FairPoint Communications 2010 Annual Report Download - page 29

Table of Contents
 We have agreed that the 2010 Annual Incentive Plan and the Success Bonus will be based on a combination of EBITDAR (EBITDA plus
restructuring costs) and service metrics and the weighting for each of these categories will be computed and clearly stated for the incentive and bonus
plans for each individual and for us in total, and that we will disclose such metrics to the MPUC and the Office of the Public Advocate of the State
of Maine (the “Maine Public Advocate”).
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 We are required to reimburse the MPUC and Maine Public Advocate for certain costs and expenses.
Vermont Regulatory Settlement
On December 23, 2010, the Vermont Board provided its approvals in Vermont, including of the Regulatory Settlement for Vermont (the “Vermont
Regulatory Settlement”). The Vermont Regulatory Settlement provides for, among other things, the following:
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 In general, all of the service quality programs contained in the January 8, 2008 settlement agreement among Verizon, the Company and the
Department of Public Service (“DPS”) (the “VT 2008 Settlement”) and the February 15, 2008 Order RE: MODIFIED PROPOSAL IN Docket
Number 7270 (the “VT 2008 Order”) will remain in place subject to certain modifications described in the Vermont Regulatory Settlement.
 SQI penalties for 2008 and 2009 were deferred until December 31, 2010. If we met specified service levels on average in ten performance areas over
the twelve calendar months in 2010, the 2008 and 2009 penalties would be waived. If we met the service levels for some but not all of these ten
performance areas, the penalties would be reduced by 10% for each performance area specified for which we met specified service levels on average
over the 12 calendar months in 2010. As of December 31, 2010 we expect to receive at least an 80% penalty waiver. The amount of the waiver is
subject to the review and approval of the Vermont Board.
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 We will undertake to deploy broadband services to 95% of all access lines in those exchanges that have been identified for 100% broadband
availability in the VT 2008 Order (the “100% Exchanges”) by June 30, 2011. With respect to the remaining 5% of lines in the 100% Exchanges, we
will deploy broadband to any requesting customer using an extended service interval of 90 days from the date of the receipt of the order from the
customer, provided such order is made no sooner than June 30, 2011. Failure to meet such requirements will require us to waive certain service
charges.
 We also will request that the Vermont Board authorize us to use high-cost USF funds for three consecutive years to upgrade local loop plant and
infrastructure in order to improve our service quality and network reliability. If the Vermont Board authorizes us to use the high-cost USF funds, and
to the extent permitted by FCC rules, we may invest the high-cost USF funds in network infrastructure that will support the deployment of
broadband services to an additional 5% of access lines on a timeline that varies depending on the date of the Vermont Board’s authorization.
 We will have the option to resell terrestrial (non-satellite) based service providers’ broadband service offerings in order to fulfill our broadband build-
out and/or service requirements as contained in the VT 2008 Order, provided that the services meet or exceed all requirements of the VT 2008 Order
as modified by the Vermont Regulatory Settlement and the resold services are purchased through and serviced by us.
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