FairPoint Communications 2003 Annual Report Download - page 64

(9) Shares of class A common stock held by Thomas H. Lee Equity Fund IV, L.P. may be deemed to be beneficially owned by THL Equity
Advisors IV, LLC, the general partner of Thomas H. Lee Equity Fund IV, L.P., Thomas H. Lee Partners, L.P., Thomas H. Lee
Advisors, LLC, the general partner of Thomas H. Lee, L.P., Mr. DiNovi, Mr. Weldon and the other members of Thomas H. Lee
Advisors, LLC. Each of such persons disclaims beneficial ownership of such shares.
(10) Includes 284,200 shares of class A common stock issuable upon exercise of options that are either currently exercisable or become
exercisable during the next 60 days. Does not include 850,000 shares of class A common stock issuable upon exercise of options that
are not currently exercisable or do not become exercisable during the next 60 days.
92























Equity compensation plans approved by
stockholders 6,737,674 $2.85 13,476,036
Equity compensation plans not approved
by stockholders 0 $0 0
For a description of our equity compensation plans, see "Item 11. Executive Compensation."


We entered into a Management Services Agreement with THL Equity Advisors IV, LLC, or THL Advisors, dated as of January 20, 2000,
and an Amended and Restated Financial Advisory Agreement, dated as of January 20, 2000, with Kelso, pursuant to which THL Advisors
and Kelso provide us certain consulting and advisory services related, but not limited to, equity financings and strategic planning. Each of
these agreements expires on the earlier to occur of (i) December 31, 2006 or (ii) solely with respect to the Management Services Agreement,
the date that THL Advisors ceases to own, and solely with respect to the Amended and Restated Financial Advisory Agreement, the date that
Kelso Investment Associates V, L.P., or KIAV, and Kelso Equity Partners V, L.P., or KEPV, collectively cease to own at least 10% of the
number of shares of our stock they held as of January 20, 2000. Pursuant to these agreements, we pay to each of THL Advisors and Kelso
annual advisory fees of $500,000, payable on a quarterly basis, we reimburse them for out of pocket expenses, and we have agreed to
indemnify them against certain liabilities they may incur in connection with their provision of advisory services. In addition, we agreed to pay
a transaction fee of approximately $8.4 million to Kelso, which fee is payable upon the earlier of (i) an initial public offering of our class A
common stock, (ii) a sale of the Company to a third party or parties, whether structured as a merger, sale of stock, sale of assets,
recapitalization or otherwise or (iii) KIAV and KEPV ceasing to own, collectively, at least 10% of the number of shares of our stock they held
collectively as of January 20, 2000. In connection with our equity financing and recapitalization in January 2000, we terminated our financial
advisory agreement with Carousel Capital Partners, L.P., a former significant stockholder, and the original financial advisory agreement with
Kelso. We paid advisory fees and out of pocket expenses of approximately $1,020,850 in the aggregate to THL Advisors and Kelso in the year
ended December 31, 2003.

Daniel G. Bergstein, a director of the Company, is a senior partner of Paul, Hastings, Janofsky & Walker LLP, a law firm, which
provides legal services to us. In the year ended December 31, 2003, we paid Paul Hastings approximately $1,270,575 for legal services and
expenses.

In connection with our January 2000 equity financing and recapitalization, we entered into a stockholders agreement with our
stockholders, dated as of January 20, 2000, which contains provisions relating to, among other things: (i) the designation of members to our
board of directors (including two members to be designated by THL, two members by Kelso and the designation jointly by THL and Kelso of
Daniel G. Bergstein, Eugene B. Johnson and Jack H. Thomas, (ii) restrictions on transfers of shares, (iii) procedures to be followed under
certain circumstances with respect to a sale of the
93
Company, (iv) the requirement that our stockholders take certain actions in connection with an initial public offering or a sale of the