STOCK-BASED COMPENSATION AND OTHER STOCK-BASED PAYMENTS

The Company has adopted the priceline.com Incorporated 1999 Omnibus Plan, as amended and restated effective June 4, 2008, (the "1999 Plan") as the stock compensation plan from which broad-based employee grants may be made. As of December 31, 2012, there were 680,109 shares of common stock reserved for future issuance under our 1999 Plan.

Stock-based compensation issued under the plans generally consists of restricted stock units, performance share units, restricted stock and non-qualified stock options. Stock options are granted to employees at exercise prices equal to the fair value of the common stock at the date of grant and have a term of 10 years. Generally, stock option grants to employees vest over three years from the grant date. Restricted stock, performance share units and restricted stock units generally vest over periods from 1 to 4 years. The Company issues new shares of common stock upon the issuance of restricted stock, the exercise of stock options and the vesting of restricted stock units and performance share units.

Stock-based compensation included in personnel expenses in the Consolidated Statements of Operations was approximately $71.6 million, $65.7 million and $68.2 million for the years ended December 31, 2012, 2011 and 2010, respectively. Stock-based compensation for the years ended December 31, 2012, 2011 and 2010 includes charges amounting to $0.9 million, $10.3 million and $13.4 million, respectively, representing the cumulative impact of adjusting the estimated probable outcome at the end of the performance period for certain outstanding unvested performance share units. Included in the stock-based compensation are approximately $1.8 million, $1.7 million, and $1.3 million for the years ended December 31, 2012, 2011, and 2010, respectively, for grants to non-employee directors. The related tax benefit for stock-based compensation is $7.6 million, $8.1 million and $7.5 million for the years ended December 31, 2012, 2011 and 2010, respectively.

The following table summarizes stock option activity during the year ended December 31, 2012:



Stock Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (000’s)

Outstanding at December 31, 2011	197,238		$	20.71	2.3 years	$	88,166
Exercised	(126,237	)	$	21.26
Expired	—		$	—
Outstanding at December 31, 2012	71,001		$	19.73	1.3 years	$	42,647

No stock options were granted during the years ended December 31, 2012, 2011 or 2010. The intrinsic value of stock options exercised was approximately $75.2 million, $77.1 million and $74.8 million for the years ended December 31, 2012, 2011 and 2010, respectively. As of December 31, 2008, all stock options were fully vested and exercisable.

The following table summarizes the activity of unvested restricted stock units ("RSUs") and performance share units during the years ended December 31, 2010, 2011 and 2012:



Share-Based Awards	Shares		Weighted Average Grant Date Fair Value

Unvested at December 31, 2009	1,488,854			$	90.82

Granted	179,101			$	236.66
Vested	(367,856	)		$	57.24
Performance Shares Adjustment	260,822			$	182.16
Forfeited	(30,274	)		$	120.80
Unvested at December 31, 2010	1,530,647			$	130.93

Granted	125,564			$	469.29
Vested	(858,019	)		$	113.37
Performance Shares Adjustment	73,710			$	496.34
Forfeited	(71,922	)		$	182.90
Unvested at December 31, 2011	799,980			$	231.87

Granted	95,062			$	643.12
Vested	(353,819	)		$	108.31
Performance Shares Adjustment	6,649			$	532.26
Forfeited	(7,744	)		$	444.18
Unvested at December 31, 2012	540,128			$	389.21

Restricted stock units and performance share units granted by the Company during the years ended December 31, 2012, 2011 and 2010 had an aggregate grant-date fair value of approximately $61.1 million, $58.9 million and $42.4 million, respectively. Share-based awards that vested during the years ended December 31, 2012, 2011, and 2010 had grant date fair values of $38.3 million, $97.3 million and $21.1 million, respectively.

As of December 31, 2012, there is $84.8 million of total future compensation cost related to unvested share-based awards to be recognized over a weighted-average period of 1.3 years.

During the year ended December 31, 2012, stock based awards included grants of 60,365 performance share units to certain executives. The performance share units had a total grant date fair value of $39.0 million based upon the grant date fair value per share of $645.86. The performance share units are payable in shares of the Company's common stock upon vesting. Stock-based compensation for performance share units is recorded based on the estimated probable outcome if the Company, and with respect to certain grants, its Booking.com and Agoda.com businesses, achieve certain financial goals at the end of the performance period. The actual number of shares to be issued on the vesting date will be determined upon completion of the performance period which ends December 31, 2014, assuming there is no accelerated vesting for, among other things, a termination of employment under certain circumstances, or a change in control. At December 31, 2012, there were 59,204 unvested performance shares outstanding, net of actual forfeitures and vesting. As of December 31, 2012, the estimated number of probable shares to be issued is a total of 67,842 shares. If the maximum performance thresholds are met at the end of the performance period, a maximum of 118,408 shares could be issued. If the minimum performance thresholds are not met, 37,450 shares would be issued at the end of the performance period.

2011 Performance Share Units

During the year ended December 31, 2011, stock-based awards included grants of 77,144 performance share units with a grant date fair value of $35.9 million, based on a weighted average grant date fair value of $464.79 per share. The actual number of shares will be determined upon completion of the performance period which ends December 31, 2013.

At December 31, 2012, there were 74,390 unvested performance share units outstanding, net of actual forfeitures and vesting. As of December 31, 2012, the number of shares estimated to be issued at the end of the performance period is a total of 151,476 shares. If the maximum performance thresholds are met at the end of the performance period, a maximum of 159,000 total shares could be issued.

2010 Performance Share Units

During the year ended December 31, 2010, stock-based awards included grants of 110,430 performance share units with a grant date fair value of $26.0 million, based on a weighted average grant date fair value of $235.34 per share. The actual number of shares will be determined upon completion of the performance period which ends December 31, 2012.

At December 31, 2012, there were 82,879 unvested performance share units outstanding, net of actual forfeitures and vesting, respectively. As of December 31, 2012, the number of shares estimated to be issued at the end of the performance period is a total of 194,735 shares. The maximum number of total shares that could be issued at the end of the performance period is 197,515 shares.

Other Stock-based Payments

In 2010, the Company granted 5,555 RSUs with a total grant date fair value of $1.6 million to an advertising partner. Expense is amortized over the service period and is charged to offline advertising expense.