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Proposed Merger with Consolidated Communications Holdings, Inc.
3 Months Ended
Mar. 31, 2017
Business Combinations [Abstract]  
Proposed Merger with Consolidated Communications
Proposed Merger with Consolidated Communications Holdings, Inc.
On December 3, 2016, FairPoint Communications entered into an Agreement and Plan of Merger (the "Merger Agreement") with Consolidated Communications Holdings, Inc. ("Consolidated"), a Delaware Corporation, and Falcon Merger Sub, Inc., a newly formed Delaware corporation and wholly-owned subsidiary of Consolidated ("Merger Sub"), which provides for, among other things, a business combination whereby Merger Sub will merge with and into FairPoint Communications, with FairPoint Communications as the surviving entity (the "Merger"). As a result of the Merger, the separate corporate existence of Merger Sub will cease, and FairPoint Communications will survive as a wholly owned subsidiary of Consolidated. Consolidated is a leading business and broadband communications provider throughout its 11-state service area.
If the Merger is completed, under the terms of the Merger Agreement, stockholders of FairPoint Communications will receive 0.7300 shares of common stock of Consolidated for each share of FairPoint Communications common stock that they own immediately before this transaction. If the Merger is not completed under certain circumstances set forth in the Merger Agreement, FairPoint Communications may be required to pay a termination fee of $18.9 million. The Merger is expected to close around the middle of 2017 and is subject to standard closing conditions, including federal and state regulatory approvals. Both Consolidated’s and FairPoint Communications’ stockholders provided required approvals for the Merger on March 28, 2017.
For the three months ended March 31, 2017, the Company recognized $1.2 million of merger related expenses, primarily for legal and advisory costs included in selling, general and administrative expense, excluding depreciation and amortization, on the consolidated statement of operations.
The award agreements granted under the FairPoint Communications, Inc. Amended and Restated 2010 Long Term Incentive Plan (the "Long Term Incentive Plan") provide that upon the occurrence of a change in control, unvested benefits will be accelerated and vest in full. The Merger Agreement provides for the exchange of these vested awards for merger consideration upon the terms set forth therein.