DELPHI 2014 Annual Report Download - page 133

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A summary of activity, including award grants, vesting and forfeitures is provided below:
RSUs Weighted Average Grant Date Fair Value
(in thousands)
Nonvested, January 1, 2012 ......................................................................................... 51 $ 19.90
Granted .................................................................................................................... 1,953 31.08
Vested...................................................................................................................... (51) 19.90
Forfeited .................................................................................................................. (54) 30.81
Nonvested, January 1, 2013 ......................................................................................... 1,899 31.09
Granted .................................................................................................................... 1,526 41.72
Vested...................................................................................................................... (285) 29.26
Forfeited .................................................................................................................. (222) 34.55
Nonvested, December 31, 2013 ................................................................................... 2,918 36.55
Granted .................................................................................................................... 1,278 57.27
Vested...................................................................................................................... (1,736) 33.14
Forfeited .................................................................................................................. (186) 41.69
Nonvested, December 31, 2014 ................................................................................... 2,274 50.38
As of December 31, 2014, there were approximately 1,331 thousand performance-based RSUs, with a weighted average
grant date fair value of $32.42, that were vested but not yet distributed.
Delphi recognized compensation expense of $76 million ($58 million, net of tax), $46 million ($35 million, net of tax)
and $20 million ($15 million net of tax) based on the Company’s best estimate of ultimate performance against the respective
targets during the years ended December 31, 2014, 2013 and 2012, respectively. Delphi will continue to recognize
compensation expense, based on the grant date fair value of the awards applied to the Company’s best estimate of ultimate
performance against the respective targets, over the requisite vesting periods of the awards. Based on the grant date fair value
of the awards and the Company’s best estimate of ultimate performance against the respective targets as of December 31, 2014,
unrecognized compensation expense on a pretax basis of approximately $69 million is anticipated to be recognized over a
weighted average period of approximately 2 years. For the years ended December 31, 2014, 2013 and 2012, respectively,
approximately $8 million, $3 million, and $0 million of cash was paid and reflected as a financing activity in the statements of
cash flows related to the minimum statutory tax withholding for vested RSUs.
Value Creation Plan
During the second quarter of 2010, the Board of Managers approved and authorized the VCP, a long-term incentive plan
designed to assist the Company in attracting, retaining, motivating and rewarding key employees of the Company and
promoting the creation of long-term value. Participants were granted an award in September 2010 for the performance period
ending December 31, 2012. Each individual participant’s target value was based on the participants’ level of responsibility
within the Company and the country in which the participant is located. The awards cliff vested on December 31, 2012, the end
of the performance period. In the event of a qualified termination, as defined in the VCP, prior to December 31, 2012, the
participant would have vested in a pro-rata percentage of their award as of the termination date. For any other termination, the
award would have been forfeited.
Approximately $200 million of the VCP awards were settled in cash during the year ended December 31, 2012 and
approximately $31 million (including $11 million of taxes to be paid) that remained in accrued liabilities as of December 31,
2012 related to certain legal entities was paid out in the first quarter of 2013. Final settlement of the awards for Delphi's officers
was comprised of a combination of cash and ordinary shares. On December 31, 2012, 717,230 ordinary shares were issued to
Delphi's officers, of which 290,798 ordinary shares were withheld to cover U.S. withholding taxes. For the years ended
December 31, 2014, 2013 and 2012, respectively, approximately $0 million, $11 million and $0 million of cash was paid and
reflected as a financing activity in the statements of cash flows related to the minimum statutory tax withholding for the vested
ordinary shares. Delphi recognized compensation expense based on estimates of the enterprise value over the requisite vesting
periods of the awards. Compensation expense recognized during the years ended December 31, 2014, 2013, and 2012 totaled
$0 million ($0 million, net of tax), $0 million ($0 million, net of tax) and $140 million ($112 million, net of tax), respectively.
The VCP awards were accounted for as liability awards pursuant to FASB ASC 718, Compensation-Stock Compensation.
Estimating the fair value of the liability awards under the VCP required assumptions regarding the Company’s enterprise value.
Prior to public quoted market prices for averages to determine fair value estimates for the VCP, the fair market value of the