FairPoint Communications 2007 Annual Report Download - page 104
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Table of Contents
compensation committee shall otherwise specify at the time of grant, any option granted under the 2000 Plan shall be a non-statutory stock
option. Effective in February 2005, the Company may no longer grant awards under the 2000 Plan.
Under the 2000 Plan, unless otherwise determined by the compensation committee at the time of grant, participating employees are
granted options to purchase common stock at exercise prices not less than the market value of the Company’s common stock at the date
of grant. Options have a term of 10 years from date of grant. Options vest in increments of 10% on the first anniversary, 15% on the
second anniversary, and 25% on the third, fourth, and fifth anniversaries of an individual grant. Stock units vest in increments of 33%
on each of the third, fourth, and fifth anniversaries of the award. Subject to certain provisions, the Company can cancel each option in
exchange for a payment in cash of an amount equal to the excess of the fair value of the shares over the exercise price for such option. The
Company has not previously exercised this right and does not currently intend to exercise this right in the future.
The 2000 Plan stock options and stock units were granted by the Company prior to becoming a public company and therefore the
Company is accounting for these awards under the prospective method under SFAS 123(R).
Stock option activity under the 2000 Plan is summarized as follows:
Outstanding at December 31, 2004 240,638 $ 36.94
Granted — —
Exercised — —
Forfeited — —
Outstanding at December 31, 2005 240,638 36.94
Granted — —
Exercised — —
Forfeited (31,563) 36.94
Outstanding at December 31, 2006 209,075 36.94
Granted — —
Exercised — —
Forfeited (388) 36.94
Outstanding at December 31, 2007 208,687 $ 36.94
Stock options available for grant at December 31, 2007 —
The remaining contractual life for the options outstanding at December 31, 2007 was 4.8 years, and 208,687 options were
exercisable. Based upon the fair market value of the stock as of December 31, 2007 of $13.02, these options do not have any intrinsic
value.
As of December 31, 2007, there were 7,273 stock units outstanding with a grant date fair value per share of $32.51. During 2007,
2,137 stock units were forfeited and 5,139 stock units vested and were converted to common shares. None of the remaining outstanding
awards were vested as of December 31, 2007 or 2006. The intrinsic value of the 5,139 stock units that vested during 2007 was
$0.1 million.
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