Frontier Communications 2007 Annual Report Download - page 79

CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
We have granted restricted stock awards to key employees in the form of our common stock. The number of
shares issued as restricted stock awards during 2007, 2006 and 2005 were 722,000, 732,000 and 352,000,
respectively. None of the restricted stock awards may be sold, assigned, pledged or otherwise transferred,
voluntarily or involuntarily, by the employees until the restrictions lapse, subject to limited exceptions. The
restrictions are time based. At December 31, 2007, 1,210,000 shares of restricted stock were outstanding.
Compensation expense, recognized in other operating expenses, of $6.6 million, $6.0 million and $7.4 million,
for the years ended December 31, 2007, 2006 and 2005, respectively, has been recorded in connection with these
grants.
Management Equity Incentive Plan
Prior to its expiration on June 21, 2000, awards of our common stock could have been granted under the
MEIP to eligible officers, management employees and non-management employees in the form of incentive
stock options, non-qualified stock options, stock appreciation rights (SARs), restricted stock or other stock-based
awards.
Since the expiration of the MEIP, no awards have been or may be granted under the MEIP. The exercise
price of stock options issued was equal to or greater than the fair market value of the underlying common stock
on the date of grant. Stock options were not ordinarily exercisable on the date of grant but vest over a period of
time (generally four years). Under the terms of the MEIP, subsequent stock dividends and stock splits have the
effect of increasing the option shares outstanding, which correspondingly decreases the average exercise price of
outstanding options.
1996 and 2000 Equity Incentive Plans
Since the expiration date of the 1996 EIP on May 22, 2006, no awards have been or may be granted under
the 1996 EIP. Under the 2000 EIP, awards of our common stock may be granted to eligible officers, management
employees and non-management employees in the form of incentive stock options, non-qualified stock options,
SAR’s, restricted stock or other stock-based awards. As discussed under the Non-Employee Directors’
Compensation Plans below, prior to May 25, 2006 non-employee directors received an award of stock options
under the 2000 EIP upon commencement of service.
At December 31, 2007, there were 13,517,421 shares authorized for grant under the 2000 EIP and 2,871,999
shares available for grant, as adjusted to reflect stock dividends. No awards will be granted more than 10 years
after the effective date (May 18, 2000) of the 2000 EIP plan. The exercise price of stock options and SARs under
the 2000 and 1996 EIP generally shall be equal to or greater than the fair market value of the underlying common
stock on the date of grant. Stock options are not ordinarily exercisable on the date of grant but vest over a period
of time (generally four years). Under the terms of the EIPs, subsequent stock dividends and stock splits have the
effect of increasing the option shares outstanding, which correspondingly decrease the average exercise price of
outstanding options.
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