mv3-2410_11k.htm
 
____________________________________________________________________
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________________
 
FORM 11-K
____________________________________________________________________
 
 
(Mark One)
x
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 2009
 
OR
 
o
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ________ to ________
 

____________________________________________________________________
 
 
A.
Full title of the plan and the address of the plan, if different from that of the issuer named below:
 
L-1 IDENTITY SOLUTIONS, INC. AMENDED AND RESTATED 2006 EMPLOYEE STOCK PURCHASE PLAN
 
B.
Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
 
L-1 IDENTITY SOLUTIONS, INC.
177 Broad Street
Stamford, Connecticut 06901
____________________________________________________________________
 

 


 
 
 

 
L-1 IDENTITY SOLUTIONS, INC.
 
 
L-1 IDENTITY SOLUTIONS, INC. AMENDED AND RESTATED 2006 EMPLOYEE STOCK PURCHASE PLAN (the “Plan”)
 
YEAR ENDED DECEMBER 31, 2009
 
Table of Contents
 
Financial Statements
Page
Report of Independent Registered Public Accounting Firm dated March 26, 2010
1
Statements of Net Assets Available for Benefits as of December 31, 2009 and 2008
2
Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2009, 2008 and 2007
3
Notes to Financial Statements
Signatures
4-6
7
   
Exhibits
Exhibit No.
Consent of Independent Registered Public Accounting Firm
23
 
 

 


 
 
 

 
Report of Independent Registered Public Accounting Firm
 
 
To the Sponsor and Participants
L-1 Identity Solutions, Inc.
Amended and Restated 2006 Employee Stock Purchase Plan
 
We have audited the accompanying statements of net assets available for benefits of L-1 Identity Solutions, Inc. Amended and Restated 2006 Employee Stock Purchase Plan as of December 31, 2009 and 2008, and the related statements of changes in net assets available for benefits for the years ended December 31, 2009, 2008 and 2007.  These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of L-1 Identity Solutions, Inc. Amended and Restated 2006 Employee Stock Purchase Plan as of December 31, 2009 and 2008, and the changes in net assets available for benefits for the years ended December 31, 2009, 2008 and 2007, in conformity with U.S. generally accepted accounting principles.
 
 
/s/ McGladrey & Pullen LLP
Stamford, Connecticut
March 26, 2010
 
 
 
 
 
1
 

 
 
 

 
L-1 IDENTITY SOLUTIONS, INC. AMENDED AND RESTATED 2006 EMPLOYEE STOCK PURCHASE PLAN
Statements of Net Assets Available for Benefits
December 31, 2009 and 2008 
 
 
December 31,
 
2009
  
2008
           
Assets
          
Receivable from Plan Sponsor
$
22,739
  
$
39,026
           
Liabilities
          
Distributions due to participants
  
22,739
    
39,026
           
Net assets available for benefits
$
--
  
$
--
           
See Notes to Financial Statements.
 
        
 
 
 
 
 
 
 
 
 
2
 

 
 
 

 
L-1 IDENTITY SOLUTIONS, INC. AMENDED AND RESTATED 2006 EMPLOYEE STOCK PURCHASE PLAN
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 2009, 2008 and 2007
 
 


 
December 31,
   2009    2008    2007
Additions to net assets attributed to:
                
Participant contributions
$
       2,915,839
  
$
2,744,106
  
$
1,884,079
                 
Deductions from net assets attributed to:
                
Distributions for purchases of stock
  
(2,473,719)
    
(2,668,912)
    
(1,838,172)
 
Refund of 2009 participant contributions due
to share limitations
  
(376,945)
    
--
    
--
 
Withdrawals by participants from the Plan
  
(65,175)
    
(75,194)
    
(45,907)
   
(2,915,839)
    
(2,744,106)
    
(1,884,079)
Change in net assets available for benefits
  
--
    
--
    
--
Net assets available for benefits:
                
Beginning
  
--
    
--
    
--
Ending
$
              --
  
$
--
  
$
--

 
 
 
 
 
See Notes to Financial Statements.
 
 
 
 
 
 
 
3
 

 
 
 

 
L-1 IDENTITY SOLUTIONS, INC. AMENDED AND RESTATED 2006 EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements

 
Note 1.
Description of Plan
 
General : The L-1 Identity Solutions, Inc. Amended and Restated 2006 Employee Stock Purchase Plan (the “Plan”) is a self-funded contributory stock purchase plan that provides employees the option to purchase L-1 Identity Solutions, Inc. (“Plan Sponsor”) common stock (the “Stock”) at a discounted price.
 
The Plan was adopted by the Board of Directors of the Plan Sponsor on July 5, 2006, and was approved by the stockholders of the Plan Sponsor on August 29, 2006, to allow eligible employees to purchase Plan Sponsor Stock (initially 500,000 shares in the aggregate). Eligible employees are employees of the Plan Sponsor or any of its subsidiaries who are employed on a basis such that they are expected to work more than twenty hours per week for more than five months per calendar year in the employ of the Plan Sponsor or any of its subsidiaries, and who are employed at the beginning of the offering period. Four offering periods commence in each calendar year. The offering periods consist of the three-month periods beginning on each January 1, April 1, July 1, and October 1, during which eligible participants may elect to have deducted a portion of their compensation to purchase shares of the Stock at the end of each offering period. The purchase price of the Stock is equal to the lesser of 85% of the fair market value of a share of Stock on the date the purchase right is granted or 85% of the fair market value of a share of Stock on the date the purchase right is exercised. Fair market value is defined on any relevant date under the Plan as the average of the high and low price per share as reported by the New York Stock Exchange.  A participant may withdraw from the Plan at any time before the last day of any offering period.

The Plan purchase for the offering period beginning on January 1, 2009 exceeded the remaining number of shares available to be issued under The Plan.  Therefore, employee purchases were limited to purchase the remaining shares available under The Plan on a prorated basis, and excess contributions were refunded to the participants.

The Plan was amended and restated on February 10, 2009 to permit the issuance of an additional 2,000,000 shares of Stock.  The stockholders of the Plan Sponsor approved the Amended and Restated 2006 Employee Stock Purchase Plan on May 6, 2009.
 
Contributions : Contributions to the Plan are made by the participants based on the amount participants elect to have deducted, not to exceed 10% of their base salary during an offering period, not taking into account changes to base salary which might occur once an offering period has commenced. However, no participant may purchase Stock that exceeds $25,000 in fair value during any one calendar year. In addition, purchase rights will not be granted to any individual who immediately thereafter would own Stock, including Stock purchasable under any outstanding purchase rights, possessing 5% or more of the total combined voting power or value of all classes of stock of the Plan Sponsor or any of its affiliates. Contributions are made through payroll deductions. The Plan’s first offering period commenced on January 1, 2007, and has had four completed periods in each of the calendar years ended December 31, 2009, 2008 and 2007, during which an aggregate of 481,171, 297,724 and 125,819 shares of stock were purchased for participants, respectively.
 
Payment of benefits: At the end of each offering period, participants’ contributions withheld during the offering period are utilized to buy Stock sufficient to reduce the participants’ Plan accounts to zero. The stock is deposited directly into participants’ personal accounts.
 
 
4


 
 
 

L-1 IDENTITY SOLUTIONS, INC. AMENDED AND RESTATED 2006 EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
 

 
Distributions : Upon written request, participants may withdraw their total contributions in cash and without interest at any time prior to the last day of an offering period, unless the participant has waived their cancellation right. Upon termination of employment for any reason or loss of eligible employee status, participation in the Plan terminates immediately and all amounts deducted for such a participant prior to the end of an offering period will be returned without interest.
 
Administrative Expenses : The Board of Directors of the Plan Sponsor or its designee administers the Plan. The expenses of administering the Plan are paid by the Plan Sponsor.
 
Vesting and Termination : At all times, participants have fully-vested, non-forfeitable rights to all amounts deducted from their compensation. The Plan may be terminated or amended by the Board of Directors of the Plan Sponsor at any time. However, the Board of Directors of the Plan Sponsor may not, without stockholder approval, take any action that would adversely affect the then existing purchase rights of any participant or amend the Plan (i) to increase the number of shares subject to the Plan, (ii) to change the class of persons eligible to participate in the Plan, or (iii) to increase materially the benefits accruing to participants under the Plan.
 
Plan Accounts : The Plan Sponsor maintains Plan accounts on its books in the name of each participant during each offering period. Amounts deducted from a participant’s compensation are credited to the participant’s Plan account. Such amounts are not held in a separate trust and may be commingled with the Plan Sponsor’s general assets. No interest is credited on such accounts.
 
Note 2.
Summary of Significant Accounting Policies
 
Basis of Accounting : The financial statements of the Plan are prepared under the accrual basis of accounting.
 
Purchases of Stock : Payments for purchase of the Plan Sponsor Stock are recorded when the purchases are made at the end of each quarterly offering period.
 
Participant Contributions : Participant contributions, as well as a related receivable from the Plan Sponsor, are recorded when amounts are deducted from participants’ compensation for the purchase of Plan Sponsor Stock.
 
Distributions Due to Participants : Participants may withdraw their contributions to the Plan up to the last day of any offering period; therefore, all participant contributions not previously used for Stock purchases are recorded as a liability.
 
Use of Estimates : The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements : During 2009, the Plan adopted the following standards:

In May 2009, the Financial Accounting Standards Board ("FASB") issued the standard, “Subsequent Events”, which establishes general accounting standards for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued.  This standard was effective for interim or annual financial periods ending after June 15, 2009.  The adoption of this standard did not have a material impact on the financial statements.
 
 
 
 
 
5

 
 
 

 
L-1 IDENTITY SOLUTIONS, INC. AMENDED AND RESTATED 2006 EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
 

In June 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-01, “Topic 105-Generally Accepted Accounting Principles” and ASU No. 2009-02, “Omnibus Update, Amendments to Various Topics for Technical Corrections” (collectively the “Codification”).  The Codification establishes the sole source of authoritative accounting principles generally accepted in the United States of America (GAAP) recognized by the FASB for nongovernmental entities.  Rules and interpretive releases issued by the Securities and Exchange Commission (SEC) under federal securities laws are also sources of authoritative GAAP for SEC registrants.  The Codification supersedes all existing non-SEC accounting and reporting standards.  All other non-grandfathered non-SEC accounting literature not included in the Codification is now non-authoritative.  This Codification was effective for financial statements issued for interim and annual periods ending after September 15, 2009.  The adoption of this Codification did not have a material impact on the financial statements.

Note 3.
Income Taxes
 
The right to purchase shares of stock under the Plan is intended to constitute an option granted by the Plan Sponsor pursuant to an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code, and such shares, for income tax purposes, shall be treated in accordance with the provisions thereof.
 
Participants are not considered to have income for federal income tax purposes as a result of their purchasing shares under the Plan. Amounts deducted from participants’ compensation do not reduce the amount of their income for tax purposes.
 
Note 4.
Subsequent Events

 In accordance with ASC 855, the Plan evaluated subsequent events through the date the financial statements were issued and determined that there were no material subsequent events that required recognition or additional disclosure in the financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
6

 
 
 

 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) of the L-1 Identity Solutions, Inc. Amended and Restated 2006 Employee Stock Purchase Plan have duly caused this annual report to be signed on their behalf by the undersigned hereunto duly authorized.
 
 
 
  L-1 IDENTITY SOLUTIONS, INC. AMENDED AND RESTATED 2006 EMPLOYEE STOCK PURCHASE PLAN  
       
 
By:
/s/  James A. DePalma  
    Name:  James A. DePalma   
    Title:  Executive Vice President, Chief Financial Officer and Treasurer   
       
 
Dated: March 26, 2010
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7
 
 
 

 
Exhibit Index
 
Exhibit No.
Description of Exhibit
23
Consent of Independent Registered Public Accounting Firm