Windstream 2013 Annual Report Download - page 208

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
____
F-72
9. Share-Based Compensation Plans, Continued:
At December 31, 2013, unrecognized compensation expense totaled $35.8 million and is expected to be recognized over the
weighted average vesting period of 1.3 years. Unrecognized compensation expense is included in additional paid-in capital in
the accompanying consolidated balance sheets and statements of shareholders’ equity. The total fair value of shares vested
during 2013, 2012 and 2011 was $24.2 million, $22.7 million and $15.5 million, respectively. Share-based compensation
expense recognized for restricted stock and restricted stock units was $26.7 million, $25.2 million and $24.0 million for 2013,
2012 and 2011, respectively.
Stock Option Activity - In conjunction with the acquisition of PAETEC, we issued 3,933,230 stock options to former PAETEC
employees to replace outstanding PAETEC stock options held by these same employees as of the acquisition date. The exercise
price of the options granted was 0.460 shares of the exercise price on the original issuances. All other terms of the original
options, including the vesting provisions, were retained. The contractual term of the options granted is ten years from the
original issuance date. Awards generally vest ratably over a three- or four-year service period. No other stock options have been
granted by us during the three year period ended December 31, 2013.
The following table summarizes stock option activity for the year ended December 31, 2013:
(Thousands)
Number of
Shares
Underlying
Options
Weighted
Average
Exercise
Price
(Years)
Weighted
Average
Remaining
Contractual
Life
(Millions)
Aggregate
Intrinsic
Value
Outstanding at December 31, 2012 1,829.2 $ 11.93
Granted — $ —
Exercised (124.1) $ 5.66
Canceled (208.4) $ 13.63
Forfeited (32.3) $ 8.68
Outstanding at December 31, 2013 1,464.4 $ 12.29 3.9 $ 1.1
Vested or expected to vest at December 31, 2013 1,409.6 $ 12.43 3.8 $ 1.1
Exercisable at December 31, 2013 1,373.1 $ 12.53 3.7 $ 1.1
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the closing
sale price of Windstream's common stock as reported on the Nasdaq Global Select Market on December 31, 2013 and the
option exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders
if all option holders had exercised their options on December 31, 2013. This amount changes based on the fair market value of
Windstream's common stock. The aggregate intrinsic value of options exercised during the year ended December 31, 2013 was
approximately $0.3 million.
Total compensation expense related to stock options granted was approximately $0.1 million, $0.2 million, and $0.1 million for
the years ended December 31, 2013, 2012 and 2011, respectively.
The following table summarizes stock option information as of December 31, 2013:
Options Outstanding Options Exercisable
Range of Exercise Prices
(Thousands)
Number of
Options
Weighted
Average
Exercise
Price
(Thousands)
Number of
Options
Weighted
Average
Exercise
Price
$1.96-$4.70 227.4 $ 4.11 227.4 $ 4.11
$4.71-$8.30 334.1 $ 7.30 278.9 $ 7.12
$8.31-$14.00 392.3 $ 10.62 356.2 $ 10.72
$14.01-$29.27 510.6 $ 20.49 510.6 $ 20.49
1,464.4 $ 12.29 1,373.1 $ 12.53
As of December 31, 2013, there was less than $0.1 million of unrecognized share-based compensation expense related to
unvested stock options granted which will be recognized in 2014.