TripAdvisor 2012 Annual Report Download - page 95

of our common stock on the date of grant. Stock options granted during the year ended December 31, 2012 have
a term of ten years from the date of grant and generally vest over a four-year requisite service period.
During the year ended December 31, 2012, we have issued 3,650,814 of primarily service based stock
options under the 2011 Incentive Plan with a weighted average estimated grant-date fair value per option of
$20.36. During the year ended December 31, 2011, we did not grant any stock options under the 2011 Incentive
Plan. We will amortize the fair value of the 2012 grants, net of estimated forfeitures, as stock-based
compensation expense over the vesting term of generally four years on a straight-line basis, with the amount of
compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the
award that is vested at that date.
A summary of the status and activity for stock option awards relating to our common stock for the year
ended December 31, 2012, is presented below:
Options
Outstanding
Weighted
Average
Exercise
Price Per
Share
Weighted
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value
(In thousands) (In years) (In thousands)
Options outstanding at January 1, 2012 ................ 6,575 $23.65
Granted ......................................... 3,651 39.79
Exercised ........................................ 1,151 14.09 $25,074
Cancelled ....................................... 421 29.42
Options outstanding at December 31, 2012 ............. 8,654 $31.41 5.7 $92,083
Exercisable as of December 31, 2012 .................. 3,329 $27.23 3.1 $49,016
Vested and expected to vest after December 31, 2012 ..... 7,655 $30.65 5.7 $86,121
Aggregate intrinsic value represents the difference between the closing stock price of our common stock and
the exercise price of outstanding, in-the-money options. Our closing stock price as reported on NASDAQ as of
December 31, 2012 was $41.92.
The fair value of stock option grants under the 2011 Incentive Plan has been estimated at the date of grant
using the Black–Scholes option pricing model with the following weighted average assumptions:
2012
Risk-free interest rate ................................. 1.03%
Expected volatility ................................... 53.46%
Expected life (in years) ............................... 6.21
Dividend yield ...................................... —
Weighted-average estimated fair value of options granted
during the year .................................... $20.36
No stock options were granted under the 2011 Incentive Plan in the years ending December 31, 2011 and
2010.
2012 RSU Activity
During the year ended December 31, 2012, we issued 85,144 RSUs under the 2011 Incentive Plan for which
the fair value was measured based on the quoted price of our common stock. The weighted average estimated
grant-date fair value per RSU was $35.76. We will amortize the fair value of the 2012 grants, net of estimated
forfeitures, as stock-based compensation expense over the weighted average remaining vesting term of 2.0 years
on a straight-line basis, with the amount of compensation expense recognized at any date at least equaling the
portion of the grant-date fair value of the award that is vested at that date.
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