Groupon 2011 Annual Report Download - page 94

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GROUPON, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
stock, the outstanding shares of the other class will be subdivided or combined in the same manner, unless different treatment of the shares of each class is
approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A common stock and Class B common stock, each voting
separately as a class.
The Company issues stock-based awards to its employees in the form of stock options, restricted stock units and restricted stock. See Note 10 " Stock-
Based Compensation
".
Stock Repurchase Activity
In April 2010 and December 2010, the Board authorized the Company to repurchase shares of its capital stock held by certain holders, using a portion
of the proceeds from the sale of Series F Preferred and the sale of Series G Preferred, respectively. The Company repurchased 93,328,656 shares of common
stock for $503.2 million, and 580,384 shares of preferred stock for $55.0 million in 2010. Total shares repurchased from Company employees were 4,370,959. In
2011, the Company repurchased 45,090,184 shares of common stock for $353.8 million and 370,401 shares of preferred stock for $35.0 million.
Return of Common Shares
On September 22, 2011, the Company's chief operating officer resigned. As a result of the separation agreement, 400,000 shares of non-
voting common
stock were returned resulting in other income of approximately $4.9 million, which represents the reversal of the originally recognized stock compensation
expense and is included in interest and other income (expense), net within the consolidated statements of operations for the year ended December 31, 2011.
Treasury Stock
As of December 31, 2010, there were 93,328,656 shares of treasury stock. On October 31, 2011, all shares of treasury stock were cancelled in
conjunction with the recapitalization prior to the initial public offering. As of December 31, 2011, there were no shares of treasury stock.
10. STOCK-BASED COMPENSATION
Groupon, Inc. Stock Plans
In January 2008, the Company adopted the ThePoint.com 2008 Stock Option Plan, as amended (the “2008 Plan”),
under which options for up to
64,618,500 shares of common stock were authorized to be issued to employees, consultants, and directors of ThePoint.com, which is now the Company. In April
2010, the Company established the Groupon, Inc. 2010 Stock Plan, as amended in April 2011 (the “2010 Plan”),
under which options and restricted stock units
(“RSUs”) for up to 20,000,000 shares of non-
voting common stock were authorized for future issuance to employees, consultants and directors of the Company.
In August 2011, the Company established the Groupon, Inc. 2011 Stock Plan (the “2011 Plan”),
under which options, RSUs, and performance stock units for up
to 50,000,000 shares of non-voting common stock were authorized for future issuance to employees, consultants and directors of the Company.
The 2008 Plan, 2010 Plan, and 2011 Plan (the “Plans”)
are administered by the Board, who determine the number of awards to be issued, the
corresponding vesting schedule and the exercise price for options. As of December 31, 2011, 50,559,387
shares were available for future issuance under
the Plans. Prior to January 2008, the Company issued stock options and RSUs that are governed by employment agreements, some of which are still unvested
and outstanding.
The Company recognized stock-
based compensation expense of $0.1 million, $7.1 million and $76.6 million during the years ended December 31,
2009, 2010 and 2011, respectively, related to stock options, restricted stock units and performance stock units issued under the Plans and employment
agreements. The corresponding tax benefit provided by stock compensation was $0.1 million, less than $0.1 million, and $12.1 million for the years ended
December 31, 2009, 2010 and 2011, respectively. The Company also capitalized $1.5 million of stock-
based compensation in 2011. No such amounts were
capitalized in prior periods.
As of December 31, 2011, a total of $112.4 million of unrecognized compensation costs related to unvested stock options and unvested restricted stock
units issued are expected to be recognized over the remaining weighted-average period of two years.
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