Employee Stock and Savings Plans

Stock Options Plans and Stock Plans

Our 2010 Omnibus Incentive Plan (Incentive Plan) is administered by the Compensation Committee of our Board of Directors and permits accelerated vesting of outstanding options, restricted stock units, restricted stock awards, and other equity incentives upon the occurrence of certain changes in control of our company. Stock options and time-based restricted stock units under the Incentive Plan are generally expected to vest over four years. Stock options have an expiration date of ten years from the date of grant and an exercise price no less than the fair market value of the shares on the date of grant. Performance-based restricted stock units vest after three years depending on attainment of goals for operating income margin. The source of shares issued under the Incentive Plan is new shares. We did not issue any options in fiscal 2015 and 2014. Our current equity strategy is to grant restricted stock rather than options to ensure that we deliver value to our employees when there is volatility in the market.

As of January 31, 2015, a total of 5,538 shares of common stock were available for future grant under the Incentive Plan.

The following table summarizes restricted stock activity (including the target number of shares awarded under performance-based restricted stock units):



	Restricted Stock Units		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Nonvested as of January 31, 2014	4,083		$	17.07
Granted	1,823		$	21.52
Vested	(1,548	)	$	14.79
Forfeited	(112	)	$	17.39
Nonvested as of January 31, 2015	4,246		$	19.63	1.61	$	97,699

The following table summarizes the fair value of restricted stock units vested:



Year ended January 31,	2015		2014		2013
Total fair value of restricted stock units vested	$	22,874	$	17,736	$	11,698

Stock options outstanding, the weighted average exercise price, and transactions involving stock options are summarized as follows:



	Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)	Aggregate Intrinsic Value
Balance as of January 31, 2014	3,587		$	9.87
Granted	—		$	—
Exercised	(426	)	$	10.89
Forfeited	—		$	—
Expired	(9	)	$	10.00
Balance as of January 31, 2015	3,152		$	9.73	4.67	$	41,849
Options exercisable as of January 31, 2015	2,844		$	9.14	4.38	$	39,454
Options vested as of January 31, 2015 and options expected to vest after January 31, 2015	3,152		$	9.73	4.67	$	41,849

The total intrinsic value of options exercised and cash received from options exercised was as follows:



Year ended January 31,	2015		2014		2013
Intrinsic value	$	4,601	$	26,769	$	21,647
Cash received	$	4,636	$	38,830	$	24,262

Employee Stock Purchase Plans

We have an ESPP for U.S. employees and an ESPP for certain foreign subsidiary employees. The ESPPs provide for six month offerings commencing on January 1 and July 1 of each year with purchases on June 30 and December 31 of each year. Each eligible employee may purchase up to six thousand shares of stock on each purchase date at prices no less than 85% of the lesser of the fair market value of the shares on the offering date or on the purchase date. As of January 31, 2015, 5,158 shares remain available for future purchase under the ESPPs.

The following table summarizes shares issued under the ESPPs and other associated information:



Year ended January 31,	2015		2014		2013
Shares issued under the ESPPs	1,389		1,554		1,884
Cash received for the purchase of shares under the ESPPs	$	25,642	$	23,895	$	22,645
Weighted average purchase price per share	$	18.47	$	15.38	$	12.02

Stock-Based Compensation Expense

The fair value of restricted stock units is the market value as of the grant date reduced by the value of expected dividends payable on our common stock prior to vesting.

We estimate the fair value of the purchase rights under our ESPPs and stock options using a Black-Scholes option-pricing model. The Black-Scholes option-pricing model incorporates several highly subjective assumptions including expected volatility, expected term, and interest rates.

The expected volatility for the purchase rights for our ESPPs is based on the historical volatility of our shares of common stock. The expected term for the purchase rights for our ESPPs is the 6 month offering period.

In determining expected volatility for options granted in fiscal 2013, we included the elements listed below at the weighted percentages presented:


•	Historical volatility of our shares of common stock at 35%;


•	Historical volatility of shares of comparable companies at 20%;


•	Implied volatility of our traded options at 30%; and


•	Implied volatility of traded options of comparable companies at 15%.

The greatest weighting was provided to our historic volatility based on the amount of consistent historic information available. A lesser weighting was applied to the implied volatility of our traded options due to a low volume of trades and shorter terms. We also included the historic and implied volatility of comparable companies in our industry in an effort to capture a broader view of the marketplace.

We based the expected term of our stock options on historical experience.

The risk-free interest rate for periods within the contractual life of the purchase rights under our ESPPs and stock options is based on the U.S. Treasury yield curve in effect at the time of the grant.

The weighted average grant date fair values are summarized as follows:



Year ended January 31,	2015		2014		2013
Restricted stock units granted	$	21.52	$	22.42	$	16.74
ESPP purchase rights	$	4.81	$	4.30	$	3.82
Options granted	$	—	$	—	$	7.18

The fair value calculations used the following assumptions:



Year ended January 31,	2015		2014		2013
Employee Stock Purchase Plans
Risk-free interest rate	0.05% - 0.09%		0.09% - 0.14%		0.05% - 0.15%
Dividend yield (range)	0.8% - 0.9%		0.0% - 1.0%		0	%
Dividend yield (weighted average)	0.8	%	0.5	%	0	%
Expected life (in years)	0.5		0.5		0.5
Volatility (range)	22% - 23%		22% - 33%		33% - 43%
Volatility (weighted average)	22	%	29	%	39	%



Year ended January 31,	2013
Stock Option Plans
Risk-free interest rate	0.9% - 1.3%
Dividend yield	0	%
Expected life (in years)	5.8 - 6.3
Volatility (range)	43% - 53%
Volatility (weighted average)	43	%

The following table summarizes stock-based compensation expense included in the results of operations and the tax benefit associated with the exercise of stock options:



Year ended January 31,	2015		2014		2013
Cost of revenues:
Service and support	$	2,304	$	1,992	$	1,529
Operating expense:
Research and development	14,027		11,182		9,206
Marketing and selling	9,103		7,777		6,654
General and administration	10,373		8,399		6,308
Equity plan-related compensation expense	$	35,807	$	29,350	$	23,697
Tax effect of the exercise of stock options	$	280	$	386	$	266

As of January 31, 2015, we had $68,648 in unrecognized compensation cost related to nonvested restricted stock units which is expected to be recognized over a weighted average period of 1.4 years and $1,667 in unrecognized compensation cost related to nonvested options which is expected to be recognized over a weighted average period of 0.7 years.

Employee Savings Plan

We have an employee savings plan (the Savings Plan) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under the Savings Plan, participating U.S. employees may defer a portion of their pretax earnings, up to the Internal Revenue Service annual contribution limit. We currently match 50% of eligible employee’s contributions, up to a maximum of 6% of the employee’s earnings. Employer matching contributions vest over five years, 20% for each year of service completed. Our matching contributions to the Savings Plan were as follows:



Year ended January 31,	2015		2014		2013
Employer matching contribution	$	8,190	$	7,708	$	7,181