ACOR » Topics » Share-based Compensation

These excerpts taken from the ACOR 10-K filed Feb 26, 2010.

Share-Based Compensation

        We account for stock options and restricted stock granted to employees and non-employees by recognizing the costs resulting from all share-based payment transactions in the financial statements at their fair values. We estimate the fair value of each option on the date of grant using the Black-Scholes closed-form option-pricing model based on assumptions for the expected term of the stock options, expected volatility of our common stock, prevailing interest rates, and an estimated forfeiture rate.

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Table of Contents

        We have based our current assumptions on the following:

 
 
Assumption
   
 
Method of estimating
  Estimated expected term of options     Based on the 50th percentile of our peer companies
  Expected volatility     Combination of historic volatility of our common stock since October 1, 2006 and the historic volatility of the stock of our peer companies
  Risk-free interest rate     Yields of U.S. Treasury securities corresponding with the expected life of option grants
  Forfeiture rates     Historical forfeiture data

        Of these assumptions, the expected term of the option and expected volatility of our common stock are the most difficult to estimate since they are based on the exercise behavior of the employees and expected performance of our common stock. Increases in the term and the volatility of our common stock will generally cause an increase in compensation expense.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.

        Our financial instruments consist of cash and cash equivalents, short-term investments, grants receivable, convertible notes payable, accounts payable, and put/call liability. The estimated fair values of all of our financial instruments approximate their carrying amounts at December 31, 2009.

        We have cash equivalents and short-term investments at December 31, 2009, which are exposed to the impact of interest rate changes and our interest income fluctuates as our interest rates change. Due to the short-term nature of our investments in money market funds and US Treasury bonds, the carrying value of our cash equivalents and short-term investments approximate their fair value at December 31, 2009. At December 31, 2009, we held $272.1 million in cash and cash equivalents and short-term investments which had an average interest rate of approximately 0.5%.

        We maintain an investment portfolio in accordance with our investment policy. The primary objectives of our investment policy are to preserve principal, maintain proper liquidity to meet operating needs and maximize yields. Although our investments are subject to credit risk, our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure from any single issue, issuer or type of investment. Our investments are also subject to interest rate risk and will decrease in value if market interest rates increase. However, due to the conservative nature of our investments and relatively short duration, interest rate risk is mitigated. We do not own derivative financial instruments. Accordingly, we do not believe that there is any material market risk exposure with respect to derivative or other financial instruments.

Item 8.    Financial Statements and Supplementary Data.

        The consolidated financial statements required pursuant to this item are included in Item 15 of this report and are presented beginning on page F-1.

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

        None.

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Table of Contents


Item 9A.    Controls and Procedures.

Share-based Compensation

        The Company has various share-based employee and non-employee compensation plans, which are described more fully in Note 7.

        The Company accounts for stock options and restricted stock granted to employees and non-employees by recognizing the costs resulting from all share-based payment transactions in the consolidated financial statements at their fair values. The Company estimates the fair value of each option on the date of grant using the Black-Scholes closed-form option-pricing model based on assumptions for the expected term of the stock options, expected volatility of its common stock, prevailing interest rates, and an estimated forfeiture rate.

These excerpts taken from the ACOR 10-Q filed May 11, 2009.

(3)    Share-based Compensation

        The Company accounts for share-based compensation, including options and nonvested shares, according to the provisions of SFAS No. 123R, Share-Based Payment. During the three-month periods ended March 31, 2009 and 2008, the Company recognized share-based compensation expense of $2.7 million and $1.9 million, respectively. Activity in options and restricted stock during the three-month period ended March 31, 2009 and related balances outstanding as of that date are reflected below. The weighted average fair value per share of options granted to employees for the three-month periods ended March 31, 2009 and 2008 were approximately $13.31 and $13.63, respectively.

9


Table of Contents

Share-based Compensation

        We account for stock options and restricted stock granted to employees according to the provisions of SFAS No. 123R, Share Based Payment, which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at their fair values. We estimate the fair value of each option on the date of grant using the Black-Scholes closed-form option-pricing model based on assumptions for the expected term of the stock options, expected volatility of our common stock, prevailing interest rates, and an estimated forfeiture rate.

23


Table of Contents

        We have based our current assumptions on the following:

 
  Assumption    
  Method of estimating
  Estimated expected term of options     Based on the 50th percentile of our peer companies
  Expected volatility     Combination of historic volatility of our common stock since October 1, 2006 and the historic volatility of the stock of our peer companies
  Risk-free interest rate     Yields of U.S. Treasury securities corresponding with the expected life of option grants
  Forfeiture rates     Historical forfeiture data

        Of these assumptions, the expected term of the option and expected volatility of our common stock are the most difficult to estimate since they are based on the exercise behavior of the employees and expected performance of our common stock. Increases in the term and the volatility of our common stock will generally cause an increase in compensation expense.

        We account for stock options granted to non-employees on a fair-value basis in accordance with EITF No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, and FASB Interpretation No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans an Interpretation of APB Opinion No. 15 and 25.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

        Our financial instruments consist of cash equivalents, short-term investments, grants receivable, notes payable, convertible notes payable, accounts payable, and put/call liability. The estimated fair values of all of our financial instruments approximate their carrying amounts at March 31, 2009.

        We have cash equivalents and short-term investments at March 31, 2009, which are exposed to the impact of interest rate changes and our interest income fluctuates as our interest rates change. Due to the short-term nature of our investments in money market funds, US Treasury bonds and commercial paper, the carrying value of our cash equivalents and short-term investments approximate their fair value at March 31, 2009. At March 31, 2009, we held $226.0 million in cash and cash equivalents and short-term investments which had an average interest rate of approximately 0.3%.

        We maintain an investment portfolio in accordance with our investment policy. The primary objectives of our investment policy are to preserve principal, maintain proper liquidity to meet operating needs and maximize yields. Although our investments are subject to credit risk, our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure from any single issue, issuer or type of investment. Our investments are also subject to interest rate risk and will decrease in value if market interest rates increase. However, due to the conservative nature of our investments and relatively short duration, interest rate risk is mitigated. We do not own derivative financial instruments. Accordingly, we do not believe that there is any material market risk exposure with respect to derivative or other financial instruments.

Item 4.    Controls and Procedures

These excerpts taken from the ACOR 10-K filed Mar 2, 2009.

Share-Based Compensation

        We account for stock options and restricted stock granted to employees according to the provisions of SFAS No. 123R, Share Based Payment, which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at their fair values. We adopted SFAS No. 123R using the modified prospective application method under which the provisions of SFAS No. 123R apply to new awards and to awards modified, repurchased, or cancelled after the adoption date of January 1, 2006.

        We estimate the fair value of each option on the date of grant using the Black-Scholes closed-form option-pricing model based on assumptions for the expected term of the stock options, expected volatility of our common stock, prevailing interest rates, and an estimated forfeiture rate.

83


Table of Contents

        We have based our current assumptions on the following:

 
 
Assumption
   
 
Method of estimating
  Estimated expected term of options     Based on the 50th percentile of our peer companies
  Expected volatility     Combination of historic volatility of our common stock since October 1, 2006 and the historic volatility of the stock of our peer companies
  Risk-free interest rate     Yields of U.S. Treasury securities corresponding with the expected life of option grants
  Forfeiture rates     Historical forfeiture data

        Of these assumptions, the expected term of the option and expected volatility of our common stock are the most difficult to estimate since they are based on the exercise behavior of the employees and expected performance of our common stock. Increases in the term and the volatility of our common stock will generally cause an increase in compensation expense.

        We account for stock options granted to non-employees on a fair-value basis in accordance with EITF No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, and FASB Interpretation No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans an Interpretation of APB Opinion No. 15 and 25.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.

        Our financial instruments consist of cash and cash equivalents, short-term investments, grants receivable, notes payable, convertible notes payable, accounts payable, and put/call liability. The estimated fair values of all of our financial instruments approximate their carrying amounts at December 31, 2008.

        We have cash equivalents and short-term investments at December 31, 2008, which are exposed to the impact of interest rate changes and our interest income fluctuates as our interest rates change. Due to the short-term nature of our investments in money market funds, US Treasury bonds and corporate debt securities, the carrying value of our cash equivalents and short-term investments approximate their fair value at December 31, 2008.

        We maintain an investment portfolio in accordance with our investment policy. The primary objectives of our investment policy are to preserve principal, maintain proper liquidity to meet operating needs and maximize yields. Although our investments are subject to credit risk, our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure from any single issue, issuer or type of investment. Our investments are also subject to interest rate risk and will decrease in value if market interest rates increase. However, due to the conservative nature of our investments and relatively short duration, interest rate risk is mitigated. We do not own derivative financial instruments. Accordingly, we do not believe that there is any material market risk exposure with respect to derivative or other financial instruments.

Item 8.    Financial Statements and Supplementary Data.

        The consolidated financial statements required pursuant to this item are included in Item 15 of this report and are presented beginning on page F-1.

84


Table of Contents


Item 9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

        None.

Item 9A.    Controls and Procedures.

Share-Based Compensation



        We account for stock options and restricted stock granted to employees according to the provisions of SFAS No. 123R, Share Based PaymentSIZE=2>, which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at
their fair values. We adopted SFAS No. 123R using the modified prospective application method under which the provisions of SFAS No. 123R apply to new awards and to awards modified,
repurchased, or cancelled after the adoption date of January 1, 2006.



        We
estimate the fair value of each option on the date of grant using the Black-Scholes closed-form option-pricing model based on assumptions for the expected term of the
stock options, expected volatility of our common stock, prevailing interest rates, and an estimated forfeiture rate.



83









HREF="#bg73301a_main_toc">Table of Contents



        We
have based our current assumptions on the following:




























































 
 
Assumption



  
 
Method of estimating



 Estimated expected term of options  Based on the 50th percentile of our peer companies
 Expected volatility  Combination of historic volatility of our common stock since October 1, 2006 and the historic volatility of the stock of our peer companies
 Risk-free interest rate  Yields of U.S. Treasury securities corresponding with the expected life of option grants
 Forfeiture rates  Historical forfeiture data




        Of
these assumptions, the expected term of the option and expected volatility of our common stock are the most difficult to estimate since they are based on the exercise behavior of the
employees and expected performance of our common stock. Increases in the term and the volatility of our common stock will generally cause an increase in compensation expense.



        We
account for stock options granted to non-employees on a fair-value basis in accordance with EITF No. 96-18,
Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services
, and FASB
Interpretation No. 28,
Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans an Interpretation of APB Opinion No. 15 and
25
.



NAME="ec73301_item_7a._quantitative_and_qual__ite02650">
Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.



        Our financial instruments consist of cash and cash equivalents, short-term investments, grants receivable, notes payable,
convertible notes payable, accounts payable, and put/call liability. The estimated fair values of all of our financial instruments approximate their carrying amounts at December 31, 2008.




        We
have cash equivalents and short-term investments at December 31, 2008, which are exposed to the impact of interest rate changes and our interest income fluctuates
as our interest rates change. Due to the short-term nature of our investments in money market funds, US Treasury bonds and corporate debt securities, the carrying value of our cash
equivalents and short-term investments approximate their fair value at December 31, 2008.



        We
maintain an investment portfolio in accordance with our investment policy. The primary objectives of our investment policy are to preserve principal, maintain proper liquidity to meet
operating needs and maximize yields. Although our investments are subject to credit risk, our investment policy specifies credit quality standards for our investments and limits the amount of credit
exposure from any single issue, issuer or type of investment. Our investments are also subject to interest rate risk and will decrease in value if market interest rates increase. However, due to the
conservative nature of our investments and relatively short duration, interest rate risk is mitigated. We do not own derivative financial instruments. Accordingly, we do not believe that there is any
material market risk exposure with respect to derivative or other financial instruments.



NAME="ec73301_item_8._financial_statements_and_supplementary_data.">
Item 8.    Financial Statements and Supplementary Data.




        The consolidated financial statements required pursuant to this item are included in Item 15 of this report and are presented
beginning on page F-1.



84









HREF="#bg73301a_main_toc">Table of Contents






NAME="ec73301_item_9._changes_in_and_disagre__ite03557">
Item 9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.



        None.



NAME="ec73301_item_9a._controls_and_procedures.">
Item 9A.    Controls and Procedures.



Share-based Compensation

        The Company has various share-based employee and non-employee compensation plans, which are described more fully in Note 8.

        On January 1, 2006, the Company adopted the provisions of SFAS 123 (revised 2004), Share-Based Payment (SFAS No. 123R), which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at their fair values. The Company adopted SFAS No. 123R using the modified prospective application method under which the provisions of SFAS No. 123R apply to new awards and to awards modified, repurchased, or cancelled after the adoption date. Additionally, compensation cost for the portion of the awards for which the requisite service has not been rendered that are outstanding as of the adoption date is recognized in the consolidated statement of operations over the remaining service period after the adoption date based on the award's original estimate of fair value. Results for prior periods were not restated.

        The Company accounts for stock options granted to non-employees on a fair-value basis in accordance with EITF No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, and FASB Interpretation No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans an Interpretation of APB Opinion No. 15 and 25.

Share-based Compensation



        The Company has various share-based employee and non-employee compensation plans, which are described more fully in
Note 8.



        On
January 1, 2006, the Company adopted the provisions of SFAS 123 (revised 2004),
Share-Based Payment (SFAS
No. 123R), which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at their fair values. The Company adopted SFAS
No. 123R using the modified prospective application method under which the provisions of SFAS No. 123R apply to new awards and to awards modified, repurchased, or cancelled after the
adoption date. Additionally, compensation cost for the portion of the awards for which the requisite service has not been rendered that are outstanding as of the adoption date is recognized in the
consolidated statement of operations over the remaining service period after the adoption date based on the award's original estimate of fair value. Results for prior periods were not restated.



        The
Company accounts for stock options granted to non-employees on a fair-value basis in accordance with EITF No. 96-18,
Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services
, and FASB
Interpretation No. 28,
Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans an Interpretation of APB Opinion No. 15 and
25
.



This excerpt taken from the ACOR 10-Q filed Nov 10, 2008.

Share-based Compensation

        We account for stock options and restricted stock granted to employees according to the provisions of SFAS No. 123R, Share Based Payment, which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at their fair values. We adopted SFAS No. 123R using the modified prospective application method under which the provisions of SFAS No. 123R apply to new awards and to awards modified, repurchased, or cancelled after the adoption date of January 1, 2006.

        We estimate the fair value of each option on the date of grant using the Black-Scholes closed-form option-pricing model based on assumptions for the expected term of the stock options, expected volatility of our common stock, prevailing interest rates, and an estimated forfeiture rate.

        We have based our current assumptions on the following:

 
  Assumption    
  Method of estimating
  Estimated expected term of options     Based on the 50th percentile of our peer companies
  Expected volatility     Combination of historic volatility of our common stock since October 1, 2006 and the historic volatility of the stock of our peer companies
  Risk-free interest rate     Yields of U.S. Treasury securities corresponding with the expected life of option grants
  Forfeiture rates     Historical forfeiture data

        Of these assumptions, the expected term of the option and expected volatility of our common stock are the most difficult to estimate since they are based on the exercise behavior of the employees and expected performance of our common stock. Increases in the term and the volatility of our common stock will generally cause an increase in compensation expense.

        We account for stock options granted to non-employees on a fair-value basis in accordance with EITF No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, and FASB Interpretation No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans an Interpretation of APB Opinion No. 15 and 25.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

        Our financial instruments consist of cash equivalents, short-term investments, convertible notes payable and put/call liability. The estimated fair values of all of our financial instruments approximate their carrying amounts at September 30, 2008.

25


        We have cash equivalents and short-term investments at September 30, 2008, which are exposed to the impact of interest rate changes and our interest income fluctuates as our interest rates change. Due to the short-term nature of our investments in money market funds and corporate debt securities, the carrying value of our cash equivalents and short-term investments approximate their fair value at September 30, 2008. At September 30, 2008, we held $263.2 million in cash and cash equivalents and short-term investments which had an average interest rate of approximately 1.4%.

        We maintain an investment portfolio in accordance with our investment policy. The primary objectives of our investment policy are to preserve principal, maintain proper liquidity to meet operating needs and maximize yields. Although our investments are subject to credit risk, our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure from any single issue, issuer or type of investment. Our investments are also subject to interest rate risk and will decrease in value if market interest rates increase. However, due to the conservative nature of our investments and relatively short duration, interest rate risk is mitigated. We do not own derivative financial instruments. Accordingly, we do not believe that there is any material market risk exposure with respect to derivative or other financial instruments.

Item 4.    Controls and Procedures

This excerpt taken from the ACOR 10-Q filed Aug 5, 2008.

Share-based Compensation

        We account for stock options and restricted stock granted to employees according to the provisions of SFAS No. 123R, Share Based Payment, which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at their fair values. We adopted SFAS No. 123R using the modified prospective application method under which the provisions of SFAS No. 123R apply to new awards and to awards modified, repurchased, or cancelled after the adoption date of January 1, 2006.

        We estimate the fair value of each option on the date of grant using the Black-Scholes closed-form option-pricing model based on assumptions for the expected term of the stock options, expected volatility of our common stock, prevailing interest rates, and an estimated forfeiture rate.

25


        We have based our current assumptions on the following:

 
  Assumption    
  Method of estimating
  Estimated expected term of options     Based on the 50th percentile of our peer companies
  Expected volatility     Combination of historic volatility of our common stock since October 1, 2006 and the historic volatility of the stock of our peer companies
  Risk-free interest rate     Yields of U.S. Treasury securities corresponding with the expected life of option grants
  Forfeiture rates     Historical forfeiture data

        Of these assumptions, the expected term of the option and expected volatility of our common stock are the most difficult to estimate since they are based on the exercise behavior of the employees and expected performance of our common stock. Increases in the term and the volatility of our common stock will generally cause an increase in compensation expense.

        We account for stock options granted to non-employees on a fair-value basis in accordance with EITF No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, and FASB Interpretation No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans an Interpretation of APB Opinion No. 15 and 25.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

        Our financial instruments consist of cash equivalents, short-term investments, convertible notes payable and put/call liability. The estimated fair values of all of our financial instruments approximate their carrying amounts at June 30, 2008.

        We have cash equivalents and short-term investments at June 30, 2008, which are exposed to the impact of interest rate changes and our interest income fluctuates as our interest rates change. Due to the short-term nature of our investments in money market funds and corporate debt securities, the carrying value of our cash equivalents and short-term investments approximate their fair value at June 30, 2008. At June 30, 2008, we held $149.0 million in cash and cash equivalents and short-term investments which had an average interest rate of approximately 1.6%.

        We maintain an investment portfolio in accordance with our investment policy. The primary objectives of our investment policy are to preserve principal, maintain proper liquidity to meet operating needs and maximize yields. Although our investments are subject to credit risk, our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure from any single issue, issuer or type of investment. Our investments are also subject to interest rate risk and will decrease in value if market interest rates increase. However, due to the conservative nature of our investments and relatively short duration, interest rate risk is mitigated. We do not own derivative financial instruments. Accordingly, we do not believe that there is any material market risk exposure with respect to derivative or other financial instruments.

Item 4.    Controls and Procedures

This excerpt taken from the ACOR 10-Q filed May 9, 2008.

(3)    Share-based Compensation

        The Company accounts for share-based compensation, including options and nonvested shares, according to the provisions of SFAS No. 123R, Share Based Payment. During the three-month periods ended March 31, 2008 and 2007, the Company recognized share-based compensation expense of $1.9 million and $2.2 million respectively Activity in options and restricted stock during the three-month period ended March 31, 2008 and related balances outstanding as of that date are reflected below. The weighted average fair value per share of options granted to employees for the three-month periods ended March 31, 2008 and 2007 amounted to approximately $13.63 and $13.00, respectively.

        A summary of share-based compensation activity for the three-month period ended March 31, 2008 is presented below:

These excerpts taken from the ACOR 10-K filed Mar 14, 2008.

Share-based Compensation

        The Company has various share-based employee and non-employee compensation plans, which are described more fully in Note 8.

        On January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards 123 (revised 2004), Share-Based Payment (SFAS No. 123R), which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at their fair values. The Company adopted SFAS No. 123R using the modified prospective application method under which the provisions of SFAS No. 123R apply to new awards and to awards modified, repurchased, or cancelled after the adoption date. Additionally, compensation cost for the portion of the awards for which the requisite service has not been rendered that are outstanding as of the adoption date is recognized in the Consolidated Statement of Operations over the remaining service period after the adoption date based on the award's original estimate of fair value. Results for prior periods have not been restated.

        In connection with the adoption of SFAS No. 123R, the Company changed from recognizing the effect of forfeitures as they occur to estimating the number of outstanding instruments for which the requisite service is not expected to be rendered. Prior to the adoption of SFAS No. 123R, the Company recognized forfeitures associated with its share-based awards as they occurred rather than estimating forfeitures. Upon adoption of SFAS No. 123R, the Company recorded a cumulative effect of change in accounting principle of $454,225, calculated as the difference between compensation cost recognized through December 31, 2005 using actual forfeitures and the cost that would have been recognized to date using estimated forfeitures.

F-15


        The Company accounts for stock options granted to non-employees on a fair-value basis in accordance with EITF No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, and FASB Interpretation No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans an Interpretation of APB Opinion No. 15 and 25.

Share-based Compensation



        The Company has various share-based employee and non-employee compensation plans, which are described more fully in Note 8.



        On
January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards 123 (revised 2004),
Share-Based
Payment
(SFAS No. 123R), which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at their fair
values. The Company adopted SFAS No. 123R using the modified prospective application method under which the provisions of SFAS No. 123R apply to new awards and to awards modified,
repurchased, or cancelled after the adoption date. Additionally, compensation cost for the portion of the awards for which the requisite service has not been rendered that are outstanding as of the
adoption date is recognized in the Consolidated Statement of Operations over the remaining service period after the adoption date based on the award's original estimate of fair value. Results for
prior periods have not been restated.



        In
connection with the adoption of SFAS No. 123R, the Company changed from recognizing the effect of forfeitures as they occur to estimating the number of outstanding instruments
for which the requisite service is not expected to be rendered. Prior to the adoption of SFAS No. 123R, the Company recognized forfeitures associated with its share-based awards as they
occurred rather than estimating forfeitures. Upon adoption of SFAS No. 123R, the Company recorded a cumulative effect of change in accounting principle of $454,225, calculated as the difference
between compensation cost recognized through December 31, 2005 using actual forfeitures and the cost that would have been recognized to date using estimated forfeitures.



F-15









        The
Company accounts for stock options granted to non-employees on a fair-value basis in accordance with EITF No. 96-18, Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, and FASB Interpretation No. 28, Accounting for Stock Appreciation Rights
and Other Variable Stock Option or Award Plans an Interpretation of APB Opinion No. 15 and 25.



This excerpt taken from the ACOR 10-Q filed Nov 8, 2007.

(3)    Share-based Compensation

        The Company accounts for share-based compensation, including options and nonvested shares, according to the provisions of SFAS No. 123R, "Share Based Payment". During the three-month periods ended September 30, 2007 and 2006, the Company recognized share-based compensation

9



expense of $1.9 million and $962,000 respectively. During the nine-month periods ended September 30, 2007 and 2006, the Company recognized share-based compensation expense of $5.9 million and $2.9 million respectively. Activity in options and restricted stock during the nine-month period ended September 30, 2007 and related balances outstanding as of that date are reflected below. The weighted average fair value per share of options granted to employees for the three-month periods ended September 30, 2007 and 2006 amounted to approximately $12.47 and $4.78, respectively. The weighted average fair value per share of options granted to employees for the nine-month periods ended September 30, 2007 and 2006 amounted to approximately $13.00 and $3.86, respectively.

        A summary of share-based compensation activity for the nine-month period ended September 30, 2007 is presented below:

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