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WYN » Topics » Incentive Equity Awards Conversion

This excerpt taken from the WYN 10-K filed Feb 27, 2009.
Incentive Equity Awards Conversion
 
Prior to August 1, 2006, all employee stock awards (stock options and RSUs) were granted by Cendant. At the time of Separation, a portion of Cendant’s outstanding equity awards were converted into equity awards of the Company at a ratio of one share of Company’s common stock for every five shares of Cendant’s common stock. As a result, the Company issued approximately 2 million RSUs and approximately 24 million stock options upon completion of the conversion of existing Cendant equity awards into Wyndham equity awards. As of December 31, 2008, there were no converted RSUs outstanding.
 
In connection with the distribution of the shares of common stock of Wyndham to Cendant stockholders, on July 31, 2006, the Compensation Committee of Cendant’s Board of Directors approved a change to the date on which all Cendant equity awards (including Wyndham awards granted as an adjustment to such Cendant equity awards) would become fully vested. These equity awards vested on August 15, 2006 rather than August 30, 2006 (which was the previous date upon which such equity awards were to vest).
 
As a result of the acceleration of the vesting of all employee stock awards granted by Cendant, the Company recorded non-cash compensation expense of $45 million during the third quarter of 2006. In addition, the Company recorded a non-cash expense of $9 million related to equitable adjustments to the accelerated awards during 2006. The $54 million of expense is recorded within separation and related costs on the Combined Statement of Operations.


F-34

Table of Contents

The activity related to the converted stock options for the year ended December 31, 2008 consisted of the following:
 
                 
          Weighted
 		 
    Number
 		    Average
 		 
    of Options     Exercise Price  
 
Balance at January 1, 2008
    13.6     $ 36.71  
Exercised (a)
    (0.2 )     20.01  
Canceled
    (2.2 )     47.23  
                 
Balance at December 31, 2008 (b)
    11.2     $ 35.08  
                 
 
 
(a) Stock options exercised during 2008 and 2007 had an intrinsic value of $600,000 and $21 million, respectively.
(b) As of December 31, 2008, the Company had zero outstanding “in the money” stock options and, as such, the intrinsic value was zero. All 11.2 million options were exercisable as of December 31, 2008. Options outstanding and exercisable as of December 31, 2008 have a weighted average remaining contractual life of 1.8 years.
 
The following table summarizes information regarding the Company’s outstanding and exercisable converted stock options as of December 31, 2008:
 
                 
          Weighted
 		 
    Number
 		    Average
 		 
Range of Exercise Prices
  of Options     Exercise Price  
 
$10.00 – $19.99
    2.5     $ 19.77  
$20.00 – $29.99
    0.9       27.45  
$30.00 – $39.99
    3.3       37.47  
$40.00 & Above
    4.5       43.25  
                 
Total Options
    11.2     $ 35.08  
                 
 
18.   Employee Benefit Plans
 
This excerpt taken from the WYN 10-Q filed May 8, 2008.
        Incentive Equity Awards Conversion
 
Prior to August 1, 2006, all employee stock awards (stock options and RSUs) were granted by Cendant. At the time of Separation, a portion of Cendant’s outstanding equity awards were converted into equity awards of the Company at a ratio of one share of the Company’s common stock for every five shares of Cendant’s common stock. As a result, the Company issued approximately 2 million RSUs and approximately 24 million stock options upon completion of the conversion of existing Cendant equity awards into Wyndham equity awards. As of March 31, 2008, there were no converted RSUs outstanding.
 
The activity related to the converted stock options for the three months ended March 31, 2008 consisted of the following:
 
                 
          Weighted
 		 
    Number
 		    Average
 		 
    of Options     Exercise Price  
 
Balance at January 1, 2008
    13.6     $ 36.71  
Exercised (a)
    (0.1 )     20.61  
Canceled
    (1.1 )     59.43  
                 
Balance at March 31, 2008 (b)
    12.4     $ 35.04  
                 
        ­ ­
  (a)   Stock options exercised during the three months ended March 31, 2008 and 2007 had an intrinsic value of approximately $275,000 and $9 million, respectively.
  (b)   As of March 31, 2008, the Company’s outstanding “in the money” stock options had aggregate intrinsic value of $2 million. All 12 million options are exercisable as of March 31, 2008. Options outstanding and exercisable as of March 31, 2008 have a weighted average remaining contractual life of 2.4 years.
 
The following table summarizes information regarding the outstanding and exercisable converted stock options as of March 31, 2008:
 
                 
          Weighted
 		 
    Number
 		    Average
 		 
Range of Exercise Prices
  of Options     Exercise Price  
 
$10.00 – $19.99
    2.6     $ 19.74  
$20.00 – $29.99
    1.2       26.53  
$30.00 – $39.99
    3.5       37.50  
$40.00 – $49.99
    5.0       43.17  
$50.00 & above
    0.1       64.27  
                 
Total Options
    12.4     $ 35.04  
                 


15

Table of Contents

This excerpt taken from the WYN 10-K filed Feb 29, 2008.
Incentive Equity Awards Conversion
 
Prior to August 1, 2006, all employee stock awards (stock options and RSUs) were granted by Cendant. At the time of Separation, a portion of Cendant’s outstanding equity awards were converted into equity awards of the Company at a ratio of one share of Company’s common stock for every five shares of Cendant’s common stock. As a result, the Company issued approximately 2 million RSUs and approximately 24 million stock options upon completion of the conversion of existing Cendant equity awards into Wyndham equity awards.
 
In connection with the distribution of the shares of common stock of Wyndham to Cendant stockholders, on July 31, 2006, the Compensation Committee of Cendant’s Board of Directors approved a change to the date on which all Cendant equity awards (including Wyndham awards granted as an adjustment to such Cendant equity awards) would become fully vested. These equity awards vested on August 15, 2006 rather than August 30, 2006 (which was the previous date upon which such equity awards were to vest). As such, there were zero converted RSUs outstanding on December 31, 2007.
 
As a result of the acceleration of the vesting of all employee stock awards granted by Cendant, the Company recorded non-cash compensation expense of $45 million during the third quarter of 2006. In addition, the Company recorded a non-cash expense of $9 million related to equitable adjustments to the accelerated awards in the third quarter of 2006. The $54 million of expense is recorded within separation and related costs on the Consolidated and Combined Statement of Income.
 
The activity related to the converted stock options for the year ended December 31, 2007 consisted of the following:
 
                 
          Weighted
 		 
    Number
 		    Average
 		 
    of Options     Exercise Price  
 
Balance at January 1, 2007
    22.0     $ 39.87  
Exercised (a)
    (1.8 )     22.32  
Canceled
    (6.6 )     51.31  
                 
Balance at December 31, 2007 (b)
    13.6  (c)   $ 36.71  
                 
(a) Stock options exercised had an intrinsic value of $21 million and $4 million during the year ended December 31, 2007 and 2006, respectively.
 
(b) As of December 31, 2007, the Company’s outstanding “in the money” stock options had aggregate intrinsic value of $11 million. All 14 million options outstanding are exercisable as of December 31, 2007.
 
(c) Options outstanding and exercisable as of December 31, 2007 have a weighted average remaining contractual life of 2.6 years.


F-33

Table of Contents

 
The following table summarizes information as of December 31, 2007 regarding the Company’s outstanding and exercisable stock options converted from Cendant stock options:
 
                 
          Weighted
 		 
    Number
 		    Average
 		 
Range of Exercise Prices
  of Options     Exercise Price  
 
$10.00 – $19.99
    2.6     $ 19.74  
$20.00 – $29.99
    1.6       25.74  
$30.00 – $39.99
    3.6       37.49  
$40.00 – $49.99
    5.1       43.17  
$50.00 & above
    0.7       72.03  
                 
Total Options
    13.6     $ 36.71  
                 
 
This excerpt taken from the WYN 10-Q filed Nov 8, 2007.
        Incentive Equity Awards Conversion
 
Prior to August 1, 2006, all employee stock awards (stock options and RSUs) were granted by Cendant. At the time of Separation, a portion of Cendant’s outstanding equity awards were converted into equity awards of the Company at a ratio of one share of the Company’s common stock for every five shares of Cendant’s common stock. As a result, the Company issued approximately 2 million RSUs and approximately 24 million stock options upon completion of the conversion of existing Cendant equity awards into Wyndham equity awards. As of September 30, 2007, there were no converted RSUs outstanding.
 
The activity related to the converted stock options through September 30, 2007 consisted of the following:
 
                 
          Weighted
 		 
    Number
 		    Average
 		 
    of Options     Grant Price  
 
Balance at January 1, 2007
    22.0     $ 39.87  
Exercised (a)
    1.7       19.96  
Canceled
    2.1       44.04  
                 
Balance at September 30, 2007 (b)
    18.2 (c)   $ 40.99  
                 
        ­ ­
  (a)   Stock options exercised during the nine months ended September 30, 2007 had an intrinsic value of approximately $20 million.
  (b)   As of September 30, 2007, the Company’s outstanding “in the money” stock options had aggregate intrinsic value of $47 million. All 18 million options are exercisable as of September 30, 2007.
  (c)   Options outstanding and exercisable as of September 30, 2007 have a weighted average remaining contractual life of 1.9 years.
 
The following table summarizes information regarding the outstanding and exercisable converted stock options as of September 30, 2007:
 
                 
          Weighted
 		 
    Number
 		    Average
 		 
Range of Exercise Prices
  of Options     Grant Price  
 
$10.00 – $19.99
    2.6     $ 19.73  
$20.00 – $29.99
    1.8       25.40  
$30.00 – $39.99
    3.7       37.50  
$40.00 – $49.99
    7.0       42.89  
$50.00 & above
    3.1       67.09  
                 
Total Options
    18.2     $ 40.99  
                 


15

Table of Contents

This excerpt taken from the WYN 10-Q filed May 10, 2007.
Incentive Equity Awards Conversion
 
Prior to August 1, 2006, all employee stock awards (stock options and RSUs) were granted by Cendant. At the time of Separation, a portion of Cendant’s outstanding equity awards were converted into equity awards of the Company at a ratio of one share of Company’s common stock for every five shares of Cendant’s common stock. As a result, the Company issued approximately 2 million RSUs and approximately 24 million stock options upon completion of the conversion of existing Cendant equity awards into Wyndham equity awards. As of March 31, 2007, there were zero converted RSUs outstanding.
 
The activity related to the converted stock options through March 31, 2007 consisted of the following:
 
                 
          Weighted
 		 
    Number
 		    Average
 		 
    of Options(c)     Grant Price  
 
Balance at January 1, 2007
    22.0     $ 39.87  
Exercised(a)
    0.8       21.91  
Canceled
    0.5       42.17  
                 
Balance at March 31, 2007(b)
    20.7     $ 40.50  
                 
 
             _ _
  (a)   Stock options exercised during the three months ended March 31, 2007 had an intrinsic value of approximately $9 million.
  (b)   As of March 31, 2007, the Company’s outstanding “in the money” stock options had aggregate intrinsic value of $64 million. All 20.7 million options are exercisable as of March 31, 2007.
  (c)   Options outstanding and exercisable as of March 31, 2007 have a weighted average remaining contractual life of 2.2 years.
 
The following table summarizes information regarding the Company’s outstanding and exercisable stock options as of March 31, 2007:
                 
          Weighted
 		 
    Number
 		    Average
 		 
Range of Exercise Prices
  of Options     Strike Price  
 
$10.00–$19.99
    2.7     $ 19.72  
$20.00–$29.99
    2.5       24.44  
$30.00–$39.99
    3.8       37.43  
$40.00–$49.99
    8.0       42.86  
$50.00 & above
    3.7       64.76  
                 
Total Options
    20.7     $ 40.50  
                 


15

Table of Contents

This excerpt taken from the WYN 10-K filed Mar 7, 2007.
Incentive Equity Awards Conversion
 
Prior to August 1, 2006, all employee stock awards (stock options and RSUs) were granted by Cendant. At the time of Separation, a portion of Cendant’s outstanding equity awards were converted into equity awards of the Company at a ratio of one share of Company’s common stock for every five shares of Cendant’s common stock. As a result, the Company issued approximately 2 million RSUs and approximately 24 million stock options upon completion of the conversion of existing Cendant equity awards into Wyndham equity awards.
 
In connection with the distribution of the shares of common stock of Wyndham to Cendant stockholders, on July 31, 2006, the Compensation Committee of Cendant’s Board of Directors approved a change to the date on which all Cendant equity awards (including Wyndham awards granted as an adjustment to such Cendant equity awards) would become fully vested. These equity awards vested on August 15, 2006 rather than August 30, 2006 (which was the previous date upon which such equity awards were to vest). As such, there were zero converted RSUs outstanding on December 31, 2006.
 
As a result of the acceleration of the vesting of all employee stock awards granted by Cendant, the Company recorded non-cash compensation expense of $45 million during the third quarter of 2006. In addition, the Company recorded a non-cash expense of $9 million related to equitable adjustments to the accelerated awards in the third quarter of 2006. The $54 million of expense is recorded within separation and related costs on the Consolidated and Combined Statement of Income.
 
The activity related to the converted stock options from the date of Separation to December 31, 2006 consisted of the following:
 
                 
          Weighted
 		 
    Number
 		    Average
 		 
    of Options (c)     Exercise Price  
 
Balance at August 1, 2006
    23.7     $ 39.84  
Exercised (a)
    0.6       30.70  
Canceled
    1.1       46.84  
                 
Balance at December 31, 2006 (b)
    22.0     $ 39.87  
                 
 


F-32

Table of Contents

(a) Stock options exercised during the five months ended December 31, 2006 had an intrinsic value of approximately $4 million.
 
(b) As of December 31, 2006, the Company’s outstanding “in the money” stock options had aggregate intrinsic value of $60 million. All 22.0 million options outstanding are exercisable as of December 31, 2006.
 
(c) Options outstanding and exercisable as of December 31, 2006 have a weighted average remaining contractual life of 2.3 years.
 
The following table summarizes information as of December 31, 2006 regarding the Company’s outstanding and exercisable stock options converted from Cendant stock options:
 
                 
          Weighted
 		 
    Number
 		    Average
 		 
Range of Exercise Prices
  of Options     Exercise Price  
 
$10.00 – $19.99
    2.7     $ 19.72  
$20.00 – $29.99
    3.3       23.85  
$30.00 – $39.99
    4.0       37.42  
$40.00 – $49.99
    8.2       42.87  
$50.00 & above
    3.8       64.74  
                 
Total Options
    22.0     $ 39.87  
                 
 

EXCERPTS ON THIS PAGE:

10-K
Feb 27, 2009
10-Q
May 8, 2008
10-K
Feb 29, 2008
10-Q
Nov 8, 2007
10-Q
May 10, 2007
10-K
Mar 7, 2007

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