Stockholders’ Equity

Annual Restricted Stock Unit (Annual RSU) Grants. The Company has elected to grant Annual RSUs to key personnel. Portions of the Annual RSUs are performance-based awards which are subject to the achievement of both performance and service conditions, and portions are time-based awards which are only subject to service conditions. The Annual RSUs entitle the recipients to receive shares of the Company's common stock upon vesting. Subject to the achievement of pre-determined performance conditions, the fiscal year 2017 performance-based Annual RSUs vest in equal one-third installments over three consecutive years, commencing on August 15, 2017. The fiscal year 2017 time-based Annual RSUs vest in equal annual installments over three consecutive years following the date of grant. During the three months ended December 31, 2016, the Company granted 18,546 time-based Annual RSUs at a weighted-average grant date fair value of $54.46 per share. There were no performance-based Annual RSUs granted during the three months ended December 31, 2016. During the nine months ended December 31, 2016, the Company granted 83,971 performance-based Annual RSUs at a weighted-average grant date fair value of $65.86 per share and 174,370 time-based Annual RSUs at a weighted-average grant date fair value of $61.94 per share. As of December 31, 2016, the Company believes that the likelihood of achievement of the minimum threshold of the performance objectives for the fiscal year 2017 performance-based Annual RSUs is remote, and therefore it has recorded a reversal of compensation expense for these awards in the amount of $500. As of December 31, 2016, future unrecognized compensation cost for the time-based Annual RSUs granted during fiscal year 2017, excluding estimated forfeitures, was $7,900.

Long Term Incentive Awards. In May 2007, the Company adopted long-term incentive awards under the Company's 2006 Equity Incentive Plan that provided for the issuance of stock appreciation rights (SARs) and restricted stock units (RSUs), which were awarded to certain of the Company's executive officers. These awards were subject to vesting based on certain performance objectives and long-term service conditions. Half of the SARs and RSUs granted were fully vested as of December 31, 2011; the other half were vested as to 80% of the awards as of December 31, 2015, while the remaining 20% were subject to vesting as of December 31, 2016, provided that certain performance conditions were met. As of December 31, 2016, it was determined that the Company had not achieved the performance conditions and therefore the remaining awards were not vested and were cancelled. Accordingly, the Company recognized a net reversal of compensation cost of $2,200.

Long Term Incentive Plan Options. In November 2016, the Company adopted and approved the grant of non-qualified stock options (NQSOs) under the Company's 2015 Stock Incentive Plan. These options were issued to the Company’s executive officers. Each option grants the holder the right to purchase a specified number of shares of the Company's common stock at a fixed exercise price per share. The options will vest in full on March 31, 2019, provided the employee provides continuous service through that date and the Company achieves the pre-established performance criteria. The Company measures stock compensation expense at the date of grant using the Black-Scholes option pricing model. This model estimates the fair value of the options based on a number of assumptions, such as expected option life, interest rates, the current fair market value and expected volatility and dividend yield of the Company’s common stock. The fair value of the options granted during the three months ended December 31, 2016 was $5,500 and $200 was expensed during the three months ended December 31, 2016.

The following table presents the weighted average valuation assumptions used for the recognition of stock compensation expense for stock options granted during the three months ended December 31, 2016:



Expected life (in years)	5.94
Expected volatility	41.8		%
Risk free interest rate	1.95		%
Dividend yield	—		%

Weighted average exercise price	$	61.86
Weighted average option value	$	26.27

Employee Stock Purchase Plan. The 2015 Employee Stock Purchase Plan (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. Each purchase period will be six 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 on that date. During the six month purchase period ended August 2016, eligible employees purchased approximately 7,000 shares of the Company's stock at a purchase price of $55.55. The next purchases will take place in February 2017.

Stock Repurchase Programs. During the nine months ended December 31, 2016, the Company repurchased approximately 222,500 shares under its stock repurchase program for approximately $12,571, or an average price of $56.51 per share, which is recorded in common stock for par value and retained earnings in the condensed consolidated balance sheets. Since inception through December 31, 2016, the Company has repurchased approximately 2,020,000 shares under the program for approximately $134,706, or an average price of $66.69 per share, leaving the remaining approved amount at approximately $65,294.

Retained Earnings. The following is a reconciliation of the Company's retained earnings:



	Retained Earnings
Balance as of March 31, 2016	$	826,449
Net income	21,414
Repurchase of common stock	(12,570		)
Balance as of December 31, 2016	$	835,293