Windstream 2007 Annual Report Download - page 151

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. Stock-Based Compensation Plans, Continued:
restricted stock awards in 2006 to the six non-employee directors, which vested on August 2, 2007 and had an
aggregate fair value on the date of grant of $0.6 million.
The Company also assumed restricted stock awards that had been granted by Valor prior to the merger to
employees that were retained by Windstream. Based on the closing stock price on July 17, 2006 of $11.50, these
shares had an aggregate fair value of $2.1 million, and they vested either as employees were terminated due to
elimination of positions or by January 1, 2008 for employees who remained with the Company.
Non-vested Windstream restricted stock activity for the years ended December 31, 2007 and 2006 was as follows:
(Thousands)
Number of
Shares
Weighted Average
Fair Value Per Share
Non-vested at July 17, 2006 - $ -
Granted 3,156.3 12.60
Assumed from Valor acquisition 186.3 11.50
Vested (42.6) 11.50
Forfeited (56.8) 12.42
Non-vested at December 31, 2006 3,243.2 $12.55
Granted 870.8 14.73
Vested (616.8) 12.60
Forfeited (398.4) 13.04
Non-vested at December 31, 2007 3,098.8 $13.09
At December 31, 2007, unrecognized compensation expense totaled to $20.9 million and is expected to be
recognized over the weighted average vesting period of 1.4 years. Unrecognized compensation expense is
included in additional paid-in capital in the accompanying consolidated balance sheets and statement of
shareholders’ equity.
Under Alltel’s stock-based compensation plans, employees that were known to be wireline division employees
(“the Company’s employees”) were granted approximately 293,700 stock options during 2005, with a weighted-
average grant date fair value of $55.45 per share. The Company’s employees exercised 211,100 shares during
2005 with total intrinsic value of $10.1 million. During 2006, the Company’s employees were not granted
additional stock options under Alltel’s compensation plan. Outstanding shares of stock options held by employees
as of the spin off totaled 1,370,300 shares. Pursuant to the spin off, all employees of the Company terminated their
employment with Alltel, and therefore forfeited any unvested stock options. All vested stock options were
required to be exercised within ninety days of termination pursuant to the plan provisions or forfeited. The total
intrinsic value of stock options exercised during the twelve months ended December 31, 2006 was $13.9 million.
Alltel received $127.8 million in cash from the exercise of stock options by employees of the Company during
2006.
In 2005, Alltel granted to certain senior management employees of the Company restricted stock awards, which
had an aggregate fair value on the date of grant of $1.8 million. The cost of the restricted stock awards was
determined based on the fair market value of the shares at the date of grant reduced by the $1.00 par value per
share charged to the employee and was expensed ratably over the original vesting period. Pursuant to the spin off,
Alltel amended its restricted stock plan such that any shares of restricted stock held by employees of the Company
became fully vested at that time. As a result, the remaining 68,200 shares of Alltel restricted stock held by the
Company’s employees vested on July 17, 2006. This resulted in the recognition by Windstream of the associated
remaining unrecognized compensation expense of $1.6 million during the third quarter of 2006.
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