Cincinnati Bell 2013 Annual Report Download - page 252

Form 10-K/A Part IV Cincinnati Bell Inc.
CyrusOne Inc. and CyrusOne LP
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(continued)
Restricted Stock
CyrusOne Inc. issued approximately 1 million restricted shares to its employees, officers and board of
director members in conjunction with CyrusOne Inc.’s IPO. The restricted shares granted to employees and
officers will vest at the end of three years and have been issued in the form of common stock. The restricted
shares granted to the board of director members will vest one-third on May 15, 2014, one-third on January 17,
2015, and one-third on January 17, 2016, and will be issued in the form of common stock. These restricted shares
also earn non-forfeitable dividends throughout the vesting period. CyrusOne Inc. recognized stock-based
compensation expense of approximately $5.3 million for the period ended December 31, 2013, with no such
expense for the period ended January 23, 2013. As of December 31, 2013, we have unrecognized compensation
expense of approximately $11.9 million. This expense will be recognized over the remaining vesting period, or
approximately 2.1 years. The forfeiture rate for these shares of restricted stock was approximately 12% in 2013.
The following table sets forth the restricted stock awards activity for the period ended December 31, 2013:
Restricted Stock Awards
(in thousands, expect per share amounts) Shares
Weighted
average
per share
Granted ..................................................................... 1,024 $19.01
Forfeited .................................................................... (119) 19.00
Vested ...................................................................... — —
Shares outstanding at December 31, 2013 .......................................... 905 $19.01
Performance and Market Based Awards
On April 17, 2013, the Company approved grants of performance and market based restricted stock and
options under the LTIP Plan. The performance based restricted stock and options will vest annually based upon
achieving certain predetermined EBITDA thresholds over a three-year cumulative performance period. The
performance based awards will vest based on the following scale:
•Below 90% of EBITDA target = 0%
•At 90% of EBITDA target = 50%
•At 100% of EBITDA target = 100%
•At or above 115% of EBITDA target = 200%
The market based restricted stock and options vest at the end of 3 years if the total stockholder return during
the three year measurement period following the grant date meets or exceeds the return of the MSCI US REIT
Index over the same period. The market based awards will vest based on the following scale:
•If CyrusOne’s total stockholder return is less than the return of the Index = 0%
•If CyrusOne’s total stockholder return is equal to or greater than the return of the Index = 100%, up to
200% if CyrusOne’s total stockholder return exceeds the return of the Index by 2%
•If CyrusOne’s total stockholder return exceeds the return of the Index, but is negative, any calculated
vesting amount will be reduced by 50%
These awards are expensed based on the grant date fair value if it is probable that the conditions will be
achieved. The forfeiture rate for these awards was approximately 11% in 2013.
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