Expedia 2006 Annual Report Download - page 83

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stock reserved for new stock-based awards under the 2005 Stock and Annual Incentive Plan. We issue new
shares to satisfy the exercise or release of stock-based awards.
As described below in “Modification of Stock-Based Compensation Awards,” certain stock options,
restricted stock, RSUs and other equity based awards granted to our employees, officers, directors and
consultants by IAC prior to the Spin-Off were converted into awards based on our common stock in
connection with the Spin-Off. For the period from January 1, 2005 to August 8, 2005, and for the year ended
December 31, 2004, IAC allocated to us stock-based compensation expense that was attributable to our
employees.
RSUs, which are stock awards that are granted to employees entitling the holder to shares of our common
stock as the award vests, are our primary form of stock-based award. We record RSUs that will settle in cash
as a liability and we remeasure them to fair value at the end of each reporting period. These awards that settle
in cash and the resulting liability are insignificant. Our RSUs generally vest over five years, but may accelerate
in certain circumstances, including changes in control.
We have fully vested stock warrants with expiration dates through February 2012 outstanding, certain of
which trade on the NASDAQ under the symbols “EXPEW” and “EXPEZ.” Each stock warrant is exercisable
for a certain number of shares of our common stock or a fraction thereof.
The following table presents a summary of RSU awards from August 9, 2005 through December 31,
2006:
RSU’s
Weighted
Average Grant-
Date Fair
Value
(In thousands)
Granted at Spin-Off, based on conversion of IAC awards .............. 5,848 $23.97
Granted ................................................... 497 25.28
Vested and released .......................................... (144) 23.19
Cancelled . . ............................................... (436) 24.38
Balance as of December 31, 2005 ............................... 5,765 24.08
Granted ................................................... 5,016 18.59
Vested and released .......................................... (1,337) 23.94
Cancelled . . ............................................... (1,923) 23.09
Balance as of December 31, 2006 ............................... 7,521 20.72
Included in RSUs outstanding at December 31, 2006 are approximately one million RSUs to certain
senior executives, whereby future vesting is tied to achievement of performance targets. The total fair value of
shares vested and released during the years ended December 31, 2006 and 2005 was $31.9 million and
$3.3 million.
F-23
Expedia, Inc.
Notes to Consolidated Financial Statements — (Continued)