Time Warner Cable 2007 Annual Report Download - page 115

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As of December 31, 2007, the intrinsic value of unvested Time Warner restricted stock and RSU awards held
by TWC employees was $9 million. Total unrecognized compensation cost related to unvested Time Warner
restricted stock and RSU awards held by TWC employees as of December 31, 2007, without taking into account
expected forfeitures, is $3 million and is expected to be recognized over a weighted-average period of one year. The
fair value of Time Warner restricted stock and RSU awards held by TWC employees that vested during the year was
$3 million in 2007 and $1 million in 2006 (none in 2005).
For the year ended December 31, 2006, Time Warner granted 431,000 RSUs to TWC employees at a weighted-
average grant date fair value of $17.40 per RSU. For the year ended December 31, 2005, Time Warner granted
58,000 RSUs to TWC employees at a weighted-average grant date fair value of $18.25 per RSU.
TWC Equity Plan
On June 8, 2006, the Company’s Board of Directors approved the Time Warner Cable Inc. 2006 Stock
Incentive Plan (the “2006 Plan”) under which awards covering the issuance of up to 100,000,000 shares of TWC
Class A common stock may be granted to directors, employees and certain non-employee advisors of TWC. TWC
made its first grant of equity awards based on TWC Class A common stock in April 2007. Stock options have been
granted under the 2006 Plan with exercise prices equal to, or in excess of, the fair market value at the date of grant.
Generally, the stock options vest ratably over a four-year vesting period and expire ten years from the date of grant.
Certain stock options provide for accelerated vesting upon an election to retire pursuant to TWC’s defined benefit
retirement plans or after reaching a specified age and years of service.
Pursuant to the 2006 Plan, the Company also granted RSU awards, which generally vest over a four-year
period from the date of grant. Certain RSU awards provide for accelerated vesting upon an election to retire
pursuant to TWC’s defined benefit retirement plans or after reaching a specified age and years of service. Shares of
TWC Class A common stock will generally be issued in connection with the vesting of an RSU. RSUs awarded to
non-employee directors of TWC are not subject to vesting restrictions and the shares underlying the RSUs will be
issued in connection with the director’s termination of service as a director of TWC.
Upon the exercise of a stock option or the vesting of a RSU award, shares of TWC Class A common stock are
issued from authorized but unissued shares.
Other information pertaining to each category of TWC equity-based compensation appears below.
TWC Stock Options
The assumptions presented in the table below represent the weighted-average value of the applicable
assumption used to value TWC stock options at their grant date for the year ended December 31, 2007.
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.1%
Expected term to exercise from grant date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.58 years
Risk-free rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7%
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0%
The following table summarizes information about TWC stock options that were outstanding as of
December 31, 2007:
Number
of Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value
(in thousands) (in years) (in thousands)
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,889 $ 36.99
Forfeited or expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79) 37.02
Outstanding as of December 31, 2007 . . . . . . . . . . . . . . . . . 2,810 36.98 9.26 $ 4
Exercisable as of December 31, 2007 . . . . . . . . . . . . . . . . . 5 37.05 4.54 $ —
110
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)