7. 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 following table illustrates the activity under the Repurchase Programs, in the aggregate, for FY2015, FY 2014, FY 2013, FY 2012 and FY 2011:

	# of shares repurchased as part of stock repurchase programs		Cost of shares repurchased (in 000’s)		Weighted Average Price
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 2015		29,502,401	$	786,723	$	26.67

As of December 31, 2015, $13.3 million and $500.0 million remained available for repurchase under the July 2013 Program and February 2014 Program, respectively.

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.

Shares Reserved for Issuance

At December 31, 2015, 2,845,017 common shares were reserved for issuance under the Amended and Restated 2009 Plan. At December 31, 2015 there were no common shares available for issuance under any previous Company plan.

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 2015, FY 2014 or FY 2013 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 2.50% Convertible Notes) and performance related options activity, and related information for FY 2015, FY 2014 and FY 2013 are as follows:

Stock Options

	Options			Weighted Average Exercise Price
Outstanding at January 1, 2013		1,444,150		$	5.90
Granted		—			—
Canceled		—			—
Exercised		(131,073	)		2.70
Expired/Forfeited		—			—
Outstanding at December 31, 2013		1,313,077		$	6.22
Granted		—			—
Canceled		—			—
Exercised		(1,172,000	)		5.49
Expired/Forfeited		—			—
Outstanding at December 31, 2014		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
Exercisable at December 31, 2015		50,000		$	17.18

The weighted average contractual term (in years) of options outstanding and exercisable as of December 31, 2015, 2014 and 2013 were 1.74, 1.43, and 1.41 respectively.

No options vested during FY 2015, FY 2014 and FY 2013. There were no options granted during FY 2015, FY 2014 and FY 2013.

Cash received from option exercise under all share-based payment arrangements for FY 2015, FY 2014 and FY 2013 was $0.3 million, $10.1 million and $0.4 million respectively. A tax benefit of approximately $0.1 million, $10.7 million and $1.2 million for FY 2015, FY 2014 and FY 2013, respectively, was 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, 2015 and the exercise price of the underlying options. At December 31, 2015, 2014 and 2013, the aggregate intrinsic value of options exercised was $0, $40.1 million and $4.8 million, respectively. At December 31, 2015, 2014 and 2013 the aggregate intrinsic value of options outstanding and exercisable was $0, $3.0 million and $44.0 million, respectively. There were no unamortized options as of December 31, 2015.

Warrants

	Warrants			Weighted Average Exercise Price
Outstanding at January 1, 2013		190,000		$	19.80
Granted		—			—
Canceled		—			—
Exercised		—			—
Expired/Forfeited		—			—
Outstanding at December 31, 2013		190,000		$	19.80
Granted		—			—
Canceled		—			—
Exercised		(170,000	)		21.35
Expired/Forfeited		—			—

Outstanding at December 31, 2014		20,000		$	6.64
Granted		—			—
Canceled		—			—
Exercised		—			—
Expired/Forfeited		—			—
Outstanding at December 31, 2015		20,000		$	6.64
Exercisable at December 31, 2015		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, 2015, 2014 and 2013 were 2.76, 3.76 and 3.66, respectively.

In FY 2015, FY 2014 and FY 2013, 0, 170,000 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 2015					FY 2014					FY 2013
	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,		2,699,732		$	22.40		2,770,147		$	20.53		2,612,000		$	18.56
Granted		355,588			20.34		256,480		40.63			1,247,879		25.29
Vested		(806,508	)	27.72			(278,305	)	20.04			(892,591	)	21.61
Forfeited/Canceled		(26,304	)	28.94			(48,590	)	25.81			(197,141	)	19.60
Non-vested, December 31,		2,222,508		$	20.06		2,699,732		$	22.40		2,770,147		$	20.53

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 2015, FY 2014 and FY 2013, the Company awarded approximately 0.4 million, 0.3 million and 1.2 million restricted shares, respectively, with a fair market value of approximately $7.2 million, $10.4 million and $31.6 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 2015, FY 2014 and FY 2013 was approximately $11.4 million, $18.5 million and $20.0 million, respectively. An additional amount of $2.6 million of expense related to time-based restricted shares is expected to be expensed evenly over a period of approximately three years. During FY 2015, FY 2014 and FY 2013, the Company repurchased shares valued at $15.5 million, $16.0 million and $3.7 million, respectively, of its common stock in connection with net share settlement of restricted stock grants and option exercises.

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”), which will expire following the 2016 annual meeting of shareholders, absent an extension being approved by shareholders. The Board of Directors adopted the Rights Plan in light of recent activity in the Company’s shares, including the recent accumulation of meaningful positions by holders of derivatives securities, and what the Iconix Board of Directors and management believes is a currently depressed share price for the Company’s common stock.

Pursuant to the Rights Plan, one preferred stock purchase right will be distributed for each share of common stock held by shareholders of record on February 12, 2016. The rights will become exercisable only if a person or group acquires beneficial ownership of 20% or more of the Company's common stock (including in the form of synthetic ownership through derivative positions). In that situation, each holder of a right (other than, as detailed in the Rights Plan, the person or group triggering the rights) will be entitled to purchase, at the then-current exercise price (which was initially set at $30 per right), shares of common stock (and, in certain circumstances, other consideration) having a value of twice the exercise price of the right (a 50% discount). Rights held by any person or group whose actions trigger the Rights Plan, including potentially counterparties to derivative transactions with such person or group, would become void. The Rights Plan had no impact on the Company’s financial reporting for the year ended December 31, 2015.