Washington Post 2009 Annual Report Download - page 84

66,020 shares were subject to awards outstanding and 85,375
shares were available for future awards. Activity related to stock
awards under the long-term incentive compensation plan for the
years ended January 3, 2010, December 28, 2008 and
December 30, 2007, was as follows:
2009 2008 2007
Number
of
Shares
Average
Award
Price
Number
of
Shares
Average
Award
Price
Number
of
Shares
Average
Award
Price
Beginning of year,
unvested ...... 32,785 $796.52 34,355 $813.99 29,105 $815.55
Awarded ....... 48,440 415.08 3,550 685.00 19,260 759.66
Vested .........(13,386) 920.32 (1,147) 968.05 (12,838) 726.94
Forfeited ........ (1,819) 672.40 (3,973) 798.37 (1,172) 913.33
End of year,
unvested ...... 66,020 $494.97 32,785 $796.52 34,355 $813.99
For the share awards outstanding at January 3, 2010, the afore-
mentioned restriction will lapse in 2010 for 825 shares, in 2011
for 13,620 shares, in 2012 for 3,850 shares and in 2013 for
36,725 shares. Also, 11,000 shares have restrictions that will
lapse once performance conditions associated with the awards
have been met. Stock-based compensation costs resulting from
Company stock awards reduced net income by $4.6 million,
$3.7 million and $3.7 million in 2009, 2008 and 2007,
respectively.
As of January 3, 2010, there was $20.5 million of total un-
recognized compensation expense related to this plan. That cost is
expected to be recognized on a straight-line basis over a weighted
average period of 1.9 years.
Stock Options. The Company’s employee stock option plan
reserves 1,900,000 shares of the Company’s Class B common
stock for options to be granted under the plan. The purchase price
of the shares covered by an option cannot be less than the fair
value on the granting date. Options generally vest over four years
and have a maximum term of ten years. At January 3, 2010, there
were 362,525 shares reserved for issuance under the stock option
plan, of which 90,569 shares were subject to options outstanding
and 271,956 shares were available for future grants.
Activity related to options outstanding for the years ended
January 3, 2010, December 28, 2008 and December 30, 2007
was as follows:
2009 2008 2007
Number
of
Shares
Average
Option
Price
Number
of
Shares
Average
Option
Price
Number
of
Shares
Average
Option
Price
Beginning of
year ....... 87,025 $581.17 92,275 $606.89 109,175 $593.82
Granted ..... 24,294 421.95 17,000 402.71 — —
Exercised .... ——(17,250) 533.94 (16,275) 519.12
Expired or
forfeited ....(20,750) 637.99 (5,000) 612.00 (625) 609.62
End of year . . . 90,569 $525.44 87,025 $ 581.17 92,275 $606.89
Of the shares covered by options outstanding at the end of 2009,
51,775 are now exercisable; 12,073 will become exercisable in
2010; 10,323 will become exercisable in 2011; 10,324 will
become exercisable in 2012; and 6,074 will become exercisable
in 2013. For 2009, 2008 and 2007, the Company recorded
expense of $1.4 million, $1.1 million and $1.2 million related to
this plan, respectively. Information related to stock options
outstanding and exercisable at January 3, 2010 is as follows:
Options Outstanding Options Exercisable
Range of
Exercise
Prices
Shares
Outstanding
at
01/03/2010
Weighted
Average
Remaining
Contractual
Life (yrs.)
Weighted
Average
Exercise
Price
Shares
Exercisable
at
01/03/2010
Weighted
Average
Remaining
Contractual
Life (yrs.)
Weighted
Average
Exercise
Price
$369–392 . . 16,000 9.1 $370.86 3,750 9.0 $369.48
419–439 . . 23,294 10.0 423.25 — — —
503–586 . . 29,400 1.4 515.28 29,400 1.4 515.28
652–693 . . 2,500 8.0 660.03 1,000 6.5 672.21
729–763 . . 14,875 5.3 733.54 13,125 5.0 734.05
816 . . . 1,500 4.0 816.05 1,500 4.0 816.05
954 . . . 3,000 5.0 953.50 3,000 5.0 953.50
90,569 5.9 $525.44 51,775 3.2 $597.32
At January 3, 2010, the intrinsic value for all options outstanding,
exercisable and unvested was $1.5 million, $0.3 million and $1.2
million, respectively. The intrinsic value of a stock option is the
amount by which the market value of the underlying stock exceeds
the exercise price of the option. The market value of the Company’s
stock was $439.60 at January 3, 2010. At January 3, 2010,
there were 38,794 unvested options related to this plan with an
average exercise price of $429.51 and a weighted average
remaining contractual term of 9.5 years. At December 28, 2008,
there were 22,219 unvested options with an average exercise
price of $480.57.
As of January 3, 2010, total unrecognized stock-based
compensation expense related to this plan was $3.7 million, which
is expected to be recognized on a straight-line basis over a
weighted average period of approximately 2.1 years. There were
no options exercised during 2009. The total intrinsic value of
options exercised during 2008 and 2007 was $2.4 million and
$4.7 million, respectively; a tax benefit from these stock option
exercises of $1.0 million and $1.9 million was realized during
2008 and 2007, respectively.
During 2009 and 2008, all options were granted at an exercise
price equal to the fair market value of the Company’s common stock
at the date of grant. During 2009, the Company granted options of
1,000, 11,944, 10,000 and 1,350, with a weighted average
fair value of $95.05, $100.27, $118.98 and $121.29,
respectively. During 2008, the Company granted options of 2,000
and 15,000, with a weighted average fair value of $159.93 and
$79.24, respectively. There were no options granted during 2007.
70 THE WASHINGTON POST COMPANY