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CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
F-27
The following is a summary of share activity subject to option under the MEIP and EIP plans.
Weighted
Shares Average
Subject to Option Price
Option Per Share
Balance at January 1, 2002 19,057,000 $11.87
Options granted 3,065,000 9.53
Options exercised (812,000) 7.90
Options canceled, forfeited or lapsed (2,178,000) 11.94
Balance at December 31, 2002 19,132,000 11.66
Options granted 2,017,000 12.14
Options exercised (1,612,000) 7.97
Options canceled, forfeited or lapsed (1,572,000) 12.92
Balance at December 31, 2003 17,965,000 11.94
Options granted - -
Options exercised (7,411,000) 9.69
Options canceled, forfeited or lapsed (355,000) 12.14
Effect of special, non-recurring dividend 2,212,000 -
Balance at December 31, 2004 12,411,000 $11.15
The following table summarizes information about shares subject to options under the MEIP and EIP at December 31,
2004.
Options Outstanding Options Exercisable
Weighted Average Weighted
Number Range of Weighted Average Remaining Number Average
Outstanding Exercise Prices Exercise Price Life in Years Exercisable Exercise Price
569,000 $ 6.45 – 6.64 $ 6.48 4.23 569,000 $ 6.48
764,000 6.67 – 7.33 7.06 2.70 764,000 7.06
50,000 7.89 – 8.06 7.96 4.37 27,000 8.01
1,685,000 8.19 – 8.19 8.19 7.38 612,000 8.19
391,000 8.80 – 9.68 9.05 2.67 391,000 9.05
1,937,000 9.80 – 10.44 10.40 8.15 456,000 10.28
656,000 10.64 – 11.09 10.88 5.50 656,000 10.88
1,091,000 11.15 – 11.15 11.15 7.38 1,091,000 11.15
586,000 11.51 – 11.58 11.58 6.45 582,000 11.58
2,013,000 11.79 – 11.79 11.79 6.38 1,418,000 11.79
2,669,000 11.83 – 18.46 15.57 5.72 2,669,000 15.57
12,411,000 $ 6.45 – 18.46 $ 11.15 6.24 9,235,000 $ 11.57
The number of options exercisable at December 31, 2003 and 2002 were 11,690,000 and 12,198,000, respectively.
There were no option grants made during 2004. The weighted average fair value of options granted during 2003 and
2002 were $6.04 and $4.98, respectively. For purposes of the pro forma calculation, the fair value of each option grant
is estimated on the date of grant using the Black Scholes option-pricing model with the following weighted average
assumptions used for grants in 2003 and 2002:
2003 2002
Dividend yield - -
Expected volatility 44% 44%
Risk-free interest rate 2.94% 4.94%
Expected life 7 years 7 years