FairPoint Communications 2004 Annual Report Download - page 467

into account the differences related to the character of the Stock Appreciation Right) to the terms and conditions that would have been applicable under Article
IV above were the grant of the Stock Appreciation Rights a grant of an Option.
7.3 Payment of Stock Appreciation Right Amount . Upon exercise of a Stock Appreciation Right, the holder shall be entitled to receive
payment, in cash, in Shares or in a combination thereof, as determined by the Committee, of an amount determined by multiplying the excess, if any, of the
Fair Market Value of a Share at the date of exercise over the Stock Appreciation Right’s base value or exercise price, by the number of Shares with respect to
which the Stock Appreciation Rights are then being exercised.
7.4 Certain Stock Appreciation Rights . If at the time of grant the Committee intends a grant of Stock Appreciation Rights to any Participant to
be excluded from the coverage of Section 409A of the Code, then, notwithstanding any other provision of the Plan, such grant of Stock Appreciation Rights
shall (i) have a base value or exercise price that is not less than the Fair Market Value of a Share on the date the Stock Appreciation Rights are granted, (ii) be
payable upon exercise only with Shares and ( iii) not include any feature for the deferral of compensation other than the deferral of recognition of income until
the exercise or other disposition of the Stock Appreciation Rights.
ARTICLE VIII
DEFERRED SHARES
8.1 Deferred Share Awards. The Committee shall have the authority to grant Deferred Shares to any Participant and to determine ( i) the
number of Deferred Shares granted to each Participant, ( ii) the date such Deferred Shares shall become vested and ( iii) the date such Deferred Shares will be
payable to the Participant. In addition, on such date or dates as shall be established by the Committee and subject to such terms and conditions as the
Committee shall determine, a Participant may be permitted to elect to defer receipt of all or a portion of his annual compensation and/or annual incentive bonus
(“Deferred Amount”) payable by the Company or a Subsidiary and receive in lieu thereof a number of Deferred Shares equal to the greatest whole number
which may be obtained by dividing (i) the Deferred Amount by (ii) the Fair Market Value of a Share on the date such compensation or bonus would otherwise
have been payable to the Participant. No Shares will be issued at the time an award of Deferred Shares is made and the Company shall not be required to set
aside a fund for the payment of any such award. The Company will establish a separate account for the Participant and will record in such account the
number of Deferred Shares awarded to the Participant. To the extent the Committee so determines, a Participant who elects to defer receipt of his or her
compensation or bonus and receive Deferred Shares may also receive that number of supplemental Deferred Shares (“ Supplemental Units”) equal to the
greatest whole number which may be obtained by dividing ( i) such percentage of the Deferred Amount as is determined by the Committee by ( ii) the Fair
Market Value of a Share on the date of grant. Each grant of Deferred Shares and Supplemental Units shall be evidenced by a written agreement setting forth
the terms of such Award.
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