Share-Based Compensation

6 Months Ended

Dec. 31, 2013

4.	Share-Based Compensation

As of December 31, 2013, 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, 2013. We recognize stock compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period. As of December 31, 2013, we had 188,286 stock options outstanding and 318,371 restricted shares outstanding. No stock options were granted during the six months ended December 31, 2013.

During the three and six months ended December 31, 2013, we awarded 32,000 and 122,000 shares of restricted stock, respectively. These restricted stock awards included 32,000 and 82,000 restricted shares during the three and six months ended December 31, 2013, respectively, granted to employee and board member participants that vest ratably over a four year service period, as long as the participant remains employed with or on the Board of Concurrent. The award of restricted shares also included 0 and 40,000 performance-based restricted shares granted to senior management during the three and six months ended December 31, 2013, respectively, that vest based upon meeting specified company financial performance criteria over the next three years. A summary of the activity of our time-based, service condition restricted shares for the six months ended December 31, 2013, is presented below:

				Weighted Average
				Grant Date
Restricted Stock Awards	Shares			Fair Value
Non-vested at July 1, 2013		225,064		$	4.91
Granted		82,000			7.67
Vested		(98,955	)		5.05
Forfeited		(5,650	)		4.77
Non-vested at December 31, 2013		202,459		$	5.96

During the three and six months ended December 31, 2013, we released restrictions on 0 and 92,166 previously granted performance based restricted shares, respectively, based upon achievement of performance goals attributable to our fiscal year 2013. We cancelled 0 and 62,934 performance-based restricted shares during the three and six months ended December 31, 2013, respectively, that had been previously granted to senior management and were forfeited during the period because neither the full performance criteria for our fiscal year 2011, 2012, and 2013 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 for the six months ended December 31, 2013, is presented below:

				Weighted Average
				Grant Date
Performance Stock Awards	Shares			Fair Value
Non-vested at July 1, 2013		231,012		$	3.66
Granted		40,000			7.86
Vested		(92,166	)		3.52
Forfeited		(62,934	)		2.90
Non-vested at December 31, 2013		115,912		$	5.59

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

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2013		2012		2013		2012
Share-based compensation expense included in the Statement of Operations:
Cost of sales	$	14	$	14	$	28	$	27
Sales and marketing		43		41		90		68
Research and development		41		27		76		54
General and administrative		140		119		435		220
Total		238		201		629		369
Tax benefit		-		-		-		-
Share-based compensation expense, net of taxes	$	238	$	201	$	629	$	369

- 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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