Note 13 — Stock Plans

Share-based incentive awards are provided to employees under the terms of the Company’s equity incentive compensation plans (the “Plans”). The Plans are administered by the Compensation Committee. Awards under the Plans may include stock options, RSAs, RSUs, PSUs, stock appreciation rights or any combination thereof. The non-employee members of the Board receive deferred stock units under a separate director compensation plan. The Company typically settles awards under employee and non-employee director compensation plans with stock held in treasury.

All Plans, with the exception of acquired companies’ stock plans, have been approved by the Company’s shareholders. The Company grants all new annual performance cash incentive bonuses, long-term performance bonuses, non-statutory stock options, RSAs, RSUs and other equity-based awards under the 2011 Incentive Plan, which replaced the 2007 Incentive Plan. Outstanding awards under the 2007 Incentive Plan and 2002 Incentive Plan, as amended, are satisfied under their respective Plans. Approximately 45 million shares of common stock were originally available to be granted to select employees and consultants under the 2011 Incentive Plan, of which no more than 10 million incentive stock options may be granted. The 2011 Incentive Plan will continue until the earlier of (i) termination by the Board or (ii) the tenth anniversary of the date of the Company’s 2011 Annual Meeting of Stockholders. Awards to the non-employee directors are granted under the 2012 Compensation Plan for Non-Employee Directors, as amended, which replaced the 2003 Compensation Plan for Non-Employee Directors, as amended.

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



	Year Ended March 31,
(in millions)	2018			2017			2016
Costs of licensing and maintenance	$	8		$	7		$	7
Cost of professional services	3			3			4
Selling and marketing	38			37			34
General and administrative	45			38			35
Product development and enhancements	26			23			17
Share-based compensation expense before tax	$	120		$	108		$	97
Income tax benefit	(37		)	(35		)	(31		)
Net share-based compensation expense	$	83		$	73		$	66

The following table summarizes information about unrecognized share-based compensation costs at March 31, 2018:



	Unrecognized Share-Based Compensation Costs		Weighted Average Period Expected to be Recognized
	(in millions)		(in years)
Stock option awards	$	4	1.8
Restricted stock units	18		1.8
Restricted stock awards	64		1.8
Performance share units	33		2.2
Total unrecognized share-based compensation costs	$	119	1.9

There were no capitalized share-based compensation costs at March 31, 2018, 2017 or 2016.

Stock Option Awards: Stock options are awards issued to employees that entitle the holder to purchase shares of the Company’s stock at a fixed price. Stock option awards are generally granted at an exercise price equal to the Company’s fair market value on the date of grant and with a contractual term of 10 years, unless the Compensation Committee establishes a shorter expiration period or the stock options are forfeited. Stock option awards generally vest one-third per year and become fully vested three years from the grant date.

At March 31, 2018, options outstanding that have vested and are expected to vest were as follows:



	Number of Shares (in millions)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value ⁽¹⁾ (in millions)
Vested	2.4	$	27.79	5.9	$	14.6
Expected to vest ⁽²⁾	1.7	31.57		8.5	4.1
Total	4.1	$	29.37	7.0	$	18.7


(1)	These amounts represent the difference between the exercise price and $33.90, the closing price of the Company’s common stock on March 29, 2018, the last trading day of the Company’s fiscal year as reported on the NASDAQ Stock Market for all in-the-money options.


(2)	Outstanding options expected to vest are net of estimated future forfeitures.

Additional information with respect to stock option activity was as follows:



	Number of Shares		Weighted Average Exercise Price
	(in millions)		Weighted Average Exercise Price
Outstanding at March 31, 2015	3.2		$	27.02
Granted	0.8		30.39
Exercised	(0.2	)	25.58
Expired or terminated	(0.1	)	31.08
Outstanding at March 31, 2016	3.7		$	27.72
Granted	1.1		31.84
Exercised	(0.8	)	27.09
Expired or terminated	(0.2	)	30.82
Outstanding at March 31, 2017	3.8		$	28.88
Granted	1.0		31.69
Exercised	(0.5	)	29.36
Expired or terminated	—		—
Outstanding at March 31, 2018	4.3		$	29.48



	Number of Shares	Weighted Average Exercise Price
	(in millions)	Weighted Average Exercise Price
Options exercisable at:
March 31, 2016	2.0	$	26.16
March 31, 2017	2.1	$	27.09
March 31, 2018	2.4	$	27.79

The following table summarizes stock option information at March 31, 2018:



	Options Outstanding						Options Exercisable
Range of Exercise Prices	Shares	Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Shares	Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price
Range of Exercise Prices	(in millions)	(in millions)		(in years)	Weighted Average Exercise Price		(in millions)	(in millions)		(in years)	Weighted Average Exercise Price
$22.82 — $25.00	0.7	$	7.1	4.8	$	23.50	0.7	$	7.1	4.8	$	23.50
$25.01 — $30.00	0.8	4.6		5.7	27.85		0.7	4.5		5.6	27.81
$30.01 — over	2.8	7.4		8.0	31.34		1.0	3.0		6.9	30.82
	4.3	$	19.1	7.1	$	29.48	2.4	$	14.6	5.9	$	27.79

The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair value of the Company’s stock options. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards.

The weighted average estimated values of employee stock option grants, as well as the weighted average assumptions that were used in calculating such values during fiscal years 2018, 2017 and 2016 were based on estimates at the date of grant as follows:



	Year Ended March 31,
	2018			2017			2016
Weighted average fair value	$	4.72		$	4.42		$	4.68
Dividend yield	3.17		%	3.56		%	3.37		%
Expected volatility factor ⁽¹⁾	21		%	22		%	23		%
Risk-free interest rate ⁽²⁾	2.1		%	1.5		%	1.9		%
Expected life (in years) ⁽³⁾	6.0			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 following table summarizes information on options exercised for the periods indicated:



	Year Ended March 31,
(in millions)	2018		2017		2016
Cash received from options exercised	$	16	$	22	$	4
Intrinsic value of options exercised	$	3	$	5	$	1

RSAs and RSUs: RSAs are shares of common stock awarded to employees, subject to restrictions on transfer and subject to forfeiture until the awards vest, typically over a three-year period. RSAs entitle holders to vote and receive dividends on the shares awarded. The fair value of the awards is determined and fixed based on the closing market value of the Company’s stock on the grant date.

RSUs are awards issued to employees that entitle the holder to receive shares of common stock as the awards vest, typically over a three-year period. RSUs do not entitle holders to vote or receive dividends on the shares underlying the RSUs. The fair value of the awards is determined and fixed based on the market value of the Company’s stock on the grant date reduced by the present value of dividends expected to be paid on the Company’s stock prior to vesting of the RSUs, which is calculated using a risk-free interest rate.

The following table summarizes the activity of RSAs and RSUs under the Plans:



	RSAs				RSUs
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
	(in millions)		Weighted Average Grant Date Fair Value		(in millions)		Weighted Average Grant Date Fair Value
Outstanding at March 31, 2015	4.3		$	27.99	1.4		$	25.74
Granted	2.8		30.59		0.9		28.72
Released	(2.1	)	27.95		(0.8	)	26.17
Forfeitures	(0.8	)	29.44		(0.2	)	26.88
Outstanding at March 31, 2016	4.2		$	29.51	1.3		$	27.35
Granted	2.9		31.56		1.0		30.17
Released	(2.1	)	29.27		(0.9	)	28.51
Forfeitures	(0.5	)	30.66		(0.1	)	28.71
Outstanding at March 31, 2017	4.5		$	30.83	1.3		$	28.67
Granted	3.0		31.76		1.1		30.47
Released	(2.3	)	30.51		(1.0	)	29.61
Forfeitures	(0.6	)	31.41		(0.1	)	29.31
Outstanding at March 31, 2018	4.6		$	31.52	1.3		$	29.47

The total fair value on the vesting date of RSAs and RSUs released during fiscal years 2018, 2017 and 2016 was approximately $98 million, $88 million and $78 million, respectively.

Performance Awards: The Company rewards certain senior executives with performance awards under its long-term incentive plans. PSUs are awards of the right to receive grants of unrestricted shares of Common Stock, RSAs or RSUs if and when the performance conditions are met and after approval by the Compensation Committee. These PSUs include 1-year and 3-year performance periods for senior executives and a 1-year performance period for members of the sales team.

The table below summarizes the RSAs and RSUs granted under the 1-year PSUs for the Company's fiscal year 2017, 2016 and 2015 incentive plan years. The RSAs and RSUs were granted in the first quarter of fiscal years 2018, 2017 and 2016, respectively. The RSAs and RSUs vest 34% on the date of grant and 33% on the first and second anniversaries of the date of grant.



		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
2017	1 year	0.6	$	31.69	0.1	$	30.69
2016	1 year	0.6	$	31.53	0.1	$	30.53
2015	1 year	0.5	$	31.41	0.1	$	30.42

The table below summarizes the shares of common stock issued under the 3-year PSUs for the Company's fiscal year 2015, 2014 and 2013 incentive plan years in the first quarter of fiscal years 2018, 2017 and 2016, respectively.



Incentive Plans for Fiscal Years	Performance Period	Shares of Common Stock (in millions)	Weighted Average Grant Date Fair Value
2015	3 years	0.4	$	31.69
2014	3 years	0.3	$	31.53
2013	3 years	0.1	$	31.41

The table below summarizes the RSAs and RSUs granted under the 1-year PSUs for the Company's fiscal year 2017, 2016 and 2015 sales retention equity programs. The RSAs and RSUs were granted in the first quarter of fiscal years 2018, 2017 and 2016, respectively. The RSAs and RSUs vest on the third anniversary of the grant date.



		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
2017	1 year	0.2	$	31.69	0.1	$	28.70
2016	1 year	0.3	$	31.53	0.1	$	28.52
2015	1 year	0.2	$	30.45	0.1	$	27.50

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 each offer period, on June 30 and December 31, respectively. The ESPP is non-compensatory. During each of the fiscal years ended March 31, 2018, 2017 and 2016, the Company issued approximately 0.2 million shares under the ESPP at an average price of $32.15, $30.65 and $27.47 per share, respectively. As of March 31, 2018, approximately 28.8 million shares were available for future issuances under the ESPP.