Stock-Based Compensation

9 Months Ended

Jun. 30, 2011

Stock-Based Compensation

16.   Stock-Based Compensation

We recognize stock-based compensation expense over the requisite service period. Our share-based awards are accounted for as equity instruments. The amounts included in the consolidated statements of operations relating to stock-based compensation are as follows (dollars in thousands):

	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Cost of product and licensing	$	2	$	7	$	29	$	25
Cost of professional services and hosting		5,764		2,612		20,514		8,173
Cost of maintenance and support		518		165		1,545		582
Research and development		5,280		2,282		18,188		6,731
Sales and marketing		10,341		12,516		32,748		29,813
General and administrative		11,883		10,512		36,481		27,544
Total	$	33,788	$	28,094	$	109,505	$	72,868

Included in stock-based compensation for the three and nine months ended June 30, 2011 is $11.0 million and $24.1 million, respectively, of expense related to awards that will be made as part of the fiscal 2011 annual bonus plan to employees. The annual bonus pool is determined by management and approved by the Compensation Committee of the Board of Directors based on financial performance targets approved at the beginning of the year. If these targets are achieved, the awards will be settled in shares based on the total bonus earned and the grant date fair value of the shares awarded to each employee.

Stock Options

The table below summarizes activity relating to stock options for the nine months ended June 30, 2011:

				Weighted		Weighted Average
	Number of			Average		Remaining		Aggregate
	Shares			Exercise Price		Contractual Term		Intrinsic Value(1)
Outstanding at September 30, 2010		10,703,237		$	8.44
Granted		1,000,000		$	16.44
Exercised		(2,448,623	)	$	6.33
Forfeited		(89,553	)	$	12.81
Expired		(63,401	)	$	14.99
Outstanding at June 30, 2011		9,101,660		$	9.79		3.4 years	$	106.3 million
Exercisable at June 30, 2011		6,917,436		$	8.21		2.6 years	$	91.7 million
Exercisable at June 30, 2010		8,021,090		$	6.94		2.9 years	$	65.9 million

(1) The aggregate intrinsic value in this table was calculated based on the positive difference, if any, between the closing market value of our common stock on June 30, 2011 ($21.47) and the exercise price of the underlying options.

As of June 30, 2011, the total unamortized fair value of stock options was $5.9 million with a weighted average remaining recognition period of 0.8 years. A summary of weighted-average grant-date fair value of stock options granted and intrinsic value of stock options exercised is as follows:

	Nine Months Ended
	June 30,
	2011		2010
Weighted-average grant-date fair value per share	$	6.13	$	5.90
Total intrinsic value of stock options exercised (in millions)	$	32.9	$	34.1

We use the Black-Scholes option pricing model to calculate the grant-date fair value of an award. The fair value of the stock options granted during the nine months ended June 30, 2011 and 2010 were calculated using the following weighted-average assumptions:

	Nine Months Ended
	June 30,
	2011			2010
Dividend yield		0.0	%		0.0	%
Expected volatility		46.1	%		50.9	%
Average risk-free interest rate		1.2	%		2.4	%
Expected term (in years)		4.1			4.2

Restricted Units

Restricted Units are not included in issued and outstanding common stock until the shares are vested and released. The table below summarizes activity relating to Restricted Units for the nine months ended June 30, 2011:

	Number of Shares			Number of Shares
	Underlying			Underlying
	Restricted Units —			Restricted Units —
	Contingent Awards			Time-Based Awards
Outstanding at September 30, 2010		2,867,840			7,795,114
Granted		1,329,988			3,521,636
Earned/released		(1,296,018	)		(3,273,826	)
Forfeited		(360,009	)		(557,123	)
Outstanding at June 30, 2011		2,541,801			7,485,801
Weighted average remaining contractual term of outstanding Restricted Units		1.0 years			1.1 years
Aggregate intrinsic value of outstanding Restricted Units(1)	$	54.6 million		$	160.7 million
Restricted Units vested and expected to vest		2,383,251			6,961,901
Weighted average remaining contractual term of Restricted Units vested and expected to vest		1.0 years			1.1 years
Aggregate intrinsic value of Restricted Units vested and expected to vest(1)	$	51.2 million		$	149.5 million

(1) The aggregate intrinsic value in this table was calculated based on the positive difference between the closing market value of our common stock on June 30, 2011 ($21.47) and the exercise price of the underlying Restricted Units.

The purchase price for vested Restricted Units is $0.001 per share. As of June 30, 2011, unearned stock-based compensation expense related to all unvested Restricted Units is $121.5 million, which will, based on expectations of future performance vesting criteria, where applicable, be recognized over a weighted-average period of 1.5 years.

A summary of weighted-average grant-date fair value and intrinsic value of all Restricted Units vested is as follows:

	Nine Months Ended,
	June 30,
	2011		2010
Weighted-average grant-date fair value per share	$	17.91	$	15.59
Total intrinsic value of shares vested (in millions)	$	81.8	$	65.2