Document:

Exhibit
10.19

 

AGREEMENT

 

(NOT TO BE SIGNED BEFORE LAST DAY OF EMPLOYMENT)

 

 

                In consideration
of the execution of this Agreement (the “Agreement”), and for other good and
valuable consideration, FairPoint Communications, Inc. (“Company”) and John P.
Duda (“I”) agree to the following terms and conditions as of the 1st
day of October 2004.

 

I understand that September 30, 2004 will be my last
day of employment with the Company, inasmuch as my position as President -
Public Policy and Industry Relations has been eliminated.

 

1.                                       Separation Agreement Benefits. 
The Company agrees that in exchange for the execution of this Agreement
I will receive, after my execution of this Agreement and after expiration of
the revocation period described in Section 14 below, the benefits described
below:

 

(a)                                  Following my execution of this Agreement,
I will receive a separation payment equivalent to fifty-two (52) weeks’ base
salary, less taxes and any standard deductions.  Following the Company’s receipt of this Agreement as fully
executed and expiration of the seven (7) day revocation period set forth in
Section 14 below, this separation payment will be made in bi-weekly
installments on October 15 and 29, 2004, November 12 and 26, 2004 and December
3, 17 and 31, 2004 and thereafter, with respect to all remaining amounts, on
January 14, 2005.

 

(b)                                 The Company will continue to subsidize my
health insurance, short term disability, long term disability and life
insurance coverage consistent with the coverage which I maintained as an active
employee, through September 30, 2005. 
The employee portion of the premium for such coverage for this period
shall be remitted to the Company on the first day of each month.  Failure to pay such amount shall result in
termination of this benefit.  In
addition, during the twelve month period following the last day of my
employment, I understand that I shall be entitled to payment of supplemental
long term disability and term life insurance premiums in an amount not to
exceed $6,000 during such twelve month period.

 

(c)                                  I will also receive any year-end
discretionary bonus, if awarded for 2004, on a prorated basis from January 1,
2004 through September 30, 2004, which I would have received had I remained an
active employee of the Company through December 31, 2004, less taxes and any
standard deductions.

 

 

(d)                                 I will also receive a lump sum payment
equivalent to any discretionary 401(k) corporate performance award, if awarded
for 2004, on a prorated basis from January 1, 2004 through September 30, 2004,
which would have been contributed to my 401(k) account had I remained an active
employee of the Company through December 31, 2004, less taxes and any standard
deductions.

 

(e)                                  I acknowledge that all of my other
employee benefits will terminate on September 30, 2004, the last day of my
employment.  I understand that I will
also receive payment for nineteen (19) days of accrued, but unused, vacation.

 

(f)                                    I understand that after September 30,
2005, I may elect to continue my health insurance coverage, at my sole expense,
pursuant to the Consolidated Omnibus Reconciliation Act (“COBRA”).  I agree to remit any amounts owed by me
pursuant to this subsection to the Company on the first day of each month, as
earlier provided.  The Company will
provide me with notice of my COBRA rights.

 

(g)                        I understand
that payments under this Agreement will not be considered compensation for
purposes of calculating the benefits to which I am entitled under any employee
benefit program.

 

                2.             FairPoint
Communications, Inc. Stock Options.

 

                                (a)           I
currently have 95,060 fully vested options under the Company’s 1995 Stock
Option Plan.  Notwithstanding anything
to the contrary in Paragraph 1(d) (ii) of my 1995 Incentive Stock Option
Agreement, the Company hereby agrees to extend my right to exercise all of
these 1995 options until May 21, 2008, subject to all other terms and
conditions and other Option exercise trigger events set forth in the 1995
Option Plan and my 1995 Incentive Stock Option Agreement.

 

                                (b)           The
stock options to purchase 410,000 shares of the Company’s Class A Common Stock,
which are fully vested, issued pursuant to the 1998 MJD Communications, Inc.
Stock Incentive Plan, shall remain in effect as provided in my Non-Qualified
Stock Option Agreement dated May 21, 1998 (inasmuch as the cessation of my
employment is a Special Termination [as defined in Paragraph 4(a) of my 1998
Non-Qualified Stock Option Agreement], being an involuntary termination by the
Company without cause) and shall become exercisable if at all and only to the
extent specified therein.

 

                                (c)           I
understand that the 285,640 stock options granted to me pursuant to the 2000
Employee Stock Option Plan which have vested prior to my last day of employment
shall terminate unless exercised by me prior to sixty days following my last
day of employment.  All unvested options
shall terminate on my last day of employment.

 

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                                (d)           I
further understand and agree that with respect to any one or more public offerings
by the Company of its equity securities (including Income Deposit Securities)
prior to May 21, 2008, I will be offered the same rights, and be subject to the
same obligations (including pro rata subordination of my interest in the
Company) in connection with any such public offering, as the Company’s
executive officers then in office, and I will execute underwriter lock-up
agreements, subordination agreements and any other agreements requested to be
executed by such executive officers.  In
addition, I acknowledge and agree that I may be required to accept securities
which have not been registered under the Securities Act of 1933 if I elect to
exchange my stock options or other equity securities of the Company for new
securities to be issued by the Company in connection with any such public
offering.

 

                3.             Adequacy of Consideration.  I understand that the payment of the
benefits described in Section 1 and other consideration provided by the Company
under this Agreement are discretionary in nature, are not an admission of the
Company’s liability therefore, are not required of the Company in the absence
of this Agreement, and constitute sufficient consideration for this Agreement.

 

                4.             Released Claims.

 

                                (a)           As a material inducement to the
Company to provide the benefits described in Section 1 above, I irrevocably and
unconditionally forever release and discharge the Company, its parent
companies, predecessors, successors, affiliates, benefit plans, and assigns,
and their respective directors, officers, shareholders, trustees,
administrators, employees, representatives and agents (collectively, the
“Released Parties”), from any and all actual or potential claims, demands,
actions, causes of action or liabilities of any kind or nature, whether known
or unknown, that arise on or before the day when I sign this Agreement,
including but not limited to all claims related to or arising out of my
employment with and separation from the Company, whether based on tort,
contract (express or implied) or any federal, state or local law, statute or
regulations, including but not limited to claims: (i) of age discrimination
under the Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C. §
621 et seq. and any analogous state and local laws; (ii) relating to employee benefits
under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et
seq. and any analogous state and local laws; (iii) relating to family or
medical leave under the Family and Medical Leave Act, 29 U.S.C. § 2611 et seq.
and any analogous state and local laws; (iv) of race, color, religion, sex, or
national origin discrimination under Title VII of the Civil Rights Act of 1964,
42 U.S.C. §2000e et seq. and any analogous state and local laws; (v) of
disability discrimination under the Americans with Disabilities Act, 42 U.S.C.
§ 12101 et seq. and any analogous state and local laws; (vi) relating to notice
of termination under the Worker Adjustment and Retraining Notification Act
(“WARN”) and any analogous state and local laws; (vii) arising under any state
or local human rights laws, civil rights laws or other laws prohibiting
discrimination in employment; (viii) arising out of any offer letters given to
me by any Released Party or employment agreements entered into between me and
any Released Party; (ix) arising under any policy, practice, handbook or plan
of any Released Party; and (x) on any other basis for wrongful discharge,
personal injury, compensatory or punitive damages or attorneys’ fees.

 

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                                (b)           This release does not apply to (i) my
rights to benefits under this Agreement; or (ii) my rights, if any, to
government provided unemployment benefits.

 

(c)           I acknowledge that I am releasing
claims I know I have and claims I may not know I have.

 

                5.             Pursuit of Released Claims.  I agree to withdraw with prejudice any and
all complaints or charges that I have filed against any Released Party with any
agency or court.  I agree that I will
not file any future complaints against any Released Party based on any of the
claims released pursuant to this Agreement. 
I agree that the parties released above in Section 4(a) may plead this
Agreement as a complete bar to any action or suit before any court or administrative
body with respect to any claim released herein.  However, the preceding two sentences shall not apply to ADEA
claims to the extent, if any, prohibited by applicable law, nor shall they
preclude me from filing a charge with any administrative agency, or
participating in a proceeding based on such a charge or on a claim released in
Section 3(a), provided that I do not seek any damages, remedies, or other
relief for myself personally, which I promise not to do, and any right to which
I hereby waive and release.

 

                6.             Confidentiality and Non-Disparagement.  I agree to keep the fact and terms of this
Agreement in strict confidence.  I agree
not to disclose this document, its contents, or subject matter to any person
other than my spouse (if applicable), attorney, accountant or income tax
preparer, or as otherwise required by law. 
To the extent I am permitted to disclose and do disclose such
information, I agree to require and warrant that the person receiving such
information will maintain its confidentiality. 
I agree that at no time will I disparage, defame, impugn or otherwise
damage or assail the reputation or integrity of the Company, any of its
affiliates or related parties, or publish any material relating to the Company,
any of its affiliates or related parties, either via audio or visual reproduction,
or in writing, on the Internet, the World Wide Web or any other public media.

 

                7.             Return of Company Property.

 

                                (a)           I represent and warrant that I have
returned all property and information belonging to the Company, including but
not limited to all files, documents, keys, credit cards, access cards, digital
cameras, optical scanners, Company-provided computer equipment, software and
hardware, cellular telephones, facsimile machines, pagers, vehicles, technical
information, customer information, pricing information, intellectual property,
confidential information, trade secrets, and any other property belonging to
the Company, any of its affiliates or related parties, whether in written,
tangible or electronic form, and whether on my home or portable computer or
other electronic media.  I further
represent and warrant that I have not kept any copies or made or retained any
notes or abstracts of such information. 
Notwithstanding the provisions of this subsection (a), I understand that
my computer, printer, monitor, laptop and port replicator, located both at home
and at the Company’s office, will be returned to me once they have been purged
of Company confidential and proprietary information.  Further, I understand that my Blackberry unit and cell phone unit
shall be similarly returned to me after service and liability therefor has been
transferred into my name.  The Company
hereby transfers title thereto,

 

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free and clear of any and all encumbrances, such title transfer to be
effective upon redelivery of such equipment to me.

 

                                (b)           I understand that all rights to work
product, discoveries, inventions, improvements, or innovations related to my
employment (whether or not patentable, copyrightable, registerable as a
trademark, or reduced to writing or an electronic format) that originated
during my employment with the Company, either alone or with others and whether
or not during working hours or by the use of the Company’s facilities, shall be
the exclusive property of the Company. 
I acknowledge that all such work product has been maintained and still
resides on the Company’s computer network and has been deleted from my home
and/or portable computer equipment.  I
agree to assign any and all rights to the Company relating to the above
whenever requested.

 

8.             Right of Offset. 
If I violate any obligation contained in this Agreement, the Company
shall have the right to offset against and deduct from any payments not yet
made to me pursuant to this Agreement, such amounts as the Company deems
reasonable to compensate it, in whole or in part, for damages caused by a
breach of this Agreement, in addition to all other rights and remedies
available to the Company in law or equity. 
I acknowledge and agree that in the event of such an offset or
deduction, the mutual covenants in this Agreement plus the payments already
made, if any, constitute sufficient consideration for this Agreement.

 

9.             Confidentiality.  I agree that I will not divulge confidential
company and customer information that I have learned through my
employment.  I acknowledged this policy
as written in the employee handbook.

 

10.           Taxes.  I am responsible for paying any taxes due on
benefits received under this Agreement and I agree that the Company is to
withhold all taxes it determines it is legally required to withhold.

 

                11.           Enforcement.  Either party shall have the right
specifically to enforce this Agreement, except for provisions which
subsequently may be held invalid or unenforceable, to obtain appropriate
injunctive relief, and to recover money damages for its breach, including
reasonable attorneys’ fees.

 

                12.           Acknowledgments.  I represent that I have carefully read and
fully understand all the provisions of this Agreement and that I am entering
into this Agreement voluntarily.  I was
advised by the Company to consult with my attorney regarding this
Agreement.  Further, I acknowledge that
the restrictive covenants set forth in Paragraph 9 of the 1995 Incentive Stock
Option Agreement continue in full force and effect for one year from my last
day of employment, until September 30, 2005. 
I understand that the Company has expressed its willingness to consider
a waiver of these restrictive covenants with respect to any particular
opportunity I may bring to it.

 

                13.           Entire Agreement.  This Agreement contains the entire agreement
between the parties and may be modified only in a writing executed in the same
manner as the original Agreement; and no agreements, representations, or
statements of any party not contained herein

 

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shall be binding on such party. 
If any provision of this Agreement is found to be unenforceable or
invalid by a court of competent jurisdiction, that provision shall be severed
and all other provisions shall remain in full force and effect.

 

14.           Consideration
Period.  I acknowledge that I was
given a period of at least twenty-one (21) days from my receipt of this
Agreement to consider its terms before executing it and that I was encouraged
to consult with my own counsel.  I
further understand that, after my execution of this Agreement, I shall have
seven (7) days to revoke my acceptance, and this Agreement shall not become
effective or enforceable (or any payments made hereunder) until the revocation
period has expired.  Revocation may be
accomplished only by delivery of a written, signed statement of revocation to
Shirley J. Linn, received before 5:00 p.m. on the seventh day after execution
hereof.  I understand that if this
Agreement is not revoked by me during the seven (7) day revocation period, it
shall be deemed accepted and irrevocable. 
FURTHER, I UNDERSTAND THAT THIS
AGREEMENT IS NOT VALID UNLESS I SIGN IT AND DELIVER IT, EITHER BY HAND ON OR
BEFORE OCTOBER 23, 2004  OR BY MAIL
POSTMARKED ON OR BEFORE OCTOBER 23, 2004 TO SHIRLEY J. LINN, FAIRPOINT
COMMUNICATIONS, INC., 521 E. MOREHEAD ST., STE. 250, CHARLOTTE, NC 28202.  This Agreement may be executed in
counterparts.

 

 

[The remainder of this page is intentionally left blank.]

 

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  READ
  THIS AGREEMENT CAREFULLY.  IT CONTAINS
  A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NOT VALID IF EXECUTED OR DATED
  PRIOR TO DATE OF TERMINATION.

  
	
   

  	
   

  	
   

  	
   

  
	
  INITIAL EACH PAGE OF THIS RELEASE.

  	
   

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 6, 2004

  	
   

  	
  /s/ John P. Duda

  
	
  Date

  	
   

  	
  Signature

  	
   

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  John P. Duda

  
	
   

  	
   

  	
  John P. Duda

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Social Security Number

  	
   

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FairPoint Communications, Inc.

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Walter E. Leach, Jr.

  
	
   

  	
   

  	
  Name:

  	
  Walter E. Leach, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial Officer

  
						

 

7Exhibit 10.23

 

 

[FairPoint Communications,
Inc. Letterhead]

 

 

October 25, 2004

 

 

 

Ms. Valeri Marks

241 Grant Avenue

Newton, Massachusetts 02459

 

 

Dear Valeri:

 

Congratulations on your appointment as President of
FairPoint Communications, Inc. (the “Company”).

 

As a member of the Company’s
senior management team, you are entitled to certain severance benefits should
your employment be terminated by the Company without cause, all as set forth on
Exhibit A attached hereto.

 

Sincerely,

 

/s/
Gene Johnson

 

Gene
Johnson

 

/bcs

Encl.

 

 

EXHIBIT A  —  VALERI MARKS OCTOBER 25, 2004 LETTER

Obligations
of the Company upon Termination.

 

(a)                                  For Cause or
Upon Employee’s Voluntary Resignation.  If FairPoint Communications, Inc. (the “Company”) shall terminate
Valeri Marks (the “Executive”) for Cause, or the Executive shall voluntarily
resign her employment, the Executive shall not be entitled to any benefits
pursuant to this letter agreement.

 

(b)                                 Without Cause.  In the event that the Executive’s employment
is terminated by the Company without Cause, the Executive shall be entitled to
receive in a lump sum payment from the Company an amount equal to one times the
Executive’s Annual Base Salary as of the date of termination plus all accrued
and unpaid base salary and benefits as of the date of termination.  In addition, the Company shall maintain the
Executive’s (and her family, as applicable) long term disability and medical
benefits for a period of twelve (12) months following the date of termination.

 

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.

 

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 her 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 Executive’s employment.  For
purposes of the Agreement, “without Cause” shall mean a termination by the
Company of the Executive’s employment for any reason other than a termination
based upon Cause, death or disability, as well as a voluntary resignation by
the Executive following (i) a

 

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material diminishment of her
duties, responsibilities and authority, (ii) a reduction in her base compensation
or bonus opportunity, or (iii) a relocation of the Company’s headquarters more
than thirty (30) miles from its current location.

 

Sincerely,

 

 /s/ Eugene Johnson

 

Eugene Johnson

Chief Executive Officer

 

Offer understood and
accepted by

 

	
  /s/ Valeri Marks

  	
  October 25, 2004

  	
   

  
	
  Signature

  	
  Date

  	
   

  

 

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