Share-Based Compensation

9 Months Ended

Mar. 31, 2012

Share-Based Compensation [Abstract]

Share-Based Compensation

4.             Share-Based Compensation

As of March 31, 2012, we had share-based employee compensation plans which are described in Note 11 of the consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2011.Option awards are granted with an exercise price equal to the market price of our stock at the date of grant.We recognize stock compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period. As of March 31, 2012, we had approximately 283,775 stock options outstanding and 459,907 restricted shares outstanding. No stock options were granted during the nine months ended March 31, 2012.

During the three and nine months ended March 31, 2012, we issued 0 and 66,500 shares of restricted stock, respectively, to employees and board members that vest over either a three or four year service period. Vesting is based solely on a service condition, and restrictions generally release ratably over the service period. A summary of the activity of our service condition restricted shares during the nine months ended March 31, 2012, is presented below:

		Weighted Average
		Grant Date
Restricted Stock Awards	Shares	Fair Value
Non-vested at July 1, 2011	330,644	$  5.05
Granted	66,500	5.29
Vested	(101,254)	4.67
Forfeited	(54,837)	5.40
Non-vested at March 31, 2012	241,053	$  5.20

During the three and nine months ended March 31, 2012, we released restrictions on 0 and 101,017 performance based restricted shares, respectively, for certain shares granted to executive management and the board of directors that were eligible for release due to our achievement of performance criteria related to our fiscal 2011 financial results. We cancelled 58,413 and 132,184 performance based restricted shares during the three and nine months ended March 31, 2012 for restricted shares granted to executive management that were either forfeited or expired during the period primarily because neither the performance criteria for our fiscal 2009, 2010 and 2011 financial results, nor the market condition (achievement of certain share price) were met. A summary of the activity of our performance based restricted shares during the nine months ended March 31, 2012, is presented below:

		Weighted Average
		Grant Date
Performance Stock Awards	Shares	Fair Value
Non-vested at July 1, 2011	452,055	$  2.09
Granted	-	-
Vested	(101,017)	1.96
Forfeited	(132,184)	1.93
Non-vested at March 31, 2012	218,854	$  2.25

We recorded share-based compensation related to issuance of stock options and restricted stock to employees, board members, and non-employees, as follows (in thousands):

			Three Months Ended		Nine Months Ended
			March 31,		March 31,
			2012	2011	2012	2011
Share-based compensation expense
	included in the Statement of Operations:
		Cost of sales	$   12	$   14	$   46	$   35
		Sales and marketing	24	89	99	206
		Research and development	14	46	88	127
		General and administrative	77	229	350	521
	Total		127	378	583	889
	Tax benefit		-	-	-	-
	Share-based compensation expense, net of taxes		$ 127	$ 378	$ 583	$ 889