Stock-based expense and assumptions

6 Months Ended

Jun. 30, 2013

Stock-based expense

Stock-based expense

6. Stock-based expense

The Company has two types of stock-based compensation programs, stock options and restricted stock awards.

During the second quarter of 2013, 0.9 million stock options were granted to certain employees of the Company.  The actual number of shares to be issued upon exercise of options is subject to vesting conditions.  Expense is recorded on a straight line basis from the date of the grant over the applicable service period of 36 months.

During the second quarter of 2013, 0.7 million restricted stock awards were granted to certain employees and members of the Board of Directors of the Company.  The final number of vested shares is subject to the achievement of certain performance targets and/or other vesting conditions.  Expense is recorded on a straight line basis from the date of the grant over the applicable service period of 36 months.

Stock-based expense is measured at the grant date based on fair value and recognized as an expense over the requisite service period, net of an estimated forfeiture rate.

The following summarizes stock-based expense recognized by income statement classification:

	Three months ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
Processing and service costs	$	58,162	$	48,220	$	107,805	$	129,001
Selling, general and administrative expenses	231,865		267,785		441,151		411,396
Total stock-based expense	$	290,027	$	316,005	$	548,956	$	540,397

The following summarizes stock-based expense recognized by stock based compensation program:

	Three months ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
Stock options	$	252,640	$	316,005	$	511,569	$	540,397
Restricted stock awards	37,387		—		37,387		—
Total stock-based expense	$	290,027	$	316,005	$	548,956	$	540,397