Dish Network 1998 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 of the 1998 Dish Network annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 81

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–26
A summary of EchoStar’s incentive stock option activity for the years ended December 31, 1996, 1997 and 1998 is as follows:
1996 1997 1998
Weighted-
Average
Exercise
Price
Weighted-
Average
Exercise
Price Options
Weighted-
Average
Exercise
Price
Options outstanding, beginning of
year.......................................... 1,117,133 $ 12.23 1,025,273 $14.27 1,524,567 $ 14.99
Granted ........................................ 138,790 27.02 779,550 17.05 698,135 18.78
Repriced....................................... – – 255,794 17.00 – –
Exercised...................................... (103,766) 10.24 (98,158) 9.64 (188,182) 12.52
Forfeited....................................... (126,884) 13.27 (437,892) 19.46 (587,505) 17.08
Options outstanding, end of year .... 1,025,273 $ 14.27 1,524,567 $14.99 1,447,015 $ 16.29
Exercisable at end of year .............. 258,368 $ 11.31 347,009 $12.15 482,303 $ 13.83
Exercise prices for options outstanding as of December 31, 1998 are as follows:
Options Outstanding Options Exercisable
Range of
Exercise Prices
Number
Outstanding
as of
December 31,
1998
Weighted-
Average
Remaining
Contractual
Life
Weighted-
Average
Exercise Price
Number
Exercisable
as of
December 31,
1998
Weighted-
Average
Exercise Price
$ 9.333 – $11.870 306,379 3.72 $ 9.61 212,536 $ 9.57
17.000 – 18.290 937,546 6.19 17.04 265,271 17.03
22.000 – 26.688 203,090 7.28 22.88 4,496 26.69
$ 9.333 – $26.688 1,447,015 5.82 $16.29 482,303 $13.83
On July 1, 1997, the Board of Directors approved a repricing of substantially all outstanding options with an exercise price greater
than $17.00 per share of Class A common stock to $17.00 per share. The Board of Directors would not typically consider reducing
the exercise price of previously granted options. However, these options were repriced due to the occurrence of certain events
beyond the reasonable control of the employees of EchoStar which significantly reduced the incentive these options were intended to
create. The fair market value of the Class A common stock was $15.25 on the date of the repricing. Options to purchase
approximately 256,000 shares of Class A common stock were affected by this repricing.
Accounting for Stock-Based Compensation
EchoStar has elected to follow Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” (“APB
25”) and related interpretations in accounting for its stock-based compensation plans. Under APB 25, EchoStar does not recognize
compensation expense on the issuance of stock under its Stock Incentive Plan because the option terms are fixed and the exercise
price equals the market price of the underlying stock on the date of grant. In October 1995, the Financial Accounting Standards
Board issued Financial Accounting Standard No. 123, “Accounting and Disclosure of Stock-Based Compensation,” (“FAS No. 123”)
which established an alternative method of expense recognition for stock-based compensation awards to employees based on fair
values. EchoStar elected to not adopt FAS No. 123 for expense recognition purposes.