FairPoint Communications 2004 Annual Report Download - page 462

ARTICLE IV
STOCK OPTIONS
4.1 Grant of Options. The Committee shall have the power to grant Options that are “incentive stock options” within the meaning of section
422 of the Code (“ISOs”) or that are non-statutory stock options (“NSOs”) to any Participant and to determine (a) the number of ISOs and the number of
NSOs to be granted to each Participant and ( b) the other terms and conditions of such Awards. An Option shall be an NSO unless otherwise specified by the
Committee at the time of grant. Each Option shall be evidenced by an Option agreement that shall specify ( a) the type of Option granted, (b) the number of
Shares to which the Option pertains, (c) the exercise price, (d) the period in which the Option may be exercised and ( e) such terms and conditions not
inconsistent with the Plan as the Committee shall determine. The maximum number of Shares that may be issued under the Plan through ISOs is 947,441.
4.2 Exercise Price. Unless otherwise determined by the Committee, Options granted pursuant to the Plan shall have an exercise price that is
not less than the Fair Market Value of a Share on the date the Option is granted.
4.3 Vesting and Exercisability. Options awarded under the Plan shall vest and become exercisable in accordance with the vesting schedule
determined by the Committee, subject to the Participant’s continuous employment with the Company or a Subsidiary from the date of grant through the
applicable vesting date. No Option shall be exercisable for more than 10 years after the date on which it is granted.
4.4 Payment. The Committee shall establish procedures governing the exercise of Options. Without limiting the generality of the foregoing, the
Committee may provide that payment of the exercise price may be made ( a) in cash or its equivalent, (b) by exchanging Shares owned by the optionee (which
are not the subject of any pledge or other security interest), ( c) through an arrangement with a broker approved by the Company whereby payment of the
exercise price is accomplished with the proceeds of the sale of Common Stock or ( d) by any combination of the foregoing; provided that the combined value of
all cash and cash equivalents paid and the Fair Market Value of any such Common Stock so tendered to the Company, valued as of the date of such tender, is
at least equal to such exercise price. No Shares shall be delivered pursuant to any exercise of an Option unless arrangements satisfactory to the Committee
have been made to assure full payment of the exercise price therefor and any required withholding or other similar taxes or governmental charges.
4.5 Termination of Employment. Unless otherwise determined by the Committee at or after the date of grant and except as provided in Article
XI, in the event a Participant’s employment terminates by reason of death or a Qualifying Termination of Employment, the Participant (or the Participant’s
beneficiary or legal representative) may exercise any Options (regardless of whether then exercisable) until the earlier of ( a) the twelve-month anniversary of the
date of such termination of employment and ( b) the date such Options would otherwise expire but for the operation of this Section 4.5. Unless otherwise
determined by the Committee at or after the date of grant, in the event a
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