IAC currently has two active plans under which awards denominated in shares of IAC common stock have been granted. These plans cover stock options to acquire shares of IAC common stock, RSUs, including those that are linked to the achievement of the Company's stock price, known as market-based awards ("MSUs") and those that are linked to the achievement of a performance target, known as performance-based awards ("PSUs"), denominated in shares of IAC common stock, as well as provide for the future grant of these and other equity awards. These plans authorize the Company to grant

The plans were adopted in 2013 and 2018, have a stated term of ten years, and provide that the exercise price of stock options granted will not be less than the market price of the Company's common stock on the grant date. The plans do not specify grant dates or vesting schedules of awards as those determinations have been delegated to the Compensation and Human Resources Committee of IAC's Board of Directors (the "Committee"). Each grant agreement reflects the vesting schedule for that particular grant as determined by the Committee. Broad-based stock option awards issued to date have generally vested in equal annual installments over a four-year period and RSU awards currently outstanding generally vest in either equal annual installments over a four-year period or cliff-vest after a three-year period, in each case, from the grant date. MSU awards currently outstanding cliff-vest after the market condition has been met either within a three-year or five-year period from the date of grant. PSU awards issued to date cliff-vest after a three-year period from the date of grant.

The amount of stock-based compensation expense recognized in the consolidated statement of operations is net of estimated forfeitures. The forfeiture rate is estimated at the grant date based on historical experience and revised, if necessary, in subsequent periods if actual forfeitures differ from the estimated rate. The expense ultimately recorded is for the awards that vest. At December 31, 2019, there is $272.6 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately 2.3 years.

The aggregate income tax benefit recognized related to the exercise of stock options for the years ended December 31, 2019, 2018 and 2017, is $137.2 million, $169.0 million, and $411.6 million, respectively. As the Company is currently in a NOL position, there will be some delay in the timing of the realization of the cash benefit of the income tax deductions related to stock-based compensation because it will be dependent upon the amount and timing of future taxable income and the timing of estimated income tax payments.



	December 31, 2019
	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
	(Shares and intrinsic value in thousands)
Options outstanding at January 1, 2019	5,814		$	62.97
Granted	—		—
Exercised	(911	)	53.41
Forfeited	(15	)	101.01
Expired	(1	)	124.29
Options outstanding at December 31, 2019	4,887		$	64.63	5.3	$	901,629
Options exercisable	3,851		$	62.83	4.9	$	717,388

The aggregate intrinsic value in the table above represents the difference between IAC's closing stock price on the last trading day of 2019 and the exercise price, multiplied by the number of in-the-money options that would have been exercised had all option holders exercised their options on December 31, 2019. The total intrinsic value of stock options exercised during the years ended December 31, 2019, 2018 and 2017 is $167.4 million, $83.7 million and $164.6 million, respectively.



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Outstanding at December 31, 2019	Weighted- Average Remaining Contractual Life in Years	Weighted- Average Exercise Price		Exercisable at December 31, 2019	Weighted- Average Remaining Contractual Life in Years	Weighted- Average Exercise Price
	(Shares in thousands)
$20.01 to $30.00	3	0.1	$	21.60	3	0.1	$	21.60
$30.01 to $40.00	363	1.3	32.39		363	1.3	32.39
$40.01 to $50.00	1,124	5.2	42.96		840	4.8	43.32
$50.01 to $60.00	142	2.2	59.89		141	2.2	59.90
$60.01 to $70.00	916	5.4	65.87		796	5.1	65.97
$70.01 to $80.00	1,755	6.4	75.29		1,206	6.0	74.99
$80.01 to $90.00	500	5.3	84.31		500	5.3	84.31
Greater than $90.01	84	8.2	150.23		2	7.6	104.13
	4,887	5.3	$	64.63	3,851	4.9	$	62.83

There were no stock options granted by the Company during 2019. Less than 0.1 million and approximately 1.2 million stock options were granted by the Company during the years ended December 31, 2018 and 2017, respectively. During 2018, the Company granted market-based stock options that only vest if the price of IAC common stock exceeds the relevant price threshold for a twenty-day consecutive period and the service requirement is met. The market-based vesting condition was achieved in the fourth quarter of 2018. The service requirement provides that this award vests in two installments, the first 50% in 2021 and the second 50% in 2022.

The fair value of stock option awards, with the exception of market-based awards, is estimated on the grant date using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates various assumptions, including expected volatility and expected term. During 2018 and 2017, expected stock price volatilities were estimated based on the Company's historical volatility. The risk-free interest rates are based on U.S. Treasuries with comparable terms as the awards, in effect at the grant date. Expected term is based upon the historical exercise behavior of our employees and the dividend yields are based on IAC's historical dividend payments. The following are the weighted average assumptions used in the Black-Scholes option pricing model:



	Years Ended December 31,
	2018		2017
Expected volatility	27	%	29	%
Risk-free interest rate	2.7	%	2.0	%
Expected term	6.2 years		5.2 years
Dividend yield	—	%	—	%

The Company currently settles all stock options on a net basis. Assuming all stock options outstanding on December 31, 2019 were net settled on that date, the Company would have issued 1.8 million common shares (of which 1.4 million is related to vested stock options and 0.4 million is related to unvested stock options) and would have remitted $450.8 million (of which

RSUs, MSUs and PSUs are awards in the form of phantom shares or units denominated in a hypothetical equivalent number of shares of IAC common stock and with the value of each RSU and PSU equal to the fair value of IAC common stock at the date of grant. The value of each MSU is estimated using a lattice model that incorporates a Monte Carlo simulation of IAC's stock price. Each RSU and PSU grant is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. PSUs also include performance-based vesting, where certain performance targets set at the time of grant must be achieved before an award vests. The vesting of MSUs is tied to the stock price of IAC. For RSU grants, the expense is measured at the grant date as the fair value of IAC common stock and expensed as stock-based compensation over the vesting term. For MSU grants, the expense is measured using a lattice model and expensed as stock-based compensation over the derived service period. For PSU grants, the expense is measured at the grant date as the fair value of IAC common stock and expensed as stock-based compensation over the vesting term if the performance targets are considered probable of being achieved.



	RSUs				MSUs			PSUs
	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
	(Shares in thousands)
Unvested at January 1, 2019	459		$	115.12	—	$	—	113		$	76.00
Granted	63		220.77		159	153.43		—		—
Vested	(304	)	118.25		—	—		—		—
Forfeited	(16	)	194.10		—	—		(113	)	76.00
Unvested at December 31, 2019	202		$	132.37	159	$	153.43	—		$	—

The weighted average fair value of RSUs and PSUs granted during the years ended December 31, 2019, 2018 and 2017 based on market prices of IAC's common stock on the grant date was $220.77, $178.29 and $90.04, respectively. The weighted average fair value of MSUs granted during the year ended December 31, 2019 based on the lattice model was $153.43. There were no MSUs granted or outstanding during the years ended December 31, 2018 and 2017. The total fair value of RSUs and PSUs that vested during the years ended December 31, 2019, 2018 and 2017 was $69.3 million, $8.9 million and $32.5 million, respectively. There were no MSUs that vested during the year ended December 31, 2019.

The Company has granted stock settled stock appreciation rights denominated in the equity of certain non-publicly traded subsidiaries to employees and management of those subsidiaries. These equity awards vest over a period of years or upon the occurrence of certain prescribed events. The value of the stock settled stock appreciation rights is tied to the value of the common stock of these subsidiaries. Accordingly, these interests only have value to the extent the relevant business appreciates in value above the initial value utilized to determine the exercise price. These interests can have significant value in the event of significant appreciation. The fair value of these interest is generally determined by negotiation or arbitration when settled, which will occur at various dates through 2026. These equity awards are settled on a net basis, with the award holder entitled to receive a payment in IAC common shares equal to the intrinsic value of the award at exercise less an amount equal to the

required cash tax withholding payment. The number of IAC common shares ultimately needed to settle these awards may vary significantly from the estimated number below as a result of both movements in our stock price and a determination of fair value of the relevant subsidiary that is different than our estimate. The expense associated with these equity awards is initially measured at fair value at the grant date and is expensed as stock-based compensation over the vesting term. The number of IAC common shares that would be required to settle these interests at current estimated fair values, including vested and unvested interests, at December 31, 2019 is 0.1 million shares. Withholding taxes, which will be paid by the Company on behalf of the employees upon exercise, would have been $20.2 million at December 31, 2019, assuming a 50% withholding rate.

MTCH currently settles substantially all equity awards on a net basis. Assuming all MTCH equity awards outstanding on December 31, 2019 were net settled on that date, MTCH would have issued 8.0 million common shares (of which 2.6 million is related to vested shares and 5.4 million is related to unvested shares) and would have remitted $655.9 million (of which $209.5 million is related to vested shares and $446.4 million is related to unvested shares) in cash for withholding taxes (assuming a 50% withholding rate). If MTCH decided to issue a sufficient number of shares to cover the $655.9 million employee withholding tax obligation, 8.0 million additional shares would be issued by MTCH.

Following the completion of the MTCH IPO, certain subsidiary denominated equity awards, including those issued by Tinder, Inc., were settleable, at IAC's election, in shares of IAC common stock or MTCH common stock. Pursuant to the Employee Matters Agreement between IAC and MTCH, to the extent shares of IAC common stock are issued in settlement of these awards, MTCH reimburses IAC for the cost of those shares in cash or by issuing IAC shares of MTCH common stock. In July 2017, Tinder was merged into MTCH and as a result, all Tinder denominated equity awards were converted into MTCH tandem stock options ("Tandem Awards"). All of the MTCH Tandem Awards exercised during 2019, 2018 and 2017 were exercised on a net basis and were settled in IAC common shares; the Company issued 0.2 million, 0.7 million and 2.0 million shares, respectively, of its common stock to settle these awards and MTCH issued 0.6 million, 2.5 million and 11.3 million shares, respectively, of its common stock to IAC as reimbursement. The Company is no longer settling the Tandem Awards in IAC common stock.

In connection with the Combination, previously issued stock appreciation rights related to the common stock of HomeAdvisor (US) were converted into ANGI stock appreciation rights that are settleable, at ANGI's option, on a net basis with ANGI remitting withholding taxes on behalf of the employee or on a gross basis with ANGI issuing a sufficient number of Class A shares to cover the withholding taxes. While these awards can be settled in either Class A shares of ANGI or shares of IAC common stock at IAC's option, these awards are currently being settled in shares of ANGI. If settled in IAC common stock, ANGI reimburses IAC in either cash or through the issuance of Class A shares to IAC. Assuming all of the stock appreciation rights outstanding on December 31, 2019 were net settled on that date, ANGI would have issued 6.8 million shares of ANGI Class A stock and ANGI would have remitted $57.3 million in cash for withholding taxes (assuming a 50% withholding rate). If ANGI decided to issue a sufficient number of shares to cover the $57.3 million employee withholding tax obligation, 6.8 million additional Class A shares would be issued by ANGI. Assuming all other ANGI equity awards outstanding on December 31, 2019 were net settled on that date, including stock options, RSUs and subsidiary denominated equity, ANGI would have issued 5.1 million shares and would have remitted $43.4 million in cash for withholding taxes (assuming a 50% withholding rate).

In connection with the Combination, the previously issued HomeAdvisor (US) stock appreciation rights were converted into ANGI equity awards resulting in a modification charge of $217.7 million of which $29.0 million, $56.9 million, and $93.4 million were recognized as stock-based compensation expense in the years ended December 31, 2019, 2018, and 2017 respectively, and the remaining charge will be recognized over the vesting period of the modified awards.

During 2014, the Company granted an equity award denominated in shares of a subsidiary of the Company to a non-employee, which was marked to market each reporting period. In the third quarter of 2017, the award was modified and MTCH settled the remaining portion of the award for cash of $33.9 million.