FairPoint Communications 2004 Annual Report Download - page 131

award to eligible participants of (i) restricted stock and restricted units; (ii) stock options, including incentive stock options (within the meaning
of Section 422 of the Internal Revenue Code); (iii) stock appreciation rights; (iv) incentive stock and incentive units; and/or (v) deferred shares
and supplemental units.
A total of 947,441 shares of our common stock are available for award under the 2005 stock incentive plan. The maximum number of
shares with respect to which options or stock appreciation rights may be granted to any one participant in any calendar year is 500,000. The
maximum number of shares that may be issued under the plan through tax-qualified incentive stock options is 947,441. Shares subject to
awards that are forfeited, canceled or otherwise terminated without the issuance of our common stock under the 2005 stock incentive plan
will again be available for future awards under the 2005 stock incentive plan. If we undergo a stock dividend, stock split, share combination,
extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares or
other similar event affecting our common stock, our compensation committee will equitably adjust the number and kind of shares that are
available under the 2005 stock incentive plan and that are subject to outstanding options or other awards. Unless our compensation
committee determines otherwise, participants will not be entitled to dividends or dividend equivalents with respect to unvested restricted stock
awards. Awards may be made to any of our current or prospective directors, officers, employees or consultants. The number of individuals
participating in the 2005 stock incentive plan will vary from year to year.
On February 15, 2005, we awarded 473,716 shares of restricted stock in the aggregate to nine of our employees.
Our compensation committee will determine the terms for vesting of awards, which may include vesting based on a period of
continuous employment, or vesting based on the attainment of one or more of the performance criteria specified in the 2005 stock incentive
plan. The shares of restricted stock awarded on the closing date of the offering will generally become vested in four equal annual installments
commencing on April 1, 2006 (three equal annual installments for our chief executive officer) and will not be entitled to receive dividends for
any period prior to April 1, 2006.
A participant's termination of employment will have the important consequences described below on outstanding awards under the 2005
stock incentive plan, unless our compensation committee determines otherwise at or after the date of grant. Participants will become vested
in a pro-rata portion (based on the number of days employed during the vesting period) of any outstanding restricted stock and restricted units
if their employment terminates because of their disability (as defined in the 2005 stock incentive plan), normal retirement (as defined in the
2005 stock incentive plan) or early retirement with the consent of our compensation committee, and will vest in full in the event of death
(these terminations are referred to as qualifying terminations). If a participant's employment is terminated for any reason other than a
qualifying termination, outstanding unvested restricted stock and restricted units will be forfeited and cancelled unless our compensation
committee determines otherwise (or, in the case of our chief executive officer, if he fails to comply with applicable post-employment non-
competition restrictions).
Participants will become vested in any outstanding stock options and stock appreciation rights if their employment terminates as a result
of a qualifying termination, and will forfeit any unvested stock options and stock appreciation rights if their employment terminates for any
reason other than a qualifying termination. Participants will become vested in a pro-rata portion (based on the number of days employed
during the performance period) of any outstanding incentive stock and incentive units that are actually earned based on our performance if
their employment terminates as a result of a qualifying termination (with full vesting in the event of death), and will forfeit any outstanding
unvested incentive stock and incentive units if their employment terminates for any reason other than a qualifying termination.
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