FairPoint Communications 2009 Annual Report Download - page 157

Table of Contents
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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 Employee Stock Incentive 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 Employee Stock Incentive Plan is summarized as follows:
The remaining contractual life for the options outstanding at December 31, 2009 was 2.8 years, and 130,935 options were exercisable. Based upon
the fair market value of the stock as of December 31, 2009 of $0.03, these options do not have any intrinsic value.
As of March 31, 2008, there were 6,957 stock units outstanding with a grant date fair value per share of $32.51. During 2008, 1,703 stock units
were forfeited and 5,254 stock units vested and were converted to common shares. No unvested awards remained as of December 31, 2008. The
intrinsic value of the 5,254 stock units that vested during 2008 was $0.1 million.
(c) 2005 Stock Incentive Plan
In February 2005, the Company adopted the FairPoint Communications, Inc. 2005 Stock Incentive Plan (the "2005 Stock Incentive Plan"). The
2005 Stock Incentive Plan provides for the grant of up to 947,441 shares of non-vested stock, stock units and stock options to members of the
Company's board of directors and certain key members of the Company's management. Shares granted to employees under the 2005 Stock Incentive
Plan vest over periods ranging from three to four years and certain of
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Outstanding at March 31, 2008 208,687 $ 36.94
Granted — —
Exercised — —
Forfeited — —
Outstanding at December 31, 2008 208,687 $ 36.94
Granted — —
Exercised — —
Forfeited 77,752 $ 36.94
Outstanding at December 31, 2009 130,935 $ 36.94
Stock options available for grant at December 31, 2009 — —