TripAdvisor 2013 Annual Report Download - page 98

Prior to the Spin-Off, we participated in the Amended and Restated Expedia, Inc. 2005 Stock and Annual
Incentive Plan, under which we, through Expedia, granted RSUs, stock options, and other stock-based awards to
our directors, officers, employees and consultants. At Spin-Off, these existing Expedia stock-based awards were
converted into TripAdvisor stock-based equity awards and resulted in approximately 6,575,000 stock options
(of which approximately 3,548,000 were fully vested at Spin-Off) and 893,000 RSU’s outstanding. These awards
accounted for our 2011 stock-based compensation expense. We will continue to amortize the fair value, net of
estimated forfeitures, over the remaining vesting term 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. All remaining unrecognized stock-based compensation expense related to these awards is included in
“Unrecognized Stock-Based Compensation” below.
Stock and Incentive Plan
On December 20, 2011, our 2011 Stock and Annual Incentive Plan became effective. On December 20,
2011, we filed Post-Effective Amendment No. 1 on Form S-8 to Registration Statement on Form S-4
(File No. 333-178637) (the “Prior Registration Statement”) with the Securities and Exchange Commission
(the “Commission”), registering a total of 17,500,000 shares of our common stock, of which 17,400,000 shares
were issuable in connection with grants of equity-based awards under our 2011 Incentive Plan (7,400,000 of
which shares were originally registered on the Form S-4 and 10,000,000 of which shares were first registered on
the Prior Registration Statement) and 100,000 shares were issuable under our Deferred Compensation Plan for
Non-Employee Directors (refer to “Note 13—Employee Benefit Plans” below for information on our Deferred
Compensation Plan for Non-Employee Directors).
At our annual meeting of stockholders held on June 28, 2013 (the “Annual Meeting”), our stockholders
approved an amendment to our 2011 Stock and Annual Incentive Plan to, among other things, increase the
aggregate number of shares of common stock authorized for issuance thereunder by 15,000,000 shares. We refer
to our 2011 Stock and Annual Incentive Plan, as amended by the amendment as the “2011 Incentive Plan.” A
summary of the material terms of the 2011 Incentive Plan can be found in “Proposal 3: Approval of the 2011
Stock and Annual Incentive Plan, as amended” in our Proxy Statement for the Annual Meeting.
Pursuant to the 2011 Stock and Annual Incentive Plan, we may, among other things, grant RSUs, restricted
stock, stock options and other stock-based awards to our directors, officers, employees and consultants. The
summary of the material terms of the 2011 Incentive Plan is qualified in its entirety by the full text of the 2011
Incentive Plan previously filed.
As of December 31, 2013, the total number of shares available under the 2011 Incentive Plan is 18,085,169 shares.
All shares of common stock issued in respect of the exercise of options or other equity awards since Spin-Off have been
issued from authorized, but unissued common stock.
Stock Based Award Activity and Valuation
2013 Stock Option Activity
During the year ended December 31, 2013, we have issued 2,824,583 of primarily service based non-
qualified stock options under the 2011 Incentive Plan. These stock options generally have a term of ten years
from the date of grant and vest over a four-year requisite service period. We will amortize the fair value of the
2013 grants, net of estimated forfeitures, as stock-based compensation expense over the vesting term 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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