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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
81
Stock Options
The table below summarizes the stock option activity under the Plan during the year ended December 31, 2011:
Shares
Weighted-
Average
Exercise Price
(per share)
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic Value
(in thousands)
Outstanding at January 1, 2011 . . . . . . . . . . . . . . . . . . 3,738,833 $ 5.28
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 $ 5.43
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —$ —
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (197,260) $ 5.58
Cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (467,417) $ 6.17
Outstanding at December 31, 2011 . . . . . . . . . . . . . . . 3,274,156 $ 5.15 4.5 $ 3
Exercisable at December 31, 2011 . . . . . . . . . . . . . . . 1,981,903 $ 5.25 4.2 $ 2
The exercise price of stock options granted under the Plan is equal to the fair market value of the underlying stock on the
date of grant. Stock options generally expire seven to ten years from the grant date. The stock options granted at the time of the
IPO as additional compensation to our employees who previously held equity awards under Travelport's Equity-Based Long-
Term Incentive Plan (the “Travelport Plan”) vested quarterly over a three-year period and became fully vested in May 2010. All
other stock options vest annually over a four-year period, or vest over a four-year period, with 25% of the awards vesting after
one year and the remaining awards vesting on a monthly basis thereafter. The fair value of stock options on the date of grant is
amortized on a straight-line basis over the requisite service period.
The fair value of stock options granted under the Plan is estimated on the date of grant using the Black-Scholes option-
pricing model. The weighted-average assumptions for stock options granted during the years ended December 31, 2011, 2010
and 2009 (excluding the stock options granted in connection with the stock option exchange) are outlined in the following
table. Expected volatility is based on implied volatilities for publicly traded options and historical volatility for comparable
companies over the estimated expected life of the stock options. The expected life represents the period of time the stock
options are expected to be outstanding and is based on the “simplified method.” We use the “simplified method” due to the lack
of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the
stock options. The risk-free interest rate is based on yields on U.S. Treasury strips with a maturity similar to the estimated
expected life of the stock options.
The fair value of the stock options and assumptions used are as follows:
Years Ended December 31,
Assumptions: 2011 2010 2009
Dividend yield (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ———
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39% 42% 49%
Expected life (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.75 4.69 4.58
Risk-free interest rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.07% 2.09% 1.47%
Weighted-average grant date fair value per share . . . . . . . . . . . . $1.98 $1.88 $1.73
(a) Our dividend yield is estimated to be zero since we did not declare or pay any cash dividends on our common stock
during the years ended December 31, 2011, 2010 and 2009, and we do not intend to in the foreseeable future.
During the years ended December 31, 2011, 2010 and 2009, the total fair value of options that vested during the period
was $3.0 million, $2.2 million and $5.0 million, respectively. In addition, the intrinsic value of options exercised was $0 for
each of the years ended December 31, 2011, 2010 and 2009.