Orbitz 2008 Annual Report Download - page 107

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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. Equity-Based Compensation (Continued)
yields on U.S. Treasury strips with a maturity similar to the estimated expected life of the stock options. We use historical turnover to estimate employee
forfeitures.
Assumptions:
Dividend yield —
Expected volatility 38%
Expected life (in years) 6.16
Risk-free interest rate 4.86%
Based on the above assumptions, the weighted average grant-date fair value of stock options granted from July 18, 2007 to December 31, 2007 was $6.89.
The table below summarizes the option activity under the Plan from July 18, 2007 to December 31, 2007:
Shares
Weighted Average
Exercise Price (per share)
Weighted Average
Remaining
Contractual Term (in
years)
Aggregate
Intrinsic Value
Outstanding at July 18, 2007 — — —
Granted 2,732,950 $ 14.96 9.6
Forfeited (172,274) $ 15.00 9.6
Outstanding at December 31, 2007 2,560,676 $ 14.96 9.6 —
Exercisable at December 31, 2007 127,762 $ 15.00 9.6 —
Intrinsic value for stock options is defined as the difference between the current market value and the exercise price. The exercise price of stock options
outstanding and exercisable at December 31, 2007 exceeded the market value, and therefore, the aggregate intrinsic value for these stock options was zero.
Restricted Stock Units
The restricted stock units granted upon conversion of the equity awards previously held by employees under the Travelport Plan, as described below, vested
5.555% in August 2007 and vest an additional 8.586% on each subsequent November, February, May and August through February 2010, and become fully
vested in May 2010. All other restricted stock units cliff vest at the end of either a two-year or three-year period, or vest annually over a four-year period. The
fair value of restricted stock units on the date of grant is amortized on a straight-line basis over the requisite service period.
100
Source: Orbitz Worldwide, In, 10-K/A, August 28, 2008