FairPoint Communications 2003 Annual Report Download - page 62

and severance arrangements between Mr. Johnson and us.
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In December 2001, we entered into a succession agreement with Mr. Thomas, pursuant to which Mr. Thomas resigned from his
position as Chief Executive Officer of the Company and we retained him to serve as a non-executive member of our board of directors. In
December 2003, Mr. Thomas resigned from his position as a member of the board of directors. The succession agreement provides for
Mr. Thomas' right to exercise all of his vested options until the termination of the succession period and the immediate vesting of all
unvested options upon a change of control or an early termination of the succession agreement without cause. In December 2003, we
entered into a letter agreement with Mr. Thomas, supplementing and modifying the succession agreement. The letter agreement provides
that Mr. Thomas and his wife shall continue to receive certain benefits until each is 65 years of age. In addition, the letter agreement extends
Mr. Thomas' right to exercise certain fully vested options, subject to certain terms, conditions and trigger events. Furthermore, the letter
agreement confirms that the restrictive covenants set forth in certain option plans continue to be in full force and effect until December 11,
2004, unless we subsequently waive the covenants.
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In January 2000, we entered into an employment agreement with Mr. Leach. The employment agreement provides that upon the
termination of Mr. Leach's employment due to a change of control, the executive is entitled to receive from us in a lump sum payment an
amount equal to such executive's base salary as of the date of termination for a period ranging from twelve months to twenty-four months.
For purposes of the previous sentence, a change of control shall be deemed to have occurred if: (a) certain of our stockholders no longer own,
either directly or indirectly, shares of our capital stock entitling them to 51% in the aggregate of the voting power for the election of our directors
as a result of a merger or consolidation, a transfer of our capital stock or otherwise; or (b) we sell, assign, convey, transfer, lease or otherwise
dispose of, in one transaction or a series of related transactions, all or substantially all of our property or assets to any other person or entity.
In addition, we have agreed to maintain Mr. Leach's long term disability and medical benefits for a similar period following a change of
control.
In December 2003, we entered into a letter agreement with Mr. Leach, supplementing and modifying his employment agreement. The
letter agreement provides that following the expiration of his employment agreement, Mr. Leach shall continue as an employee at will.
During this period, Mr. Leach is entitled to receive certain benefits. The letter agreement also provides that upon termination of Mr. Leach's
employment by us without cause (including upon a change of control), Mr. Leach is entitled to receive from us in a lump sum payment an
amount equal to his base salary as of the date of termination for a period of twelve months, plus all accrued and unpaid base salary and
benefits as of the date of termination. In addition, Mr. Leach is entitled to receive certain benefits following his termination for twelve months
following such date of termination.
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In January 2000, we entered into an employment agreement with Mr. Duda. In November 2002, we entered into a letter agreement with
Mr. Duda, supplementing and modifying his employment agreement. The letter agreement provides that upon the termination of Mr. Duda's
employment with us without cause, Mr. Duda is entitled to receive certain benefits. These benefits include continued long-term disability,
term life insurance and medical benefits for twelve months and a lump sum payment from us in an amount equal to twelve months of his
base salary as of the date of termination, plus accrued and unpaid base salary and benefits as of the date of termination.
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In November 2002, we entered into a letter agreement with each of Mr. Nixon and Ms. Linn. The letter agreements provide that upon the
termination of their respective employment with us without cause, each is entitled to receive from us in a lump sum payment an amount
equal to twelve months of such executive's base salary as of the date of termination, plus the continuation of certain benefits, including
medical benefits, for twelve months.
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The following table sets forth information regarding beneficial ownership of our class A common stock as of December 31, 2003 for
(i) each executive officer named in the "Summary Compensation Table"; (ii) each director, (iii) all of our named executive officers and
directors as a group, and (iv) each person who beneficially owns 5% or more of the outstanding shares of our class A common stock. All
persons listed have sole voting and investment power with respect to their shares unless otherwise indicated.
The amounts and percentages of common stock reflected in this table assume the conversion of all of our shares of class C common
stock into shares of our class A common stock. Our shares of class C common stock are convertible into shares of class A common stock
only upon the occurrence of certain events, including (i) the consummation by the Company of an offering of its class A common stock to the
public pursuant to which the Company raises at least $150 million in gross proceeds or (ii) any transfer of shares of class C common stock to
any person or persons who are not affiliates of the transferor.
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