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Note 11 - Stock-based Compensation

9 Months Ended

Oct. 31, 2020

Share-based Payment Arrangement [Text Block]

11.

STOCK-BASED COMPENSATION

The Company’s equity awards consist of RSUs, PSUs and SARs. For a description of the Company’s stock-based compensation plans, see Note 6 “Stock-Based Compensation” in Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended January 31, 2020.

Stock-Based Compensation

The following table sets forth reported stock-based compensation expense for the three and nine months ended October 31, 2020 and 2019:

	Three Months Ended October 31,				Nine Months Ended October 31,
	2020		2019		2020		2019
	(in thousands)				(in thousands)
Cost of subscription	$	156	$	84	$	402	$	226
Cost of maintenance		125		143		354		396
Cost of professional services		449		404		1,198		1,085
Sales and marketing		792		607		2,020		1,562
Research and development		607		492		1,618		1,360
General and administrative		1,641		1,174		4,534		3,767
Total stock-based compensation expense	$	3,770	$	2,904	$	10,126	$	8,396

RSU Information

The estimated fair value of RSUs was calculated based on the closing price of the Company’s common stock on the date of grant, reduced by the present value of dividends foregone during the vesting period.

The following table summarizes the activity for RSUs for the nine months ended October 31, 2020:

	RSUs (in thousands)			Weighted Average Grant Date Fair Value
Restricted stock at January 31, 2020		627		$	39.86
Granted		343			40.28
Released (1)		(248	)		35.69
Forfeited		(19	)		41.67
Restricted stock at October 31, 2020		703		$	41.49

(1)

The number of RSUs released includes shares withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.

The Company withholds a portion of the released shares as consideration for the Company’s payment of applicable employee income taxes. During the three months ended October 31, 2020, the Company withheld 200 shares for payment of these taxes at a value of $9,000. During the nine months ended October 31, 2020, the Company withheld 76,000 shares for payment of these taxes at a value of $3.2 million.

Total unrecognized compensation cost related to RSUs was approximately $24.8 million as of October 31, 2020. This cost is expected to be recognized over a weighted-average period of approximately 2.8 years.

PSU Information

The following table summarizes the activity for PSUs for the nine months ended October 31, 2020:

	PSUs (in thousands)			Weighted Average Grant Date Fair Value
Performance stock units at January 31, 2020		90		$	39.82
Granted		93			40.54
Released (1)		(21	)		39.82
Forfeited		(9	)		39.82
Performance stock units at October 31, 2020		153		$	40.26

(1)

The number of PSUs released includes shares withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.

The Company withholds a portion of the released shares as consideration for the Company’s payment of applicable employee income taxes. During the three months ended October 31, 2020, the Company did not withhold shares for payment of these taxes as there were no shares released during the quarter. During the nine months ended October 31, 2020, the Company withheld 8,000 shares for payment of these taxes at a value of $0.3 million.

Total unrecognized compensation cost related to PSUs was approximately $2.8 million as of October 31, 2020. This cost is expected to be recognized over a period of approximately 1.2 years.

SAR Information

The following table summarizes the activity for outstanding SARs for the nine months ended October 31, 2020:

	SARs (in thousands)			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 31, 2020		1,349		$	24.86
Granted		-			-
Exercised		(202	)		12.92
Expired		-			-
Forfeited		-			-
Outstanding at October 31, 2020		1,147		$	26.98		3.1	$	17,897
Vested and exercisable at October 31, 2020		1,004		$	24.25		2.8	$	17,413

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the aggregate difference between the closing stock price of the Company’s common stock based on the last trading day as of October 31, 2020, and the exercise price for in-the-money SARs) that would have been received by the holders if all SARs had been exercised on October 31, 2020. The total intrinsic value of SARs exercised in the nine months ended October 31, 2020 was $6.0 million.

The number of SARs exercised includes shares withheld on behalf of employees to satisfy minimum statutory tax withholding requirements. During the three months ended October 31, 2020, the Company withheld 400 shares for payment of these taxes at a value of $15,000. During the nine months ended October 31, 2020, the Company withheld 57,000 shares for payment of these taxes at a value of $2.4 million.

At October 31, 2020, there was approximately $1.6 million of total unrecognized compensation cost related to unvested SARs. This cost is expected to be recognized over a weighted-average period of approximately 1.4 years.