Enom 2010 Annual Report Download - page 130

Table of Contents
Demand Media, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(In thousands, except per share amounts)
12. Employee Benefit Plan (Continued)
employees may defer up to 90% of their pre-tax eligible compensation, up to the annual maximum allowed by the Internal Revenue Service. Under the 401(k)
Plan, the Company may, but is not obligated to, match a portion of the employee contributions up to a defined maximum. The Company did not make any
matching contributions for the years ended December 31, 2008, 2009 and 2010.
13. Share-based Compensation Plans and Awards
Stock Incentive Plans
Under the Company's 2010 Incentive Award Plan (the "2010 Plan"), the Administrator of the 2010 Plan, which is appointed by the Company's board of
directors, may grant up to 15,500 stock options, restricted stock, restricted stock units and other incentive awards (excluding up to 27,500 stock option,
restricted stock, restricted stock unit and other similar awards that were originally available for grant under the Company's 2006 Amended and Restated
Equity Incentive Plan or the "2006 Plan", which was terminated with the adoption of the 2010 Plan) to employees, officers, nonemployee directors, and
consultants, and such options or awards may be designated as incentive or nonqualified stock options at the discretion of the plan Administrator. In connection
with the adoption of the 2010 Plan, 334 stock-based awards then available for grant under the 2006 Plan were canceled. Any stock-based awards outstanding
under the 2006 Plan as of August 5, 2010 that subsequently are forfeited, expire or lapse are available for future grants under the 2010 Plan. As of
December 31, 2010, 9,241 stock-based awards were available for future grant under the 2010 Plan. Generally, stock option grants have 10-year terms and
employee stock options and restricted stock awards vest 1/4th on the anniversary of the vesting commencement date and 1/48th monthly thereafter, over a 4-
year period. Certain stock options and restricted stock awards have accelerated vesting provisions in the event of a change in control, termination without
cause or an initial public offering (as defined).
Valuation of Awards
The per share fair value of stock options granted with service and/or performance conditions was determined on the date of grant using the Black-Scholes
option pricing model with the following assumptions:
Year ended
December 31,
2008
Year ended
December 31,
2009
Year ended
December 31,
2010
Expected life (in years) 6.19 5.72 6.27
Risk-free interest rate 1.54-3.52% 1.37-2.86% 1.31-2.83%
Expected volatility range 65-72% 60-62% 54-56%
Weighted average expected volatility 69% 61% 56%
Expected dividend yield 0% 0% 0%
The expected term of stock options granted represents the weighted average period that the stock options are expected to remain outstanding. Effective
January 1, 2009, the Company determined the expected term assumption based on the Company's historical exercise behavior combined with estimates of the
post-vesting holding period. Prior to January 1, 2009, the Company did not have adequate history of exercises of its stock-based awards and used the
simplified method to calculate the expected
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