Orbitz 2008 Annual Report Download - page 110

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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. Equity-Based Compensation (Continued)
stock units and stock options as additional compensation to the employees who previously held the Travelport interests. This compensation was granted as an
award in consideration of potential future increases in value of the awards previously granted under the Travelport Plan. No incremental compensation expense
was recognized as a result of the conversion.
The fair value of the Class A-2 capital interests granted under the Travelport Plan was estimated on the date of grant based on the fair market value of
Travelport's common equity relative to the number of Class A shares then outstanding. The fair value of the Class B, Class C and Class D partnership interests
was estimated on the date of grant using the Monte-Carlo valuation model with the weighted average assumptions outlined in the table below.
Partnership Interests Granted In
Assumptions:
2007
2006
Dividend yield — —
Expected volatility 45% 40%
Expected life (in years) 6.2 6.6
Risk-free interest rate 4.64% 4.73%
The table below summarizes our activity under the Travelport Plan during 2007, immediately prior to the conversion date, and the year ended December 31,
2006:
Restricted Equity Units
Partnership Interest
Class A-2
Class B
Class C
Class D
Number of
Shares
Weighted Average
Grant Date Fair
Value (per share)
Number of
Shares
Weighted Average
Grant Date Fair
Value (per share)
Number of
Shares
Weighted Average
Grant Date Fair
Value (per share)
Number of
Shares
Weighted Average
Grant Date Fair
Value (per share)
Balance at August 22, 2006 — — — — — — — —
Granted 5,367,234 $ 1.00 1,103,501 $ 0.49 1,103,501 $ 0.43 1,103,501 $ 0.38
Balance at December 31, 2006 5,367,234 $ 1.00 1,103,501 $ 0.49 1,103,501 $ 0.43 1,103,501 $ 0.38
Granted 230,881 $ 1.84 99,863 $ 0.67 99,863 $ 0.65 99,863 $ 0.56
Balance immediately prior to
conversion date 5,598,115 $ 1.03 1,203,364 $ 0.50 1,203,364 $ 0.45 1,203,364 $ 0.39
During 2007, prior to the conversion date, and the period from August 23, 2006 to December 31, 2006, 728,625 and 670,904 restricted equity units vested,
respectively, for a total fair value of $1 million and $1 million, respectively. No partnership interests were vested prior to the conversion date. We expensed the
restricted equity units and the Class B partnership interests on a straight-line basis over the requisite service period based upon the fair value of the award on the
grant date. We did not record any compensation expense for the Class C and Class D partnership interests as it was determined that it was not probable that these
awards would vest.
Cendant Stock-Based Compensation Plans
During the period in which we were owned by Cendant, from November 2004 to August 2006, certain of our employees were granted equity awards in
Cendant's equity under Cendant's existing
103
Source: Orbitz Worldwide, In, 10-K/A, August 28, 2008