SHARE-BASED COMPENSATION

3 Months Ended

Sep. 30, 2011

SHARE-BASED COMPENSATION.

SHARE-BASED COMPENSATION

5. SHARE-BASED COMPENSATION

Employee Stock Purchase Plan

The 2008 Employee Stock Purchase Plan (the “2008 ESPP”) provides that eligible employees are able to contribute up to 10% of their eligible earnings towards the quarterly purchase of the Company’s common stock. The employee’s purchase price is equal to 85% of the fair market value. During the three months ended September 30, 2011 and 2010, employees purchased 23,442 shares and 19,572 shares of common stock for approximately $0.6 million and $0.5 million, respectively, under the 2008 ESPP.

Share-Based Award Plans

Stock option activity as of and for the three months ended September 30, 2011 is summarized below:

			Weighted Average
	Shares		Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
	(in 000s)		(per share)		(years)	(in 000s)
Balance outstanding as of June 30, 2011	3,682		$	24.45		$	60,558
Granted	14		33.82
Exercised	(73	)	18.84
Forfeited or expired	(20	)	34.06
Balance outstanding as of September 30, 2011	3,603		$	24.54	3.62	$	19,074
Exercisable as of September 30, 2011	2,751		$	21.31	3.10	$	18,242

Restricted stock and RSU activity as of and for the three months ended September 30, 2011 is summarized below:

	Restricted Stock		Weighted Average Grant Date Fair Value		RSUs		Weighted Average Grant Date Fair Value
	(in 000s)		(per share)		(in 000s)		(per share)
Balance outstanding as of June 30, 2011	337		$	38.42	600		$	18.92
Granted	73		40.84		—		—
Vested	(15	)	33.98		(15	)	42.01
Forfeited or expired	—		—		—		—
Balance outstanding as of September 30, 2011	395		$	39.04	585		$	18.32
Vested as of September 30, 2011					534		$	16.04

Share-Based Compensation

The following table presents share-based compensation expense and related effect of the income tax benefit included in the Company’s unaudited condensed consolidated statements of operations:

	Three Months Ended September 30,
	2011		2010
	(in 000s)
Selling, general and administrative	$	2,422	$	2,407
Research and development costs	927		836
Cost of gaming equipment and systems and gaming operations	43		41
Share-based compensation expense before tax	3,392		3,284
Income tax benefit	1,187		1,149
Net share-based compensation expense	$	2,205	$	2,135

As of September 30, 2011, there was $10.0 million of total unrecognized compensation expense related to the unvested portion of stock options which will be recognized over the subsequent 1.80 years. In addition, as of September 30, 2011, there was $12.9 million of total unrecognized compensation expense related to the unvested portion of restricted stock and RSUs which will be recognized over the subsequent 1.79 years.