Charter 2005 Annual Report Download - page 150

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 2005 FORM 10-K
Notes to Consolidated Financial Statements (continued)
date and ratably thereafter. Generally, options expire 10 years 80,603 shares, respectively, of restricted Class A common stock
from the grant date. of which 44,121 shares had been cancelled as of December 31,
The 2001 Plan allows for the issuance of up to a total of 2005. The shares vest one year from the date of grant. In 2005,
90,000,000 shares of Charter Class A common stock (or units 2004 and 2003, in connection with new employment agree-
convertible into Charter Class A common stock). The total ments, certain officers were awarded 2,987,500, 50,000 and
shares available reflect a July 2003 amendment to the 2001 Plan 50,000 shares, respectively, of restricted Class A common stock
approved by the board of directors and the shareholders of of which 68,750 shares had been cancelled as of December 31,
Charter to increase available shares by 30,000,000 shares. In 2005. The shares vest annually over a one to three-year period
2001, any shares covered by options that terminated under the beginning from the date of grant. As of December 31, 2005,
1999 Plan were transferred to the 2001 Plan, and no new deferred compensation remaining to be recognized in future
options can be granted under the 1999 Plan. period totaled $2 million.
In the years ended December 31, 2005, 2004 and 2003,
certain directors were awarded a total of 492,225, 182,932 and
A summary of the activity for the Company’s stock options, excluding granted shares of restricted Class A common stock, for the
years ended December 31, 2005, 2004 and 2003, is as follows (amounts in thousands, except per share data):
2005 2004 2003
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Options outstanding, beginning of period 24,835 $ 6.57 47,882 $12.48 53,632 $14.22
Granted 10,810 1.36 9,405 4.88 7,983 3.53
Exercised (17) 1.11 (839) 2.02 (165) 3.96
Cancelled (6,501) 7.40 (31,613) 15.16 (13,568) 14.10
Options outstanding, end of period 29,127 $ 4.47 24,835 $ 6.57 47,882 $12.48
Weighted average remaining contractual life 8 years 8 years 8 years
Options exercisable, end of period 9,999 $ 7.80 7,731 $10.77 22,861 $16.36
Weighted average fair value of options granted $ 0.65 $ 3.71 $ 2.71
The following table summarizes information about stock options outstanding and exercisable as of December 31, 2005:
Options Outstanding Options Exercisable
Weighted- Weighted-
Average Weighted- Average Weighted-
Remaining Average Remaining Average
Range of Number Contractual Exercise Number Contractual Exercise
Exercise Prices Outstanding Life Price Exercisable Life Price
(In thousands) (in thousands)
$1.11 - $1.60 12,565 9 years $ 1.39 1,297 9 years $ 1.49
$2.85 - $4.56 5,906 7 years 3.40 3,028 7 years 3.33
$5.06 - $5.17 6,970 8 years 5.15 2,187 8 years 5.13
$9.13 - $13.68 1,712 6 years 10.96 1,513 6 years 11.10
$13.96 - $23.09 1,974 4 years 19.24 1,974 4 years 19.24
On January 1, 2003, the Company adopted the fair value accordance with SFAS No. 123, the fair value method will be
measurement provisions of SFAS No. 123, under which the applied only to awards granted or modified after January 1,
Company recognizes compensation expense of a stock-based 2003, whereas awards granted prior to such date will continue
award to an employee over the vesting period based on the fair to be accounted for under APB No. 25, unless they are modified
value of the award on the grant date. Adoption of these or settled in cash. The ongoing effect on consolidated results of
provisions resulted in utilizing a preferable accounting method operations or financial condition will be dependent upon future
as the consolidated financial statements present the estimated stock based compensation awards granted. The Company
fair value of stock-based compensation in expense consistently recorded $14 million, $31 million and $4 million of option
with other forms of compensation and other expense associated compensation expense for the years ended December 31, 2005,
with goods and services received for equity instruments. In 2004 and 2003, respectively.
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