Stock-Based Compensation

3 Months Ended

Dec. 31, 2011

Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]

Stock-Based Compensation

Stock-based Compensation

We measure the cost of employee services received in exchange for restricted stock and restricted stock unit (RSU) awards based on the fair value of our common stock on the date of grant. That cost is recognized over the period during which an employee is required to provide service in exchange for the award.

Our equity incentive plan provides for grants of nonqualified and incentive stock options, common stock, restricted stock, RSUs and stock appreciation rights to employees, directors, officers and consultants. We award restricted stock and RSUs as the principal equity incentive awards, including certain performance-based awards that are earned based on achievement of performance criteria established by the Compensation Committee of our Board of Directors. Each RSU represents the contingent right to receive one share of our common stock.

Our equity incentive plans are described more fully in Note K to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2011.

Restricted stock activity for the three months ended December 31, 2011	Shares		Weighted Average Grant Date Fair Value (Per Share)
	(in thousands)
Balance of outstanding restricted stock September 30, 2011	90		$	21.30
Granted	9		$	21.27
Vested	(15	)	$	15.36
Balance of outstanding restricted stock December 31, 2011	84		$	22.33
Restricted stock unit activity for the three months ended December 31, 2011	Shares		Weighted Average Grant Date Fair Value (Per Share)
	(in thousands)
Balance of outstanding restricted stock units September 30, 2011	5,490		$	17.75
Granted	1,914		$	19.70
Vested	(1,760	)	$	15.18
Forfeited or not earned	(127	)	$	18.72
Balance of outstanding restricted stock units December 31, 2011	5,517		$	19.22

Restricted stock and restricted stock unit grants in the first three months of 2012

	Restricted Stock (1)		Restricted Stock Units
Grant Period	Performance-based	Time-based	Performance-based (2)	Time-based (3)
	(in thousands)
	(Number of Shares)		(Number of Units)
First three months of 2012	—	9	786	1,128

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(1) The time-based shares of restricted stock were issued to a non-employee director in connection with a consulting contract we entered into with him. The restrictions on these shares lapse in two substantially equal annual installments from the date of grant.

(2) Of these performance-based RSUs, 52,012 will be eligible to vest in two substantially equal installments on the later of each of November 15, 2012 and November 15, 2013 and the date the Compensation Committee determines the extent to which the performance criteria have been achieved and 424,258 will vest to the extent earned in three substantially equal installments on the later of November 15, 2012 and the date the Compensation Committee determines the extent to which performance criteria have been achieved, November 15, 2013 and November 15, 2014. The remaining 309,976 performance-based RSUs are eligible to vest in two substantially equal installments on the later of each of November 15, 2013 and November 15, 2014 and the date the Compensation Committee determines the extent to which the applicable performance criteria have been achieved; RSUs not earned for 2013 may be earned for 2014 to the extent the cumulative performance criteria are achieved.

(3) The time-based RSUs were issued to employees, including some of our executive officers. These time-based RSUs will vest in three substantially equal annual installments in November 2012, 2013 and 2014.

Classification of compensation expense recorded for our stock-based awards as reflected in our consolidated statements of operations

	December 31, 2011		January 1, 2011
	(in thousands)
Cost of license revenue	$	5	$	3
Cost of service revenue	2,513		2,137
Sales and marketing	3,728		2,429
Research and development	2,549		2,393
General and administrative	4,587		4,065
Total stock-based compensation expense	$	13,382	$	11,027