Windstream 2014 Annual Report Download - page 187

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-71
8. Share-Based Compensation Plans, Continued:
Restricted stock and restricted stock unit activity for the year ended December 31, 2014 was as follows:
(Thousands)
Underlying
Number of
Shares
Weighted
Average Fair
Value
Non-vested at December 31, 2013 5,259.5 $ 10.75
Granted 4,681.5 $ 8.39
Vested (2,548.3) $ 11.19
Forfeited (1,524.7) $ 8.85
Non-vested at December 31, 2014 5,868.0 $ 9.17
At December 31, 2014, unrecognized compensation expense totaled $29.2 million and is expected to be recognized over the
weighted average vesting period of 1.5 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
2014, 2013 and 2012 was $28.5 million, $24.2 million and $22.7 million, respectively. Share-based compensation expense
recognized for restricted stock and restricted stock units was $22.0 million, $26.7 million and $25.2 million for 2014, 2013 and
2012, respectively.
Stock Option Activity - In conjunction with the acquisition of PAETEC, we issued approximately 3.9 million 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 service period of three or four years. Our practice is to issue new
shares of common stock upon the exercise of stock options. No other stock options have been granted by us during the three year
period ended December 31, 2014.
The following table summarizes stock option activity for the year ended December 31, 2014:
(Thousands)
Number of
Shares
Underlying
Options
Weighted
Average
Exercise
Price
(Years)
Weighted
Average
Remaining
Contractual
Life
(Millions)
Aggregate
Intrinsic
Value
Outstanding at December 31, 2013 1,464.4 $ 12.29
Granted — $ —
Exercised (228.2) $ 6.84
Canceled (370.0) $ 13.78
Forfeited (12.4) $ 8.93
Outstanding at December 31, 2014 853.8 $ 13.15 2.8 $ 0.8
Vested or expected to vest at December 31, 2014 834.1 $ 13.26 2.7 $ 0.8
Exercisable at December 31, 2014 826.1 $ 13.30 2.7 $ 0.8
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, 2014 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, 2014. 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, 2014 was approximately
$0.4 million.
Total compensation expense related to stock options granted was approximately $0.1 million, $0.1 million, and $0.2 million for
the years ended December 31, 2014, 2013 and 2012, respectively.