Home Shopping Network 2013 Annual Report Download - page 53

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51
NOTE 11—STOCK-BASED AWARDS
Stock-based compensation expense is included in the following line items in the accompanying consolidated statements
of operations (in thousands):
Year Ended December 31,
2013 2012 2011
Selling and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,793 $ 3,515 $ 4,722
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,250 15,541 21,679
Stock-based compensation expense before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,043 19,056 26,401
Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,835) (6,494) (8,792)
Stock-based compensation expense after income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,208 $ 12,562 $ 17,609
As of December 31, 2013, there was approximately $22.1 million of unrecognized compensation cost, net of estimated
forfeitures, related to all equity-based awards, which is currently expected to be recognized on a straight-line basis over a
weighted average period of approximately 2.5 years.
Second Amended and Restated 2008 Stock and Annual Incentive Plan
The Second Amended and Restated 2008 Stock and Annual Incentive Plan, as amended (the “Plan”), authorizes the
issuance of 8.0 million shares of HSNi common stock for new awards granted by HSNi. The purpose of the Plan is to assist
HSNi in attracting, retaining and motivating officers, employees, directors and consultants, and to provide HSNi with the
ability to provide incentives more directly linked to the profitability of HSNi’s business and increases in shareholder value. As
of December 31, 2013, there were approximately 2.7 million shares of common stock available for grants under the Plan.
HSNi can grant restricted stock units ("RSUs"), market stock units ("MSUs"), stock options, stock appreciation rights
(“SARs”), dividend equivalents and other stock-based awards under the Plan. Stock-based awards have a maximum term of 10
years. The exercise price of options and SARs granted under the Plan is required to be at, or above, the fair market value of
HSNi’s stock on the date of grant. RSUs have rights to receive dividend equivalents that vest at the same time the underlying
RSUs vest once the requisite service has been rendered. HSNi elects to issue shares of its common stock for RSU vestings and
SAR exercises net of the employees’ minimum tax withholding obligation. The payments made by HSNi to the taxing
authorities for these taxes were $14.4 million, $18.2 million, and $11.4 million for the years ended December 31, 2013, 2012
and 2011, respectively.
Restricted Stock Units
RSUs are awards that are denominated in a hypothetical equivalent number of shares of HSNi’s common stock. At the
time of grant, HSNi determines if the RSUs will be settled in cash, stock or both. The value to the holder of the RSU is based
upon the market value of HSNi’s stock when the RSUs vest. Compensation expense for RSUs granted under the Plan is
measured at the grant date as the fair market value of HSNi’s common stock and expensed ratably over the vesting term. The
RSUs are generally subject to service-based vesting over a term of 3 years to 5 years.
A summary of the status of the nonvested RSUs, as of December 31, 2013 and changes during the year ended
December 31, 2013 is as follows:
Number of
RSUs
Weighted
Average Grant
Date Fair Value
Nonvested at January 1, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 872,109 $ 28.02
Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495,881 58.83
Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (634,512) 38.23
Forfeited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (109,769) 38.56
Nonvested at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623,709 40.25