FairPoint Communications 2009 Annual Report Download - page 177

Table of Contents
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The table below identifies and explains the reason for each component of our executive compensation program. See "—Executive Compensation
Decisions for 2009" for amounts and further detail.
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Salary Our career-oriented philosophy toward executive compensation requires a competitive base salary as a
starting point. The compensation committee establishes the base salaries for our NEOs as fixed amounts to
provide a reliable indication of the minimum amount of compensation each NEO will receive in a given year.
Annual Incentives We maintain an Annual Incentive Plan under which our NEOs and other key employees may earn annual
cash incentives based on corporate and individual performance. The Annual Incentive Plan is designed to
provide an incentive for executives to attain short term goals. The compensation committee establishes and
approves the goals of the Chief Executive Officer and the Chief Executive Officer approves the goals of the
other NEOs and the compensation committee reviews them.
Long Term Incentives/Equity Awards We maintain the 2008 Long Term Incentive Plan that allows for a variety of stock-based awards to link
employee compensation to stockholders' interests and encourage the creation of long term value for our
stockholders by increasing the retention of qualified key employees.
Deferred Compensation We have maintained a Non-Qualified Deferred Compensation Plan, which we refer to as the NQDC Plan,
which covers certain employees. The NQDC Plan allows senior management employees to defer additional
compensation beyond the contribution limitations of the 401(k) plan. Company matching contributions are
made according to the same percentage of deferrals as is made under our 401(k) plan, but only with respect
to compensation that exceeds the limits for the 401(k) plan, up to the maximum allowed contribution.
Welfare Benefits We provide, on equal terms for all employees, group term life insurance, group health insurance, and short
term and long term disability insurance.
Post-employment Benefits . We maintain a 401(k) retirement savings plan that in 2009 included an employer matching
contribution up to an amount equal to 5% of each participant's compensation.
. We provide severance benefits to certain NEOs at levels that we
consider conservative yet competitive when compared to those offered by our peers. We believe that such
benefits are necessary and appropriate in order to attract and retain qualified NEOs.