STOCK-BASED COMPENSATION

Summary of Restricted Stock Units

Restricted stock unit activity for the six months ended May 29, 2015 and the fiscal year ended November 28, 2014 was as follows (in thousands):



	2015		2014
Beginning outstanding balance	13,564		17,948
Awarded	3,171		4,413
Released	(5,712	)	(7,502	)
Forfeited	(518	)	(1,295	)
Ending outstanding balance	10,505		13,564

Information regarding restricted stock units outstanding at May 29, 2015 and May 30, 2014 is summarized below:



	Number of Shares (thousands)	Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value^(*) (millions)
2015
Restricted stock units outstanding	10,505	1.23	$	830.8
Restricted stock units vested and expected to vest	9,405	1.16	$	734.2
2014
Restricted stock units outstanding	14,297	1.28	$	922.7
Restricted stock units vested and expected to vest	12,552	1.22	$	804.0

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^(*)	The intrinsic value is calculated as the market value as of the end of the fiscal period. As reported by the NASDAQ Global Select Market, the market values as of May 29, 2015 and May 30, 2014 were $79.09 and $64.54, respectively.

Summary of Performance Shares

On January 26, 2015, our Executive Compensation Committee approved the 2015 Performance Share Program, including the award calculation methodology, under the terms of our 2003 Equity Incentive Plan. Under our 2015 Performance Share Program (“2015 Program”), shares may be earned based on the achievement of an objective relative total stockholder return measured over a three-year performance period. The purpose of the 2015 Program is to help focus key employees on building stockholder value, provide significant award potential for achieving outstanding Company performance and enhance the ability of the Company to attract and retain highly talented and competent individuals. Performance share awards will be awarded and fully vest upon the Executive Compensation Committee's certification of the level of achievement following the three-year anniversary of the grant date on January 24, 2018. Participants in the 2015 Program generally have the ability to receive up to 200% of the target number of shares originally granted.

On January 24, 2014, our Executive Compensation Committee approved the 2014 Performance Share Program, including the award calculation methodology, under the terms of our 2003 Equity Incentive Plan. Under our 2014 Performance Share Program (“2014 Program”), shares may be earned based on the achievement of an objective relative total stockholder return measured over a three-year performance period. The purpose of the 2014 Program is to help focus key employees on building stockholder value, provide significant award potential for achieving outstanding company performance and enhance the ability of the Company to attract and retain highly talented and competent individuals. Performance share awards will be awarded and fully vest upon the Executive Compensation Committee’s certification of the level of achievement following the three-year anniversary of the grant date on January 24, 2017. Participants in the 2014 Program generally have the ability to receive up to 200% of the target number of shares originally granted.

Effective January 24, 2013, our Executive Compensation Committee modified our Performance Share Program by eliminating the use of qualitative performance objectives, with 100% of shares to be earned based on the achievement of an objective relative total stockholder return measured over a three-year performance period. Performance awards were granted under the 2013 Performance Share Program (“2013 Program”) pursuant to the terms of our 2003 Equity Incentive Plan. The purpose of the 2013 Program is to align key management and senior leadership with stockholders’ interests over the long term and to retain key employees. Performance share awards will be awarded and fully vest upon the Executive Compensation Committee's certification of the level of achievement following the three-year anniversary of the grant date on January 24, 2016. Participants in the 2013 Program generally have the ability to receive up to 200% of the target number of shares originally granted.

As of May 29, 2015, the shares awarded under our 2015, 2014, and 2013 Performance Share Programs are yet to be achieved. The following table sets forth the summary of performance share activity under our 2015, 2014, and 2013 Performance Share Programs for the six months ended May 29, 2015 and the fiscal year ended November 28, 2014 (in thousands):



	2015				2014
	Shares Granted		Maximum Shares Eligible to Receive		Shares Granted		Maximum Shares Eligible to Receive
Beginning outstanding balance	1,517		3,034		854		1,707
Awarded	671		1,342		709		1,417
Forfeited	(101	)	(201	)	(46	)	(90	)
Ending outstanding balance	2,087		4,175		1,517		3,034

The following table sets forth the summary of performance share activity under our performance share programs prior to fiscal 2013, based upon share awards actually achieved, for the six months ended May 29, 2015 and the fiscal year ended November 28, 2014 (in thousands):



	2015		2014
Beginning outstanding balance	354		861
Released	(354	)	(486	)
Forfeited	—		(21	)
Ending outstanding balance	—		354

Information regarding performance shares outstanding at May 30, 2014 is summarized below:



	Number of Shares (thousands)	Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value^(*) (millions)
2014
Performance shares outstanding	358	0.65	$	23.1
Performance shares vested and expected to vest	335	0.65	$	21.5

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^(*)	The intrinsic value is calculated as the market value as of the end of the fiscal period. As reported by the NASDAQ Global Select Market, the market value as of May 30, 2014 was $64.54.

Summary of Stock Options

There were no option grants during the six months ended May 29, 2015 and the six months ended May 30, 2014. Option activity for the six months ended May 29, 2015 and the fiscal year ended November 28, 2014 was as follows (in thousands):



	2015		2014
Beginning outstanding balance	3,173		7,359
Exercised	(1,218	)	(4,055	)
Cancelled	(30	)	(153	)
Increase due to acquisition	88		22
Ending outstanding balance	2,013		3,173

Information regarding stock options outstanding at May 29, 2015 and May 30, 2014 is summarized below:



	Number of Shares (thousands)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value^(*) (millions)
2015
Options outstanding	2,013	$	28.35	2.95	$	102.1
Options vested and expected to vest	1,993	$	28.48	2.92	$	100.9
Options exercisable	1,825	$	29.95	2.61	$	89.7
2014
Options outstanding	4,972	$	29.37	3.14	$	174.9
Options vested and expected to vest	4,922	$	29.47	3.11	$	172.6
Options exercisable	4,140	$	30.59	2.74	$	140.5

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^(*)	The intrinsic value is calculated as the difference between the market value as of the end of the fiscal period and the exercise price of the shares. As reported by the NASDAQ Global Select Market, the market values as of May 29, 2015 and May 30, 2014 were $79.09 and $64.54, respectively.

Summary of Employee Stock Purchase Plan Shares

There were no stock purchases under the employee stock purchase plan (“ESPP”) during the three months ended May 29, 2015 and May 30, 2014. The expected life of the ESPP shares is the average of the remaining purchase periods under each offering period. The assumptions used to value employee stock purchase rights during the six months ended May 29, 2015 and May 30, 2014 were as follows:



	2015	2014
Expected life (in years)	0.5 - 2.0	0.5 - 2.0
Volatility	27% - 30%	27% - 28%
Risk free interest rate	0.12% - 0.67%	0.09% - 0.39%

Employees purchased 0.7 million shares at an average price of $50.31 and 1.2 million shares at an average price of $27.84 for the six months ended May 29, 2015 and May 30, 2014, respectively. The intrinsic value of shares purchased during the six months ended May 29, 2015 and May 30, 2014 was $16.0 million and $39.0 million, respectively. The intrinsic value is calculated as the difference between the market value on the date of purchase and the purchase price of the shares.

Compensation Costs

As of May 29, 2015, there was $499.8 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock-based awards which will be recognized over a weighted average period of 1.8 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.

Total stock-based compensation costs that have been included in our Condensed Consolidated Statements of Income for the three months ended May 29, 2015 and May 30, 2014 were as follows (in thousands):



	2015				2014
Income Statement Classifications	Option Grants and Stock Purchase Rights		Restricted Stock and Performance Share Awards		Option Grants and Stock Purchase Rights		Restricted Stock and Performance Share Awards
Cost of revenue—subscription	$	371	$	1,780	$	505	$	1,441
Cost of revenue—services and support	1,404		1,429		964		1,682
Research and development	3,639		25,292		3,989		25,910
Sales and marketing	4,630		28,255		4,316		25,363
General and administrative	1,133		17,191		1,494		17,346
Total	$	11,177	$	73,947	$	11,268	$	71,742

Total stock-based compensation costs that have been included in our Condensed Consolidated Statements of Income for the six months ended May 29, 2015 and May 30, 2014 were as follows (in thousands):



	2015				2014
Income Statement Classifications	Option Grants and Stock Purchase Rights		Restricted Stock and Performance Share Awards		Option Grants and Stock Purchase Rights		Restricted Stock and Performance Share Awards
Cost of revenue—subscription	$	812	$	3,309	$	1,441	$	2,810
Cost of revenue—services and support	2,620		3,286		1,682		3,220
Research and development	7,695		51,997		25,910		52,467
Sales and marketing	9,228		55,540		25,363		51,094
General and administrative	2,596		33,952		17,346		32,941
Total	$	22,951	$	148,084	$	71,742	$	142,532