(11)	Stock Plans:

At December 31, 2012, we had five stock-based compensation plans under which grants were made and awards remained outstanding. No further awards may be granted under three of the plans: the 1996 Equity Incentive Plan (the 1996 EIP), the Amended and Restated 2000 Equity Incentive Plan (the 2000 EIP) and the Non-Employee Directors' Deferred Fee Equity Plan (the Deferred Fee Plan). At December 31, 2012, there were 12,540,761 shares authorized for grant and 2,169,089 shares available for grant under the 2009 Equity Incentive Plan (the 2009 EIP and together with the 1996 EIP and the 2000 EIP, the EIPs) and the Non-Employee Directors' Equity Incentive Plan (the Directors' Equity Plan, and together with the Deferred Fee Plan, the Director Plans). Our general policy is to issue shares from treasury upon the grant of restricted shares and the exercise of options.

In connection with the Director Plans, compensation costs associated with the issuance of stock units was $0.8 million, ($0.6) million and $1.7 million in 2012, 2011 and 2010, respectively. Cash compensation associated with the Director Plans was $0.7 million in 2012, $0.7 million in 2011 and $0.5 million in 2010. These costs are recognized in Other operating expenses.

We have granted restricted stock awards to employees in the form of our common stock. The number of shares issued as restricted stock awards during 2012, 2011 and 2010 were 3,976,000, 1,734,000 and 3,264,000, respectively. None of the restricted stock awards may be sold, assigned, pledged or otherwise transferred, voluntarily or involuntarily, by the employees until the restrictions lapse, subject to limited exceptions. The restrictions are time-based. At December 31, 2012, 7,049,000 shares of restricted stock were outstanding. Compensation expense, recognized in Other operating expenses, of $15.9 million, $14.8 million and $12.8 million, for the years ended December 31, 2012, 2011 and 2010, respectively, has been recorded in connection with these grants.

1996, 2000 and 2009 Equity Incentive Plans

Since the expiration dates of the 1996 EIP and the 2000 EIP on May 22, 2006 and May 14, 2009, respectively, no awards have been or may be granted under the 1996 EIP and the 2000 EIP. Under the 2009 EIP, awards of our common stock may be granted to eligible officers, management employees and non-management employees in the form of incentive stock options, non-qualified stock options, SARs, restricted stock, performance shares or other stock-based awards. As discussed under the Non-Employee Directors' Compensation Plans below, prior to May 25, 2006 non-employee directors received an award of stock options under the 2000 EIP upon commencement of service.

At December 31, 2012, there were 10,000,000 shares authorized for grant under the 2009 EIP and 746,097 shares available for grant. No awards may be granted more than 10 years after the effective date (May 14, 2009) of the 2009 EIP plan. The exercise price of stock options and SARs under the EIPs generally are equal to or greater than the fair market value of the underlying common stock on the date of grant. Stock options are not ordinarily exercisable on the date of grant but vest over a period of time (generally four years). Under the terms of the EIPs, subsequent stock dividends and stock splits have the effect of increasing the option shares outstanding, which correspondingly decrease the average exercise price of outstanding options.

Performance Shares

On February 15, 2012, the Company's Compensation Committee, in consultation with the other non-management directors of the Company's Board of Directors and the Committee's independent executive compensation consultant, adopted the new Frontier Long-Term Incentive Plan (the LTIP). LTIP awards are granted in the form of performance shares. The LTIP is offered under the Company's 2009 Equity Incentive Plan and participants consist of senior vice presidents and above. The LTIP awards have performance, market and time-vesting conditions.

Beginning in 2012, during the first 90 days of a three-year performance period (a Measurement Period), a target number of performance shares are awarded to each LTIP participant with respect to the Measurement Period. The performance metrics under the LTIP are (1) annual targets for operating cash flow based on a goal set during the first 90 days of each year in the three-year Measurement Period and (2) an overall performance "modifier" set during the first 90 days of the Measurement Period, based on the Company's total return to stockholders (i.e., Total Shareholder Return or TSR) relative to the Diversified Telecommunications Services Group (GICS Code 501010) for the three-year Measurement Period. Operating cash flow performance is determined at the end of each year and the annual results will be averaged at the end of the three-year Measurement Period to determine the preliminary number of shares earned under the LTIP award. The TSR performance measure is then applied to decrease or increase payouts based on the Company's three year relative TSR performance. LTIP awards, to the extent earned, will be paid out in the form of common stock shortly following the end of the three-year Measurement Period.

On February 15, 2012, the Compensation Committee granted 930,020 performance shares under the LTIP for the 2012-2014 Measurement Period and set the operating cash flow performance goal for the first year in that Measurement Period and the TSR modifier for the three-year Measurement Period. The number of shares of common stock earned at the end of the three-year Measurement Period may be more or less than the number of target performance shares granted as a result of operating cash flow and TSR performance. An executive must maintain a satisfactory performance rating during the Measurement Period and must be employed by the Company at the end of the three-year Measurement Period in order for the award to vest. The Compensation Committee will determine the number of shares earned for the 2012-2014 Measurement Period in February 2015.

The Company recognized an expense of $0.4 million during 2012 for the LTIP awards granted in 2012.

Restricted Stock

The following summary presents information regarding unvested restricted stock and changes with regard to restricted stock under the 2009 EIP:

			Weighted
			Average
		Number of	Grant Date	Aggregate
		Shares	Fair Value	Fair Value
Balance at January 1, 2010		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
	Restricted stock granted	3,976,000	$ 4.18	$ 17,017,000
	Restricted stock vested	(1,387,000)	$ 8.78	$ 5,937,000
	Restricted stock forfeited	(387,000)	$ 5.99
Balance at December 31, 2012		7,049,000	$ 6.08	$ 30,169,000

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, 2012 was $24.8 million and the weighted average period over which this cost is expected to be recognized is approximately 1.5 years.

Stock Options

The following summary presents information regarding outstanding stock options and changes with regard to options under the EIPs:

			Weighted	Weighted
		Shares	Average	Average	Aggregate
		Subject to	Option Price	Remaining	Intrinsic
		Option	Per Share	Life in Years	Value
Balance at January 1, 2010		3,551,000	$ 13.74	1.5	$ -
	Options granted	-	$ -
	Options exercised	-	$ -
	Options canceled, forfeited or lapsed	(2,044,000)	$ 16.13
Balance at December 31, 2010		1,507,000	$ 10.50	1.7	$ 603,000
	Options granted	-	$ -
	Options exercised	(10,000)	$ 8.19		$ 12,000
	Options canceled, forfeited or lapsed	(602,000)	$ 10.86
Balance at December 31, 2011		895,000	$ 9.94	1.3	$ -
	Options granted	-	$ -
	Options exercised	-	$ -
	Options canceled, forfeited or lapsed	(355,000)	$ 8.35
Balance at December 31, 2012		540,000	$ 10.99	0.9	$ -

The following table summarizes information about shares subject to options under the EIPs at December 31, 2012:

Options Outstanding					Options Exercisable
				Weighted Average		Weighted
	Number	Range of	Weighted Average	Remaining	Number	Average
	Outstanding	Exercise Prices	Exercise Price	Life in Years	Exercisable	Exercise Price

	428,000	$10.44	$10.44	0.4	428,000	$10.44
	112,000	$11.90 - 14.15	$13.12	2.6	112,000	$13.12
	540,000	$10.44 - 14.15	$10.99	0.9	540,000	$10.99

The number of options exercisable at December 31, 2011 and 2010 were 895,000 and 1,507,000, with a weighted average exercise price of $9.94 and $10.50, respectively.

Cash received upon the exercise of options during 2011 was $0.1 million. There were no stock options exercised during 2010 and 2012. There were no stock options granted during 2010, 2011 and 2012. There is no remaining unrecognized compensation cost associated with unvested stock options at December 31, 2012.

Non-Employee Directors' Compensation Plans

Prior to October 1, 2010, non-employee directors received stock options upon joining the Board of Directors. These options were awarded under the Directors' Equity Plan commencing May 25, 2006. Prior thereto, these options were awarded under the 2000 EIP. Options awarded to directors under the 2000 EIP are included in the above tables.

Beginning October 1, 2010, we revised our non-employee director compensation program in accordance with best practices. Each non-employee director is now entitled to receive an annual retainer of (1) $75,000 in cash, which he or she may elect to receive in the form of stock units, and (2) $75,000 in the form of stock units. In addition, the Lead Director, the chair of the Audit Committee and the chair of the Compensation Committee each receives an annual stipend of $20,000, the chair of the Nominating and Corporate Governance Committee receives an annual stipend of $10,000 and the chair of the Retirement Plan Committee receives an annual stipend of $7,500. Directors no longer receive meeting fees.

All fees paid to the non-employee directors in 2012 were paid quarterly. Directors are required to irrevocably elect by December 31 of the prior year to receive the cash portion of the retainer and/or stipends in stock units in lieu of cash. Stock units are credited to the director's account in an amount that is determined as follows: the total cash value of the fees payable to the director are divided by 85% of the closing prices of Frontier common stock on the grant date of the units. Units are credited to the director's account quarterly. Directors must also elect to convert the units to either common stock (convertible on a one-to-one basis) or cash upon retirement or death.

Dividends are paid on stock units held by directors at the same rate and at the same time as we pay dividends on shares of our common stock. Dividends on stock units are paid in the form of additional stock units.

The number of shares of common stock authorized for issuance under the Directors' Equity Plan is 2,540,761, which includes 540,761 shares that were available for grant under the Deferred Fee Plan on the effective date of the Directors' Equity Plan. In addition, if and to the extent that any "plan units" outstanding on May 25, 2006 under the Deferred Fee Plan are forfeited or if any option granted under the Deferred Fee Plan terminates, expires, or is cancelled or forfeited, without having been fully exercised, shares of common stock subject to such "plan units" or options cancelled shall become available under the Directors' Equity Plan. At December 31, 2012, there were 1,422,992 shares available for grant. There were 10 directors participating in the Directors' Plans during all or part of 2012. In 2012, the total plan units earned were 306,634. In 2011, the total plan units earned were 197,600. In 2010, the total options granted and plan units earned were 30,000 and 95,695, respectively. Options granted prior to the adoption of the Directors' Equity Plan were granted under the 2000 EIP. At December 31, 2012, 137,709 options were outstanding and exercisable under the Director Plans at a weighted average exercise price of $11.64.

For purposes of determining compensation expense, the fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model which requires the use of various assumptions including expected life of the option, expected dividend rate, expected volatility, and risk-free interest rate. The expected life (estimated period of time outstanding) of stock options granted was estimated using the historical exercise behavior of employees. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant. Expected volatility is based on historical volatility for a period equal to the stock option's expected life, calculated on a monthly basis.

To the extent directors elect to receive the distribution of their stock unit account in cash, they are considered liability-based awards. To the extent directors elect to receive the distribution of their stock unit accounts in common stock, they are considered equity-based awards. Compensation expense for stock units that are considered equity-based awards is based on the market value of our common stock at the date of grant. Compensation expense for stock units that are considered liability-based awards is based on the market value of our common stock at the end of each period.