Citrix 2013 Annual Report Download - page 87

CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-23
7. EMPLOYEE STOCK-BASED COMPENSATION AND BENEFIT PLANS
Plans
The Company’s stock-based compensation program is a long-term retention program that is intended to attract and
reward talented employees and align stockholder and employee interests. As of December 31, 2013, the Company had two
stock-based compensation plans under which it was granting stock options and non-vested stock units. The Company is
currently granting stock-based awards from its Amended and Restated 2005 Equity Incentive Plan (as amended, the “2005
Plan”) and its Amended and Restated 2005 Employee Stock Purchase Plan (as amended, the “2005 ESPP”). In February 2014,
the Company's Board of Directors approved the 2014 Equity Incentive Plan, which is subject to stockholder approval at the
Company Annual Meeting of Stockholders on May 22, 2014. There will be no grants under this plan until the plan is approved
by the Company's stockholders. In connection with certain of the Company’s acquisitions, the Company has assumed certain
plans from acquired companies. The Company’s Board of Directors has provided that no new awards will be granted under the
Company’s acquired stock plans. Awards previously granted under the Company's superseded and expired stock plans that are
still outstanding typically expire ten years from the date of grant and will continue to be subject to all the terms and conditions
of such plans, as applicable. The Company’s superseded and expired stock plan includes the Amended and Restated 1995 Stock
Plan.
Under the terms of the 2005 Plan, the Company is authorized to grant incentive stock options (“ISOs”), non-qualified
stock options (“NSOs”), non-vested stock, non-vested stock units, stock appreciation rights (“SARs”), and performance units
and to make stock-based awards to full and part-time employees of the Company and its subsidiaries or affiliates, where legally
eligible to participate, as well as to consultants and non-employee directors of the Company. Currently, the 2005 Plan provides
for the issuance of a maximum of 48,600,000 shares of common stock. Under the 2005 Plan, ISOs must be granted at exercise
prices no less than fair market value on the date of grant, except for ISOs granted to employees who own more than 10% of the
Company’s combined voting power, for which the exercise prices must be no less than 110% of the fair market value at the date
of grant. NSOs and SARs must be granted at no less than fair market value on the date of grant, or in the case of SARs in
tandem with options, at the exercise price of the related option. Non-vested stock awards may be granted for such consideration
in cash, other property or services, or a combination thereof, as determined by the Company’s Compensation Committee of its
Board of Directors. Stock-based awards are generally exercisable or issuable upon vesting. The Company’s policy is to
recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over
the requisite service period for the entire award. As of December 31, 2013, there were 26,960,367 shares of common stock
reserved for issuance pursuant to the Company’s stock-based compensation plans and the Company had authorization under its
2005 Plan to grant 16,605,208 additional stock-based awards.
Under the 2005 ESPP, all full-time and certain part-time employees of the Company are eligible to purchase common
stock of the Company twice per year at the end of a six-month payment period (a “Payment Period”). During each Payment
Period, eligible employees who so elect may authorize payroll deductions in an amount no less than 1% nor greater than 10%
of his or her base pay for each payroll period in the Payment Period. At the end of each Payment Period, the accumulated
deductions are used to purchase shares of common stock from the Company up to a maximum of 12,000 shares for any one
employee during a Payment Period. Shares are purchased at a price equal to 85% of the fair market value of the Company’s
common stock on the last business day of a Payment Period. Employees who, after exercising their rights to purchase shares of
common stock in the 2005 ESPP, would own shares representing 5% or more of the voting power of the Company’s common
stock, are ineligible to participate under the 2005 ESPP. The 2005 ESPP provides for the issuance of a maximum of 10,000,000
shares of common stock. As of December 31, 2013, 2,991,834 shares had been issued under the 2005 ESPP. The Company
recorded stock-based compensation costs related to the 2005 ESPP of $4.9 million, $4.0 million and $3.5 million for the years
ended December 31, 2013, 2012 and 2011, respectively.
Expense Information under the Authoritative Guidance
As required by the authoritative guidance, the Company estimates forfeitures of stock awards and recognizes
compensation costs only for those awards expected to vest. Forfeiture rates are determined based on historical experience. The
Company also considers whether there have been any significant changes in facts and circumstances that would affect its
forfeiture rate quarterly. Estimated forfeitures are adjusted to actual forfeiture experience as needed. The Company recorded
stock-based compensation costs, related deferred tax assets and tax benefits of $183.9 million, $57.1 million and $55.7 million,
respectively, in 2013, $149.9 million, $46.7 million and $65.8 million, respectively, in 2012 and $92.9 million, $28.4 million
and $67.9 million, respectively, in 2011.
The detail of the total stock-based compensation recognized by income statement classification is as follows (in
thousands):