Stock Plans

12 Months Ended

Dec. 31, 2024

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(13) Stock Plans:

Frontier Communications Parent, Inc. has one active long-term incentive plan, the 2024 Management Incentive Plan (the “2024 Incentive Plan”), under which grants are made and awards remain outstanding. The plan was approved by shareholders at the Annual Meeting on May 15, 2024, with 8,765,000 shares available for awards. The 2024 Incentive Plan permits stock-based awards to be made to employees, directors, or consultants of the Company or its affiliates, as determined by the Compensation and Human Capital Committee of the Board. Available shares under the previous plan of 1,151,334 were rolled into the new 2024 plan for a total of 9,916,334 shares reserved for issuance. Equity awards have been issued in the form of time-based restricted stock units (RSUs) and performance-based stock units (PSUs). As of December 31, 2024, there were 10,130,566 shares available to grant.

In connection with the Merger, our Named Executive Officers (“NEOs”) may become entitled to payments and benefits that may be treated as “excess parachute payments”. To mitigate the potential impact of certain applicable tax provisions on the Company and certain NEOs, on December 19, 2024, in accordance with the terms of the Merger Agreement, the Committee approved the acceleration into December 2024 of the vesting and payments of target annual cash incentive bonuses, time-based RSUs and PSUs that would otherwise have been payable to the NEOs in the ordinary course in the first quarter of fiscal year 2025. These actions are intended to benefit the Company by preserving compensation-related corporate income tax deductions for the Company that otherwise might be disallowed by such tax provisions and to mitigate or eliminate the amount of excise tax that may be payable by the NEOs pursuant to such tax provisions.

Restricted Stock Units

The following summary presents information regarding unvested restricted stock under the 2024 Incentive Plan:


2021 Incentive Plan
		Weighted
		Average
	Number of	Grant Date		Aggregate
	Shares	Fair Value		Fair Value
	(in thousands)	(per share)		(in millions)
Balance at January 1, 2022	2,483	$	28.67	$	72
Restricted stock granted	1,104	$	25.80	$	28
Restricted stock vested	(892)	$	25.81	$	(23)
Restricted stock forfeited	(181)	$	25.88
Balance at December 31, 2022	2,514	$	25.78	$	64
Restricted stock granted	1,373	$	23.11	$	35
Restricted stock vested	(1,225)	$	25.77	$	(31)
Restricted stock forfeited	(194)	$	24.97
Balance at December 31, 2023	2,468	$	24.37	$	63


2024 Incentive Plan
		Weighted
		Average
	Number of	Grant Date		Aggregate
	Shares	Fair Value		Fair Value
	(in thousands)	(per share)		(in millions)
Balance at January 1, 2024	2,468	$	24.37	$	63
Restricted stock granted	1,370	$	23.49	$	48
Restricted stock vested	(1,686)	$	25.70	$	(59)
Restricted stock forfeited	(94)	$	23.71
Balance at December 31, 2024	2,058	$	24.45	$	71

For purposes of determining compensation expense, the fair value of each restricted stock grant is estimated based on the closing price of our common stock on the date of grant. The non-vested restricted stock units granted in 2022, 2023, and 2024 generally vest, and are expensed, on a ratable basis over three years from the grant date of the award. Total remaining unrecognized compensation cost associated with unvested restricted stock awards that is deferred at December 31, 2024 was $33 million and the weighted average vesting period over which this cost is expected to be recognized is approximately 2 years.

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. Compensation expense, recognized in “Selling, general, and administrative expenses”, of $34 million, $38 million and $34 million for the years ended

December 31, 2024, 2023 and 2022, respectively, has been recorded in connection with restricted stock.

Performance Stock Units

We currently have outstanding performance stock units (“PSU”) that were granted in 2022, 2023 and 2024. Under these awards, a target number of PSUs are granted to each participant with respect to a three-year performance period (“The Measurement Period”). For the 2024 PSU awards, for example, the Measurement Period is from January 1, 2024, through December 31, 2026.

The performance metrics under the 2024 PSU awards consist of (1) Adjusted Fiber EBITDA, (2) Fiber Revenue and (3) Relative Total Shareholder Return (“TSR”). Relative TSR is based on our total return to stockholders over the Measurement Period relative to the S&P 400 Mid Cap Index. Each performance metric is weighted 33.3%, the goals for the relative TSR metric have been fully set.

The performance metrics under the 2022 and 2023 PSU awards are (1) Adjusted Fiber EBITDA, (2) Fiber Locations Constructed and (3) Expansion Fiber Penetration with an overall relative TSR modifier. Each performance metric is weighted 33.3% and goals for each metric have been set for the full Measurement Period.

Achievement of the metrics for outstanding PSUs will be measured separately, and the number of awards earned will be determined based on actual performance relative to the targets of each performance metric. Achievement is measured on a cumulative basis for each performance metric individually at the end of the three-year Measurement Period with a TSR modifier for the 2022 and 2023 plans. The payout of the 2022, 2023 and 2024 PSUs can range from 0% to a maximum award payout of 200% of the target units.

The number of PSUs earned at the end of the Measurement Period may be more or less than the number of target PSUs granted as a result of performance. An executive must maintain a satisfactory performance rating during the Measurement Period and, except for limited circumstances, must be employed by Frontier on the determination date in order for the award to vest. The Compensation and Human Capital Committee will determine the number of shares earned for the Measurement Period in the first quarter of the year following the end of the Measurement Period. PSUs awards, to the extent earned, will be paid out in the form of common stock on a one-for-one basis.

Under ASC 718, Stock Based Compensation Expense, a grant date, and the fair value of a performance award are determined once the targets are finalized. For the 2022 and 2023 PSU awards, targets for all of the metrics have been fully set for each performance period and the related expense will be amortized over the appropriate performance period. For the 2024 PSU awards, the targets related to two of the three performance metrics have not been set. As a result, as of December 31, 2024, we have recognized associated expense with respect to 1/3 of the aggregate outstanding 2024 PSU awards.

The performance metrics under the 2024 PSU plan consist of (1) Adjusted Fiber EBITDA, (2) Fiber Revenue and (3) Relative Total Shareholder Return (“TSR”). Relative TSR is based on our total return to stockholders over the Measurement Period relative to the S&P 400 Mid Cap Index. The metrics under the 2022 and 2023 plans are (1) Adjusted Fiber EBITDA, (2) Fiber Locations Constructed and (3) Expansion Fiber Penetration with an overall relative TSR modifier. For 2022 and 2023 outstanding plans, each performance metric is weighted 33.3% and goals for each metric have been set for the full Measurement Period. For the 2024 outstanding plan, each performance metric is weighted 33.3%, the goals for the relative TSR metric have been fully set, and the goals for the remaining metrics have been set for the first portion of the Measurement Period. Achievement of the metrics will be measured separately, and the number of awards earned will be determined based on actual performance relative to the targets of each performance metric. Achievement is measured on a cumulative basis for each performance metric individually at the end of the three-year Measurement Period with a TSR modifier for the 2022 and 2023 plans. The payout of the 2022, 2023 and 2024 PSUs can range from 0% to a maximum award payout of 200% of the target units. 2021 PSU awards paid out at 126% of target on March 1, 2024.

The following summary presents information regarding performance shares and changes during the period with regard to performance shares awarded under the 2024 Incentive Plan:


2021 Incentive Plan
			Weighted Average
	Number of		Award Date
	Shares		Fair Value
	(in thousands)		(per share) ⁽¹⁾
Balance at January 1, 2022	3,144	$	25.62
Target performance shares awarded, net	388	$	25.66 ⁽²⁾
Target performance shares forfeited	(47)
Balance at December 31, 2022	3,485	$	25.62
Target performance shares awarded, net	1,040	$	24.36
Target performance shares forfeited	(38)
Balance at December 31, 2023	4,487	$	25.33

⁽¹⁾ Represents the weighted average of the closing price of our stock on the date of the awards.
⁽²⁾ Approximately 0.2 million shares included in this award were granted in 2022 with a grant date fair value of $26.81 per share. Approximately 0.2 million shares have been granted as of December 31, 2023 with a grant date fair value of $23.95 per share.

2024 Incentive Plan
			Weighted Average
	Number of		Award Date
	Shares		Fair Value
	(in thousands)		(per share) ⁽¹⁾
Balance at January 1, 2024	4,487	$	25.33
Target performance shares awarded, net ⁽²⁾	1,769	$	24.35
Target performance shares vested or converted ⁽³⁾	(4,692)	$	25.76
Target performance shares forfeited	(12)	$	25.12
Balance at December 31, 2024	1,552	$	24.58

⁽¹⁾ Represents the weighted average of the closing price of our stock on the date of the awards.
⁽²⁾ Approximately 0.3 million shares included in this award were granted in 2024 with a grant date fair value of $33.35 per share. Approximately 0.6 million shares in this award relate to performance measures that have not been set and therefore do not yet have a grant date fair value.
⁽³⁾ Includes approximately 501,000 PSU's converting our CEO’s 2023-2025 PSUs into performance-based restricted stock subject to identical performance and service vesting conditions. No impact to accounting treatment.

For purposes of determining compensation expense, the fair value of each performance share grant is estimated based on the closing price of a share of our common stock on the date of the grant, adjusted to reflect the fair value of the relative TSR modifier. In 2024, 2023 and 2022, we recognized net compensation expense, reflected in “Selling, general, and administrative expenses,” of $32 million, $69 million and $47 million, respectively related PSU awards.

Non-Employee Director Equity Compensation

Non-employee directors receive $250,000 of annual core compensation which includes $150,000 of RSUs granted annually. In each of 2024, 2023 and 2022, we recognized $1 million in stock-based compensation expense related to non-employee director units.

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