Rosetta Stone 2011 Annual Report Download - page 111

Table of Contents
ROSETTA STONE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. STOCK-BASED COMPENSATION (Continued)
The following table presents the stock-based compensation expense for stock options and restricted stock included in the related financial statement line
items (in thousands):
Years Ended December 31,
2011 2010 2009
Included in cost of revenue:
Cost of product revenue $ 55 $ 39 $ 34
Cost of subscription and service revenue — — —
Total included in cost of revenue 55 39 34
Included in operating expenses:
Sales and marketing 1,932 774 999
Research & development 2,448 1,181 5,959
General and administrative 7,918 2,393 15,158
Total included in operating expenses 12,298 4,348 22,116
Total $ 12,353 $ 4,387 $ 22,150
11. COMMON STOCK
At December 31, 2011, the Company's Board of Directors had the authority to issue 200,000,000 shares of stock, of which 190,000,000 were designated
as Common Stock, with a par value of $0.00005 per share, and 10,000,000 were designated as Preferred Stock, with a par value of $0.001 per share. At
December 31, 2011 and 2010, the Company had shares of Common Stock issued and outstanding of 21,258,249 and 20,975,379, respectively.
12. CONVERTIBLE PREFERRED STOCK
On April 21, 2009, in conjunction with the Company's qualified underwritten initial public offering of common stock, its total outstanding preferred
shares in the amount of 557,989 automatically converted at a ratio of 26:1 into 14,507,714 shares of Common Stock and the then-existing classes of preferred
stock ceased to exist. At December 31, 2011 and 2010, the Company had no preferred shares outstanding and the authorized preferred stock was undesignated
blank check preferred.
13. EMPLOYEE BENEFIT PLAN
The Company maintains a defined contribution 401(k) Plan (the "Plan"). The Company matches employee contributions to the Plan up to 4% of their
compensation that vest immediately. The Company recorded expenses for the Plan totaling $1.4 million and $1.4 million for the years ended December 31,
2011 and 2010, respectively.
14. COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company leases many kiosks, copiers, parking spaces, buildings, a warehouse and office space under operating lease and site license arrangements,
some of which contain renewal options. The rental payments under some kiosk site licenses are based on a minimum rental plus a percentage of the
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