Share-Based Compensation

3 Months Ended

Sep. 30, 2014

4.	Share-Based Compensation

As of September 30, 2014, we had share-based 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, 2014. We recognize stock compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period. As of September 30, 2014, we had 183,317 stock options outstanding and 208,207 restricted shares outstanding. No stock options were granted, exercised, or cancelled during the three months ended September 30, 2014. A summary of the activity of our time-based, service condition restricted shares during the three months ended September 30, 2014, is presented below:

				Weighted-
				Average
				Grant-Date
Restricted Stock Awards	Shares			Fair-Value
Non-vested at July 1, 2014		183,634			$	6.08
Granted		7,000				7.50
Vested		(46,046	)			6.06
Forfeited		(1,000	)			8.41
Non-vested at September 30, 2014		143,588			$	6.14

During the three months ended September 30, 2014, we released restrictions on 51,293 previously granted performance based restricted shares, based upon achievement of performance goals attributable to our fiscal year 2014 financial results. A summary of the activity of our performance based restricted shares during the three months ended September 30, 2014, is presented below:

				Weighted Average
				Grant Date
Performance Stock Awards	Shares			Fair-Value
Non-vested at July 1, 2014		115,912			$	5.59
Granted		-				-
Vested		(51,293	)			5.30
Forfeited		-				-
Non-vested at September 30, 2014		64,619			$	5.83

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

	Three Month Ended September 30,
	2014		2013
Share-based compensation expense included in the Statement of operations:
Cost of sales	$	14	$	14
Sales and marketing		40		47
Research and development		28		35
General and administrative		144		295
Total		226		391
Tax benefit		85		-
Share-based compensation expense, net of taxes	$	141	$	391

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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