NET INCOME PER SHARE

Basic and diluted net income per share was as follows:



		Three Months Ended March 31,
		2016		2015
	(In thousands, except per share amounts)
Basic net income per share:
Net income from continuing operations		$	11,648	$	11,732
Net loss from discontinued operations		—		(3,348		)
Net income		$	11,648	$	8,384

Weighted average common shares outstanding		36,967		32,736

Basic net income per common share from continuing operations		$	0.32	$	0.36
Basic net loss per common share from discontinued operations		—		(0.10		)
Basic net income per common share		$	0.32	$	0.26

Diluted net income per share:
Net income from continuing operations		$	11,648	$	11,732
Net loss from discontinued operations		—		(3,348		)
Net income		$	11,648	$	8,384

Weighted average common shares outstanding — Basic		36,967		32,736
Effect of dilutive securities:
2016 Convertible notes		653		30
Stock options and restricted stock		521		576
Weighted average common shares for diluted earnings per share		38,141		33,342

Diluted net income per common share from continuing operations		$	0.31	$	0.35
Diluted net loss per common share from discontinued operations		—		(0.10		)
Diluted net income per common share		$	0.31	$	0.25

In connection with the separation of SeaSpine on July 1, 2015 and in accordance with the Employee Matters Agreement the Company made certain adjustments to the exercise price and number of share-based compensation awards with the intention of preserving the intrinsic value of the awards prior to the separation. Stock options issued in 2015 prior to the separation converted to those of the entity where the employee is working post-separation. Stock options issued prior to 2015 converted to both Integra and SeaSpine options such that the holders received stock options in both companies. The exercise price of these outstanding awards was adjusted to preserve the value of the awards immediately prior to the separation. Performance stock, restricted stock, and contract stock were adjusted to provide holders performance stock, restricted stock, and contract stock in the company that employs such employee following the separation. The adjustments to the Company's stock-based compensation awards resulted in an increase in incremental fair value of $4.4 million, of which $3.3 million has previously been recorded and $0.2 million was recorded in the three months ended March 31, 2016. The remaining $0.9 million will be recognized prospectively over the remaining term of outstanding awards, adjusted, as applicable, for forfeitures.

Common stock of approximately 0.3 million and a minimal amount of shares at March 31, 2016 and 2015, respectively, that are issuable through exercise or conversion of dilutive securities were not included in the computation of diluted net income per share because their effect, would have been antidilutive. The Company also has warrants outstanding related to its 2016 Notes at March 31, 2016 and 2015 and the Company's 2016 Notes are convertible to common shares in certain circumstances (see Note 6). These warrants and the excess conversion value of the 2016 Notes are included in the diluted earnings per share calculation using the treasury stock method, unless the effect of including such items would be anti-dilutive.

For the three months ended March 31, 2016 and 2015, the potential excess conversion value on the 2016 Notes was included in the Company's dilutive share calculation because the average stock price for the three months ended March 31, 2016 and 2015 exceeded the conversion price.

Performance Shares and Restricted Units that entitle the holders to approximately 0.1 million shares of common stock are included in the basic and diluted weighted average shares outstanding calculation for their date of issuance because no further consideration is due related to the issuance of the underlying common shares.