NOTE M – ACCOUNTING FOR SHARE-BASED COMPENSATION

The Company recognized share-based compensation in the following line items in the Condensed Consolidated Statements of Operations for the periods indicated:



	Three Months Ended December 31,						Nine Months Ended December 31,
	2014			2013			2014			2013
	(in millions)
Costs of licensing and maintenance	$	2		$	1		$	4		$	3
Cost of professional services	1			1			3			3
Selling and marketing	8			8			23			22
General and administrative	8			8			21			20
Product development and enhancements	4			5			14			15
Share-based compensation expense before tax	$	23		$	23		$	65		$	63
Income tax benefit	(7		)	(7		)	(20		)	(20		)
Net share-based compensation expense	$	16		$	16		$	45		$	43

The following table summarizes information about unrecognized share-based compensation costs at December 31, 2014:



	Unrecognized Share-Based Compensation Costs		Weighted Average Period Expected to be Recognized
	(in millions)		(in years)
Stock option awards	$	6	1.8
Restricted stock units	19		2.0
Restricted stock awards	69		2.1
Performance share units	26		2.6
Total unrecognized share-based compensation costs	$	120	2.1

There were no capitalized share-based compensation costs for the three and nine months ended December 31, 2014 and 2013.

The value of performance share unit (PSU) awards is determined using the closing price of the Company’s common stock on the last trading day of the quarter until the PSUs are granted. Compensation costs for the PSUs are amortized over the requisite service periods based on the expected level of achievement of the performance targets. At the conclusion of the performance periods for the PSUs, the applicable number of shares of restricted stock awards (RSAs), restricted stock units (RSUs) or unrestricted shares granted may vary based upon the level of achievement of the performance targets and the approval of the Company’s Compensation and Human Resources Committee (which may reduce any award for any reason in its discretion).

For the nine months ended December 31, 2014 and 2013, the Company issued stock options for approximately 0.6 million shares and 1.6 million shares, respectively. The weighted average fair values and assumptions used for the options granted were as follows:



	Nine Months Ended December 31,
	2014			2013
Weighted average fair value	$	5.87		$	5.19
Dividend yield	3.29		%	4.05		%
Expected volatility factor ⁽¹⁾	29		%	30		%
Risk-free interest rate ⁽²⁾	2.1		%	1.5		%
Expected life (in years) ⁽³⁾	6.0			6.0


(1)	Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term of the options and the implied volatility derived from the market prices of the Company’s traded options.


(2)	The risk-free rate for periods within the contractual term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant.


(3)	The expected life is the number of years the Company estimates that options will be outstanding prior to exercise. The Company’s computation of expected life was determined based on the simplified method (the average of the vesting period and option term).

The shares under the 1-year PSU awards for the fiscal year 2014 and 2013 incentive plan years under the Company’s long-term incentive plans were granted in the first nine months of fiscal years 2015 and 2014, respectively. The awards vest 34% on the date of grant and 33% on the first and second anniversaries of the grant date. The table below summarizes the RSAs and RSUs granted under these PSUs:



		RSAs		RSUs
Incentive Plans for Fiscal Years	Performance Period	Shares (in millions)	Weighted Average Grant Date Fair Value	Shares (in millions)	Weighted Average Grant Date Fair Value
2014	1 year	0.7	$29.91	0.1	$28.92
2013	1 year	0.4	$27.11	0.1	$26.12

Share-based awards were granted under the Company’s fiscal year 2014 and 2013 sales retention equity programs in the first nine months of fiscal years 2015 and 2014, respectively. These awards vest on the third anniversary of the grant date. The table below summarizes the RSAs and RSUs granted under these programs:



		RSAs		RSUs
Incentive Plans for Fiscal Years	Performance Period	Shares (in millions)	Weighted Average Grant Date Fair Value	Shares (in millions)	Weighted Average Grant Date Fair Value
2014	1 year	0.2	$28.69	0.1	$25.73
2013	1 year	0.2	$27.11	0.1	$24.13

The table below summarizes all of the RSAs and RSUs, including grants made pursuant to the long-term incentive plans discussed above, granted during the three and nine months ended December 31, 2014 and 2013:



	Three Months Ended December 31,						Nine Months Ended December 31,
	2014			2013			2014		2013
	(shares in millions)
RSAs:
Shares	0.1			—		⁽¹⁾	3.1		2.7
Weighted average grant date fair value ⁽²⁾	$	29.72		$	32.51		$	28.97	$	27.03
RSUs:
Shares	—		⁽¹⁾	—			0.8		0.8
Weighted average grant date fair value ⁽³⁾	$	27.98		$	—		$	26.92	$	25.37


(1)	Less than 0.1 million.


(2)	The fair value is based on the quoted market value of the Company’s common stock on the grant date.


(3)	The fair value is based on the quoted market value of the Company’s common stock on the grant date reduced by the present value of dividends expected to be paid on the Company’s common stock prior to vesting of the RSUs, which is calculated using a risk-free interest rate.

Employee Stock Purchase Plan: The Company maintains the 2012 Employee Stock Purchase Plan (ESPP) for all eligible employees. The ESPP offer period is semi-annual and allows participants to purchase the Company’s common stock at 95% of the closing price of the stock on the last day of the offer period. The ESPP is non-compensatory. For the six-month offer period ended June 30, 2014, the Company issued approximately 0.1 million shares under the ESPP at $27.30 per share. For the six-month offer period ended December 31, 2014, the Company issued approximately 0.1 million shares under the ESPP at $28.93 per share. As of December 31, 2014, approximately 29.4 million shares are available for future issuances under the ESPP.