8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported )            March 27, 2008

FairPoint Communications, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-32408	13-3725229
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

521 East Morehead Street,
Suite 250,
Charlotte, North Carolina	28202
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code     (704) 344-8150

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Appointment of Directors

On March 31, 2008, Thomas F. Gilbane, Jr., Robert A. Kennedy and Michael R. Tuttle were appointed to the board of directors (the “Board”) of FairPoint Communications, Inc. (the “Company”) by the Company’s existing directors.  Mr. Gilbane, Mr. Kennedy and Mr. Tuttle were selected by Verizon Communications Inc. (“Verizon”) as three of its designees to the Company’s Board pursuant to the Agreement and Plan of Merger, dated as of January 15, 2007, by and among the Company, Verizon and Northern New England Spinco Inc. (“Spinco”), as amended by Amendment No. 1 to Agreement and Plan of Merger, dated as of April 20, 2007, Amendment No. 2 to Agreement and Plan of Merger, dated as of June 28, 2007, Amendment No. 3 to Agreement and Plan of Merger, dated as of July 3, 2007, Amendment No. 4 to Agreement and Plan of Merger, dated as of November 16, 2007, and Amendment No. 5 to Agreement and Plan of Merger, dated as of February 25, 2008, in each case, by and among the Company, Verizon and Spinco.  In addition, Mr. Gilbane was appointed to serve on the Compensation Committee (the “Compensation Committee”) of the Board, Mr. Kennedy was appointed to serve on the Audit Committee of the Board and Mr. Tuttle was appointed to serve on the Corporate Governance Committee of the Board. Mr. Gilbane, Mr. Kennedy and Mr. Tuttle will be distributed evenly among three classes of directors.  Mr. Gilbane will be considered a Class III director (whose term expires at the annual meeting of the Company’s stockholders in 2008), Mr. Tuttle will be considered a Class II director (whose term expires at the annual meeting of the Company’s stockholders in 2010) and Mr. Kennedy will be considered a Class I director (whose term expires at the annual meeting of the Company’s stockholders in 2009).

Thomas F. Gilbane Jr., age 60, has served as the Chairman and Chief Executive Officer of Gilbane Building Company, one of the nation’s largest general contractors and construction managers, since January 2004. Mr. Gilbane also currently serves as the Vice President of Gilbane Inc., the parent company of Gilbane Building Company and Gilbane Development Company. Prior to his assuming his current role, Mr. Gilbane served as President and Chief Operating Officer of Gilbane Building Company from 1997 to January 2004.  The Company hired the Gilbane Building Company to construct a new data center in Manchester, New Hampshire. Gilbane Building Company was hired by the Company prior to Mr. Gilbane’s designation by Verizon. The Company paid Gilbane Building Company fees of $0.1 million in the year ended December 31, 2007 and expects to pay Gilbane Building Company fees of $3.5 million in the year ending December 31, 2008.

Robert A. Kennedy, age 61, has served as the President of the University of Maine, Orono, since April 2005. Prior to his current responsibilities, Mr. Kennedy served as the Interim President of the University of Maine, Orono, from August 2004 to April 2005. From August 2000 until August 2004, Mr. Kennedy served as Executive Vice President and Provost of the University of Maine, Orono.

Michael R. Tuttle, age 51, has served as the President and Chief Executive Officer of Merchants Bank, a commercial bank with headquarters in Burlington, Vermont, since January 2006. Prior to

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assuming his current responsibilities, Mr. Tuttle served as Chief Operating Officer and Senior Lender of Merchants Bank from 1997 through 2005. He is also a Director of Merchants Bancshares.

Amended and Restated Employment Agreement with Chairman and Chief Executive Officer

On April 1, 2008, the Company entered into an amended and restated employment agreement (the “Employment Agreement”) with Eugene B. Johnson (“Mr. Johnson”), its Chairman and Chief Executive Officer.  The Employment Agreement provides for the continued employment of Mr. Johnson through December 31, 2009, unless terminated earlier in accordance the terms of the Employment Agreement (the “Employment Period”).  The Employment Agreement provides that Mr. Johnson will receive a base salary at an annual rate of $600,000 (the “Annual Base Salary”).  In addition, Mr. Johnson will be eligible for a bonus each year during the term of the Employment Agreement of up to 200% of his Annual Base Salary, which bonus will be based on objective bonus arrangements set and documented by the Compensation Committee.  The Employment Agreement further provides for a target award of 245,000 performance units (“Performance Units”) under the Company’s 2008 Long Term Incentive Plan (the “2008 Plan”) subject to approval of the 2008 Plan by the Company’s stockholders.  If the 2008 Plan is not approved by the Company’s stockholders, the Company will pay Mr. Johnson cash in satisfaction of the Performance Units.  The Employment Agreement provides that during the term of Mr. Johnson’s employment with the Company, including any continued employment after the Employment Period, and for a period of one year thereafter Mr. Johnson is restricted from competing with the Company in certain prohibited territories.

                The foregoing summary of the Employment Agreement is qualified in its entirety by reference to the Employment Agreement which is being furnished by being attached hereto as Exhibit 10.1 and is incorporated herein by reference.

                Further descriptions of the 2008 Plan and the Performance Units awarded to Mr. Johnson are set forth below.

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2008 Plan

                On March 27, 2008, the Board approved the 2008 Plan subject to the approval of the Company’s stockholders. The 2008 Plan provides for the awards of options to purchase shares of the Company’s common stock, stock appreciation rights, restricted stock awards and performance awards to key employees or directors of the Company and its subsidiaries.  The Compensation Committee will administer the 2008 Plan and will have the authority, within the limitations imposed by the 2008 Plan, to grant stock options, stock appreciation rights, restricted stock and performance awards to such individuals and upon such terms as the Compensation Committee considers appropriate.  The Board has reserved a total of 9,500,000 shares of common stock for issuance under the 2008 Plan pursuant to the exercise or settlement of awards thereunder.  The 2008 Plan will be submitted for approval by the Company’s stockholders at the 2008 annual meeting of stockholders.

                In addition, on March 27, 2008, the Board approved the award of Performance Units to key employees of the Company as described below.  If stockholder approval of the 2008 Plan is obtained, the awards under the Interim Plan will be converted into awards of Performance Units under the 2008 Plan, and one share of the Company’s common stock will be delivered to each Performance Unit holder for each earned Performance Unit.  If the Company’s stockholders do not approve the 2008 Plan, the Interim Plan provides that the Company will pay to each Performance Unit holder an amount in cash equal to the fair market value of the shares of the Company’s common stock that would have been delivered to the holder if stockholder approval of the 2008 Plan had been obtained.

Awards of Performance Units to the Chairman and Chief Executive Officer and Other Key Employees

On March 27, 2008, the Board approved a recommendation by the Compensation Committee to award a target of 245,000 Performance Units to Mr. Johnson for the performance period beginning April 1, 2008 and ending December 31, 2009.  On April 1, 2008, the Company entered into a Performance Unit Award Agreement (the “Award Agreement”) with Mr. Johnson evidencing such award.  The actual number of Performance Units earned by Mr. Johnson will be based on the following table and the “value” of the Company’s common stock as of December 31, 2009:

Value of the Company’s Common Stock as of December 31, 2009	Number of Performance Units Earned
Less than $19.94	0
$19.94	136,111
$21.94	245,000
$23.94	334,100
$25.94 or higher	408,333

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The number of Performance Units earned for a value between any of the amounts set forth in the table above will be determined by linear interpolation.  For these purposes, “value” means the sum of (i) the average of the closing prices for shares of the Company’s common stock during the 30 day trading period ending December 31, 2009 and (ii) all cash dividends paid by the Company with respect to a share of its common stock during the period from April 1, 2008 through December 31, 2009.

                If Mr. Johnson’s employment with the Company terminates prior to December 31, 2009 for any reason other than termination by the Company without cause or his death or disability, he will forfeit the Performance Units.  If the Company terminates Mr. Johnson’s employment without cause prior to December 31, 2009, the Performance Units will remain outstanding and be earned as if his employment with the Company had continued through December 31, 2009.  If Mr. Johnson’s employment with the Company terminates prior to December 31, 2009 due to his death or disability, he will be deemed to have earned all 245,000 of the target Performance Units awarded to him.

                In the event a change in control of the Company occurs prior to December 31, 2009, the number of Performance Units earned by Mr. Johnson will be based on the value of the Company’s common stock immediately prior to the change in control and all cash dividends paid by the Company with respect to a share of its common stock during the period April 1, 2008 through the change in control.

                The foregoing summary of the Award Agreement is qualified in its entirety by reference to the Award Agreement which is being furnished by being attached hereto as Exhibit 10.2 and is incorporated herein by reference.

The Board also approved at its meeting on March 27, 2008 a recommendation by the Compensation Committee to authorize the Chief Executive Officer to award Performance Units to certain key employees within certain guidelines approved by the Board.  The guidelines permit the Chief Executive to award Performance Units for the 2008 fiscal year performance and for performance during the period beginning April 1, 2008 and ending December 31, 2009.

Each performance unit award for the 2008 fiscal year performance will entitle the holder to earn Performance Units having a value equal to three times the 2008 bonus earned by the holder under the FairPoint Communications, Inc. Annual Incentive Plan.

Each Performance Unit award for performance during the April 1, 2008 through December 31, 2009 period will provide a target Performance Unit award equal to a percentage of the holder’s base salary.  The target percentages are 100% for Executive Vice Presidents and more senior employees, 50% for Senior Vice Presidents and 25% for Vice Presidents.  The actual number of Performance Units earned will be based on the following table and the value of the Company’s common stock (as defined above) as of December 31, 2009:

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Value of the Company’s Common Stock as of December 31, 2009	Percentage of Target Performance Units Earned
Less than $19.94	0%
$19.94	40%
$21.94	100%
$23.94	150%
$25.94 or higher	200%

The percentage earned for a value between any of the amounts set forth in the table above will be determined by linear interpolation.

If a holder’s employment with the Company terminates prior to the end of the applicable performance period for any reason other than termination by the Company without cause or the holder’s death or disability, the holder will forfeit the Performance Units.  If the Company terminates the holder’s employment without cause prior to the end of the performance period, the Performance Units will remain outstanding and be earned as if his or her employment with the Company had continued through the end of the performance period. If the holder’s employment with the Company terminates prior to the end of the performance period due to his or her death or disability, or a change in control of the Company occurs prior to the end of the performance period, the holder will be deemed to have earned 100% of the target Performance Units awarded to him or her.

Item 9.01               Financial Statements and Exhibits.

                (d) Exhibits

Exhibit Number	Description
10.1	Employment Agreement, dated April 1, 2008, between Mr. Johnson and the Company
10.2	Performance Unit Award Agreement, dated April 1, 2008, between Mr. Johnson and the Company

The information in this Current Report is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise

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subject to the liabilities of such section.  The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FAIRPOINT COMMUNICATIONS, INC.
By:	/s/ John P. Crowley
	Name:	John P. Crowley
	Title:	Executive Vice President and Chief
		Financial Officer

Date: April 1, 2008

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EX-10.1

Exhibit 10.1

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of April 1, 2008, by and between FAIRPOINT COMMUNICATIONS, INC., a Delaware corporation (together with its successors and assigns permitted hereunder, the “Company”), and EUGENE B. JOHNSON (the “Executive”).

RECITALS:

WHEREAS, the Executive is currently employed by the Company as its Chief Executive Officer pursuant to an Employment Agreement dated as of December 31, 2002, as amended on March 17, 2006 to extend the term through December 31, 2008 (as so amended, the “Existing Employment Agreement”);

WHEREAS, immediately prior to the execution of this Agreement, the Company consummated a series of transactions resulting in the Company’s acquisition of certain wireline telecommunications businesses formerly conducted by Verizon Communications Inc. in Maine, New Hampshire and Vermont; and

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is desirable and in the best interests of the Company to amend and restate the Existing Employment Agreement to insure that the Company will continue to have the exclusive benefit of the Executive’s knowledge and experience during the integration of the acquired businesses with the Company’s existing operations;

NOW, THEREFORE, in consideration of the agreements and covenants set forth herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree that the Existing Employment Agreement is amended and restated in its entirety to read as follows:

1.Employment Period.  The Company hereby agrees to continue to employ the Executive, and the Executive hereby agrees to continue his employment with the Company for a period commencing on the date hereof and ending on December 31, 2009 unless terminated earlier in accordance with Section 3 (the “Employment Period”).  In the event the Executive continues to perform services for the Company as an employee after the Employment Period for any reason, such services shall constitute employment for an unspecified term, terminable at will, with or without cause or reason, with or without advance notice, and with or without pay in lieu of advance notice.

2.Terms of Employment.

(a)Position and Duties.

(i)During the Employment Period through the date the Board appoints a successor to the Executive (the “Transition Date”), the Executive shall serve as the Chairman and/or Chief Executive Officer of the Company and shall perform and have the normal duties and responsibilities associated with such positions.  For the remainder of the Employment Period following the Transition Date, the Executive shall perform and have such duties and responsibilities as shall be assigned to him from time to time by the Board.

(ii)During the Employment Period (excluding any periods of vacation and other leave to which the Executive is entitled), the Executive agrees to devote substantially all his business time to the business and affairs of the Company and to use the Executive’s best efforts to perform faithfully, effectively and efficiently his duties and responsibilities.

(iii)Notwithstanding Section 2(a)(ii) hereof, it shall not be a violation of this Agreement for the Executive to (1) serve on industry, trade, civic, educational or charitable boards or committees, (2) deliver lectures or fulfill speaking engagements, or (3) manage personal investments, so long as none of such activities interfere with the performance of the Executive’s duties and responsibilities as an employee of the Company.

(iv)Executive agrees to observe and comply with the Company’s rules and policies as adopted by the Company from time to time.

(b)Compensation.

(i)Base Salary.  During the Employment Period, the Executive shall receive base salary at an annual rate of $600,000 (the “Annual Base Salary”), which shall be paid in substantially equal installments in accordance with the customary payroll practices of the Company but no less frequently than monthly.

(ii)Bonus.  Executive shall be eligible for a bonus each year (up to 200% of Executive’s Annual Base Salary), which bonus shall be paid if fully earned, all as provided in an objective bonus arrangement set and documented by the Compensation Committee of the Board each year.

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(iii)Incentive, Savings and Retirement Plans.  During the term of the Executive’s employment, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other senior executives of the Company, as amended from time to time.

(iv)Performance Unit Award.  Concurrently with the execution of this Agreement, the Company shall award the Executive a target award of 245,000 performance units under the 2008 FairPoint Long Term Incentive Plan, the terms of which award shall be set forth in a separate award agreement between the Company and the Executive.  The actual number of performance units that shall be earned by the Executive and paid in shares of the Company’s common stock shall be determined by the terms of the award agreement and the 2008 FairPoint Long Term Incentive Plan.

The Executive acknowledges that the performance unit award shall be subject to approval of the 2008 FairPoint Long Term Incentive Plan by the stockholders of the Company at the 2008 annual stockholders meeting, provided that in the event such approval is not obtained, the Company shall pay to the Executive in cash the value of the performance units that would have been earned by the Executive and paid in shares of the Company’s common stock.

(v)Welfare Benefit Plans.  During the Employment Period, the Executive and the Executive’s eligible dependents shall be eligible for participation in and shall receive all benefits under the welfare benefit plans, practices, policies and programs provided by the Company, including medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs, as amended from time to time, to the extent applicable generally to other employees of the Company.

(vi)Perquisites.  During the Employment Period, the Executive shall be entitled to receive, in addition to the benefits described above, such perquisites and fringe benefits appertaining to his position in accordance with any policies, practices and procedures established by the Board, as amended from time to time.

(vii)Expenses.  During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable employment expenses incurred by the Executive in accordance with the Company’s policies, practices and procedures, as amended from time to time.

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3.Termination of Employment and Employment Period.

(a)Death or Disability.  The Executive’s employment and the Employment Period shall terminate automatically upon the Executive’s death.  If a Disability (as defined below) of the Executive occurs, the Company may give to the Executive written notice in accordance with Section 8(e) hereof of its intention to terminate the Executive’s employment and the Employment Period.  In such event, the Executive’s employment with the Company and the Employment Period shall terminate effective on the ninetieth (90th) day after receipt of such notice by the Executive (the “Disability Effective Date”), if, within ninety (90) days after such receipt, the Executive shall not have returned to perform, with reasonable accommodation, the essential functions of his position.  For purposes of this Agreement, at any time the Company or any of its affiliates sponsors a long-term disability plan for the Company’s employees, “Disability” shall mean disability as defined in such long-term disability plan.  The determination of whether the Executive has a Disability shall be made by the person or persons required to render disability determinations under the long-term disability plan.  At any time the Company does not sponsor a long-term disability plan for its employees, “Disability” shall mean the Executive’s inability to perform, with reasonable accommodation, the essential functions of his position hereunder for a period of 180 days in any 360 consecutive day period due to mental or physical incapacity, as determined by a physician selected by the Company or its insurers.

(b)Cause or Without Cause.  The Company may terminate the Executive’s employment and the Employment Period for Cause or without Cause.  For purposes of this Agreement, “Cause” shall mean (a) misappropriating any funds or any material property of the Company, (b) obtaining or attempting to obtain any material personal profit from any transaction in which the Executive has an interest which is adverse to the interest of the Company unless the Company shall first give its consent to such transaction, (c) (i) the willful taking of actions which directly impair the Executive’s ability to perform the duties required by the terms of his employment, or (ii) taking any action detrimental to the Company’s goodwill or damaging to the Company’s relationships with its customers, suppliers or employees; provided that such neglect or refusal, action or breach shall have continued for a period of twenty (20) days following written notice thereof, (d) being convicted of or pleading nolo contendere to any crime or offense constituting a felony under applicable law or any crime or offense involving fraud or moral turpitude, or (e) any material intentional failure to comply with applicable laws or governmental regulations within the scope of employment as defined by this Agreement.  For purposes of this Agreement, “without Cause” shall mean a termination by the Company of the Executive’s employment and the Employment Period for any reason other than a termination based upon Cause, death or Disability.

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(c)Notice of Termination.  Any termination by the Company for Cause or without Cause shall be communicated by a Notice of Termination to the Executive given in accordance with Section 8(e).  For purposes of this Agreement, the term “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the Date of Termination.  The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company’s rights hereunder.

(d)Date of Termination.  The term “Date of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, the date of receipt of the Notice of Termination or any later date specified therein pursuant to Section 3(c), as the case may be, (ii) if the Executive’s employment is terminated by the Executive, thirty (30) days from the date of receipt of the Notice of Termination, (iii) if the Executive’s employment is terminated by the Company other than for Cause, the date on which the Company notifies the Executive of such termination, and (iv) if the Executive’s employment is terminated by reason of death or Disability, the date of death of the Executive or the Disability, as the case may be.

4.Obligations of the Company upon Termination.

(a)If the Company shall terminate the Executive’s employment for Cause or the Executive shall voluntarily resign, the Executive shall not be entitled to any future benefits pursuant to this Agreement.

(b)Upon the earlier of (1) expiration of the Employment Period, or (2) termination of the Executive’s employment without Cause, the Executive shall be entitled to receive from the Company the following, effective as of the date of occurrence of such event (the “Termination Event”), subject to the following being suspended for a breach of the Executive’s covenant not to compete set forth in Section 6 hereof:

(i)Continued medical coverage for Executive and Executive’s spouse, at Executive’s election, for the life of each under the Company’s then existing health insurance plan upon continued timely payment by Executive or Executive’s spouse of the then applicable employee and spouse premium.  This coverage shall continue to be available to Executive’s spouse upon the death of Executive.  Following the time each of which Executive or Executive’s spouse is eligible for Medicare,

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ongoing retiree health coverage shall be calculated on the assumption that each of Executive or Executive’s spouse had enrolled in all available parts of Medicare.

(ii)Extension of the Executive’s right to exercise all of his vested options under the Company’s 2000 Employee Stock Option Plan until the earlier of (A) March 12, 2012, or (B) a Sale of the Company (as defined in the Company’s 1998 Stock Incentive Plan).

(iii)Continued vesting of all restricted stock granted through the Termination Event under the Company’s 2005 Stock Incentive Plan as provided in the restricted stock agreement applicable to each grant of such restricted stock.  The Executive acknowledges that this Section 4(b)(iii) shall not apply to any of the performance units awarded to the Executive pursuant to Section 2(b)(iv).

5.Protection of Confidential Information.  Executive acknowledges that by reason of his position with the Company, he has had and will continue to have complete access to and knowledge of the Company’s Confidential Information.  The Company’s “Confidential Information”, as used in this Agreement, means any form of data or information in the possession or control of the Company which relates to its business affairs, including but not limited to trade secrets, proprietary information or other information not in the public domain.  Confidential Information includes but is not limited to product or service concepts and designs, marketing insights, technology related to the Company’s business, business methods and strategies, all financial information and plans of the Company, acquisition targets and potential targets, strategic business plans, pricing terms and methods, growth, expansion or acquisition plans, financing or venture capital sources and plans, and all similar information that the Company holds in confidence or that competitors of the Company would be desirous of obtaining.  Executive agrees to use the Confidential Information only for the purpose of or in connection with the business of the Company, and to keep the Company’s Confidential Information in strictest confidence and secrecy and not to use or disclose Confidential Information to any person or entity except for purposes of conducting the business of the Company, both during the term of Executive’s employment with the Company (both during the Employment Period and any continuation period thereafter) and thereafter for a period of five (5) years.  Executive will return all Confidential Information to the Company immediately upon termination of his employment with the Company.

6.Non-Competition.

(a)Non-Competition Agreement.  Executive agrees that, without the prior written consent of the Company’s Board of Directors, during the term of his employment with the Company, including any continued employment after the Employment Period, and for a period of one (1) year thereafter, he will not “Compete” with the Company in the “Prohibited Territory.”

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(b)Definition of “Compete”.  For purposes of this Section 6, the term “Compete” means to be employed or engaged in any capacity, whether as an employee, as a consultant, or by self-employment, individually or on behalf of others, or to have any ownership interest in, any business or entity engaged in business in the “Communications Industry”; provided, however, that the purchase and ownership of capital stock of less than two percent (2%) in a publicly traded entity within the Communications Industry shall not constitute competing.  As used herein, the term “Communications Industry” shall have its broadest definition, as generally understood by the investing public, and includes, but is not necessarily limited to the ownership, acquisition or operation of, investment in, or the provision of services or technology related to Rural Local Exchange Carriers (RLECs), Incumbent Local Exchange Carriers (ILECs), Competitive Local Exchange Carriers (CLECs), Internet Service Providers (ISPs), cable television services, retail or wholesale distribution of long distance services, Internet portal services, web casting and web hosting, dedicated service lines (DSL), broadband, voice or video conferencing, voice mail services, voice, data or video transmissions, cellular or wireless telephone, data, paging or Internet access services, prepaid calling cards and other prepaid communication services, electronic mail services, directory and operator assistance services, facsimile and data services, and other similar and related services and products.

(c)Definition of “Prohibited Territory”.  For purposes of this Section 6, the term “Prohibited Territory” shall mean and include each of the following defined areas: (i) the United States, and (ii) any State within the United States where the Company is engaged in business in the Communications Industry.  For purposes of this Section 6, a person or entity is considered to be Competing in the Prohibited Territory if it is engaged in offering or providing products or services related to the Communications Industry within the Prohibited Territory, regardless of the geographic location of the Competing individual or entity.

(d)Acknowledgments by Executive.  Executive acknowledges that the terms of this Section 6, including the definitions of Compete, Communications Industry and Prohibited Territory, and the three (3) year post employment term are reasonable, and are no broader than necessary to protect the Company’s legitimate business interests.  Executive specifically acknowledges and agrees that (i) he has received adequate and valuable consideration for entering into this noncompetition agreement, (ii) the Company is currently engaged in business in the Communications Industry, and is either actively engaged in each aspect thereof set out in the definition set forth in Section 6(b) above, or it reasonably anticipates that it will be engaged in each such aspect or activity competitive with it, during the Employment Period, and that part of Executive’s responsibilities as Chief Executive Officer of the Company and as Chairman of the Board of Directors of the Company are and will continue to be to explore and expand the Company into each aspect of the Communications Industry where it can

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profitably do so, (iii) the nature of the Communications Industry is such that the range of business and competition is not necessarily contained within easily definable geographic territories, and that, in many respects, otherwise unrelated aspects of the Communications Industry are competitive with each other (for example, cable television providers, telephone companies and ISPs all compete with each other to provide Internet access and services to consumers and businesses), (iv) the business of investing in and operating RLECs, ILECs, CLECs and/or ISPs is highly competitive, and (v) by reason of his responsibilities as Chief Executive Officer of the Company and/or as Chairman of the Board of Directors of the Company, he will be intimately familiar with and engaged in developing the Company’s business, financial and growth plans and other Confidential Information, and that if he engages in any of the activity prohibited by this Section 6, it is inevitable that he would use or disclose Confidential Information of the Company.

(e)Governing Law; Enforcement; Survival.  Notwithstanding the provisions of Section 8(c), the provisions of Section 5 and the provisions of this Section 6 shall be construed and enforced in accordance with the laws of the State of North Carolina, without regard to principles of conflict of laws.  Executive agrees that the Company would suffer irreparable harm in the event of any violation of Sections 5 or 6 hereof, and the Company is therefore entitled to injunctive relief to enforce the provisions thereof.  The provisions of Sections 5 and 6 shall survive the termination of this Agreement in accordance with their terms, and shall inure to the benefit of the Company and its affiliates, and each of their successors and assigns.

(f)Severability.  In the event that any provision contained in this Section 6 is held to be invalid, prohibited or unenforceable because of the scope, duration or area of applicability, such provision shall be ineffective only to the extent of such invalidity, prohibition or unenforceability.  Executive and the Company agree that it is each of their intent and desire that the provisions of Section 6 be enforced to the absolute greatest extent permissible by law, and they each therefore agree and request that, to the extent a court determines these provisions or any part thereof are unenforceable to any extent, such court may and should limit the enforcement to discrete geographic territories set forth in Section 6(c), or to specific states in which the Company is doing business, or to specific aspects of the Communications Industry as listed in Section 6(b), as the court deems necessary to the enforceability of the letter and intent of this Agreement.

7.Severability.  If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable, this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect and shall not be

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affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement.  This Section 7 is intentionally in addition to but not in replacement of Section 6(f) above.

8.Miscellaneous.

(a)Counterparts.  This Agreement may be executed in several counterparts each of which is an original.  This Agreement and any counterpart so executed shall be deemed to be one and the same instrument.  It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.

(b)Contents of Agreement; Parties-In-Interest.  This Agreement sets forth the entire understanding of the parties regarding the subject matter hereof.  Any previous agreements or understandings between the parties regarding the subject matter hereof are merged into and superseded by this Agreement.  All representations, warranties, covenants, terms, conditions and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, legal representatives, successors and permitted assigns of the Company and the Executive.  Neither this Agreement nor any rights, interests or obligations hereunder may be assigned by any party without the prior written consent of the other party hereto.

(c)NEW YORK LAW TO GOVERN.  EXCEPT AS PROVIDED IN SECTION 6(e), THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.

(d)Section Headings.  The section headings herein have been inserted for convenience of reference only and shall in no way modify or restrict any of the terms or provisions hereof.

(e)Notices.  All notices, requests, demands and other communications which are required or permitted hereunder shall be sufficient if given in writing and delivered personally or by registered or certified mail, postage prepaid, or by facsimile transmission (with a copy simultaneously sent by registered or certified mail, postage prepaid), as follows (or to such other address as shall be set forth in a notice given in the same manner):

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If to the Company, to:

FairPoint Communications, Inc.

521 East Morehead Street, Suite 250

Charlotte, North Carolina 28202

Facsimile:       (704) 344-1594

Attn:     Shirley J. Linn, Esq.

If to the Executive, to:

Eugene B.  Johnson

Most recent address on the Company’s

employment records for the Executive

(f)Modification and Waiver.  Any of the terms or conditions of this Agreement may be waived in writing at any time by the party which is entitled to the benefits thereof, and this Agreement may be modified or amended at any time by the Company and the Executive.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by each of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof nor shall such waiver constitute a continuing waiver.

(g)Third Party Beneficiaries.  Except as otherwise expressly set forth herein, no individual or entity shall be a third-party beneficiary of the representations, warranties, covenants and agreements made by any party hereto.

(h)Termination of Prior Arrangements.  The parties hereto acknowledge and agree that this Agreement supersedes and terminates all existing employment and severance agreements or arrangements between the Company or any of its affiliates and the Executive, including but not limited to the Existing Employment Agreement.

(i)Executive’s Legal Fees.  The reasonable costs and expenses for legal services incurred by Executive in the negotiation and execution of this Agreement shall be paid by the Company.

(j)Compliance with Code Section 409A.  Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that the Company determines would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Internal Revenue Code of 1986 (the “Code”) would otherwise be payable or distributable under this Agreement by reason of the Executive’s separation from service, then to the extent necessary to comply with Code Section 409A:  (i) if the payment or distribution is payable in a lump sum,

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the Executive’s right to receive payment or distribution of such non-exempt deferred compensation will be delayed until the earlier of the Executive’s death or the first day of the seventh month following the Executive’s separation from service, and (ii) if the payment, distribution or benefit is payable or provided over time, the amount of such non-exempt deferred compensation or benefit that would otherwise be payable or provided during the six-month period immediately following the Executive’s separation from service will be accumulated, and the Executive’s right to receive payment or distribution of such accumulated amount or benefit will be delayed until the earlier of the Executive’s death or the first day of the seventh month following the Executive’s separation from service and paid or provided on the earlier of such dates, without interest, and the normal payment or distribution schedule for any remaining payments, distributions or benefits will commence.  For purposes of this Agreement, the term “separation from service” shall be defined as provided in Code Section 409A and applicable regulations.

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IN WITNESS WHEREOF, the parties hereto have executed or have caused this Agreement to be duly executed as of the date first above written.

EXECUTIVE
/s/ Eugene B. Johnson
Eugene B. Johnson
FAIRPOINT COMMUNICATIONS, INC.
By:	/s/ John P. Crowley
Name:		John P. Crowley
Title:			Executive Vice President and Chief Financial Officer

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EX-10.2

EXHIBIT 10.2

FAIRPOINT COMMUNICATIONS, INC.

PERFORMANCE UNIT AWARD AGREEMENT

THIS PERFORMANCE UNIT AWARD AGREEMENT (this “Agreement”), made and entered into this 1st day of April, 2008, by and between FairPoint Communications, Inc. (the “Company”) and Eugene B. Johnson (the “Participant”).

W I T N E S S E T H:

WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) has awarded the Participant Two Hundred Forty-Five Thousand (245,000) Performance Units under the Company’s 2008 Long Term Incentive Plan (the “Plan”); and

WHEREAS, the Company and the Participant desire to enter into a written agreement that sets forth the terms and provisions of the Participant’s Performance Unit award.

NOW, THEREFORE, in consideration of the premises and the mutual promises contained herein, the Company and the Participant hereby agree as follows:

1.             The Participant acknowledges that the Performance Unit award is governed by this Agreement and the terms of the Plan.  The terms of the Plan are incorporated into this Agreement in their entirety and made a part hereof by reference.  Unless otherwise defined herein, capitalized terms used herein shall have the meanings set forth in the Plan.  In the event of any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall govern and control.

2.             The Participant is awarded a target award of Two Hundred Forty-Five Thousand (245,000) Performance Units.  The number of Performance Units earned by the Participant shall be determined in accordance with the Plan and this Agreement.

3.             The Performance Units shall be earned by the Participant based on the following table and the “Value” (as hereinafter defined) of the Company’s Common Stock as of December 31, 2009.

Value of the Company’s Common Stock as of December 31, 2009		Number of Performance Units Earned
$	19.94	136,111
$	21.94	245,000
$	23.94	334,100
$	25.94	408,333

The number of Performance Units earned for a Value between any of the amounts set forth in the table above will be determined by linear interpolation.

The term “Value” for purposes of this Agreement shall mean the sum of (i) the average of the closing prices for Shares of the Company’s Common Stock during the 30 days trading period immediately preceding December 31, 2009 and (ii) all cash dividends paid by the Company with respect to the Common Stock during the period from the date of this Agreement through December 31, 2009.

The number of Performance Units earned by the Participant shall be determined and certified in writing by the Committee.

4.             One Share of the Company’s Common Stock will be distributed to the Participant for each Performance Unit earned by the Participant.  Dividends on the Shares underlying the Performance Units will not accrue or be paid during the Performance Period.

5.             Any Shares to be distributed in respect of the Performance Units earned by the Participant will be delivered to the Participant no later than March 15, 2010.  If the Participant’s employment with the Company terminates prior to December 31, 2009 for any reason other than termination by the Company without Cause or the Participant’s death or Disability, the Participant shall forfeit the Performance Units and any Shares distributable in respect of such Performance Units.  If the Company terminates the Participant’s employment without Cause prior to December 31, 2009, the Performance Units awarded to the Participant shall remain outstanding and be earned by the Participant (and any Shares distributable in respect of such earned Performance Units (based on the Value of the Company’s Shares as of December 31, 2009) shall be distributed to the Participant) as if the Participant’s employment with the Company had continued through December 31, 2009.  If the Participant’s employment with the Company terminates prior to December 31 2009 due to the Participant’s death or Disability, Shares for one hundred percent (100%) of the Performance Units awarded to the Participant hereunder shall be distributed to the Participant without any adjustment for the Value of the Company’s Shares as of December 31, 2009.

6.             In the event a Change in Control occurs prior to December 31, 2009, the number of Performance Units earned by the Participant will be determined in accordance with the table set forth in Section 3 above, provided, however, for purposes of such determination, the Value of the Company’s Common Stock shall mean the sum of (i) the Fair Market Value of the Company’s Common Stock immediately prior to the Change in Control and (ii) all cash dividends paid by the Company with respect to the Common Stock during the period from the date of this Agreement through the Change in Control.  Any Shares to be distributed in respect of the Performance Units earned by the Participant upon a Change in Control will be delivered to the Participant immediately prior to the Change in Control.

7.             Unless otherwise elected by the Participant in accordance with procedures adopted by the Committee, the Company shall deduct from any Shares otherwise distributable to the Participant that number of Shares having a value equal to the amount of any taxes required by law to be withheld from awards made under the Plan.

8.             The Participant may elect, by entering into a Deferral Agreement with the Company, to defer delivery of all (or any portion) of the Shares otherwise payable to the Participant in respect of the Performance Units earned by the Participant.  To be effective, the

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Participant must complete and return the Deferral Agreement to the Company in accordance with procedures established by the Committee.

9.             The Performance Units awarded hereunder to the Participant shall not entitle the Participant to any rights as a stockholder of the Company.

10.           The Participant’s award under this Agreement and the Plan may not be assigned or alienated.  Subject to any limitations under the Plan on transferability, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.  Neither the Plan, nor this Agreement, nor any action taken under the Plan or this Agreement shall be construed as giving to the Participant the right to be retained in the employ of the Company.

11.           Any distribution of Shares may be delayed until the requirements of any applicable laws or regulations or any stock exchange requirements are satisfied.  The Shares distributed to the Participant shall be subject to such restrictions and conditions on disposition as counsel for the Company shall determine to be desirable or necessary under applicable law.

12.           The Participant may designate a beneficiary or beneficiaries to receive all or part of the Shares to be distributed to the Participant under this Award Agreement in the event of the Participant’s death.  If no beneficiary is designated, such Shares shall be paid to the estate of the Participant.

13.           This Agreement, and the award of the Performance Units to the Participant hereunder, are contingent upon the approval of the Plan by the stockholders of the Company at the 2008 annual stockholders meeting.  In the event such approval is not obtained for any reason, the Company shall pay to the Participant an amount equal to the Fair Market Value of the Shares that would have delivered to the Participant in respect of the Performance Units if such approval had been obtained, such amount to be paid in a single lump sum (less applicable tax withholding).

14.           This Agreement and the Plan constitute the entire understanding of the parties with respect to the award of Performance Units to the Participant.  Except with respect to modifications of the Plan as provided therein, this Agreement can be amended only in writing executed by the Participant and a duly authorized officer of the Company.

15.           This Agreement shall be governed by the laws of the State of Delaware to the extent not preempted by applicable federal law.

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IN WITNESS WHEREOF, the parties hereto have executed or caused this Agreement to be executed in duplicate as of the date first above written.

FAIRPOINT COMMUNICATIONS, INC.
By:	/s/ John P. Crowley
Name:		John P. Crowley
Title:		Executive Vice President and Chief Financial Officer
PARTICIPANT
/s/ Eugene B. Johnson
Eugene B. Johnson

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