Exhibit
10.1


March 14, 2007


Mr.
Walter E. Leach, Jr.

6419 Sharon Hills Rd.

Charlotte NC 28210


Re: Change in Control and Severance Agreement


Dear Walt:


This letter agreement (the “Agreement”) between you
and FairPoint Communications, Inc. (the “Company”) sets forth certain rights
and obligations with respect to the payment of severance and receipt of certain
benefits (the “Severance Benefits”) in the event of the termination of your
employment for any of the circumstances described in Paragraph 1, below.  This Agreement shall supersede any prior
agreements or other arrangements between you and the Company or its affiliates
concerning the receipt of payment or benefits upon your employment termination,
including those described in that certain letter agreement dated as of December
15, 2003,  or  in accordance
with the Company’s published or unpublished policies.


1.             Events That Trigger Severance Benefits


(a)           Termination
After a Change in Control.  You will
receive Severance Benefits under this Agreement if, within  two
years  after a Change in Control has
occurred, the Company terminates your employment without Cause.


(b)           Termination  Without Cause.  You
will receive Severance Benefits under this Agreement if  the
Company terminates your employment without Cause (as defined herein below) from
and after the date hereof prior to a Change in Control or after the second
anniversary of a Change in Control.


(c)           Resignation for Good Reason After a
Change in Control. You will receive Severance Benefits under this Agreement
if, within two years after a Change in Control has occurred, you resign your
employment for Good Reason (as defined herein below).


2.             Events That Do Not Trigger Severance Benefits


You shall not be entitled to receive Severance
Benefits under this Agreement if the Company terminates your employment for
Cause or your employment terminates on account of death or Disability (as
defined herein below), or if you resign without Good Reason.


3.             Obligations
of the Company Upon Termination


(a)           Severance Benefits Following a
Change in Control.  Subject to the
provisions of Paragraphs 5 and 6 below, if you become entitled to Severance
Benefits under Paragraphs 1(a) or 1(c) of this Agreement, the Company will
provide you the following:













 


(i)            any
unpaid base salary as of the date of separation, expense reimbursements,
accrued benefits, and any earned but unpaid bonus or incentive payment for the
fiscal year before the year of termination, provided that any unpaid vested
amounts or benefits under the Company’s compensation, incentive or benefits
plans will be paid in accordance with the terms of those plans;


(ii)           a
lump sum cash payment of two times your Annual Base Salary (as defined herein
below) in effect as of the termination date;


(iii)          a
lump sum cash payment of two times your Annual Incentive Payment (as defined
herein below);


(iv)          a lump sum cash payment equivalent to
twenty-four (24) months of COBRA premiums (as customarily charged to other
individuals who have terminated from the Company), grossed up for applicable
federal and state taxes. The COBRA premiums shall be based on your coverage
election in effect as of the date of termination.  If you elect to continue coverage under the
Company’s health care plans pursuant to COBRA, you hereby agree that such
coverage will continue only for so long as allowed under COBRA or until you
become eligible for another group health plan by virtue of employment; and you
shall notify the Company as soon as you become eligible for coverage under
another group health plan;


(v)           a lump sum cash payment equivalent to
twenty-four (24) months of LTD and Group Term Life Insurance and any other
benefit plan premiums, grossed up for applicable federal and state taxes.  The LTD and Group Term Life Insurance and
other benefit plan premiums shall be based on your coverage election in effect
as of the date of termination; and


(vi)          all
non-vested and/or unearned long-term incentive awards previously granted to
you, including but not limited to restricted stock units, deferred share
awards, and stock options shall fully vest and become nonforfeitable; provided,
however, that any applicable performance requirement under any long-term
incentive awards must be satisfied and will not be deemed waived as a result of
this provision.


(b)           Severance Benefits Prior to or Two
Years after a Change in Control. 
Subject to the provisions of Paragraphs 5 and 6 below, if you become
entitled to Severance Benefits under Paragraph 1(b) of this Agreement, the
Company will provide you with all of the same Severance Benefits as described
in Paragraph 3(a) above.


(c)           Timing of Payment.  The payment of the Severance Benefits will
occur no later than ten (10) days after the effective date of the Release (as
specified therein), unless the Company institutes a 409A Suspension Period (as
defined below).


(d)           Release.  The Severance Benefits are conditioned upon
your signing and making effective a general release of claims in a form
designated by the Company in its sole discretion (the “Release”).  The Company shall not have any obligation to
provide the Severance Benefits in the event you do not sign and make effective
the Release.



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(e)           Other
Amounts.  Regardless of whether you
sign and make effective the Release, the Company shall pay you any unpaid base
salary, expense reimbursements, and any earned but unpaid bonus or incentive
payment for the fiscal year before the year of termination within ten (10) days
of your termination date.  Any unpaid
vested amounts or benefits under the Company’s compensation, incentive or
benefits plans will be paid in accordance with the terms of those plans.


4.             Definitions


(a)           “Annual
Base Salary” shall mean the average monthly salary in effect during the
twelve (12) months immediately preceding the date of termination, multiplied by
a factor of twelve (12).


(b)            “Cause”
shall mean, as reasonably and in good faith determined by the Company’s Board
of Directors, (i) misappropriating any funds or any material property of the
Company; (ii) obtaining or attempting to obtain any material personal profit
from any transaction in which you have an interest which is adverse to the
interest of the Company unless the Company shall first give its consent to such
transaction; (iii)(x) the willful taking of actions which directly impair your
ability to perform the duties required by the terms of your employment; or (y)
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; (iv) 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 (v) any material failure to
comply with applicable laws or governmental regulations within the scope of
your employment or any material breach of Company policies and procedures,
including a material breach of the Company’s Code of Business Conduct and
Ethics.


 (c)          “Change in Control” shall have
the same meaning as in section 13.1 of the FairPoint Communications, Inc. 2005
Stock Incentive Plan as in effect on January 1, 2006; provided, however, that
there shall be no provision for any threatened or anticipated Change in Control
that does not actually occur.


(d)           “Disability”
shall mean a long-term disability within the meaning of the long-term
disability or other similar program applicable to employees at the
Company.  At any time the Company does
not sponsor a long-term disability plan for its employees, “Disability” shall
mean your inability to perform, with reasonable accommodation, the essential
functions of your position for a period of 180 days in any 360 consecutive day
period due to mental or physical incapacity, and determined by an independent
physician, selected by joint agreement by you and the Company.


(e)           “Good
Reason” means your resignation from employment within forty-five days after
notice of the occurrence of any of the following without your express written
consent:



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(i)            Your key responsibilities or duties
as Executive Vice President, Corporate Development  (and
ignoring for such purpose any temporary responsibilities) are significantly and
materially reduced or if you are downgraded to a career band level that is
lower than the career band level you are currently in; provided, however, that
a “Good Reason’ shall not occur merely because of a change in the individual
(or position) to whom (or to which) you report.


(ii)           A reduction in your overall
compensation opportunities (as contrasted with overall compensation actually
paid or awarded), other than if the Company for business reasons has to reduce
bonus opportunities or base salaries of all executives;


(iii)          The
diminishment or elimination of your rights hereunder to the Severance Benefits;
or


(iv)          any material breach by the Company of
this Agreement.


You may resign from your employment for Good Reason so
long as you tender your written resignation to the CEO or to the Board of
Directors within forty-five (45) days after the occurrence of the event that
forms the basis for your resignation for Good Reason, and as long as your
resignation describes in reasonable detail your objection to any of the matters
described in this paragraph  4(e) and
provides the Company an opportunity to cure such action or breach within
fourteen (14) calendar days after receiving your written resignation.


(f)            “Annual
Incentive Payment” shall mean the average of the incentive payments made to
you in each of the two (2) calendar years immediately preceding the date of
termination.


5.             Golden Parachute


Your total
payments and benefits under this Agreement may exceed the relevant limitations
under the “golden parachute” provisions of Code Section 280G.  However, nothing in this Agreement will cause
the Company to be required to pay to you any amount in excess of the Severance
Benefits provided for in this Agreement.  
Notwithstanding the foregoing, in the event any payment or benefit to
you under this Agreement or otherwise would (a) constitute a “parachute
payment” within the meaning of Code Section 280G and (b) but for this
sentence, be subject to the excise tax imposed by Section 4999 of the Code (or
any comparable successor  or state law
provision) and any related interest or penalties (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the “Excise Tax”), then you shall receive either (i) the largest portion of
such payments and benefits that would result in no portion of such payments and
benefits being subject to the Excise Tax or (ii) the full amount of such
payments and benefits; whichever of the amounts under (i) and (ii), when taking
into account all applicable federal, state, local and foreign income and
employment taxes, the Excise Tax and any other applicable taxes (all computed
at the highest applicable marginal rate), results in your receipt, on an
after-tax basis, of the greatest amount of payments and benefits, notwithstanding
that all or some portion thereof may be subject to the Excise Tax.  In the event of a reduction hereunder, you
will be given the choice of which payments or benefits to reduce to the extent
practicable for the Company.  The
foregoing calculations shall be made at the Company’s



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expense by an accounting
firm selected by the Company.  You shall remain solely liable for all
income taxes, Excise Taxes, or other amounts assessed on any payments or
benefits to which you are entitled and nothing in this Agreement or otherwise
shall be interpreted as obligating the Company to pay (or reimburse you for)
any income taxes, Excise Taxes, or other taxes or amounts assessed against or
incurred by you in connection with your receipt of such payments and benefits.


6.             409A


The terms of this Agreement (and the terms of any
and all other agreements which cover you and are deferred compensation
plans subject to Code Section 409A) are intended to be, and shall be
interpreted so as to, comply with Code Section 409A so as to not subject
you to any excise tax or penalty under Code Section 409A by virtue of any
payment or benefit related to that agreement.   In the event it
is determined that any term or provision of this Agreement (and/or
of any other agreements covering you which are subject to Code Section
409A) does not so comply with Code Section 409A, then any and all such
non-compliant terms or provisions are amended so as to delay payments and
benefits (of whatever kind, including stock options, dividends and any
other equity-related payments that may be subject to Code Section 409A) in a
manner that will comply with all of the following three requirements: (1)
conform to Section 409A of the Code;  (2) to the extent possible under
Code Section 409A, preserve the original intent of that provision; and (3)
otherwise be without any reduction in the amount of such payments or
benefits ultimately paid or provided to you.  Without limitation of the
foregoing, if you are a ‘specified employee’ under Code Section 409A(a)(2)(B),
then, except as permitted by Code Section 409A, any payments subject to Code
Section 409A will be delayed until the date that is six months after your
separation from service (the “409A Suspension Period”), and any such
payments or benefits to which you would otherwise be entitled during the first
six months after your separation from service will be accumulated and paid or
provided on the date that is six months after such separation form service.


7.             Non-Competition/Non-Solicitation


(a)           Acknowledgements.   You acknowledge and
agree that in the course of your employment with the Company, you have been and
will be given access to, become familiar with, develop, maintain, and acquire
knowledge of the Company’s client, employment and other relationships and
confidential information relating to those relationships.   You acknowledge and agree that you will
comply with the Company’s confidentiality policies.


(b)           Non-competition.  You agree that for a
period of twelve (12) months after you leave the employ of the Company for any
reason, you shall not, directly or indirectly, for your own benefit or for the
benefit of any other person or entity, whether as an owner, director, officer,
partner, employee, agent, consultant, for pay or otherwise, perform any
supervisory, managerial, marketing, sales, administrative, executive,
financial, or research and development or similar services for a rural local
exchange carrier business headquartered in the Southeastern United States,
which shall mean the states of Florida, Georgia, North Carolina and South
Carolina.



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(c)           Non-solicitation.  You agree that for a  period
of twelve (12) months after you leave the employ of the Company for any reason,
you shall not, directly or indirectly, for your own benefit or for the benefit
of any other person or entity, whether as an owner, director, officer, partner,
employee, agent, consultant, for pay or otherwise solicit the service of or
solicit, induce, encourage, identify or target any person who was employed by
the Company during the last year of your employment with the Company, to
terminate his or her employment with the Company.


(d)           Injunctive
Relief.   You recognize that breach
of this paragraph 7 may severely and irreparably injure the Company in an
amount that cannot be readily calculated. 
Therefore, you agree that the Company may, in addition to all other
remedies to which it is entitled (including recovery of attorneys’ fees),
obtain equitable relief, including a temporary restraining order and/or
preliminary injunction, from any court having personal jurisdiction over you.


(e)           Reasonable
Restrictions.  You acknowledge and
agree that the restrictions and covenants contained in this paragraph 7 are
reasonably necessary to protect the goodwill and legitimate business interests
of the Company, including without limitation the Company’s confidential
information and customer, employment and other relationships and that the
restrictions are not overbroad, overlong, or unfair (including in duration or
scope).


(f)            Reformation.  Whenever possible, each provision of this
paragraph 7 will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this paragraph 7 is held to be
prohibited by or invalid under applicable law, such provision will be ineffective
only to the extent of such prohibition or invalidity, without invalidating the
remainder of this paragraph 7 or this Agreement.  If a Court determines that at the time this
Agreement is presented for enforcement any provisions are overly broad or
unenforceable, the parties agree that the Court shall reform paragraph 7 to
make it enforceable to the maximum extent possible and shall enforce the other
terms as written.


8.             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 affected by the illegal, invalid or unenforceable provision or
by its severance from this Agreement.


9.             Entire Agreement


This Agreement is the entire agreement between you and
the Company and its affiliates with respect to any payments or benefits upon
termination of employment.  This
Agreement supersedes any prior or contemporaneous oral or written agreements or
understandings on the subject.  No party
is relying on any representations, oral or written, on the subject of the
effect, enforceability or meaning of this Agreement, except as specifically set
forth in this Agreement.



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10.          Governing Law


The statutes and common law of the State of North
Carolina (excluding its choice of laws provisions) will apply to this
Agreement, its interpretation and enforceability, except as provided by the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”).


We look forward to your
and the Company’s continued success.


	
   

  	
  Sincerely,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Eugene B.
  Johnson

  	
   

  
	
   

  	
  Eugene B.
  Johnson

  	
   

  
	
   

  	
  Chief Executive
  Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Agreed: 

  	
  /s/ Walter E.
  Leach, Jr.

  	
   

  
	
   

  	
   

  	
  Walter E. Leach,
  Jr.

  	
   

  
					



 



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