(2) Stock-Based Compensation

Liberty Incentive Plans

The holder of an outstanding option to purchase shares of Liberty Ventures common stock on the record date (an “original Ventures option”) will receive an option to purchase shares of the corresponding series of our common stock (a “new TripCo option”) and an adjustment to the exercise price of and the number of shares subject to the original Ventures option (as so adjusted, “an adjusted Ventures option”). The exercise prices of and the number of shares subject to the new TripCo option and the related adjusted Ventures option will be determined based on the exercise price of and the number of shares subject to the original Ventures option, the pre‑Trip Spin‑Off trading price of Liberty Ventures common stock (determined using the volume weighted average price of Liberty Ventures common stock over the three consecutive trading days immediately preceding the Trip Spin‑Off) and the relative post‑Spin‑Off trading prices of Liberty Ventures common stock and TripCo common stock (determined using the volume weighted average price of the applicable series of common stock over the three consecutive trading days beginning on the first trading day following the Trip Spin‑Off on which both the Liberty Ventures common stock and the TripCo common stock trade in the “regular way” (meaning once the common stock trades using a standard settlement cycle)), such that the pre‑Trip Spin‑Off intrinsic value of the original Ventures option is allocated between the new TripCo option and the adjusted Ventures option.

Except as described above, all other terms of an adjusted Ventures option and a new TripCo option (including, for example, the vesting terms thereof) will in all material respects, be the same as those of the corresponding original Ventures option. The terms of the adjusted Ventures option will be determined and the new TripCo option will be issued as soon as practicable following the determination of the pre‑ and post‑ Trip Spin‑Off trading prices of Liberty Ventures and TripCo common stock, as applicable. Liberty has outstanding approximately 1.8 million Liberty Ventures Series A options, as adjusted for the Ventures 2 for 1 stock split, at June 30, 2014 with a weighted average exercise price of $28.88. Approximately 1.0 million were exercisable at June 30, 2014 with a weighted average exercise price of $28.15.

Included in the accompanying condensed combined statements of operations are the following amounts of stock‑based compensation, a portion of which relates to TripAdvisor as discussed below:

TripAdvisor Equity Grant Awards

During the six months ended June 30, 2014, TripAdvisor issued approximately 491 thousand of primarily service based stock options under their 2011 Incentive Plan with a weighted average price per option of $96.45 and a weighted average estimated grant‑date fair value per option of $47.25. As of June 30, 2014, TripAdvisor has 8.9 million options outstanding (at a weighted average exercise price of $43.79 per share) of which 4.0 million are exercisable (at a weighted average exercise price of $31.79 per share). TripAdvisor related stock‑based compensation for the six months ended June 30, 2014 was $34 million. As of June 30, 2014, the total unrecognized compensation cost related to unvested TripAdvisor stock options was approximately $99 million and will be recognized over a weighted average period of approximately 3.0 years.

Additionally, during the six months ended June 30, 2014, TripAdvisor granted 513 thousand service based RSUs under their 2011 Incentive Plan for which the fair value was measured based on the quoted price of TripAdvisor common stock at the date of grant. The weighted average grant date fair value for RSU’s granted during the six months ended June 30, 2014 was $96.00 per share. As of June 30, 2014, the total unrecognized compensation cost related to 1.3 million unvested TripAdvisor RSUs was approximately $57 million and will be recognized over a weighted average period of approximately 3.2 years.