Humana 2004 Annual Report Download - page 91

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Activity for our restricted stock awards was as follows for the years ended December 31, 2004, 2003 and
2002:
2004 2003 2002
Balance, January 1, .......................... 155,000 4,131,726 4,733,000
Granted ............................... 10,000 — —
Vested ................................ (155,000) (3,904,382) (270,000)
Forfeited ............................... — (72,344) (331,274)
Balance, December 31, ....................... 10,000 155,000 4,131,726
Restricted stock awards generally vest three years from the date of grant. Unearned compensation under the
restricted stock award plans is amortized over the vesting periods. Compensation expense recognized related to
our restricted stock award plans was $0.2 million in 2004, $5.8 million in 2003, and $9.0 million in 2002. The
decrease in compensation expense in 2004 and 2003 primarily was due to the August 7, 2003 vesting of 3.9
million shares of restricted stock.
Options are granted at the average market price on the date of grant. Exercise provisions vary, but most
options vest in whole or in part 1 to 5 years after grant and expire 10 years after grant. At December 31, 2004,
there were 15,543,781 shares reserved for employee and director stock option plans, including 5,451,095 shares
of common stock available for future grants. On February 24, 2005, the Board of Directors approved the issuance
of 2,595,700 additional options and restricted stock awards.
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