Stock Options - Note 9

6 Months Ended

Jun. 30, 2013

Stock Option Plans

(9) Stock Options

The Company recognized $2.1 million and $5.1 million of compensation expense during the three and six months ended June 30, 2013, respectively and $1.6 million and $3.5 million during the three and six months ended June 30, 2012, respectively, related to all stock based compensation. As of June 30, 2013, there was $17.6 million of total unrecognized compensation cost related to all unvested share-based compensation arrangements that is expected to be recognized over a weighted-average period of 2.76 years.

During the year ended December 31, 2010, the Company's Board of Directors awarded a total of 1,130,700 performance condition options to certain of the Company's employees. Vesting of these options is subject to the Company achieving certain performance criteria established at the grant date and the individuals fulfilling a service condition (continued employment). As of June 30, 2013, the performance criteria of 825,340 of these options had been satisfied and will become exercisable based on the following vesting schedule: 25% on each of the first four anniversaries of the date of grant, which was February 20, 2010 (the date of grant). The Company recognized $83,000 and $244,000 of compensation expense during the three and six months ended June 30, 2013, respectively and $32,000 and $316,000 of compensation expense during the three and six months ended June 30, 2012, respectively, related to these options. The next performance criteria is the acceptance of the BLA filing for Natpara by the FDA. This acceptance would trigger approximately $98,000 of compensation expense related to these options.

The Company utilized the Black-Scholes option pricing model to determine the grant date fair value of these awards. As of June 30, 2013, except for the 825,340 options discussed above, the Company does not believe that the achievement of the remaining performance criteria is probable and therefore, has not recognized any compensation expense related to these options during the three and six months ended June 30, 2013 and 2012, respectively. Compensation expense will be recognized only once the performance condition is probable of being achieved and then only the cumulative amount related to the service condition that has been fulfilled.

On May 7, 2013, the Company held its Annual Meeting of Stockholders. At the Annual Meeting, the Company's stockholders approved an amendment to the Company's 2005 Omnibus Incentive Plan to, among other things, increase by 3,500,000 the shares reserved for issuance under the Plan.

A summary of activity related to aggregate stock options under all plans is indicated in the following table (in thousands, except per share amounts):

	As of June 30, 2013
			Weighted	Weighted
	Number		average	average remaining		Aggregate
	of		exercise	contractual		intrinsic
	options		price	term		value
	(in thousands)			(in years)		(in thousands)
Options outstanding at beginning
of year	7,390	$	6.75
Options granted	1,910		8.91
Options exercised	1,298		4.93
Options forfeited/expired	373		13.57
Options outstanding at June 30, 2013	7,629		7.27	7.54	$	61,009
Vested and expected to vest	7,109		7.18	7.42	$	57,540
Options exercisable at June 30, 2013	3,614	$	6.54	5.98	$	32,144