Dish Network 2013 Annual Report Download - page 153

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-43
15. Stock-Based Compensation
Stock Incentive Plans
We maintain stock incentive plans to attract and retain officers, directors and key employees. Stock awards under
these plans include both performance and non-performance based stock incentives. As of December 31, 2013, we
had outstanding under these plans stock options to acquire 14.1 million shares of our Class A common stock and 1.9
million restricted stock units. Stock options granted on or prior to December 31, 2013 were granted with exercise
prices equal to or greater than the market value of our Class A common stock at the date of grant and with a
maximum term of approximately ten years. While historically we have issued stock awards subject to vesting,
typically at the rate of 20% per year, some stock awards have been granted with immediate vesting and other stock
awards vest only upon the achievement of certain company-specific subscriber, operational and/or financial goals.
As of December 31, 2013, we had 69.7 million shares of our Class A common stock available for future grant under
our stock incentive plans.
During December 2011, we paid a dividend in cash of $2.00 per share on our outstanding Class A and Class B
common stock to shareholders of record on November 17, 2011. In light of such dividend, during January 2012, the
exercise price of 21.2 million stock options, affecting approximately 600 employees, was reduced by $2.00 per
share (the “2011 Stock Option Adjustment”). Except as noted below, all information discussed below reflects the
2011 Stock Option Adjustment.
On December 28, 2012, we paid a dividend in cash of $1.00 per share on our outstanding Class A and Class B
common stock to shareholders of record on December 14, 2012. In light of such dividend, during January 2013, the
exercise price of 16.3 million stock options, affecting approximately 550 employees, was reduced by $0.77 per
share (the “2012 Stock Option Adjustment”). Except as noted below, all information discussed below reflects the
2012 Stock Option Adjustment.
On January 1, 2008, we completed the distribution of our technology and set-top box business and certain
infrastructure assets (the “Spin-off”) into a separate publicly-traded company, EchoStar. In connection with the
Spin-off, each DISH Network stock award was converted into an adjusted DISH Network stock award and a new
EchoStar stock award consistent with the Spin-off exchange ratio. We are responsible for fulfilling all stock awards
related to DISH Network common stock and EchoStar is responsible for fulfilling all stock awards related to
EchoStar common stock, regardless of whether such stock awards are held by our or EchoStar’s employees.
Notwithstanding the foregoing, our stock-based compensation expense, resulting from stock awards outstanding at
the Spin-off date, is based on the stock awards held by our employees regardless of whether such stock awards were
issued by DISH Network or EchoStar. Accordingly, stock-based compensation that we expense with respect to
EchoStar stock awards is included in “Additional paid-in capital” on our Consolidated Balance Sheets. As of
March 31, 2013, we have recognized all of our stock-based compensation expense resulting from EchoStar stock
awards outstanding at the Spin-off date held by our employees except for the 2005 LTIP performance awards,
which were determined not to be probable as of December 31, 2013. See discussion of the 2005 LTIP below.
The following stock awards were outstanding:
Stock Awards Outstanding
Stock
Op ti ons
Restricted
Stock
Units
Stock
Options
Restricted
Stock
Units
Held by DISH Net work empl oyees.......... 12,821,2 90 1,876,498 602,048 44,288
Held by EchoStar employees................... 1,237,284 66,999 N/A N/A
Total......................................................... 14,058,574 1,943,497 602,048 44,288
A s of December 3 1, 20 13
EchoStar Aw ardsDISH Network Awards