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, 2016.

Stock-Based Compensation

The following table sets forth reported stock-based compensation expense for the three and six months ended July 31, 2016:

	Three Months Ended July 31,				Six Months Ended July 31,
	201 6		201 5		201 6		201 5
	(in thousands)				(in thousands)
Cost of subscription	$	35	$	22	$	54	$	34
Cost of maintenance and other revenue		99		87		160		133
Cost of professional services		278		234		433		353
Sales and marketing		427		429		688		690
Research and development		330		290		557		438
General and administrative		1,249		1,369		2,080		2,089
Total stock-based compensation expense	$	2,418	$	2,431	$	3,972	$	3,737

SAR Information

The weighted average assumptions used to value SARs granted in the six months ended July 31, 2016 and 2015 are shown in the following table:

	Six Months Ended July 31 ,
	201 6			201 5
Expected life in years (1)		5.25			5.00
Risk free interest rate (2)		1.16	%		1.64	%
Volatility (3)		36	%		41	%
Dividend rate (4)		1.51	%		1.10	%

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(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, 2016.

The following table summarizes the activity for outstanding SARs for the six months ended July 31, 2016:

	SARs (in thousands)			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 31, 2016		2,596		$	14.74
Granted		380			18.64
Exercised		(60	)		10.60
Expired		(17	)		12.58
Forfeited		(6	)		12.16
Outstanding at July 31, 2016		2,893		$	15.36		4.8	$	13,510
Vested and expected to vest at July 31, 2016 (1)		2,891		$	15.36		4.8	$	13,495
Vested and exercisable at July 31, 2016		1,896		$	12.83		3.8	$	12,427

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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 July 31, 2016, 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, 2016. The total intrinsic value of SARs exercised in the six months ended July 31, 2016 was $0.5 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, 2016, the Company withheld 5,400 shares for payment of these taxes at a value of $101,000. During the six months ended July 31, 2016, the Company withheld 8,800 shares for payment of these taxes at a value of $170,000.

At July 31, 2016, there was approximately $6.3 million of total unrecognized compensation cost related to unvested SARs. This cost is expected to be recognized over a weighted-average period of approximately 2.8 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 six months ended July 31, 2016:

	RSUs			Weighted Average Grant Date Fair Value
	(in thousands)

Restricted stock at January 31, 2016		617		$	20.91
Granted		299			18.45
Released (1)		(250	)		18.98
Forfeited		(18	)		21.09
Restricted stock at July 31, 2016		648		$	20.51

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(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, 2016, the Company withheld 56,700 shares for payment of these taxes at a value of $1.1 million. During the six months ended July 31, 2016, the Company withheld 72,500 shares for payment of these taxes at a value of $1.4 million.

Total unrecognized compensation cost related to RSUs was approximately $11.4 million as of July 31, 2016. This cost is expected to be recognized over a weighted-average period of approximately 3.0 years.