American Home Shield 2015 Annual Report Download - page 103

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Table of Contents
85
A summary of option activity under the MSIP and Omnibus Incentive Plan as of December 31, 2015, and changes during the year then
ended is presented below:
Weighted Avg.
Remaining
Weighted Avg. Aggregate Contractual
Stock Exercise Intrinsic Term
Options Price (in millions) (in years)
Total outstanding, December 31, 2014 4,604,099 $ 12.27 $67
Granted to employees 411,506 $ 32.70
Exercised (1,182,674) $ 12.33
Forfeited (160,500) $ 20.92
Expired (4,376) $ 16.01
Total outstanding, December 31, 2015 3,668,055 $ 14.16 $ 92 7.22
Total exercisable, December 31, 2015 1,644,793 $12.01 $45 6.10
The Company granted the Company’s executives, officers and employees 304,680; 99,622; and 907,516 RSUs in 2015, 2014
and 2013, respectively, with weighted-average grant date fair values of $32.55 per unit for 2015, $17.52 per unit for 2014, and $13.02
per unit in 2013, which was equivalent to the then current fair value of the Company’s common stock at the grant date. All RSUs
outstanding as of December 31, 2015 will vest in three equal annual installments, subject to an employee’s continued employment.
Upon vesting, each RSU will be converted into one share of the Company’s common stock. The total fair value of RSUs vested during
the years ended December 31, 2015, 2014 and 2013, was $7 million, $5 million and $2 million, respectively.
A summary of RSU activity under the MSIP and the Omnibus Incentive Plan as of December 31, 2015, and changes during
the year then ended is presented below:
Weighted Avg.
Grant Date
RSUs Fair Value
Total outstanding, December 31, 2014 433,506 $ 13.12
Granted to employees 304,680 $ 32.55
Vested (206,610) $ 12.92
Forfeited (31,610) $ 29.77
Total outstanding, December 31, 2015 499,966 $ 23.99
During the years ended December 31, 2015, 2014 and 2013, the Company recognized stock-based compensation expense of
$10 million ($6 million, net of tax), $8 million ($5 million, net of tax) and $4 million ($3 million, net of tax), respectively. As of
December 31, 2015, there was $19 million of total unrecognized compensation costs related to non-vested stock options and RSUs
granted by the Company under the MSIP and Omnibus Incentive Plan. These remaining costs are expected to be recognized over a
weighted-average period of 2.17 years.
There were no stock option modifications in 2015, 2014 and 2013.
TruGreen Spin-Off
In connection with the TruGreen Spin-off, on January 14, 2014, the Company distributed all of New TruGreen’s common
stock to the Company’s stockholders. Following the distribution, the Company’s employees held equity incentive awards covering
shares of New TruGreen common stock as well as equity incentive awards covering shares of the Company’s common stock, and
employees who transferred to New TruGreen held equity incentive awards covering shares of the Company’s common stock as well
as equity incentive awards covering shares of New TruGreen common stock.
To align the interests of the Company’s continuing employees and the interests of New TruGreen’s employees with their
respective employers, on February 14, 2014, the Company and New TruGreen extended offers to each other’s employees to allow
them to tender their equity awards covering shares of their non-employing entity to the respective issuer and subsequently to apply the
proceeds of any such tendered equity awards to subscribe for equity awards in their respective employers at the then-current fair
market value ($12.00, in the case of the Company’s common stock, and $3.75, in the case of New TruGreen common stock). As a
result of this program, on March 18, 2014, the Company accepted tenders of 199,075 shares of the Company’s common stock and
DSUs from New TruGreen employees and issued 237,762 shares of the Company’s common stock and DSUs to the Company’s
continuing employees. Additionally, 63,663 RSUs were converted under this program.
In connection with the TruGreen Spin-off, the Company adjusted the exercise price of options held by the Company’s
employees to reflect the fair market value of its common stock after giving effect to the TruGreen Spin-off by multiplying the exercise
price of such options immediately prior to the TruGreen Spin-off by a fraction, the numerator of which was the fair market value of a
share of its common stock immediately following the TruGreen Spin-off ($12.00 per share) and the denominator of which was the fair
2015 Annual Report 101