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Accounting for stock-based compensation
3 Months Ended
Mar. 31, 2013
Accounting for stock-based compensation

3. Accounting for stock-based compensation

Total stock-based compensation expense recognized in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2013 and 2012 was as follows (in thousands):

 

 

     Three months ended
March 31,
 
     2013      2012  

Stock-based compensation

   $ 5,189       $ 2,878   
  

 

 

    

 

 

 

On March 7, 2013, the Board approved a management proposal designed to encourage employee retention, as recommended for approval by the Compensation Committee. The Company granted 5,846,000 performance-based restricted stock units to employees, including executive officers of the Company other than our Chief Executive Officer, with vesting terms subject to the achievement of specified regulatory and business development milestones related to AFREZZA. The performance-based restricted stock units had a grant date fair value of $2.81 per unit.

As of March 31, 2013, there was $13.6 million and $22.7 million of unrecognized compensation cost related to options and restricted stock units, respectively, which are expected to be recognized over the remaining weighted average vesting period of 1.6 years. The Company evaluates stock awards with performance conditions as to the probability that the performance conditions will be met and estimates the date at which the performance conditions will be met in order to properly recognize stock-based compensation expense over the requisite service period. As of March 31, 2013, there was $107,000 and $3.7 million of unrecognized expenses related to performance options and restricted stock units, respectively, for milestones not considered probable of achievement.