Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
2009 Restricted Cash Plan
In March 2009, the Compensation Committee approved the Interpublic Restricted Cash Plan (the “Cash Plan”). Under the Cash Plan, the Board, the Compensation Committee or the Plan Administrator may grant cash awards to certain employees eligible to receive stock-settled and cash-settled awards. Cash awards, when granted, have a service period vesting condition and generally vest in three years.
During the years ended December 31, 2015, 2014 and 2013, the Compensation Committee granted cash awards under the Cash Plan with a total target value of $1.3, $5.8 and $4.6, respectively, and we recognized $3.0, $3.1 and $4.0, respectively, in salaries and related expenses in our Consolidated Statements of Operations.
During the years ended December 31, 2015, 2014 and 2013, the Compensation Committee granted performance awards to be settled in cash under the 2014 PIP and 2009 PIP with a total target value of $31.8, $33.0, and $47.4, respectively, and we recognized $35.8, $27.3 and $18.3, respectively, in salaries and related expenses in our Consolidated Statements of Operations.
We amortize the present value of the amount expected to vest for cash awards and performance cash awards over the vesting period using the straight-line method, less an assumed forfeiture rate. Cash awards do not fall within the scope of the authoritative guidance for stock compensation as they are not paid in equity and the value of the award is not correlated with our stock price. Due to the cash nature of the payouts and the vesting period, we account for these awards in accordance with authoritative guidance for deferred compensation arrangements.
Employee Stock Purchase Plans
In December 2015, the Board approved The Interpublic Group of Companies Employee Stock Purchase Plan (2016) (the “New ESPP”), replacing the prior employee stock purchase plan under which, prior to its expiration on December 31, 2015, 3.0 shares were issued. The issuance of shares under the New ESPP is subject to shareholder approval of the plan at the Company’s 2016 Annual Meeting of Shareholders. Subject to receiving shareholder approval, under the New ESPP eligible employees may purchase our common stock through payroll deductions not exceeding 10% of their eligible compensation or 900 (actual number) shares each offering period, consistent with the prior employee stock purchase plan. The price an employee pays for a share of common stock under the New ESPP continues to be 90% of the lesser of the average market price of a share on the first business day of the offering period or the average market price of a share on the last business day of the offering period of three months. An aggregate of 10.0 shares are reserved for issuance under the New ESPP.
Note 11: Fair Value Measurements
Authoritative guidance for fair value measurements establishes a fair value hierarchy which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:
Unadjusted quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Financial Instruments that are Measured at Fair Value on a Recurring Basis
We primarily apply the market approach to determine the fair value of financial instruments that are measured at fair value on a recurring basis. There were no changes to our valuation techniques used to determine the fair value of financial instruments during 2015 as compared to the prior year.