EXHIBIT 10.1

FAIRPOINT COMMUNICATIONS, INC.

AMENDED AND RESTATED 2010 LONG TERM INCENTIVE PLAN

 

Plan Document
as amended and restated effective May 12, 2014

 

1.Introduction.
(a)Purpose. FairPoint Communications, Inc. (the “Company”) has previously
established and is hereby amending and restating this equity-based incentive
compensation plan, to be known henceforth as the “FairPoint Communications, Inc.
Amended and Restated 2010 Long Term Incentive Plan” (as amended and restated,
the “Plan”), for the following purposes: (i) to enhance the Company’s ability to
attract highly qualified personnel; (ii) to strengthen its retention
capabilities; (iii) to enhance the long-term performance and competitiveness of
the Company; and (iv) to align the interests of Plan participants with those of
the Company’s shareholders. This Plan is intended to serve as the sole source
for all future equity-based awards to those eligible for Plan participation.
(b)Effective Date. This Plan as amended and restated shall become effective on
May 12, 2014 upon its receipt of shareholder approval (the “Effective Date”). If
such shareholder approval is received, this amended and restated Plan shall be
the sole plan under which the Company provides Share-based awards to Eligible
Persons. If such shareholder approval is not received, this amended and restated
Plan shall be null and void and the plan as in effect immediately before this
restatement shall remain in full force and effect (without any effect on
outstanding awards).
(c)Definitions. Terms in the Plan and any Appendix that begin with an initial
capital letter have the defined meaning set forth in Appendix I or elsewhere in
this Plan, in either case unless the context of their use clearly indicates a
different meaning.
(d)Effect on Other Plans. As of the Effective Date, this Plan shall be the sole
plan under which the Company makes future awards of equity-based compensation.
(e)Appendices. Incorporated by reference, and thereby part of this Plan, are the
terms set forth in Appendix I (Definitions) and Appendix II (Incentive Stock
Options).
2.Types of Awards. The Plan permits the granting of the following types of
Awards according to the Sections of the Plan listed below:

Section 5
Stock Options and SARs
Section 6
Section 6(f)
Restricted Shares, Restricted Share Units and Unrestricted Shares
Performance Awards

3.Shares Available for Awards.
(a)    Generally. Subject to Sections 3(d) and 9 below, a total number of Shares
equal to 2,850,000 shall be available for issuance under the Plan pursuant to
Awards made on and after the Effective Date (the “Available Share Limit”). The
Shares deliverable pursuant to Awards hereunder shall be authorized but unissued
Shares or Shares that the Company otherwise holds in treasury or in trust.
(b)    Counting of Shares. Any Full-Value Award made on or after the Effective
Date shall be counted against the Available Share Limit as 1.35 Shares for each
Share issued pursuant to the Award, and any other Awards, whether made before,
on or after the Effective Date, shall be counted as one Share for each Share
issued pursuant to the Award. To the extent that a Share subject to a Full Value
Award made on or after the Effective Date is returned to the Plan in accordance
with Section 3(c) below, the Available Share Limit shall be increased by 1.35
Shares. To the extent that a Share subject to any other Award, whether made
before, on or after the Effective Date, is returned to the Plan in accordance
with Section 3(c) below, the Available Share Limit shall be increased by one
Share.
(c)    Replenishment. Any Shares reserved for Awards will again be available for
future Awards if the Shares for any reason will never be issued to a Participant
or Beneficiary pursuant to an Award due to its settlement in cash rather than in
Shares or its forfeiture, cancellation or expiration without the issuance of
Shares. Further, to the extent permitted under Applicable Law, the Available
Share Limit shall not be reduced by any Shares issued under the Plan through the
settlement, assumption or substitution of outstanding awards or obligations to
grant future awards as a condition of the Company’s or an Affiliate’s acquiring
another entity. Shares that a Person separately owns and tenders in payment of
all or part of the exercise price of an Option or SAR or in satisfaction of
Withholding Taxes relating to the exercise of an Option or SAR shall not
increase the Available Share Limit and Shares otherwise deliverable pursuant to
an Award but that are surrendered to the Company to pay such exercise price or
taxes shall count as being issued pursuant to the Plan (and shall not be
available for future Awards). On the other hand, the Available Share Limit shall
not be reduced either by Shares withheld by the Company to satisfy the
Withholding Taxes relating to the vesting or settlement of a Full Value Award or
by the Shares underlying Awards that may only be settled in cash.
(d)    Awards Made and Plan Terms in Effect Prior to the Effective Date. Any
Awards before the Effective Date shall remain in full force and effect. The
Available Share Limit shall be increased by any of the 19,320 Shares that were
reserved for Awards under the Plan, as in effect before the Effective Date, but
that are not subject to Awards made before the Effective Date. Subject to and in
accordance with the foregoing provisions of this Section 3, the Available Share
Limit shall be increased by the number of Shares reserved for Awards on or
before the Effective Date that are never issued due to such an Award’s
settlement in cash rather than in Shares or its forfeiture, cancellation or
expiration without the issuance of Shares. In addition, with respect to the Plan
as in effect before its amendment and restatement herein, its prior contingent
authorization for up to 310,326 Shares for Awards has been and hereby is
canceled.
4.Eligibility.
(a)    General Rule. Subject to the express provisions of the Plan, the
Committee shall determine from the class of Eligible Persons those Persons to
whom Awards may be granted. Each Award shall be evidenced by an Award Agreement
that sets forth its Grant Date and all other terms and conditions of the Award,
that is signed on behalf of the Company (or delivered by an authorized agent
through an electronic medium) and that, if required by the Committee, is signed
by the Eligible Person as an acceptance of the Award. To the extent reasonably
practical (as determined by the Committee in its discretion), each Award
Agreement shall set forth terms and conditions that are consistent with the
Company’s share ownership guidelines, as in effect immediately before the Award
is granted. The grant of an Award shall not obligate the Company or any
Affiliate to continue the employment or service of any Eligible Person or to
provide any future Awards or other remuneration at any time thereafter.
(b)    Option and SAR Limits per Person. During the term of the Plan, no
Participant may receive Options and SARs that relate to more than thirty percent
(30%) of the Available Share Limit as of the Effective Date, as such number may
be adjusted pursuant to Section 9 below.
(c)    Replacement Awards. Subject to Section 14 below and to Applicable Law
(including any associated shareholder approval requirements), the Committee may,
in its sole discretion and upon such terms as it deems appropriate, require as a
condition of the grant of an Award to a Participant that the Participant consent
to surrender for cancellation some or all of the Awards or other grants that the
Participant has received under this Plan or otherwise. An Award conditioned upon
such surrender may or may not be the same type of Award, may cover the same (or
a lesser or greater) number of Shares as such surrendered Award, may have other
terms that are determined without regard to the terms or conditions of such
surrendered Award and may contain any other terms that the Committee deems
appropriate. In the case of Options and SARs, these other terms may not involve
an exercise price that is lower than the exercise price of the surrendered
Option or SAR unless the Company’s shareholders approve the grant itself or the
program under which the new grant is made pursuant to the Plan.
5.Stock Options and SARs.
(a)    Grants. Subject to the limitations set forth in Section 3 and to the
special rules for ISOs set forth in Appendix II (Incentive Stock Options), the
Committee may grant Options and/or SARs to Eligible Persons pursuant to Award
Agreements setting forth terms and conditions that are not inconsistent with the
Plan, that may be immediately exercisable or that may become exercisable in
whole or in part based on future events or conditions, that may include vesting
or other requirements for the right to exercise the Option and that may differ
for any reason between Eligible Persons or classes of Eligible Persons, provided
in all instances that:
(i)the exercise price for Shares subject to purchase through exercise of an
Option or SAR shall not be less than 100% of the Fair Market Value of the
underlying Shares on the Grant Date; and
(ii)no Option or SAR shall be exercisable for a term ending more than ten (10)
years after its Grant Date.
(b)    Method of Option Exercise. Each Option may be exercised, in whole or in
part (provided that the Company shall not be required to issue fractional
shares), at any time and from time to time prior to its expiration, but only
pursuant to the terms of the applicable Award Agreement and subject to the
times, circumstances and conditions for exercise contained in the applicable
Award Agreement. Exercise shall occur by delivery of both written notice of
exercise to the secretary of the Company and payment of the full exercise price
for the Shares being purchased. The methods of payment that the Committee may in
its discretion accept or commit to accept in an Award Agreement include:
(i)    cash or check payable to the Company (in U.S. dollars);
(ii)    other Shares that (A) are owned by the Participant who is purchasing
Shares pursuant to an Option, (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which the
Option is being exercised, (C) are all, at the time of such surrender, free and
clear of any and all claims, pledges, liens and encumbrances or any restrictions
which would in any manner restrict the transfer of such Shares to or by the
Company (other than such restrictions as may have existed prior to an issuance
of such Shares by the Company to such Participant) and (D) are duly endorsed for
transfer to the Company;
(iii)    a net exercise by surrendering to the Company Shares otherwise
receivable upon exercise of the Option;
(iv)    a cashless exercise program that the Committee may approve, from time to
time in its discretion, pursuant to which a Participant may elect to
concurrently provide irrevocable instructions (A) to such Participant’s broker
or dealer to effect the immediate sale of the purchased Shares and remit to the
Company, out of the sale proceeds available on the settlement date, sufficient
funds to cover the exercise price of the Option plus all applicable Withholding
Taxes required by reason of such exercise and (B) to the Company to deliver the
certificates for the purchased Shares directly to such broker or dealer in order
to complete the sale; or
(v)    any combination of the foregoing methods of payment.
The Company shall not be required to deliver Shares pursuant to the exercise of
an Option until the Company has received sufficient funds to cover the full
exercise price due and all applicable Withholding Taxes required by reason of
such exercise.
Notwithstanding any other provision of the Plan to the contrary, no Participant
who is a Director or an “executive officer” of the Company within the meaning of
Section 13(k) of the Exchange Act shall be permitted to make payment with
respect to any Awards granted under the Plan or continue any extension of credit
with respect to such payment with a loan from the Company or a loan arranged by
the Company in violation of Section 13(k) of the Exchange Act.
(c)    Termination of Continuous Service. The Committee may establish and set
forth in the applicable Award Agreement the terms and conditions on which an
Option shall remain exercisable, if at all, following termination of a
Participant’s Continuous Service. The Committee may waive or modify these
provisions at any time. To the extent that a Participant is not entitled to
exercise an Option at the date of his or her termination of Continuous Service
or if the Participant (or other Person entitled to exercise the Option) does not
exercise the Option to the extent so entitled within the time specified in the
Award Agreement or below (as applicable), the Option shall terminate and the
Shares underlying the unexercised portion of the Option shall revert to the Plan
and become available for future Awards.
The following provisions shall apply to the extent an Award Agreement does not
specify the terms and conditions upon which an Option shall terminate when there
is a termination of a Participant’s Continuous Service:
Reason for terminating Continuous Service
Option Termination Date
(I) By the Company for Cause or what would have been Cause if the Company had
known all of the relevant facts.
Termination of the Participant’s Continuous Service, or when Cause first existed
if earlier.
(II) Disability of the Participant.
One year after termination of the Participant’s Continuous Service.
(III) Retirement of the Participant.
One year after termination of the Participant’s Continuous Service.
(IV) Death of the Participant during Continuous Service or within 90 days
thereafter.
One year after termination of the Participant’s Continuous Service.
(V) By the Company without Cause and without what would have been Cause if the
Company had known all of the relevant facts.
90 days after termination of the Participant’s Continuous Service.
(VI) Other than as set forth above.
90 days after termination of the Participant’s Continuous Service.

If there is a blackout period under the Company’s insider trading policy or
under Applicable Law (or a Committee-imposed blackout period) that prohibits the
buying or selling of Shares or the exercise of Options during any part of the
ten (10) day period before the expiration of any Option based on the termination
of a Participant’s Continuous Service (as described above), the period for
exercising the Options shall be extended until ten (10) days beyond when such
blackout period ends. Notwithstanding any provision hereof or within an Award
Agreement, no Option shall ever be exercisable after the expiration date of its
original term as set forth in the Award Agreement.
(d)    SARs. The Award Agreement for each SAR shall set forth terms and
conditions that are consistent with those set forth above for the granting of a
non-ISO, other than that settlement of the SAR shall occur pursuant to the terms
of this subsection. Subject to the Plan’s terms, a SAR shall entitle the
Participant, upon exercise of the SAR, to receive Shares having a Fair Market
Value on the date of exercise equal to the product of the number of Shares as to
which the SAR is being exercised and the excess of (i) the Fair Market Value, on
such date, of the Shares covered by the exercised SAR over (ii) the exercise
price designated in the SAR Award Agreement with respect to such SAR.
Notwithstanding the foregoing, a SAR Award Agreement may limit the total
settlement value that the Participant will be entitled to receive upon the SAR’s
exercise and may provide for settlement either in cash or in any combination of
cash or Shares that the Committee may authorize pursuant to an Award Agreement.
If, on the date on which a SAR or portion thereof is to expire, the Fair Market
Value of the underlying Shares exceeds the aggregate exercise price of such SAR,
then the SAR shall be deemed exercised and the Participant shall within ten (10)
days thereafter receive the Shares and/or cash that would have been issued on
such date if the Participant had affirmatively exercised the SAR on that date.
At each time of exercise of a SAR that is settled through the delivery of Shares
to the Participant, the total number of Shares subject to the Award being
exercised shall reduce the Available Share Limit for future Awards under the
Plan.
6.Restricted Shares, Restricted Share Units, Unrestricted Shares and Performance
Awards.
(a)    Grant. Subject to the limitations set forth in Section 3, the Committee
may grant Restricted Share Awards and/or Restricted Share Units (“RSU”) Awards
to Eligible Persons, in each and all cases pursuant to Award Agreements setting
forth terms and conditions that are not inconsistent with the Plan. The
Committee shall establish as to each Restricted Share or RSU Award the number of
Shares deliverable or subject to the Award (which number may be determined by a
written formula) and the period or periods of time (the “Restriction Period”) at
the end of which all or some restrictions specified in the Award Agreement shall
lapse, and the Participant shall receive unrestricted Shares in settlement of
the Award. Such restrictions may include, without limitation, restrictions
concerning voting rights and transferability and such restrictions may lapse
separately or in combination at such times and pursuant to such circumstances or
based on such criteria as selected by the Committee, including, without
limitation, criteria based on the Participant’s duration of Continuous Service,
individual, group, or divisional performance criteria, Company performance or
other criteria selected by the Committee. The Committee may make any, some or
all Restricted Share and RSU Awards with or without the requirement for payment
of cash or other consideration. In addition, the Committee may grant Awards
hereunder in the form of Unrestricted Shares that shall vest in full upon the
Grant Date or such later date as the Committee may determine and specify in
writing or that the Committee may issue pursuant to any program under which one
or more Eligible Persons (selected by the Committee in its sole discretion)
elect to pay for such Shares or to receive Unrestricted Shares in lieu of cash
bonuses that would otherwise be paid.
(b)    Vesting and Forfeiture. The Committee shall set forth, in an Award
Agreement granting Restricted Shares (or RSUs), the terms and conditions that
establish not only a “substantial risk of forfeiture” within the meaning of
Section 83 of the Code, but also when the Participant’s interest in the
Restricted Shares (or the Shares subject to RSUs) may become vested and
non-forfeitable. Except as set forth in the applicable Award Agreement or as the
Committee otherwise determines, upon termination of a Participant’s Continuous
Service for any reason, the Participant shall forfeit his or her Restricted
Shares and RSUs to the extent the Participant’s interest therein has not vested
on or before such termination date; provided that if a Participant purchases
Restricted Shares and forfeits them for any reason, the Company shall return the
purchase price to the Participant to the extent either set forth in an Award
Agreement or required by Applicable Law.
(c)    Voting and Dividend Rights; Certificates for Restricted Shares. From the
date on which Restricted Shares are issued to a Participant until the Restricted
Shares are either forfeited or exchanged for unrestricted Shares upon a vesting
event, the Participant shall be entitled to exercise full voting rights for such
Restricted Shares. Each Participant receiving Restricted Shares or RSUs shall be
credited with additional Restricted Shares (or RSUs, as the case may be) with
respect to any Share dividends issued to shareholders of record during such
period. Unless otherwise provided in an Award Agreement, the Company shall hold
all Restricted Shares (including any cash or Share dividends that accrue with
respect to them and any stock certificates that may document their issuance)
until the restrictions lapse. If requested by the Company, the Participant shall
provide the Company with appropriate stock powers endorsed in blank. The
Participant’s failure to provide such stock powers within ten (10) days after a
written request from the Company shall entitle the Committee to unilaterally
declare a forfeiture of all or some of the Participant’s Restricted Shares.
(d)    Section 83(b) Elections. A Participant may make an election under Code
Section 83(b) (the “Section 83(b) Election”) with respect to Restricted Shares.
(e)    Issuance of Shares upon Vesting. As soon as practicable after vesting of
a Participant’s Restricted Shares (or of the Participant’s right to receive the
Shares underlying RSUs), the Company shall deliver to the Participant, free from
vesting restrictions, one Share for each surrendered and vested Restricted Share
(or deliver one Share, free from vesting restrictions, for each Share subject to
a vested RSU), unless an Award Agreement provides otherwise and subject to
Section 7 regarding Withholding Taxes and to Section 6(c) regarding dividend
rights. No fractional Shares shall be distributed and cash shall be paid in lieu
thereof.
(f)    Performance Awards. Subject to the limitations set forth in this Section,
the Committee may, at the time of grant of any Restricted Share or RSU Award
before the Company’s first shareholder meeting in 2019, designate such Award as
a “Performance Award” (that shall be settled only in Shares) in order that such
Award constitutes, and has terms and conditions that are designed to qualify as,
“qualified performance-based compensation” under Code Section 162(m). The
Committee may also make cash-settled Performance Awards independently of
Restricted Share and RSU Awards, provided that such Awards constitute, and have
terms and conditions that are designed to qualify as, “qualified
performance-based compensation” under Code Section 162(m). With respect to each
Performance Award, the Committee shall establish, in writing within the time
required under Code Section 162(m), a “Performance Period,” “Performance
Measure(s)”, and “Performance Formula(e)” (each such term being defined below).
Once established for a Performance Period, the Performance Measure(s) and
Performance Formula(e) shall not be amended or otherwise modified to the extent
such amendment or modification would cause the compensation payable pursuant to
the Award to fail to constitute qualified performance-based compensation under
Code Section 162(m).
(i)    A Participant shall be eligible to receive Shares in respect of a
Performance Award only to the extent that the Performance Measure(s) for such
Award is achieved and the Performance Formula(e) as applied against such
Performance Measure(s) determines that all or some portion of such Participant’s
Award has been earned for the Performance Period.
(ii)    The maximum Performance Award that any one Participant may receive for
any one Performance Period, without regard to time of vesting or exercisability,
shall not exceed (I) for Performance Awards settled in Shares, thirty percent
(30%) of the Available Share Limit as of the Effective Date, as such number may
be adjusted pursuant to Section 9 below and (II) for Performance Awards settled
in cash, $5,000,000.00. With respect to any Performance Award that is to be
settled in Shares, the Participant shall be entitled to dividend rights,
determined in accordance with Section 6(c), from the Grant Date of the
Performance Award until unrestricted Shares are issued pursuant to the Award.
(iii)    Following the completion of each Performance Period, the Committee
shall meet to review and certify in writing whether, and to what extent, the
Performance Formula(e) for the Performance Period has been achieved and, if so,
to calculate and certify in writing the amount of the Performance Awards earned
for the period based upon the Performance Formula(e). The Committee shall then
determine the actual size of each Participant’s Performance Award for the
Performance Period and, in so doing, may apply Negative Discretion if and when
it deems appropriate in its sole judgment.
(iv)    Definitions.
(I)    “Performance Formula” means, for a Performance Period, one or more
objective formulas or standards established by the Committee for purposes of
determining whether or the extent to which an Award has been earned based on the
level of performance attained or to be attained with respect to one or more
Performance Measure(s). Performance Formulae may vary from Performance Period to
Performance Period and from Participant to Participant and may be established on
a stand-alone basis, in tandem or in the alternative.
(II)    “Performance Measure” means one or more of the following selected by the
Committee to measure Company, Affiliate and/or business unit performance for a
Performance Period, whether in absolute or relative terms (including, without
limitation, terms relative to a peer group or index): basic, diluted or adjusted
earnings per share; sales or revenue; earnings before interest, taxes and other
adjustments (in total or on a per share basis); basic or adjusted net income;
returns on equity, assets, capital, revenue or similar measure; free cash flow;
economic value added; working capital; total shareholder return;
objectively-determinable customer service quality measures and/or individualized
goals; and product development, product market share, research, licensing,
litigation, human resources, information services, mergers, acquisitions and/or
sales of assets of Affiliates or business units. Each such measure shall be, to
the extent applicable, determined in accordance with generally accepted
accounting principles as consistently applied by the Company (or such other
standard applied by the Committee) and, if so determined by the Committee, and
in the case of a Performance Award, to the extent permitted under Code Section
162(m), adjusted to omit the effects of extraordinary items, gain or loss on the
disposal of a business segment, unusual or infrequently occurring events and
transactions and cumulative effects of changes in accounting principles.
Performance Measures may vary from Performance Period to Performance Period and
from Participant to Participant and may be established on a stand-alone basis,
in tandem or in the alternative.
(III)    “Performance Period” means one or more periods of time (of not less
than one fiscal year of the Company), as the Committee may designate, over which
the attainment of one or more Performance Measure(s) will be measured for the
purpose of determining a Participant’s rights in respect of an Award.
7.Taxes; Withholding; Code §409A.
(a)    General Rule. Participants are solely responsible and liable for the
satisfaction of all taxes and penalties that may arise in connection with Awards
and neither the Company, nor any Affiliate, nor any of their employees,
directors or agents shall have any obligation to mitigate, indemnify or to
otherwise hold any Participant harmless from any or all of such taxes. The
Company’s obligation to deliver Shares (or to pay cash) to Participants pursuant
to Awards is at all times subject to their prior or coincident satisfaction of
all Withholding Taxes. If authorized by the Committee in its sole discretion,
the Committee may require (in an Award Agreement) or permit a Participant to
satisfy Withholding Taxes that the Participant has not otherwise arranged to
settle
(i)    by withholding cash otherwise payable to the Participant pursuant to the
Award;
(ii)    by withholding and canceling the Participant’s rights with respect to a
number of Shares that (A) would otherwise have been delivered to the Participant
pursuant to the Award and (B) have an aggregate Fair Market Value on the date of
the withholding equal to the Withholding Taxes; or
(iii)    by withholding the cash otherwise payable to the Participant by the
Company.
The number of Shares withheld and canceled to pay a Participant’s Withholding
Taxes will be rounded up to the nearest whole Share sufficient to satisfy such
taxes, with cash being paid to the Participant in an amount equal to the amount
by which the Fair Market Value of such Shares exceeds the Withholding Taxes.
Notwithstanding the foregoing, for any period during which the Company does not
generally permit Participants to satisfy their Withholding Taxes through the
cashless method described in clause 7(a)(ii) hereof, the Company shall use
reasonable commercial efforts to operate a cashless exercise program pursuant to
which each Participant may, before or concurrently with the recognition of
income pursuant to an Award, provide irrevocable instructions (A) to a broker or
dealer designated by the Company (but individually selected and engaged by the
Participant if the Participant is a Reporting Person) to effect the immediate
sale of any Shares that would otherwise be issued to the Participant pursuant to
an Award and to remit to the Company, out of the sale proceeds available on the
settlement date, sufficient funds to cover all Withholding Taxes and/or the
exercise price of the Option being exercised (if applicable) by reason of such
exercise and (B) to the Company to deliver the certificates for the purchased
Shares directly to such broker or dealer in order to complete the cashless
transaction.
(b)    U.S. Code Section 409A. To the extent that the Committee determines that
any Award granted under the Plan is subject to Code Section 409A, the Award
Agreement evidencing such Award shall incorporate the terms and conditions
required by Code Section 409A. To the extent applicable, the Plan and Award
Agreements shall be interpreted in accordance with Code Section 409A and
Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance
that may be issued after the Effective Date. Notwithstanding any provision of
the Plan to the contrary, the Committee may adopt such amendments to the Plan
and the applicable Award Agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect) or take
any other actions that the Committee determines are necessary or appropriate (i)
to exempt the Award from Code Section 409A and/or preserve the intended tax
treatment of the benefits provided with respect to the Award or (ii) to comply
with the requirements of Code Section 409A and related Department of Treasury
guidance and thereby avoid the application of any penalty taxes under such
Section.
(c)     Unfunded Tax Status. The Plan is intended to be an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a Person
pursuant to an Award, nothing contained in the Plan or any Award Agreement shall
give the Person any rights that are greater than those of a general creditor of
the Company or any Affiliate and a Participant’s rights under the Plan at all
times constitute an unsecured claim against the general assets of the Company
for the collection of benefits as they come due. Neither the Participant nor the
Participant’s duly-authorized transferee or Beneficiaries shall have any claim
against or rights in any specific assets, Shares or other funds of the Company.
8.Non-Transferability of Awards.
(a)    General. Except as set forth in this Section or as otherwise approved by
the Committee, Awards may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of
descent or distribution. The designation of a death Beneficiary by a Participant
will not constitute a transfer. The Committee will determine the validity of a
Beneficiary designation based on the law of the state in which the Participant
is domiciled at the time the designation is made. An Award may be exercised
during the lifetime of the holder of an Award only by such holder, by the
duly-authorized legal representative of a holder who is Disabled or by a
transferee permitted by this Section.
(b)    Limited Transferability Rights. The Committee may in its discretion
provide in an Award Agreement that an Award (other than an ISO or one that is or
may be settled in cash) may be transferred, on such terms and conditions as the
Committee deems appropriate, either (i) by instrument to the Participant’s
“Immediate Family” (as defined below), (ii) by instrument to an inter vivos or
testamentary trust (or other entity) in which the Award is to be passed to the
Participant’s designated Beneficiaries or (iii) by gift to charitable
institutions. Any transferee of the Participant’s rights shall succeed and be
subject to all of the terms of the applicable Award Agreement and the Plan.
“Immediate Family” means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse (including a domestic partner), former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law and shall include adoptive relationships.
(c)    Death. In the event of the death of a Participant, any outstanding Awards
issued to the Participant shall automatically be transferred to the
Participant’s Beneficiary (or, if no Beneficiary is designated or surviving, to
the Person or Persons to whom the Participant’s rights under the Award pass by
will or the laws of descent and distribution in the state in which the
Participant was domiciled at the time of his or her death).
9.Change in Capital Structure; Change in Control; Etc.
(a)    Changes in Capitalization. The Committee shall equitably adjust the
number of Shares covered by each outstanding Award and the number of Shares that
have been authorized for issuance under the Plan but as to which no Awards have
yet been granted or that have been returned to the Plan upon cancellation,
forfeiture or expiration of an Award, as well as the exercise or other price per
Share covered by each such outstanding Award, to reflect any increase or
decrease in the number of issued Shares resulting from a stock-split, reverse
stock-split, stock dividend, combination, recapitalization or reclassification
of the Shares, extraordinary distribution to shareholders (excluding regular
cash dividends), merger, consolidation, change in form of organization or any
other increase or decrease in the number of issued Shares effected without
receipt or payment of consideration by the Company. In the event of any such
transaction or event, the Committee may provide in substitution for any or all
outstanding Awards such alternative consideration (including cash or securities
of any surviving entity) as it may in good faith determine to be equitable under
the circumstances and may require in connection therewith the surrender of all
Awards so replaced. In any case, such substitution of cash or securities shall
not require the consent of any Person who is granted Awards pursuant to the
Plan. Except as expressly provided herein or in an Award Agreement, if the
Company issues for consideration shares of stock of any class or securities
convertible into shares of stock of any class, the issuance shall not affect,
and no adjustment by reason thereof shall be required to be made with respect to
the number or price of Shares subject to any Award.
(b)    Dissolution or Liquidation. In the event of the dissolution or
liquidation of the Company other than as part of a Change of Control, each Award
will terminate immediately prior to the consummation of such dissolution or
liquidation, subject to the ability of the Committee to exercise any discretion
authorized in the case of a Change in Control.
(c)    Change in Control. In the event of a Change in Control but subject to the
terms of any Award Agreements or employment-related agreements between the
Company or any Affiliates and any Participant, each outstanding Award shall be
assumed or a substantially equivalent award shall be substituted by the
surviving or successor company or a parent or subsidiary of such successor
company (in each case, the “Successor Company”) upon consummation of the
transaction. Notwithstanding the foregoing, instead of having outstanding Awards
be assumed or replaced with equivalent awards by the Successor Company, the
Committee may in its sole and absolute discretion and authority, without
obtaining the approval or consent of the Company’s shareholders or any
Participant with respect to his or her outstanding Awards, take one or more of
the following actions (with respect to any or all of the Awards and with
discretion to differentiate between individual Participants and Awards for any
reason):
(v)    accelerate the vesting of Awards so that Awards shall vest (and, to the
extent applicable, become exercisable) as to the Shares that otherwise would
have been unvested and provide that repurchase rights of the Company, if any,
with respect to Shares issued pursuant to an Award shall lapse as to the Shares
subject to such repurchase right;
(vi)    arrange or otherwise provide for the payment of cash or other
consideration to Participants in exchange for the satisfaction and cancellation
of outstanding Awards (with the Committee determining the amount payable to each
Participant based on the fair market value, on the date of the Change in
Control, of the Award being canceled, based on any reasonable valuation method
selected by the Committee); provided that the Committee may unilaterally cancel
any Options or SARs whose exercise price is equal to or greater than the Fair
Market Value of the Shares, as of the date of the Change in Control, in which
event the holders of such Options and SARs shall not be entitled to receive
payment of any consideration whatsoever;
(vii)    terminate all or some Awards upon the consummation of the transaction;
provided that the Committee shall provide for vesting of such Awards in full as
of a date immediately prior to consummation of the Change in Control. To the
extent that an Award is not exercised, settled or canceled prior to consummation
of a transaction in which the Award is not being assumed or substituted, such
Award shall terminate upon such consummation; or
(viii)    make such other modifications, adjustments or amendments to
outstanding Awards or this Plan as the Committee deems equitable and necessary
or appropriate, subject however to the terms of this Section 9 above.
Notwithstanding the above and unless otherwise provided in an Award Agreement or
in any employment-related agreement between the Company or any Affiliate and the
Participant, in the event a Participant is Involuntarily Terminated on or within
12 months (or other period set forth in an Award Agreement) following a Change
in Control, then any Award that is assumed or substituted pursuant to this
Section above shall accelerate and become fully vested (and become exercisable
in full in the case of Options and SARs) and any repurchase right applicable to
any Shares underlying the Award shall lapse in full. The acceleration of vesting
and lapse of repurchase rights provided for in the previous sentence shall occur
immediately prior to the effective date of the Participant’s Involuntary
Termination.
10.Termination, Rescission and Recapture of Awards.
(a)    Each Award under the Plan is intended to align the Participant’s
long-term interests with those of the Company and its shareholders. Accordingly,
to the extent provided in an Award Agreement, the Company may terminate any
outstanding, unexercised, unexpired, unpaid or deferred Awards (“Termination”),
rescind any exercise, payment or delivery pursuant to the Award (“Rescission”)
or recapture any Shares (whether restricted or unrestricted) or proceeds from
the Participant’s sale of Shares issued pursuant to the Award (“Recapture”), if
the Participant does not comply with the conditions of subsections (b), (c), (d)
and (e) hereof (collectively, the “Conditions”) at all times from the Grant Date
of an Award through the later of its vesting and the date one year after
termination of the Participant’s Continuous Service.
(b)    A Participant shall not, without the Company’s prior written
authorization, disclose to anyone outside the Company, or use in other than the
Company’s business, any proprietary or confidential information or material, as
those or other similar terms are used in any applicable patent, confidentiality,
inventions, secrecy or other agreement between the Participant and the Company
(including a Company policy applicable to the Participant) with regard to any
such proprietary or confidential information or material.
(c)    Pursuant to any agreement between the Participant and the Company with
regard to intellectual property (including but not limited to patents,
trademarks, copyrights, trade secrets, inventions, developments, improvements,
proprietary information and confidential business and personnel information), a
Participant shall promptly disclose and assign to the Company or its designee
all right, title and interest in such intellectual property and shall take all
reasonable steps necessary to enable the Company to secure all right, title and
interest in such intellectual property in the United States and in any foreign
country.
(d)    Upon exercise, payment or delivery of cash or Shares pursuant to an
Award, the Participant shall, if requested in writing by the Company, certify on
a form acceptable to the Company that he or she is in compliance with the terms
and conditions of the Plan and, if a severance of Continuous Service has
occurred for any reason, shall state the name and address of the Participant’s
then-current employer or any entity for which the Participant performs business
services and the Participant’s title thereat and further shall identify any
organization or business in which the Participant owns a
greater-than-five-percent equity interest.
(e)    If the Company determines, in its sole and absolute discretion, that (i)
a Participant has violated any of the Conditions or (ii) during his or her
Continuous Service, or within one year after his or her termination for any
reason, a Participant (x) has rendered services to or otherwise directly or
indirectly engaged in or assisted any organization or business that, in the
judgment of the Company in its sole and absolute discretion, is or is working to
become competitive with the Company; (y) has solicited any non-administrative
employee of the Company to terminate employment with the Company or (z) has
engaged in activities which are materially prejudicial to or in conflict with
the interests of the Company, including any breaches of fiduciary duty or the
duty of loyalty, then the Company may, in its sole and absolute discretion,
impose a Termination, Rescission and/or Recapture with respect to any or all of
the Participant’s relevant Awards, Shares and/or the proceeds thereof.
(f)    Within ten (10) days after receiving notice from the Company of any such
activity described in Section 10(e) above, the Participant shall deliver to the
Company the Shares acquired pursuant to the Award or, if the Participant has
sold the Shares, the gain realized or payment received as a result of the
rescinded exercise, payment or delivery; provided that if the Participant
returns Shares that the Participant purchased pursuant to the exercise of an
Option (or the gains realized from the sale of such Common Stock), the Company
shall promptly refund the exercise price, without earnings, that the Participant
paid for the Shares. Any payment by the Participant to the Company pursuant to
this Section shall be made either in cash or by returning to the Company the
number of Shares that the Participant received in connection with the rescinded
exercise, payment or delivery. It shall not be a basis for Termination,
Rescission or Recapture if after termination of a Participant’s Continuous
Service, the Participant purchases, as an investment or otherwise, stock or
other securities of such an organization or business, so long as (i) such stock
or other securities are listed upon a recognized securities exchange or traded
over-the-counter and (ii) such investment does not represent more than a five
percent (5%) equity interest in the organization or business.
(g)    Notwithstanding the foregoing provisions of this Section, the Company has
sole and absolute discretion not to require Termination, Rescission and/or
Recapture, and its determination not to require Termination, Rescission and/or
Recapture with respect to any particular act by a particular Participant or
Award shall not in any way reduce or eliminate the Company’s authority to
require Termination, Rescission and/or Recapture with respect to any other act
or Participant or Award. Nothing in this Section shall be construed to impose
obligations on the Participant to refrain from engaging in lawful competition
with the Company after the termination of Continuous Service that does not
violate the Conditions, other than any obligations that are part of any separate
agreement between the Company and the Participant or that arise under Applicable
Law.
(h)    All administrative and discretionary authority given to the Company under
this Section shall be exercised by the most senior human resources executive of
the Company or such other Person or committee (including without limitation the
Committee) as the Committee may designate from time to time.
(i)    If any provision within this Section is determined to be unenforceable or
invalid under any Applicable Law, such provision will be applied to the maximum
extent permitted by Applicable Law and shall automatically be deemed amended in
a manner consistent with its objectives and any limitations required under
Applicable Law. Notwithstanding the foregoing, but subject to any contrary terms
set forth in any Award Agreement, this Section shall not be applicable to any
Participant from and after his or her termination of Continuous Service after a
Change in Control.
11.Recoupment of Awards. Unless otherwise specifically provided in an Award
Agreement, and to the extent permitted by Applicable Law, the Committee may in
its sole and absolute discretion, without obtaining the approval or consent of
the Company’s shareholders or of any Participant, require that any Participant
reimburse the Company for all or any portion of any Awards granted under this
Plan (“Reimbursement”) or the Committee may require the Termination or
Rescission of, or the Recapture relating to, any Award, if and to the extent:
(a)    the granting, vesting or payment of such Award was predicated upon the
achievement of certain financial results that were subsequently the subject of a
material financial restatement;
(b)    in the Committee’s view the Participant either benefited from a
calculation that later proves to be materially inaccurate or engaged in fraud or
misconduct that caused or partially caused the need for a material financial
restatement by the Company or any Affiliate; and
(c)    a lower granting, vesting or payment of such Award would have occurred
but for the conduct described in clause (b) of this Section.
In each instance, the Committee may, to the extent practicable and allowable
under Applicable Law, require Reimbursement, Termination or Rescission of, or
Recapture relating to, any such Award granted to a Participant; provided that
the Company will not seek Reimbursement, Termination or Rescission of, or
Recapture relating to, any such Awards that were paid or vested more than three
years prior to the first date of the applicable restatement period.
Notwithstanding the foregoing and any other Plan provisions, all Awards shall be
subject to any applicable compensation recovery requirements in effect under
Section 10D of the Exchange Act.
12.Relationship to other Benefits. No payment pursuant to the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance or welfare or other benefit plan of the
Company or any Affiliate except to the extent otherwise expressly provided in
writing in such other plan or an agreement thereunder.
13.Administration of the Plan. The Committee shall administer the Plan in
accordance with its terms, provided that the Board may act in lieu of the
Committee on any matter. The Committee shall hold meetings at such times and
places as it may determine and shall make, prescribe, amend and/or rescind such
procedures, rules and regulations for the conduct of its business as it deems
advisable. In the absence of a duly appointed Committee, the Board shall
function as the Committee for all purposes of the Plan.
(a)    Committee Composition. The Board shall appoint the members of the
Committee. To the extent permitted by Applicable Law, the Committee may
authorize one or more executive officers to make Awards to Eligible Persons
other than themselves. The Board may at any time appoint additional members to
the Committee, remove and replace members of the Committee with or without Cause
and fill vacancies on the Committee however caused.
(b)    Powers of the Committee. Subject to the provisions of the Plan, the
Committee shall have the authority, in its sole discretion:
(i)    to grant Awards and to determine Eligible Persons to whom Awards shall be
granted from time to time and the number of Shares, units, or dollars to be
covered by each Award;
(ii)    to determine, from time to time, the Fair Market Value of Shares;
(iii)    to determine and to set forth in Award Agreements the terms and
conditions of all Awards, including any applicable exercise or purchase price,
the installments and conditions under which an Award shall become vested (which
may be based on performance), terminated, expired, canceled or replaced and the
circumstances for vesting, acceleration or waiver of forfeiture restrictions and
other restrictions and limitations;
(iv)    to approve the forms of Award Agreements and all other documents,
notices and certificates in connection therewith which need not be identical
either as to type of Award or among Participants;
(v)    to establish and administer Performance Awards, to determine associated
Performance Periods, Performance Measures and Performance Formula(e) and to
certify whether, and to what extent, they have been attained;
(vi)    to construe and interpret the terms of the Plan and any Award Agreement,
to determine the meaning of their terms and to prescribe, amend and rescind
rules and procedures relating to the Plan and its administration;
(vii)    to the extent consistent with the purposes of the Plan and without
amending the Plan, to modify, to cancel or to waive the Company’s rights with
respect to any Awards, to adjust or to modify Award Agreements for changes in
Applicable Law and to recognize differences in foreign law, tax policies or
customs;
(viii)    to require, as a condition precedent to the grant, vesting, exercise,
settlement and/or issuance of Shares pursuant to any Award, that a Participant
agree to execute a general release of claims (in any form that the Committee may
require, in its sole discretion, which form may include any other provisions,
e.g. confidentiality and restrictions on competition, that are found in general
claims release agreements that the Company utilizes or expects to utilize);
(ix)    in the event that the Company establishes, for itself or using the
services of a third party, an automated system for the documentation for the
granting, settlement or exercise of Awards, such as a system using an internet
website or interactive voice response, to implement paperless documentation,
granting, settlement or exercise of Awards by a Participant through the use of
such an automated system; and
(x)    to make all interpretations and to take all other actions that the
Committee may consider necessary or advisable to administer the Plan or to
effectuate its purposes.
Subject to Applicable Law and the restrictions set forth in the Plan, the
Committee may delegate administrative functions to individuals who are Directors
or Employees.
(c)    Local Law Adjustments and Sub-plans. To facilitate the making of any
grant of an Award under this Plan, the Committee may adopt rules and provide for
such special terms for Awards to Participants who are located within the United
States, foreign nationals or who are employed by the Company or any Affiliate
outside of the United States of America as the Committee may consider necessary
or appropriate to accommodate differences in local law, tax policy or custom.
Without limiting the foregoing, the Company is specifically authorized to adopt
rules and procedures regarding the conversion of local currency, taxes,
withholding procedures and handling of stock certificates which vary with the
customs and requirements of particular countries. The Company may adopt
sub-plans and establish escrow accounts and trusts and settle Awards in cash in
lieu of Shares, as may be appropriate, required or applicable to particular
locations and countries.
(d)    Action by Committee. Unless otherwise established by the Board or in any
charter of the Committee, a majority of the Committee shall constitute a quorum
and the acts of a majority of the members present at any meeting at which a
quorum is present, and acts approved in writing by all members of the Committee
in lieu of a meeting, shall be deemed the acts of the Committee. Each member of
the Committee is entitled to, in good faith, rely or act upon any report or
other information furnished to that member by an officer or other Employee of
the Company or any Affiliate, the Company’s independent certified public
accountants or any executive compensation Consultant or other professional
retained by the Company to assist in the administration of the Plan.
(e)    Deference to Committee Determinations. The Committee shall have the
discretion to interpret or construe ambiguous, unclear or implied (but omitted)
terms in any fashion it deems to be appropriate in its sole discretion and to
make any findings of fact needed in the administration of the Plan or Award
Agreements. The Committee’s prior exercise of its discretionary authority shall
not obligate it to exercise its authority in a like fashion thereafter. The
Committee’s interpretation and construction of any provision of the Plan, or of
any Award or Award Agreement, and all determinations the Committee makes
pursuant to the Plan shall be final, binding and conclusive. The validity of any
such interpretation, construction, decision or finding of fact shall not be
given de novo review if challenged in court, by arbitration or in any other
forum and shall be upheld unless clearly made in bad faith or materially
affected by fraud.
(f)    Claims Limitations Period. Any Participant who believes he or she is
being denied any benefit or right under the Plan or under any Award may file a
written claim with the Committee. Any claim must be delivered to the Committee
within four (4) months of the specific event giving rise to the claim. Untimely
claims will not be processed and shall be deemed denied. The Committee, or its
designee, will notify the Participant of its decision in writing as soon as
administratively practicable after the receipt of any claim. Claims not
responded to by the Committee in writing within one hundred and twenty (120)
days of the date the written claim is delivered to the Committee shall be deemed
denied. The Committee’s decision will be final and conclusive and binding on all
Persons. No lawsuit relating to the Plan may be filed before a written claim is
filed with the Committee and is denied or deemed denied and any lawsuit must be
filed within one year of such denial or deemed denial or be forever barred.
(g)    No Liability; Indemnification. Neither the Board nor any Committee
member, nor any Person acting at the direction of the Board or the Committee,
shall be liable for any act, omission, interpretation, construction or
determination made in good faith with respect to the Plan, any Award or any
Award Agreement. The Company and its Affiliates shall pay or reimburse any
member of the Committee, as well as any Director, Employee or Consultant, who in
good faith takes action on behalf of the Plan, for all expenses incurred with
respect to the Plan and, to the full extent allowable under Applicable Law,
shall indemnify each and every one of them for any claims, liabilities and costs
(including reasonable attorney’s fees) arising out of their good faith
performance of duties on behalf of the Plan. The Company and its Affiliates may,
but shall not be required to, obtain liability insurance for this purpose.
(h)    Expenses. The expenses of administering the Plan shall be borne jointly
and severally by the Company and its Affiliates.
14.Modification of Awards and Substitution of Options and SARs. Within the
limitations of the Plan, the Committee may modify an Award to accelerate the
rate at which an Option or SAR may be exercised, to accelerate the vesting of
any Award, to extend or renew outstanding Awards, to accept the cancellation of
outstanding Awards to the extent not previously exercised or to make any change
that the Plan would permit for a new Award. Notwithstanding the foregoing, no
modification of an outstanding Award may materially and adversely affect a
Participant’s rights thereunder unless either (i) the Participant provides
written consent to the modification or (ii) before a Change in Control, the
Committee determines in good faith that the modification is not materially
adverse to the Participant. Furthermore, except in connection with a Change in
Control or as approved by the Company’s shareholders, the Committee may not
cancel an outstanding Option or SAR whose exercise price is greater than Fair
Market Value at the time of cancellation for the purpose of reissuing the Option
or SAR to the Participant at a lower exercise price, or granting a replacement
award of a different type or otherwise allowing for a “repricing” within the
meaning of applicable federal securities laws or other applicable governance
standards.
15.Plan Amendment and Termination. The Board may amend or terminate the Plan as
it shall deem advisable; provided that no change shall be made that increases
the total number of Shares reserved for issuance pursuant to Awards (except
pursuant to Section 9 above) unless such change is authorized by the
shareholders of the Company. Unless permitted under Section 7(b), a termination
or amendment of the Plan shall not materially and adversely affect a
Participant’s vested rights under an Award previously granted to him or her,
unless the Participant consents in writing to such termination or amendment.
Notwithstanding the foregoing, the Committee may amend the Plan to comply with
changes in tax or securities laws or regulations or in the interpretation
thereof. Furthermore, neither the Company nor the Committee shall, without
shareholder approval, amend the Plan either (a) to allow for a “repricing”
within the meaning of either the federal securities laws applicable to proxy
statement disclosures or other applicable governance standards or (b) to cancel
an outstanding Option or SAR whose exercise price is greater than Fair Market
Value at the time of cancellation for the purpose of reissuing the Option or SAR
to the Participant at a lower exercise price or granting a replacement award of
a different type.
16.Term of Plan. If not sooner terminated by the Board, this Plan shall
terminate at the close of business on March 14, 2024, which is the date ten (10)
years after its receipt of Board approval. No Awards shall be made under the
Plan after its termination.
17.Governing Law. Except as otherwise provided in Section 8 above, the terms of
this Plan shall be governed by the laws of the State of Delaware, within the
United States of America, without regard to the State’s conflict of laws rules.
18.Laws and Regulations.
(a)    General Rules.    This Plan, the granting of Awards, the exercise of
Options and SARs and the obligations of the Company hereunder (including those
to pay cash or to deliver, sell or accept the surrender of any of its Shares or
other securities) shall be subject to all Applicable Law. In the event that any
Shares are not registered under any Applicable Law prior to the required
delivery of them pursuant to Awards, the Company may require, as a condition to
their issuance or delivery, that the Persons to whom the Shares are to be issued
or delivered make any written representations and warranties (such as that such
Shares are being acquired by the Participant for investment for the
Participant’s own account and not with a view to, for resale in connection with,
or with an intent of participating directly or indirectly in, any distribution
of such Shares) that the Committee may reasonably require and the Committee may
in its sole discretion include a legend to such effect on the certificates
representing any Shares issued or delivered pursuant to the Plan.
(b)    Black-out Periods. Notwithstanding any contrary terms within the Plan or
any Award Agreement, the Committee shall have the absolute discretion to impose
a “blackout” period on the exercise of any Option or SAR, as well as the
settlement of any Award, with respect to any or all Participants (including
those whose Continuous Service has ended) to the extent that the Committee
determines that doing so is either desirable or required in order to comply with
applicable securities laws.
(c)    Severability; Blue Pencil. In the event that any one or more of the
provisions of this Plan shall be or become invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby. If in the opinion of
any court of competent jurisdiction such covenants are not reasonable in any
respect, such court shall have the right, power and authority to excise or
modify such provision or provisions of these covenants as to the court shall
appear not reasonable and to enforce the remainder of these covenants as so
amended.
19.    No Shareholder Rights. Except as otherwise provided herein, neither a
Participant nor any transferee or Beneficiary of a Participant shall have any
rights as a shareholder of the Company with respect to any Shares underlying any
Award until the date on which such Participant, transferee or Beneficiary
becomes the shareholder of record for such Shares in accordance with the
Company’s governing instruments and Applicable Law. Except as otherwise provided
in this Plan, prior to the issuance of Shares or Restricted Shares pursuant to
an Award, a Participant shall not have the right to vote or to receive dividends
or any other rights as a shareholder with respect to the Shares underlying the
Award, notwithstanding its exercise in the case of Options and SARs. No
adjustment will be made for a dividend or other right that is determined based
on a record date prior to the date the stock certificate is issued, except as
otherwise specifically provided for in this Plan or an Award Agreement.

___________________
Appendix I: Definitions
___________________

As used in the Plan, the following terms have the meanings indicated when they
begin with initial capital letters within the Plan:

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly controls or is controlled by or under common control with such
Person. For the purposes of this definition, “control,” when used with respect
to any Person, means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of such Person or the
power to elect directors, whether through the ownership of voting securities, by
contract or otherwise; and the terms “affiliated,” “controlling” and
“controlled” have meanings correlative to the foregoing.
“Applicable Law” means the legal requirements relating to the administration of
options and share-based plans under any applicable laws of the United States,
any other country, any provincial, state or local subdivision or any applicable
stock exchange or automated quotation system rules or regulations, as such laws,
rules, regulations and requirements shall be in place from time to time.
“Award” means any award made, in writing or by any electronic medium, pursuant
to the Plan, including awards made in the form of an Option, a SAR, a Restricted
Share, an Unrestricted Share, a Restricted Share Unit or a Performance Award, or
any combination thereof.
“Award Agreement” means any written document setting forth the terms of an Award
that has been authorized by the Committee. The Committee shall determine the
form or forms of documents to be used and may change them from time to time for
any reason.
“Beneficiary” means the Person or entity designated by the Participant, in a
form approved by the Company, to exercise the Participant’s rights with respect
to an Award or receive payment or settlement under an Award after the
Participant’s death.
“Board” means the Board of Directors of the Company.
“Cause” means, unless otherwise provided in an Award, (i) the refusal of the
Participant to perform substantially his or her material employment related
duties, (ii) the Participant’s commission of material acts of fraud,
embezzlement, personal dishonesty, willful misconduct or breach of fiduciary
duty, (iii) the Participant’s conviction of a crime constituting a felony (or a
crime or offense of equivalent magnitude in any jurisdiction) or his or her
willful violation of any other law, rule or regulation (other than a traffic
violation or other offense or violation outside of the course of employment
which in no way adversely and materially affects the Company or its reputation
or the ability of the Participant to perform his or her employment related
duties or to represent the Company) or (iv) the material breach by the
Participant of any applicable written policy of the Company or any Affiliate;
provided that, with respect to any Participant who is a party to an employment
agreement with the Company or any Affiliate, “Cause” shall have the meaning
specified in such Participant’s employment agreement. The determination as to
whether “Cause” has occurred shall be made by the Committee, which shall have
the authority to waive the consequences under the Plan of the existence or
occurrence of any of the events, acts or omissions constituting “Cause.” The
foregoing definition does not in any way limit the Company’s ability to
terminate a Participant’s employment at any time and the term “Company” will be
interpreted herein to include any Affiliate or successor thereto, if
appropriate. Furthermore, a Participant’s Continuous Service shall be deemed to
have terminated for Cause within the meaning hereof if, at any time (whether
before, on or after termination of the Participant’s Continuous Service), facts
or circumstances are discovered that would have justified a termination for
Cause.
“Change in Control” means, unless another definition is set forth in an Award
Agreement, the first of the following to occur after the Effective Date:
(i)    the members of the Board as of the Effective Date (the “Incumbent
Directors”) cease for any reason other than due to death to constitute at least
a majority of the members of the Board, provided that the term "Incumbent
Director" shall include a Director whose nomination for election to the Board
was approved by a vote of at least a majority of the members of the Board other
than as a result of (or in connection with) either a proxy contest or any
agreement arising out of an actual or threatened proxy contest;
(ii)    the acquisition by any Person, entity or “group” (as defined in Section
13(d) of the Exchange Act), other than the Company, the Subsidiaries or any
employee benefit plan of the Company or the Subsidiaries of more than 50% of the
combined voting power of the Company’s then outstanding voting securities;
(iii)    the merger or consolidation of the Company, as a result of which
Persons who were shareholders of the Company immediately prior to such merger or
consolidation, do not, immediately thereafter, own, directly or indirectly, more
than 50% of the combined voting power entitled to vote generally in the election
of directors of the merged or consolidated company;
(iv)    the liquidation or dissolution of the Company other than a liquidation
of the Company into any Subsidiary; and
(v)    the sale, transfer or other disposition of all or substantially all of
the assets of the Company to one or more Persons or entities that are not,
immediately prior to such sale, transfer or other disposition, Affiliates of the
Company.
Notwithstanding the foregoing, a “Change in Control” shall not be deemed to
occur (I) in the event the Company files for bankruptcy, liquidation or
reorganization under the United States Bankruptcy Code, or (II) by virtue of the
consummation of any transaction or series of integrated transactions immediately
following which the record holders of the common stock of the Company
immediately prior to such transaction or series of transactions continue to have
substantially the same proportionate ownership in any entity which owns all or
substantially all of the assets of the Company immediately following such
transaction or series of transactions.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Committee” means the Compensation Committee of the Board or its successor,
provided that the term “Committee” means (i) the Board when acting at any time
in lieu of the Committee, (ii) with respect to any decision involving an Award
intended to satisfy the requirements of Code Section 162(m), a committee
consisting of two or more Directors of the Company who are “outside directors”
within the meaning of Code Section 162(m) and (iii) with respect to any decision
relating to a Reporting Person, a committee consisting solely of two or more
Directors who are disinterested within the meaning of Rule 16b-3. The mere fact
that a Committee member shall fail to qualify as an “outside director” or as a
“disinterested director” within the meaning of Section 162(m) of the Code and
Rule 16b-3, respectively, shall not invalidate any Award made by the Committee
which Award is otherwise validly made under the Plan.
“Company” means FairPoint Communications, Inc., a Delaware corporation; provided
that in the event the Company reincorporates in another jurisdiction, all
references to the term “Company” shall refer to the Company in such new
jurisdiction.
“Consultant” means any Person (other than an Employee or Director), including an
advisor, who is engaged by the Company or any Affiliate to render services and
is compensated for such services.
“Continuous Service” means a Participant’s period of service in the absence of
any interruption or termination, as an Employee or Director. Continuous Service
shall not be considered interrupted in the case of: (i) sick leave; (ii)
military leave; (iii) any other leave of absence approved by the Committee,
provided that such leave is for a period of not more than 90 days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; (iv) changes in status from Director to advisory director or
emeritus status; or (iv) transfers between locations of the Company or between
the Company and its Affiliates. Changes in status between service as an Employee
and Director will not constitute an interruption of Continuous Service if the
individual continues to perform bona fide services for the Company. The
Committee shall have the discretion to determine whether and to what extent the
vesting of any Awards shall be tolled during any paid or unpaid leave of
absence; provided, however, that in the absence of such determination, vesting
for all Awards shall be tolled during any such unpaid leave (but not for a paid
leave).
“Director” means a member of the Board.
“Disabled” or “Disability” means, unless otherwise provided in an Award, a
long-term disability within the meaning of the Company’s long-term disability or
other similar program then applicable to a Participant or, in the absence of any
such program, as determined by the Committee in accordance with Section 409A of
the Code; provided that with respect to any Participant who is a party to an
employment agreement with the Company or a Subsidiary, “Disability” shall have
the meaning, if any, specified in such agreement.
“Eligible Person” means any Director or Employee and includes non-Employees to
whom an offer of employment has been or is being extended.

“Employee” means any Person whom the Company or any Affiliate classifies as an
employee (including an officer) for employment tax purposes, whether or not that
classification is correct. The payment by the Company of a director’s fee to a
Director shall not be sufficient to constitute “employment” of such Director by
the Company.
“Employer” means the Company and each Subsidiary and Affiliate that employs one
or more Participants.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fair Market Value” means the fair market value of the Shares as of such date
based on the then prevailing closing prices of the Shares on the New York Stock
Exchange, NASDAQ or such other stock exchanges as the Shares are then listed for
trading (and, if none, as determined by the Committee in good faith based on
relevant facts and circumstances).
“Full Value Award” means an Award pursuant to Section 6(a) in the form of
Restricted Shares, Restricted Share Units or Unrestricted Shares and/or pursuant
to Section 6(f) in the form of a Performance Award.
“Grant Date” means the date designated as the “Grant Date” within an Award
Agreement.
“Incentive Stock Option” (or “ISO”) means an Option that qualifies for favorable
income tax treatment under Code Section 422.
“Involuntary Termination” means termination of a Participant’s Continuous
Service under the following circumstances occurring on or after a Change in
Control:
(i) termination without Cause by the Company or an Affiliate or successor
thereto, as appropriate; or
(ii) voluntary resignation by the Participant through the following actions: (1)
the Participant provides the Company with written notice of the existence of one
of the events, arising without the Participant’s consent, listed in clauses (A)
through (C) below within thirty (30) days of the initial existence of such
event; (2) the Company fails to cure such event within thirty (30) days
following the date such notice is given; and (3) the Participant elects to
voluntarily terminate employment within the ninety (90) day period immediately
following such event. The events include: (A) a material reduction in the
Participant’s authority, duties and responsibilities without Cause, (B) the
Participant being required to relocate his or her place of employment, other
than a relocation within fifty (50) miles of the Company’s office that was
immediately beforehand the Participant’s primary workplace, or (C) a material
reduction in the Participant’s base salary other than any such reduction
consistent with a general reduction of pay across the executive staff as a
group, as an economic or strategic measure due to poor financial performance by
the Company.
“Negative Discretion” means the discretion authorized by the Plan to be applied
by the Committee to eliminate or reduce the size of a Performance Award;
provided that the exercise of such discretion would not cause the Performance
Award to fail to qualify as “performance-based compensation” under Section
162(m) of the Code. By way of example and not by way of limitation, in no event
shall any discretionary authority granted to the Committee by the Plan
including, but not limited to, Negative Discretion, be used to (a) grant or
provide payment in respect of Performance Awards for a Performance Period if the
Performance Measure(s) and Performance Formula(e) for such Performance Period
have not been attained or (b) increase a Performance Award above the maximum
amount payable under Section 6 of the Plan. In no event shall Negative
Discretion be exercised by the Committee with respect to any Option or SAR.
“Non-ISO” means an Option not designated or qualifying as an Incentive Stock
Option.
“Option” means a right to purchase Shares granted under Section 5 of the Plan,
at a price determined in accordance with the Plan.
“Participant” means any Eligible Person who holds an outstanding Award.
“Performance Award” means an Award of Restricted Shares or RSUs pursuant to
Section 6(f) of the Plan.
“Person” means any natural person, association, trust, business trust,
cooperative, corporation, general partnership, joint venture, joint-stock
company, limited partnership, limited liability company, real estate investment
trust, regulatory body, governmental agency or instrumentality, unincorporated
organization or organizational entity.
“Plan” means this FairPoint Communications, Inc. Amended and Restated 2010 Long
Term Incentive Plan.
“Recapture” and “Rescission” have the meaning set forth in Section 10 of the
Plan.
“Reimbursement” has the meaning set forth in Section 11 of the Plan.
“Reporting Person” means an Employee or Director who is required to file reports
with the Securities and Exchange Commission pursuant to Section 16(a) of the
Exchange Act.
“Restricted Share” means a Share awarded with restrictions imposed under Section
6 of the Plan.
“Restricted Share Unit” or “RSU” means a right granted to a Participant to
receive Shares (or cash, if an Award so provides) upon the lapse of restrictions
imposed under Section 6 of the Plan.
“Retirement” means a Participant’s termination of employment after age 62 and
after completing at least five years of Continuous Service.
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended
from time to time, or any successor provision.
“SAR” “means a right to receive amounts awarded under Section 5 of the Plan.
“Share” means a share of Common Stock of the Company, as adjusted in accordance
with Section 9 of the Plan.
“Ten Percent Holder” means a Person who owns (within the meaning of Code Section
422) stock representing more than ten percent (10%) of the combined voting power
of all classes of stock of the Company.
“Unrestricted Shares” mean Shares that are both awarded to Participants pursuant
to Section 6 of the Plan and not subject to a “substantial risk of forfeiture”
within the meaning of Section 83 of the Code.
“Withholding Taxes” means the aggregate minimum amount of federal, state, local
and foreign income, payroll and other taxes that the Company and any Affiliates
are required to withhold in connection with any Award.
___________________
Appendix II: Incentive Stock Options
___________________
The following terms and conditions shall apply to any Option that the Committee
decides, in its discretion, to grant in the form of an ISO:
(i)    ISO Share Reserve. From within (and not in addition to) the Available
Share Limit established under Section 3 of the Plan, the maximum number of
Shares that are available for ISO Awards shall be 2,850,000 (as adjusted
pursuant to Section 9 above and as determined by permitting ISO Awards to the
full extent allowable after incorporation herein by reference of the applicable
provisions set forth in Treas. Reg. 1.422-2(b)(3)(iii) as in effect on the
Effective Date).
(ii)    Eligibility. The Committee may grant ISOs only to Employees (including
officers who are Employees) of the Company or an Affiliate that is a “parent
corporation” or “subsidiary corporation” within the meaning of Code Section 424;
provided that ISOs may not be awarded unless the Plan receives shareholder
approval within twelve (12) months after Board approval of the Plan and ISOs may
not be granted more than ten (10) years after Board approval of the Plan, as
amended and restated herein.
(iii)     Documentation. Each Option that is intended to be an ISO must be
designated in the Award Agreement as an ISO, provided that any Option designated
as an ISO will be a Non-ISO to the extent the Option fails to meet the
requirements of Code Section 422 or the provisions herein. In the case of an
ISO, the Committee shall determine on the Grant Date the acceptable methods of
paying the exercise price for Shares and it shall be included in the applicable
Award Agreement.
(iv)     $100,000 Limit. To the extent that the aggregate Fair Market Value of
Shares with respect to which ISOs first become exercisable by a Participant in
any calendar year (under this Plan and any other plan of the Company or any
Affiliate) exceeds U.S. $100,000, such excess Options shall be treated as
Non-ISOs. For purposes of determining whether the U.S. $100,000 limit is
exceeded, the Fair Market Value of the Shares subject to an ISO shall be
determined as of the Grant Date. In reducing the number of Options treated as
ISOs to meet the U.S. $100,000 limit, the most recently granted Options shall be
reduced first. In the event that Code Section 422 is amended to alter the
limitation set forth therein, the limitation of this clause (iii) shall be
automatically adjusted accordingly.
(v)      Grants to 10% Holders. In the case of an ISO granted to an Employee who
is a Ten Percent Holder on the Grant Date, the ISO’s term shall not exceed five
years from the Grant Date and the exercise price shall be at least 110% of the
Fair Market Value of the underlying Shares on the Grant Date. In the event that
Code Section 422 is amended to alter the limitations set forth therein, the
limitation of this paragraph shall be automatically adjusted accordingly.
(vi)  Substitution of Options. In the event the Company or an Affiliate acquires
(whether by purchase, merger or otherwise) all or substantially all of the
outstanding capital stock or assets of another corporation or in the event of
any reorganization or other transaction qualifying under Code Section 424, the
Committee may, in accordance with the provisions of that Code Section,
substitute ISOs for ISOs previously granted under the plan of the acquired
company provided (A) the excess of the aggregate Fair Market Value of the Shares
subject to an ISO immediately after the substitution over the aggregate exercise
price of such shares is not more than the similar excess immediately before such
substitution, and (B) the new ISO does not give additional benefits to the
Participant, including any extension of the exercise period.
(vii)    Notice of Disqualifying Dispositions. By executing an ISO Award
Agreement, each Participant agrees to notify the Company in writing immediately
after the Participant sells, transfers or otherwise disposes of any Shares
acquired through exercise of the ISO, if such disposition occurs within the
earlier of (A) two years of the Grant Date or (B) one year after the exercise of
the ISO being exercised. Each Participant further agrees to provide any
information about a disposition of Shares as may be requested by the Company to
assist it in complying with any applicable tax laws.

FAIRPOINT COMMUNICATIONS, INC.
AMENDED AND RESTATED 2010 LONG TERM INCENTIVE PLAN

As approved by the Board of
Directors on March 14, 2014, and by the Shareholders on May 12, 2014.

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