Restricted Unit Agreement

Exhibit 10.2


RESTRICTED UNIT AGREEMENT


This Restricted Unit Agreement, dated as of the Grant Date set forth on the signature page hereto (the "Grant Date"), between FairPoint Communications, Inc., a Delaware corporation (the "Company"), and the director whose name appears on the signature page hereto (the "Director"), is being entered into pursuant to the FairPoint Communications, Inc. 2005 Stock Incentive Plan (the "Plan"). Capitalized terms used herein without definition have the meaning given in the Plan.


1. Grant of Restricted Units. The Company hereby evidences and confirms its grant to the Director, effective as of the Grant Date, of the number of Restricted Units specified on the signature page hereto. All Restricted Units received by the Director under this Agreement are subject to the restrictions contained herein and are referred to as "Restricted Units." This Agreement is subordinate to, and the terms and conditions of the Restricted Units granted hereunder are subject to, the terms and conditions of the Plan, which are incorporated by reference herein. If there is any inconsistency between the terms hereof and the terms of the Plan, the terms of the Plan shall govern.


2. Transfer Restrictions and Vesting of Restricted Units.


(a) Restrictions on Transfer. Except for transfers to Permitted Transferees approved by the Committee and transfers by will or by the laws of descent and distribution, the Restricted Units granted hereby may not be sold, assigned, transferred, pledged, hypothecated or otherwise directly or indirectly encumbered or disposed of until settlement of the Restricted Units in accordance with Section 6.


(b) Restricted Period. Subject to the Director's remaining in office on each vesting date, and except as provided in Section 2(c)(i) hereof or Article IX of the Plan, the Period of Restriction shall lapse, and the Restricted Units shall become vested, in four equal installments on the first day of each of the first four calendar quarters following the Grant Date.


(c) Termination of Service. Notwithstanding anything contained in this Agreement to the contrary, (i) if the Director's service is terminated by reason of the Director's death or Disability during the Period of Restriction, the Restricted Units shall become fully vested and nonforfeitable, and (ii) if the Director's service is terminated for any reason other than death or Disability during the Period of Restriction, any Restricted Units held by the Director for which the Period of Restriction has not then expired shall be forfeited and canceled as of the date of such termination.


3. Adjustment in Capitalization. In the event of any Adjustment Event, all of the Director's Restricted Units shall be treated in accordance with the provisions of Section 3.3 of the Plan.


4. Dividend Equivalents. The Director shall have the right to receive Dividend Equivalents with respect to all Restricted Units granted hereunder (including additional Restricted Units credited in respect of Dividend Equivalents) until settlement of the Restricted Units in accordance with Section 6. Any cash Dividend Equivalents paid with respect to Restricted Units shall be credited to the Director's account and shall be deemed to have been invested in Shares on the record date established for the related dividend and, accordingly, a number of Restricted Units shall be credited to th ...