Washington Post 2004 Annual Report Download - page 65

Stock Awards. In 1982, the Company adopted a long-term Changes in options outstanding for the years ended January 2,
incentive compensation plan, which, among other provisions, autho- 2005, December 28, 2003, and December 29, 2002, were as
rizes the awarding of Class B common stock to key employees. follows:
Stock awards made under this incentive compensation plan are
2004 2003 2002
subject to the general restriction that stock awarded to a participant Number Average Number Average Number Average
will be forfeited and revert to Company ownership if the partici- of Option of Option of Option
Shares Price Shares Price Shares Price
pant's employment terminates before the end of a specified period
of service to the Company. At January 2, 2005, there were Beginning of yearÏÏÏÏÏ 152,475 $530.81 163,900 $515.74 170,575 $490.86
52,476 shares reserved for issuance under the incentive compen- Granted ÏÏÏÏÏÏÏÏÏÏ 4,000 953.50 5,000 803.70 11,500 729.00
Exercised ÏÏÏÏÏÏÏÏÏ (33,225) 467.68 (15,675) 450.87 (16,675) 404.14
sation plan. Of this number, 28,001 shares were subject to awards
Forfeited ÏÏÏÏÏÏÏÏÏÏ (1,000) 621.38 (750) 729.00 (1,500) 561.77
outstanding, and 24,475 shares were available for future awards.
End of year ÏÏÏÏÏÏÏÏÏ 122,250 $561.05 152,475 $530.81 163,900 $515.74
Activity related to stock awards under the long-term incentive
compensation plan for the years ended January 2, 2005, Decem- Of the shares covered by options outstanding at the end of 2004,
ber 28, 2003, and December 29, 2002, was as follows: 103,750 are now exercisable, 10,500 will become exercisable in
2005, 4,750 will become exercisable in 2006, 2,250 will
2004 2003 2002
become exercisable in 2007, and 1,000 will become exercisable
Number Average Number Average Number Average
of Award of Award of Award in 2008. Information related to stock options outstanding at Janua-
Shares Price Shares Price Shares Price ry 2, 2005 is as follows:
Beginning of year ÏÏÏÏ 29,845 $643.89 27,625 $536.74 29,895 $539.25
Weighted
AwardedÏÏÏÏÏÏÏÏÏ 200 973.88 15,990 734.01 215 563.36
Average Weighted Weighted
VestedÏÏÏÏÏÏÏÏÏÏÏ (561) 625.91 (12,752) 523.60 (601) 540.61 Number Remaining Average Number Average
Forfeited ÏÏÏÏÏÏÏÏÏ (1,483) 683.58 (1,018) 658.44 (1,884) 578.37 Range of Outstanding Contractual Exercise Exercisable Exercise
End of yearÏÏÏÏÏÏÏÏÏ 28,001 $644.51 29,845 $643.89 27,625 $536.74 Exercise Prices at 1/2/2005 Life (yrs.) Price at 1/2/2005 Price
$222Ó299 500 1.0 $298.75 500 $298.75
In addition to stock awards granted under the long-term incentive 344 5,000 2.0 343.94 5,000 343.94
compensation plan, the Company also made stock awards of 472Ó484 12,125 3.7 473.70 12,125 473.70
500Ó596 85,625 6.0 535.51 79,875 530.99
2,550 shares in 2004, 1,050 shares in 2003, and 2,150 shares
693 500 9.0 692.51 125 692.51
in 2002. Also, on January 3, 2005, the Company made stock 729 10,000 8.0 729.00 5,000 729.00
awards of 13,090 shares. 816 4,500 9.0 816.05 1,125 816.05
954 4,000 10.0 953.50 Ì Ì
For the share awards outstanding at January 2, 2005, the afore-
mentioned restriction will lapse in 2005 for 15,491 shares, in All options were granted at an exercise price equal to or greater
2006 for 450 shares, in 2007 for 17,435 shares, and in 2008 for than the fair market value of the Company's common stock at the
675 shares. Stock-based compensation costs resulting from stock date of grant. The weighted average fair value for options granted
awards reduced net income by $3.6 million ($0.38 per share, during 2004, 2003 and 2002 was $274.93, $229.81, and
basic and diluted), $3.9 million ($0.41 per share, basic and $197.89, respectively. The fair value of options at date of grant
diluted), and $3.5 million ($0.37 per share, basic and diluted) in was estimated using the Black-Scholes method utilizing the following
2004, 2003, and 2002, respectively. assumptions:
Stock Options. The Company's employee stock option plan 2004 2003 2002
reserves 1,900,000 shares of the Company's Class B common
Expected life (years)ÏÏÏÏÏÏÏÏÏÏÏ 777
stock for options to be granted under the plan. The purchase price Interest rateÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3.85% 4.38% 3.69%
of the shares covered by an option cannot be less than the fair VolatilityÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 20.24% 20.43% 21.74%
value on the granting date. At January 2, 2005, there were Dividend yieldÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.73% 0.71% 0.77%
421,125 shares reserved for issuance under the stock option plan,
Refer to Note A for additional disclosures surrounding stock option
of which 122,250 shares were subject to options outstanding, and
accounting.
298,875 shares were available for future grants.
The Company also maintains a stock option plan at its Kaplan
subsidiary that provides for the issuance of Kaplan stock options to
certain members of Kaplan's management. The Kaplan stock option
plan was adopted in 1997 and initially reserved 15 percent, or
150,000 shares, of Kaplan's common stock for options to be
granted under the plan. Under the provisions of this plan, options
are issued with an exercise price equal to the estimated fair value of
Kaplan's common stock and options vest ratably over the number of
years specified (generally 4 to 5 years) at the time of the grant.
Upon exercise, an option holder receives cash equal to the
2004 FORM 10-K 49