FairPoint Communications 2009 Annual Report Download - page 196

Table of Contents
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Under the employment agreement with Mr. Hauser, either party may terminate Mr. Hauser's employment at any time. In the event the Company
terminates Mr. Hauser's employment without cause or Mr. Hauser resigns his employment for good reason (each as defined in the agreement),
Mr. Hauser will receive: (i) any unpaid base salary, expense reimbursements, accrued bonuses or incentive compensation; (ii) a lump sum cash payment
of 2 times (A) base salary, (B) his target annual incentive award and (C) the value of the long term incentive award that would have been due for the
performance period ending as of the next December 31; (iii) accelerated vesting of the Inducement Options; and (iv) accelerated award and vesting of all
shares of Inducement Restricted Stock. The employment agreement contains a provision pursuant to which Mr. Hauser may not compete with the
Company for a period of two years following termination of employment.
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We entered into change in control and severance agreements, which we refer to collectively as the severance agreements, with Mr. Nixon and
Ms. Linn, on March 14, 2007, and with Mr. Giammarino, on September 3, 2008. Each severance agreement provides, subject to certain other
conditions, that we will pay severance and provide benefits to the subject executive (i) in the event of such employee's termination without cause or
following a change in control, or (ii) within two years of a change in control, upon such employee's resignation within 45 days following (A) a
significant or material reduction of such employee's key responsibilities or duties, (B) a reduction in such employee's overall compensation
opportunities, (C) the diminishment or elimination of such employee's rights to the severance benefits detailed in the severance agreement, or (D) any
material breach by the Company of the severance agreement. The severance payable and benefits required to be provided include unpaid base salary,
lump sum cash payments equal to two times such employee's annual base salary and annual bonus, COBRA premiums and life insurance premiums for
24 months, and the vesting of all non-performance based, non-vested and/or unearned long term incentive awards, among others. The severance
agreements do not require the Company to provide any tax gross-up on the benefits paid under the severance agreements. However, if the Company
determines that reducing the benefits to just below the level that would trigger the "golden parachute" excise tax payable by the executive will result in a
greater after-tax benefit to the executive, the benefits will be reduced to that level.
The severance agreements also contain provisions pursuant to which the subject employees, for a period of 12 months following termination of
employment, promise to refrain from certain activities including (1) soliciting any of our employees or consultants to leave us or to perform services for
another company, or (2) accepting any employment or similar arrangements with our competitors.
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Both the 2008 - 2010 performance units and the 2009 - 2011 performance units under the 2008 Long Term Incentive Plan contain provisions
whereby participants will receive 100% of the target performance units (as defined in each participant's individual award agreement) upon the
occurrence of a change in control, without any adjustment for the levels of performance actually achieved during the performance period prior to or after
the change of control.
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