Stock Compensation

3 Months Ended

Sep. 30, 2012

Stock Compensation

4. Stock Compensation

Stock-based compensation expense is computed using the fair value of stock-based awards measured at the grant date, recognized over the relevant service period, and is adjusted each period for anticipated forfeitures. The grant date fair value of stock option awards is estimated using the Black-Scholes option pricing model, assuming no expected dividends and the following weighted average assumptions:

	Three months  ended September 30,
	2012			2011
Expected volatility (based on historical data)		33.3	%		29.0	%
Expected life in years		4.00			4.75
Risk-free interest rate		0.71	%		1.15	%
Fair value per award	$	2.34		$	1.82

Stock-based compensation expense reflects non-cash compensation expense associated with restricted stock purchase rights and employee stock options. Share-based compensation expense was included in costs and expenses as follows:

	Three months  ended September 30,
	2012		2011
Cost of service and other revenues	$	19	$	14
Sales and marketing		189		133
Research and development		115		74
General and administrative		180		224
Total	$	503	$	445

As of September 30, 2012, $3.6 million of unrecognized compensation costs related to non-vested awards is expected to be recognized over a weighted average period of approximately 1.9 years.

Restricted Stock

The vesting period for restricted stock is generally a three-year period. Stock will remain restricted until the full vesting period has expired. A summary of changes in restricted stock awards during the year ended June 30, 2012 and the three-month period ended September 30, 2012 is as follows:

	Shares			Weighted Average Grant Date Fair Value		Weighted Average Remaining Vesting Period (in years)
Outstanding and unvested at June 30, 2011		1,047,000		$	4.42		1.29
Granted		539,000			5.96		2.71
Vested		(701,000	)		3.84		—
Forfeited		(66,000	)		5.36		—
Outstanding and unvested at June 30, 2012		819,000			5.73		2.56
Granted		17,000			8.29		2.90
Vested		—			—		—
Forfeited		(5,000	)		5.66		—
Outstanding and unvested at September 30, 2012		831,000		$	5.77		1.80

Common Stock

The vesting period for stock options is generally over a four-year period. Options are generally exercisable by the holder only for the vested portion of each grant. A summary of changes in common stock options during the year ended June 30, 2012 and the three-month period ended September 30, 2012 is as follows:

	Shares			Weighted Average Exercise Price
Options outstanding, June 30, 2011		2,303,706		$	4.83
Granted		215,000		$	6.26
Exercised		(365,705	)	$	3.95
Surrendered		(134,525	)	$	5.17
Options outstanding, June 30, 2012		2,018,476		$	5.11
Granted		65,500		$	8.29
Exercised		(163,925	)	$	5.01
Surrendered		(45,500	)	$	6.13
Options outstanding, September 30, 2012		1,874,551		$	5.21

The following is additional information relating to outstanding options:

	Options Outstanding				Options Exercisable
Range of Exercise Price	September 30, 2012		June 30, 2012		September 30, 2012
$ 3.60 to $ 4.00		625,000		669,875		604,938
$ 4.03 to $ 6.00		729,300		831,100		585,675
$ 6.01 to $ 8.29		520,251		517,501		283,313
$ 3.60 to $ 8.29		1,874,551		2,018,476		1,473,926