FairPoint Communications 2005 Annual Report Download - page 93
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stock options. Unless the compensation committee shall otherwise specify at the time of grant, any option granted under the 2000 Plan shall be a nonstatutory
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 Class A common stock at exercise prices not less than the market value of the Company’s Class A 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. Subject to certain provisions, in the event of a change of control, the Company will cancel each option
in exchange for a payment in cash of an amount equal to the excess, if any, of the highest price per share of Class A common stock offered in conjunction with
any transaction resulting in a change of control over the exercise price for such option.
Restricted units vest in increments of 33% on each of the third, fourth, and fifth anniversaries of the award. In December 2003, 27,382 units were
awarded with an aggregate value of $890,000. At December 31, 2004, 26,442 units remain outstanding as 940 units were forfeited in 2004. The Company
recognized compensation expense of $178,000, $177,000 and $15,000 during 2005, 2004 and 2003, respectively, related to these awards and will recognize
the balance of compensation expense over the remaining vesting period.
Stock option activity under the 2000 Plan is summarized as follows:
Outstanding at December 31, 2002 231,331 $ 36.94
Granted 90,580 36.94
Exercised — —
Canceled or forfeited (21,177) 36.94
Outstanding at December 31, 2003 300,734 36.94
Granted — —
Exercised — —
Canceled or forfeited (60,096) 36.94
Outstanding at December 31, 2004 240,638 36.94
Granted — —
Exercised — —
Canceled or forfeited — —
Outstanding at December 31, 2005 240,638 $ 36.94
Stock options available to grant at December 31, 2005 —
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