Exhibit 10.12


 


FORM OF NOMINATING
AGREEMENT


THIS NOMINATING AGREEMENT (this “Agreement”), dated as of February
[__], 2005, is entered into by and among FairPoint Communications, Inc., a
Delaware corporation (the “Company”), Kelso Investment Associates V, L.P.,
a Delaware limited partnership (“KIA V”), Kelso Equity Partners V, L.P.,
a Delaware limited partnership (“KEP V” and together with KIA V, “Kelso”)
and Thomas H. Lee Equity Fund IV, L.P., a Delaware limited partnership (“THL”).
 Kelso and THL, together with the
affiliates of THL listed on Schedule A
attached hereto, are referred to herein collectively as the “Stockholders.”


WHEREAS, as of the date
hereof and immediately prior to the consummation of the Company’s initial
public offering of its common stock, par value $.01 per share (the “Common
Stock”), the Stockholders own in the aggregate [_____] shares (collectively,
the “Shares”) of Common Stock; and


WHEREAS, Kelso, THL and
the Company wish to make certain agreements with respect to the nomination of candidates
for election to the board of directors of the Company, upon the terms and
conditions set forth in this Agreement.


NOW, THEREFORE, in
consideration of the premises and the mutual covenants and considerations
herein set forth, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:


1.             Board of
Directors.  The size of the Board of
Directors of the Company (the “Board”) shall be established in
accordance with the Certificate of Incorporation and By-Laws of the Company.  The members of the Board shall be nominated
and elected in accordance with the Certificate of Incorporation and By-Laws of
the Company, and the provisions of this Agreement.  “Certificate of Incorporation” shall
mean the Eighth Amended and Restated Certificate of Incorporation of the
Company, as filed with the Secretary of State of the State of Delaware and
effective as of the date hereof, as may be amended from time to time.  “By-Laws” shall mean the Amended and
Restated By-Laws of the Company, effective as of the date hereof, as may be
amended from time to time.


2.             Staggered Board.  The Certificate of Incorporation and By-Laws
of the Company shall provide that the Board shall be divided into three
classes, as nearly equal in number as possible, as follows: (A) one class
initially consisting of two directors (“Class I”), the initial term of
which shall expire at the first annual meeting of the stockholders to be held
after the date hereof; (B) a second class initially consisting of two directors
(“Class II”), the initial term of which shall expire at the second
annual meeting of the stockholders to be held after the date hereof and (C) a
third class initially consisting of two directors (“Class III”), the
initial term of which shall expire at the third annual meeting of the
stockholders to be held after the date hereof, with each class to hold office
until its successors are elected and qualified. 
At each annual meeting of the stockholders of the Company, the
successors of the members of the class of directors whose term expires at that
meeting shall be elected to hold office for a term expiring at the third
succeeding annual meeting of stockholders. 
On the date hereof, the Board shall


 


 





















 


consist of: (i)
Eugene B. Johnson and Patricia Garrison-Corbin in Class I, (ii) Frank K. Bynum
and David L. Hauser in Class II and (iii) Kent R. Weldon and Claude C. Lilly in
Class III.


3.             Designees.  Upon
expiration of the respective terms of the initial Board members set forth in
Section 2 above, and subject to the provisions of Section 4 hereof, Kelso and
THL shall have the right to designate individuals for nomination for election
to the Board as set forth below and the Company shall, acting through its Nominating
Committee, cause such individuals to be nominated for election to the Board as
set forth below; provided that the Nominating Committee’s obligations under
this Agreement are subject to the requirements of their fiduciary duties as
directors and the Delaware General Corporation Law.


(a)           For so long as the
Stockholders (together with any of their respective successors and permitted
assigns) own, in the aggregate, at least forty percent (40%) of the Shares and
Kelso (together with its successors and permitted assigns) owns at least one
(1) Share, (i) Kelso shall be entitled to designate one person for nomination
for election to the Board in Class II and (ii) THL shall be entitled to
designate one person for nomination for election to the Board in Class III; provided, however, that if
Kelso no longer owns any Shares, but THL (together with its successors and
permitted assigns)  owns at least
forty percent (40%) of the Shares, THL shall be entitled to designate one
person for nomination for election to the Board in Class II and one person for
nomination for election to the Board in Class III; or


(b)           For so long as the
Stockholders (together with any of their respective successors and permitted
assigns) own, in the aggregate, less than forty percent (40%), but at least
twenty percent (20%), of the Shares, THL shall be entitled to designate one
person for nomination for election to the Board in Class III.


4.             Mechanics of Designation.


(a)           In order to nominate an individual for election to the Board,
Kelso or THL, as applicable, must submit to the Company a prior written notice at
least ninety (90) days prior to the date of the next scheduled annual meeting
of the Company’s stockholders in accordance with the notice provisions set
forth in Section 11 hereof, which notice shall include (i) the name of the designee,
(ii) a current resume and curriculum vitae of the designee, (iii) a statement
describing the designee’s qualifications and (iv) contact information for
personal and professional references.  At
least one hundred and twenty (120) days prior to the date of such annual
meeting of the Company’s stockholders, the Company shall provide Kelso and THL
with written notice of the expected date of such meeting in accordance with the
notice provisions set forth in Section 11 hereof.


(b)           At each meeting of the Company’s stockholders at which the directors
of the Company are to be elected, the Company agrees to recommend that the
stockholders elect to the Board each designee of Kelso and/or THL nominated for
election at such meeting in accordance with the provisions of Section 3 above.


 


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5.             Vacancies.


(a)           At
any time at which a vacancy shall be created on the Board in any class as a
result of the death, disability, retirement, resignation, removal or otherwise
of a designee of Kelso and Kelso maintains the right to designate a person for
nomination for election to the Board, as specified in Section 3 above, Kelso
shall have the right to designate for appointment by the remaining directors of
the Company under the Certificate of Incorporation an individual to fill such
vacancy and to serve as a director on the Board in such class.


(b)           At
any time at which a vacancy shall be created on the Board in any class as a
result of the death, disability, retirement, resignation, removal or otherwise
of a designee of THL and THL maintains the right to designate a person or
persons for nomination for election to the Board, as specified in Section 3
above, THL shall have the right to designate for appointment by the remaining
directors of the Company under the Certificate of Incorporation an individual
to fill such vacancy and to serve as a director on the Board in such
class.   In addition, in the event a
vacancy of a Kelso designee occurs at a time when Kelso no longer owns any
Shares, but THL owns at least forty percent (40%) of the Shares, THL shall be
entitled to designate an individual to fill such vacancy.


(c)           In
connection with the foregoing, THL or Kelso, as applicable, must submit to the
Company written notice of such designee or designees in accordance with the
notice provisions set forth in Section 11 hereof, which notice shall include
(i) the name of the designee, (ii) a current resume and curriculum vitae of the
designee, (iii) a statement describing the designee’s qualifications and (iv)
contact information for personal and professional references.  The Company agrees to take such actions as
will result in the appointment to the Board as soon as practicable of any
individual so designated by THL or Kelso, as applicable.


6.             Modification,
Amendment, Waiver.  No modification,
amendment or waiver of any provision of this Agreement shall be effective
unless approved in writing by the Company, THL and Kelso; provided, however,
that Kelso’s consent will not be required if Kelso no longer owns any Shares.  The failure of any party at any time to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the rights of the party
thereafter to enforce the provisions of this Agreement in accordance with its
terms.


7.             Invalid or
Unenforceable Provisions.  Whenever
possible, each provision of this Agreement will be interpreted in such manner
as to be effective and valid under applicable law, but if any term or provision
of this Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect and this Agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.  The parties
further agree that any court of competent jurisdiction is expressly authorized to
modify any such unenforceable provision of this Agreement in lieu of severing
such unenforceable provision from this Agreement in its entirety, whether by
rewriting the offending provision, deleting any or all of the offending
provision, adding additional language to this Agreement, or by making such
other modifications as it deems warranted to carry out the intent and agreement
of the parties as


 


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embodied herein to
the maximum extent permitted by law.  The
parties expressly agree that this Agreement as so modified by a court of
competent jurisdiction shall be binding upon and enforceable against each of
them.


8.             Entire
Agreement. Except as otherwise expressly set forth herein, this document
embodies the complete agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.


9.             Binding Effect; Assignment.  All of the terms of this Agreement shall
inure to the benefit of and shall be binding upon the Company, THL and Kelso
and their respective successors and permitted assigns; provided, however,
that this Agreement may not be assigned except in accordance with the following
sentence.  No party hereto shall assign
its rights, or delegate its duties, under this Agreement without the prior
written consent of all of the other parties hereto; provided, however,
that (a) THL and Kelso may assign their respective rights hereunder to their
respective affiliates without consent and (b) Kelso’s consent will not be
required if Kelso no longer owns any Shares.


10.           Remedies.  The parties hereto will be entitled to
enforce their rights under this Agreement specifically (without posting a bond
or other security), to recover damages by reason of any material breach of any
provision of this Agreement and to exercise all other rights existing in their
favor.  The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions of this Agreement. 
In the event of any dispute involving the terms of this Agreement, the
prevailing party shall be entitled to collect reasonable fees and expenses
incurred by the prevailing party in connection with such dispute from the other
parties to such dispute.


11.           Notices.  Any notice or other communication in
connection with this Agreement or the Shares shall be deemed to be delivered
and received if in writing (or in the form of a telex or telecopy) addressed as
provided below (a) when actually delivered, in person, (b) if telexed or
telecopied to said address, when electronically confirmed, (c) when delivered
if delivered by overnight courier or (d) in the case of delivery by mail, five
(5) business days shall have elapsed after the same shall have been deposited
in the United States mails, postage prepaid and registered or certified:


If
to the Company, to:


FairPoint Communications,
Inc.


521 East Morehead Street


Suite 250


Charlotte, North Carolina
28202


Attention: 
Shirley J. Linn, Esq.


Facsimile: 
(704) 344-1594


 


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with a copy to:


 


Paul, Hastings, Janofsky & Walker LLP

75 East 55th Street

New York, New York  10022

Attention: Jeffrey J. Pellegrino, Esq.


 


If to Kelso, to:


 


Kelso & Company


320 Park Avenue, 24th Floor


New York, New York 10022


Attention: 
James J. Connors, II, Esq.


Facsimile: 
(212) 223-2379


 


If to THL, to:


 


Thomas H. Lee Partners, L.P.


100 Federal Street


35th Floor


Boston, Massachusetts 02110


Attention: 
Anthony J. DiNovi


                 
Kent R. Weldon


Facsimile: 
(617) 227-3514


 


12.           Term.  The term of this Agreement shall terminate
upon the earlier to occur of: (i) the mutual consent in writing of all of the
parties hereto, provided that Kelso’s consent will not be required if Kelso no
longer owns any Shares or (ii) the date on which the Stockholders (together
with any of their respective successors and permitted assigns) own, in the
aggregate, less than twenty percent (20%) of the Shares.


13.           Governing Law;
Submission to Jurisdiction.  All
questions concerning the construction, validity and interpretation of this Agreement
will be governed by the internal laws of the State of Delaware, without giving
effect to principles of conflicts of law. The parties hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the courts
of the State of Delaware or the United States of America located in the State
of Delaware for any actions, suits or proceedings arising out of or relating to
this Agreement and the transactions contemplated hereby (and the parties agree
not to commence any action, suit or proceeding relating hereto except in such
courts), and further agree that service of any process, summons, notice or
documents by United States registered mail to a party in accordance with Section
11 hereof shall be effective service of process for any action, suit or
proceeding brought against such party in any such court and, absent any
statute, rule or order to the contrary, that each party shall have thirty (30)
days from actual receipt of any complaint to answer or otherwise plead with
respect thereto.  The parties hereby irrevocably
and unconditionally


 


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waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in the courts of the
State of Delaware or the United States of America located in the State of Delaware,
and hereby further irrevocably and unconditionally waive and agree not to plead
or claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.


14.           Descriptive
Headings.  The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
part of this Agreement.


15.           Counterparts.  This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement.


 


(Signature
Pages Follow)


 


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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.


 


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
  FAIRPOINT
  COMMUNICATIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  KELSO:

  
	
   

  	
   

  	
   

  
	
   

  	
  KELSO INVESTMENT
  ASSOCIATES V, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: Kelso Partners V, L.P.,

  
	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  KELSO EQUITY PARTNERS V, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  THL:

  
	
   

  	
   

  	
   

  
	
   

  	
  THOMAS H. LEE EQUITY FUND IV, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: THL Equity Advisors IV, LLC,

  
	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				



 


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Schedule A


THL Related Parties


 


 


Thomas H. Lee Foreign Fund IV, L.P.


Thomas H. Lee Foreign Fund IV-B, L.P.


1987 Thomas H. Lee Nominee Trust


David V. Harkins


The Harkins 1995 Gift Trust


Scott A. Schoen


C. Hunter Boll


Scott M. Sperling


Anthony J. DiNovi


Thomas M. Hagerty


Warren C. Smith, Jr.


Seth W. Lawry


Kent R. Weldon


Terrence M. Mullen


Todd M. Abbrecht


Charles A. Brizius


Scott Jaeckel


Soren Oberg


Thomas R. Shepherd


Joseph J. Incandela


Wendy L. Malser


Andrew D. Flaster


Robert Schiff Lee 1988 Irrevocable Trust


Stephen Zachary Lee


Charles W. Robins as Custodian for Jesse Lee


Charles W. Robins as Custodian for Nathan Lee


Charles W. Robins


James Westra


Thomas H. Lee Charitable Investment L.P.


THL-CCI Investors Limited Partnership


Putnam Investments, Inc.


 


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