Share-Based Payment Arrangements

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

On June 22, 2018, the Company's stockholders adopted the FalconStor Software, Inc. 2018 Incentive Stock Plan (the "2018 Plan"). The 2018 Plan is administered by the Compensation Committee and provides for the issuance of up to 1,471,997 shares of the Company's common stock upon the grant of shares with such restrictions as determined by the Compensation Committee to the employees and directors of, and consultants providing services to, the Company or its affiliates. Exercise prices of the options will be determined by the Compensation Committee of the Company's Board of Directors, subject to the consent of Hale Capital Partners, LP. The vesting terms shall be performance based and determined by the Compensation Committee, subject to the consent of Hale Capital Partners, LP, based on various factors, including (i) the return of capital to the holders of the Series A Preferred Stock and the Company’s Common Stock in the event of a Change of Control, (ii) the repayment of the Company’s obligations under its senior secured debt, and (iii) the Company’s free cash flow.

The following table summarizes the 2018 Plan, which was the only plan under which the Company was able to grant equity compensation as of September 30, 2020:

Shares Available

Name of Plan

Authorized

for Grant

Outstanding

FalconStor Software, Inc. 2018 Incentive Stock Plan

1,471,997

(1,248)

1,473,245

The following table summarizes the Company’s equity plans that have terminated or expired but that still have equity awards outstanding as of September 30, 2020:


Name of Plan	Shares Available for Grant	Shares Outstanding
FalconStor Software, Inc., 2016 Incentive Stock Plan	—	3,850

FalconStor Software, Inc., 2006 Incentive Stock Plan	—	6,095

The following table summarizes the share-based compensation expense for all awards issued under the Company’s stock equity plans in the following line items in the condensed consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

Cost of revenue - support and service	104		104		310		2,146
Research and development costs	433		371		1,289		5,977
Selling and marketing	186		186		554		3,844
General and administrative	3,099		2,439		9,239		16,615
	$	3,822	$	3,100	$	11,392	$	28,582