Stockholders' Equity

Equity Incentive Plans

In May 2006, the Company adopted the 2006 Equity Incentive Plan (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.

The Company uses various types of stock-based compensation under the 2006 Plan and 2015 SIP, including time-based restricted stock units (RSUs), performance-based stock units (PSUs), stock appreciation rights (SARs) and non-qualified stock options (NQSOs). Annual grants of RSUs (Annual RSUs) and PSUs (Annual PSUs) are available to key personnel and certain executive officers, and long-term incentive (LTIP) awards or options are available to certain officers, including named executive officers.

Annual Awards

The Company has elected to grant Annual RSUs and Annual PSUs to key employees, including certain executive officers of the Company. These grants entitle the recipients to receive shares of common stock of the Company upon vesting. The vesting of Annual PSUs is subject to achievement of certain performance criteria measured over the fiscal year during which they are granted, while Annual RSUs are subject only to time-based vesting restrictions. Annual PSUs vest in equal one-third installments annually over three years after the performance criteria are achieved, and Annual RSUs vest in equal annual installments over a three-year period following the date of grant. During the year ended March 31, 2017, the Company granted 83,971 Annual PSUs at a weighted-average grant date fair value of $54.51 per share and 184,531 Annual RSUs at a weighted-average grant date fair value of $61.54 per share. At March 31, 2017, the Company determined that the performance criteria for the fiscal year 2017 Annual PSUs was not met, and therefore, the awards were cancelled and the Company recorded a reversal of total stock compensation expense recorded in fiscal year 2017 of $500. As of March 31, 2017, future unrecognized stock compensation expense for Annual RSUs and Annual PSUs granted to date, excluding estimated forfeitures, was $7,951.

Long-Term Incentive Awards

2007 LTIP SARs and 2007 LTIP PSUs

In May 2007, the Company adopted LTIP awards under the 2006 Plan for issuance of SARs (2007 LTIP SARs) and PSUs (2007 LTIP PSUs), which were awarded to certain executive officers of the Company. These awards were subject to vesting based on certain performance criteria and service conditions. Half of the 2007 LTIP SARs and 2007 LTIP PSUs granted were fully vested as of December 31, 2011; the other half of the awards granted vested 80% on December 31, 2015, with the remaining 20% subject to vesting on December 31, 2016, provided certain performance criteria were achieved. As of December 31, 2016, it was determined that the Company had not achieved the performance criteria and therefore the remaining awards did not vest and were cancelled. Accordingly, the Company recognized a net reversal of stock compensation expense of $2,400 during fiscal year 2017.

2013 LTIP PSUs

In December 2013, the Company adopted LTIP awards (2013 LTIP PSUs) 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 2013 LTIP PSUs, each of which represented the right to receive one share of the Company's common stock. The 2013 LTIP PSUs vested subject to certain performance criteria and service conditions over three years and would have vested on March 31, 2016. At March 31, 2016, the Company did not meet the minimum threshold performance criteria, and the awards did not vest and were cancelled.

2015 LTIP PSUs

In September 2014, the Company approved LTIP awards (2015 LTIP PSUs) 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 2015 LTIP PSUs, each of which represented the right to receive one share of the Company's common stock. The 2015 LTIP PSUs vested subject to certain performance criteria and service conditions over three years and would have vested on March 31, 2017. Vesting would not have occurred if the minimum threshold performance criteria were not met for the year ended March 31, 2017. To the extent financial performance was achieved above the minimum threshold performance criteria, the number of 2015 LTIP PSUs that vested would increase up to the maximum number of units granted under the award. Under this award program, the Company granted awards that contained a maximum amount of approximately 160,000 2015 LTIP PSUs during the year ended March 31, 2015. The weighted-average grant date fair value of the 2015 LTIP PSUs was $98.29 per share. At March 31, 2016, the Company did not believe the achievement of at least the minimum threshold performance criteria was probable, and accordingly, the Company recognized a net reversal of stock compensation expense of approximately $1,400. At March 31, 2017, the Company did not meet the minimum threshold performance criteria and the awards did not vest and were cancelled.

2016 LTIP PSUs

In November 2015, the Company approved LTIP awards (2016 LTIP PSUs) under the 2015 SIP. 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 2016 LTIP PSUs, each of which represented the right to receive one share of the Company's common stock. The 2016 LTIP PSUs vest subject to certain performance and market criteria and service conditions over three years and would vest on March 31, 2018. To the extent financial performance is achieved above the minimum threshold performance criteria, the number of 2016 LTIP PSUs 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 PSUs will occur if the Company fails to achieve at least 90% of the minimum threshold performance criteria. If the Company achieves the performance criteria, vesting of the 2016 LTIP PSUs 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 that contained a maximum amount of approximately 308,000 2016 LTIP PSUs during the year ended March 31, 2016. The weighted-average grant date fair value of the 2016 LTIP PSUs was $50.05 per share. The Company does not believe the achievement of at least the minimum threshold performance criteria is probable, and accordingly, did not recognize stock compensation expense for these awards during the years ended March 31, 2017 and 2016. If the performance criteria are deemed probable in fiscal year 2018, the Company will recognize a cumulative catch-up adjustment to stock compensation expense. At March 31, 2017, the cumulative catch-up adjustment to stock compensation expense would be approximately $9,813, assuming the maximum amount of 2016 LTIP PSUs vest because the performance criteria are deemed probable.

2017 LTIP NQSOs

In November 2016, the Company adopted and approved the grant of NQSOs (2017 LTIP NQSOs) under the Company's 2015 SIP. These options were issued to the Company’s executive officers. Each option grants the recipient 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 on March 31, 2019, if the recipient provides continuous service through that date and the Company achieves the minimum threshold performance criteria. The Company measures stock compensation expense for the 2017 LTIP NQSOs 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, as well as dividend yield of the Company’s common stock. The fair value of 2017 LTIP NQSOs granted during the year ended March 31, 2017 was $5,456, and $694 was expensed during the year ended March 31, 2017. As of March 31, 2017, future unrecognized stock compensation expense for the 2017 LTIP NQSOs granted to date, excluding estimated forfeitures, was $4,344.

The following table presents the weighted-average valuation assumptions used for the recognition of stock compensation expense for the 2017 LTIP NQSOs granted during the year ended March 31, 2017:



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

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.

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 the full $200,000 amount authorized under the program through the repurchase of approximately 3,823,000 shares at an average price of $52.31 per share.

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. During fiscal years 2017, 2016 and 2015, the Company repurchased approximately 222,000, 1,420,000 and 1,436,000, respectively, of its common stock. In fiscal years 2017, 2016 and 2015, the cost of these repurchases was approximately $12,572, $94,200, and $107,200, respectively, at an average price per share of $56.51, $66.32, and $74.68, respectively. Under the new program, during the year ended March 31, 2015, the Company repurchased approximately 377,000 shares, out of the total 1,436,000 shares repurchased under both programs in fiscal year 2015, for approximately $27,900, or an average price of $74.09 per share.

Since inception through March 31, 2017, the Company had repurchased a total of approximately 2,020,000 shares under this program for approximately $134,706, or an average price of $66.69 per share, leaving the remaining approved amount at approximately $65,294.

The following is a reconciliation of the Company's retained earnings for repurchases of its common stock during the year ended March 31, 2017:



	Retained Earnings
Balance at March 31, 2016	$	826,449
Net income	5,710
Repurchases of common stock	(12,570		)
Balance at March 31, 2017	$	819,589

The remaining amount of approximately 222,000 shares of the purchase price of $12,572 was recorded in common stock during the year ended March 31, 2017.

Stock Compensation Expense

The table below summarizes stock compensation expense by award or option type recognized in the consolidated statements of comprehensive income (loss):



	Years Ended March 31,
	2017			2016			2015
Stock compensation expense recorded for:
Annual RSUs	$	5,191		$	2,356		$	1,603
Annual PSUs	1,203			3,807			7,692
2007 LTIP SARs	(1,949		)	893			1,846
LTIP PSUs*	(296		)	(1,511		)	1,323
2017 LTIP NQSOs	694			—			—
Directors' shares	1,168			1,077			1,060
Employee Stock Purchase Plan**	164			—			—
Total stock compensation expense	6,175			6,622			13,524
Income tax benefit recognized	(2,322		)	(2,525		)	(5,143		)
Net stock compensation expense	$	3,853		$	4,097		$	8,381

*2007 LTIP PSUs, 2013 LTIP PSUs, 2015 LTIP PSUs, and 2016 LTIP PSUs are collectively referred to herein as “LTIP PSUs”.

**The 2015 Employee Stock Purchase Plan (2015 ESPP) provides for the initial authorization of 1,000,000 shares of the Company’s common stock for sale to eligible employees. Eligible employees commenced participation in the 2015 ESPP in March 2016 with payroll deductions. Each consecutive purchase period is six months in duration and shares are 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. Purchase windows take place in February and August of each fiscal year.

The table below summarizes the total remaining unrecognized stock compensation expense 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 as of March 31, 2017:



	Unrecognized Stock Compensation Expense		Weighted-Average Remaining Vesting Period (Years)
Annual RSUs	$	7,497	1.4
Annual PSUs	454		1.0
2007 LTIP SARs	—		—
LTIP PSUs	—		—
2017 LTIP NQSOs	4,344		2.0
Total	$	12,295

The amount of unrecognized stock compensation expense as of March 31, 2017 excludes a maximum of $13,510 of stock compensation expense on the 2016 LTIP PSUs, as achievement of the performance criteria are not deemed probable.

Annual RSUs and Annual PSUs Issued under the 2006 Plan and 2015 SIP

The table below summarizes Annual RSU and Annual PSU activity:



	Number of Shares		Weighted- Average Grant-Date Fair Value
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
Granted	268,000		59.34
Vested	(111,000	)	65.37
Forfeited	(66,000	)	70.79
Cancelled*	(68,000	)	65.23
Nonvested at March 31, 2017	226,000		$	63.96

*Shares cancelled during the period represent Annual PSUs granted that did not meet the required performance criteria.

2007 LTIP SARs Issued Under the 2006 Plan

No SARs have been issued under the 2015 SIP. The table below summarizes 2007 LTIP SARs activity:



	Number of 2007 LTIP SARs		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at March 31, 2014	730,000		$	26.73	6.7	$	38,700
Exercised	(15,000	)	26.73
Outstanding at March 31, 2015	715,000		26.73		5.8	33,000
Exercised	(80,000	)	26.73
Forfeited	(15,000	)	26.73
Outstanding at March 31, 2016	620,000		26.73		3.5	20,600
Exercised	(290,000	)	26.73
Forfeited	(90,000	)	26.73
Outstanding at March 31, 2017	240,000		$	26.73	5.1	$	7,920
Exercisable at March 31, 2017	240,000		$	26.73	5.1	$	7,920

The maximum contractual term is 10 and 15 years from the grant date for those 2007 LTIP SARs with final vesting dates of December 31, 2011 and December 31, 2015, respectively.

LTIP PSUs Issued Under the 2006 Plan and the 2015 SIP

The table below summarizes the LTIP PSU activity:



	Number of Shares		Weighted- Average Grant-Date Fair Value
Nonvested at March 31, 2014	729,000		$	67.01
Granted	160,000		98.29
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
Granted	7,000		56.56
Forfeited	(27,000	)	68.63
Cancelled*	(100,000	)	89.77
Nonvested at March 31, 2017	269,000		$	50.22

*Shares cancelled represent LTIP PSUs granted that did not meet the required performance criteria.

2017 LTIP NQSOs Issued Under the 2015 SIP

The table below summarizes the 2017 LTIP NQSO:



	Number of Shares		Weighted- Average Grant-Date Fair Value		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at March 31, 2016	—		$	—	—	$	—
Granted	208,000		61.86
Forfeited	(16,000	)	61.86
Outstanding at March 31, 2017	192,000		$	61.86	9.0	$	—
Exercisable at March 31, 2017	—		$	—	—	$	—

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