(11)	Stock Plans:

At December 31, 2011, we had five stock-based compensation plans under which grants were made and awards remained outstanding. These plans, which are described below, are the 1996 Equity Incentive Plan (1996 EIP), the Amended and Restated 2000 Equity Incentive Plan (2000 EIP), the Non-Employee Directors' Deferred Fee Equity Plan (Deferred Fee Plan), the Non-Employee Directors' Equity Incentive Plan (Directors' Equity Plan, and together with the Deferred Fee Plan, the Director Plans) and the 2009 Equity Incentive Plan (2009 EIP, and together with the 2000 EIP, the EIP).

Our general policy is to issue shares from treasury upon the grant of restricted shares and exercise of options. At December 31, 2011, there were 12,540,761 shares authorized for grant under these plans and 7,027,871 shares available for grant under two of the plans. No further awards may be granted under three of the plans: the 1996 EIP, the 2000 EIP or the Deferred Fee Plan.

In connection with the Director Plans, compensation costs associated with the issuance of stock units was ($0.6) million, $1.7 million and $0.7 million in 2011, 2010 and 2009, respectively. Cash compensation associated with the Director Plans was $0.7 million in 2011, $0.5 million in 2010 and $0.6 million in 2009. 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 2011, 2010 and 2009 were 1,734,000, 3,264,000 and 1,119,000, 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, 2011, 4,847,000 shares of restricted stock were outstanding. Compensation expense, recognized in Other operating expenses, of $14.8 million, $12.8 million and $8.7 million, for the years ended December 31, 2011, 2010 and 2009, 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 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, 2011, there were 10,000,000 shares authorized for grant under the 2009 EIP and 5,265,147 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 2009, 2000 and 1996 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.

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

				Weighted		Weighted
	Shares			Average		Average		Aggregate
	Subject to			Option Price		Remaining		Intrinsic
	Option			Per Share		Life in Years		Value
Balance at January 1, 2009		3,713,000		$	13.46		2.5	$	495,000
Options granted		-		$	-
Options exercised		(114,000	)	$	6.58			$	65,000
Options canceled, forfeited or lapsed		(48,000	)	$	9.24
Balance at December 31, 2009		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	$	-

The following table summarizes information about shares subject to options under the EIP at December 31, 2011:

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
	338,000	$	8.19-8.19	$	8.19		0.37		338,000	$	8.19
	438,000		10.44-10.44	$	10.44		0.69		438,000	$	10.44
	119,000		11.90-14.15	$	13.10		3.61		119,000	$	13.10
	895,000	$	8.19-14.15	$	9.94		1.31		895,000	$	9.94

The number of options exercisable at December 31, 2010 and 2009 were 1,507,000 and 3,551,000, with a weighted average exercise price of $10.50 and $13.74, respectively.

Cash received upon the exercise of options during 2011, 2010 and, 2009 was $0.1 million, $0 million and $0.8 million, respectively. There were no stock options granted during 2009, 2010 and 2011 under the EIP. There is no remaining unrecognized compensation cost associated with unvested stock options at December 31, 2011.

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 annual stipend of $25,000, the chair of the Compensation Committee received an annual stipend of $20,000, the chair of the Nominating and Corporate Governance Committee received an annual stipend of $7,500 and the chair of the Retirement Plan Committee received an annual stipend of $7,500.

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 2011 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, 2011, there were 1,762,724 shares available for grant. There were 12 directors participating in the Directors' Plans during all or part of 2011. 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. In 2009, the total plan units earned were 76,326. Options granted prior to the adoption of the Directors' Equity Plan were granted under the 2000 EIP. At December 31, 2011, 140,616 options were outstanding and exercisable under the Director Plans at a weighted average exercise price of $11.29.

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.