** **

**Exhibit 14.1**

 

**FAIRPOINT COMMUNICATIONS, INC.CODE OF BUSINESS CONDUCT AND ETHICS**

 

**Introduction**

** **

Set forth herein is the Code of Business Conduct andEthics (the “Code”) adopted by FairPoint Communications, Inc. (the “Company”).This Code summarizes basic guiding principles and standards of conduct to guideall employees, directors and officers of the Company and its subsidiaries andcontrolled affiliates in meeting our goal to achieve the highest business andpersonal ethical standards as well as compliance with the laws and regulationsthat apply to our business. This Code covers a wide range of business practicesand procedures, but it does not address every applicable law or respond toevery ethical question or concern that may arise. All of our employees,directors and officers must conduct themselves accordingly in every aspect ofour business and seek to avoid even the appearance of wrongdoing or improperbehavior. Our standard has been, and will continue to be, to advance thehighest standards of ethical conduct. We expect the Company’s agents,consultants, contractors, suppliers and representatives to be guided by theprinciples and standards set forth in this Code.

 

Our Chief Executive Officer, Chief Financial Officerand other financial and accounting officers must adhere to our Code of Ethicsfor Financial Professionals which sets forth additional standards in connectionwith our public disclosures. If you have questions regarding any of the goals,principles, or standards discussed or policies or procedures referred to inthis Code or are in doubt about the best course of action to take in aparticular situation, you should contact the General Counsel, or follow theguidelines set forth in Section 16 of this Code.

 

Every director, officer and employee has a duty toadhere to this Code and those who violate the standards in this Code will besubject to disciplinary action which may include suspension or dismissaland/or the reporting of violative conduct to appropriate regulatory andcriminal authorities. If you are involved in a situation which you believe may violateor lead to a violation of this Code, follow the guidelines described in Section 16of this Code.

 

We are committed to continuously reviewing andupdating our policies and procedures. Therefore, this Code is subject tomodification. This Code supercedes all other such codes, policies, procedures,instructions, practices, rules or written or verbal representationsconcerning the subject matter of this Code to the extent they are inconsistent.

 

Please sign the acknowledgment form attachedhereto as Exhibit A, indicating that you have received, read,understand and agree to comply with this Code, and return the form asinstructed. The signed acknowledgment form will be located in yourpersonnel file. Each year, as part of the annual review process, officersand other appropriate personnel will be asked to sign an acknowledgmentindicating their continued understanding of and compliance with the Code. Inaddition, periodically, you may be asked to participate in seminars,training meetings and similar activities related to reinforcing yourunderstanding of this Code and its applicability to the Company’s business.

 

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**1.**                                       Compliance withLaws, Rules and Regulations

** **

Obeying the law, both in letter and in spirit, is thefoundation on which this Company’s ethical standards are built. All employees,directors and officers must respect and obey the laws of the cities, states andcountries in which we operate and the rules and regulations applicable to theCompany’s business. Although not all employees are expected to know the detailsof these laws, rules and regulations, it is important to know enough todetermine when to seek advice from supervisors, managers or other appropriatepersonnel who should consult with the Legal Department as necessary or appropriate. Compliance with the law doesnot obviate the need to act with the highest honest and ethical standards.

 

To promote compliance with laws, rules, regulationsand the policies of the Company, including insider trading rules, othersecurities laws, and anti-discrimination and anti-harassment laws and policies,the Company has established various compliance policies and procedures and,where appropriate, may conduct information and training sessions.

 

**2.**                                       Conflicts ofInterest

** **

A “conflict of interest” exists when a person’spersonal private interest interferes in any way - or even appears to interferein any way - with the interests of the Company. A conflict situation can arisewhen an employee, officer or director takes actions or has interests inconnection with or as a result of a material transaction or relationship that may makeit difficult for him or her or others to perform work or make decisionsobjectively and effectively in the Company’s interest. Conflicts of interest may alsoarise when an employee, officer or director, or members of his or her family,receives improper personal benefits as a result of his or her position in theCompany. Conflicts of interest, unless approved in accordance with this Code,as applicable, are prohibited as a matter of Company policy. Examples includethe following:

 

(a)**                                  Employment/OutsideEmployment**

 

In consideration of their employment with the Company,employees are expected to devote their full attention to the business interestsof the Company. Employees are prohibited from engaging in any activity thatinterferes with their performance or responsibilities to the Company or isotherwise in conflict with or prejudicial to the Company. Our policies prohibitany employee from accepting simultaneous employment with a client, creditsource, supplier, or competitor, or from taking part in any activity thatenhances or supports a competitor’s position. If you have any questionsregarding this requirement, you should contact the Legal Department.

 

(b)                                 **Outside Directorships**

 

It is a conflict of interest to serve as a director ofany company that competes with the Company. Employees may not serve as adirector of another company without first obtaining the approval of the Company’sChief Executive Officer (the “CEO”). Directors of the Company arerequired to review with the Company’s Board of Directors and the Company’sSecretary other proposed directorships to confirm that accepting suchdirectorship is consistent with the Company’s Corporate Governance Guidelines.

 

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(c)                                  **Business Interests**

 

If you are considering investing in a client, creditsource, supplier or competitor, great care must be taken to ensure that theseinvestments do not compromise your responsibilities to the Company. Manyfactors should be considered in determining whether a conflict exists,including the size and nature of the investment; your ability to influence theCompany’s decisions; your access to confidential information of the Company orof the other company; and the nature of the relationship between the Companyand the other company. The Audit Committee of the Company’s Board of Directorsmust approve in advance any such investment (other than purchases of $50,000 orless of stock of a publicly traded company).

 

(d)                                 **Related****Parties**

 

As a general rule, you should avoid conductingbusiness or engaging in a transaction on behalf of the Company with a familymember or significant other, or with a company or firm with which you or afamily member or significant other is a significant owner or associated oremployed in a significant role or position. “Family members” include any personrelated by blood, adoption or marriage, including grandparents, aunts, uncles,nieces, nephews, cousins, stepchildren, stepparents, andin-laws. “Significant others” include co-habitants, domestic partners, andpersons with whom an employee has (or reasonably expects to have) a consensualromantic, sexual, intimate or dating relationship.

 

The Audit Committee must review and approvein advance all material related party transactions or business or professionalrelationships. All instances involving such potential related partytransactions or business or professional relationships must be reported to theLegal Department who will assess the materiality of the transaction orrelationship and elevate the matter to the Audit Committee as appropriate. Youmust not enter into, develop or continue any such material transaction orrelationship without obtaining such prior Audit Committee approval. The Companymust report all material related party transactions and business orprofessional relationships under applicable accounting rules and theSecurities and Exchange Commission’s (the “SEC”) rules andregulations. Any dealings with a related party must be conducted in such a wayas to avoid preferential treatment and assure that the terms obtained by theCompany are no less favorable than could be obtained from unrelated parties onan arm’s-length basis.

 

Conflicts of interest or the material nature of atransaction or relationship may not always be clear-cut; if questionsarise, you should consult with the Legal Department before entering into,developing or continuing a transaction that could reasonably be expected togive rise to a conflict of interest.

 

(e)                                  **Other****Situations**

 

Because other conflicts of interest may arise, itwould be impractical to attempt to list all possible situations. Any employee,officer or director who becomes aware of a conflict of interest or a potentialconflict of interest should bring it to the attention of a supervisor, manageror other appropriate personnel or consult the guidelines described in Section 16of this Code.

 

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**3.**                                       Insider Trading

** **

Employees, officers and directors who have access toconfidential information are not permitted to use or share that information forstock trading purposes or for any other purpose except the conduct of our business.All non-public information about the Company should be considered confidentialinformation. To use non-public information about the Company or any othercompany for personal financial benefit or to “tip” others who might make aninvestment decision on the basis of this information is not only unethical butalso illegal. Please refer to the Company’s Insider Trading Policy. The purposeof such policy is to inform you of your legal responsibilities to makeclear to you that the misuse of sensitive information is contrary to Companypolicies and to set forth procedures with respect to trading in the Company’ssecurities.

 

**4.**                                       PublicDisclosure

** **

The Company is committed to providing full, fair,accurate, timely and understandable disclosure in the periodic reports andother information it files with or submits to the SEC and in other publiccommunications, such as press releases, earnings conference calls and industryconferences, made by the Company. In meeting such standards for disclosure, theCompany’s executive officers and directors shall at all times strive to complywith the Company’s disclosure obligations and, as necessary, appropriatelyconsider and balance the need or desirability for confidentiality with respectto non-public negotiations or other business developments. The Company’s CEOand CFO are responsible for establishing effective disclosure controls andprocedures and internal controls over financial reporting within the meaning ofapplicable SEC rules and regulations. The Company expects the CEO and CFOto take a leadership role in implementing such controls and procedures and toposition the Company to comply with its disclosure obligations and otherwisemeet the foregoing standards for public disclosure.

 

No employee, officer or director should interferewith, hinder or obstruct the Company’s efforts to meet the standards for publicdisclosure set forth above.

 

**5.**                                       CorporateOpportunities

** **

Employees, officers and directors are prohibited fromexploiting for their own personal gain opportunities that are discoveredthrough the use of corporate property, information or position unless theopportunity is fully disclosed to the Board and the Board declines to pursuesuch opportunity. No employee, officer or director may use corporateproperty, information, or position for improper personal gain, and no employee may competewith the Company directly or indirectly. Employees, officers and directors owea duty to the Company to advance the Company’s legitimate interest when theopportunity to do so arises.

 

**6.**                                       Competition andFair Dealing

** **

We seek to outperform our competition fairly andhonestly. We seek competitive advantages through superior performance, neverthrough unethical or illegal business practices. Stealing proprietaryinformation, possessing trade secret information that was obtained without

 

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the owner’s consent, or inducing such disclosures bypast or present employees of other companies is prohibited. Each employee,director and officer should endeavor to respect the rights of and deal fairlywith the Company’s customers, suppliers, consultants, competitors and employees.No employee, director or officer should take unfair advantage of anyone throughmanipulation, concealment, abuse of privileged information, misrepresentationof material facts, or any other intentional unfair-dealing practice.

 

The purpose of business entertainment and gifts in acommercial setting is to create good will and sound working relationships, notto gain unfair advantage with customers. No gift or entertainment should everbe offered, given, provided or accepted by any Company employee, officer,director, family member of any of the foregoing or agent unless it:

 

•                                          is not a cashgift,

 

•                                          is consistentwith customary business practices,

 

•                                          is notexcessive in value,

 

•                                          cannot beconstrued as a bribe or payoff and does not create an appearance ofimpropriety, and

 

•                                          is incompliance with the Company’s policy on gifts and gratuities and does notviolate any laws or rules or regulations.

 

Please discuss with your Human Resourcesrepresentative any gifts or proposed gifts which you are not certain areappropriate.

 

**7.**                                       Discriminationand Harassment

 

The diversity of the Company’s employees is atremendous asset. It is the Company’s policy to provide equal employmentopportunity for all applicants and employees. The Company does not unlawfullydiscriminate on the basis of race, color, religion, sex (including pregnancy,childbirth, or related medical conditions), national origin, age, disability,marital status, veteran status, or any other basis prohibited under federal,state or local law. In addition, the Company is committed to providing aworkplace free of unlawful harassment. This includes not only sexual harassment,but also harassment on any of the bases set forth above. The Company stronglydisapproves of and will not tolerate harassment of employees by managers,supervisors, co-workers or non-employees. Similarly, the Company will nottolerate harassment by its employees of non-employees with whom Companyemployees have a business, service, or professional relationship. Forinformation about the Company’s policies against discrimination and harassment,please refer to the Company’s Employee Handbook.

 

All of our employees deserve a positive workenvironment where they will be respected and we are committed to providing anenvironment that supports honesty, integrity, respect, trust and responsibility.All of our employees should contribute to the creation and maintenance of suchan environment and our executive officers and management and supervisorypersonnel should take a leadership role in achieving a work environment thatmeets our diversity standards and is free from the fear of retribution.

 

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**8.**                                       Health andSafety

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The Company strives to provide each employee with asafe and healthful work environment. Each employee has a responsibility formaintaining a safe and healthy workplace for all employees by following safetyand health rules and practices and reporting accidents, injuries andunsafe equipment, practices or conditions.

 

Violence and threatening behavior are not permittedand the use of illegal drugs or alcohol in the workplace will not be tolerated.Employees should report to work in condition to perform their duties, freefrom the influence of illegal drugs or alcohol.

 

**9.**                                       Record-Keeping

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The purpose of this policy is to set forth and conveythe Company’s requirements in managing records, including all recordedinformation regardless of medium or characteristics. Records include paperdocuments, CDs, DVDs, computer hard disks, email, floppy disks, microfiche,microfilm or all other media. The Company requires honest and accuraterecording and reporting of information in order to make responsible businessdecisions.

 

Many employees, officers and directors regularly usebusiness expense accounts, which must be documented and recorded accurately. Ifyou are not sure whether a certain expense is legitimate, ask your supervisoror contact the Company’s Controller. Please refer to the Company’s businesstravel policy for further information regarding business expenses.

 

The Company’s responsibilities to its shareholders andthe investing public require that all of the Company’s books, records, accountsand financial statements must be maintained in reasonable detail, mustappropriately reflect the Company’s transactions and must conform both toapplicable legal requirements and to the Company’s system of internal controlsand generally accepted accounting practices and principles. No one shouldrationalize or even consider misrepresenting facts or falsifying records. Unrecordedor “off the books” funds or assets should not be maintained unless permitted byapplicable law or regulation.

 

Business records and communications often becomepublic, and we should avoid exaggeration, derogatory remarks, guesswork, orinappropriate characterizations of people and companies that can bemisunderstood. This applies equally to e-mail, internal memos, and formalreports. Records should always be retained or destroyed according to theCompany’s record retention policies. No record or document shall be destroyedwhich is the subject of a subpoena or other legal process or if there is areasonable belief that litigation proceedings or government investigativeproceedings are likely to occur and it is anticipated that such record ordocument is relevant to such proceedings. All employees are expected to complywith all federal, state and industry-specific record retention rules andrequirements as well as the Company’s record retention policies.

 

**10.**                                 Confidentiality

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Employees, directors and officers must maintain theconfidentiality of confidential information entrusted to them by the Company orits customers, except when disclosure is authorized by the CEO or CFO orrequired by laws or regulations. Confidential information includes allnon-public information that might be of use to competitors, or harmful

 

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to the Company or its customers, if disclosed. It alsoincludes information that suppliers and customers have entrusted to us. Theobligation to preserve confidential information continues even after employmentends.

 

The Company and its employees, agents, consultants andcontractors must cooperate with appropriate government inquiries andinvestigations. In this context, however, it is important to protect the legalrights of the Company with respect to its confidential information. Allgovernment inquiries and requests for information, documents or investigativeinterviews (whether in person, by phone, email or written correspondence) mustbe referred to the General Counsel, who will be responsible for coordinating aresponse. No financial information may be disclosed without the priorapproval of the CEO or CFO.

 

**11.**                                 Protection and ProperUse of Company Assets

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All employees, directors and officers should endeavorto protect the Company’s property, electronic communications systems,information resources, facilities and equipment and ensure their efficient use.Theft, carelessness, and waste have a direct impact on the Company’sprofitability. Any suspected incident of fraud or theft should be immediatelyreported for investigation pursuant to Section 16 of this Code. Companyassets should not be used for non-Company business, although we recognize thatincidental personal use may be permitted without adversely affecting theinterests of the Company. Personal use of Company assets must always be inaccordance with Company policy. You should consult your Human Resourcesrepresentative for appropriate guidance and permission.

 

The obligation of employees, directors and officers toprotect the Company’s assets includes its proprietary information. Proprietaryinformation includes intellectual property such as trade secrets, patents,trademarks and copyrights, as well as business, marketing and service plans,designs, databases, records, salary information and any unpublished financialdata and reports. Unauthorized use or distribution of this information wouldviolate Company policy. It could also be illegal and result in civil or evencriminal penalties.

 

Unauthorized duplication of copyrighted documents orcomputer software violates the law. You must neither engage in nor tolerate themaking or using of unauthorized documents or software copies and must complywill all license and purchase terms regulating the use of any document orsoftware. The Company will provide all documents and software needed to meetlegitimate needs.

 

**12.**                                 Payments to GovernmentPersonnel

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The U.S. Foreign Corrupt Practices Act prohibitsgiving anything of value, directly or indirectly, to officials of foreigngovernments or foreign political candidates in order to obtain or retainbusiness. It is strictly prohibited to make illegal payments to governmentofficials of any country.

 

In addition, there are a number of federal and statelaws and regulations regarding business gratuities which may be acceptedby U.S. or state government personnel. The promise, offer or delivery to anofficial or employee of the U.S. government or a state government of a gift,favor or other gratuity in violation of these rules would not only violateCompany policy but

 

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could also be a criminal offense. Local governments,as well as foreign governments, may have similar rules. You must consultwith the Legal Department prior to making any such gifts.

 

**13.**                                 Waivers of the Code ofBusiness Conduct and Ethics

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Any waiver of any provision of this Code for executiveofficers or directors must be approved by the Audit Committee and will bepromptly disclosed as required by applicable securities law or stock exchangeregulation. With regard to employees who are not executive officers, waiversmust be approved by the General Counsel.

 

**14.**                                 Reporting any Illegalor Unethical Behavior; No Retaliation

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It is your obligation and ethicalresponsibility to help enforce this Code, and to that end, you should promptlyreport violations of this Code in accordance with the guidelines set forth in Section 16of this Code. Employees, directors and officers are encouraged to report tosupervisors, managers or his or her Human Resources representative aboutobserved or suspected illegal, improper or unethical behavior and when in doubtabout the best course of action in a particular situation. You should know thatreprisal, threats, retribution or retaliation against any person who has ingood faith reported a violation or a suspected violation of law, this Code orother Company policies, or against any person who is assisting in anyinvestigation or process with respect to such a violation, is both a violationof Company policy and is prohibited by a variety of state and federal civil andcriminal laws including the Sarbanes-Oxley Act of 2002. Accordingly, it is thepolicy of the Company not to allow retaliation for reports of wrongdoing ormisconduct by others made in good faith by employees. Employees, directors and officersare expected to cooperate in internal investigations of wrongdoing ormisconduct.

 

**15.**                                 Accounting Complaints

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The Company’s policy is to comply with all applicablefinancial reporting and accounting regulations. If any director, officer oremployee of the Company has unresolved concerns or complaints regardingquestionable accounting, internal control or auditing matters of the Company,then he or she is encouraged to submit those concerns or complaints inaccordance with the Company’s Complaint Procedures for Accounting and AuditingMatters.

 

16.                                 **Compliance Procedures**

 

We must all work to ensure prompt and consistentaction against violations of this Code. However, in some situations it isdifficult to know right from wrong. Since we cannot anticipate every situationthat will arise, you should keep in mind the following steps as you consider aparticular problem or concern.

 

(a)                                  Make sure you haveall the facts. In order to reach the right solutions, we must be as fullyinformed as possible.

 

(b)                                 Ask yourself:  What specifically am I being asked to do orignore?  Does it seem illegal, unethicalor improper?  This will enable you to focuson the specific question you

 

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are faced with, and thealternatives you have. Use your judgment and common sense; if something seemsunethical or improper, it may very well be.

 

(c)                                  Clarifyyour responsibility and role. In most situations, there is sharedresponsibility. Are your colleagues informed? It may help to get others involved and discuss your concerns.

 

(d)                                 Youshould report violations of this Code to or otherwise discuss your concerns inthis regard with your supervisor or your Human Resources representative. Inmany cases, your supervisor will be more knowledgeable about the question orconcern, and will appreciate being brought into the decision-making process. Rememberthat it is your supervisor’s responsibility to help solve problems. Supervisorsand Human Resources representatives are obligated to report violations of thisCode to the General Counsel.

 

(e)                                  Inthe case where it may not be appropriate to report a violation to ordiscuss your concerns with your supervisor or your Human Resourcesrepresentative, or where you do not feel comfortable approaching yoursupervisor to report a violation or discuss your concerns, you may reportthe violation or discuss your concerns with the General Counsel. If you preferto report violations or your concerns in writing, on an anonymous basis, pleaseaddress your concerns to our General Counsel at the following address:  FairPoint Communications, Inc., 521 EastMorehead Street, Suite 250, Charlotte, NC 28202, Attention: Shirley J.Linn.

 

(f)                                    **You may also report any violations of this Code on an anonymousand confidential basis through the EthicsPoint Hotline link set forth on theintranet and on our website or by calling the EthicsPoint Hotline at866-294-9318. Your report will be sent to the Company’s Audit Committee andGeneral Counsel on a no-name basis unless you grant permission for youridentity to be revealed.**

 

(g)                                 Reportsof violations of this Code or other complaints made to the EthicsPoint Hotlineor to the persons referenced above will be reviewed by the General Counsel orher designee, who shall either (i) conduct an investigation of the factsand circumstances as she deems appropriate and report her conclusions andremedial actions taken, if any, to the Audit Committee or (ii) report thealleged violation or other complaint to the Audit Committee for furtherdirection. The Chairperson of the Audit Committee will also receive allEthicsPoint Hotline reports directly from EthicsPoint.

 

(h)                                 Yourcommunications of violations or concerns will be kept confidential to theextent feasible and appropriate, and except as required by law.

 

(i)                                     Allreports of violations of the Code will be promptly investigated and addressed. Ifyou are not satisfied with the response, you may contact the AuditCommittee directly.

 

(j)                                     Alwaysask first, act later:  If you are unsureof what to do in any situation, seek guidance before you act.

 

17.                                 **Compliance Required**

 

The matters covered in this Code are of theutmost importance to the Company, its shareholders and its business partners,and are essential to the Company’s ability to conduct

 

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its business in accordance with its stated values. We expect all of ourdirectors, officers, employees, agents, contractors, consultants andrepresentatives to adhere to these rules in carrying out their duties forthe Company.

 

Any individual whose actions are found to violatethese policies or any other policies of the Company will be subject todisciplinary action, up to and including immediate termination of employment orbusiness relationship. Where the Company has suffered a loss, it may pursueits legal remedies against the individuals or entities responsible.

 

**18.**                                 Administration

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No code, including this one, can cover all situations.Similarly, exceptional circumstances may occur which do not fit neatlywithin the guidelines of this Code or where strict application of this Code may notproduce a fair result. Overall administration of this Code including itsinterpretation and amendment is under the authority of the Audit Committee ofthe Board.

 

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EXHIBIT A

 

**ACKNOWLEDGMENTOF RECEIPT OF CODE**

**OFBUSINESS CONDUCT AND ETHICS**

 

I have received and read the Company’s Codeof Business Conduct and Ethics (the “Code”). I understand the standards andpolicies contained in the Code and understand that there may be additionalpolicies or laws specific to my position as an employee, officer or director ofthe Company. I further agree to comply with the Code.

 

If I have questions concerning the meaning orapplication of the Code, any Company policies, or the legal and regulatoryrequirements applicable to my position, I know I can consult my supervisor, myHuman Resources representative or the Legal Department, knowing that myquestions or reports to these sources will be maintained in confidence to theextent feasible and appropriate.

 
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Please sign and return this form to [                       ].

 

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