(2) Share-Based Payment Arrangements (Tables)

3 Months Ended

Mar. 31, 2013

Notes to Financial Statements

Details of Stock Option Plan

	Shares	Shares Available	Shares	Last Date for Grant
Name of Plan	Authorized	for Grant	Outstanding	of Shares
FalconStor Software, Inc., 2006 Incentive Stock Plan	12,224,133	2,365,421	7,220,990	May 17, 2016

Schedule of Equity Awards Outstanding

	Shares Available	Shares
Name of Plan	for Grant	Outstanding
FalconStor Software, Inc., 2000 Stock Option Plan	--	2,062,787
1994 Outside Directors Stock Option Plan	--	40,000
2004 Outside Directors Stock Option Plan	--	190,000
FalconStor Software, Inc., 2007 Outside Directors Equity	--	170,000
Compensation Plan
Stand-Alone Stock Option Agreement between	--	1,220,000
the Company and James P. McNiel
FalconStor Software, Inc, 2010 Outside Directors Equity Compensation Plan	--	90,300

Schedule of Stock Option Activity

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Options			Price		Life  (Years)		Value
Options Outstanding at December 31, 2012		11,360,842		$	4.66
Granted		70,000		$	2.31
Exercised		(310,000	)	$	2.25
Forfeited		(224,795	)	$	4.56
Expired		(20,000	)	$	3.96
Options Outstanding at March 31, 2013		10,876,047		$	4.72		6.13	$	1,136,141
Options Exercisable at March 31, 2013		7,567,615		$	5.52		5.17	$	340,020

Schedule Of Share Based Compensation Recognized

	Three months ended March 31,
	2013		2012
Cost of revenues - Product	$	49	$	49
Cost of revenues - Support and Service		50,256		70,969
Research and development costs		134,910		318,958
Selling and marketing		284,038		486,625
General and administrative		421,482		571,701
	$	890,735	$	1,448,302

Stock Based Compensation Expense - Restricted Stock

	Three months ended March 31,
	2013		2012
Directors, officers and employees	$	63,197	$	277,417
Non-employee consultants		—		—
	$	63,197	$	277,417

Schedule of Restricted Stock Units Activity

	Number of
	Restricted Stock
	Awards
Non-Vested at December 31, 2012		171,190
Granted		—
Vested		(48,570	)
Forfeited		(4,590	)
Non-Vested at March 31, 2013		118,030

Schedule Of Share Based Compensation - Nonemployee

	Three months ended March 31,
	2013		2012
Non-qualified stock options	$	—	$	55,192
Restricted stock awards		—		—
	$	—	$	55,192