FairPoint Communications 2013 Annual Report Download - page 95

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93
(16) Stock-Based Compensation
Stock-based compensation expense recognized in the financial statements is as follows (in thousands):
Predecessor
Company
Year Ended
December 31, 2013
Year Ended
December 31, 2012
Three Hundred
Forty-One
Days Ended
December 31, 2011
Twenty-Four
Days Ended
January 24, 2011
Amounts charged against income, before
income tax benefit $ 5,807 $ 4,055 $ 3,810 $ 5,499
Amount of related income tax benefit
recognized in income (2,326) (1,656) (1,552) (2,220)
Total net income impact $ 3,481 $ 2,399 $ 2,258 $ 3,279
At December 31, 2013, the Company had $1.6 million of stock-based compensation cost related to non-vested awards that
will be recognized over a weighted average period of 1.60 years, all of which is related to awards granted under the FairPoint
Communications, Inc. 2010 Long Term Incentive Plan (the "Long Term Incentive Plan").
Long Term Incentive Plan
The Long Term Incentive Plan provides for grants of up to 3,134,603 shares of common stock awards, of which stock options
and restricted stock awards can be granted. Pursuant to the terms of the Long Term Incentive Plan, if the consolidated enterprise
value of the Company (as defined in the Long Term Incentive Plan) does not equal or exceed $2.3 billion on or prior to the expiration
of the warrants, then the aggregate number of shares available for issuance of future awards will be automatically reduced by
310,326 shares. As of December 31, 2013, there are 972,399 shares available for grant under the Long Term Incentive Plan prior
to the share reduction clause noted in the Long Term Incentive Plan. Each stock option or restricted stock award granted reduces
the availability under the Long Term Incentive Plan by one share. Upon the exercise of each stock option or vesting of each
restricted share award, one new share of common stock will be issued.
On the Effective Date, certain of the Company's employees, a consultant of the Company and members of the board of
directors were granted stock options and/or restricted stock awards. The restricted stock awards granted to the consultant of the
Company were 100% vested on the Effective Date. The remaining restricted stock awards and stock options granted to the
Company's employees and members of the board of directors on the Effective Date vested 25% immediately, with the remainder
of these awards to vest in three equal annual installments, commencing on the first anniversary of the Effective Date, with accelerated
vesting upon (x) a change in control or (y) a termination of an award holder's employment either without cause (but only to the
extent the vesting becomes at least 50%, plus an additional 25% for each full year of the award holder's employment after the first
full year after the Effective Date) or due to the award holder's death or disability (but, for stock options, only to the extent vesting
would have otherwise occurred within one year following such termination of employment).
Subsequent to the Effective Date, through December 31, 2013, the Company has granted additional shares of restricted stock
and stock options with one of the following vesting terms: (i) vest immediately; (ii) vest 100% on the first anniversary; (iii) vest
over three equal annual installments, with one-third vesting on the first anniversary of the grant date and one-third on the second
and third anniversaries thereafter or (iv) vest 25% immediately and 25% on the first, second and third anniversaries thereafter.