FairPoint Communications 2003 Annual Report Download - page 65

Company, (v) the requirement of the Company to sell shares to the stockholders under certain circumstances upon authorization of an
issuance or sale of additional shares, (vi) the participation rights of stockholders in connection with a sale of shares by other stockholders,
and (vii) our right to purchase all (but not less than all) of the shares of a management stockholder in the event of resignation, termination of
employment, death or disability. The stockholders agreement also provides that we must obtain the consent of THL and Kelso in order for us
to incur debt in excess of $5 million.
We entered into a registration rights agreement with certain of our stockholders, dated as of January 20, 2000, pursuant to which such
stockholders have the right in certain circumstances and, subject to certain conditions, to require us to register shares of our common stock
held by them under the Securities Act of 1933. Under the registration rights agreement, except in limited circumstances, we are obligated to
pay all expenses in connection with such registration.

Daniel G. Bergstein, Jack H. Thomas, Meyer Haberman and Eugene B. Johnson, our founding stockholders, have entered into an
arrangement with Walter E. Leach, Jr. and John P. Duda pursuant to which such stockholders have agreed to provide compensation to
Mr. Leach and Mr. Duda upon the occurrence of certain specified liquidation events with respect to us, based on our value at the time of such
liquidation event.

The following table sets forth the aggregate fees billed to the Company during fiscal years 2002 and 2003 by KPMG LLP:
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
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
Audit Fees $540,000 $533,000
All Other Fees:
Audit-Related Fees $26,000 $496,000
Tax Fees 146,000 156,000
Total of All Other Fees $172,000 $652,000
 consist of fees for assurance and related services that are reasonably related to the performance of the audit or
review of the Company's financial statements. This category includes fees related to audit services not required by statute or regulations, due
diligence services related to acquisitions and divestitures and consulting services related to financial accounting and reporting standards.
During 2003, $479,000 of audit related fees were associated with the March 6, 2003 refinancing activities.
 consist of fees for professional services for tax compliance, tax advice and tax planning. These services include assistance
regarding federal and state tax compliance, return preparation and tax audits.
The audit committee pre-approves all audit and non-audit services performed by our independent auditor.
The audit committee has considered whether the provision of non-audit services is compatible with maintaining the independence of
KPMG LLP and has concluded that it is.
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 
(1) Financial Statements
The following items are included in Part II, Item 8 of this report:
INDEPENDENT AUDITORS' REPORT
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2001, 2002 AND 2003:
Consolidated Balance Sheets as of December 31, 2002 and 2003
Consolidated Statements of Operations for the Years Ended December 31, 2001,
2002 and 2003
Consolidated Statements of Stockholders' Equity (Deficit) for the Years Ended
December 31, 2001, 2002 and 2003