Stock-Based Compensation

We currently have one shareholder-approved stock plan from which we can issue stock-based awards, which was approved by our shareholders in fiscal year 2008 (2008 Plan). The 2008 Plan replaced the 1992 Incentive and Nonqualified Stock Option Plan, the 1994 Stock Incentive Plan and the 1997 Stock Incentive Plan (collectively, the “Previous Plans”). The Previous Plans solely exist to satisfy outstanding options previously granted under those plans. The 2008 Plan permits the granting of stock awards to officers, members of the Board of Directors, employees and consultants. Awards under the 2008 Plan may include nonqualified stock options, incentive stock options, grants of conditioned or restricted stock, unrestricted grants of stock, grants of stock contingent upon the attainment of performance goals, deferred stock units and stock appreciation rights. A total of 54,510,000 shares are issuable under these plans, of which 3,129,512 shares were available for grant as of November 30, 2017.

We have adopted two stock plans for which the approval of shareholders was not required: the 2002 Nonqualified Stock Plan (2002 Plan) and the 2004 Inducement Stock Plan (2004 Plan). The 2002 Plan permits the granting of stock awards to non-executive officer employees and consultants. Executive officers and members of the Board of Directors are not eligible for awards under the 2002 Plan. Awards under the 2002 Plan may include nonqualified stock options, grants of conditioned or restricted stock, unrestricted grants of stock, grants of stock contingent upon the attainment of performance goals and stock appreciation rights. A total of 9,750,000 shares are issuable under the 2002 Plan, of which 906,293 shares were available for grant as of November 30, 2017.

The 2004 Plan is reserved for persons to whom we may issue securities as an inducement to become employed by us pursuant to the rules and regulations of the NASDAQ Stock Market. Awards under the 2004 Plan may include nonqualified stock options, grants of conditioned or restricted stock, unrestricted grants of stock, grants of stock contingent upon the attainment of performance goals and stock appreciation rights. A total of 1,500,000 shares are issuable under the 2004 Plan, of which 583,021 shares were available for grant as of November 30, 2017.

Under all of our plans, the options granted generally begin to vest within one year of the grant.

A summary of stock option activity under all the plans is as follows:



	Shares		Weighted Average		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value⁽¹⁾
	(in thousands)		Exercise Price		(in years)	(in thousands)
Options outstanding, December 1, 2016	417		$	24.10
Granted	937		29.70
Exercised	(203	)	25.90
Canceled	(149	)	29.31
Options outstanding, November 30, 2017	1,002		$	28.29	4.89	$	13,077
Exercisable, November 30, 2017	269		$	24.09	2.64	$	4,639
Vested or expected to vest, November 30, 2017	875		$	28.06	4.77	$	11,620


(1)	The aggregate intrinsic value was calculated based on the difference between the closing price of our stock on November 30, 2017 of $41.34 and the exercise prices for all in-the-money options outstanding.

A summary of restricted stock units activity is as follows (in thousands, except per share data):



	Number of Shares		Weighted Average Fair Value
Restricted stock units outstanding, December 1, 2016	1,583		$	26.14
Granted	833		29.54
Issued	(638	)	31.40
Canceled	(642	)	25.58
Restricted stock units outstanding, November 30, 2017	1,136		$	28.15

Each restricted stock unit represents one share of common stock. The restricted stock units generally vest semi-annually over a three-year period. Performance-based restricted stock units are subject to performance criteria aligned with our business plan and are earned only to the extent the performance criteria are achieved, with any awards earned being subject to subsequent time-based vesting similar to that discussed above.

The fair value of outright stock awards, restricted stock units and DSUs is equal to the closing price of our common stock on the date of grant, less the present value of expected dividends, as the recipient is not entitled to dividends during the requisite service period.

In addition, during fiscal years 2015, 2016, and 2017, we granted performance-based restricted stock units that include a three-year market condition under a Long-Term Incentive Plan (“LTIP”) where the performance measurement period is three years. Vesting of the LTIP awards is based on our level of attainment of specified total shareholder return (TSR) targets relative to the percentage appreciation of a specified index of companies for the respective three-year periods and is also subject to the continued employment of the grantees. In order to estimate the fair value of such awards, we used a Monte Carlo Simulation valuation model. The performance measurement period related to the LTIP awards granted during fiscal year 2015 ended as of November 30, 2017. As the level of attainment of the specified TSR target was not met, none of the LTIP awards under this grant vested.

The 1991 Employee Stock Purchase Plan (ESPP) permits eligible employees to purchase up to an aggregate of 9,450,000 shares of our common stock through accumulated payroll deductions. The ESPP has a 27-month offering period comprised of nine three-month purchase periods. The purchase price of the stock is equal to 85% of the lesser of the market value of such shares at the beginning of a 27-month offering period or the end of each three-month segment within such offering period. If the market price at any of the nine purchase periods is less than the market price on the first date of the 27-month offering period, subsequent to the purchase, the offering period is canceled and the employee is entered into a new 27-month offering period with the then current market price as the new base price. We issued 220,000 shares, 266,000 shares and 226,000 shares with weighted average purchase prices of $22.27, $20.01 and $19.58 per share, respectively, in fiscal years 2017, 2016 and 2015, respectively. At November 30, 2017, approximately 815,000 shares were available and reserved for issuance under the ESPP.

We estimated the fair value of stock options and ESPP awards granted in fiscal years 2017, 2016 and 2015 on the measurement dates using the Black-Scholes option valuation model, and LTIP awards using the Monte Carlo Simulation valuation model, with the following weighted average assumptions:



	Fiscal Year Ended
	November 30, 2017		November 30, 2016		November 30, 2015
Stock options:
Expected volatility	25.0	%	—	%	28.0	%
Risk-free interest rate	1.9	%	—	%	1.3	%
Expected life (in years)	4.8		0		4.8
Expected dividend yield	1.7	%	—		—
Employee stock purchase plan:
Expected volatility	22.9	%	25.3	%	21.1	%
Risk-free interest rate	1.2	%	0.6	%	0.5	%
Expected life (in years)	1.5		1.6		1.6
Expected dividend yield	1.6	%	—		—
Long-term incentive plan:
Expected volatility	27.5	%	27.1	%	32.1	%
Risk-free interest rate	1.4	%	1	%	0.9	%
Expected life (in years)	2.7		2.7		2.7
Expected dividend yield	1.8	%	—		—

For each stock option award, the expected life in years is based on historical exercise patterns and post-vesting termination behavior. Expected volatility is based on historical volatility of our stock, and the risk-free interest rate is based on the U.S. Treasury yield curve for the period that is commensurate with the expected life at the time of grant. The expected annual dividend yield is based on the weighted-average of the dividend yield assumptions used for options granted during the applicable period.

For each ESPP award, the expected life in years is based on the period of time between the beginning of the offering period and the date of purchase, plus an additional holding period of three months. Expected volatility is based on historical volatility of our stock, and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at each purchase period. The expected annual dividend yield is based on the weighted-average of the dividend yield assumptions used for options granted during the applicable period.

Based on the above assumptions, the weighted average estimated fair value of stock options granted in fiscal years 2017, 2016, and 2015 was $5.95, $0 and $6.79 per share, respectively. We amortize the estimated fair value of stock options to expense over the vesting period using the straight-line method. The weighted average estimated fair value for shares issued under our ESPP in fiscal years 2017, 2016 and 2015 was $8.32, $7.43 and $6.89 per share, respectively. We amortize the estimated fair value of shares issued under the ESPP to expense over the vesting period using a graded vesting model.

Total unrecognized stock-based compensation expense, net of expected forfeitures, related to unvested stock options and unvested restricted stock awards amounted to $24.5 million at November 30, 2017. These costs are expected to be recognized over a weighted average period of 2.2 years.

The following additional activity occurred under our plans (in thousands):



	Fiscal Year Ended
	November 30, 2017		November 30, 2016		November 30, 2015
Total intrinsic value of stock options on date exercised	$	1,622	$	2,017	$	3,895
Total fair value of deferred stock units on date vested	57		—		93
Total fair value of restricted stock units on date vested	20,032		17,213		18,621

The following table provides the classification of stock-based compensation as reflected in our consolidated statements of operations (in thousands):



	Fiscal Year Ended
	November 30, 2017		November 30, 2016		November 30, 2015
Cost of maintenance and services	$	1,016	$	899	$	617
Sales and marketing	2,214		4,093		4,805
Product development	4,576		9,965		5,433
General and administrative	6,347		7,584		13,149
Total stock-based compensation	$	14,153	$	22,541	$	24,004
Income tax benefit included in the provision for income taxes from continuing operations	$	4,057	$	5,208	$	5,225

Separation Arrangements

During fiscal year 2017, we entered into separation agreements with three executives, which entitled them to accelerated vesting of certain stock-based awards. Due to the separation and accelerated vesting, we recognized additional stock-based compensation expense of $1.5 million, of which $0.8 million was recorded as sales and marketing expense and $0.7 million was recorded as general and administrative expense, in the consolidated statement of operations.

During fiscal year 2016, we entered into separation agreements with two executives, which entitled them to accelerated vesting of certain stock-based awards. Due to the separation and accelerated vesting, we recognized additional stock-based compensation expense of $0.3 million, of which $0.2 million was recorded as sales and marketing expense and $0.1 million was recorded as product development expense, in the consolidated statement of operations.

During fiscal year 2015, we entered into separation agreements with three executives, which entitled them to accelerated vesting of certain stock-based awards. Due to the separation and accelerated vesting, we recognized additional stock-based compensation expense of $0.3 million, of which $0.2 million was recorded as general and administrative expense and $0.1 million was recorded as sales and marketing expense, in the consolidated statement of operations.