|
CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
15. Capital Stock
The Company has stock compensation plans pursuant to which it is authorized to grant restricted stock and options to purchase stock for up to 9.6 million shares of the Company’s common stock, of which 1.3 million shares remain available for grant as of December 31, 2003. Restricted stock and stock options may be granted to officers, key employees and non-employee directors.
Restricted Stock.
In 2003, the Company granted non-employee directors 7,428 restricted shares of common stock with a fair value of $0.2 million at the date of grant, all of which vest over three years. In 2002, the Company granted a key employee and non-employee directors an aggregate of 109,894 restricted shares of common stock with a fair value of $2.3 million on the date of grant, all of which vest over five years. In 2001, the Company granted key employees and non-employee directors an aggregate of 155,515 restricted shares of common stock with a fair value of $2.3 million on the date of grant. The shares vest over a three to five year period with 10,015 shares vesting over a three year period and 145,500 shares vesting over a five year period. No restricted shares were forfeited in 2003 or 2002. A total of 9,130 shares of restricted stock were forfeited in 2001. The Company incurred compensation expense totaling $0.9 million, $1.7 million and $0.7 million related to the vesting of restricted stock during the years ended December 31, 2003, 2002 and 2001, respectively. The Company also recorded $0.3 million of compensation expense related to the vesting of restricted stock as part of its 2001 restructuring accrual related to 46,064 shares.
Stock Options.
A summary of the stock option activity under the Company’s stock option plan is as follows as of December 31, 2003, 2002 and 2001:
| |
2003 |
|
2002 |
|
2001 |
 |
|
|
|
| |
|
|
Weighted |
|
|
Weighted |
|
|
Weighted |
| |
|
Average |
|
Average |
|
Average |
| Fixed Options |
Shares |
Exercise Price |
Shares |
Exercise Price |
Shares |
Exercise Price |
|
|
|
|
|
|
|
| Outstanding at beginning of year |
|
3,111,991 |
|
$ |
15.03 |
|
|
3,095,589 |
|
$ |
13.56 |
|
|
4,306,584 |
|
$ |
12.39 |
|
| Granted |
|
683,467 |
|
$ |
20.52 |
|
|
601,895 |
|
$ |
21.53 |
|
|
348,836 |
|
$ |
15.08 |
|
| Exercised |
|
(462,522 |
) |
$ |
13.58 |
|
|
(442,869 |
) |
$ |
13.01 |
|
|
(1,363,050 |
) |
$ |
9.90 |
|
| Cancelled |
|
(40,696 |
) |
$ |
18.79 |
|
|
(142,624 |
) |
$ |
16.83 |
|
|
(196,781 |
) |
$ |
15.52 |
|
|
|
|
|
|
|
|
| Outstanding at end of year |
|
3,292,240 |
|
$ |
16.33 |
|
|
3,111,991 |
|
$ |
15.03 |
|
|
3,095,589 |
|
$ |
13.56 |
|
|
|
|
|
|
|
|
| Options exercisable at year end |
|
1,673,129 |
|
$ |
13.71 |
|
|
1,533,471 |
|
$ |
12.96 |
|
|
1,374,395 |
|
$ |
12.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average fair value of |
| options granted during |
| the year |
|
$ |
8.65 |
|
|
$ |
8.95 |
|
|
$ |
7.67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes information about stock options outstanding at December 31, 2003:
| |
Options Outstanding |
|
Options Exercisable |
|
|
|
| |
|
|
Weighted |
|
|
|
|
|
| |
Number |
Average |
Weighted |
Number |
Weighted |
| |
Outstanding at |
Remaining |
Average |
Exercisable at |
Average |
| Range of Exercise Prices |
12/31/03 |
Contractual Life |
Exercise Price |
12/31/03 |
Exercise Price |
|
|
|
|
|
|
| $ 5.01 to 9.00 |
|
41,000 |
|
|
6.7 years |
|
$ |
7.82 |
|
|
17,000 |
|
$ |
7.82 |
|
| 9.01 to 13.00 |
|
1,097,394 |
|
|
4.2 years |
|
$ |
12.12 |
|
|
992,488 |
|
$ |
12.13 |
|
| 13.01 to 17.65 |
|
936,072 |
|
|
5.5 years |
|
$ |
15.65 |
|
|
570,417 |
|
$ |
15.42 |
|
| 17.66 to 30.00 |
|
1,217,774 |
|
|
8.5 years |
|
$ |
20.94 |
|
|
93,224 |
|
$ |
21.12 |
|
|
|
|
|
| |
|
3,292,240 |
|
|
6.2 years |
|
$ |
16.33 |
|
|
1,673,129 |
|
$ |
13.71 |
|
|
|
|
|
|
|
|
|
|
|
