Washington Post 2002 Annual Report Download - page 50

G. CAPITAL STOCK, STOCK AWARDS, AND STOCK OPTIONS
on the unused portion of the facility, and 0.25 percent to 0.75
percent on the used portion of the facility. Under the terms of the Capital Stock. Each share of Class A common stock and Class B
$350 million 364-day revolving credit facility, interest on bor- common stock participates equally in dividends. The Class B
rowings is at floating rates, and based on the Company’s long- stock has limited voting rights and as a class has the right to elect
term debt rating, the Company is required to pay an annual fee 30 percent of the Board of Directors; the Class A stock has
of 0.05 percent to 0.125 percent on the unused portion of the unlimited voting rights, including the right to elect a majority of
facility, and 0.25 percent to 0.75 percent on the used portion of the Board of Directors.
the facility. Also under the terms of the $350 million 364-day
During 2002, 2001 and 2000, the Company purchased a total
revolving credit facility, the Company has the right to extend the
of 1,229 shares, 714 shares and 200 shares, respectively, of
term of any borrowings for up to one year from the credit facili-
its Class B common stock at a cost of approximately $0.8 mil-
ty’s maturity date for an additional fee of 0.125 percent. Both
lion, $0.4 million and $0.1 million. At December 29, 2002,
revolving credit facilities contain certain covenants, including a
the Company has authorization from the Board of Directors to
financial covenant that the Company maintain at least $1 billion
purchase up to 544,796 shares of Class B common stock.
of consolidated shareholders’ equity.
Stock Awards. In 1982, the Company adopted a long-term
During 2002 and 2001, the Company had average borrowings
incentive compensation plan, which, among other provisions,
outstanding of approximately $793.7 million and $965.8 mil-
authorizes the awarding of Class B common stock to key employ-
lion, respectively, at average annual interest rates of approxi-
ees. Stock awards made under this incentive compensation plan
mately 3.7 percent and 4.9 percent, respectively. The Company
are subject to the general restriction that stock awarded to a
incurred net interest costs on its borrowings of $33.5 million and
participant will be forfeited and revert to Company ownership if
$47.5 million during 2002 and 2001, respectively. No interest
the participant’s employment terminates before the end of a
expense was capitalized in 2002 or 2001.
specified period of service to the Company. At December 29,
At December 29, 2002 and December 30, 2001, the fair value 2002, there were 68,290 shares reserved for issuance under
of the Company’s 5.5 percent unsecured notes, based on quot- the incentive compensation plan. Of this number, 27,625
ed market prices, totaled $426.6 million and $387.7 million, shares were subject to awards outstanding, and 40,665 shares
respectively, compared with the carrying amount of $398.4 mil- were available for future awards. Activity related to stock
lion and $398.1 million, respectively. awards under the long-term incentive compensation plan for the
years ended December 29, 2002, December 30, 2001 and
The carrying value of the Company’s commercial paper borrow-
December 31, 2000, was as follows:
ings and other unsecured debt at December 29, 2002 and
December 30, 2001 approximates fair value. 2002 2001 2000
Number Average Number Average Number Average
F. REDEEMABLE PREFERRED STOCK of Award of Award of Award
Shares Price Shares Price Shares Price
In connection with the acquisition of a cable television system in
Awards Outstanding
1996, the Company issued 11,947 shares of its Series A Pre-
Beginning of year *** 29,895 $539.25 30,165 $413.28 31,360 $412.86
ferred Stock. On February 23, 2000, the Company issued an Awarded ******** 215 563.36 16,865 608.96 1,155 501.72
additional 1,275 shares related to this transaction. From 1998 Vested*********** (601) 540.61 (15,200) 364.13 (99) 330.75
to 2002, 306 shares of Series A Preferred Stock were redeemed Forfeited ********* (1,884) 578.37 (1,935) 555.02 (2,251) 456.41
at the request of Series A Preferred Stockholders. End of year ******** 27,625 $536.74 29,895 $539.25 30,165 $413.28
The Series A Preferred Stock has a par value of $1.00 per share In addition to stock awards granted under the long-term incentive
and a liquidation preference of $1,000 per share; it is redeem- compensation plan, the Company also made stock awards of
able by the Company at any time on or after October 1, 2015 2,150 shares in 2002, 3,300 shares in 2001 and 1,950
at a redemption price of $1,000 per share. In addition, the shares in 2000.
holders of such stock have a right to require the Company to
For the share awards outstanding at December 29, 2002, the
purchase their shares at the redemption price during an annual
aforementioned restriction will lapse in 2003 for 14,861
60-day election period; the first such period began on Februa-
shares, in 2004 for 2,637 shares, in 2005 for 17,623 shares,
ry 23, 2001. Dividends on the Series A Preferred Stock are
and in 2006 for 1,438 shares. Stock-based compensation costs
payable four times a year at the annual rate of $80.00 per
resulting from stock awards reduced net income by $3.5 million
share and in preference to any dividends on the Company’s
($0.37 per share, basic and diluted), $2.6 million ($0.27 per
common stock. The Series A Preferred Stock is not convertible
share, basic and diluted), and $2.4 million ($0.25 per share,
into any other security of the Company, and the holders thereof
basic and diluted) in 2002, 2001 and 2000, respectively.
have no voting rights except with respect to any proposed
changes in the preferences and special rights of such stock. Stock Options. The Company’s employee stock option plan,
which was adopted in 1971 and amended in 1993, reserves
1,900,000 shares of the Company’s Class B common stock for
48 THE WASHINGTON POST COMPANY