10.	STOCK-BASED COMPENSATION

The Company’s equity awards consist of SARs and RSUs. For a description of the Company’s stock-based compensation plans, see Note 5 “Stock-Based Compensation” in Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended January 31, 2015.

Stock-Based Compensation

The following table sets forth reported stock-based compensation expense for the three and six months ended July 31, 2015 and 2014:

	Three Months Ended July 31,				Six Months Ended July 31,
	2015		2014		2015		2014
	(in thousands)				(in thousands)
Cost of subscription	$	22	$	14	$	34	$	22
Cost of maintenance and other revenue		87		48		133		77
Cost of professional services		234		156		353		243
Sales and marketing		429		257		690		384
Research and development		290		176		438		268
General and administrative		1,369		1,058		2,089		1,591
Total stock-based compensation expense	$	2,431	$	1,709	$	3,737	$	2,585

SAR Information

The weighted average assumptions used to value SARs granted in the six months ended July 31, 2015 and 2014 are shown in the following table:

	Six Months Ended July 31,
	2015			2014
Expected life in years ⁽¹⁾		5.00			4.98
Risk free interest rate ⁽²⁾		1.64	%		1.58	%
Volatility ⁽³⁾		41	%		47	%
Dividend rate ⁽⁴⁾		1.10	%		1.32	%

(1)	The expected life of SARs granted under the stock-based compensation plans is based on historical vested SAR exercise and post-vest forfeiture patterns and includes an estimate of the expected term for 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 six months ending on July 31, 2015.

The following table summarizes the activity for outstanding SARs for the six months ended July 31, 2015:

	SARs (in thousands)			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 31, 2015		2,499		$	12.69
Granted		380			25.34
Exercised		(211	)		10.85
Expired		(10	)		14.63
Forfeited		(3	)		12.10
Outstanding at July 31, 2015		2,655		$	14.64		5.2	$	30,152
Vested and expected to vest at July 31, 2015 ⁽¹⁾		2,646		$	14.65		5.2	$	30,020
Vested and exercisable at July 31, 2015		1,497		$	11.49		4.2	$	21,697

(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 July 31, 2015, and the exercise price for in-the-money SARs) that would have been received by the holders if all SARs had been exercised on July 31, 2015. The total intrinsic value of SARs exercised in the six months ended July 31, 2015 was $2.9 million.

The number of SARs exercised includes shares withheld on behalf of employees to satisfy minimum statutory tax withholding requirements. During the three months ended July 31, 2015, the Company withheld 18,400 shares for payment of these taxes at a value of $0.5 million. During the six months ended July 31, 2015, the Company withheld 34,100 shares for payment of these taxes at a value of $0.9 million.

At July 31, 2015, there was approximately $7.3 million of total unrecognized compensation cost related to unvested SARs. This cost is expected to be recognized over a weighted-average period of approximately 2.9 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 six months ended July 31, 2015:

	RSUs			Weighted Average Grant Date Fair Value
	(in thousands)
Restricted stock at January 31, 2015		503		$	16.27
Granted		323			24.77
Released ⁽¹⁾		(183	)		15.48
Forfeited		(13	)		18.18
Restricted stock at July 31, 2015		630		$	20.84

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

The Company withholds, at the employee’s election, a portion of the released shares as consideration for the Company’s payment of applicable employee income taxes. During the three months ended July 31, 2015, the Company withheld 48,800 shares for payment of these taxes at a value of $1.3 million. During the six months ended July 31, 2015, the Company withheld 49,400 shares for payment of these taxes at a value of $1.3 million.

Total unrecognized compensation cost related to RSUs was approximately $10.9 million as of July 31, 2015. This cost is expected to be recognized over a weighted-average period of approximately 3.2 years.