Stock-based Compensation

3 Months Ended

Dec. 28, 2013

Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]

Stock-Based Compensation

Stock-based Compensation

We measure the cost of employee services received in exchange for restricted stock and restricted stock unit (RSU) awards based on the fair value of our common stock on the date of grant. That cost is recognized over the period during which an employee is required to provide service in exchange for the award.

Our equity incentive plan provides for grants of nonqualified and incentive stock options, common stock, restricted stock, RSUs and stock appreciation rights to employees, directors, officers and consultants. We award RSUs as the principal equity incentive awards, including certain performance-based awards that are earned based on achievement of performance criteria established by the Compensation Committee of our Board of Directors. Each RSU represents the contingent right to receive one share of our common stock.

Our equity incentive plans are described more fully in Note K to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2013.

Restricted stock unit activity for the three months ended December 28, 2013	Shares		Weighted Average Grant Date Fair Value (Per Share)
	(in thousands)
Balance of outstanding restricted stock units October 1, 2013	5,186		$	21.67
Granted	1,130		$	32.17
Vested	(1,627	)	$	21.13
Forfeited or not earned	(172	)	$	21.87
Balance of outstanding restricted stock units December 28, 2013	4,517		$	24.47

	Restricted Stock Units
Grant Period	Performance-based (1)	Time-based (2)
	(Number of Units in thousands)
First three months of 2014	345	785

_________________

(1) The performance based RSUs were granted to employees, including our executive officers. Substantially all of these performance-based will be eligible to vest in three substantially equal installments on (i) the later of November 15, 2014 and the date the Compensation Committee determines the extent to which 2014 performance criteria have been achieved, (ii) the later of November 15, 2015 and the date the Compensation Committee determines the extent to which the applicable 2015 performance criteria have been achieved, and (iii) the later of November 15, 2016 and the date the Compensation Committee determines the extent to which the applicable 2016 performance criteria have been achieved; RSUs not earned for a period may be earned in subsequent periods.

(2) The time-based RSUs were issued to employees, including our executive officers, and a member of our Board of Directors as described in Note 1. Substantially all of these time-based RSUs, will vest in three substantially equal annual installments in November 2014, 2015 and 2016.

Compensation expense recorded for our stock-based awards was classified in our consolidated statements of operations as follows:

	Three months ended
	December 28, 2013		December 29, 2012
	(in thousands)
Cost of license revenue	$	4	$	5
Cost of service revenue	1,598		1,612
Cost of support revenue	924		826
Sales and marketing	2,499		2,458
Research and development	2,689		2,512
General and administrative	5,050		4,480
Total stock-based compensation expense	$	12,764	$	11,893