Frontier Communications 2010 Annual Report Download - page 82

The following summary presents information regarding unvested restricted stock and changes with regard
to restricted stock under the EIP:
Number of
Shares
Weighted
Average
Grant Date
Fair Value
Aggregate
Fair Value
Balance at January 1, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,209,000 $14.06 $15,390,000
Restricted stock granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 887,000 $11.02 $ 7,757,000
Restricted stock vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (367,000) $13.90 $ 3,209,000
Restricted stock forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,000) $13.39
Balance at December 31, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,702,000 $12.52 $14,876,000
Restricted stock granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,119,000 $ 8.42 $ 8,738,000
Restricted stock vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (557,000) $12.77 $ 4,347,000
Restricted stock forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (71,000) $11.02
Balance at December 31, 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,193,000 $10.41 $17,126,000
Restricted stock granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,264,000 $ 7.54 $31,760,000
Restricted stock vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (874,000) $10.86 $ 8,507,000
Restricted stock forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (143,000) $ 7.95
Balance at December 31, 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,440,000 $ 8.29 $43,199,000
In connection with the completion of the Merger on July 1, 2010, the Company granted an aggregate of
1,911,000 shares of restricted stock with a total fair value of $14.2 million to its senior management, as a
retention and transaction bonus based on contributions that senior management made to achieve key milestones
of the Transaction, and to all employees (including senior management) as a Founder’s Stock Grant during the
third quarter of 2010. The restricted shares granted to senior management vest in three equal annual
installments commencing one year after the grant date. The Founder’s Stock granted to all employees vest
100% on the third anniversary of the grant date.
For purposes of determining compensation expense, the fair value of each restricted stock grant is
estimated based on the average of the high and low market price of a share of our common stock on the date of
grant. Total remaining unrecognized compensation cost associated with unvested restricted stock awards at
December 31, 2010 was $26.0 million and the weighted average period over which this cost is expected to be
recognized is approximately two years.
Non-Employee Directors’ Compensation Plans
Prior to October 1, 2010, upon commencement of his or her service on the Board of Directors, each non-
employee director received a grant of 10,000 stock options. These options were awarded under the Directors’
Equity Plan following effectiveness of the Directors’ Equity Plan on May 25, 2006. Prior thereto, these options
were awarded under the 2000 EIP. The exercise price of these options, which became exercisable six months
after the grant date, was the fair market value (as defined in the relevant plan) of our common stock on the date
of grant. Options granted under the Directors’ Equity Plan expire on the earlier of the tenth anniversary of the
grant date or the first anniversary of termination of service as a director. Options granted to non-employee
directors under the 2000 EIP expire on the tenth anniversary of the grant date.
Prior to October 1, 2010, each non-employee director also received an annual grant of 3,500 stock units.
These units were awarded under the Directors’ Equity Plan and prior to effectiveness of that plan, were
awarded under the Deferred Fee Plan. Since the effectiveness of the Directors’ Equity Plan, no further grants
have been made under the Deferred Fee Plan. Prior to April 20, 2004, each non-employee director received an
award of 5,000 stock options. The exercise price of such options was set at 100% of the fair market value on
the date the options were granted. The options were exercisable six months after the grant date and remain
exercisable for ten years after the grant date.
F-23
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements