FairPoint Communications 2004 Annual Report Download - page 130

Options granted under the 2000 plan generally become vested based upon the participant's completion of a minimum period of
continued employment with us, with 10% of each option grant becoming vested on the first anniversary of grant, 15% of each option grant
becoming vested on the second anniversary of grant and 25% of each option grant becoming vested on each of the third, fourth and fifth
anniversaries of grant. Unless otherwise determined by our compensation committee, any options that are not vested upon a participant's
termination of employment will be cancelled.
Any options outstanding under the 2000 plan that are vested and exercisable may continue to be exercised in accordance with the terms
of the 2000 plan. Any unvested options under the 2000 plan will continue to become vested and exercisable in accordance with the terms of
the 2000 plan.
In December 2003, we amended the 2000 plan to allow for the grant to members of our management of restricted stock units in addition
to stock options. As a result, the 2000 plan provides for the grant to members of management of up to 1,898,521 shares of our common
stock represented by restricted stock units and/or options to purchase our common stock, at the discretion of the compensation committee. As
of December 31, 2004, 26,442 restricted stock units were outstanding.
Restricted stock units granted under the 2000 plan generally become vested based upon the participant's completion of a minimum
period of continued employment with us, with 331/3% of each grant becoming vested on each of the third, fourth and fifth anniversaries of
grant. Unless otherwise determined by our compensation committee, if the participant's employment terminates because of the participant's
death, disability (as defined in the 2000 plan) or retirement (as defined in the 2000 plan), all of the participant's restricted stock units will
become immediately vested. If the participant's employment terminates for any other reason, all unvested restricted stock units will be
forfeited and cancelled.
All of the restricted stock units granted under the 2000 plan are currently unvested. These restricted stock units will continue to become
vested in accordance with the terms of the 2000 plan.
The 2000 plan contains a change in control provision that, if triggered, will potentially accelerate the vesting of options and restricted
stock units granted under the 2000 plan. In the event of a change in control (as defined in the 2000 plan), each outstanding option will be
canceled in exchange for a payment in cash equal to the product of (i) the excess of the change in control price over the option exercise price
and (ii) the number of shares of common stock covered by such stock option. All restricted stock units granted under the 2000 plan will
become vested and shall be immediately deliverable. Notwithstanding the foregoing, if the compensation committee determines before the
change in control either that all outstanding awards will be honored or assumed by the acquirer, or alternative awards with equal or better
terms will be made available, such outstanding awards will not be canceled, their vesting and exercisability will not be accelerated, and there
will be no payment in exchange for such awards. Any alternative awards offered must generally:
•have rights and entitlements (such as vesting, exercisability and payment) that are substantially equivalent to or better than the
rights and entitlements of the awards related to our stock;
•have substantially equivalent economic value, at the time of the change in control, to the awards in respect of our stock; and
•provide that, upon the involuntary termination or constructive termination, of the participant's employment, the awards will be
deemed vested or exercisable and any restrictions on transfer shall lapse, as the case may be.
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The FairPoint Communications, Inc. 2005 Stock Incentive Plan, which we refer to as the 2005 stock incentive plan, was adopted in
February 2005. The 2005 stock incentive plan provides for the
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