TripAdvisor 2011 Annual Report Download - page 92

Table of Contents
Shares Subject to the Plan
The 2011 Incentive Plan authorizes the issuance of up to 10,000,000 shares of TripAdvisor Common Stock pursuant to new awards under
the 2011 Incentive Plan, plus shares to be granted pursuant to the assumption of outstanding adjusted awards. During a calendar year, no single
participant may be granted (a) stock options covering in excess of 3,000,000 shares of TripAdvisor Common Stock, or (b) restricted stock or
RSUs, intended to qualify under Section 162(m) (4)(C) of the Code, covering in excess of 2,000,000 shares of TripAdvisor Common Stock;
provided, however, that adjusted awards will not be subject to these limitations. The maximum number of shares of TripAdvisor Common Stock
that may be granted pursuant to stock options intended to be incentive stock options within the meaning of Section 422 of the Code is 7,000,000
shares.
The shares of TripAdvisor Common Stock subject to grant under the 2011 Incentive Plan were made available from authorized but
unissued shares or from treasury shares, as determined by the Board of Directors. Other than adjusted awards, to the extent that any award is
forfeited, or any option or stock appreciation right terminates, expires or lapses without being exercised, or any award is settled for cash, the
shares of TripAdvisor Common Stock subject to such awards not delivered as a result thereof will again be available for awards under the plan.
If the exercise price of any option and/or the tax withholding obligations relating to any award are satisfied by delivering shares of TripAdvisor
Common Stock (by either actual delivery or by attestation), only the number of shares of TripAdvisor Common Stock issued net of the shares of
TripAdvisor Common Stock delivered or attested to will be deemed delivered for purposes of the limits in the plan. To the extent any shares of
TripAdvisor Common Stock subject to an award are withheld to satisfy the exercise price (in the case of an option) and/or the tax withholding
obligations relating to such award, such shares of TripAdvisor Common Stock will not generally be deemed to have been delivered for purposes
of the limits set forth in the plan.
In the event of certain extraordinary corporate transactions, the Committee or the Board of Directors will be able to make such
substitutions or adjustments as it deems appropriate and equitable to (1) the aggregate number and kind of shares or other securities reserved for
issuance and delivery under the plan, (2) the various maximum limitations set forth in the plan, (3) the number and kind of shares or other
securities subject to outstanding awards, and (4) the exercise price of outstanding options and stock appreciation rights.
As indicated above, several types of stock grants can be made under the 2011 Incentive Plan. A summary of these grants is set forth below.
The 2011 Incentive Plan will govern TripAdvisor options and TripAdvisor RSUs that have converted from existing Expedia options and Expedia
RSUs in connection with the Spin-Off as well as other award grants made following the Spin-Off pursuant to the 2011 Incentive Plan.
Notwithstanding the foregoing, the terms that govern Expedia options and Expedia RSUs that have converted into TripAdvisor options and
TripAdvisor RSUs in connection with the Spin-Off will govern the TripAdvisor options and TripAdvisor restricted stock units to the extent
inconsistent with the terms described below.
Stock Options and Stock Appreciation Rights
Stock options granted under the 2011 Incentive Plan may either be incentive stock options or nonqualified stock options. Stock
appreciation rights granted under the 2011 Incentive may either be granted alone or in tandem with a stock option. The exercise price of options
and stock appreciation rights cannot be less than 100% of the fair market value of the stock underlying the options or stock appreciation rights on
the date of grant. Optionees may pay the exercise price in cash or, if approved by the Committee, in TripAdvisor Common Stock (valued at its
fair market value on the date of exercise) or a combination thereof, or by “cashless exercise” through a broker or by withholding shares
otherwise receivable on exercise. The term of options and stock appreciation rights will be as determined by the Committee, but an incentive
stock option may not have a term longer than ten years from the date of grant. The Committee will determine the vesting and exercise schedule
of options and stock appreciation rights, and the extent to which they will be exercisable after the award holder’s employment terminates.
Generally, unvested options and stock appreciation rights terminate upon the termination of employment, and vested options and stock
appreciation rights will remain exercisable for one year after the
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