Time Warner Cable 2014 Annual Report Download - page 103

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TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
retention grant corresponding to the 2016 annual grant will vest 50% in February of 2019 and 50% in February of 2020, in
each case subject to continued employment. Like the Company’s other equity awards, if a grantee’s employment is
terminated without cause or for good reason within 24 months following the closing of the Comcast merger, the retention
grants will vest in full. However, if the merger has not yet closed and the grantee’s employment is terminated prior to the
date on which either retention grant would have normally been made (i.e., February 2015 or 2016, as appropriate), such
retention grant will be forfeited. Employees who received retention grants will generally not be eligible for additional
equity awards in 2015 or 2016. Consequently, absent the closing of the Comcast merger, both the employees and the
Company would generally be in the same position they would have been in had the additional RSUs been granted in 2015
and 2016, rather than in 2014.
With the exception of the retention grants discussed above, RSUs, including PBUs, generally vest 50% 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 generally provide for accelerated vesting
upon the termination of the grantee’s employment after reaching a specified age and years of service or upon certain
terminations of the grantee’s employment within 24 months following the closing of the Comcast merger 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 TWC’s Board 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. Upon the vesting of a RSU, shares of TWC common stock may be
issued from authorized but unissued shares or from treasury stock, if any.
Stock Options
The following table summarizes information about stock options that were outstanding as of December 31, 2014:
Number of
Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(in millions) (in years) (in millions)
Outstanding as of December 31, 2013 ...................... 7.991 $ 70.58
Exercised ............................................ (3.658) 64.91
Forfeited or expired .................................... (0.114) 78.05
Outstanding as of December 31, 2014 ...................... 4.219 75.29 6.71 $ 324
Exercisable as of December 31, 2014 ...................... 1.372 61.38 5.02 124
Expected to vest as of December 31, 2014 .................. 2.775 81.91 7.52 195
For the year ended December 31, 2014, TWC granted no stock options. For the year ended December 31, 2013, TWC
granted 2.539 million stock options at a weighted-average grant date fair value of $15.66 per option, which included
302,000 stock options subject to performance-based vesting conditions (“PBOs”) at a weighted-average grant date fair
value of $15.57 per PBO. For the year ended December 31, 2012, TWC granted 3.017 million stock options at a weighted-
average grant date fair value of $16.85 per option, which included 372,000 PBOs at a weighted-average grant date fair
value of $16.85 per PBO.
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