FairPoint Communications 2007 Annual Report Download - page 103
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Table of Contents
resulted in the principal shareholders holding less than 10% of their original ownership, or other changes in control, as defined, were to
have occurred. The number of options that would have become ultimately exercisable also depended upon the extent to which the price per
share obtained in the sale of the Company would exceed a minimum selling price of $22.59 per share. The initial public offering did not
trigger exercisability of these options.
In February 2007, all the options outstanding under the 1998 Plan were cancelled, except the 47,373 options with a $36.94 exercise
price. This cancellation was triggered by certain events noted in the 1998 Plan.
These stock options were granted by the Company prior to becoming a public company and therefore the Company is accounting
for these options under the prospective method under SFAS 123(R). As of December 31, 2007 and 2006, options to purchase
47,373 shares of common stock were outstanding with a weighted average exercise price of $36.94. These remaining options outstanding
are time-based vesting only and are fully vested and exercisable as of December 31, 2007.
Stock option activity under the 1998 Plan is summarized as follows:
Outstanding at December 31, 2005 832,888 $ 10.80
Granted — —
Exercised — —
Forfeited — —
Outstanding at December 31, 2006 832,888 10.80
Granted — —
Exercised — —
Forfeited (785,515) 9.22
Outstanding at December 31, 2007 47,373 $ 36.94
Stock options available for grant at December 31, 2007 —
$ 36.94 47,373 4.0 — 47,373
The outstanding options have no aggregate intrinsic value based on the closing price of the Company’s stock of $13.02 on
December 31, 2007.
In May 2000, the Company adopted the FairPoint Communications, Inc. 2000 Employee Stock Incentive Plan (the 2000 Plan). The
2000 Plan provided for grants to members of management of up to 1,898,521 options to purchase common stock, at the discretion of the
compensation committee. During 2002, the Company amended the 2000 Plan to limit the number of shares available for grant to 448,236.
In December 2003, the Company amended the 2000 Plan to allow for the grant to members of management of up to 1,898,521 shares of
stock units in addition to shares available for stock options. Options granted under the 2000 Plan may be of two types: (i) incentive stock
options and (ii) non-statutory stock options. Unless the
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