Equity Incentive Plan |
Equity Incentive Plan Our 2000 Equity Incentive Plan (2000 Plan) provides for grants of nonqualified and incentive stock options, common stock, restricted stock, restricted stock units and stock appreciation rights to employees, directors, officers and consultants. We award restricted stock and restricted stock units as the principal equity incentive awards, including certain performance-based awards that are earned based on achieving performance criteria established by the Compensation Committee of our Board of Directors generally on or prior to the grant date. Each restricted stock unit represents the contingent right to receive one share of our common stock. The fair value of restricted shares and restricted stock units granted in 2012, 2011 and 2010 was based on the fair market value of our stock on the date of grant. The weighted average fair value per share of restricted shares and restricted stock units granted in 2012, 2011 and 2010 was $20.16, $21.91 and $16.07, respectively. Pre-vesting forfeiture rates for purposes of determining stock-based compensation for all periods presented were estimated by us to be 0% for directors and executive officers, 4% for vice president-level employees and 7% for all other employees. The following table shows total stock-based compensation expense recorded from our stock-based awards as reflected in our consolidated statements of operations: | | | | | | | | | | | | | | Year ended September 30, | | 2012 | | 2011 | | 2010 | | (in thousands) | Cost of license revenue | $ | 22 |
| | $ | 15 |
| | $ | 24 |
| Cost of service revenue | 8,916 |
| | 7,732 |
| | 9,122 |
| Sales and marketing | 13,809 |
| | 11,428 |
| | 13,432 |
| Research and development | 8,761 |
| | 8,547 |
| | 9,480 |
| General and administrative | 19,797 |
| | 17,680 |
| | 16,853 |
| Total stock-based compensation expense | $ | 51,305 |
| | $ | 45,402 |
| | $ | 48,911 |
|
As of September 30, 2012, total unrecognized compensation cost related to unvested restricted shares and restricted stock units expected to vest was approximately $58.5 million and the weighted average remaining recognition period for unvested awards was 13 months. As of September 30, 2012, 1.4 million shares of common stock were available for grant under the 2000 Plan and 5.7 million shares of common stock were reserved for issuance upon the exercise of stock options and vesting of restricted stock units granted and outstanding. | | | | | | | | | | | | | Shares | | Weighted Average Grant Date Fair Value | | Aggregate Intrinsic Value as of September 30, 2012 | Restricted stock activity for the year ended September 30, 2012 | (in thousands except grant date fair value data) | Balance of nonvested outstanding restricted stock October 1, 2011 | 90 |
| | $ | 21.30 |
| | | Granted (1) | 59 |
| | $ | 25.14 |
| | | Vested | (77 | ) | | $ | 21.23 |
| | | Balance of nonvested outstanding restricted stock September 30, 2012 | 72 |
| | $ | 24.49 |
| | $ | 1,570 |
|
| | (1) | These shares were issued to our non-employee directors as part of their compensation. The restrictions on these shares generally lapse in one or two equal annual installments from the date of grant. |
| | | | | | | | | | | | | Shares | | Weighted Average Grant Date Fair Value | | Aggregate Intrinsic Value as of September 30, 2012 | Restricted stock unit activity for the year ended September 30, 2012 | (in thousands except grant date fair value data) | Balance of nonvested outstanding restricted stock units October 1, 2011 | 5,492 |
| | $ | 17.75 |
| | | Granted | 2,786 |
| | $ | 20.06 |
| | | Vested | (2,742 | ) | | $ | 15.71 |
| | | Forfeited or not earned | (402 | ) | | $ | 19.00 |
| | | Balance of nonvested outstanding restricted stock units September 30, 2012 | 5,134 |
| | $ | 19.99 |
| | $ | 112,165 |
|
| | | | | | | | | | | | | | Restricted Stock (1) | | Restricted Stock Units | Restricted stock and restricted stock unit grants | Performance-based | | Time-based | | Performance-based (2) | | Time-based (3) | | (in thousands) | | (Number of Shares) | | (Number of Units) | Year ended September 30, 2012 | — |
| | 59 |
| | 780 |
| | 2,006 |
|
| | (1) | Of the time-based shares of restricted stock, 9,402 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 installments from the date of grant. The remaining 49,252 were issued to non-employee directors. The restrictions on these shares lapse one year from the date of grant. |
| | (2) | Of these performance-based RSUs, 11,899 will be eligible to vest on the later of November 15, 2012 and the date the Compensation Committee determines the extent to which the performance criteria have been achieved and 417,508 will be eligible to vest 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; and 309,976 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). The remaining 40,698 have been forfeited. |
| | (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 from the date of grant. |
Until July 2005, we generally granted stock options. For those options, the option exercise price was typically the fair market value at the date of grant, and they generally vested over four years and expired ten years from the date of grant.
| | | | | | | | | | | | | | | | Shares | | Weighted Average Exercise Price | | Weighted Average Remaining Contractual Term | | Aggregate Intrinsic Value | Stock option activity for the year ended September 30, 2012 | (in thousands) | | | | (in years) | | (in thousands) | Outstanding: | | | | | | | | Balance October 1, 2011 | 3,004 |
| | $ | 9.89 |
| | | | | Granted | — |
| | $ | — |
| | | | | Cancelled | (152 | ) | | $ | 16.43 |
| | | | | Exercised | (2,279 | ) | | $ | 9.33 |
| | | | | Balance, September 30, 2012 | 573 |
| | $ | 10.36 |
| | 1.59 |
| | $ | 6,539 |
| Exercisable September 30, 2012 | 556 |
| | $ | 10.48 |
| | 1.53 |
| | $ | 6,283 |
|
| | | | | | | | | | | | | | Year ended September 30, | | 2012 | | 2011 | | 2010 | Value of stock option and stock-based award activity | (in thousands) | Total intrinsic value of stock options exercised | $ | 31,746 |
| | $ | 15,983 |
| | $ | 10,528 |
| Total fair value of restricted stock and restricted stock unit awards vested | $ | 65,574 |
| | $ | 68,772 |
| | $ | 63,457 |
|
In 2012, shares issued upon vesting of restricted stock units were net of 0.9 million shares retained by us to cover employee tax withholdings of $21.0 million. In 2011, shares issued upon vesting of restricted stock units were net of 1.0 million shares retained by us to cover employee tax withholdings of $22.5 million. In 2010, shares issued upon vesting of restricted stock and restricted stock units were net of 1.2 million shares retained by us to cover employee tax withholdings of $20.3 million. |