Dish Network 2012 Annual Report Download - page 80

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
If all of the stock awards under the 2005 LTIP were vested and the goal had been met or if we had determined that
achievement of the goal was probable during the year ended December 31, 2012, we would have recorded total non-
cash, stock-based compensation expense for our employees as indicated in the table below. If the goal is met and
there are unvested stock awards at that time, the vested amounts would be expensed immediately on our
Consolidated Statements of Operations and Comprehensive Income (Loss), with the unvested portion recognized
ratably over the remaining vesting period.
Total
Vested
Portion (1)
DISH Network awards held by DISH Network employees............ 35,508$ 32,863$
EchoStar awards held by DISH Network employees..................... 6,389 6,032
Total............................................................................................... 41,897$ 38,895$
2005 LTIP
(In thousands)
(1) Represents the amount of this award that has met the foregoing vesting schedule and would therefore vest upon
achievement of the performance condition.
2008 LTIP. During 2008, we adopted a long-term, performance-based stock incentive plan (the “2008 LTIP”). The
2008 LTIP provides stock options and restricted stock units, either alone or in combination, which vest based on
company-specific subscriber and financial goals. Exercise of the stock awards is contingent on achieving these
goals by December 31, 2015.
Although no awards vest until the Company attains the performance goals, compensation related to the 2008 LTIP
will be recorded based on management’s assessment of the probability of meeting the remaining goals. If the
remaining goals are probable of being achieved, we will begin recognizing the associated non-cash, stock-based
compensation expense on our Consolidated Statements of Operations and Comprehensive Income (Loss) over the
estimated period to achieve the goal. See the table below titled “Estimated Remaining Non-Cash, Stock-Based
Compensation Expense.”
During the first quarter 2011, we determined that all of the 2008 LTIP performance goals are probable of
achievement. As of December 31, 2012, approximately 70% of the 2008 LTIP awards had vested. We are
recognizing the associated non-cash stock-based compensation expense on our Consolidated Statements of
Operations and Comprehensive Income (Loss) over the estimated period for vesting of the approximately 30% of
the awards remaining, as indicated in the table below titled “Non-Cash, Stock-Based Compensation Expense
Recognized.”
Other Employee Performance Awards. In addition to the above long-term, performance stock incentive plans, we
have other stock awards that vest based on certain other company-specific subscriber, operational and financial
goals. Exercise of these stock awards is contingent on achieving certain performance goals.
Additional compensation related to these awards will be recorded based on management’s assessment of the
probability of meeting the remaining performance goals. If the remaining goals are probable of being achieved, we
will begin recognizing the associated non-cash, stock-based compensation expense on our Consolidated Statements
of Operations and Comprehensive Income (Loss) over the estimated period to achieve the goal. See the table below
titled “Estimated Remaining Non-Cash, Stock-Based Compensation Expense.”
Although no awards vest until the performance goals are attained, we determined that certain goals were probable of
achievement and, as a result, recorded non-cash, stock-based compensation expense for the years ended December
31, 2012 and 2011, as indicated in the table below titled “Non-Cash, Stock-Based Compensation Expense
Recognized.”
F-50
DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
Given the competitive nature of our business, small variations in subscriber churn, gross new subscriber activation
rates and certain other factors can significantly impact subscriber growth. Consequently, while it was determined that
achievement of certain other company-specific subscriber, operational and financial goals was not probable as of
December 31, 2012, that assessment could change in the future.
The non-cash stock-based compensation expense associated with these awards is as follows:
Estimated Remaining Non-Cash, Stock-Based Compensation Expense 2008 LTIP
Other
Employee
Performance
Awards
Expense estimated to be recognized during 2013.......................................... 1,994$ 2,677$
Estimated contingent expense subsequent to 2013........................................ - 42,804
Total estimated remaining expense over the term of the plan........................ 1,994$ 45,481$
(In thousands)
Non-Cash, Stock-Based Compensation Expense Recognized 2012 2011 2010
2008 LTIP............................................................................................. 9,812$ 19,230$ 2,984$
Other employee performance awards.................................................... 7,471 10 271
Total non-cash, stock-based compensation expense
recognized for performance based awards......................................... 17,283$ 19,240$ 3,255$
For the Years Ended December 31,
(In thousands)
Of the 16.4 million stock options and 1.2 million restricted stock units outstanding under our stock incentive plans
as of December 31, 2012, the following awards were outstanding pursuant to our performance-based stock incentive
plans:
Performance Based Stock Options
Number of
Awards
Weighted-
Average
Grant Price
2005 LTIP................................................................ 3,214,500 21.10$
2008 LTIP................................................................ 1,714,750 10.59$
Other employee performance awards....................... 3,000,000 21.16$
Total......................................................................... 7,929,250 18.85$
Restricted Performance Units
2005 LTIP................................................................ 319,830
2008 LTIP................................................................ 10,250
Other employee performance awards....................... 855,000
Total......................................................................... 1,185,080
As of December 31, 2012
F-51