FairPoint Communications 2007 Annual Report Download - page 98

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Table of Contents


The initial carrying amount of the Series A preferred stock was recorded at its fair value at the date of issuance ($78.4 million). The
carrying amount was increased by periodic accretions, using the interest method, so that the carrying amount equaled the mandatory
redemption amount ($82.3 million) at the mandatory redemption date (May 2011). On March 6, 2003, in connection with the Company’s
issuance of the 2003 Notes, the Company used a portion of these proceeds to repurchase $13.3 million aggregate liquidation preference of
its Series A preferred stock at a 35% discount (together with accrued and unpaid dividends thereon). For the years ended December 31,
2005 and 2004, the Series A preferred stock was increased by $0.2 million and $1.4 million, respectively, to reflect the periodic
accretions. The carrying amount of the Series A preferred stock was further increased by $2.2 million and $18.8 million in connection
with dividends paid in kind on the outstanding shares of the Series A preferred stock for the years ended December 31, 2005 and 2004,
respectively.
In February 2005, the Company repurchased all of the Company’s outstanding Series A preferred stock for $129.2 million. The
Company recorded a loss of $9.9 million on the redemption.
 
The Company sponsors a voluntary 401(k) savings plan (the 401(k) Plan) that covers substantially all eligible employees. Each
401(k) Plan year, the Company contributes to the 401(k) Plan an amount of matching contributions determined by the Company at its
discretion. For the 401(k) Plan years ended December 31, 2007, 2006 and 2005, the Company matched 100% of each employee’s
contribution up to 3% of compensation and 50% of additional contributions up to 6%. The 401(k) Plan also allows for a profit sharing
contribution that is made based upon management discretion. Total Company contributions to the 401(k) Plan were $1.5 million,
$1.5 million, and $1.3 million for the years ended December 31, 2007, 2006 and 2005, respectively.
In 1999, the Company began a Non-Qualified Deferred Compensation Plan (the NQDC Plan) that covers certain employees. The
NQDC Plan allows highly compensated individuals to defer additional compensation beyond the limitations of the 401(k) Plan.
Company matching contributions are subject to the same percentage as the 401(k) Plan. Total Company contributions to the NQDC Plan
were approximately $16,000, $3,000, and $26,000 for the years ended December 31, 2007, 2006 and 2005, respectively. At
December 31, 2007 and 2006, the NQDC Plan assets were $1.0 million and $0.7 million, respectively. The related deferred compensation
obligation is included in other liabilities in the accompanying consolidated balance sheets.
C&E, Taconic, and GT Com also sponsor defined contribution 401(k) retirement savings plans for union employees. C&E,
Taconic, and GT Com match contributions to these plans based upon a percentage of pay of all qualified personnel and make certain
profit sharing contributions. Contributions to these plans were $0.3 million for each of the years ended December 31, 2007, 2006 and
2005, respectively.
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