Discover 2015 Annual Report Download - page 137

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As of December 31, 2015 and 2014, there was $28 million and $24 million, respectively, of total unrecognized
compensation cost related to non-vested RSUs. The cost is expected to be recognized over a weighted-average period
of 1.5 years and 2.3 years.
RSUs provide for accelerated vesting if there is a change in control or upon certain terminations (as defined in the
Omnibus Plan or the award certificate). RSUs include the right to receive dividend equivalents in the same amount and
at the same time as dividends paid to all Company common shareholders.
PSUs
The following table sets forth the activity related to vested and unvested PSUs:
Number of
Units
Weighted-
Average
Grant-Date
Fair Value
Aggregate
Intrinsic Value
(in millions)
PSUs at December 31, 2014 ................................................................................................. 1,559,675 $ 36.92 $ 102
Granted .......................................................................................................................... 354,773 $ 57.32
Conversions to common stock ............................................................................................ (612,748) $ 24.74
Forfeited ......................................................................................................................... (130,315) $ 48.33
PSUs at December 31, 2015 ................................................................................................. 1,171,385 $ 48.21 $ 63
The following table sets forth the activity related to unvested PSUs:
Number of
Units
Weighted-
Average
Grant-Date
Fair Value
Unvested PSUs at December 31, 2014 ............................................................................................................ 1,465,365 $ 37.71
Granted ................................................................................................................................................... 354,773 $57.32
Vested ...................................................................................................................................................... (518,438) $ 24.74
Forfeited ................................................................................................................................................... (130,315) $ 48.33
Unvested PSUs at December 31, 2015(1)(2)(3) ..................................................................................................... 1,171,385 $ 48.21
(1) Includes 511,524 PSUs granted in 2013 that are earned based on the Company's achievement of EPS during the three-year performance period which ends
December 31, 2015 and are subject to the requisite service period which ended February 1, 2016.
(2) Includes 340,838 PSUs granted in 2014 that are earned based on the Company's achievement of EPS during the three-year performance period which ends
December 31, 2016 and are subject to the requisite service period which ends February 1, 2017.
(3) Includes 319,023 PSUs granted in 2015 that may be earned based on the Company's achievement of EPS during the three-year performance period which ends
December 31, 2017 and are subject to the requisite service period which ends February 1, 2018.
Compensation cost associated with PSUs is determined based on the number of instruments granted, the fair value
on the date of grant, and the performance factor. The fair value is amortized on a straight-line basis, net of estimated
forfeitures, over the requisite service period. Each PSU outstanding at December 31, 2015 is a restricted stock instrument
that is subject to additional conditions and constitutes a contingent and unsecured promise by the Company to pay up to
1.5 shares per unit of the Company's common stock on the conversion date for the PSU, contingent on the number of PSUs
to be issued. PSUs have a performance period of three years and a vesting period of three years. The requisite service
period of an award, having both performance and service conditions, is the longest of the explicit, implicit and derived
service periods.
As of December 31, 2015, there was $22 million of total unrecognized compensation cost related to non-vested
PSUs. The cost is expected to be recognized over a weighted-average period of 0.9 years. As of December 31, 2014,
there was $27 million of total unrecognized compensation cost related to non-vested PSUs. The cost is expected to be
recognized over a weighted-average period of 0.8 years.
PSUs provide for accelerated vesting if there is a change in control or upon certain terminations (as defined in the
Omnibus Plan or the award certificate). PSUs include the right to receive dividend equivalents which will accumulate
and pay out in cash, if at all, if and when the underlying shares are issued.