STOCK-BASED COMPENSATION

9 Months Ended

Oct. 31, 2013

STOCK-BASED COMPENSATION [Abstract]

STOCK-BASED COMPENSATION

11.  STOCK-BASED COMPENSATION

The Company’s equity awards consist of stock options, SARs and RSUs. For a description of the Company’s stock-based compensation plans, see Note 12 “Stock-Based Compensation” in Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended January 31, 2013.

Stock-Based Compensation

The following table sets forth reported stock-based compensation expense for the three and nine months ended October 31, 2013 and 2012:

	Three Months Ended October 31,				Nine Months Ended October 31,
	2013		2012		2013		2012
	(in thousands)				(in thousands)
Cost of maintenance, subscription and other revenue	$	58	$	48	$	161	$	155
Cost of professional services		124		124		388		375
Sales and marketing		236		209		687		646
Research and development		160		166		512		516
General and administrative		642		592		1,966		1,914
Total stock-based compensation expense	$	1,220	$	1,139	$	3,714	$	3,606

Option/SAR Information

The weighted average assumptions used to value SARs granted in the nine months ended October 31, 2013 and 2012 are shown in the following table:

	Nine Months Ended October 31,
	2013			2012
Expected life in years (1)		4.57			4.61
Risk free interest rate (2)		1.00	%		0.69	%
Volatility (3)		53	%		61	%
Dividend rate (4)		2.42	%		2.25	%

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⁽¹⁾ The expected life of SARs granted under the stock-based compensation plans is based on historical vested stock option and SAR exercise and post-vest forfeiture patterns and includes an estimate of the expected term for stock options and SARs that were fully vested and outstanding.

⁽²⁾ The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of SARs in effect at the time of grant.

⁽³⁾ The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of the Company’s common stock for a period equivalent to the expected life of the SARs, which it believes is representative of the expected volatility over the expected life of the SARs.

⁽⁴⁾ The Company expects to continue paying quarterly dividends at the same rate as the three months ended October 31, 2013.

The following table summarizes the activity for outstanding stock options and SARs for the nine months ended October 31, 2013:

	Stock Options/ SARs(in thousands)			Weighted Average Exercise Price per Share		Weighted Average RemainingContractualTerm (years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 31, 2013		2,920		$	11.11
Granted		598			11.72
Exercised		(224	)		8.52
Expired		(229	)		15.17
Forfeited		(39	)		10.63
Outstanding at October 31, 2013		3,026		$	11.12		5.1	$	11,017
Vested and expected to vest at October 31, 2013 (1)		2,986		$	11.11		5.1	$	10,893
Vested and exercisable at October 31, 2013		1,565		$	10.76		3.6	$	6,272

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⁽¹⁾ The expected-to-vest SARs are the result of applying the pre-vesting forfeiture rate assumptions to total outstanding SARs.

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the aggregate difference between the closing stock price of the Company’s common stock based on the last trading day as of October 31, 2013, and the exercise price for in-the-money stock options and SARs) that would have been received by the holders if all stock options and SARs had been exercised on October 31, 2013. The total intrinsic value of stock options and SARs exercised in the nine months ended October 31, 2013 was $931,000.

The number of SARs exercised includes shares withheld on behalf of employees to satisfy minimum statutory tax withholding requirements.  During the three months ended October 31, 2013, the Company withheld 13,000 shares for payment of these taxes at a value of $167,000. During the nine months ended October 31, 2013, the Company withheld 25,000 shares for payment of these taxes at a value of $318,000.

At October 31, 2013, there was approximately $5.5 million of total unrecognized compensation cost related to unvested SARs. This cost is expected to be recognized over a weighted-average period of approximately 2.8 years.

RSU Information

The estimated fair value of RSUs was calculated based on the closing price of the Company’s common stock on the date of grant, reduced by the present value of dividends foregone during the vesting period.

The following table summarizes the activity for RSUs for the nine months ended October 31, 2013:

	RSUs (in thousands)			Weighted Average Grant Date Fair Value
Restricted stock at January 31, 2013		385		$	10.49
Granted		230			11.19
Vested (1)		(164	)		10.05
Forfeited		(17	)		11.00
Restricted stock at October 31, 2013		434		$	11.02

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⁽¹⁾ The number of RSUs vested includes shares withheld on behalf of employees to satisfy statutory tax withholding requirements.

The Company withholds, at the employee’s election, a portion of the vested shares as consideration for the Company’s payment of applicable employee income taxes. During the three months ended October 31, 2013, the Company withheld 10,000 shares for payment of these taxes at a value of $138,000. During the nine months ended October 31, 2013, the Company withheld 46,000 shares for payment of these taxes at a value of $576,000.

Total unrecognized compensation cost related to RSUs was approximately $3.9 million as of October 31, 2013. This cost is expected to be recognized over a weighted-average period of approximately 2.9 years.