FairPoint Communications 2004 Annual Report Download - page 129

(2) Reflects the value of certain benefits provided pursuant to employment arrangements.
(3) Reflects matching contributions made under our 401(k) plan and the value of group term life insurance coverage.
(4) Mr. Duda served as our President from April 2001 until September 2004. Mr. Duda's employment with us ended effective as of
September 30, 2004.
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The FairPoint Communications Inc. (formerly MJD Communications, Inc.) 1995 Stock Option Plan, which we refer to as the 1995
plan, was adopted in February 1995. The 1995 plan provides for the grant of options to purchase up to an aggregate of 215,410 shares of our
common stock. The 1995 plan is administered by our compensation committee, which has made discretionary grants of options to our
officers, directors and employees. As of December 31, 2004, a total of 112,265 options to purchase shares of our common stock were
outstanding under the 1995 plan. Such options all have an exercise price equal to $1.32 per share, and are vested and exercisable.
The options outstanding under the 1995 plan are vested and exercisable and may be exercised in accordance with the terms of the 1995
plan.
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The FairPoint Communications, Inc. (formerly MJD Communications, Inc.) Stock Incentive Plan, which we refer to as the 1998 plan,
was adopted in August 1998. The 1998 plan provides for grants to members of management of up to 1,317,425 nonqualified options to
purchase our common stock, at the discretion of the compensation committee. As of December 31, 2004, a total of 836,356 options to
purchase shares of our common stock were outstanding under the 1998 plan. 756,332 of these options have an exercise price equal to
$9.02 per share and are vested, 29,183 have an exercise price equal to $14.46 per share and are vested, 3,468 have an exercise price equal
to $17.31 per share and are vested and exercisable and 47,373 of these options have an exercise price equal to $36.94 per share and are
vested.
While all of the options granted under the 1998 plan are vested, these options generally will only become exercisable if there is an exit
event (as defined in the 1998 plan) and certain specified thresholds are met. An exit event will occur if (i) Kelso Investment Associates V, L.P.
and Kelso Equity Partners V, L.P. sell all of the shares of common stock they own to one or more third parties or (ii) all or substantially all of
our assets are sold. Upon an exit event, options granted under the 1998 plan will become exercisable only if Kelso Investment Associates V,
L.P. and Kelso Equity Partners V, L.P. receive a certain internal rate of return, compounded annually, and determined after giving effect to any
exercisable options granted under any of our equity incentive plans. The number of options, if any, that become exercisable upon such an
exit event will be based on the price per share of common stock received in the transaction, with the percentage of each option grant
becoming exercisable increasing as the price per share increases. Any options that do not become exercisable in connection with an exit
event will be cancelled in connection with the exit event.
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The FairPoint Communications, Inc. 2000 Employee Stock Incentive Plan, which we refer to as the 2000 plan, was adopted in
May 2000. The 2000 plan provides for grants to members of our management and other key employees of up to 1,898,521 options to
purchase shares of our common stock, at the discretion of the compensation committee. During 2002, the Company amended the 2000 plan
to limit the number of shares available for grant to 448,236. As of December 31, 2004, 240,638 options to purchase shares of our common
stock were outstanding under the 2000 plan. Such options have an exercise price of $36.94 per share.
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