Delta Airlines 2015 Annual Report Download - page 95

TableofContents
NOTE12.EQUITYANDEQUITYCOMPENSATION
Equity
Weareauthorizedtoissue2.0billionsharesofcapitalstock,ofwhichupto1.5billionmaybesharesofcommonstock,parvalue$0.0001pershare,andupto
500millionmaybesharesofpreferredstock.
PreferredStock.Wemayissuepreferredstockinoneormoreseries.TheBoardofDirectorsisauthorized(1)tofixthedescriptions,powers(includingvoting
powers),preferences,rights,qualifications,limitationsandrestrictionswithrespecttoanyseriesofpreferredstockand(2)tospecifythenumberofsharesofany
seriesofpreferredstock.Wehavenotissuedanypreferredstock.
TreasuryStock.WegenerallywithholdsharesofDeltacommonstocktocoveremployees'portionofrequiredtaxwithholdingswhenemployeeequityawards
areissuedorvest.Thesesharesarevaluedatcost,whichequalsthemarketpriceofthecommonstockonthedateofissuanceorvesting.Theweightedaverage
costofsharesheldintreasurywas$17.70and$15.82asofDecember31,2015and2014,respectively.
Equity-Based Compensation
Ourbroad-basedequityandcashcompensationplanprovidesforgrantsofrestrictedstock,stockoptions,performanceawards,includingcashincentiveawards
andotherequity-basedawards(the"2007Plan").Sharesofcommonstockissuedunderthe2007Planmaybemadeavailablefromauthorized,butunissued,
commonstockorcommonstockweacquire.Ifanysharesofourcommonstockarecoveredbyanawardthatiscanceled,forfeitedorotherwiseterminateswithout
deliveryofshares(includingsharessurrenderedorwithheldforpaymentoftheexercisepriceofanawardortaxesrelatedtoanaward),suchshareswillagainbe
availableforissuanceunderthe2007Plan.The2007Planauthorizestheissuanceofupto157millionsharesofcommonstock.AsofDecember31,2015,there
were27millionsharesavailableforfuturegrants.
Wemakelong-termincentiveawardsannuallytoeligibleemployeesunderthe2007Plan.Generally,awardsvestovertime,subjecttotheemployee'scontinued
employment.Equitycompensationexpensefortheseawardsisrecognizedinsalariesandrelatedcostsovertheemployee'srequisiteserviceperiod(generally,the
vestingperiodoftheaward)andtotaled$76million,$81millionand$90millionfortheyearsendedDecember31,2015,2014and2013,respectively.We
recordexpenseonastraight-linebasisforawardswithinstallmentvesting.AsofDecember31,2015,unrecognizedcostsrelatedtounvestedsharesandstock
optionstotaled$61million.Weexpectsubstantiallyallunvestedawardstovest.
RestrictedStock.Restrictedstockiscommonstockthatmaynotbesoldorotherwisetransferredforaperiodoftimeandissubjecttoforfeitureincertain
circumstances.Thefairvalueofrestrictedstockawardsisbasedontheclosingpriceofthecommonstockonthegrantdate.AsofDecember31,2015,therewere
2.5millionunvestedrestrictedstockawards.
StockOptions.StockoptionsaregrantedwithanexercisepriceequaltotheclosingpriceofDeltacommonstockonthegrantdateandgenerallyhavea10-year
term.Wedeterminethefairvalueofstockoptionsatthegrantdateusinganoptionpricingmodel.AsofDecember31,2015,therewere5.3millionoutstanding
stockoptionawardswithaweightedaverageexercisepriceof$15.05,and4.6millionwereexercisable.
PerformanceShares.Performancesharesarelong-termincentiveopportunities,whicharepayableincommonstockand/orcash,andaregenerallycontingent
uponourachievingcertainfinancialgoals.
Other.Therewasnotaxbenefitrecognizedinequityin2015,2014or2013relatedtoequity-basedcompensationasourexcesstaxbenefitshavenotreduced
taxespayable.Therefore,wewillnotrecognizeanincometaxbenefitrelatedtoequitycompensationuntilweexhaustournetoperatinglosses.
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