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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
79
modification to $2.40 per share. As of December 31, 2012, we expect that the performance condition will be satisfied, and as
such, the fair value of the PSUs is being amortized over the requisite service period of each vesting tranche.
Stock Options
The table below summarizes the stock option activity under the Plan during the year ended December 31, 2012:
Shares
Weighted-
Average
Exercise Price
(per share)
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic Value
(in thousands)
Outstanding at January 1, 2012 . . . . . . . . . . . . . . . . . . 3,274,156 $ 5.15
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (232,638) $ 5.49
Cancelled. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (317,265) $ 6.34
Outstanding at December 31, 2012 . . . . . . . . . . . . . . . 2,724,253 $ 4.98 3.6 $ —
Exercisable at December 31, 2012 . . . . . . . . . . . . . . . 2,328,669 $ 5.00 3.5 $ —
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. 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. There were no stock options granted in 2012.
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 and
2010 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
Dividend yield (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39% 42%
Expected life (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.75 4.69
Risk-free interest rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.07% 2.09%
Weighted-average grant date fair value per share . . . . . . . . . . . . $1.98 $1.88
(a) Our dividend yield is estimated to be zero since we did not declare or pay any cash dividends on our common stock
and we do not intend to in the foreseeable future.
During the years ended December 31, 2012, 2011 and 2010, the total fair value of options that vested during the period
was $1.3 million, $3.0 million and $2.2 million, respectively. In addition, the intrinsic value of options exercised was $0 for
each of the years ended December 31, 2012, 2011 and 2010.
Non-Employee Directors Deferred Compensation Plan
We have a deferred compensation plan that enables 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). In addition, 100% of the annual equity grant payable to non-
employee directors is deferred under the Plan.