RESTRICTED STOCK

9 Months Ended

Sep. 30, 2013

Notes to Financial Statements

Note 10. RESTRICTED STOCK

 During the nine months ended September 30, 2013, the Company granted an aggregate of 64,088 restricted shares of Common Stock to certain officers, employees, directors and consultants of the Company.  The grants were issued pursuant to the 2008 Plan.  The grant date fair value of these restricted stock grants was approximately $313,000.  Share-based compensation expense related to restricted stock recognized in the nine months ended September 30, 2013 and September 30, 2012 was approximately $355,000 and $200,000, respectively.

 A summary of the Company’s non-vested restricted stock activity as of and for the nine months ended September 30, 2013, is as follows:

Restricted Stock	Shares			Weighted- Average Grant-Date Fair Value
Non-vested at January 1, 2013		316,044		$	16.60
Granted		64,088			4.88
Vested		(33,042	)		18.38
Forfeited		(24,500	)		9.94
Non-vested at September 30, 2013		157,373		$	14.40

 Among the 322,590 shares of non-vested restricted stock, the various vesting criteria include the following:

· 165,460 shares of restricted stock vest upon the FDA approval of Symphony or the sale of the Company or its assets; and

· 157,130 shares of restricted stock vest over one to four years, at each of the anniversary dates of the grants.

 As of September 30, 2013, there was approximately $863,000 of total unrecognized compensation expense related to non-vested share-based restricted stock arrangements granted pursuant to the Company’s equity compensation plans that vest over time in the foreseeable future. As of September 30, 2013, the Company cannot estimate the timing of completion of performance vesting requirements required by certain of these restricted stock grant arrangements.  Compensation expense related to these restricted share grants will be recognized when the Company concludes that achievement of the performance vesting conditions is probable.