Time Warner Cable 2012 Annual Report Download - page 110

TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
RSUs, including RSUs subject to performance-based vesting conditions (“PBUs”), generally vest equally on each of the
third and fourth anniversary of the grant date, subject to continued employment and, in the case of PBUs, subject to the
satisfaction and certification of the applicable performance conditions. RSUs provide for accelerated vesting upon the
grantee’s termination of employment after reaching a specified age and years of service and, in the case of PBUs, subject to
the satisfaction and certification of the applicable performance conditions. PBUs are subject to forfeiture if the applicable
performance condition is not satisfied. RSUs awarded to non-employee directors are not subject to vesting or forfeiture
restrictions and the shares underlying the RSUs will generally be issued in connection with a director’s termination of service
as a director. Pursuant to the directors’ compensation program, certain directors with more than three years of service on the
Board of Directors have elected an in-service vesting period for their RSU awards. Holders of RSUs are generally entitled to
receive cash dividend equivalents or retained distributions related to regular cash dividends or other distributions,
respectively, paid by TWC. In the case of PBUs, the receipt of the dividend equivalents is subject to the satisfaction and
certification of the applicable performance conditions. Retained distributions are subject to the vesting requirements of the
underlying RSUs.
Stock options, including stock options subject to performance-based vesting conditions (“PBOs”), have exercise prices
equal to the fair market value of TWC common stock at the date of grant. Generally, stock options vest ratably over a four-
year vesting period and expire ten years from the date of grant, subject to continued employment and, in the case of PBOs,
subject to the satisfaction and certification of the applicable performance condition. Certain stock option awards provide for
accelerated vesting upon the grantee’s termination of employment after reaching a specified age and years of service and, in
the case of PBOs, subject to the satisfaction and certification of the applicable performance conditions. PBOs are subject to
forfeiture if the applicable performance condition is not satisfied.
Upon the exercise of a stock option or the vesting of a RSU, shares of TWC common stock may be issued from
authorized but unissued shares or from treasury stock, if any.
Special Dividend Retained Distribution
In connection with the Separation, on March 12, 2009, TWC paid a special cash dividend to holders of record on
March 11, 2009 of TWC’s Class A common stock and Class B common stock (the “Special Dividend”). In connection with
the Special Dividend, holders of RSUs could elect to receive the retained distribution on their RSUs related to the Special
Dividend (the “Special Dividend Retained Distribution”) in the form of cash (payable, without interest, upon vesting of the
underlying RSUs) or in the form of additional RSUs (with the same vesting dates as the underlying RSUs). In connection
with these elections and in conjunction with the payment of the Special Dividend, during the first quarter of 2009, the
Company established a liability of $46 million in other liabilities and TWC shareholders’ equity in the consolidated balance
sheet for the Special Dividend Retained Distribution to be paid in cash, taking into account estimated forfeitures. During the
years ended December 31, 2012, 2011 and 2010, the Company made cash payments of $16 million, $14 million and $6
million, respectively, against the Special Dividend Retained Distribution liability, which are included in other financing
activities in the consolidated statement of cash flows. As of December 31, 2012, the remaining Special Dividend Retained
Distribution liability was $6 million and is classified in other current liabilities in the consolidated balance sheet.
Restricted Stock Units
The following table summarizes information about unvested RSUs for the year ended December 31, 2012:
Number
of
Units
Weighted-
Average
Grant Date
Value
(in millions)
Unvested as of December 31, 2011 ................................................. 5.315 $ 53.74
Granted ....................................................................... 1.442 77.09
Vested ........................................................................ (1.465) 52.21
Forfeited ...................................................................... (0.252) 61.54
Unvested as of December 31, 2012 ................................................. 5.040 60.47
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