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 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 2013, 2012 and 2011 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 2013, 2012 and 2011 was $22.87, $20.16 and $21.91, 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,
	2013		2012		2011
	(in thousands)
Cost of license revenue	$	21	$	22	$	15
Cost of service revenue	6,134		5,682		5,011
Cost of support revenue	3,324		3,234		2,721
Sales and marketing	11,326		13,809		11,428
Research and development	8,590		8,761		8,547
General and administrative	19,392		19,797		17,680
Total stock-based compensation expense	$	48,787	$	51,305	$	45,402

As of September 30, 2013, total unrecognized compensation cost related to unvested restricted shares and restricted stock units expected to vest was approximately $60 million and the weighted average remaining recognition period for unvested awards was 12 months.

As of September 30, 2013, 6.7 million shares of common stock were available for grant under the 2000 Plan and 5.3 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, 2013
Restricted stock activity for the year ended September 30, 2013	(in thousands except grant date fair value data)
Balance of nonvested outstanding restricted stock October 1, 2012	72		$	24.49
Vested	(67	)	$	24.72
Balance of nonvested outstanding restricted stock September 30, 2013	5		$	21.27	$	134



	Shares		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value as of September 30, 2013
Restricted stock unit activity for the year ended September 30, 2013	(in thousands except grant date fair value data)
Balance of nonvested outstanding restricted stock units October 1, 2012	5,134		$	19.99
Granted	2,654		$	22.87
Vested	(2,188	)	$	19.26
Forfeited or not earned	(414	)	$	21.26
Balance of nonvested outstanding restricted stock units September 30, 2013	5,186		$	21.67	$	147,684

(1)

Of these performance-based RSUs, the performance conditions were achieved for approximately 200 thousand shares, half of which vested in November 2013, with the remainder to vest in two substantially equal installments in November 2014 and 2015. The remaining approximately 200 thousand shares will be eligible to vest in two substantially equal installments on the later of November 15, 2014 and November 15, 2015 and the date the Compensation Committee determines the extent to which performance criteria have been achieved. RSUs not earned for earlier periods are eligible to be earned in 2014 or 2015.


(2)	The time-based RSUs were issued to directors and employees, including some of our executive officers. The time-based RSUs issued to employees and executives will vest in three substantially equal annual installments from the date of grant. Substantially all of the time-based RSUs issued to our directors will vest one year from the date of grant.

Additionally, 0.3 million performance-based shares that were granted to our executive officers in prior years vested in November 2013 as the performance criteria were achieved.

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, 2013	(in thousands)				(in years)	(in thousands)
Outstanding:
Balance, October 1, 2012	573		$	10.36
Cancelled	(7	)	$	7.56
Exercised	(467	)	$	10.45
Balance, September 30, 2013	99		$	10.13	0.82	$	1,817
Exercisable September 30, 2013	99		$	10.13	0.82	$	1,814



	Year ended September 30,
	2013		2012		2011
Value of stock option and stock-based award activity	(in thousands)
Total intrinsic value of stock options exercised	$	6,525	$	31,746	$	15,983
Total fair value of restricted stock and restricted stock unit awards vested	$	48,083	$	65,574	$	68,772

In 2013, shares issued upon vesting of restricted stock units were net of 0.7 million shares retained by us to cover employee tax withholdings of $15.0 million. 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 and restricted stock units were net of 1.0 million shares retained by us to cover employee tax withholdings of $22.5 million.

Restricted Stock Units

Restricted stock unit grants

Performance-based (1)

Time-based (2)

(Number of Units in thousands)

Year ended September 30, 2013