Rosetta Stone 2014 Annual Report Download - page 87

Table of Contents



The weighted average grant-date fair value per share of stock options granted was $6.73 and $8.88 for the years ended December 31, 2014 and 2013,
respectively.
The aggregate intrinsic value disclosed above represents the total intrinsic value (the difference between the fair market value of the Company's
common stock as of December 31, 2014, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the
option holders had all option holders exercised their options on December 31, 2014. This amount is subject to change based on changes to the fair market
value of the Company's common stock.
Restricted Stock Awards—The following table summarizes the Company's restricted stock activity for the years ended December 31, 2014 and 2013,
respectively:









Nonvested Awards, January 1, 2013
758,103
$ 11.00
$ 8,339,133
Awards granted
352,985
14.83
Awards vested
(304,560)
11.72
Awards canceled
(172,497)
12.88
Nonvested Awards, December 31, 2013
634,031
12.28
7,785,901
Awards granted
236,338
11.69
Awards vested
(253,526)
10.72
Awards canceled
(134,198)
13.23
Nonvested Awards, December 31, 2014
482,645
12.59
6,074,136
During 2014 and 2013, 236,338 and 352,985 shares of restricted stock were granted, respectively. The aggregate grant date fair value of the awards in
2014 and 2013 was $2.8 million and $5.2 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 2014, 134,198 shares of restricted stock were forfeited. As of December 31, 2014, future compensation cost related to the nonvested portion of
the restricted stock awards not yet recognized in the statement of operations was $5.1 million and is expected to be recognized over a period of 2.39 years.
Restricted stock awards are considered outstanding at the time of grant as the stockholders 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 2014 and 2013, 43,842 and 24,779 restricted stock units were granted, respectively. The aggregate grant date fair
value of the awards in 2014 and 2013 was $0.4 million and $0.4 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.
Long Term Incentive Program—On February 21, 2013, the Company’s board of directors approved the 2013 Rosetta Stone Inc. Long Term Incentive
Program (“2013 LTIP”). The 2013 LTIP was administered under the Rosetta Stone Inc. 2009 Omnibus Incentive Plan (the “2009 Plan”) and the shares
awarded under the 2013 LTIP will be taken from the shares reserved under the 2009 Plan. The purpose of the 2013 LTIP was to: motivate senior management
and other executives to achieve key financial and strategic business objectives of the Company; offer eligible executives of the Company a competitive total
compensation package; reward executives in the success of the Company; provide ownership in the Company; and retain key talent. The 2013 LTIP was
effective from January 1, 2013 until December 31, 2014.
Certain executives were designated for eligibility by the board of directors to receive performance stock awards and cash upon the Company’s
achievement of specified performance goals between January 1, 2013 and December 31, 2014. In order for
F-30