Xerox 2015 Annual Report Download - page 140

Commencing in 2014, we expanded the PS program to include those employees who had previously been awarded
RSUs, and modified the program to remove the annual performance component. All PSs granted in 2014 will vest
contingent upon meeting cumulative goals for Revenue, EPS and Cash Flow from Operations over a three-year
performance period. As before, if actual results exceed the stated targets, then the participants have the potential to
earn additional shares of common stock: a maximum overachievement of 50% of the original grant for officers and
selected executives and a maximum of 25% of the original grant for all other participants. All PSs entitle the holder
to one share of common stock, payable after a three-year service period and the attainment of the stated goals.
In 2015, the maximum overachievement that can be earned was changed to 100% (from 50%) for officers and
selected executives. All other terms of the awards remain unchanged.
The fair value of PSs is based upon the market price of our stock on the date of the grant. Compensation expense
is recognized over the vesting period, which is normally three years from the date of grant, based on management's
estimate of the number of shares expected to vest. If the stated targets are not met, any recognized compensation
cost would be reversed.
Employee Stock Options: With the exception of the conversion of ACS options in connection with the ACS
acquisition in 2010, we have not issued any new stock options associated with our employee long-term incentive
plan since 2004. All stock options previously issued under our employee long-term incentive plan were fully
exercised, cancelled or expired as of December 31, 2013.
There were 3,119 thousand and 6,115 thousand ACS options outstanding at December 31, 2015 and 2014,
respectively. The ACS options at December 31, 2015 generally expire within the next 2 years.
Summary of Stock-based Compensation Activity
2015 2014 2013
(shares in thousands) Shares
Weighted
Average Grant
Date Fair
Value Shares
Weighted
Average Grant
Date Fair
Value Shares
Weighted
Average Grant
Date Fair
Value
Restricted Stock Units
Outstanding at January 1 12,197 $ 9.50 19,079 $9.62 30,414 $9.19
Granted 798 11.08 926 12.30 610 9.09
Vested (10,191) 7.86 (6,934) 10.33 (9,992)8.43
Cancelled (414)9.27 (874)8.55 (1,953)8.77
Outstanding at December 31 2,390 11.05 12,197 9.50 19,079 9.62
Performance Shares
Outstanding at January 1 20,721 $ 11.36 8,058 $9.15 14,536 $8.74
Granted 9,470 10.68 16,967 12.28 1,839 7.97
Vested (3,268) 7.90 (2,404) 10.68 (6,817)8.03
Cancelled (3,717) 10.74 (1,900) 11.07 (1,500)8.82
Outstanding at December 31 23,206 11.67 20,721 11.36 8,058 9.15
Stock Options
Outstanding at January 1 6,115 $7.00 14,199 $6.95 33,732 $6.86
Granted ——————
Canceled/expired (405)7.43 (215)6.95 (1,298)6.53
Exercised (2,591) 7.09 (7,869) 6.92 (18,235) 6.82
Outstanding at December 31 3,119 6.87 6,115 7.00 14,199 6.95
Exercisable at December 31 3,119 6.87 6,115 7.00 12,164 7.06
In 2013, we deferred the annual grant of RSUs and PSs from July 1, 2013 to January 1, 2014. RSUs granted in
2013 represent off-cycle awards while PSs granted in 2013 represent over-achievement shares associated with the
2010 PSs grant, which vested in 2013. On January 1, 2014, we granted 8,395 thousand PSs with a grant date fair
value of $12.17 per share (the deferral of the 2013 annual grant) and on July 1, 2014, we granted 8,518 thousand
PSs with a grant date fair value of $12.38 per share (the 2014 annual grant).
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