Priceline 2011 Annual Report Download - page 78

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77
position are permitted if market or credit risks are managed on a net basis and other criteria are met, and (c) premiums and
discounts are allowed only if a market participant would also include them in the fair value measurement. This accounting
update is effective for public companies for interim or annual periods beginning after December 15, 2011, with early adoption
permitted. We expect to make the additional disclosures required in 2012.
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, 2011, there are 792,227 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 $65.7 million, $68.2 million and $40.7 million for the years ended December 31, 2011, 2010 and 2009,
respectively. Stock-based compensation for the years ended December 31, 2011 and 2010 includes charges amounting to $10.3
million and $13.4 million, respectively, 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 $1.7 million, $1.3 million, and $1.1 million for the years ended December 31, 2011, 2010, and
2009, respectively, for grants to non-employee directors. The related tax benefit for stock-based compensation is $8.1 million,
$7.5 million and $4.9 million for the years ended December 31, 2011, 2010 and 2009, respectively.
The following table summarizes stock option activity during the year ended December 31, 2011:
Stock Options
Outstanding at December 31, 2010
Exercised
Expired
Outstanding at December 31, 2011
Shares
355,468
(158,230)
—
197,238
Weighted
Average
Exercise Price
$ 23.59
$ 27.19
$ —
$ 20.71
Weighted
Average
Remaining
Contractual
Term
2.6 years
2.3 years
Aggregate
Intrinsic
Value
(000’s)
$ 133,641
$ 88,166
No stock options were granted during the years ended December 31, 2011, 2010 or 2009. The intrinsic value of stock
options exercised was approximately $77.1 million, $74.8 million and $61.9 million for the years ended December 31, 2011,
2010 and 2009, respectively. As of December 31, 2008, all stock options were fully vested and exercisable.