FairPoint Communications 2010 Annual Report Download - page 115
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Table of Contents
In August 1998, the Company adopted the FairPoint Communications, Inc. (formerly MJD Communications, Inc.) Stock Incentive Plan (the “1998
Plan”). The 1998 Plan provided for grants of up to 1,317,425 nonqualified stock options to executives and members of management, at the discretion of the
compensation committee of the board of directors. Options vest in 25% increments on the second, third, fourth, and fifth anniversaries of an individual grant.
All options have a term of 10 years from date of grant. In the event of a change in control, outstanding options will vest immediately. Effective in
February 2005, the Company may no longer grant awards under the 1998 Plan.
Pursuant to the terms of the grant, options granted in 1998 and 1999 would have become exercisable only in the event that the Company was sold, an
initial public offering of the Company’s common stock resulted in the principal shareholders holding less than 10% of their original ownership, or other
changes in control, as defined, were to have occurred. The number of options that would have become ultimately exercisable also depended upon the extent to
which the price per share obtained in the sale of the Company would exceed a minimum selling price of $22.59 per share. The initial public offering did not
trigger exercisability of these options.
In February 2007, all the options outstanding under the 1998 Plan were cancelled, except the 47,373 options with a $36.94 exercise price. This cancellation
was triggered by certain events noted in the 1998 Plan.
These stock options were granted by the Company prior to becoming a public company and therefore the Company is accounting for these options under
the prospective method under SFAS 123(R). As of December 31, 2010, options to purchase 47,373 shares of common stock were outstanding with a weighted
average exercise price of $36.94. These remaining options outstanding are time-based vesting only and are fully vested and exercisable as of December 31,
2010.
Stock option activity under the 1998 Plan is summarized as follows:
Outstanding at March 31, 2008 47,373 $ 36.94
Granted — —
Exercised — —
Forfeited — —
Outstanding at December 31, 2008 47,373 $ 36.94
Granted — —
Exercised — —
Forfeited — —
Outstanding at December 31, 2009 47,373 $ 36.94
Granted — —
Exercised — —
Forfeited — —
Outstanding at December 31, 2010 47,373 $ 36.94
Stock options available for grant at December 31, 2010 — —
$36.94 47,373 1.0 — 47,373
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