Frontier Communications 2011 Annual Report Download - page 86

FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
F-23
The following summary presents information regarding unvested restricted stock and changes with regard to restricted
stock under the EIP:
Weighted
Average
Number of Grant Date Aggregate
Shares Fair Value Fair Value
Balance at January 1, 2009 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$
Restricted stock granted 1,734,000 9.38$ 8,930,000$
Restricted stock vested (1,146,000) 9.52$ 5,899,000$
Restricted stock forfeited (181,000) 7.99$
Balance at December 31, 2011 4,847,000 8.40$ 24,962,000$
In connection with the completion of the Transaction 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, 2011 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 the 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.
In addition, prior to October 1, 2010, each non-employee director was entitled to receive an annual retainer, which he
or she had the option of receiving in the form of 5,760 stock units or a cash payment of $40,000. Each non-employee
director was also entitled to receive a fee of $2,000 for each in-person meeting of the board of directors or committee of
the board attended and $1,000 for each telephonic meeting of the board of directors or committee of the board attended.
Additionally, the Lead Director received an annual stipend of $15,000, the chair of the Audit Committee received an