Dish Network 2004 Annual Report Download - page 114

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ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
Effective August 9, 2004, our Board of Directors authorized the repurchase of an aggregate of up to an additional $1.0
billion of our Class A common stock pursuant to a new share repurchase plan. As of December 31, 2004, we had not
repurchased any shares under this plan. Our share repurchase program does not require us to acquire any specific
number or amount of securities and may be terminated at any time.
Cash Dividend
On December 14, 2004, we paid a one-time cash dividend of $1.00 per share, or approximately $455.7 million, on
outstanding shares of our Class A and Class B common stock to shareholders of record at the close of business on
December 8, 2004.
7. Stock Compensation Plans
Stock Incentive Plans
We have adopted stock incentive plans to attract and retain officers, directors and key employees. We currently
have 80.0 million shares of our Class A common stock reserved for granting awards under our 1995 Stock Incentive
Plan and an additional 80.0 million shares of our Class A common stock for granting awards under our 1999 Stock
Incentive Plan. In general, stock options granted through December 31, 2004 have included exercise prices not less
than the fair market value of our Class A common stock at the date of grant, and vest, as determined by our Board of
Directors, generally at the rate of 20% per year.
During 1999, we adopted an incentive plan under our 1995 Stock Incentive Plan, which provided certain key
employees a contingent incentive including stock options and cash. The payment of these incentives was contingent
upon our achievement of certain financial and other goals. We met certain of these goals during 1999.
Accordingly, in 1999, we recorded approximately $178.8 million of deferred compensation related to post-grant
appreciation of options to purchase approximately 4.2 million shares. The related deferred compensation, net of
forfeitures, was recognized over the five-year option vesting period. During the year ended December 31, 2004,
2003 and 2002, we recognized expense of $1.2 million, $3.5 million and $11.3 million, respectively, under the 1999
incentive plan. There is no remaining deferred compensation to be recognized under this plan.
Effective January 26, 2005, we adopted a long-term, performance-based stock incentive plan (the “2005 LTIP”)
within the terms of our 1999 Stock Incentive Plan to provide incentive to our executive officers and certain other
key employees upon achievement of specified long-term business objectives. Employees participating in the 2005
LTIP may elect to receive a one-time award of (i) an option to acquire a specified number of shares priced at market
value on the date of the awards, expected to be March 31, 2005; (ii) rights to acquire for no additional consideration
a specified smaller number of shares of our Class A common stock; or (iii) a corresponding combination of a lesser
number of option shares and such rights to acquire our Class A common stock. The options and rights will vest at a
varying rate over a seven year period; provided, however, that none of the options or rights will vest if we fail to
achieve the specified long-term performance goal. We will record the related compensation when achievement of
this performance goal becomes probable, if ever. Such compensation, if recorded, would likely result in material
non-cash, stock-based compensation expense in our consolidated statements of operations and comprehensive
income (loss).
We report all non-cash compensation based on stock option appreciation as a single expense category in our
accompanying consolidated statements of operations and comprehensive income (loss). The following table
represents the other expense categories in our consolidated statements of operations and comprehensive income
(loss) that would be affected if non-cash, stock-based compensation was allocated to the same expense categories as
the base compensation for key employees who participate in the 1999 incentive plan.
F–34