FairPoint Communications 2003 Annual Report Download - page 89

(a) . Options may be granted to Participants at such time or times as shall be determined by the Committee.
Options granted under the Plan may be of two types: ( ) Incentive Stock Options and () Nonstatutory Stock Options,  that no
Incentive Stock Option shall be granted to any Employee who is not eligible to receive such an Option under Section 422 of the Code and the
regulations thereunder. The Committee shall have complete discretion in determining the number of Options, if any, to be granted to a
Participant. Without limiting the foregoing, the Committee may grant Options containing provisions for the issuance to the Participant, upon
exercise of such Option and payment of the exercise price therefore with previously owned shares of Common Stock, of an additional Option
for the number of shares so delivered. Each Option shall be evidenced by an option agreement that shall specify the type of Option granted,
the exercise price, the duration of the Option, the number of shares of Common Stock to which the option pertains, and such other terms
and conditions not inconsistent with the Plan as the Committee shall determine.
(b) . Unless otherwise determined by the Committee at the time of grant, Options granted pursuant to the Plan shall
have an exercise price which is not less than the Fair Market Value of a share of Common Stock on the date the Option is granted.
(c) . Subject to Section 9(e), Options awarded under the Plan shall be exercisable at such times, and shall be
subject to such restrictions and conditions, including the performance of a minimum period of service or the satisfaction of performance
goals, as the Committee may impose, either at or after the time of grant of such Options;  no Option shall be exercisable on or
after the tenth anniversary of the date on which it is granted.
(d) . The Committee shall establish procedures governing the exercise of Options which shall require that () as a condition
to the issuance of any shares of Common Stock upon the exercise of the Options prior to a Public Offering, the Participant become a party to
the Stockholders' Agreement with respect to such shares and ( ) written notice of exercise be given to the Company. No shares shall be
delivered pursuant to any exercise of an Option unless arrangements satisfactory to the Committee have been made to ensure full payment
of the option price. Without limiting the generality of the foregoing, the Committee may provide, on such terms and conditions as the
Committee deems appropriate, that payment of the option price may be made () in cash or its equivalent, () at any time following a Public
Offering by exchanging shares of Common Stock (which are not subject to any pledge or other security interest or encumbrance) owned by
the optionholder for at least six months (or such longer period as is required by applicable accounting standards to avoid a charge to earnings)
having an aggregate Fair Market Value on the date of exercise equal to such aggregate Option exercise price or in a combination of cash and
such unencumbered shares of Common Stock, ( ) at any time following a Public Offering, through an arrangement with a broker approved
by the Company whereby
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payment of the exercise price is accomplished with the proceeds of the sale of Stock or ( ) by any combination of the foregoing, 
the combined value of all cash and cash equivalents paid and the Fair Market Value of any Common Stock so tendered to the Company,
valued as of the date of such tender, is at least equal to such option price.
(e) . Unless otherwise determined by the Committee at the time of grant, upon termination of a
Participant's employment for any reason, any Options which have not become exercisable in accordance with the terms thereof shall be
cancelled upon such termination of employment.
(f)  . Unless otherwise determined by the Committee at the
time of grant, in the event a Participant's employment terminates by reason of death, Disability or Retirement, any Options granted to such
Participant which are exercisable at the date of his or her death, Disability or Retirement may be exercised at any time prior to the earlier of
the expiration of the term of the Options and the first anniversary of the Participant's termination of employment (or such other period as the
Committee shall determine at the time of grant).
(g) . Unless otherwise determined by the Committee at or after the time of grant,
in the event the employment of the Participant shall terminate for any reason other than those specified in Section 5(f), any Options granted
to such Participant which are exercisable at the date of the Participant's termination of employment may be exercised at any time prior to the
earlier of the expiration of the term of the Options and the sixtieth day following the Participant's termination of employment; , if
a Participant's employment is terminated for Cause, all Options granted to such Participant which are then outstanding shall be immediately
forfeited (whether or not then exercisable).
(h) . Notwithstanding anything in the Plan to the contrary, no term of the Plan relating to Incentive Stock
Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to
disqualify the Plan under Section 422 of the Code.
(i) . The Committee may at any time offer to buy out an Option previously granted for a payment in cash, based on such
terms and conditions as the Committee shall establish and communicate to the optionholder at the time that such offer is made. In addition,
prior to a Public Offering, unless otherwise provided in the applicable Option Agreement evidencing the Option, upon any termination of a
Participant's employment with the Company, the Company may repurchase all or any portion of the vested Options then held by such
Participant as of the date of such termination for a cash payment equal to the excess, if any, of ( ) the Fair Market Value of the shares of
Common Stock subject to such Option (or to the portion thereof so purchased), over ( ) the aggregate Option exercise price for such shares
and on such other terms and conditions as the Committee shall establish at the date of grant.
6. Restricted Stock Units