Priceline 2010 Annual Report Download - page 164

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December 15, 2008. The adoption of this standard may change the Company’s accounting treatment for future
business combinations.
3. STOCK-BASED COMPENSATION AND OTHER STOCK-BASED PAYMENTS
The Company has adopted the priceline.com Incorporated 1999 Omnibus Plan, as amended and restated
effective June 4, 2008, (the “1999 Plan”) as the stock compensation plan from which broad-based employee grants
may be made. The 1999 Plan provides for stock-based compensation grants of up to 9,195,833 shares of
priceline.com Incorporated common stock as incentives and rewards to encourage employees, officers, consultants
and directors to contribute to the long-term success of the Company. As of December 31, 2010, there are 806,763
shares available to be issued under the plan.
Stock-based compensation issued under the plans generally consists of restricted stock units, performance
share units, restricted stock and non-qualified stock options. Stock options are granted to employees at exercise
prices equal to the fair value of the common stock at the date of grant and have a term of 10 years. Generally, stock
option grants to employees vest over three years from the grant date. Restricted stock, performance share units and
restricted stock units generally vest over periods from 1 to 4 years. The Company issues new shares of common
stock upon the issuance of restricted stock, the exercise of stock options and the vesting of restricted stock units and
performance share units.
Stock-based compensation included in personnel expenses in the Consolidated Statements of Operations
was approximately $68.2 million, $40.7 million and $40.5 million for the years ended December 31, 2010, 2009 and
2008, respectively. Stock-based compensation for the year ended December 31, 2010 includes charges amounting
to $13.4 million representing the cumulative impact of adjusting the estimated probable outcome at the end of the
performance period for certain outstanding unvested performance share units. Included in the stock-based
compensation are approximately $1.3 million, $1.1 million, and $0.9 million for the years ended December 31,
2010, 2009, and 2008, respectively, for grants to non-employee directors. The related tax benefit for stock-based
compensation is $7.5 million, $4.9 million and $6.3 million for the years ended December 31, 2010, 2009 and 2008,
respectively. Also included in the above amounts for the year ended December 31, 2008 is stock-based
compensation and related tax benefits for restricted stock and restricted stock units related to shares of priceline.com
International.
The following table summarizes stock option activity during the year ended December 31, 2010:
Stock Options
Shares
Weighted
Average
Exercise Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(000’s)
Outstanding at December 31, 2009 920,299 $ 91.41 2.4 $ 132,519
Exercised (407,461) $ 63.20
Expired (157,370) $ 317.66
Outstanding at December 31, 2010 355,468 $ 23.59 2.6 $ 133,641
No stock options were granted during the years ended December 31, 2010, 2009 or 2008. The intrinsic
value of stock options exercised was approximately $74.8 million, $61.9 million and $23.2 million for the years
ended December 31, 2010, 2009 and 2008, respectively. As of December 31, 2008, all stock options were fully
vested and exercisable.