Rosetta Stone 2011 Annual Report Download - page 109

Table of Contents
ROSETTA STONE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. STOCK-BASED COMPENSATION (Continued)
The following table summarizes the Company's restricted stock activity for the years ended December 31, 2011 and 2010, respectively:
Nonvested
Outstanding
Weighted
Average
Grant Date
Fair Value
Aggregate
Intrinsic
Value
Nonvested Awards, January 1, 2010 179,802 $ 18.67 $ 3,356,903
Awards granted 211,757 23.33
Awards vested (54,363) 18.34
Awards cancelled (29,672) 19.89
Nonvested Awards, December 31, 2010 307,524 21.69 6,670,196
Awards granted 170,260 14.09
Awards vested (87,436) 21.58
Awards cancelled (67,338) 19.26
Nonvested Awards, December 31, 2011 323,010 18.22 5,885,242
During 2011 and 2010, 170,260 and 211,757 shares of restricted stock were granted, respectively. The aggregate grant date fair value of the awards in
2011 and 2010 was $2.4 million and $4.9 million, respectively, which will be recognized as expense on a straight-line basis over the requisite service period
of the awards, which is also the vesting period. The Company's restricted stock grants are accounted for as equity awards. The grant date fair value is based on
the market price of the Company's common stock at the date of grant. The Company did not grant any restricted stock prior to April 2009.
During year ended December 31, 2011, 67,338 shares of restricted stock were forfeited. As of December 31, 2011, future compensation cost related to
the nonvested portion of the restricted stock awards not yet recognized in the statement of operations was $4.3 million and is expected to be recognized over a
period of 2.55 years.
Restricted stock awards are considered outstanding at the time of grant as the stock holders are entitled to voting rights and to receive any dividends
declared subject to the loss of the right to receive accumulated dividends if the award is forfeited prior to vesting. Unvested restricted stock awards are not
considered outstanding in the computation of basic earnings per share.
Restricted Stock Units—During 2011 and 2010, 22,227 and 12,096 restricted stock units were granted, respectively. The aggregate grant date fair value
of the awards in 2011 and 2010 was $0.3 million and $0.2 million, respectively, which was recognized as expense on the grant date, as the awards were
immediately vested. The Company's restricted stock units are accounted for as equity awards. The grant date fair value is based on the market price of the
Company's common stock at the date of grant. The Company did not grant any restricted stock units prior to April 2009.
Common Stock Grant—In May 2006, the Company adopted the Rosetta Stone Inc. Liquidity Performance Award Plan. The Company amended this plan
by resolution dated December 31, 2008. This plan provides a bonus to its key employees in the event of an acquisition of the Company, an acquisition of
substantially all of the assets of the Company, a liquidation of the Company or any other transaction resulting in liquidating distributions to any holders of its
preferred stock. This plan
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