FairPoint Communications 2009 Annual Report Download - page 179

Table of Contents
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.
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Our NEOs participate in our broad-based 401(k) and welfare benefit plans, and thereby receive, for example, group health insurance, group term
life insurance and short term and long term disability insurance. The costs of these benefits constitute only a small percentage of each executive officer's
total compensation.
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We provide post-employment severance and change-in-control benefits to Mr. Hauser, pursuant to an employment agreement, and to
Messrs. Giammarino and Nixon and Ms. Linn, pursuant to change in control and severance agreements. See "—Potential Payments Upon Termination
or Change of Control." We also provide post-employment severance and change-in-control benefits to certain other non-NEO executives. The severance
benefits for these executives are generally paid only if the executives are terminated without cause and they do not voluntarily resign. The severance
benefits are also provided if any termination of employment occurs because of a change in control. In addition to severance payments, each executive is
entitled to continued welfare benefits for a limited period.
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Explained below are the key components of the compensation that our NEOs earned in 2009 as shown in the "Summary Compensation Table."
Their base salaries generally accounted for between 33% and 50% of their total potential compensation, while incentive compensation accounted for
most of the remainder of their total potential compensation. The compensation committee believes that the balance described below of 2009 levels for
salary, annual cash incentive awards and other benefits (including, with respect to Mr. Hauser, a stock option award and a restricted stock award) reflect
both (i) an appropriate performance-oriented structure for total compensation, and (ii) a suitable correlation of total NEO compensation to the
Company's financial and business performance in 2009. Note that the "Summary Compensation Table" below reports the grant date value of equity
awards rather than the fair value of the awards when they are subsequently earned or become vested.
Pursuant to the Plan, all outstanding equity interests of the Company, including but not limited to all outstanding shares of common stock, options
and contractual or other rights to acquire any equity interests, will be canceled and extinguished on the Effective Date. In addition, on the Effective Date,
the Company will be deemed to have adopted the New Long Term Incentive Plan and the Success Bonus Plan without any further action by the
Company. On the Effective Date, in accordance with the Plan, (i) management and other employees of the Company are expected to receive certain cash
bonuses pursuant to the Success Bonus Plan and certain equity awards pursuant to the New Long Term Incentive Plan and (ii) members of the New
Board are expected to receive certain equity awards pursuant to the New Long Term Incentive Plan. See "Item 1. Business—Bankruptcy—The Plan
—New Long Term Incentive Plan and Success Bonus Plan."
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None of the NEOs received a base salary increase in 2009. Upon the recommendation of the compensation committee, our board of directors
approved a starting annual base salary for Mr. Hauser of $800,000 effective as of his hire on July 1, 2009.
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