Orbitz 2009 Annual Report Download - page 102

Performance-Based Restricted Stock Units
On June 19, 2008, the Compensation Committee approved a grant of performance-based restricted stock
units (“PSUs”) under the Plan to certain of our executive officers. The PSUs entitle the executives to receive a
certain number of shares of our common stock based on the Company’s satisfaction of certain financial and
strategic performance goals, including net revenue growth, adjusted EBITDA margin improvement and the
achievement of specified technology milestones during fiscal years 2008, 2009 and 2010 (the “Performance
Period”). The performance conditions also provide that if the Company’s aggregate adjusted EBITDA during
the Performance Period does not equal or exceed a certain threshold, each PSU award will be forfeited. Based
on the achievement of the performance conditions during the Performance Period, the final settlement of the
PSU awards will range between 0 and 1662⁄3% of the target shares underlying the PSU awards based on a
specified objective formula approved by the Compensation Committee. The PSUs will vest within 75 days of
the end of the Performance Period.
The target number of shares underlying the PSUs that were granted to certain executive officers during
the year ended December 31, 2008 totaled 249,108 shares and had a grant date fair value of $6.28 per share.
As of December 31, 2008, the Company expects that none of the PSUs will vest.
Non-Employee Directors Deferred Compensation Plan
The table below summarizes the deferred stock unit activity under the Plan for the year ended
December 31, 2008 and the period from July 18, 2007 to December 31, 2007:
Deferred
Stock Units
Weighted Average
Grant Date
Fair Value
(per share)
Outstanding at July 18, 2007 . . ............................. — —
Granted............................................... 62,316 $12.90
Outstanding at December 31, 2007 .......................... 62,316 $12.90
Granted............................................... 203,353 $ 5.58
Common stock issued (a) ................................. (12,853) $11.94
Outstanding at December 31, 2008 .......................... 252,816 $ 7.06
(a) A non-employee director terminated service from our board of directors during the year ended
December 31, 2008. As a result, the non-employee director was entitled to receive one share of our
common stock for each deferred stock unit held by him, or 12,853 shares of our common stock.
In connection with the IPO, we adopted a deferred compensation plan to enable our non-employee
directors to defer the receipt of certain compensation earned in their capacity as non-employee directors.
Eligible directors may elect to defer up to 100% of their annual retainer fees (which are paid by us on a
quarterly basis). We require that at least 50% of the annual retainer be deferred under the plan. In addition,
100% of the annual equity grant payable to non-employee directors is deferred under the plan.
We grant deferred stock units to each participating director on the date that the deferred fees would have
otherwise been paid to the director. The deferred stock units are issued as restricted stock units under the
Orbitz Worldwide, Inc. 2007 Equity and Incentive Plan, as amended.
The deferred stock units are issued as restricted stock units under the plan and are immediately vested
and non-forfeitable. The deferred stock units entitle the non-employee director to receive one share of our
common stock for each deferred stock unit on the date that is 200 days immediately following the non-
employee director’s retirement or termination of service from the board of directors, for any reason. The entire
grant date fair value of deferred stock units is expensed on the date of grant.
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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)