Washington Post 2011 Annual Report Download - page 91

prices, totaled $460.5 million and $457.2 million, respectively,
compared with the carrying amount of $397.1 million and $396.7
million. The carrying value of the Company’s other unsecured debt
at December 31, 2011 approximates fair value.
11. REDEEMABLE PREFERRED STOCK
The Series A preferred stock has a par value of $1.00 per share
and a liquidation preference of $1,000 per share; it is redeemable
by the Company at any time on or after October 1, 2015, at a
redemption price of $1,000 per share. In addition, the holders of
such stock have a right to require the Company to purchase their
shares at the redemption price during an annual 60-day election
period. Dividends on the Series A preferred stock are payable four
times a year at the annual rate of $80.00 per share and in
preference to any dividends on the Company’s common stock. The
Series A preferred stock is not convertible into any other security of
the Company, and the holders thereof have no voting rights except
with respect to any proposed changes in the preferences and
special rights of such stock.
12. CAPITAL STOCK, STOCK AWARDS AND STOCK OPTIONS
Capital Stock. Each share of Class A common stock and Class B
common stock participates equally in dividends. The Class B stock
has limited voting rights and as a class has the right to elect 30% of
the Board of Directors; the Class A stock has unlimited voting rights,
including the right to elect a majority of the Board of Directors. In
2011 and 2010, the Company’s Class A shareholders converted
11,500, or 1%, and 50,810, or 4%, respectively, of the Class A
shares of the Company to an equal number of Class B shares. The
conversions had no impact on the voting rights of the Class A and
Class B common stock.
During 2011, 2010 and 2009, the Company purchased a total of
644,948, 1,057,940 and 145,040 shares, respectively, of its
Class B common stock at a cost of approximately $248.1 million,
$404.8 million and $61.0 million, respectively. In September
2011, the Board of Directors increased the authorization to
repurchase a total of 750,000 shares of Class B common stock.
The Company did not announce a ceiling price or a time limit for
the purchases. The authorization included 43,573 shares that
remained under the previous authorization. At December 31,
2011, the Company had authorization from the Board of Directors
to purchase up to 493,474 shares of Class B common stock.
Stock Awards. In 1982, the Company adopted a long-term
incentive compensation plan, which, among other provisions,
authorizes the awarding of Class B common stock to key employees.
Stock awards made under this incentive compensation plan are
primarily subject to the general restriction that stock awarded to a
participant will be forfeited and revert to Company ownership if the
participant’s employment terminates before the end of a specified
period of service to the Company. Some of the awards are also
subject to performance conditions and will be forfeited and revert to
Company ownership if the conditions are not met. At December 31,
2011, there were 316,805 shares reserved for issuance under the
incentive compensation plan. Of this number, 77,319 shares were
subject to awards outstanding and 239,486 shares were available
for future awards. Activity related to stock awards under the long-term
incentive compensation plan for the years ended December 31,
2011, January 2, 2011 and January 3, 2010, was as follows:
2011 2010 2009
Number
of
Shares
Average
Award
Price
Number
of
Shares
Average
Award
Price
Number
of
Shares
Average
Award
Price
Beginning of year,
unvested ... 48,359 $498.95 66,020 $494.97 32,785 $796.52
Awarded..... 44,030 432.09 1,859 442.29 48,440 415.08
Vested....... (13,132) 722.67 (2,644) 754.81 (13,386) 920.32
Forfeited ..... (1,938) 436.31 (16,876) 437.06 (1,819) 672.40
End of year,
unvested ... 77,319 $424.45 48,359 $498.95 66,020 $494.97
For the share awards outstanding at December 31, 2011, the
aforementioned restriction will lapse in 2012 for 3,200 shares, in
2013 for 31,555 shares, in 2014 for 674 shares and in 2015 for
41,890 shares. Also, in early 2012, the Company made stock
awards of 26,675 shares. Stock-based compensation costs resulting
from Company stock awards were $5.3 million, $2.9 million and
$4.6 million in 2011, 2010 and 2009, respectively.
As of December 31, 2011, there was $18.7 million of total
unrecognized compensation expense related to this plan. That
cost is expected to be recognized on a straight-line basis over a
weighted average period of 1.8 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 December 31, 2011,
there were 362,525 shares reserved for issuance under the stock
option plan, of which 129,044 shares were subject to options
outstanding and 233,481 shares were available for future grants.
Activity related to options outstanding for the years ended
December 31, 2011, January 2, 2011 and January 3, 2010 was
as follows:
2011 2010 2009
Number
of Shares
Average
Option
Price Number of Shares
Average
Option
Price Number of Shares
Average
Option
Price
Beginning
of year . . . 87,919 $495.05 90,569 $525.44 87,025 $581.17
Granted .... 51,000 499.45 22,500 395.68 24,294 421.95
Expired or
forfeited . . (9,875) 519.04 (25,150) 515.59 (20,750) 637.99
End of
year ..... 129,044 $494.95 87,919 $495.05 90,569 $525.44
Of the shares covered by options outstanding at the end of 2011,
45,585 are now exercisable; 27,886 will become exercisable in
2012; 24,448 will become exercisable in 2013; 18,375 will
become exercisable in 2014; and 12,750 will become exercisable
in 2015. For 2011, 2010 and 2009, the Company recorded
expense of $2.7 million, $1.4 million and $1.3 million related to
2011 FORM 10-K 79