Orbitz 2013 Annual Report Download - page 80

ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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In June 2012, we granted 1,425,000 PSUs with a fair value per share of $3.65 to certain of our executive officers. The
PSUs were subject to the satisfaction of a performance condition that the Company's net revenue for fiscal year 2012
equal or exceed a certain threshold. In December 2012, the Compensation Committee modified the performance
condition such that the established net revenue threshold can be achieved over any trailing twelve month period
ending on or prior to December 31, 2013, or each PSU will be forfeited. As a result of this Type III modification, the
PSUs were revalued as of the date of modification to $2.40 per share and the aggregate fair value of the modification
was $3.4 million, which represents the incremental and total expense. At December 31, 2012 the performance
condition of this modification was expected to be met and the performance condition was met in February 2013. The
modified PSUs will vest 25% on each anniversary of the original grant date.
Stock Options
The table below summarizes the stock option activity under the Plan during the year ended December 31, 2013:
Shares
Weighted-
Average
Exercise Price
(per share)
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic Value
(in thousands)
Outstanding at January 1, 2013 2,724,253 $ 4.98
Exercised (1,445,729) $ 5.08
Forfeited (20,000) $ 4.90
Cancelled (30,805) $ 6.28
Outstanding at December 31, 2013 1,227,719 $ 4.84 2.6 $ 2,878
Exercisable at December 31, 2013 1,083,469 $ 4.84 2.5 $ 2,545
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 2013 or 2012.
During the years ended December 31, 2013, 2012 and 2011, the total fair value of options that vested during the
period, was $1.1 million, $1.3 million and $3.0 million, respectively. In addition, the intrinsic value of options exercised was
$3.1 million, $0.0 million, and $0.0 million for the years ended December 31, 2013, 2012 and 2011, respectively.
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 to100% 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.
We grant deferred stock units (“DSUs”) to each participating director on the date that the deferred fees would have
otherwise been paid to the director. The DSUs are issued as restricted stock units under the Plan and are immediately vested
and non-forfeitable. The DSUs entitle the non-employee director to receive one share of our common stock for each deferred
stock unit following the director's retirement or termination of service from the Board of Directors. For all awards granted prior
to 2011, the DSUs are distributed 200 days immediately following such termination date and for all awards granted in 2011 or
later, the DSUs are distributed immediately. The entire grant date fair value of deferred stock units is expensed on the date of
grant.
The table below summarizes the deferred stock unit activity under the Plan during the year ended December 31, 2013: