Charter 2004 Annual Report Download - page 135

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 2004 FORM 10-K
Notes to Consolidated Financial Statements (continued)
18. Selling, General and Administrative Expenses tom stock and/or shares of restricted stock (not to exceed
3,000,000), as each term is defined in the 2001 Plan. Employees,
Selling, general and administrative expenses consist of the officers, consultants and directors of the Company and its
following for the years presented: subsidiaries and affiliates are eligible to receive grants under the
2001 Plan. Options granted generally vest over four years from
Year Ended December 31,
the grant date, with 25% vesting on the anniversary of the grant
2004 2003 2002
date and ratably thereafter. Generally, options expire 10 years
General and administrative $849 $833 $810 from the grant date.
Marketing 122 107 153 The 2001 Plan allows for the issuance of up to a total of
$971 $940 $963 90,000,000 shares of Charter Class A common stock (or units
Components of selling expense are included in general and convertible into Charter Class A common stock). The total
administrative and marketing expense. shares available reflect a July 2003 amendment to the 2001 Plan
approved by the board of directors and the shareholders of
19. STOCK COMPENSATION PLANS Charter to increase available shares by 30,000,000 shares. In
The Company grants stock options, restricted stock and other 2001, any shares covered by options that terminated under the
incentive compensation pursuant to the 2001 Stock Incentive 1999 Plan were transferred to the 2001 Plan, and no new
Plan of Charter (the ‘‘2001 Plan’’). Prior to 2001, options were options can be granted under the 1999 Plan.
granted under the 1999 Option Plan of Charter Holdco (the In the years ended December 31, 2004 and 2003, certain
‘‘1999 Plan’’). directors were awarded a total of 182,932 and 80,603 shares,
The 1999 Plan provided for the grant of options to respectively, of restricted Class A common stock of which
purchase membership units in Charter Holdco to current and 25,705 shares had been cancelled as of December 31, 2004. The
prospective employees and consultants of Charter Holdco and shares vest one year from the date of grant. In December 2003
its affiliates and current and prospective non-employee directors and January 2004, in connection with new employment agree-
of Charter. Options granted generally vest over five years from ments, certain officers were awarded 50,000 and 50,000 shares,
the grant date, with 25% vesting 15 months after the anniversary respectively, of restricted Class A common stock of which
of the grant date and ratably thereafter. Options not exercised 50,000 shares had been cancelled as of December 31, 2004. The
accumulate and are exercisable, in whole or in part, in any shares vest annually over a four-year period beginning from the
subsequent period, but not later than 10 years from the date of date of grant. As of December 31, 2004, deferred compensation
grant. Membership units received upon exercise of the options remaining to be recognized in future period totaled $0.4 million.
are automatically exchanged into Class A common stock of A summary of the activity for the Company’s stock options,
Charter on a one-for-one basis. excluding granted shares of restricted Class A common stock,
The 2001 Plan provides for the grant of non-qualified stock for the years ended December 31, 2004, 2003 and 2002, is as
options, stock appreciation rights, dividend equivalent rights, follows (amounts in thousands, except per share data):
performance units and performance shares, share awards, phan-
2004 2003 2002
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Options outstanding, beginning of period 47,882 $ 12.48 53,632 $14.22 46,558 $17.10
Granted 9,405 4.88 7,983 3.53 13,122 4.88
Exercised (839) 2.02 (165) 3.96 ——
Cancelled (31,613) 15.16 (13,568) 14.10 (6,048) 16.32
Options outstanding, end of period 24,835 $ 6.57 47,882 $12.48 53,632 $14.22
Weighted average remaining contractual life 8 years 8 years 8 years
Options exercisable, end of period 7,731 $ 10.77 22,861 $16.36 17,844 $17.93
Weighted average fair value of options granted $ 3.71 $ 2.71 $ 2.89
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