Company. These awards vest subject to certain long-term performance objectives and certain long-term service conditions. One-half of the SAR and RSU awards vested 80% on December 31, 2010 and 20% on December 31, 2011. The other half of the SAR and RSU awards vested 80% on December 31, 2015 and, provided that the conditions are met, 20% will vest on December 31, 2016. The Company considers achievement of the remaining performance conditions as probable and is recognizing such compensation cost over the service period.

2013 LTIP Awards. In December 2013, the Board of the Company adopted long-term incentive awards (2013 LTIP Awards) under the 2006 Plan. The shares under these awards were available for issuance to current and future members of the Company's management team, including the Company's named executive officers. Each recipient received a specified maximum number of RSUs, each of which represented the right to receive one share of the Company's common stock. These awards were to vest subject to certain long-term performance objectives and certain long-term service conditions. At March 31, 2016, the Company did not meet the threshold performance criteria and the awards did not vest.

2015 LTIP Awards. In September 2014, the Board of the Company approved long-term incentive awards (2015 LTIP Awards) under the 2006 Plan. The shares under these awards were available for issuance to current and future members of the Company's leadership team, including the Company's named executive officers. Each recipient received a specified maximum number of RSUs, each of which represents the right to receive one share of the Company's common stock. These awards vest subject to certain long-term performance objectives and certain long-term service conditions. The awards will vest on March 31, 2017 only if the Company meets certain revenue targets ranging between approximately $2,155,000 and approximately $2,447,000 and certain EBITDA targets ranging between approximately $336,000 and approximately $394,000 for the fiscal year ending March 31, 2017. No vesting of any 2015 LTIP Awards will occur if either of the threshold performance criteria is not met for the year ending March 31, 2017. To the extent financial performance is achieved above the threshold levels, the number of RSUs that will vest will increase up to the maximum number of units granted under the award. Under this award program, the Company granted awards that contain a maximum amount of approximately 160,000 RSUs during the year ended March 31, 2015. The average grant date fair value of these RSUs was $98.29 per share. At March 31, 2016, the Company believed that the achievement of at least the threshold performance objectives was remote. During the year ended March 31, 2016, the Company reversed approximately $1,400 of compensation expense previously recognized. If the performance objectives become probable, the Company will then begin recording an expense for the 2015 LTIP Awards and would recognize a cumulative catch-up adjustment in the period they become probable. At March 31, 2016, the cumulative amount would be approximately $6,000 based on the maximum number of units if the performance objectives were probable.

2016 LTIP Awards. In November 2015, the Board approved long-term incentive awards (2016 LTIP Awards) under the 2015 SIP. The shares under these awards will be available for issuance to current and future members of the Company's leadership team, including the Company's named executive officers. Each recipient will receive a specified maximum number of restricted stock units (RSUs), each of which will represent the right to receive one share of the Company's common stock. The awards will vest on March 31, 2018 only if the Company meets certain revenue targets and certain consolidated EBITDA targets for the fiscal year ending March 31, 2018. To the extent financial performance is achieved above the threshold levels for each of these performance criteria, the number of RSUs that will vest will increase up to a maximum of 200% of the targeted amount for that award. No vesting of any portion of the 2016 LTIP Awards will occur if the Company fails to achieve revenue and EBITDA amounts equal to at least 90% of either threshold amounts for these criteria. Following the determination of the Company’s achievement with respect to the revenue and EBITDA criteria for the performance period, the vesting of each 2016 LTIP Award will be subject to adjustment based on the application of a total stockholder return (TSR) modifier. The amount of the adjustment will be determined based on a comparison of the Company's TSR relative to the TSR of a pre-determined set of peer group companies for the 36-month performance period commencing on April 1, 2015 and ending on March 31, 2018. A Monte-Carlo simulation model, which is a generally accepted statistical technique, was used to determine the grant date fair value by simulating a range of possible future stock prices for the Company and each member of the peer group over the TSR 36-month performance period. Under this award program, the Company granted awards covering a maximum of approximately 308,000 RSUs during the year ended March 31, 2016. The average grant date fair value of these RSUs was $50.05 per share. Based on the Company's current long-range forecast, the Company believed that the achievement of at least the threshold performance objectives of these awards was remote, and therefore has not recognized compensation expense for the fiscal year ended March 31, 2016. If the performance objectives become probable, the Company will then begin recording an expense for the 2016 LTIP Awards and would recognize a cumulative catch-up adjustment in the period they become probable. At March 31, 2016, the cumulative amount would be approximately $2,000 based on the maximum number of units if the performance objectives were probable.

Grants to Directors

On a quarterly basis, the Company grants shares of its common stock to each of its outside directors. The fair value of such shares, which is determined based on the closing price at the date of issuance, is expensed on the date of issuance.

Employee Stock Purchase Plan

In September 2015, the Company's stockholders approved the 2015 Employee Stock Purchase Plan (2015 ESPP). The primary purpose of the 2015 ESPP is to enhance the Company’s ability to attract and retain the services of eligible employees and provide additional incentives to eligible employees to devote their effort and skill to the Company’s advancement by providing them an opportunity to participate in the ownership of the Company’s stock. The 2015 ESPP provides for the initial authorization of 1,000,000 shares of the Company’s common stock. Eligible employees commenced participation in the 2015 ESPP in March 2016 with payroll deductions. Each consecutive purchase period will be 6 months in duration and shares will be purchased on the last trading day of the purchase period at a price that reflects a 15% discount to the closing price.

Stock Repurchase Programs

In June 2012, the Company approved a stock repurchase program to repurchase up to $200,000 of the Company's common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors. The program did not obligate the Company to acquire any particular amount of common stock and the program may have been suspended at any time at the Company's discretion. At February 28, 2015, the Company had repurchased approximately 3,823,000 shares under this program at an average price of $52.31 per share for approximately $200,000. At February 28, 2015, the Company had repurchased the full amount authorized under this program.

In January 2015, the Company approved a new stock repurchase program to repurchase up to $200,000 of the Company's common stock, which included the same stipulations as the purchase program approved in June 2012, as described above. Under the new program, during the year ended March 31, 2016, the Company repurchased approximately 1,420,000 shares for $94,200, or an average price of $66.32 per share. Through March 31, 2016, the Company had repurchased a total of approximately 1,797,000 shares under this program for approximately $122,100, or an average price of $67.95 per share, leaving the remaining approved amount at approximately $77,900.

Stock Compensation

The table below summarizes stock compensation amounts recognized in the consolidated statements of comprehensive income (loss):



	Years ended March 31,						Quarter ended (transition period) March 31,			Year ended December 31,
	2016			2015			2014			2013
Compensation expense recorded for:
NSUs	$	6,163		$	9,295		$	1,863		$	10,545
SARs	893			1,846			381			1,302
RSUs	(1,511		)	1,323			354			287
Directors' shares	1,077			1,060			267			1,002
Total compensation expense	6,622			13,524			2,865			13,136
Income tax benefit recognized	(2,525		)	(5,143		)	(1,082		)	(4,950		)
Net compensation expense	$	4,097		$	8,381		$	1,783		$	8,186

The table below summarizes the total remaining unrecognized compensation cost related to nonvested awards that the Company considers are probable to vest and the weighted-average period over which the cost is expected to be recognized at March 31, 2016:



	Unrecognized Compensation Cost		Weighted-Average Remaining Vesting Period (Years)
NSUs	$	6,568	1.2
SARs	117		0.8
RSUs	17		0.8
Total	$	6,702

The unrecognized compensation cost excludes a maximum of $9,657 and $13,950 of compensation cost on the 2015 LTIP Awards and 2016 LTIP Awards, respectively. Achievement of the performance conditions are not considered probable.

Nonvested Stock Units Issued Under the 2006 Plan and the 2015 SIP

The table below summarizes the 2006 Plan and the 2015 SIP activity:



	Number of Shares		Weighted- Average Grant-Date Fair Value
Nonvested at January 1, 2013	371,000		$	58.51
Granted	304,000		57.30
Vested	(315,000	)	53.19
Forfeited	(20,000	)	61.08
Nonvested at December 31, 2013	340,000		62.23
Granted	—		—
Vested	(2,000	)	58.11
Forfeited	(7,000	)	64.15
Nonvested at March 31, 2014	331,000		62.21
Granted	196,000		82.34
Vested	(142,000	)	68.39
Forfeited	(30,000	)	64.18
Cancelled*	(15,000	)	84.04
Nonvested at March 31, 2015	340,000		70.11
Granted	240,000		70.82
Vested	(132,000	)	66.74
Forfeited	(91,000	)	72.84
Cancelled*	(154,000	)	74.22
Nonvested at March 31, 2016	203,000		68.80

*Nonvested Stock Units cancelled during the period represent awards granted with respect to which performance criteria were not met.

Stock Appreciation Rights Issued Under the 2006 Plan

No stock appreciation rights have been issued under the 2015 SIP. The table below summarizes stock appreciation rights activity under the 2006 Plan:



	Number of SARs		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2013	745,000		$	26.73	7.9	$	10,100
Granted	—		—
Exercised	(15,000	)	26.73
Forfeited	—		—
Outstanding at December 31, 2013	730,000		26.73		6.9	42,100
Granted	—		—
Exercised	—		—
Forfeited	—		—
Outstanding at March 31, 2014	730,000		26.73		6.7	38,700
Granted	—		—
Exercised	(15,000	)	26.73
Forfeited	—		—
Outstanding at March 31, 2015	715,000		26.73		5.8	33,000
Granted	—		—
Exercised	(80,000	)	26.73
Forfeited	(15,000	)	26.73
Outstanding at March 31, 2016	620,000		26.73		3.5	20,600
Exercisable at March 31, 2016	530,000		26.73		3.3	17,600
Expected to vest and exercisable at March 31, 2016	620,000		26.73		3.5	20,600

The maximum contractual term is 10 and 15 years from the date of grant for those SARs with final vesting dates of December 31, 2011 and December 31, 2016, respectively. The number of SARs expected to vest is based on the probability of achieving certain performance conditions and is also reduced by estimated forfeitures.

Restricted Stock Units Issued Under the 2006 Plan and the 2015 SIP

The table below summarizes the restricted stock unit activity under the 2006 Plan and 2015 SIP:



	Number of Shares		Weighted- Average Grant-Date Fair Value
Nonvested at January 1, 2013	671,000		$	62.80
Granted	156,000		84.52
Vested	—		—
Forfeited	(32,000	)	63.69
Nonvested at December 31, 2013	795,000		67.03
Granted	—		—
Vested	—		—
Forfeited	(66,000	)	67.23
Nonvested at March 31, 2014	729,000		67.01
Granted	160,000		98.29
Vested	—		—
Forfeited	(35,000	)	78.39
Cancelled*	(230,000	)	82.09
Nonvested at March 31, 2015	624,000		68.82
Granted	308,000		50.05
Vested	(47,000	)	26.73
Forfeited	(232,000	)	70.98
Cancelled*	(264,000	)	63.22
Nonvested at March 31, 2016	389,000		61.53

*Nonvested Stock Units cancelled during the period represent awards granted with respect to which performance criteria were not met.

The amounts granted are the maximum amounts under the respective awards.