FairPoint Communications 2006 Annual Report Download - page 112

 


 
John P. Crowley Executive Vice President
and Chief Financial Officer
50%(i) 60%—FairPoint achieving a specified EBITDA target for 2006 and generating
sufficient cash available for dividends to maintain the current dividend level;
(ii) 20%—improving FairPoint’s investor relations efforts; (iii) 15%—FairPoint
complying with the internal control requirements of the Sarbanes-Oxley Act and
effecting certain operating efficiencies; and (iv) 5%—complying with FairPoint’s
safety, ethics and business conduct initiatives.
Walter E. Leach, Jr. Executive Vice President, Corporate
Development
50%(i) 55%—FairPoint completing a specified amount of RLEC acquisitions which
satisfy certain criteria; (ii) 25%—developing new lines of business; and (iii) 15%
—managing FairPoint’s non-strategic assets.
Shirley J. Linn Executive Vice President, General
Counsel and Secretary
40%(i) 40%—meeting the needs of FairPoint’s various departments; (ii) 30%
—standardizing and enhancing FairPoint’s compliance with public company and
corporate governance requirements; (iii) 10%—assisting in FairPoint’s compliance
with the internal control requirements of the Sarbanes-Oxley Act; (iv) 10%
—assessing performance and cost of FairPoint’s outside legal advisors; and
(v) 10%—facilitating board and board committee communications.
The compensation committee made bonus decisions in January 2007 to the general effect that each NEO had satisfied all (or substantially all) of their
performance goals for 2006. Cash bonus awards were consequently paid at various levels from 88% to 120% of the target levels based on the NEOs actual
performance against these goals.

Mr. Johnson’s March 2006 employment agreement provided for the grant of 50,000 shares of restricted stock coincident with the execution of his
employment agreement. In addition, his employment agreement provides for an additional grant of 50,000 shares of restricted stock on each of January 1, 2007
and January 1, 2008 provided Mr. Johnson is not terminated for cause and/or voluntarily resigns. Mr. Johnson received 50,000 shares of restricted stock on
January 1, 2007. The compensation committee also awarded 50,000 shares of restricted stock to Ms. Linn and Mr. Crowley in December 2006. Both
Ms. Linn and Mr. Crowley received the awards at the discretion of the compensation committee, for excellent individual corporate performance in 2006.
In September 2006, the compensation committee also approved grants to various employees based on their title and current salary. For example, all
employees that were executive vice presidents or above received a grant valued on the date of grant to equal 75% of their base salary. Each of the NEOs received
shares of restricted stock as part of this grant, except the chief executive officer.

In 2006, we provided NEOs with limited perquisites and other personal benefits (such as use of Company automobiles, additional life and disability
insurance benefits and, for the chief executive officer, reimbursement of country club dues). The compensation committee believes these perquisites were
reasonable and consistent with the objective of better enabling us to attract and retain superior employees
110