18. STOCK-BASED COMPENSATION

Stock-based compensation expense associated with awards made by CTI and its subsidiaries is included in the Company's consolidated statements of operations as follows:


	Fiscal Years Ended January 31,
	2011		2010		2009
	(In thousands)
Stock options:
Product costs	$	796	$	928	$	350
Service costs		2,499		3,591		4,604
Selling, general and administrative		14,709		14,306		16,363
Research and development		4,410		5,579		5,698

		22,414		24,404		27,015

Restricted/Deferred stock awards:
Product costs		850		759		381
Service costs		2,350		1,510		811
Selling, general and administrative		28,555		27,358		22,589
Research and development		3,229		3,634		2,459

		34,984		33,261		26,240

Total	$	57,398	$	57,665	$	53,255

Consolidated stock-based compensation expense consists of expense recognized for awards related to separate CTI, Verint and Starhome stock incentive plans. The following table presents the Company's stock-based compensation expense included in the consolidated statements of operations based on the underlying subsidiary plans for the fiscal years ended January 31, 2011, 2010 and 2009:


	Fiscal Years Ended January 31,
	2011		2010		2009
	(In thousands)
Stock options:
CTI ⁽¹⁾	$	16	$	2,610	$	5,156
Verint ⁽²⁾		21,237		20,320		20,027
Starhome		1,161		1,474		1,832

		22,414		24,404		27,015
Restricted/Deferred stock awards:
CTI ⁽¹⁾		9,402		9,344		10,292
Verint ⁽²⁾		25,582		23,917		15,948

		34,984		33,261		26,240

Total	$	57,398	$	57,665	$	53,255

(1)	Stock options to purchase CTI's common stock and deferred stock awards were awarded to employees of CTI's subsidiaries, including employees of Verint and Starhome. Accordingly, the related stock-based compensation expense has been recognized in the respective subsidiary statements of operations.

(2)	Verint's stock-based compensation expense consists of stock options to purchase Verint common stock, Verint phantom stock units, and Verint restricted stock awards and restricted stock units.

The Company did not recognize excess tax benefits during the fiscal years ended January 31, 2011, 2010 and 2009.

The following is a discussion of the material stock-based compensation plans of the Company.

CTI Plans

Overview of CTI's Stock Incentive Plans

CTI granted stock options and deferred stock units ("DSUs") awards under its various stock incentive plans during the fiscal years ended January 31, 2011, 2010 and 2009. The plans generally permit the issuance of incentive and non-qualified stock options, DSU awards, restricted stock and stock appreciation rights ("SARs") to employees, officers and directors of CTI and its subsidiaries and terminate in ten years. Termination of a plan does not affect awards outstanding under such plan. These plans generally provide that unexercised options expire within 90 days of termination of service from the Company. Stock options which are designated as "incentive stock options" under the plans may be granted with an exercise price of not less than the fair market value of the underlying shares on the date of grant and are subject to certain limitations specified in Section 422 of the Internal Revenue Code. Stock options that are not intended to qualify as incentive stock options may be granted at a price below fair market value. The stock options and the underlying shares are subject to adjustment in accordance with the terms of the plans in the event of stock dividends, recapitalizations and similar transactions. Stock options and DSUs generally vest over a three or four-year period from the date of grant with the right to exercise up to a maximum term of ten years for all stock options granted. The stock-based compensation expense is recognized on a straight-line basis over the life of vesting period, reduced by estimated forfeitures. Upon exercise of stock options, issuance of restricted stock and DSU awards, or issuance of shares under the stock incentive plans, CTI issues authorized but unissued common stock unless treasury stock is available.

1996 Stock Option Plan

CTI's 1996 Stock Option Plan provided that stock options that qualify as incentive stock options under Section 422A of the Internal Revenue Code may be granted to key employees and non-qualifying options may be granted to other employees, independent contractors or directors of the Company. The plan authorized up to 3 million shares of CTI's common stock to be granted. The plan provided that for qualified awards the exercise price was based on fair value of CTI's common stock at the date of the grant, except for the individuals who hold 10 percent or more interest in CTI, for whom the exercise price should not be less than 110 percent of the share price. The plan also provided that for non-qualified awards, the exercise price was not to be lower than $0.10 per share. Due to the lapse of ten years from the date of approval, no awards may be granted by CTI under the plan.

Boston Technology, Inc. 1996 Stock Option Plan

The plan authorized the granting of awards in the form of stock options, both qualified and non-qualified, CTI's common stock in the form of DSUs, restricted and unrestricted stock awards and SARs. The plan authorized up to 5.85 million shares or options to purchase shares of CTI's common stock to be granted. The plan provided that for qualified stock option awards, the exercise price be based on the fair value of CTI's common stock at the date of the grant, except for the individuals who hold more than a 10 percent interest in CTI, for whom the exercise price should not be less than 110 percent of the share price. Due to the lapse of ten years from the date of approval, no awards may be granted by CTI under the plan.

1997 and 1999 Stock Incentive Compensation Plans

CTI's 1997 and 1999 Stock Incentive Compensation Plans, authorized the granting of awards in the form of stock options, both qualified and non-qualified, as well as CTI's common stock in the form of DSU and restricted stock awards. Additionally, the plan provided that SARs may be issued to any officer or other key employee of the Company. The plans authorized up to 7.5 and 7.0 million shares or options, respectively, to purchase shares of CTI's common stock to be granted. The plans provided that for qualified awards the exercise price be based on the fair value of CTI's common stock at the date of the grant, except for the individuals who hold 10 percent or more interest in CTI, for whom the exercise price should not be less than 110 percent of the share price. The plans also provided that the exercise price for the non-qualified awards in the form of stock options may be less than the fair market value of CTI's common stock at the date of the grant as determined by the compensation committee. Due to the lapse of ten years from the dates of approval, no awards may be granted by CTI under these plans.

2000, 2001, 2004 and 2005 Stock Incentive Compensation Plans

CTI's 2000 Stock Incentive Compensation Plan authorized and the 2001, 2004 and 2005 Stock Incentive Compensation Plans authorize the granting of awards in the form of stock options, both qualified and non-qualified, as well as CTI's common stock in the form of DSUs and restricted stock awards. Additionally, under the plans, SARs may be issued to any officer or other key employee of the Company. The 2000 plan authorized up to 9.0 million and the 2001, 2004 and 2005 plans authorize up to 9.7, 2.5 and 6.0 million shares or options to purchase shares of CTI's common stock to be granted. The plans have a maximum term of 10 years. The 2000 plan terminated in September 2010 and, as such, no additional awards may be granted by CTI under the plan. The 2001, 2004 and 2005 plans are scheduled to terminate in June 2011, 2014 and 2015, respectively. The plans provide that for qualified awards the exercise price be based on the fair value of CTI's common stock at the date of the grant, except for the individuals who hold 10 percent or more interest in CTI, for whom the exercise price should not be less than 110 percent of the share price. The plans also provide that the exercise price for the non-qualified awards in the form of stock options may be less than the fair market value of CTI's common stock at the date of the grant, as determined by the compensation committee of CTI's Board of Directors, provided that the discount is expressly granted in lieu of a reasonable amount of salary or bonus and the discount shall not exceed 15 percent of the fair market value of CTI's common stock at the date of the grant.

Restricted Period

As a result of the delinquency in the filing of periodic reports since April 2006, CTI has been ineligible to use its registration statements on Form S-8 for the offer and sale of equity securities, including through the exercise of stock options by employees. Consequently, to ensure that it does not violate applicable securities laws, CTI prohibited the exercise of vested stock options from April 2006, until such time, as it is determined that CTI has filed all periodic reports required in a 12-month period and has an effective registration statement on Form S-8 on file with the SEC. This period is referred to as the "restricted period."

April 2006 Modification

During the restricted period, certain employees left the Company whose vested stock options lapsed as a result of the prohibition on exercise of the stock options during the plan-mandated post-employment exercise period. In order to accommodate these former employees, the Company extended their exercise rights with respect to their vested stock options until the later of (i) 90 days after the date of his or her termination of employment, or (ii) 30 days after the restricted period has expired. However, this accommodation did not extend any stock option's term beyond its contractual termination date; typically ten years after the date of grant. The Company accounted for the additional time to exercise afforded to these employees as modifications of the original awards on the date the restricted period commenced. Certain individuals who received additional time to exercise were terminated employees at the time of the modification. Their modifications were accounted for using the liability method of accounting. This is referred to as the "April 2006 Modification."

July 2006 Modification

Consistent with its commitment to employees and upon approval by its board of directors, CTI voluntarily compensated, in cash, current employees holding in-the-money options whose original 10-year terms expired during the restricted period, resulting in a modification charge. For the fiscal years ended January 31, 2011, 2010 and 2009, changes in fair value of these awards (decreased) increased the Company's liability and compensation expense by $(0.5) million, $0.2 million and $(3.9) million, respectively. CTI made cash payments for expired stock options of $44 thousand, $1 thousand and $1.9 million during the fiscal years ended January 31, 2011, 2010 and 2009, respectively. This is referred to as the "July 2006 Modification."

Liability Awards

Primarily as a result of the aforementioned decision made during the restricted period to cash settle expired CTI options held by current employees and the modification of certain CTI awards held by employees terminated before the April 2006 Modification, but who could still exercise their awards as of the April 2006 Modification, such awards were accounted for under the liability method of accounting. Under the liability method, CTI measures the award at each balance sheet date based on its estimated fair value. Compensation expense for each period thereafter is based on the change in fair value of the award. As of January 31, 2011 and 2010, the Company had a liability related to these awards of $0.3 million and $1.4 million, respectively. Related stock-based compensation expense for the fiscal years ended January 31, 2011, 2010 and 2009, includes (credits) expense of $(0.5) million, $0.2 million and $(3.7) million, respectively.

Restricted Awards and Stock Options

CTI grants restricted stock and DSU awards subject to vesting provisions (collectively, "Restricted Awards") to certain key employees. For the fiscal years ended January 31, 2011, 2010 and 2009, CTI granted Restricted Awards valued at $14.4 million, $7.8 million and $16.8 million, respectively, based on the fair market value of CTI's common stock on the date of grant. CTI's stock-based compensation associated with Restricted Awards, net of credits for forfeitures, for the fiscal years ended January 31, 2011, 2010 and 2009 was $9.4 million, $9.3 million and $10.3 million, respectively, and was primarily included in "Selling, general and administrative" in the consolidated statements of operations.

In addition to the Restricted Awards above, CTI granted DSU awards covering an aggregate 246,200 shares of common stock with vesting and delivery conditioned upon the achievement of certain performance criteria ("Performance Awards") in the fiscal year ended January 31, 2010. These Performance Awards were valued at $1.7 million based on the fair market value of CTI's common stock on the date of grant. However, CTI later determined that the performance criteria were unlikely to be achieved, and no stock-based compensation expense was recorded for these awards. The Performance Awards were cancelled subsequently, when the performance criteria were not achieved.

As of January 31, 2011, 11,137,991 stock options to purchase CTI's common stock and 2,152,817 restricted awards were outstanding and 4,226,102 shares were available for future grant under CTI's Stock Incentive Compensation Plans. The following table summarizes exercisable options and vested Restricted Awards:


	Stock Options Exercisable						Restricted Awards Vested
	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Shares/ Units		Weighted Average Grant Date Fair Value
January 31, 2011		10,738,923	$	17.42		3.2		740,381	$	11.83
January 31, 2010		12,004,593	$	18.25		3.7		594,361	$	14.77
January 31, 2009		12,576,904	$	17.97		4.3		418,356	$	19.49

As of January 31, 2011, CTI was committed to issue 690,880 shares to restricted award holders who elected deferred delivery of their vested awards.

The following table presents the combined activity of all the CTI stock incentive plans for the fiscal years ended January 31, 2011, 2010 and 2009:


				Outstanding Options					Nonvested Restricted/Deferred Stock
	Shares Available for Grant			Shares ⁽¹⁾			Weighted Average Exercise Price		Shares			Weighted Average Grant Date Fair Value

Balance, January 31, 2008		10,813,220			13,305,854			18.68		678,331			20.70
Plan shares expired		(5,418	)		—			—		—			—
Options granted ⁽²⁾		(920,146	)		920,146			8.92		—			—
Options expired		—			(149,309	)		10.95		—			—
Options canceled ⁽²⁾		920,146			(920,146	)		16.60		—			—
Options forfeited		257,872			(257,872	)		23.55		—			—
Deferred shares granted		(1,174,472	)		—			—		1,174,472			14.28
Restricted/deferred shares vested ⁽³⁾		—			—			—		(418,356	)		19.49
Restricted/deferred shares forfeited		70,000			—			—		(70,000	)		15.65

Balance, January 31, 2009		9,961,202			12,898,673			18.12		1,364,447			15.81
Plan shares expired		(1,828,505	)		—			—		—			—
Options granted		(903,300	)		903,300			7.12		—			—
Options expired		—			(864,541	)		16.06		—			—
Options forfeited		85,339			(85,339	)		13.07		—			—
Deferred shares granted		(1,366,200	)		—			—		1,366,200			6.92
Restricted/deferred shares vested ⁽³⁾		—			—			—		(594,361	)		14.77
Restricted/deferred shares forfeited		301,829			—			—		(301,829	)		12.83

Balance, January 31, 2010		6,250,365			12,852,093		$	17.52		1,834,457		$	10.01
Plan shares expired		(1,300,937	)		—			—		—			—
Options granted		—			—			—		—			—
Options expired		—			(1,378,687	)		22.24		—			—
Options canceled ⁽⁴⁾		143,500			(143,500	)		22.11		—			—
Options forfeited		191,915			(191,915	)		7.16		—			—
Deferred shares granted		(1,700,771	)		—			—		1,700,771			8.47
Restricted/deferred shares vested ⁽³⁾		—			—			—		(740,381	)		11.83
Restricted/deferred shares forfeited		642,030			—			—		(642,030	)		8.46

Balance, January 31, 2011 ^(5)(6)(7)		4,226,102			11,137,991		$	17.05		2,152,817		$	8.63

(1)	The fair value of options vested was $0.6 million, $2.3 million and $9.3 million during the fiscal years ended January 31, 2011, 2010 and 2009, respectively.

(2)

During the fiscal year ended January 31, 2009, CTI canceled 920,146 stock options that were granted in previous years and replaced them during the same fiscal year to address Internal Revenue Code Section 409A non-compliance associated with previously backdated stock options which were vested and remained unexercised after December 31, 2004.

(3)	The total fair value of Restricted Awards vested during the fiscal years ended January 31, 2011, 2010 and 2009 was $8.8 million, $8.8 million and $8.2 million, respectively.

(4)	As part of settlement agreements of the consolidated shareholder derivative action and another separate litigation matter, 143,500 vested stock options held by former directors and a former employee were canceled in June 2010.

(5)

The outstanding stock options as of January 31, 2011 include 399,068 nonvested stock options with a weighted-average grant date fair value of $2.34, an expected term of 3.98 years and a total fair value of $0.9 million. The unrecognized compensation expense related to the remaining nonvested stock options was $0.7 million which is expected to be recognized over a weighted-average period of 1.34 years.

(6)	As of January 31, 2011, the unrecognized compensation expense related to nonvested Restricted Awards was $12.1 million which is expected to be recognized over a weighted-average period of 1.89 years.

(7)	As of January 31, 2011, options to purchase an aggregate of 10,738,923 shares of CTI's common stock were vested and exercisable under the plans.

The following table summarizes information about CTI's stock options as of January 31, 2011:


	Fiscal Year Ended January 31, 2011
	Options Outstanding						Options Exercisable
Range of Exercise Price	Shares Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Shares Exercisable		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
$00.01 – $05.60		641,013		2.6	$	5.60		641,013	$	5.60		2.6
$05.61 – $10.52		2,626,348		2.8	$	9.17		2,227,280	$	9.54		1.8
$10.53 – $20.62		3,091,414		2.5	$	16.51		3,091,414	$	16.51		2.5
$20.63 – $23.69		2,432,163		3.9	$	22.44		2,432,163	$	22.44		3.9
$23.70 – $46.50		2,342,397		4.7	$	24.08		2,342,397	$	24.08		4.7
$46.51 – $98.11		4,656		0.2	$	52.97		4,656	$	52.97		0.2

		11,137,991						10,738,923

As of January 31, 2011, the aggregate intrinsic value was $0.6 million and $0.6 million for outstanding and exercisable stock options, respectively.

Fair Value Assumptions

CTI estimated the fair value of stock options on the date of grant or modification utilizing the Black-Scholes option valuation model. Assumptions for all grants and significant modifications are detailed below.

The fair value assumptions for the July 2006 Modification for the period July 2006 through January 31, 2011 were as follows:


	Minimum			Maximum
Risk-Free Rate		0.15	%		5.18	%
Volatility		25.64	%		67.30	%
Expected Term (years)		0.03			4.39
Market Value	$	6.32		$	22.68

The fair value assumptions for stock options granted during the fiscal year ended January 31, 2010, which had a weighted-average grant date fair value of $2.34, were as follows:


Risk-Free Rate		1.98	%
Volatility		38.77	%
Expected Term (years)		3.99
Market Value	$	7.12

There were no grants for the fiscal year ended January 31, 2011 and no net grants for the fiscal year ended January 31, 2009.

CTI based the risk-free interest rate on the implied yields on U.S. Treasury zero-coupon issues with an equivalent remaining term at the time of grant.

CTI used the implied volatility approach because it believes that implied volatility is a better indicator of expected volatility as it is generally reflective of both historical volatility and the expectation of how future volatility will differ from historical volatility. CTI used options that were traded on an exchange to estimate the implied volatility of its stock.

Subsequent to February 1, 2007, CTI could not determine its implied volatility because trading on its options ceased due to the delisting of its common stock from NASDAQ. As such, historical price stock volatility was used as a proxy of expected volatility. When there is sufficient volume trading on its traded options, CTI will resume using implied volatility.

The expected term in years represents the period of time that the awards granted are expected to be outstanding based on historical exercise patterns. The assumption for dividend yield is zero because CTI has not historically paid dividends nor does it expect to do so in the foreseeable future.

Verint Plans

Overview of Verint's Stock Incentive Plans

Verint, a consolidated subsidiary of CTI, whose common stock is publicly traded, granted stock options and restricted stock under its various stock incentive plans. The plans generally permit the issuance of awards of deferred stock, Restricted Stock Awards ("RSAs") and Restricted Stock Units ("RSUs"), incentive and non-qualified stock options, performance awards, performance compensation awards or other awards and SARs to employees, directors and consultants of Verint and its subsidiaries and affiliates. Awards granted under the plans are generally subject to multi-year vesting periods and generally expire 10 years or less after the date of grant. Verint recognizes compensation expense for awards on a straight-line basis over the life of the vesting period, reduced by estimated forfeitures. Upon exercise of stock options, issuance of restricted stock, or issuance of shares under the plans, Verint will generally issue new shares of Verint Systems' common stock, but occasionally may issue treasury shares.

As of January 31, 2011, 1,766,931 stock options to purchase shares of Verint Systems' common stock were outstanding and 2,647,451 shares were available for future grants under Verint's stock incentive plans.

Restricted Period

As a result of Verint's previous inability to be current in its periodic reporting obligations under the federal securities laws, Verint was ineligible to use its registration statements on Form S-8 for the offer and sale of equity securities, including through the exercise of stock options by employees. Consequently, Verint prohibited the exercise of vested stock options commencing March 2006. As such, Verint modified grants held by terminated employees by extending the time a terminated employee would normally have to exercise vested stock option awards. The modification was communicated to the employees at the time of their termination. Verint accounted for the additional time to exercise afforded to these employees as modifications of the original awards on the date of each employee termination. The resulting modification expense for the fiscal years ended January 31, 2011, 2010 and 2009 was $0.1 million, $0.2 million and $0.7 million, respectively. Verint became current in their periodic reporting obligations under federal securities laws in June 2010 and resumed allowing option exercises under equity initiative plans after June 18, 2010.

No excess tax benefits were recognized by Verint for the fiscal years ended January 31, 2011, 2010 and 2009.

Restricted Awards

Verint grants restricted stock under its plans, which includes grants of RSAs and RSUs. The fair value of these awards is equivalent to the market values of Verint Systems' common stock on the grant date. The principal difference between these instruments is that RSUs are not shares of Verint Systems' common stock and do not have any of the rights or privileges thereof, including voting or dividend rights. On the applicable vesting date, the holder of an RSU becomes entitled to a share of Verint Systems' common stock. Both RSAs and RSUs are subject to certain restrictions and forfeiture provisions prior to vesting.

The unrecognized compensation expense related to unvested RSAs and RSUs expected to vest as of January 31, 2011 was approximately $13.1 million with remaining weighted average vesting periods of approximately 0.3 years, and 0.7 years, respectively, over which such expense is expected to be recognized. The total fair value of restricted stock awards and units vested during the fiscal years ended January 31, 2011, 2010 and 2009 is $43.5 million, $3.5 million and $2.9 million, respectively.

The following table summarizes Verint's exercisable options and vested restricted awards:


	Stock Options Excercisable						Restricted Awards Vested
	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Shares/Units		Weighted Average Grant Date Fair Value

January 31, 2011		1,764,380	$	27.33		2.7		2,502,960	$	17.39
January 31, 2010		4,498,900	$	23.24		2.2		115,560	$	29.93
January 31, 2009		4,461,275	$	22.42		3.0		84,629	$	33.98

The following table presents the combined activity of certain of the Verint stock incentive plans for the fiscal years ended January 31, 2011, 2010 and 2009:


				Outstanding Options					Nonvested Restricted Awards
	Shares Available for Grant			Shares ⁽⁶⁾			Weighted Average Exercise Price		Shares			Weighted Average Grant Date Fair Value

Balance, January 31, 2008		4,505,493			5,734,667			21.77		1,267,665			29.39
Options expired		213,599			(213,599	)		5.94		—			—
Options forfeited		295,822			(295,822	)		22.40		—			—
Restricted awards granted		(865,359	)		—			—		865,359			18.07
Restricted awards vested ⁽¹⁾		—			—			—		(84,629	)		33.98
Restricted awards forfeited		217,319			—			—		(217,319	)		23.91
Others ⁽²⁾		6,053			—			—		(110	)		—

Balance, January 31, 2009		4,372,927			5,225,246		$	22.36		1,830,966		$	24.48
Options expired		464,025			(464,025	)		14.23		—			—
Options forfeited		30,102			(30,102	)		21.69		—			—
Restricted awards granted		(492,167	)		—			—		492,167			4.43
Restricted awards vested ⁽¹⁾		—			—			—		(115,560	)		29.93
Restricted awards forfeited		86,663			—			—		(86,663	)		24.03
Plan shares expired		(3,985,663	)		—			—		—			—

Balance, January 31, 2010		475,887			4,731,119		$	23.16		2,120,910		$	19.57
Additional shares authorized		4,000,000			—			—		—			—
Options expired		796,417			(796,417	)		25.56		—			—
Options forfeited		3,268			(3,268	)		23.94		—			—
Options exercised		—			(2,164,503	)		18.88		—			—
Restricted awards granted		(2,393,828	)		—			—		2,393,828			15.90
Restricted awards vested ⁽¹⁾		—			—			—		(2,502,960	)		17.39
Restricted awards forfeited		75,505			—			—		(75,505	)		13.23
Plan shares expired		(309,798	)		—			—		—			—

Balance, January 31, 2011 ^{(3) (4) (5)}		2,647,451			1,766,931		$	27.33		1,936,273		$	18.09

(1)	The total fair value of restricted shares vested during the fiscal years ended January 31, 2011, 2010 and 2009 was $43.5 million, $3.5 million and $2.9 million, respectively.

(2)	Others includes an addition of 8,485 shares and a deduction of 2,542 shares of Verint Systems' common stock cancelled from one of Verint's stock incentive plans that are not available for grant.

(3)

The outstanding stock options to purchase Verint Systems' common stock as of January 31, 2011 include 2,551 nonvested stock options with a weighted-average grant date fair value of $11.33, an expected term of 4.83 years and a total fair value of $29 thousand. The total unrecognized compensation cost related to nonvested options was $19 thousand and is expected to be recognized over a weighted-average period of 0.1 years.

(4)	As of January 31, 2011, the unrecognized compensation expense related to nonvested RSAs and RSUs was $13.1 million and is expected to be recognized over a weighted-average period of 0.3 and 0.7 years, respectively.

(5)	As of January 31, 2011, stock options to purchase an aggregate of 1,764,380 shares of Verint Systems' common stock were vested and currently exercisable under the plans.

(6)

The total fair value of vested stock options to purchase Verint Systems' common stock was $30.2 million, $69.6 million and $68.3 million during the fiscal years ended January 31, 2011, 2010 and 2009, respectively. The intrinsic value of Verint stock options exercised was $18.4 million and the cash received from the exercise of Verint stock options was $40.8 million during the fiscal year ended January 31, 2011.

The following table summarizes information about Verint's stock options as of January 31, 2011:


	Fiscal Year Ended January 31, 2011
	Options Outstanding						Options Exercisable
Range of Exercise Price	Shares Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares Exercisable		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)

$4.93 – $17.00		249,177		1.76	$	14.76		249,177	$	14.76		1.76
$17.06 – $18.77		179,138		0.60	$	18.25		179,138	$	18.25		0.60
$19.16 – $23.00		190,473		2.47	$	22.20		190,473	$	22.20		2.47
$23.95 – $23.95		210,342		1.00	$	23.95		210,342	$	23.95		1.00
$25.01 – $29.27		100,188		2.06	$	28.29		97,637	$	28.28		2.08
$31.78 – $31.78		18,000		3.43	$	31.78		18,000	$	31.78		3.43
$32.16 – $32.16		27,000		2.69	$	32.16		27,000	$	32.16		2.69
$34.40 – $34.40		137,000		4.95	$	34.40		137,000	$	34.40		4.95
$35.11 – $35.11		631,613		3.84	$	35.11		631,613	$	35.11		3.84
$37.99 – $37.99		24,000		4.64	$	37.99		24,000	$	37.99		4.64

		1,766,931						1,764,380

As of January 31, 2011, the aggregate intrinsic value was $13.1 million for both outstanding and exercisable stock options.

Verint has not granted stock options subsequent to January 31, 2006.

Verint Phantom Stock Units

During the fiscal year ended January 31, 2007, Verint began awarding phantom stock units to non-officer employees that settle, or are expected to settle, with cash payments upon vesting, pursuant to the terms of a form of a phantom stock award agreement approved by the Verint board of directors. Phantom stock units provide for the payment of a cash bonus equivalent to the value of Verint common stock as of the vesting date of the award. Phantom stock units generally have a multi-year vesting and are generally subject to the same vesting conditions as other Verint equity awards granted on the same date. Verint recognizes compensation expense for phantom stock units on a straight-line basis, reduced by estimated forfeitures. The phantom stock units are being accounted for as liabilities and as such their value tracks Verint's stock price and is subject to market volatility.

The total accrued liability for Verint phantom stock units was $9.8 million and $14.5 million as of January 31, 2011 and 2010, respectively. Total cash payments made upon vesting of Verint phantom stock units were $22.9 million, $2.5 million and $0.3 million for the fiscal years ended January 31, 2011, 2010 and 2009, respectively.

The following table summarizes Verint phantom stock unit activity for the fiscal years ended January 31, 2011, 2010 and 2009:


	Fiscal Years Ended January 31,
	2011			2010			2009
	(In thousands)
Beginning balance, in units		1,106			1,239			85
Granted		196			421			1,323
Released		(865	)		(482	)		(33	)
Forfeited		(34	)		(72	)		(136	)

Ending balance, in units		403			1,106			1,239

The phantom stock units granted during the fiscal years ended January 31, 2011, 2010 and 2009 primarily vest over two-year and three-year periods, subject to applicable performance conditions.

The unrecognized compensation expense related to 0.4 million unvested phantom stock units expected to vest as of January 31, 2011 was approximately $3.5 million, based on Verint's stock price of $34.46 as of January 31, 2011 with a remaining weighted-average vesting period of approximately 0.9 years over which such expense is expected to be recognized.