Rosetta Stone 2013 Annual Report Download - page 91

Table of Contents
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Accrued marketing expenses
$19,885
$16,922
Accrued professional and consulting fees
4,570
3,282
Sales return reserve
4,834
5,883
Sales, withholding, and property taxes payable
3,968
3,451
Other
8,935
6,849
$42,192
$ 36,387
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On January 16, 2009, the Company entered into a credit agreement with Wells Fargo Bank, N.A. ("Wells Fargo"), which provided the Company with a
$12.5 million revolving line of credit. This revolving credit facility had a two-year term and the applicable interest rate was 2.5% above one month LIBOR.
On January 17, 2011, the Company allowed its $12.5 million revolving line of credit with Wells Fargo to expire and we had no borrowings outstanding
for any of the periods presented.
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On January 4, 2006, the Company established the Rosetta Stone Inc. 2006 Stock Incentive Plan (the "2006 Plan") under which the Company's Board of
Directors, at its discretion, could grant stock options to employees and certain directors of the Company and affiliated entities. The 2006 Plan initially
authorized the grant of stock options for up to 1,942,200 shares of common stock. On May 28, 2008, the Board of Directors authorized the grant of
additional stock options for up to 195,000 shares of common stock under the plan, resulting in total stock options available for grant under the 2006 Plan of
2,137,200 as of December 31, 2008. The stock options granted under the 2006 Plan generally expire at the earlier of a specified period after termination of
service or the date specified by the Board or its designated committee at the date of grant, but not more than ten years from such grant date. Stock issued as a
result of exercises of stock options will be issued from the Company's authorized available stock.
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On February 27, 2009, the Company's Board of Directors approved a new Stock Incentive and Award Plan (the "2009 Plan") that provides for the
ability of the Company to grant up to 2,437,744 new stock incentive awards or options including Incentive and Nonqualified Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares, Performance based Restricted Stock, Share Awards,
Phantom Stock and Cash Incentive Awards. The stock incentive awards and options granted under the 2009 Plan generally expire at the earlier of a specified
period after termination of service or the date specified by the Board or its designated committee at the date of grant, but not more than ten years from such
grant date. On May 26, 2011 the Board of Directors authorized and the Company's shareholders' approved the allocation of an additional 1,000,000 shares of
common stock to the 2009 Plan. On May 23, 2012, the Board of Directors authorized and the Company's shareholders approved the allocation of 1,122,930
additional shares of common stock to the 2009 Plan. On May 23, 2013, the Board of Directors authorized and the Company's shareholders approved the
allocation of 2,317,000 additional shares of common stock to the 2009 Plan.
Concurrent with the approval of the 2009 Plan, the 2006 Plan was terminated for purposes of future grants. At December 31, 2013 there were 2,580,846
shares available for future grant under the 2009 Plan.
In accordance with ASC 718, the fair value of stock-based awards to employees is calculated as of the date of grant. Compensation expense is then
recognized on a straight-line basis over the requisite service period of the award. The Company uses the Black-Scholes pricing model to value its stock
options, which requires the use of estimates, including future stock price
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