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Stock-Based Compensation
9 Months Ended
Sep. 30, 2011
Stock Based Compensation [Abstract] 
Disclosure of Compensation Related Costs, Share-based Payments
Employee Stock-Based Compensation
Options and restricted stock units granted on or after July 21, 2010 are issued under the 2010 Equity Incentive Plan and options granted prior to July 21, 2010 are issued under the 2001 Stock Plan, the predecessor to our 2010 Equity Incentive Plan. We have reserved shares of our Class A common stock and Class B common stock for issuance under the 2010 Equity Incentive Plan and 2001 Stock Plan, respectively.
The following table summarizes information for the stock options and restricted stock units that we granted:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2011
 
2010
 
2011
 
2010
 
 
 
 
 
 
 
 
Stock options granted
250,950

 
79,500

 
751,753

 
299,000

Weighted-average exercise price
$
33.97

 
$
36.00

 
$
39.86

 
$
30.08

Weighted-average grant-date fair value
$
16.27

 
$
17.23

 
$
19.24

 
$
14.68

 
 
 
 
 
 
 
 
Restricted stock units granted
—

 
—

 
13,656

 
—

Grant-date fair value
$
—

 
$
—

 
$
32.82

 
$
—

We estimated the fair value of each stock option grant on the date of grant using the following weighted-average assumptions:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2011
 
2010
 
2011
 
2010
 
 
 
 
 
 
 
 
Risk-free interest rate
1.72
%
 
1.93
%
 
2.06
%
 
2.39
%
Expected term (life) of options (in years)
6.08

 
6.08

 
6.06

 
5.90

Expected dividends
—

 
—

 
—

 
—

Expected volatility
48.50
%
 
48.00
%
 
48.32
%
 
49.62
%


We recognized employee stock-based compensation expense of $2.7 million and $1.7 million for the three-month periods ended September 30, 2011 and 2010, respectively. We recognized employee stock-based compensation expense of $7.0 million and $5.2 million for the nine-month periods ended September 30, 2011 and 2010, respectively. Stock-based compensation includes expense related to awards of stock options and restricted stock units and purchases under the 2010 Employee Stock Purchase Plan.
Stock-Based Retailer Incentive Compensation
As discussed in Note 6 — Stockholders’ Equity, we issued Walmart 2,208,552 shares of our Class A common stock. We recognize the fair value of 36,810 shares each month over the 60-month term of the commercial agreement. An early expiration of our right to repurchase as described above would, however, result in the recognition of the fair value of all the shares still subject to repurchase on the date of the expiration. We currently assess an early expiration of our repurchase right to be remote. We record the fair value recognized as stock-based retailer incentive compensation, a contra-revenue component of our total operating revenues. We recognize monthly the fair value of the shares for which our right to repurchase has lapsed using the then-current fair market value of our Class A common stock. We recognized $3.5 million and $5.2 million of stock-based retailer incentive compensation for the three-month periods ended September 30, 2011 and 2010, respectively. We recognized $13.8 million and $7.7 million of stock-based retailer incentive compensation for the nine-month periods ended September 30, 2011 and 2010, respectively.