ServiceMagic 2010 Annual Report Download - page 102

Table of Contents
IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 13—STOCK-BASED COMPENSATION (Continued)
As of December 31, 2010, 2009 and 2008 there were no outstanding nonvested restricted stock awards. Nonvested RSUs and PSUs
outstanding as of December 31, 2010 and changes during the year ended December 31, 2010 were as follows:
The weighted average fair value of RSUs and PSUs granted during the years ended December 31, 2010, 2009 and 2008 based on market
prices of IAC's common stock on the grant date was $23.05, $19.95 and $21.22, respectively. The total fair value of restricted stock, RSUs and
PSUs that vested during the years ended December 31, 2010, 2009 and 2008 was $23.6 million, $5.3 million and $72.2 million, respectively.
Equity Instruments Denominated in the Shares of Certain Subsidiaries
IAC has granted phantom equity units and stock options in various operating subsidiaries to certain members of the subsidiaries'
management. These equity awards vest over a period of years or upon the occurrence of certain prescribed events. In some cases, IAC has taken
a preferred interest in the subsidiary with a face value equal to the subsidiary's acquisition price or, when funding a start-up business, its
investment cost, or a certain other fixed amount. In some cases, these preferred interests accrete with paid-in-kind dividends at a prescribed rate
of return. The value of the phantom equity units and stock options is tied to the value of the common stock of the entity, with the equity awards
management receives as a whole generally representing a small minority of the total common stock outstanding. Accordingly, these interests
only have value to the extent the relevant business appreciates in value above the preferred interest (including the accretion of dividends), our
investment cost or other fixed amount or, in the case of stock options, the initial value utilized to determine the exercise price. These interests
can have significant value in the event of significant appreciation. The interests are ultimately settled in IAC common stock or cash at the option
of IAC, with fair market value determined by negotiation or arbitration, at various dates through 2015. The expense associated with these equity
awards is initially measured at fair value at the grant date and is expensed as non-cash compensation over the vesting term. The aggregate
number of IAC common shares that would be required to settle these interests at current estimated fair values, including vested and unvested
interests, as of December 31, 2010 is 3.0 million shares, which is included in the calculation of diluted earnings per share if the effect is dilutive.
The comparable amount as of December 31, 2009 was 2.0 million shares.
96
RSUs
PSUs
Number
of shares
Weighted
Average
Grant Date
Fair Value
Number
of shares(a)
Weighted
Average
Grant Date
Fair Value
(Shares in thousands)
Nonvested at January 1, 2010
2,395
$
25.82
1,815
$
22.03
Granted
336
32.58
3,014
21.99
Vested
(1,065
)
28.98
—
—
Forfeited
(98
)
23.07
(931
)
23.99
Nonvested at December 31, 2010
1,568
$
24.78
3,898
$
21.52
(a) Included in the table are PSUs which cliff vest at the end of two or three years in varying amounts depending upon certain
performance conditions. In all, depending on the award the number of shares vesting can range from 0% to 250% of the
initial "target" award. The PSU table above includes these awards at their maximum.