UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended November 30, 2008

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

PROGRESS SOFTWARE CORPORATION

MASSACHUSETTS		04-2746201
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

14 Oak Park
Bedford, Massachusetts 01730
(Address of principal executive offices)
Telephone Number: (781) 280-4000

Title of Each Class		Name of Each Exchange on Which Registered
Common Stock $.01 par value		The NASDAQ Stock Market LLC

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes þ No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes o       No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ       No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o       No þ

As of May 31, 2008 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of voting stock held by non-affiliates of the registrant was approximately $1,273,000,000.

As of February 27, 2009, there were 39,821,735 common shares outstanding.

None

 

 

PROGRESS SOFTWARE CORPORATION
FORM 10-K/A
For the year ended November 30, 2008

TABLE OF CONTENTS

		Page
Explanatory Note			3
PART III
Item 10. Directors, Executive Officers and Corporate Governance			4
Item 11. Executive Compensation			6
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			25
Item 13. Certain Relationships and Related Transactions, and Director Independence			27
Item 14. Principal Accountant Fees and Services
PART IV
Item 15. Exhibits and Financial Statement Schedules			29
Signatures			31
EX-31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Joseph W. Alsop
EX-31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Norman R. Robertson
EX-32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EXPLANATORY NOTE

     Progress Software Corporation (referred to as the company, we, us or our) is filing this Amendment No. 1 on Form 10-K/A (this “Amendment”) to its Annual Report on Form 10-K for the year ended November 30, 2008, originally filed on January 29, 2009 (the “Original Report”), for the sole purpose of including the information required by Part III of Form 10-K. Accordingly, Items 10, 11, 12, 13 and 14 of Part III of our Original Report are replaced in their entirety with the information provided herein. This Form 10-K/A does not amend, update or change any other items or disclosure in the Original Report or reflect events that occurred after the date of the Original Report. Therefore, this Amendment should be read in conjunction with our Original Report and our other filings made with the United States Securities and Exchange Commission (“SEC”) subsequent to the filing of the Original Report.

     This Form 10-K/A is also being filed in order to file correct versions of the certifications required by Rule 13a-14(a) of the Securities Exchange Act of 1934 (the “Section 302 Certifications”). The Section 302 Certifications filed with the Original Report were inadvertently missing certain required information. We have also included as exhibits the certifications required under Section 906 of The Sarbanes-Oxley Act of 2002.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Board of Directors

     Currently, our Board of Directors is comprised of seven members. Each director has been elected to hold office until the next annual meeting of shareholders or special meeting in lieu of such annual meeting and until his successor has been duly elected and qualified, or until his earlier death, resignation or removal. There are no family relationships among any of our executive officers or directors.

     The following table sets forth our directors, their ages, and the positions currently held by each person with our company.

Name		Age		Position
Joseph W. Alsop		63		Co-Founder, Chief Executive Officer and Director
Barry N. Bycoff (1)(2)		60		Director
Ram Gupta (2)(3)		46		Director
Roger J. Heinen, Jr. (2)(3)		58		Director
Charles F. Kane (1)		51		Director
David A. Krall (3)		48		Director
Michael L. Mark (1)		63		Chairman of the Board

     Mr. Alsop, our co-founder, has been a director and Chief Executive Officer since our inception in 1981.

     Mr. Bycoff has been a director since March 2007. From May 2005 to July 2007, Mr. Bycoff was a venture partner of Pequot Ventures, the venture capital arm of Pequot Capital Management, Inc., and from July 1996 to November 2004, Mr. Bycoff was Chairman and CEO of Netegrity, Inc. Mr. Bycoff is currently a private investor.

     Mr. Gupta has been a director since May 2008. From August 2000 to October 2004, Mr. Gupta was Executive Vice President, Peoplesoft Inc, and from November 2005 to May 2007, Mr. Gupta was President and Chief Executive Officer of CAST Iron Systems, Inc. Mr. Gupta is currently a private investor. Mr. Gupta also is a director of Source Forge, Inc. and S1 Corp.

     Mr. Heinen has been a director since March 1999. From 1999 to 2008, Mr. Heinen was a Partner of Flagship Ventures, a venture capital company. Mr. Heinen formerly was Senior Vice President, Developer Division, Microsoft Corporation. Mr. Heinen also is a director of Monotype Imaging Holdings Inc.

     Mr. Kane has been a director since November 2006. Mr. Kane is currently President and Chief Operating Officer of One Laptop Per Child. From May 2006 to October 2006, Mr. Kane was Chief Financial Officer of RSA Security Inc., and from July 2002 to May 2006, was Chief Financial Officer of Aspen Technology, Inc. Mr. Kane also is a director of Netezza Corporation and Borland Software Corporation.

     Mr. Krall has been a director since February 2008. Mr. Krall is currently President, Chief Executive Officer and a member of the Board of Directors of QSecure, Inc. From 2000 to 2007, Mr. Krall was President, Chief Executive Officer and a member of the Board of Directors of Avid Technology, Inc.

     Mr. Mark was elected Chairman of the Board of Directors in December 2006, and has been a director since July 1987. Mr. Mark is a private investor.

Executive Officers

The following table sets forth certain information regarding our executive officers.

Name		Age				Position
Joseph W. Alsop			63			Co-Founder and Chief Executive Officer and Director
Gary G. Conway			55			Senior Vice President and Chief Marketing Officer
James D. Freedman			60			Senior Vice President and General Counsel
John P. Goodson			44			Vice President and General Manager, Data Infrastructure
David G. Ireland			62			Executive Vice President
Richard D. Reidy			49			Chief Operating Officer
Norman R. Robertson			60			Senior Vice President, Finance and Administration and Chief Financial Officer
Jeffrey P. Stamen			63			Senior Vice President, Corporate Development and Strategy

Mr. Alsop, our co-founder, has been a director and Chief Executive Officer since our inception in 1981.

Mr. Conway joined us in November 2008 as Senior Vice President and Chief Marketing Officer. Prior to joining us, Mr. Conway was Senior Vice President, Marketing at SprintNextel, Inc., with whom he was employed from 2004 until August 2006. Prior to that time, he was Group Vice President, Marketing at PeopleSoft, Inc.

Mr. Freedman has been Senior Vice President and General Counsel since August 2004. Prior to that time, he was Vice President and General Counsel. Mr. Freedman joined us in 1992.

Mr. Goodson has been Vice President and General Manager for Data Infrastructure since December 2008. Prior to that time, he was Vice President and General Manager for DataDirect Technologies, a position he assumed in December 2007. Prior to December 2007, Mr. Goodson was Vice President, Product Operations, for DataDirect Technologies. Mr. Goodson joined DataDirect in 1992.

Mr. Ireland has been Executive Vice President since December 2007. In that capacity, he is responsible for our OpenEdge business unit and our global field organization. Prior to December 2007, Mr. Ireland was President, Progress OpenEdge Division. Mr. Ireland joined us in 1997.

Mr. Reidy has been Chief Operating Officer since September 2008. Prior to that time, he was Executive Vice President, a position he assumed in December 2007. Prior to December 2007, Mr. Reidy was President, DataDirect Technologies. Mr. Reidy joined us in 1985.

Mr. Robertson has been Senior Vice President, Finance and Administration and Chief Financial Officer since 2000. Mr. Robertson joined us in 1996.

Mr. Stamen has been Senior Vice President, Corporate Development and Strategy since joining us in June 2004. Prior to that time, he was Chief Executive Officer of Syncra Systems, Inc., a software developer.

Audit Committee

     The Audit Committee of our Board of Directors currently consists of Messrs. Bycoff, Kane and Mark, with Mr. Kane serving as Chairman. Our Board of Directors has determined that each member of the Audit Committee meets the independence requirements promulgated by The NASDAQ Stock Market LLC, or NASDAQ, and the Securities and Exchange Commission, or SEC, including Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended. In addition, our Board of Directors has determined that each member of the Audit Committee is financially literate and that Mr. Kane qualifies as an “audit committee financial expert” under the rules of the SEC.

     The Audit Committee operates under a written charter adopted by our Board of Directors, a copy of which can be found on our website at www.progress.com under the Corporate Governance page. As described more fully in its charter, the Audit Committee oversees our accounting and financial reporting processes, internal controls and audit functions.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. These reporting persons are required by regulations of the SEC to furnish us with copies of all such filings. Based solely on a review of the copies of such forms that we have received, and on written representations from certain reporting persons, we believe that, with respect to the fiscal year ended November 30, 2008, our directors, officers and 10% shareholders complied with all applicable Section 16(a) filing requirements, except that Mr. Kane inadvertently filed a Form 4 reporting one transaction late, one day after the due date.

Codes of Conduct

     Our Board of Directors has adopted a Finance Code of Professional Ethics that applies to the Chief Executive Officer, Chief Financial Officer, Corporate Controller and other employees of our finance organization and a Code of Conduct that applies to all of our officers, directors and employees. Copies of the Code of Conduct and the Finance Code of Professional Ethics can be found on our website at www.progress.com under the Corporate Governance page.

ITEM 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

     Our philosophy is to reward executives based upon corporate and individual performance, as well as to provide long-term incentives for the achievement of future financial and strategic goals. We emphasize pay-for-performance compensation programs, which we believe advance both the short and long-term interests of our shareholders. We use a combination of total target cash compensation, composed of base salary and an annual cash incentive compensation program, a long-term equity incentive compensation program, and a broad-based benefits program to create a competitive compensation package for our executive management team. We describe below our compensation philosophy, policies and practices with respect to our Chief Executive Officer, Chief Financial Officer and our three other most highly compensated executive officers, who are collectively referred to as our named executive officers.

Administration and Objectives of our Executive Compensation Program

     Our Compensation Committee is responsible for establishing and administering our policies governing the compensation for our executive officers, including salaries, cash incentives and equity incentive compensation. Our Compensation Committee consists of three independent members of our Board of Directors, all with extensive experience in the industry.

     Our Compensation Committee has designed our overall executive compensation program to achieve the following objectives:

	•		attract and retain talented executives in today’s highly competitive market;
	•		motivate and reward executives whose knowledge, skills and performance are critical to our success;
	•		provide a competitive compensation package that aligns the interests of our executive officers and shareholders by tying a significant portion of an executive’s cash compensation to the achievement of performance goals; and
	•		ensure fairness among the executive management team by recognizing the contributions each executive makes to our success.

     We use a mix of short-term compensation (base salaries and cash incentive bonuses) and long-term compensation (equity incentive compensation) to provide a total compensation structure that is designed to achieve these objectives. The Compensation Committee uses its judgment and experience and the recommendations of the Chief Executive Officer (except for his own compensation) to determine the appropriate mix of compensation for each individual.

     In determining whether to adjust the compensation of any one of our named executive officers, the Compensation Committee takes into account market compensation levels for each role, the contributions and performance of each named executive officer, and any changes in the responsibilities and roles of each named executive officer.

     To assist the Compensation Committee in making decisions on total direct compensation for executives and company-wide equity grants, the Compensation Committee utilizes peer and industry group data and analysis provided by its external compensation consultant, Radford Surveys + Consulting, or “Radford”. Radford provided the following studies: “Executive Compensation Review” and “Aggregate Equity Usage”. The reports prepared by Radford utilized the survey data from the Radford High Tech Executive Total Direct Compensation survey to benchmark the various elements of executive pay and utilized the peer group data from the Aggregate Equity Usage report for details of equity practices, in particular stock option burn rates.

     The peer group list is comprised of 14 other companies in the software industry with revenue and market capitalization comparable to us. These companies are BEA Systems, Inc. (BEAS), Borland Software Corporation (BORL), Citrix Systems, Inc. (CTXS), Cognos (COGN), Epicor Software Corporation (EPIC), Informatica Corporation (INFA), Lawson Software (LWSN), MicroStrategy Incorporated (MSTR), Parametric Technology Corporation (PMTC), Red Hat, Inc. (RHT), Salesforce.com, inc. (CRM), Sybase, Inc. (SY), TIBCO Software Inc. (TIBX) and Wind River Systems, Inc. (WIND). This peer group list is reviewed on an annual basis to ensure the companies remain a valid comparison and to account for any corporate structure changes in the peer groups, such as an acquisition by another company. In November 2007, at the time Radford compiled data for the peer group, the companies in the peer group ranged in size on a revenue basis from approximately $0.3 billion to $1.2 billion with a median of $0.7 billion as compared to our revenue of $0.5 billion, and on a market capitalization basis from approximately $0.2 billion to $8.5 billion with a median of $1.7 billion as compared to our market capitalization of $1.1 billion.

     We also use survey data for additional perspective on executive compensation. We participate in the Radford Executive survey to benchmark our executives, including the named executive officers, to the marketplace. The materials from Radford include a comprehensive report providing details on the benchmark positions used for each executive as well as analysis on base salary, short term incentives, total actual cash, total target cash compensation, actual total direct compensation and target total direct compensation. The survey data was comprised of compensation information from companies in the high technology industry with revenue ranging from $0.4 billion to $0.8 billion. There were 63 companies that fit within this criterion.

Executive Compensation Components

     Our executive compensation program is primarily composed of three elements: (1) base salary; (2) incentive compensation in the form of annual cash bonus awards; and (3) equity-based long-term incentive compensation in the form of stock options. Our Compensation Committee has not adopted a formal policy for allocating between these various forms of compensation; however, we generally strive to provide our named executive officers with a balance of short-term and long-term incentives. In addition, we provide our executives with benefits that are generally available to our employees, including medical, dental, group life and disability insurance and our 401(k) plan. We also have entered into an Employee Retention and Motivation Agreement with each of our named executive officers, which provides for payments and benefits upon a change of control of our company and/or certain involuntary terminations of employment thereafter.

     Within the context of the overall objectives of our compensation programs, the Compensation Committee determined the specific amounts of compensation, including base salary, incentive cash compensation and equity compensation, to be paid to each of our executives for our fiscal year ended November 30, 2008 based on a number of factors, including:

	•		our understanding of compensation generally paid by similarly-situated companies to their executives with similar roles and responsibilities;
	•		the roles and responsibilities of our executives; and
	•		the individual experience and skills of, and expected contributions from, our executives.

     Our philosophy in designing our executive compensation plan is to target base salary at or below the 50^th percentile, total cash compensation around the median level of actual cash compensation and equity awards between the 50^th and 75^th percentile as compared to the compensation studies prepared by the outside compensation firms. In fiscal 2008, our named executive officers ranged from 62% to 118% of the 50^th percentile for total target cash compensation and ranged from 56% to 106% of the 75^th percentile for equity awards in comparison to the survey data. These total cash compensation levels are only achieved if we perform against our goals. The Compensation Committee uses between the 50^th and 75^th percentile for equity awards in order to reward executive officers for superior performance and align the interests of the executive officers with the interests of shareholders by having a significant portion of their compensation based on increases in shareholder value.

     We discuss each of the primary elements of our executive compensation program in detail below. While we have identified particular compensation objectives that each element of executive compensation serves, our compensation programs are meant to complement each other and collectively serve all of our executive compensation objectives described above. Accordingly, whether or not specifically mentioned below, we believe that, as a part of our overall executive compensation, each element to a greater or lesser extent serves each of our objectives.

     Base Salary. Our Compensation Committee annually reviews total target cash compensation ranges, including base salary, for each of our executive officers in April. We have historically established base salaries for each of our executives based on a number of factors, including:

	•		competition in the marketplace to hire and retain executives;
	•		the roles and responsibilities of our executives; and
	•		the data received from an outside compensation consulting firm.

     In April 2008, as part of our annual review process, our Compensation Committee adjusted annual base salaries for our named executive officers, other than Messrs. Alsop and Stamen. In doing so, with respect to our named executive officers, other than Mr. Alsop, our Compensation Committee considered the recommendations of Mr. Alsop in determining appropriate base salary levels. The Compensation Committee decided to increase the base salary of each of Messrs. Ireland, Reidy and Robertson by between 3% and 21%. The Compensation Committee also decided to retain the base salary of Mr. Stamen at its current level. The Board of Directors, based on the recommendation of the Compensation Committee, did not change Mr. Alsop’s base salary. These base salary increases were made by the Compensation Committee based upon a review of individual, business unit and/or departmental contribution and performance by each named executive officer, and were made in connection with an overall review of the named executive officer’s total target cash compensation for the fiscal year, including both his annual base salary and target cash bonus amount. These increases were effective April 1, 2008.

     In October 2008, the Compensation Committee approved a $10,000 increase in Mr. Reidy’s base salary. This increase was made in connection with Mr. Reidy’s appointment as our Chief Operating Officer in September 2008. The Compensation Committee approved this increase based, in part, upon data provided by Radford.

     Based on their salaries as of the beginning of the fiscal year and these changes, the named executive officers were paid the salary amounts for the fiscal year ended November 30, 2008 as set forth below in the Summary Compensation Table.

     Annual Cash Incentive Program. It is our philosophy to base a significant portion of an executive officer’s total compensation opportunity on performance incentives. Our named executive officers participate in our Corporate Executive Bonus Plan, which is intended to provide an incentive for superior work and to motivate eligible executive officers toward overall business results, to tie their goals and interests to those of the company and its shareholders, and to enable the company to attract and retain highly qualified executives. This bonus plan is administered by our Compensation Committee.

     Executive officers may receive a bonus payment under the bonus plan based upon the attainment of performance targets which are established by the Compensation Committee. These performance goals are based on our growth strategy as reflected in our annual operating budget. In April 2008, our Compensation Committee formally approved corporate goals under the bonus plan for our named executive officers.

     As in prior years, these corporate goals were based on total revenue and non-GAAP operating income for the current fiscal year. The Compensation Committee also added a third performance goal tied to the growth of revenue within the Enterprise Infrastructure and DataDirect product lines. The Compensation Committee added this performance goal as an incentive for us to achieve further growth in these newer product lines. Our Board of Directors discussed and reviewed operating plans with management during board presentations in September and December. The Compensation Committee reviewed and discussed performance goals and incentive bonus plan designs with management during committee meetings in January, February and April.

     For fiscal year 2008, one-third of a named executive officer’s bonus was contingent upon the attainment of the performance goal related to our total revenue, one-third was contingent upon the attainment of the performance goal related to our non-GAAP operating income and one-third was contingent upon the attainment of the performance goal related to revenue in those product lines listed above. The Compensation Committee communicated the bonus criteria to the named executive officers after those criteria were established. The Compensation Committee may in its discretion adjust bonuses payable under the bonus plan based on the achievement of individual performance goals, although no such adjustments occurred in fiscal 2008.

     The Compensation Committee established a minimum level of total revenue, a minimum level of non-GAAP operating income and a minimum level of selected product line revenue for fiscal year 2008, which minimum level must be achieved for an executive officer to receive any portion of his target bonus amount allocated to that performance goal. Once the minimum threshold has been achieved, the attainment percentage for each performance goal for an executive officer’s bonus is a linear calculation of:

target amount — threshold amount

     After the performance goals were established for the bonus plan, we acquired IONA Technologies PLC in September 2008. We paid approximately $125 million to acquire IONA, net of cash acquired, which represented the largest acquisition in our history. IONA was a provider of SOA infrastructure products and services and the acquisition broadened our Enterprise Infrastructure product lines.

     As in prior years with past acquisitions, the Compensation Committee determined that post-acquisition revenue from the IONA product lines should not be added 100% to our results for purposes of determining the attainment of the fiscal year 2008 performance goals. This revenue was excluded because the IONA acquisition was not contemplated at the time the performance goals were established. However, upon the recommendation of the Compensation Committee, our Board of Directors approved an aggregate $1,000,000 increase in the total amount of funds to be paid as (1) bonuses under our bonus plan, and (2) matching contributions to our 401(k) Plan, to reflect the significant time and effort required to complete the IONA acquisition and integrate the IONA product lines with our existing products.

     As approved by our Board of Directors and Compensation Committee, we implemented this increase by including a portion of post-acquisition IONA revenue within total revenue and product line revenue for those divisions or product lines into which the IONA product lines were integrated. In the case of the bonus plan, approximately 50% of the post-acquisition IONA revenue was included. The revenue figures below for fiscal year 2008 reflect the inclusion of this IONA post-acquisition revenue.

     For our fiscal year ended November 30, 2008, the total revenue target was $524 million and the minimum threshold amount was $444 million. Our total revenue for fiscal year 2008 for bonus purposes, including the IONA revenue as described above, was $509 million, resulting in the payment of approximately 82% of the portion of each named executive officer’s bonus allocated to that performance goal. In addition, the difference between the total revenue for bonus purposes of $509 million and total revenue in our financial statements of $516 million related to adjustments for translation differences between actual and budgeted foreign exchange rates and differences between open software license orders at the beginning and end of the fiscal year.

     For our fiscal year ended November 30, 2008, the non-GAAP operating income target was $124 million and the minimum threshold amount was $84 million. Our non-GAAP operating income for fiscal year 2008 for bonus purposes was $116 million, resulting in the payment of approximately 81% of the portion of each named executive officer’s bonus allocated to that performance goal.

     Non-GAAP operating income differs from operating income determined under generally accepted accounting principles (GAAP) by excluding amortization of acquired intangibles, stock-based compensation, impairment of goodwill, and professional services fees associated with the investigation and shareholder derivative lawsuits related to our historical stock option grant practices. We use non-GAAP operating income to make operational and investment decisions because we believe the costs and expenses that we exclude from GAAP operating income are not tied to our core operating results. For these reasons, we also use non-GAAP operating income as a performance goal.

     For our fiscal year ended November 30, 2008, the revenue target for the Enterprise Infrastructure and DataDirect product lines was $196 million and the minimum threshold amount was $172 million. Our revenue within these divisions for fiscal year 2008 for bonus purposes, including the IONA revenue as described above, was $178 million, resulting in the payment of approximately 27% of the portion of each named executive officer’s bonus allocated to that performance goal.

     In April 2008, as part of the annual review process, the Compensation Committee reviewed and approved changes to target incentive bonuses for each named executive officer, other than Mr. Alsop. In doing so, our Compensation Committee considered the recommendations of Mr. Alsop with respect to each of the other named executive officers. The Compensation Committee decided to increase the target incentive bonus of each of Messrs. Ireland, Reidy, Robertson and Stamen by between 4% and 25%. These new target incentive bonus amounts were $250,000 for Mr. Robertson, $250,000 for Mr. Ireland, $250,000 for Mr. Reidy, and $180,000 for Mr. Stamen. The Board of Directors, based on the recommendation of the Compensation Committee, did not change Mr. Alsop’s target incentive bonus amount of $325,000.

     In October 2008, the Compensation Committee approved a $20,000 increase in Mr. Reidy’s target bonus amount. This increase was made in connection with Mr. Reidy’s appointment as our Chief Operating Officer in September 2008. The Compensation Committee approved this increase based, in part, upon data provided by Radford.

     These target incentive bonus amounts represented over 40% of the named executive’s total target cash compensation. Thus, these targets represented a significant percentage of our named executive officers’ total target cash compensation and varied depending on the position of the named executive officer, with our Chief Executive Officer having the greatest percentage of his compensation tied to the company’s targets since he has the most influence over the success of our company. Based on the achievement of the performance goals described above, the named executive officers were paid the bonus amounts set forth below in the Summary Compensation Table.

     Equity Compensation. We also use equity compensation to attract, retain, motivate and reward our named executive officers. Historically, we have used stock options as our primary equity compensation tool. Stock option grants are intended to correlate executive compensation with our long-term success as measured by our stock price. Stock options are tied to our future success because options granted have an exercise price equal to the closing market value at the date of grant and will only provide value to the extent that the price of our stock increases above the exercise price.

     The Compensation Committee’s decisions regarding the amount and type of equity incentive compensation, the allocation of equity and relative weighting of these awards within total executive compensation have been based on the Compensation Committee’s understanding and individual experiences of market practices of similarly-situated companies. Equity-based incentive awards are intended to be the longer-term components of our overall executive compensation program. While annual incentive cash compensation is designed to encourage shorter-term performance (generally performance over a one-year period), equity-based awards are designed to encourage performance by our executive officers over several years.

     The Compensation Committee utilizes the grant data from the peer group and the survey data provided by Radford Surveys + Consulting to assist it in determining the size of the overall equity pool for our company as well as the individual grants to the named executive officers. In fiscal 2008, our equity compensation program for executive officers consisted primarily of stock options. Our executive officers realize value on these options only if our stock price increases (which benefits all shareholders) and only if the executive officers remain employed with us beyond the date their options vest.

     The Compensation Committee believes that option grants to executive officers provide the following benefits:

	•		Align management interests with shareholder interests by creating a direct link between compensation and shareholder return;
	•		Give management a significant, long-term interest in our success; and
	•		Help retain key executives in a competitive market for talent.

     Stock option awards provide our named executive officers with the right to purchase shares of our common stock at a fixed exercise price, typically for a period of either ten years, if awarded prior to 2005, or seven years, if awarded since 2005, subject to continued employment with our company. Stock options are awarded on the basis of anticipated long-term contribution to us and generally vest in monthly increments over a five-year period versus a software industry norm of four years.

     Consistent with our Stock Option Grant Policy, our current practice is to make annual grants of stock options to our employees, including our named executive officers, in two equal installments during the fiscal year. As a result, on April 24, 2008 and October 15, 2008, the Compensation Committee granted a stock option to each of our named executive officers set forth below in the Grants of Plan-Based Awards Table based on the factors listed above. In October 2008, the Compensation Committee approved an increase in the option award to Mr. Reidy by an additional 30,000 shares. This increase was made in connection with Mr. Reidy’s appointment as our Chief Operating Officer in September 2008. The Compensation Committee approved this increase based, in part, upon data provided by Radford Surveys + Consulting.

     For fiscal year 2008, the Compensation Committee also included a performance share award program as part of the overall equity pool. The named executive officers were eligible to participate, with each of Messrs. Robertson, Ireland and Reidy eligible to receive 4,000 performance shares and Mr. Stamen eligible to receive 3,000 performance shares. The extent of Mr. Alsop’s participation was to be determined by the full Board of Directors at a later date. If issued, the performance share awards would consist of restricted shares of our common stock, subject to two-year vesting. Under the program, performance shares would not be issued unless we exceeded the total revenue target established to achieve 100% payout under the bonus plan. As described above, we did not achieve the total revenue target necessary to achieve 100% payout under the bonus plan and, accordingly, no performance shares were issued in fiscal year 2008.

Severance and Change in Control Benefits

     We have entered into an Employee Retention and Motivation Agreement with each of the named executive officers. Each agreement provides for certain payments and benefits upon a change of control of our company and/or certain involuntary terminations of employment thereafter. Our Board of Directors determined that it is in the best interests of our company and its shareholders to assure that we will have the continued dedication and objectivity of our key employees, despite the possibility, threat or occurrence of a change of control of the company.

     On September 30, 2008, the Employee Retention and Motivation Agreements with Messrs. Alsop, Reidy, Robertson and Ireland, as well as certain other employees, expired in accordance with their terms. In December 2008, our Board of Directors approved the execution of new Employee Retention and Motivation Agreements with those employees whose agreements expired on September 30, 2008, with those new agreements having a term of five years. Our Board of Directors also approved certain technical amendments to these agreements to ensure compliance with Internal Revenue Code Section 409A. These new agreements otherwise have substantially the same terms as the prior agreements with these employees. These amended agreements also were offered to substantially all employees with existing Employee Retention and Motivation Agreements, including the named executive officers, but without extending the terms of their current agreements.

     Under the amended agreement, upon a change of control, each executive officer’s annual cash bonus award will be fixed and guaranteed at his respective target level. Payment of this bonus will immediately occur on a pro-rata basis with respect to the elapsed part of the relevant fiscal year. In addition, upon a change of control, all outstanding unvested options and restricted equity of the executive officer will fully accelerate, unless the acquirer assumes all such options and restricted equity. Upon involuntary termination of the executive officer within 12 months following a change of control, all remaining outstanding options and restricted equity of the executive officer will automatically become vested, the executive officer will be entitled to receive a lump sum payment equal to 15 months of total target compensation, and his benefits will continue for 15 months.

401(k) Plan

     We currently provide a matching contribution under our 401(k) plan. All employees who participated in our 401(k) plan received a discretionary matching contribution for fiscal year 2008 representing 4.9% of such employee’s calendar year compensation, including base salary, commissions and bonus, depending upon the employee’s length of service with the company and the employee’s contribution level. This matching contribution was approved by the Compensation Committee and reflected the increase approved by our Board of Directors to reflect the IONA acquisition, as described above. The named executive officers also received this matching contribution, except that, due to limitations imposed on 401(k) matching to higher-paid individuals under federal tax law, a portion of the contributions that otherwise would have been received by the named executive officers were instead paid directly to them in cash in a manner consistent with other employees subject to the matching limitations.

Other Benefits

     We believe that establishing competitive benefit packages for our employees is an important factor in attracting and retaining highly qualified personnel. The named executive officers are eligible to participate in all of our health and insurance plans, in each case on the same basis as other employees. In addition, our stock purchase plan is available to all employees other than employees, if any, who hold 5% or more of our common stock. Mr. Alsop is such an employee under the terms of the plan.

Tax and Accounting Implications

     Deductibility of Executive Compensation. Section 162(m) of the Internal Revenue Code places a limit of $1 million on the amount of compensation that public companies may deduct in any one year with respect to certain of their named executive officers. Certain performance-based compensation approved by shareholders is not subject to this deduction limit. The Compensation Committee’s strategy in this regard is to be cost and tax effective. Therefore, the Compensation Committee intends to preserve corporate tax deductions, while maintaining the flexibility in the future to approve arrangements that it deems to be in our best interests and the best interests of our shareholders, even if such arrangements do not always qualify for full tax deductibility.

     Accounting for Stock-Based Compensation. As of December 1, 2005, we began accounting for stock-based awards in accordance with the requirements of Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004) Share-Based Payment (SFAS 123R).

Compensation Committee Report

     This report is submitted by the Compensation Committee of our Board of Directors. The Compensation Committee has reviewed the Compensation Discussion and Analysis included in this Form 10-K /A and discussed it with management. Based on that review and discussions, the Compensation Committee has recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Form 10-K/A.

     No portion of this Compensation Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, through any general statement incorporating by reference in its entirety the From 10-K/A in which this report appears, except to the extent that the company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.

Respectfully submitted by the Compensation Committee,

Roger J. Heinen, Jr., Chairman
Ram Gupta
David A. Krall

Compensation Committee Interlocks and Insider Participation

     The members of the Compensation Committee of our Board of Directors during fiscal year 2008 were Messrs. Heinen, Krall (from February 2008) and Gupta (from May 2008). Scott McGregor, a former director of our company, served on the Compensation Committee until the 2008 annual meeting of shareholders held in April 2008. None of these directors is or has ever been an officer or employee of our company or of any of its subsidiaries, or had any relationship with us requiring disclosure in this Form 10-K/A. There are no compensation committee interlocks amongst any of our directors.

Summary of Executive Compensation

     The following table sets forth certain information with respect to compensation for the fiscal years ended November 30, 2008 and November 30, 2007, earned by our Chief Executive Officer, our Chief Financial Officer, and our three other most highly compensated executive officers, referred to collectively as our named executive officers, as determined in accordance with applicable SEC rules.

     As reflected in the Summary Compensation Table below, we pay our named executive officers a mix of cash and equity compensation.

     Cash Compensation. We pay our named executive officers a base salary and a cash bonus under a non-equity incentive plan.

     Equity Compensation. We make annual stock option grants to the named executive officers. Consistent with our Stock Option Grant Policy, these option grants are made in two equal installments during the fiscal year, in April and October. These options have an exercise price equal to the closing price of our stock on the date of grant and vest in monthly increments over five years. The amounts shown in the “Option Awards” column reflect the compensation expense recorded in 2008 and 2007. For 2008, our named executive officers also participated in a performance share award program in which they were eligible to receive shares of restricted stock if certain performance measures were achieved. These performance measures were not achieved and none of the performance shares were issued.

     Other Forms of Compensation. We do not provide our named executive officers with pensions or the ability to defer compensation. Amounts shown in the “All Other Compensation” column reflect the matching cash contribution under our 401(k) Plan and certain other items described in the footnotes below.

SUMMARY COMPENSATION TABLE — FISCAL YEARS 2007 AND 2008

																		Non-Equity				All Other
																		Incentive Plan				Compens
										Stock				Option				Compensation				ation
Name and Principal Position		Year				Salary				Awards				Awards (1)				(2)				(3)				Total
Joseph W. Alsop			2008			$	350,000				0			$	1,471,902			$	204,750			$	40,088			$	2,066,740
Co-Founder and			2007				350,000				0				1,918,113				334,750				44,476				2,647,339
Chief Executive Officer
Norman R. Robertson			2008				305,821				0				520,970				149,077				28,873				1,004,741
Senior Vice President,			2007				266,666				0				999,408				206,473				31,209				1,503,756
Finance and Administration and Chief Financial Officer
David G. Ireland			2008				317,487				0				891,046				155,394				43,200				1,407,127
Executive Vice President			2007				308,333				0				1,158,099				245,490				45,016				1,756,938
Richard D. Reidy			2008				304,565				0				749,286				149,560				29,199				1,232,610
Chief Operating Officer (4)			2007				260,830				0				854,987				200,445				35,734				1,351,966
Jeffrey P. Stamen Senior Vice President, Corporate Development and			2008				238,108				0				436,703				105,730				27,829				808,370
Strategy			2007				213,442			$	115,750				523,961				148,613				24,013				1,025,779

						Cash Payment for portion of								Term life
		Company				match in excess of				Long-term disability				insurance				Trip & Sale
Name		Contributions (401(k))				participation limits				insurance premiums				premiums				Event
Alsop		$	11,316			$	22,365			$	966			$	2,781			$	2,660
Robertson			11,316				13,931				845				2,781				—
Ireland			11,316				19,622				874				2,781				8,607
Reidy			11,316				16,410				841				632				—
Stamen			11,316				9,237				655				2,781				3,840

Amounts listed in this column for 2007 include:

						Cash Payment for portion of								Term life
		Company				match in excess of				Long-term disability				insurance
Name		Contributions (401(k))				participation limits				insurance premiums				premiums				Sale Event
Alsop		$	13,905			$	26,203			$	1,365			$	3,003				—
Robertson			13,905				13,258				1,043				3,003				—
Ireland			13,905				21,381				1,203				3,003			$	5,524
Reidy			13,905				14,605				1,017				683				5,524
Stamen			13,905				6,263				842				3,003				—

Grants of Plan-Based Awards

     For 2008, the named executive officers received stock option grants pursuant to our 2008 Stock Option and Incentive Plan. Consistent with our Stock Option Grant Policy, these option grants were made in two equal installments during the fiscal year, in April and October. These options have an exercise price equal to the closing price of our stock on the date of grant and vest in monthly increments over five years.

     For 2008, our named executive officers also participated in a performance share award program in which they were eligible to receive shares of restricted stock if certain performance measures were achieved. As described below, these performance measures were not achieved and none of the performance shares were issued.

     The following table sets forth certain information with respect to grants of plan-based awards for the fiscal year ended November 30, 2008 to the named executive officers.

GRANTS OF PLAN-BASED AWARDS TABLE — FISCAL YEAR 2008

																		Estimated
																		Potential
																		Payments
																		under				All Other								Grant
																		Equity				Option				Exercise				Date Fair
																		Incentive				Awards:				or Base				Value of
																		Plan				Number of				Price of				Stock and
						Estimated Possible Payouts												Awards/				Securities				Option				Option
		Grant				Under Non-Equity												Target				Underlying				Awards				Awards
Name		Date				Incentive Plan Awards (1)												(2)				Options				(3)				(4)
						Threshold				Target				Maximum
Joseph W. Alsop			4/24/08				0			$	325,000				—				—				87,500	(5)			29.94			$	808,255
			10/15/08																				87,500	(6)			19.51				511,428
Norman R. Robertson			4/24/08				0				250,000				—				4,000				30,000	(5)			29.94				277,116
			10/15/08																				30,000	(6)			19.51				175,347
David G. Ireland			4/24/08				0				250,000				—				4,000				30,000	(5)			29.94				277,116
			10/15/08																				30,000	(6)			19.51				175,347
			10/15/08
Richard D. Reidy			4/24/08				0				270,000				—				4,000				30,000	(5)			29.94				277,116
			10/15/08																				90,000	(6)			19.51				526,041
Jeffery P. Stamen			4/24/08				0				180,000				—				3,000				15,000	(5)			29.94				138,558
			10/15/08																				15,000	(6)			19.51				87,674

     The terms of the stock options granted in calendar year 2008 to our named executive officers were consistent with the vesting schedules and expiration dates of the majority of the options granted to employees during the year. Stock options to acquire a total of 2,223,000 shares of our common stock were granted to our employees in fiscal year 2008.

Outstanding Equity Awards

     The following table sets forth certain information with respect to the outstanding equity awards at November 30, 2008 for each of the named executive officers. There were no outstanding stock awards at November 30, 2008.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

		Option Awards
										Equity
										Incentive
										Plan
										Awards:
										Number of
										Securities
										Underlying
		Number of Securities								Unexercised				Option				Option
		Underlying								Unearned				Exercise				Expiration
Name		Unexercised Options								Options				Price				Date
		Exercisable				Unexercisable
Joseph W. Alsop			800				0							$	12.81				02/10/2009	(1)
			125,000				0							$	21.86				11/10/2013	(2)
			33,000				27,000							$	23.07				05/21/2013	(3)
			22,500				7,500							$	23.07				05/21/2013	(4)
			33,000				27,000							$	25.01				09/19/2013	(5)
			22,500				7,500							$	25.01				09/19/2013	(6)
			62,000				0							$	13.88				05/17/2009	(8)
			10,200				0							$	23.00				02/18/2010	(9)
			89,800				0							$	23.00				02/18/2010	(9)
			150,000				0							$	14.94				10/06/2010	(10)
			100,000				0							$	14.30				04/02/2011	(11)
			25,000				0							$	14.30				04/02/2011	(11)
			75,000				0							$	17.42				10/09/2011	(12)
			50,000				0							$	17.42				10/09/2011	(12)
			229,000				0							$	13.50				08/01/2012	(13)
			21,000				0							$	13.50				08/01/2012	(13)
			125,000				0							$	16.99				02/23/2013	(14)
			71,250				3,750							$	18.75				05/23/2014	(15)
			118,275				6,225							$	21.45				09/26/2014	(16)
			475				25							$	21.45				09/26/2014	(16)
			23,013				42,737							$	31.18				04/25/2014	(17)
			22,500				7,500							$	31.18				04/25/2014	(18)
			5,250				9,750							$	32.25				10/15/2014	(19)
			17,763				32,987							$	32.25				10/15/2014	(19)
			22,500				7,500							$	32.25				10/15/2014	(20)
			13,125				74,375							$	29.94				04/23/2015	(26)
			13,125				74,375							$	19.51				10/15/2015	(27)
Norman R. Robertson			50,000				0							$	21.86				11/10/2013	(2)
			18,000				6,000							$	30.81				11/14/2012	(21)
			12,000				4,000							$	30.81				11/14/2012	(21)
			13,750				11,250							$	23.07				05/21/2013	(3)
			13,750				11,250							$	25.01				09/19/2013	(5)
			25,500				0							$	23.00				02/18/2010	(9)
			14,500				0							$	23.00				02/18/2010	(9)
			10,000				0							$	14.30				04/02/2011	(11)
			50,000				0							$	16.99				02/23/2013	(14)
			33,250				1,750							$	18.75				05/23/2014	(15)

		Option Awards
										Equity
										Incentive
										Plan
										Awards:
										Number of
										Securities
										Underlying
		Number of Securities								Unexercised				Option				Option
		Underlying								Unearned				Exercise				Expiration
Name		Unexercised Options								Options				Price				Date
		Exercisable				Unexercisable
			33,250				1,750							$	21.45				09/26/2014	(16)
			7,000				13,000							$	31.18				04/25/2014	(17)
			7,000				13,000							$	32.25				10/15/2014	(19)
			4,500				25,500							$	29.94				04/23/2015	(26)
			4,500				25,500							$	19.51				10/15/2015	(27)
David G. Ireland			75,000				0							$	21.86				11/10/2013	(2)
			40,500				13,500							$	30.81				11/14/2012	(21)
			16,500				13,500							$	23.07				05/21/2013	(3)
			16,500				13,500							$	25.01				09/19/2013	(5)
			58,000				0							$	19.25				02/18/2010	(9)
			2,000				0							$	23.00				02/18/2010	(9)
			3,750				0							$	17.42				10/09/2011	(12)
			5,792				0							$	16.99				02/23/2013	(14)
			8,333				0							$	18.15				05/23/2014	(15)
			39,167				2,500							$	18.75				05/23/2014	(15)
			8,333				0							$	19.25				09/26/2014	(16)
			39,167				2,500							$	21.45				09/26/2014	(16)
			7,000				13,000							$	31.18				04/25/2014	(17)
			7,000				13,000							$	32.25				10/15/2014	(19)
			4,501				25,499							$	29.94				04/23/2015	(26)
			4,501				25,499							$	19.51				10/15/2015	(27)
Richard D. Reidy			899				87							$	12.81				02/10/2009	(22)
			50,000				0							$	21.86				11/10/2013	(2)
			21,750				7,250							$	30.81				11/14/2012	(21)
			8,250				2,750							$	30.81				11/14/2012	(21)
			11,000				9,000							$	23.07				05/21/2013	(3)
			11,000				9,000							$	25.01				09/19/2013	(5)
			7,413				1,000							$	13.88				05/17/2009	(23)
			17,110				0							$	19.25				02/18/2010	(9)
			590				0							$	23.00				02/18/2010	(9)
			7,057				0							$	19.25				02/18/2010	(9)
			243				0							$	23.00				02/18/2010	(9)
			11,667				0							$	14.30				04/02/2011	(11)
			35,701				0							$	13.08				10/09/2011	(12)
			11,667				0							$	17.42				10/09/2011	(12)
			50,320				0							$	13.24				08/01/2012	(13)
			38,480				0							$	13.50				08/01/2012	(13)
			6,347				0							$	13.24				08/01/2012	(13)
			4,853				0							$	13.50				08/01/2012	(13)
			18,333				0							$	15.07				02/23/2013	(14)
			31,667				0							$	16.99				12/23/2013	(14)
			5,833				0							$	18.15				05/23/2014	(15)
			27,417				1,750							$	18.75				05/23/2014	(15)
			5,834				0							$	19.25				09/26/2014	(16)
			27,416				1,750							$	21.45				09/26/2014	(16)
			3,500				6,500							$	31.18				04/25/2014	(17)
			1,750				3,250							$	31.18				04/25/2014	(17)
			5,250				9,750							$	32.25				10/15/2014	(19)
			4,500				25,500							$	29.94				04/23/2015	(26)
			13,500				76,500							$	19.51				10/15/2015	(27)
Jeffrey P. Stamen			43,519				6,481							$	19.31				07/08/2014	(24)
			18,000				6,000							$	30.81				11/14/2012	(21)
			12,000				4,000							$	30.81				11/14/2012	(21)
			4,125				3,375							$	23.07				05/21/2013	(3)
			4,125				3,375							$	25.01				09/19/2013	(5)
			43,519				6,481							$	21.45				09/26/2014	(25)
			4,375				8,125							$	31.18				04/25/2014	(17)
			4,375				8,125							$	32.25				10/15/2014	(19)
			2,250				12,750							$	29.94				04/23/2015	(26)
			2,250				12,750							$	19.51				10/15/2015	(27)

(2)		This option vests 9/60ths on the date of grant, with the remainder vesting in 51 monthly increments commencing on December 1, 2003.
(3)		This option vests 3/60ths on the date of grant, with the remainder vesting in 57 monthly increments commencing on June 1, 2006.
(4)		This option vests 15/60ths on the date of grant, with the remainder vesting in 45 monthly increments commencing on June 1, 2006.
(5)		This option vests 7/60ths on the date of grant, with the remainder vesting in 53 monthly increments commencing on October 1, 2006.
(6)		This option vests 19/60ths on the date of grant, with the remainder vesting in 41 monthly increments commencing on October 1, 2006.
(7)		Intentionally omitted.
(8)		This option was originally granted on May 17, 1999 and vests 3/60ths on the date of grant, with the remainder vesting in 57 monthly increments commencing on June 1, 1999.
(9)		This option was originally granted on February 18, 2000 and vests in 60 monthly increments commencing on March 1, 2000.
(10)		This option was originally granted on October 6, 2000 and vests 8/60ths on the date of grant, with the remainder vesting in 52 monthly increments commencing on November 1, 2000.
(11)		This option was originally granted on April 3, 2001 and vests 2/60ths on the date of grant, with the remainder vesting in 58 monthly increments commencing on May 1, 2001.
(12)		This option was originally granted on October 10, 2001 and vests 8/60ths on the date of grant, with the remainder vesting in 52 monthly increments commencing on November 1, 2001.
(13)		This option was originally granted on August 2, 2002 and vests 6/60ths on the date of grant, with the remainder vesting in 54 monthly increments commencing on September 1, 2002.
(14)		This option was originally granted on February 24, 2003 and vests in 60 monthly increments commencing on March 1, 2003.
(15)		This option was originally granted on May 24, 2004 and vests 3/60ths on the date of grant, with the remainder vesting in 57 monthly increments commencing on June 1, 2004.
(16)		This option was originally granted on September 27, 2004 and vests 7/60ths on the date of grant, with the remainder vesting in 53 monthly increments commencing on October 1, 2004.
(17)		This option vests 2/60ths on the date of grant, with the remainder vesting in 58 monthly increments commencing on May 1, 2007.
(18)		This option vests 26/60ths on the date of grant, with the remainder vesting in 34 monthly increments commencing on May 1, 2007.
(19)		This option vests 8/60ths on the date of grant, with the remainder vesting in 52 monthly increments commencing on November 1, 2007.
(20)		This option vests 32/60ths on the date of grant, with the remainder vesting in 28 monthly increments commencing on November 1, 2007.
(21)		This option vests 9/60ths on the date of grant, with the remainder vesting in 51 monthly increments commencing on December 1, 2005.
(22)		This option vests as to 600 shares on November 17, 1999, vests in equal monthly increments from December 1, 1999 to January 1, 2009 and vests as to 206 shares on January 1, 2009.

(23)		This option vests as to 1,100 shares on January 17, 1999, vests in equal monthly increments from December 1, 1999 to March 1, 2009 and vests as to 292 shares on April 1, 2009.
(24)		This option vests in 54 monthly increments commencing on January 1, 2005.
(25)		This option was originally granted on September 27, 2004 and vests in 54 monthly increments commencing on January 1, 2005.
(26)		This option vests 2/60ths on the date of grant, with the remainder vesting in 58 monthly increments commencing on May 1, 2008.
(27)		This option vests 8/60ths on the date of grant, with the remainder vesting in 52 monthly increments commencing on November 1, 2008.

Option Exercises and Stock Vested

     The following table sets forth certain information regarding the number of stock options exercised in the fiscal year ended November 30, 2008 under our equity incentive plans and the corresponding amounts realized by the named executive officers. There were no stock awards that vested during the fiscal year ended November 30, 2008.

OPTION EXERCISES AND STOCK VESTED TABLE — FISCAL YEAR 2008

		Option Awards
		Number of Shares				Value
		Acquired on				Realized on
Name		Exercise				Exercise
Joseph W. Alsop			359,400			$	4,907,171
Norman R. Robertson			—				—
David G. Ireland			11,708				194,190
Richard D. Reidy			15,400				314,157
Jeffrey P. Stamen			—				—

Potential Payments upon Termination or Change of Control

     We do not have employment or severance agreements with our named executive officers. However, we have entered into an Employee Retention and Motivation Agreement with each of the named executive officers. Each agreement provides for certain payments and benefits upon a change of control (as defined in the agreement) of our company and/or upon an involuntary termination (as defined in the agreement) of the executive officer’s employment by the company within twelve months of a change of control. Under these agreements, upon a change of control, each executive officer’s annual cash bonus award will be fixed and guaranteed at his respective target level. Payment of this bonus will immediately occur on a pro-rata basis with respect to the elapsed part of the relevant fiscal year. In addition, upon a change of control, all outstanding unvested options and restricted equity of the executive officer will fully accelerate, unless the acquirer assumes all such options and restricted equity. Upon involuntary termination of the executive officer within 12 months following a change of control, all remaining outstanding options and restricted equity of the executive officer will automatically become vested, the executive officer will be entitled to receive a lump sum payment equal to 15 months of his total target compensation, and his benefits will continue for 15 months.

     For purposes of these agreements, a “change of control” is defined as the occurrence of any one of the following events: (1) any person becoming the beneficial owner (as defined in the Exchange Act) of 50% or more of the total voting power of our outstanding stock; (2) certain changes in a majority of our Board of Directors; (3) certain mergers or consolidations of our company with another entity; (4) the liquidation of our company; or (5) the sale of all or substantially all of our assets.

     An “involuntary termination” is defined as: (1) the assignment to the executive of any duties or the significant reduction of his duties, either of which is materially inconsistent with his position and responsibilities in effect immediately prior to such assignment, or the removal of the executive from such position and responsibilities, which is not effected for

disability or for “cause” (as defined in the agreement); (2) a material reduction in the base salary and/or bonus of the executive as in effect immediately prior to such reduction; (3) a material reduction in the kind or level of employee benefits to which the executive is entitled immediately prior to such reduction with the result that the executive’s overall benefit package is significantly reduced; (4) the relocation of the executive to a facility or a location more than 50 miles from the executive’s then present location; (5) any purported termination of the executive by us which is not effected for death or disability or for cause, or any purported termination for cause for which the grounds relied upon are not valid; or (6) our failure to obtain, on or before a change of control, the assumption of the terms of the agreement by any successor.

     “Cause” is defined as: (1) any act of personal dishonesty taken by the executive in connection with his responsibilities as an employee and intended to result in substantial personal enrichment of the executive; (2) the conviction of a felony; (3) a willful act by the executive which constitutes gross misconduct and which is injurious to our company; and (4) continued violations by the executive of his obligations as an employee of our company which are demonstrably willful and deliberate on his part after written demand for performance by us.

     In the event that any amounts provided for under these agreements or otherwise payable to the executive officer would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and be subject to the related excise tax, the executive would be entitled to receive either full payment of the benefits under the agreement or such lesser amount which would result in no portion of the benefits being subject to the excise tax, whichever results in the greatest amount of after-tax benefits to the executive officer. The agreements do not require the company to provide any tax gross-up payments.

     On September 30, 2008, the Employee Retention and Motivation Agreements with Messrs. Alsop, Reidy, Robertson and Ireland, as well as certain other employees, expired in accordance with their terms. In December 2008, our Board of Directors approved the execution of new Employee Retention and Motivation Agreements with those employees whose agreements expired on September 30, 2008, with those new agreements having a term of five years. Our Board of Directors also approved certain technical amendments to these agreements to ensure compliance with Internal Revenue Code Section 409A. These new agreements otherwise have substantially the same terms as the prior agreements with these employees. These amended agreements also were offered to substantially all employees with existing Employee Retention and Motivation Agreements, including the named executive officers, but without extending the terms of their current agreements.

     The following tables indicate the estimated payments and benefits that each of the named executive officers would have received under their respective Employee Retention and Motivation Agreements with the company, assuming that the change of control of our company and/or termination of his employment occurred in the circumstances described above at November 30, 2008. These amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to the named executive officer, which would only be known at the time that he becomes entitled to such payment.

Joseph W. Alsop

						Involuntary
						Termination
		Change of				Within 12 Months
		Control				Following Change
Payments and Benefits		Only				of Control
Cash Severance		$	0			$	437,498
Pro Rata Bonus			325,000				406,250
Stock Options (1)			0				141,131
Benefits (2)			0				5,677
Total		$	325,000			$	990,556

Norman R. Robertson

						Involuntary
						Termination
		Change of				Within 12 Months
		Control				Following Change
Payments and Benefits		Only				of Control
Cash Severance		$	0			$	400,000
Pro Rata Bonus			250,000				312,495
Stock Options (1)			0				49,563
Benefits (2)			0				5,069
Total		$	250,000			$	767,127

David G. Ireland

						Involuntary
						Termination
		Change of				Within 12 Months
		Control				Following Change
Payments and Benefits		Only				of Control
Cash Severance		$	0			$	400,000
Pro Rata Bonus			250,000				312,495
Stock Options (1)			0				51,458
Benefits (2)			0				5,193
Total		$	250,000			$	769,146

Richard D. Reidy

						Involuntary
						Termination
		Change of				Within 12 Months
		Control				Following Change
Payments and Benefits		Only				of Control
Cash Severance		$	0			$	412,500
Pro Rata Bonus			270,000				337,500
Stock Options (1)			0				147,970
Benefits (2)			0				3,065
Total		$	270,000			$	901,035

Jeffrey P. Stamen

						Involuntary
						Termination
		Change of				Within 12 Months
		Control				Following Change
Payments and Benefits		Only				of Control
Cash Severance		$	0			$	296,876
Pro Rata Bonus			171,000				213,750
Stock Options (1)			0				35,335
Benefits (2)			0				4,937
Total		$	171,000			$	550,898

Director Compensation

     The following table sets forth a summary of the compensation earned by or paid to our non-employee directors in fiscal year 2008.

DIRECTOR COMPENSATION TABLE — FISCAL YEAR 2008

						Stock				Option
		Fees Earned or				Awards				Awards
Name		Paid in Cash				(1)(2)				(3)(4)				Total
Barry N. Bycoff (5)		$	87,500			$	122,063			$	194,596			$	404,159
Ram Gupta (6)			73,800				60,229				87,592				220,821
Roger J. Heinen, Jr. (7)			74,400				104,563				119,653				298,216
Charles F. Kane (8)			87,500				122,500				193,788				403,788
David A. Krall (9)			71,900				83,855				137,957				293,712
Michael L. Mark (10)			80,000				112,000				128,152				320,152
Scott A. McGregor (11)			29,948				89,844				—				119,792

		Total deferred stock units				Total deferred stock units
Name		granted in fiscal 2008				as of November 30, 2008
Mr. Bycoff			5,170				10,947
Mr. Gupta			3,087				3,087
Mr. Heinen			4,421				11,517
Mr. Kane			5,184				12,989
Mr. Krall			3,698				3,698
Mr. Mark			4,740				4,740
Mr. McGregor			3,000				—

(3)		Amounts listed reflect the dollar amount recognized for financial statement reporting purposes for fiscal year 2008 in accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004) Share-Based Payment (FAS 123R) with respect to stock options. Amounts include awards granted in and prior to fiscal year 2008. The methodology and assumptions used to calculate the cost of each director’s option grants for fiscal year 2008 are described in Note 8 appearing on page 47 of our Annual Report on Form 10-K for the fiscal year ended November 30, 2008.
(4)		Amounts listed relate to the grant of stock options to the named directors as follows:

	•		Mr. Bycoff was granted a fully vested option to purchase 7,612 shares of our common stock with an exercise price of $29.94 on April 24, 2008, and a fully vested option to purchase 11,864 shares of our common stock with an exercise price of $19.51 on October 15, 2008. The aggregate grant date fair value of these options was $139,657.
	•		Mr. Gupta was granted an option to purchase 25,000 shares of our common stock with an exercise price of $19.51 on October 15, 2008, in connection with joining our Board of Directors. This option was vested and exercisable on the grant date with respect to 6/60th of the option, with the balance of the option to be exercisable in 54 monthly installments commencing on November 1, 2008. Mr. Gupta was also granted a fully vested option to purchase 11,667 shares of our common stock with an exercise price of $19.51 on October 15, 2008. The aggregate grant date fair value of these options was $214,315.

	•		Mr. Heinen was granted a fully vested option to purchase 6,572 shares of our common stock with an exercise price of $29.94 on April 24, 2008, and a fully vested option to purchase 10,085 shares of our common stock with an exercise price of $19.51 on October 15, 2008. The aggregate grant date fair value of these options was $119,653.
	•		Mr. Kane was granted a fully vested option to purchase 7,667 shares of our common stock with an exercise price of $29.94 on April 24, 2008, and a fully vested option to purchase 11,864 shares of our common stock with an exercise price of $19.51 on October 15, 2008. The aggregate grant date fair value of these options was $140,166.
	•		Mr. Krall was granted an option to purchase 25,000 shares of our common stock with an exercise price of $29.94 on April 24, 2008, in connection with joining our Board of Directors. This option was vested and exercisable on the grant date with respect to 3/60th of the option, with the balance of the option to be exercisable in 57 monthly installments commencing on May 1, 2008. Mr. Krall was also granted a fully vested option to purchase 4,199 shares of our common stock with an exercise price of $29.94 on April 24, 2008, and a fully vested option to purchase 9,746 shares of our common stock with an exercise price of $19.51 on October 15, 2008. The aggregate grant date fair value of these options was $326,681.
	•		Mr. Mark was granted a fully vested option to purchase 7,010 shares of our common stock with an exercise price of $29.94 on April 24, 2008, and a fully vested option to purchase 10,847 shares of our common stock with an exercise price of $19.51 on October 15, 2008. The aggregate grant date fair value of these options was $128,152.
	•		Mr. McGregor was not granted any additional options prior to his departure from our Board of Directors.

Each director had the following unexercised stock options outstanding at November 30, 2008:

		Unexercised stock options
		outstanding at
Name		November 30, 2008
Mr. Bycoff			44,476
Mr. Gupta			36,667
Mr. Heinen			52,157
Mr. Kane			44,531
Mr. Krall			38,945
Mr. Mark			134,788
Mr. McGregor			—

(5)		In addition to the annual board retainer, Mr. Bycoff received compensation in connection with his service as Chairman of the Nominating and Corporate Governance Committee and as a member of the Audit and Special Litigation Committees.
(6)		Mr. Gupta was elected to our Board of Directors on May 22, 2008. In addition to the annual board retainer, Mr. Gupta received compensation in connection with his service as a member of the Compensation and Nominating and Corporate Governance Committees.
(7)		In addition to the annual board retainer, Mr. Heinen received compensation in connection with his service as Chairman of the Compensation Committee and as a member of the Nominating and Corporate Governance Committee.
(8)		In addition to the annual board retainer, Mr. Kane received compensation in connection with his service as Chairman of the Audit Committee and as Chairman of the Special Litigation Committee.
(9)		Mr. Krall was elected to our Board of Directors on February 5, 2008. In addition to the annual board retainer, Mr. Krall received compensation in connection with his service as a member of the Compensation Committee.
(10)		In addition to the annual board retainer, Mr. Mark received compensation in connection with his service as Chairman of the Board and as a member of the Audit Committee.

(11)

Mr. McGregor did not stand for re-election at our 2008 annual meeting of shareholders. Prior to his departure from our Board of Directors, Mr. McGregor received compensation in connection with his service as a member of the Compensation Committee.

Discussion of Director Compensation Table

     For fiscal year 2008, the non-employee directors of our company were paid an annual retainer of $275,000. In addition, the Chairman of the Board received $25,000 for serving in that capacity. With respect to service on the committees of our Board of Directors, the following fees were paid: Audit Committee — $25,000 for the Chairman and $20,000 for the other members; Compensation Committee — $15,000 for the Chairman and $12,500 for the other members; Nominating and Corporate Governance Committee — $10,000 for the Chairman and $7,500 for the other members; Special Litigation Committee-$50,000 for the Chairman and $45,000 for the other members; and other special committees (while in use) — $30,000 for the Chairman and $25,000 for the other members. Mr. Alsop receives no compensation for serving as a director, except that he, like all directors, is eligible to be reimbursed for expenses incurred in attending board or committee meetings.

     These fees were paid 25% in cash and 75% in equity (with 35% in the form of fully vested deferred stock units and 40% in the form of fully vested stock options). The number of option shares was determined by dividing the compensation amount by the grant date Black Scholes value. The number of deferred stock units was determined by dividing the compensation amount by the grant date closing price of our common stock as reported by NASDAQ. The deferred stock units will be settled for an equivalent number of shares of our common stock (1) following the date upon which the director ceases to provide services to our company in that capacity or (2) upon a change of control of our company, except in the event that the company is involved in a transaction in which shares of our common stock will be exchanged for cash or other consideration, in which case the director will receive cash or other consideration equal in value to the aggregate number of deferred stock units credited to the director as of the change of control.

     The fiscal year 2008 compensation was paid to our non-employee directors in two installments, coincident with the April and October dates upon which we made our broad-based employee equity grants. Amounts paid were pro-rated for Mr. Krall, who was elected a director on February 5, 2008, and Mr. Gupta, who was elected a director on May 22, 2008. Each of Messrs. Krall and Gupta also received an option to acquire 25,000 shares of our common stock in connection with his appointment to our Board of Directors.

     In April 2007, we adopted stock retention guidelines for our non-employee directors. These guidelines provide for all non-employee directors to hold at least 10,000 shares of our common stock and/or deferred stock units. Directors have three years to attain this ownership threshold.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND RELATED STOCKHOLDER MATTERS

     The following table sets forth certain information regarding beneficial ownership of our common stock as of February 27, 2009:

	•		by each person who is known by us to beneficially own more than 5% of the outstanding shares of our common stock;
	•		by each director of our company;
	•		by each of the named executive officers; and
	•		by all directors and executive officers of our company as a group.

		Beneficially Owned Shares
Name and Address of Beneficial Owner (1)		Number				Percent
T. Rowe Price Associates, Inc. (2)			3,446,485				8.7	%
100 East Pratt Street Baltimore, MD 21202
Barclays Global Investors, N.A. (3)			2,863,218				7.2	%
45 Fremont Street San Francisco, CA 94015
FMR LLC, Edward C. Johnson 3d (4)			2,450,000				6.2	%
82 Devonshire Street Boston, MA 02109
Joseph W. Alsop (5)			1,965,741				4.8	%
Richard D. Reidy (6)			464,907				1.2	%
David G. Ireland (7)			362,181				*
Norman R. Robertson (8)			321,182				*
Michael L. Mark (9)			215,528				*
Jeffrey P. Stamen (10)			167,563				*
Roger J. Heinen, Jr. (11)			63,674				*
Charles F. Kane (12)			44,604				*
Barry N. Bycoff (13)			40,840				*
David A. Krall (14)			23,893				*
Ram Gupta (15)			19,754				*
All executive officers and directors as a group (14 persons) (16)			3,871,014				9.0	%

Information related to securities authorized for issuance under equity compensation plans as of November 30, 2008 is as follows:

(In thousands, except per share data)

Number of

Weighted-average

Number of

Securities to be

Exercise

Securities

Issued Upon

Price of

Remaining

Exercise of

Outstanding

Available

Outstanding

Options,

For

Options, Warrants

Warrants

Future

Plan Category

and Rights

and Rights

Issuance

Equity compensation plans approved by shareholders (1)

6,846

(2)

$

23.09

2,561

(3)

Equity compensation plans not approved by shareholders (4)

2,923

23.01

815

Total

9,769

$

23.07

3,376