13. Equity-Based Compensation

Partnership Restricted Equity Units — Class A-2

TDS Investor (Cayman) L.P., the partnership which, prior to comprehensive refinancing in April 2013, indirectly owned a majority shareholding in the Company (the “Partnership”), had an equity-based, long-term incentive program for the purpose of retaining certain key employees. Under several plans within this program, key employees were granted restricted equity units (“REUs”) and profit interests in the Partnership. During 2006, the Board of Directors of the Partnership approved the grant of up to approximately 120 million REUs for this incentive plan. The grant date fair value of each award under a plan within the program is based on a valuation of the total equity of the Partnership at the time of each grant of an award.

In May 2013, the Board of Directors of the Partnership approved a grant of substantially all the remaining outstanding authorized REUs/Class A-2 Interests in the Partnership under the plan (approximately 18 million), a substantial portion of which vested immediately, and the balance vested in August 2013. At June 30, 2013, none of the REUs remained outstanding or authorized for grant.

During the nine months ended September 30, 2013, the Company recorded an equity compensation expense of $1 million related to these REUs/Class A-2 Interests in the Partnership, considering the grant date fair value of $0.06 per REU.

Worldwide Equity Plan

In December 2011, Travelport Worldwide Limited (“Worldwide”), a parent company indirectly owning 100% of the Company, introduced an equity-based long-term incentive program (the “2011 Worldwide Equity Plan”), pursuant to which the key employees of the Company were granted shares and restricted share units (“RSUs”) in Worldwide. The grant date fair value of each award under the Worldwide Equity Plan is based on a valuation of the total equity of Worldwide at the time of each grant of an award.

During the nine months ended September 30, 2013, the Board of Directors of Worldwide introduced another equity-based long-term incentive program (the “2013 Worldwide Equity Plan”) whereby 84.1 million of awards were authorized to be granted to certain key employees of the Company. In May 2013, 75.7 million of RSUs were granted to employees, with two-thirds, or 50.5 million RSUs, vesting one-sixth semi-annually on April 15 and October 15 each year for a period of three years, if the employee continues to remain in employment. The balance of one-third or 25.2 million RSUs, vest on April 15, 2015 upon satisfaction of certain performance conditions. As the performance conditions have not been communicated to the employees, these 25.2 million RSUs have not been considered as granted for accounting purposes.

Further, in June 2013, the Board of Directors of Worldwide authorized the grant of 4 million stock options to the Company’s Non-Executive Chairman, Douglas M. Steenland, which vest in 3 years from the date of grant. Of the options granted, 2 million options are subject to time-based vesting and the balance of 2 million options are subject to vesting upon achieving certain performance conditions. The stock options have a contractual life of five years from the date of grant. None of the stock options have vested or have become exercisable as of September 30, 2013.

During the nine months ended September 30, 2013, the Company recorded an equity compensation expense of $2 million related to these RSUs considering the grant date fair value of $0.37 per RSU and less than $1 million related to stock options considering grant date fair value of $0.12 per option.

The activity of all the Company’s equity award programs is presented below:


	Partnership								Worldwide
	Restricted Equity Units (Class A-2)				Shares				Restricted Share Units				Options
	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value		Number of Options		Weighted Average Grant Date Fair Value
Balance as of January 1, 2013		102.2	$	2.08		1.6	$	1.85		0.5	$	1.85		—		—
Granted at fair market value		18.0	$	0.06		—		—		50.6	$	0.37		2.0	$	0.12
Net share settlement		(11.7)	$	0.06		—		—		—		—		—		—
Forfeited		(0.7)	$	0.06		—		—		—		—		—		—

Balance as of September 30, 2013		107.8	$	1.97		1.6		1.85		51.1	$	0.38		2.0	$	0.12

Compensation expense for the nine months ended September 30, 2013 resulted in a credit to the equity on the Company’s consolidated condensed balance sheets of $3 million. The Company expects the future equity-based compensation expense recognized for accounting purposes as being granted as of September 30, 2013 will be approximately $17 million based on the fair value of the RSUs and the options on the grant date.