Share-Based Compensation

9 Months Ended

Mar. 31, 2013

Share-Based Compensation [Abstract]

Share-Based Compensation

4. Share-Based Compensation

     As of March 31, 2013, 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, 2012. Stock 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, 2013, we had 245,047 stock options outstanding and 471,951 restricted shares outstanding. No stock options were granted during the nine months ended March 31, 2013.

     During the third quarter of our fiscal year 2013 our Board of Directors approved a $0.50 reduction in the exercise price of outstanding stock options for existing employees and board members as an equitable adjustment for the $0.50 special dividend declared and paid during the second quarter of our fiscal year 2013. We accounted for this equitable adjustment to exercise price as a modification on the date of approval. This modification resulted in less than $1,000 of additional expense as most option exercise prices remain above our stock's trading price after the equitable adjustment. We use the Black-Scholes valuation model to estimate the fair value of each option award under modification accounting.

     During the nine months ended March 31, 2013, we issued 243,000 shares of restricted stock. During the three months ended March 31, 2013, we did not issue any shares of restricted stock. These restricted stock issuances consisted of 109,667 restricted shares granted to participants that vest ratably over a four year service period as long as the participant remains employed with Concurrent. The issuance of restricted shares also consisted of 133,333 performance-based restricted shares granted to executive management during the nine months ended March 31, 2013 that vest based upon meeting specified company performance criteria over the next three years. A summary of the activity of our time-based, service condition restricted shares during the nine months ended March 31, 2013, is presented below:

				Weighted Average
				Grant Date
Restricted Stock Awards	Shares			Fair Value
Non-vested at July 1, 2012	246,066		$	4.94
Awarded	109,667			4.63
Released	(91,102	)		4.61
Forfeited	(23,692	)		5.15
Non-vested at March 31, 2013	240,939		$	4.90

     During the three and nine months ended March 31, 2013, we did not release restrictions on any previously granted performance based restricted shares, as we did not meet the specified performance criteria related to our fiscal 2012 results that would allow for release of such shares. We cancelled 33,794 and 121,175 performance-based restricted shares during the three and nine months ended March 31, 2013, respectively, that had been granted to executive management and were either forfeited due to termination or expired during the period because neither the performance criteria for our fiscal 2010, 2011 and 2012 financial results, nor the market condition (achievement of a certain share price) were met. A summary of the activity of our performance based restricted shares during the nine months ended March 31, 2013, is presented below:

				Weighted Average
				Grant Date
Performance Stock Awards	Shares			Fair Value
Non-vested at July 1, 2012	218,854		$	2.25
Awarded	133,333			4.40
Released	-			-
Forfeited	(121,175	)		1.93
Non-vested at March 31, 2013	231,012		$	3.66

     We recorded share-based compensation related to the 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,
		2013		2012		2013		2012
Share-based compensation expense
included in the Statements of Operations:
Cost of sales	$	14	$	12	$	41	$	46
Sales and marketing		48		24		116		99
Research and development		37		14		90		88
General and administrative		125		77		346		350
Total		224		127		593		583
Tax benefit		-		-		-		-
Share-based compensation expense, net of taxes	$	224	$	127	$	593	$	583