TripAdvisor 2012 Annual Report Download - page 150

granted under the 2011 Plan will be non-qualified options if they fail to qualify as incentive options or exceed the
annual limit on incentive stock options. Incentive stock options may only be granted to employees of
TripAdvisor and its subsidiaries. Non-qualified options may be granted to any persons eligible to receive
incentive options and to non-employee directors and consultants. The option exercise price of each option will be
determined by the Compensation Committees but may not be less than 100% of the fair market value of the
common stock on the date of grant. Fair market value for this purpose will be the closing price of the shares of
common stock on the NASDAQ on the date of grant. Without stockholder approval, the exercise price of an
option may not be reduced after the date of the option grant, other than to appropriately reflect changes in our
capital structure.
The term of each option will be fixed by the Compensation Committees and, in the case of incentive stock
options, may not exceed ten years from the date of grant. The Compensation Committees will determine at what
time or times each option may be exercised. Options may be made exercisable in installments and the
exercisability of options may be accelerated by the Compensation Committees. In general, unless otherwise
permitted by the Compensation Committees, no option granted under the 2011 Plan is transferable by the
optionee other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations
order, and options may be exercised during the optionee’s lifetime only by the optionee, or by the optionee’s
legal representative or guardian in the case of the optionee’s incapacity.
Upon exercise of options, the option exercise price must be paid in full by certified or bank check or other
instrument acceptable to the Compensation Committees or, if authorized at the time the option is granted, by
delivery (or attestation to the ownership) of shares of common stock that are beneficially owned by the optionee.
Subject to applicable law, the exercise price may also be delivered to TripAdvisor by a broker pursuant to
irrevocable instructions to the broker from the optionee. In addition, the Compensation Committees may permit
options to be exercised using a net exercise feature which reduces the number of shares issued to the optionee by
the number of shares with a fair market value equal to the exercise price.
To qualify as incentive options, options must meet additional federal tax requirements, including a $100,000
limit on the value of shares subject to incentive options that first become exercisable by a participant in any one
calendar year.
Stock Appreciation Rights. The Compensation Committees may award tandem or free-standing stock
appreciation rights, subject to such conditions and restrictions as the Compensation Committees may determine.
Stock appreciation rights entitle the recipient to shares of common stock equal to the value of the appreciation in
the stock price over the exercise price. The exercise price may not be less than the fair market value of the
common stock on the date of grant. The term of a stock appreciation right shall be determined by the
Compensation Committees.
Restricted Stock. The Compensation Committees may award shares of common stock to participants
subject to such conditions and restrictions as the Compensation Committees may determine. These conditions
and restrictions may include the achievement of certain performance goals (as summarized above) and/or
continued employment with us through a specified restricted period.
Restricted Stock Units. The Compensation Committees may award restricted stock units to any
participants. Restricted stock units are ultimately payable in the form of shares of common stock, cash or a
combination of both and may be subject to such conditions and restrictions as the Compensation Committees
may determine. These conditions and restrictions may include the achievement of certain performance goals (as
summarized above) and/or continued employment with TripAdvisor through a specified vesting period.
Unrestricted Stock Awards. The Compensation Committees may also grant shares of common stock which
are free from any restrictions under the 2011 Plan.
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