America Online 2014 Annual Report Download - page 115

AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
$27.00 to $30.00 per share. Upon expiration, approximately 0.3 million shares were tendered through the offer at
a final purchase price of $30.00 per share, for a total purchase price of approximately $8.8 million. AOL
accounted for the repurchase of these shares as treasury stock on the Company’s consolidated balance sheet
during the third quarter of 2012.
NOTE 8—EQUITY-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS
Defined Contribution Plans
AOL employees participate in domestic and international defined contribution plans, primarily consisting of
AOL’s domestic savings plan. AOL’s contributions to these plans are based on a percentage of the employees’
elected contributions and are subject to plan provisions.
Expenses related to AOL’s contribution to plans amounted to $13.4 million, $14.7 million and $14.5 million
for the years ended December 31, 2014, 2013 and 2012, respectively.
Equity-Based Compensation
AOL Equity Plan
Pursuant to the Company’s 2010 SIP stock options are granted to employees, advisors and non-employee
directors of AOL with exercise prices equal to the quoted market value of the common stock at the date of grant.
Performance stock options are also granted to certain senior level executives. Generally, the stock options vest
ratably over a three to four year vesting period and expire ten years from the date of grant. Certain stock option
awards provide for accelerated vesting upon an election to retire after reaching a specified age and years of
service, as well as certain additional circumstances for non-employee directors.
Also pursuant to the 2010 SIP, AOL may also grant shares of common stock, RSUs or PSUs to its
employees, advisors and non-employee directors, which generally vest ratably over a three to four year period
from the date of grant. Holders of common stock, RSU and PSU awards are generally entitled to receive regular
cash dividends or dividend equivalents at the discretion of the Board, if paid by the Company during the period
of time that the restricted stock or RSU awards are unvested. Certain of the Company’s PSU awards are subject
to quarterly remeasurement of expense with corresponding adjustments to cumulative recognized compensation
expense, as the service inception date precedes the grant date for these awards.
The Company is authorized to grant equity awards to employees, advisors and non-employee directors
covering an aggregate of 34.4 million shares of AOL common stock under the 2010 SIP. Amounts available for
issuance pursuant to grants under the 2010 SIP will change over time based on such activities as the conversion
of equity awards into common stock, the forfeiture of equity awards and the cancellation of equity awards,
among other activities.
Upon the (i) exercise of a stock option award, (ii) vesting of a RSU or (iii) grant of restricted stock, shares
of AOL common stock are issued from authorized but unissued shares or from treasury stock.
AOL Employee Stock Purchase Plan
Pursuant to the Company’s 2012 Employee Stock Purchase Plan (the “ESPP”), eligible employees who elect
to participate are granted the opportunity to purchase AOL’s common stock at a discount. The purchase price for
the shares will be the lower of (i) 85% of the fair market value of the Company’s common stock on the first day
of the offering period, or (ii) 85% of the fair market value of the Company’s common stock on the last day of the
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