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This excerpt taken from the SOHU 10-Q filed May 11, 2009. Share Awards to Executive Officers (other than Tao Wang) and Certain Key Employees In April 2008, Sohu approved and communicated to executive officers other than Tao Wang the grant of an aggregate of 180,000 restricted ordinary shares and to certain key employees the grant of an aggregate of 94,000 restricted share units of Changyou (settleable in ordinary shares upon vesting). These restricted ordinary shares and restricted share units were subject to vesting over a four-year period commencing on February 1, 2008 and are subject to the completion of initial public offering by Changyou. The fair value of the awards at grant date will be recognized in the consolidated statement of operations starting from April 2, 2009, when Changyou was listed on the NASDAQ Global Select Market. On January 15, 2009, Changyou issued 180,000 Class B restricted ordinary shares to executive officers other than Tao Wang and the 94,000 Class B restricted share units to certain key employees. On March 13, 2009, Changyou exchanged the 180,000 Class B restricted ordinary shares for Class B restricted share units (settleable in Class B ordinary shares upon vesting) that otherwise have the same vesting and other terms as applied to the Class B restricted ordinary shares described above. Class B restricted share units granted to executive officers other than Tao Wang and certain key employees totaled 274,000. On March 16, 2009, the above 274,000 Class B restricted share units became 2,740,000 Class B restricted share units as a result of the ten-for-one share split effected on that date. A summary of the above Class B restricted share units activity as of and for the three months ended March 31, 2009 is presented below. The shares and fair value presented in the following form have been revised on a retroactive basis to give effect to the ten-for-one share split.
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As of March 31, 2009, unrecognized compensation cost related to unvested Class B restricted share units of Changyou granted to executive officers other than Tao Wang and to certain key employees was $5.5 million. The methods Changyou used to determine the fair value as of April 2008 grant date of restricted share unites were the same with the methods used for Tao Wang’s shares mentioned above, while the discount rate and DLOM might be slightly different in accordance with the changed circumstances. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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