Stock-based compensation expense related to stock options, stock appreciation rights ("SARs"), employee stock purchase plan ("ESPP") shares, and restricted stock units ("RSUs") was recognized on Advent's consolidated statement of operations for fiscal 2011, 2010 and 2009 as follows (in thousands):

	Fiscal Years

	2011									2010									2009
	Options, SARs & ESPP			RSUs			Total			Options, SARs & ESPP			RSUs			Total			Options, SARs & ESPP			RSUs			Total
Statement of operations classification
Cost of recurring revenues	$	1,105		$	1,049		$	2,154		$	1,066		$	708		$	1,774		$	985		$	712		$	1,697
Cost of non-recurring revenues		753			561			1,314			804			337			1,141			799			470			1,269

Total cost of revenues		1,858			1,610			3,468			1,870			1,045			2,915			1,784			1,182			2,966
Sales and marketing		4,324			1,981			6,305			4,141			1,725			5,866			3,274			2,116			5,390
Product development		2,348			2,790			5,138			2,856			2,344			5,200			2,148			2,709			4,857
General and administrative		2,443			1,784			4,227			3,213			1,236			4,449			3,180			1,769			4,949

Total operating expenses		9,115			6,555			15,670			10,210			5,305			15,515			8,602			6,594			15,196

Total stock-based employee compensation expense	$	10,973		$	8,165		$	19,138		$	12,080		$	6,350		$	18,430		$	10,386		$	7,776		$	18,162

Tax effect on stock-based employee compensation		(4,303	)		(3,169	)		(7,472	)		(5,592	)		(2,568	)		(8,160	)		(4,091	)		(3,131	)		(7,222	)

Effect on net income from continuing operations, net of tax	$	6,670		$	4,996		$	11,666		$	6,488		$	3,782		$	10,270		$	6,295		$	4,645		$	10,940

Effect on net income from discontinued operation, net of tax	$	—		$	—		$	—		$	—		$	—		$	—		$	76		$	128		$	204

Effect on net income, net of tax	$	6,670		$	4,996		$	11,666		$	6,488		$	3,782		$	10,270		$	6,371		$	4,773		$	11,144

Advent capitalized stock-based compensation expense of $233,000, $94,000 and $228,000 during fiscal 2011, 2010 and 2009, respectively, associated with the Company's software development, internal-use software and professional services implementation projects.

As of December 31, 2011, total unrecognized compensation cost related to unvested awards not yet recognized under all equity compensation plans, adjusted for estimated forfeitures, was $33.7 million and is expected to be recognized through the remaining vesting period of each grant. As of December 31, 2011, the weighted average remaining period was 2.3 years.

Advent uses the Black-Scholes option pricing model to determine the fair value of equity compensation awards, stock options, RSUs and SARs and employee stock purchase plan shares.

The fair value of each equity award grant is estimated on the date of grant using the Black-Scholes option valuation model and the straight-line attribution approach with the following assumptions:

	Fiscal Years

	2011	2010	2009
Stock Options / Stock Appreciation Rights
Risk-free interest rate	0.9% - 2.4%	1.3% - 2.7%	1.8% - 3.0%
Volatility	36.0% - 42.8%	35.2% - 38.8%	38.5% - 57.7%
Expected life	5 years	4 - 5 years	4 - 5 years
Expected dividends	None	None	None
Employee Stock Purchase Plan*
Risk-free interest rate	0.1% - 0.2%	0.2%	0.2% - 0.4%
Volatility	28.6% - 48.3%	28.8% - 29.9%	29.5% - 72.8%
Expected life	6 months	6 months	6 months
Expected dividends	None	None	None

The expected stock price volatility for fiscal 2011, 2010 and 2009 was determined based on an equally weighted average of historical and implied volatility of the Company's common stock. Advent determined that a blend of implied volatility and historical volatility is more reflective of the market conditions and a better indicator of expected volatility than using purely historical volatility. The expected life for fiscal 2011, 2010 and 2009 was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The risk-free interest rate is based on the US Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option or SAR. The dividend yield assumption is based on the Company's history of not paying dividends and the future expectation of zero dividend payouts.

A summary of the status of the Company's stock option and SAR activity for the period presented is as follows (in thousands, except weighted average exercise price):

	Fiscal Years

	2011					2010					2009
	Number of Shares			Weighted Average Exercise Price		Number of Shares			Weighted Average Exercise Price		Number of Shares			Weighted Average Exercise Price
Outstanding at beginning of year		6,780		$	15.73		7,886		$	14.57		8,182		$	14.13
Options and SARs granted		1,469		$	26.72		1,041		$	22.13		1,256		$	16.05
Options and SARs exercised		(1,032	)	$	14.47		(1,795	)	$	13.91		(1,077	)	$	10.58
Options and SARs canceled		(188	)	$	22.96		(352	)	$	18.05		(475	)	$	19.95

Outstanding at end of year		7,029		$	18.01		6,780		$	15.73		7,886		$	14.57

Exercisable at end of year		4,355		$	14.65		4,278		$	13.37		4,916		$	12.92

The aggregate intrinsic value of options and SARs outstanding and exercisable as of December 31, 2011 was $48.3 million and $42.4 million, respectively. The intrinsic value is calculated as the difference between the Company's closing stock price of $24.36 as of December 31, 2011 and the exercise price of the underlying awards for options or SARs that were in-the-money as of that date.

The weighted average grant date fair value of options and SARs granted for the total Company (as determined under ASC 718), total intrinsic value of options and SARS exercised and cash received from option exercises during fiscal 2011, 2010 and 2009 were as follows (in thousands, except weighted average grant date fair value):

	Fiscal Years

	2011		2010		2009
Options and SARs
Weighted average grant date fair value	$	9.35	$	7.64	$	7.36
Total intrinsic value of awards exercised	$	13,612	$	18,875	$	7,992
Options
Cash received from exercises	$	7,189	$	14,020	$	8,637

The options and SARs outstanding and currently exercisable for the total Company by exercise price at December 31, 2011 were as follows:

	Options and SARs Outstanding						Options and SARs Exercisable

Exercise Price	Number of Shares (in thousands)		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable (in thousands)		Weighted Average Exercise Price
$6.96 - $9.08		844		2.40	$	8.94		844	$	8.94
$9.13 - $10.38		804		2.42	$	9.54		804	$	9.54
$10.47 - $14.18		755		4.60	$	13.49		700	$	13.67
$14.53 - $16.21		753		6.93	$	16.05		478	$	16.02
$16.30 - $19.79		710		5.62	$	18.17		594	$	18.12
$19.94 - $21.34		611		6.52	$	20.85		403	$	20.85
$21.75 - $21.75		733		8.14	$	21.75		264	$	21.75
$21.90 - $26.85		681		7.74	$	24.74		253	$	23.86
$26.91 - $26.91		1,016		9.26	$	26.91		13	$	26.91
$27.02 - $30.15		122		9.24	$	27.64		2	$	27.02

As of December 31, 2011		7,029		6.03	$	18.01		4,355	$	14.65

Expected to vest at December 31, 2011		6,764		5.91	$	17.73

The aggregate intrinsic value of options and SARs expected to vest at December 31, 2011 was $48.0 million.

The equity awards available for grant for the total Company for the periods presented were as follows (in thousands):

	Fiscal Years

	2011			2010			2009
Beginning balance		6,622			5,087			2,720
Awards authorized		—			3,002			3,600
Options and SARs granted		(1,469	)		(1,041	)		(1,256	)
Options and SARs canceled		188			352			475
Options expired		(10	)		—			(3	)
RSUs granted		(489	)		(452	)		(423	)
RSUs canceled		94			62			128
RSU adjustment(1)(2)		(391	)		(388	)		(154	)

Ending balance		4,545			6,622			5,087

(1): Effective with our 2002 Stock Plan amended on April 1, 2010, awards of restricted stock, restricted stock units, performance shares or performance units reduce the number of shares available under the Plan by 1.99 shares for each share covered by such awards.

(2): Effective with our 2002 Stock Plan amended on April 1, 2009, awards of restricted stock, restricted stock units, performance shares or performance units reduce the number of shares available under the Plan by 1.52 shares for each share covered by such awards.

During fiscal 2011, 2010 and 2009, the Company granted RSUs under its 2002 Stock Plan. A summary of RSU activity for the total Company during for 2011, 2010 and 2009 is as follows:

	Fiscal Years

						2010					2009
	2011					2010					2009
	2011								Weighted Average Grant Date Fair Value					Weighted Average Grant Date Fair Value
	Number of Shares (in thousands)			Weighted Average Grant Date		Number of Shares (in thousands)			Weighted Average Grant Date Fair Value		Number of Shares (in thousands)			Weighted Average Grant Date Fair Value
Outstanding and unvested at beginning of period		1,308		$	19.58		1,369		$	18.17		1,402		$	18.95
RSUs granted		489		$	26.75		452		$	22.05		423		$	16.50
RSUs vested		(450	)	$	35.35		(451	)	$	17.85		(328	)	$	18.89
RSUs canceled		(94	)	$	22.21		(62	)	$	18.99		(128	)	$	19.34

Outstanding and unvested at end of period		1,253		$	16.51		1,308		$	19.58		1,369		$	18.17

The weighted average grant date fair value was determined based on the closing market price of the Company's common stock on the date of the award. Aggregate intrinsic value of RSUs outstanding at December 31, 2011 was $30.5 million, based on the closing price of $24.36 per share as of December 31, 2011.

Advent has equity awards outstanding under three stock option plans, the 2002 Stock Plan (the "Plan"), the 1998 Non-statutory Stock Option Plan (the "Non-statutory Plan") and the 1995 Director Option Plan (the "Director Plan").

The Plan. On June 2, 2010, the Company's stockholders approved the amendment and restatement of Advent's 2002 Stock Plan, originally approved by the Board of Directors (the "Board") and stockholders in February and May, respectively, of 2002. Under the Plan, the Company may grant options to purchase common stock to employees, consultants and directors. The Plan also permits the award of restricted stock, RSUs, SARs, performance shares, and performance units.

Options granted may be incentive stock options or non-statutory stock options and shall be granted at a price not less than fair market value on the date of grant. Fair market value (as defined in the Plan) and the vesting of these options shall be determined by the Board. The options generally vest over 5 years (for grants prior to February 2009) or 4 years (for grants after February 2009) and expire no later than 10 years from the date of grant. Upon exercise, stock options will be settled in shares of Advent common stock.

The RSUs are awards of restricted stock units that generally vest over four years in two equal installments on the second and fourth anniversaries of the date of grant. Upon vesting, the RSUs will convert into an equivalent number of shares of common stock. The value of the RSUs is based on the closing market price of the Company's common stock on the date of grant and is amortized on a straight-line basis over the four-year requisite service period.

A SAR is the right to receive the appreciation in fair market value of common stock between the exercise date and the date of grant. SARs generally vest over 5 years (for grants prior to February 2009) or 4 years (for grants after February 2009) and expire no later than 10 years from the date of grant. Upon exercise, SARs will be settled in shares of Advent common stock.

Unvested RSUs, stock options and SARs are canceled on termination of employment and returned to the Plan.

Effective February 11, 2010, each non-employee director became eligible to receive the following awards of SARs and RSUs under the 2002 Stock Plan:

In the event of a merger with or into another corporation, or other change in control, each non-employee director shall fully vest in and have the right to exercise all of his or her outstanding equity compensation (including outstanding stock options, SARs, RSUs, or performance shares). Upon a director's retirement from the Board, the director's unvested options, SARs and RSUs are canceled and returned to the Plan.

All individuals employed by Advent are eligible to participate in the ESPP if Advent employs them for at least 20 hours per week and at least five months per year. The ESPP permits eligible employees to purchase Advent common stock through payroll deductions at a price equal to 85% of the lower of the closing sale price for the Company's common stock reported on the NASDAQ National Market at the beginning or the end of each six-month offering period. In any calendar year, eligible employees can withhold up to 10% of their salary and certain variable compensation.

On May 18, 2005, Advent's shareholders approved the 2005 ESPP with 4,000,000 shares of common stock reserved for issuance. The following table summarizes the Company's issuance of common stock for the total Company under the 2005 ESPP:

As of December 31, 2011, common shares of 1,817,141 were reserved for future issuance under the 2005 ESPP.

Advent sponsors a 401(k) Plan to provide retirement benefits for its US employees. This Plan provides for tax-deferred salary deductions for eligible employees. Employees may contribute between 1% and 70% of their compensation to this Plan, limited by an annual maximum amount as determined by the Internal Revenue Service. The Company also makes a 50% matching contribution of up to 6% of employee compensation. The Company's matching contributions to this plan totaled $3.7 million, $3.4 million, and $3.1 million for fiscal 2011, 2010 and 2009, respectively. In addition to the employer matching contribution, Advent may make profit sharing contributions at the discretion of the Board of Directors. Advent did not make any profit sharing contributions in fiscal 2011, 2010 or 2009.