Earthlink 2014 Annual Report Download - page 90

Download and view the complete annual report

Please find page 90 of the 2014 Earthlink annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 148

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148

Table of Contents EARTHLINK HOLDINGS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The weighted average grant date fair value of options granted during the years ended December 31, 2012, 2013 and 2014 was $1.65
per share,
$1.19 per share and $1.48
per share, respectively. The dividend yield assumption was based on the Company's history of dividend payouts at the
time of grant. The expected volatility was based on a combination of the Company's historical stock price and implied volatility. The selection of
implied volatility data to estimate expected volatility was based upon the availability of prices for actively traded options on the Company's
stock. The risk-
free interest rate assumption was based upon the U.S. Treasury yield curve in effect at the time of grant for periods corresponding
with the expected life of the option. The expected life of employee stock options represents the weighted-
average period the stock options are
expected to remain outstanding.
Restricted Stock Units
The following table summarizes restricted stock unit activity as of and for the year ended December 31, 2014 :
The fair value of restricted stock units is determined based on the closing price of EarthLink’s common stock on the grant date. The weighted-
average grant date fair value of restricted stock units granted during the years ended December 31, 2012, 2013 and 2014 was $7.51 , $6.01
and
$4.14 , respectively. The total fair value of shares vested during the years ended December 31, 2012, 2013 and 2014 was $7.4 million ,
$5.7
million and $8.0 million , respectively, which represents the closing price of the Company’
s common stock on the vesting date multiplied by the
number of restricted stock units that vested. As of December 31, 2014 , there was $15.1 million
of total unrecognized compensation cost related
to nonvested restricted stock units. That cost is expected to be recognized over a weighted-average period of 1.9 years .
13. Profit Sharing Plans
The Company sponsors the EarthLink Holdings Corp. 401(k) Plan ("Plan"), which qualifies as a deferred salary arrangement under Section 401
(k) of the Internal Revenue Code. Under the Plan, participating employees may defer a portion of their pretax earnings up to the Internal
Revenue Service annual contribution limit. The Company makes a matching contribution of 50% of the first 6%
of base compensation that a
participant contributes to the Plan. The Company's matching contributions vest over four years
from the participant's date of hire. The Company
contributed $3.9 million , $3.7 million and $3.6 million during the years ended December 31, 2012, 2013 and 2014 , respectively.
80
Restricted
Stock Units
Weighted
Average
Grant Date
Fair Value
(in thousands)
Outstanding as of December 31, 2013
3,936
$
6.80
Granted
4,712
4.14
Vested
(1,921
)
7.04
Forfeited
(917
)
5.71
Outstanding as of December 31, 2014
5,810
$
4.74