Expedia 2011 Annual Report Download - page 100

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• each unvested stock option to purchase shares of Expedia common stock converted into a stock option
to purchase shares of common stock of the applicable company for which the employee was employed
following the spin-off,
• all RSUs converted into RSUs of the applicable company for which the employee was employed
following the spin-off, and
• each vested and unvested warrant converted into a warrant to purchase shares of Expedia common
stock and a warrant to purchase shares of TripAdvisor common stock.
The adjustments to the number of shares subject to each option and the option exercise prices were based on
the relative market capitalization of Expedia and TripAdvisor as of the date of the spin-off. These modifications
resulted in a one-time expense of $11 million due to the modification of vested stock options that remain
unexercised at the date of the spin-off.
The following table presents a summary of our stock option activity:
Options (1)
Weighted Average
Exercise Price (1)
Remaining
Contractual Life
Aggregate
Intrinsic Value
(In thousands) (In years) (In thousands)
Balance as of January 1, 2009 4,917 $46.58
Granted 5,162 15.66
Exercised (439) 35.76
Cancelled (639) 32.92
Balance as of December 31, 2009 9,001 30.34
Granted 2,908 52.42
Exercised (1,834) 24.96
Cancelled (972) 30.96
Balance as of December 31, 2010 9,103 35.90
Granted 3,725 43.19
Exercised (1,176) 24.16
Cancelled (1,030) 32.48
Adjustments due to the spin-off (2) 4,288
Exercised—post spin-off (112) 14.13
Balance as of December 31, 2011 (3) 14,798 17.96 5.0 $168,743
Exercisable as of December 31, 2011 3,440 22.82 3.7 26,468
Vested and expected to vest after
December 31, 2011 12,900 18.18 4.9 144,962
(1) Reflects the one-for-two reverse stock split on December 20, 2011.
(2) Reflects the equitable adjustment to the exercise prices and number of outstanding stock options necessary
to maintain the intrinsic value of those awards immediately prior to and following the spin-off.
(3) Outstanding options as of December 31, 2011 represent options outstanding after giving effect to the
one-for-two reverse stock split and spin-off adjustments made in order to maintain the intrinsic value of
those awards immediately prior to and immediately following the transaction.
The aggregate intrinsic value of outstanding options shown in the stock option activity table above
represents the total pretax intrinsic value at December 31, 2011, based on our closing stock price of $29.02 as of
the last trading date. The total intrinsic value of stock options exercised was $30 million, $41 million and
$6 million for the years ended December 31, 2011, 2010 and 2009.
F-25