FairPoint Communications 2010 Annual Report Download - page 142
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Table of Contents
The table below identifies and explains the reason for each component of our executive compensation program. See “—Executive Compensation Decisions
for 2010” for amounts and further detail.
Salary
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 adopted the 2010 Long Term Incentive Plan effective as of the Effective Date 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
Retirement. We maintain a 401(k) retirement savings plan that in 2010 included an employer matching
contribution up to an amount equal to 5% of each participant’s compensation.
Severance and Change in Control Benefits. 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.
Success Bonus Plan
We adopted the Success Bonus Plan effective as of the Effective Date that allowed us to pay one-time cash
bonuses to our NEOs and other key employees based on certain performance measures, subject to upward or
downward adjustment to reflect the timing of the Effective Date.
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