ServiceMagic 2011 Annual Report Download - page 104

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IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 14—STOCK-BASED COMPENSATION (Continued)
Nonvested RSUs and PSUs outstanding as of December 31, 2011 and changes during the year ended December 31, 2011 were as follows:
The weighted average fair value of RSUs and PSUs granted during the years ended December 31, 2011, 2010 and 2009 based on market
prices of IAC's common stock on the grant date was $32.41, $23.05 and $19.95, respectively. The total fair value of RSUs and PSUs that vested
during the years ended December 31, 2011, 2010 and 2009 was $33.2 million, $23.6 million and $5.3 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 generally determined by negotiation or arbitration, at various dates through 2016. 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, 2011 is 2.2 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, 2010 was 3.0 million shares.
97
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, 2011
1,568
$
24.78
3,898
$
21.52
Granted
126
35.27
1,332
32.14
Vested
(1,060
)
22.79
—
—
Forfeited
(74
)
23.91
(689
)
22.95
Nonvested at December 31, 2011
560
$
31.06
4,541
$
24.41
(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. The PSU table above includes these awards at their maximum.