Earthlink 2015 Annual Report Download - page 84

Table of Contents
EARTHLINK HOLDINGS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Escrow Transactions
On April 1, 2011, the Company acquired One Communications Corp. (“One Communications”), a privately-held integrated telecommunications solutions provider
serving customers in the northeast, mid-Atlantic and upper midwest sections of the United States. Pursuant to the One Communications merger agreement, the
Company deposited shares into an escrow account to fund certain post-closing employment obligations and to secure potential post-closing working capital and
other adjustments. The following table presents shares returned from the One Communications escrow fund and recorded as treasury stock for the years ended
December 31, 2013 and 2014:
Year Ended December 31,
2013
2014
(in thousands)
Total shares returned 231
56
Total value of shares returned $ 1,320
$ 258
Dividends
During the years ended December 31, 2013, 2014 and 2015 , cash dividends declared were $0.20 , $0.20 and $0.20 per common share, respectively. The Company
also pays cash dividend amounts on each outstanding restricted stock unit to be paid at the time the restricted stock unit vests. Cash dividend amounts are forfeited
if the restricted stock units do not vest. Total dividend payments were $20.8 million , $16.0 million and $26.4 million , respectively, during the years ended
December 31, 2013, 2014 and 2015 . The decision to declare future dividends is made at the discretion of the Board of Directors and will depend on, among other
things, the Company’s results of operations, financial condition, cash requirements, investment opportunities and other factors the Board of Directors may deem
relevant. In addition, the agreements governing the Company’s Senior Secured Notes and Senior Notes and the Company's Credit Agreement contain restrictions
on the amount of dividends the Company can pay.
9. Stock-Based Compensation
Stock-based compensation expense was $13.3 million , $12.6 million and $14.6 million during the years ended December 31, 2013, 2014 and 2015 , respectively.
The Company has classified stock-based compensation expense within selling, general and administrative expense, the same operating expense line item as cash
compensation paid to employees.
Stock Incentive Plans
The Company has granted options and restricted stock units to employees and non-employee directors to purchase the Company’s common stock under various
stock incentive plans. Under the plans, employees and non-employee directors are eligible to receive awards of various forms of equity-based incentive
compensation, including stock options, restricted stock, restricted stock units, phantom share units and performance awards, among others. The plans are
administered by the Board of Directors or the Leadership and Compensation Committee of the Board of Directors, which determine the terms of the awards
granted. Stock options are generally granted with an exercise price equal to the closing market value of EarthLink common stock on the date of grant, have a term
of ten years or less, and vest over terms of four years from the date of grant. Restricted stock units are granted with various vesting terms that range from one to
three years from the date of grant. The Company's various stock incentive plans provide for the issuance of a maximum of 22.5 million shares, of which
approximately 10.7 million shares were still available for grant as of December 31, 2015 . Upon exercise of stock options or vesting of restricted stock units, the
Company will issue authorized but unissued common stock.
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