**EXHIBIT10(c)**

PERSONAL ANDCONFIDENTIAL

October 16, 2006

Michael I. Williams

Interim COO, SVP,CFO, and Asst. Secretary

Dear Mike;

Thank you for allof your hard work and patience during this transition period at Maine &Maritimes Corporation.  We believe thatthe ongoing actions to stabilize costs and reassess revenue streams will openup opportunities for improving the financial and operational performance of thecompany, and we look forward to you playing a vital role in MAM’s success.

As a way to recognizeyour contributions, we wish to provide additional incentive to you tocontribute to MAM’s stabilization and future success. This letter agreementprovides that, in the event that you remain continuously employed with MAM, anysuccessor to MAM’s business by purchase of substantially all of its assets orat least 51% of the voting equity of MAM, or any affiliate of MAM, through andincluding November 1, 2007 (“Retention Date”), you will be entitled to aretention bonus of not less than $25,000 (the “Bonus”).  The Bonus paid pursuant to this Agreementwill not affect your eligibility for future merit salary increases or promotionbased on performance.

Payment of theretention bonus less all appropriate payroll withholdings will occur withinseven days from the Retention Date.  In the event the above named employeeis involuntarily terminated for cause or voluntarily terminates his/heremployment prior to the retention date, no bonus will be paid.  In theevent the above named employee is terminated without cause i.e. due to a changein control or work force reduction, the bonus shall be pro-rated accordingly.

 As you can appreciate, an additional andmaterial condition to your being entitled to the Bonus is your keeping theterms of this letter strictly confidential, and the execution of the attachedform of release.  If you have satisfiedthese conditions of the Program as of the Retention Date, the Bonus paymentwill be added to your salary payment the month after the Retention Date.

You hereby acknowledge and agree that this Agreement is not intended toaffect or alter your “at will” status, and that this Agreement does not conferany right to continued employment with MAM or otherwise interfere with itsexisting right (i) to terminate your employment with or without cause, or (ii)to increase or decrease your compensation (other than the amount of the Bonus).

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I am available to answer any questions you may have about thisAgreement.  Thank you again for all ofyour contributions to the continuing success of MAM.

Please sign the counterpart copy of this letter toacknowledge your understanding of and agreement with the terms of this letter.
|                      | Sincerely,                 |
|---------------------------|----------------------------|
|                      |                       |
|                      |                       |
|                      | /s/ Nathan Grass           |   |
|                      | Nathan Grass               |
|                      | Interim  President and CEO |
|                      |                       |
|                      |                       |
| Acknowledged and  agreed: |                       |
|                      |                       |
|                      |                       |
| /s/ Michael I.  Williams  |                       |   |
| Michael I.  Williams      |                       |   |
|                      |                       |   |
|                      |                       |   |
| Date:                     | 10/25/06                   |   |   |
|                           |                            |  |  |  |

 

 

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