Exhibit 10.1

 

SEVERANCE, NON-DISCLOSURE AND RELEASE AGREEMENT

 

PARTIES

 

The parties to this Agreement (“Agreement”) are SureWest Communications, and its
affiliates and all of its subsidiaries (collectively referred to as “Company”),
and Bill DeMuth (referred to as “I,” “me,” or “Employee”).

 

BASIS

 

Employee has been employed by the Company since May 10, 1976 and Employee was
Senior Vice President and Chief Technology Officer at the time of this
Agreement.  I have agreed to voluntarily terminate my employment with the
Company.  I understand that the purpose and intent of this Agreement is to
ensure confidentiality of information to which I have had access in the course
of my employment with the Company, and also to fully and finally settle and
resolve any and all Claims, as defined herein, known or unknown, that I may have
against Company arising out of or related to my employment with Company,
including the resignation of my employment.

 

TERMS OF AGREEMENT

 

1.                                       Termination of Employment.  The parties
have agreed that Employee will voluntarily terminate his employment with the
Company effective June 30, 2010 (“Exit Date”).  Employee agrees not to seek
re-employment with Company or any of its subsidiaries or affiliates.  Employee
agrees that any application for reinstatement or for future employment with
Complaint will be considered void from its inception, and may be summarily
rejected without explanation or liability.

 

2.                                       Severance.

 

(a)                                Company shall pay to Employee a lump-sum
severance payment of one hundred fifty-six thousand five hundred thirty-eight
dollars ($156,538) (“Severance”) in consideration for Employee’s execution of a
full release of the Company for all matters and conditions regarding his
employment and this termination, and certain restrictive covenants. The
Severance shall be subject to withholding, deductions, assessments and taxes and
shall be paid within 7 days after the execution of this document and the seven
day revocation has elapsed.

 

(b)                               Any unvested restricted shares or restricted
share grants or awards pursuant to any restricted stock award agreement entered
into prior to June 30, 2010 shall become fully vested as of the date this
executed agreement becomes irrevocable. Company agrees to execute any all
documents and or release any conditions or legends on any certificates necessary
to effectuate the intent of this section.

 

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(c)                                If, within two years of the date this
executed agreement becomes irrevocable, (i) the company enters into a definitive
agreement that would result in a change of control of the Company as defined in
paragraph 1(c) of the change of control agreement entered into between employee
and Company, and (ii) a change of control actually occurs pursuant to such
definitive agreement or pursuant to a change of control related to or arising
out of such definitive agreement (as for example a topping agreement), or
(iii) a change of control of the Company without a definitive agreement actually
occurs within such two year period (as for example a tender offer), then
employee shall be entitled to a benefit as follows:

 

If an event described in (i) occurs within twelve months of June 30, 2010, and
if the event described in (ii) occurs, then employee shall be entitled to a
payment of (1) two times employees base salary as of June 30, 2010, plus (2) two
times his 2010 annual target incentive award, such payment to made within 30
days of the date described in (ii).

 

If an event described in (i) occurs after June 30, 2011 but before June 30,
2012, and if the event described in (ii) occurs, then employee shall be entitled
to a payment of (1) two times employees base salary as of June 30, 2010 plus
(2) two times the employees 2010 target incentive award, multiplied by a
fraction, the numerator of which is the number of days remaining between the
date described in (i) and June 30, 2012, and the denominator of which is 365,
such payment to be made within 30 days of the date described in (ii).

 

If an event described in (iii) occurs within twelve months of June 30, 2010,
then employee shall be entitled to a payment of (1) two times his base salary as
of June 30, 2010, plus (2) two times his 2010 annual target incentive award,
such payment to be made within 30 days of the actual change of control.

 

If an event described in (iii) occurs after June 30, 2011 but before June 30,
2012, then employee shall be entitled to a payment of (1) two times his annual
base salary as of June 30, 2010, plus (2) two times his 2010 annual target
incentive award, multiplied by a fraction, the numerator of which is the number
of days remaining between the date described in (iii) and June 30, 2012, and the
denominator of which is 365.

 

3.                                       Confidential Information and
Non-Disclosure.  Employee shall preserve as confidential all Confidential
Information (as defined below) in accordance with this Agreement.  Employee
shall not directly or indirectly use Confidential Information for the benefit of
Employee or any third party or disclose it to others.  If Employee is required
to disclose Confidential Information pursuant to a subpoena or as part of the
discovery process authorized by a court or governmental entity, then Employee
shall first give notice to Company so that it will have a reasonable opportunity
to protect its rights in

 

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such Confidential Information.  “Confidential Information” means: (i) any
personal identifying information of other employees or customers, (ii) any
strategy, plan, procedure, design or list relating to the present or planned
business of Company or products or services of Company which has not been
released publicly by authorized representatives of Company or which is not
common to industry practice including trade secrets as defined by Cal. Civ. Code
3426 et seq. or at common law, (iii) any strategies, including their strengths
and weaknesses, that the Company may use in dealing with employees, governmental
entities, courts, competitors, customers and regulatory matters; (iv) any
information that if disclosed, could negatively affect the Company’s reputation
and its relationship with its employees, governmental entities, and customers,
(v) any information received by Company under an obligation of confidentiality
to a third party, (vi) all non public information regarding the Company that
Employee obtained during the course of his employment by the Company, and
(vii) all communications with the Company’s counsel that are protected by the
attorney-client privilege or the attorney work product doctrine.

 

4.                                       Return of Company Property and
Confidential Material.  I agree to promptly return to the Company all files,
memoranda, documents, and records of any nature, including any Confidential
Information or information pertaining to my employment, all copies of the
foregoing, credit cards, keys, and any other property of the Company, its
subsidiaries or its affiliates in my possession.  I will not retain or take with
me any tangible materials or electronically stored data containing or pertaining
to any Confidential Information that I produced, acquired or obtained access to
during the course of my employment.  Before signing this Agreement, I have not
made unauthorized disclosures to any third party relating to Company, have not
disclosed any Confidential Information and have not provided originals or copies
of documents belonging to the Company to any third party, except my attorney.
Notwithstanding the foregoing, I can retain copies of documents that relate
specifically to my employment with Company that the law entitles me to possess,
such as materials relating to my participation in the Company’s benefit plans.

 

5.                                       Non-Disparagement.  Employee agrees to
refrain from any publication, oral or written, of a defamatory, disparaging or
otherwise derogatory manner pertaining to the Released Parties or to Employee’s
employment relationship with or resignation from Company.

 

6.                                       Release.  Employee hereby waives and
releases Company and its officers, directors, agents, attorneys, and employees
(collectively referred to as “Released Parties”) from any claims, rights,
contracts or causes of action which have arisen on or before the date this
Agreement is executed by Employee (collectively referred to as “Claims”) which
arise out of or are related to Employee’s employment with Company, or Employee’s
resignation from employment, or Employee’s separation from service (hereafter
referred to as “Release”).  This Release includes, but is not limited to, the
following:

 

(a)                                  Claims which are known or unknown at the
time of the signing of this Agreement;

 

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(b)                                 Claims which are based upon or arise under
any state or federal laws, including, but not limited to: 42 U.S.C. §2000e et
seq. (Civil Rights Act); 29 U.S.C. §621 et seq. (Age Discrimination in
Employment Act); the Older Workers Benefit Protection Act (OWBPA); 29 U.S.C.
§1001 et seq. (Employee Retirement Income Security Act); 29 U.S.C. §2101 et seq.
(Worker Adjustment and Retraining Notification Act); 29 U.S.C. §2601 et seq.
(Family Medical Leave Act); 42 U.S.C. §12101 et seq. (Americans with
Disabilities Act); and Cal. Govt. Code § 12940, and Cal. Labor Code §§ 1025 and
1101 et seq. (employment discrimination and unlawful employment practices); and

 

(c)                                  Claims based upon any tort or contract,
including, but not limited to, any employment agreement.

 

(d)                                 This general release is intended to apply to
all claims, known or unknown, disclosed or undisclosed.  Therefore, Employee
expressly waives any and all rights under Civil Code section 1542 which states
as follows:  “A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement with
the debtor.”

 

This Release does not release or waive any Claims which may arise after the date
this Agreement is executed by Employee.  This Release also does not release or
waive any rights or claims which controlling law clearly states may not be
released or waived by settlement.  I understand that I am releasing claims I may
not know about and I understand that I am releasing and waiving such claims.  I
represent that I do not currently have pending any complaints or charges filed
against Released Parties with any agency or court.  I promise never to seek any
damages, remedies, or other relief for myself personally with respect to any
Claim released by this Release, and I am hereby releasing and forever waiving
any private right to sue that may be issued by any state or federal agency
related to events that have occurred as of the effective date of this Agreement.
I understand that this Agreement does not prohibit me from filing a Charge of
Discrimination with the U.S. Equal Employment Opportunity Commission (“EEOC”) or
limit my right to testify, assist, or participate in an investigation, hearing
or other proceeding conducted by the EEOC.

 

7.                                       Employee further expressly acknowledges
and agrees that:

 

(a)                                  Employee has carefully read and fully
understands all of the provisions of this Agreement.

 

(b)                                 Employee is knowingly and voluntarily
agreeing to all of the terms set forth in this Agreement, and knowingly and
voluntarily intends to be legally bound by the same.

 

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(c)                                  Employee agrees there is sufficient
consideration for the waiver and Release.

 

(d)                                 Employee has been advised in writing to
consider the terms of this Agreement and to consult with an attorney of his
choice before signing this Agreement and has had sufficient time and opportunity
to do so.

 

(e)                                  Employee understands that rights or claims
under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621 et seq.)
that may arise after the date of this Agreement is executed are not waived.

 

(f)                                  Because RELEASOR is part of a class of
employees being offered participation in Company’s severance program, the Older
Workers Benefit Protection Act requires Company to disclose to each participant
the job titles and ages of all individuals covered by the program.  This
information is set forth in Appendix A, attached hereto.  No persons in the
classifications covered by the program are ineligible to participate.

 

(g)                                 Employee acknowledges receiving this
Agreement and was informed that Employee has 45 days following receipt to
consider whether to sign this Agreement.  By signing on any date prior to the
expiration of the 45 day period, Employee voluntarily elects to forego waiting
45 full days to sign the Agreement and release.  If Employee fails to execute
this Agreement during the 45 day period, then the Agreement is automatically
withdrawn without further action or notice by Company.

 

(h)                                 Employee was informed and understands that
Employee has 7 days following the date Employee executes this Agreement within
which to revoke it (“Revocation”), and that this Agreement shall not become
effective or enforceable until such revocation period has lapsed.  At the end of
the 7 day revocation period, this Agreement will become irrevocable.  Any
Revocation must be in writing and delivered to Karlyn Oberg, Vice President,
Human Resources, at the following address:

 

SureWest Communications

8150 Industrial Avenue

Building A

Roseville, CA 95678

ATTN:  Karlyn Oberg

Vice President, Human Resources

k.oberg@surewest.com

 

8.                                       Modification of Employee Benefit
Plans.  Various Company sponsored employee health and welfare benefit plans,
including all medical and health care plans, allow Company to modify or
eliminate coverage and other benefits and I understand that this Agreement does
not restrict Company’s right to modify or eliminate the coverage or any other
benefits under any employee benefit plan.

 

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9.                                       Dispute Resolution:  Except as provided
in Section 10(e) below, any dispute between the parties which is covered by,
arises out of or is based upon this Agreement shall be settled by final and
binding arbitration.  Any award or determination rendered by the arbitrator may
be entered as a judgment in California state court having jurisdiction thereof. 
The arbitration is subject to the following:

 

 

(a)                                  The arbitration shall be administered by
the American Arbitration Association (“AAA”) in accordance with its Employment
Dispute Resolution Rules (“Rules”) in effect at the time of the arbitration.

 

(b)                                 The arbitration shall be heard by one
neutral arbitrator.  The arbitrator shall be an attorney admitted to the
practice of law in the State of California.

 

(c)                                  The arbitrator shall have the authority to
award any remedy or relief that a state or federal court having jurisdiction
over the persons and subject matter is authorized to grant including attorney
fees and costs.

 

(d)                                 The Company shall pay all of the costs
and/or fees charged by AAA and the arbitrator.

 

(e)                                  Enforcement.  Employee acknowledges and
agrees that the restrictive covenants contained in this Agreement are reasonable
and necessary to protect the business and interests of the Company, do not
create any undue hardship for him, and that any violation of these restrictions
would cause Company substantial irreparable injury.  Accordingly, Employee
agrees that a remedy at law for any breach of the restrictive covenants or other
obligations in this Agreement would be inadequate and that Company, in addition
to any other obligations in this Agreement, shall be entitled to obtain
preliminary and permanent injunctive relief to secure specific performance of
such covenants and to prevent a breach or contemplated or threatened breach of
this Agreement without the necessity of proving actual damage and without the
necessity of posting bond or security, which Employee expressly waives. 
Employee will provide Company a full accounting of all proceeds and profits
received by him as a result of or in connection with a breach of this
Agreement.  In any legal proceeding commenced under this Paragraph 10(e),
Employee agrees that Company shall be entitled to recover its reasonable
attorneys’ fees and costs if it prevails in any action to enforce this
Agreement.

 

10.                                 Entire Agreement.  This Agreement contains
all of the terms, promises, representations and understandings between or among
the Released Parties and me regarding my employment with Company and/or the
resignation and termination of that

 

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employment and all other matters covered under this Agreement.  This Agreement
supersedes any prior oral or written understandings, statements or agreements
between or among the Released Parties and me regarding the subject matter of
this Agreement.  If any provision of this Agreement is held by a court of
competent jurisdiction to be illegal, invalid, or unenforceable, the remaining
provisions shall continue to be fully effective as if such illegal, invalid or
unenforceable provision had never been included. This Agreement contains all of
the terms and conditions agreed upon by the parties.  The Company has made no
additional representations or promises upon which Employee relies in signing
this Agreement including any tax consequences.

 

11.                                 Jurisdiction.  This Agreement shall be
construed under the laws of the State of California except where Federal laws
are applicable.  Venue for any arbitration or action to enforce the arbitration
provisions of this Agreement shall be in the State of California.

 

12.                                 Amendment.  Any amendment to this Agreement
shall be in writing and signed by both parties.

 

13.                                 Successors and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.  Employee consents to any assignment by the
Company of this Agreement.

 

14.                                 Adequate Consideration:  The parties agree
that this Agreement and each provision herein is supported and contains valuable
and adequate consideration.

 

15.                                 Signatures.  The undersigned acknowledge
that they have the authority and capacity to sign and be bound by this
Agreement.

 

 

COMPANY

 

 

EMPLOYEE

 

 

 

 

 

 

/s/ STEVEN C. OLDHAM

June 22, 2010

 

/s/ BILL DEMUTH

June 22, 2010

President and CEO

Date

 

Employee Signature

Date

 

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