**Exhibit 10.20**

 

**CHANGE OF CONTROL AGREEMENT**

 

                This Change of Control Agreement(this “Agreement”) is entered into as of the 29th day of November,2007, by and between HickoryTech Corporation, a Minnesota corporation (the “Company”),and Damon D. Dutz (the “Executive”).

 

**WITNESSETH:**

 

                WHEREAS, the Executive willdevote substantial skill and effort to the affairs of the Company, and theBoard of Directors of the Company desires to recognize the significant personalcontribution that the Executive will make to further the best interests of theCompany; and

 

                WHEREAS, it is desirable and inthe best interests of the Company and its stockholders to continue to obtainthe benefits of the Executive’s services and attention to the affairs of theCompany, and

 

                WHEREAS, it is desirable and inthe best interests of the Company and its stockholders to provide inducementfor the Executive (1) to remain in the service of the Company in order tofacilitate an orderly transition in the event of a change in control of the Companyand (2) to remain in the service of the Company in the event of anythreatened or anticipated change in control of the Company; and

 

                WHEREAS, it is desirable and inthe best interests of the Company and its stockholders that the Executive be ina position to make judgments and take actions with respect to a proposed changein control of the Company without regard to the possibility that his or heremployment may be terminated without compensation in the event of certainchanges in control of the Company; and

 

                WHEREAS, the Executive desiresto be protected in the event of certain changes in control of the Company; and

 

                WHEREAS, for the reasons setforth above, the Company and the Executive desire to enter into this Agreement.

 

                NOW, THEREFORE, in considerationof the facts recited above and the mutual covenants and agreements containedherein, the Company and the Executive agree as follows:

 

1.                                       Right to Payment. If the Executive’s employment with theCompany or its Successor is terminated within three (3) years following anEvent (as defined in Paragraph 2 below) for any reason other than a reasonspecified in Paragraph 3(a) through (d) below, then the Executiveshall be entitled to receive the Benefits set out in Paragraph 4 below. If asubsequent Event occurs, and if the Executive is an employee of the Company orits Successor, without limiting any rights the Executive may have, Executiveshall have all rights provided by the first sentence of this Paragraph 1relating to such subsequent event.

 

2.                                       Change of Control Events. An “Event” shall be deemed to haveoccurred if:

 

(a)                                  A majority of the directors of theCompany shall be persons other than persons

 

(1)                                  for whose election proxies shall havebeen solicited by the Board of Directors of the Company; or

 

(2)                                  who are then serving as directors and whowere initially appointed or elected by the Board of Directors to fill vacancieson the Board of Directors caused by death or resignation (but not by removal),or to fill newly created directorships created by the Board of Directors;

 

provided, however, that aperson shall not be deemed to be a director subject to clause (1) or (2),above, if his or her initial assumption of office occurs as a result of anactual or threatened election contest with respect to the threatened electionor removal of directors (or other actual or threatened solicitation of proxiesor consents) by or on behalf of any person other than the Board of Directors ofthe Company; or

 

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(b)                                 30% or more of the outstanding votingstock of the Company or all or substantially all of the assets or stock of theCompany is acquired or beneficially owned (as defined in Rule 13d-3 underthe Securities and Exchange Act of 1934, as amended, or any successor rule thereto),directly or indirectly, by any Person (other than by the Company, a subsidiaryof the Company, an employee benefit plan (or related trust) sponsored ormaintained by the Company or one or more of its subsidiaries, or by theEmployee or a group of persons, including the Employee, acting in concert) orgroup of Persons, acting in concert, whether by acquisition of assets, merger,consolidation, statutory share exchange (other than a merger, consolidation orstatutory share exchange described in clause (c)(i) or (ii), below),tender offer, exchange offer, or otherwise;

 

(c)                                  The Company is merged into orconsolidated with another corporation (other than a subsidiary of the Company)or a statutory share exchange for the Company’s outstanding voting stock of anyclass is consummated unless (i) a majority of the voting power of thevoting stock of the surviving corporation is, immediately following the merger,consolidation or statutory share exchange, beneficially owned, directly orindirectly, by the Employee (or a group of Persons, including the Employee,acting in concert) or (ii) immediately following the merger, consolidationor statutory share exchange, more than 70% of the voting power of the votingstock of the surviving corporation is beneficially owned, directly orindirectly, by the persons who beneficially owned voting stock of the Companyimmediately prior to such merger, consolidation or statutory share exchange insubstantially the same proportion as their ownership of the voting stock of theCompany immediately prior to such merger, consolidation or statutory shareexchange; or

 

(d)                                 The shareholders of the Company approvethe complete liquidation or dissolution of the Company.

 

3.                                       Termination Not Entitling Executive toBenefits. The Executiveshall not be entitled to the Benefits set out in Paragraph 4 if his or heremployment is terminated during the three (3) year period following anEvent for any of the following reasons:

 

(a)                                  Death. The Executive’s death.

 

(b)                                 Disability. The Executive’s disability. “Disability” shall meanthe inability of the Executive to perform the duties and responsibilities ofhis or her employment by reasons of illness or other physical or mentalimpairment or condition, if such inability continues for an uninterruptedperiod of ninety (90) calendar days or more. A period of inability shall be “uninterrupted”unless and until the Executive is no longer considered disabled by the Company’sLong Term Disability Insurer.

 

(1)                                  The determination of whether the Executiveis suffering from a “disability” as defined herein shall be made. Thedetermination of whether the Executive is disabled shall be on the same basisas the Company provided Long-Term Disability benefit, which is a fully insuredbenefit provided by an independent third party. If the Executive meets thedisability criteria for long term disability benefits under this Companyprovided benefit, the Executive will also be considered disabled under thisAgreement.

 

(2)                                  The Executive agrees to make himself orherself available for and to submit to examinations by such physicians as maybe requested by the Company or the Company’s Long Term Disability Insurer. TheExecutive’s failure to submit to examinations by such physicians as may berequested shall disqualify Executive from receiving Benefits under thisAgreement.

 

(c)                                  Voluntary Termination. The Executive’s voluntary retirement orvoluntary termination of employment. However, the Executive’s retirement ortermination of employment shall not be considered voluntary if, following theEvent and subject to the provisions for notification set forth below, one ormore of the following has occurred without Executive’s express written consentand results in a material negative change to Executive:

 

(1)                                  There has been a failure to provide theExecutive with substantially equivalent reporting responsibilities, titles,offices or positions, or Executive has been removed from, or has not beenre-elected to, any of such positions, which has the effect of materially diminishingthe Executive’s responsibility or authority;

 

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(2)                                  There has been a failure to provide theExecutive with: (a) the same base salary, or (b) substantiallyequivalent (or greater) total salary opportunity, or (c) employee benefitswhich are, in the aggregate, substantially equivalent to those provided to theExecutive at the time of the Event;

 

(3)                                  There has been a failure to provide theExecutive with substantially equivalent office space or administrative support;or

 

(4)                                  Executive has been required to performhis or her services in a location that is more than fifty (50) miles from theExecutive’s regularly assigned office location at the time of the Event, orExecutive is required to undertake substantially more job-related traveling.

 

In the event of anoccurrence of the type enumerated in subparagraphs (1) through (4) above,Executive shall, within ten (10) days following Executive’s actualknowledge of such occurrence, notify the Company in writing of the specificoccurrence which Executive believes would render his/her retirement ortermination not voluntary and, following receipt of such notice, the Companyshall be afforded a period of thirty (30) days within which to remedy suchoccurrence.  In the event that Executivefails to provide such notice or to afford such opportunity to remedy theoccurrence, or in the event the Company does remedy the occurrence withinthirty days, then none of the occurrences specified in subparagraphs (1) through(4) above may be relied upon by Executive to characterize his/herretirement or termination as not voluntary.

 

(d)                                 Involuntary Termination For Cause. TheExecutive’s involuntary termination “for cause.” “For cause” shall mean:

 

(1)                                  A persistent failure by the Executive toperform the duties and responsibilities of his or her job, which failure iswillful and deliberate on the Executive’s part and is not remedied within areasonable period of time after the Executive’s receipt of written notice fromthe Company or its Successor specifying the act or omission constituting suchfailure;

 

(2)                                  A criminal act or acts undertaken by theExecutive and intended to result in substantial gain or personal enrichment ofthe Executive at the expense of the Company or its Successor;

 

(3)                                  Unlawful conduct or gross misconduct thatis willful and deliberate on the Executive’s part and that, in either event, ismaterially injurious to the Company or its Successor; or

 

(4)                                  The conviction of the Executive of afelony.

 

(e)                                  Subsequent Occurrences. If the Executive’s employment isterminated under circumstances in which Executive would be entitled to Benefitsas defined in Paragraph 4, and thereafter there is an occurrence that wouldhave justified the termination of the Executive’s employment with noentitlement to Benefits (such as the Executive’s death, disability, voluntarytermination, or involuntary termination for cause [all as defined above in thisParagraph]), that subsequent occurrence shall not disqualify the Executive (orthe Executive’s legal representative) from receiving or continuing to receivethe Benefits provided under this Agreement. If the Executive’s employment isterminated under circumstances in which the Executive would be entitled toBenefits as defined in Paragraph 4, and thereafter the executive is re-employedby the Company, the Executive would be entitled to continue to receive paymentsprovided under this Agreement.

 

4.                                       Benefits. If the Executive’s employment is terminated undercircumstances entitling the Executive to Benefits, the Executive shall receivethe following:

 

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(a)                                  Lump Sum Payment. The Executive shall be entitled to alump sum cash payment in the amount of One Month’s Salary times 24. One Month’sSalary shall be determined by taking the Executive’s highest annualcompensation for a calendar year (including base salary, the HickoryTechExecutive Incentive Plan bonuses paid in that calendar year, stock grants underthe Long Term Executive Incentive Program and any other incentive payments withthe exception of stock options) during the five-year period prior to theExecutive’s termination and dividing that amount by twelve (12).  For executives who have not yet been eligibleto receive a payment under the HickoryTech Executive Incentive Plan, or whohave only been eligible for one bonus payment under the HickoryTech ExecutiveIncentive Plan due to their time in the position or with the Company, One Month’sSalary will be determined by taking one month of current base salary and addingit to the greater of:

 

(1)                                  the bonus percentage for which theExecutive is eligible, calculated at the target payout as indicated in theHickory Tech Executive Incentive Plan, divided by twelve (12); or

 

(2)                                  the actual bonus payment received, orcalculated at the close of the fiscal year but not yet received due to timingof the payout as indicated in the HickoryTech Executive Incentive Plan, dividedby twelve (12).

 

This lump sum paymentshall be made by the Company or its Successor at the time of the Executive’stermination of employment, and shall be subject to withholding of all taxes andother amounts required by law to be withheld or paid to others.

 

(b)                                 Section 280G Parachute Tax. In the event it shall be determined thatany payment or distribution by the Company or other amount with respect to theCompany to or for the benefit of the Executive, whether paid or payable ordistributed or distributable pursuant to the terms of this Agreement orotherwise, (a “Payment”) is (or will be) subject to the excise tax imposed by Section 280Gof the Internal Revenue Code or any interest or penalties are (or will be)incurred by the Executive with respect to the excise tax imposed by Section 280Gof the Internal Revenue Code with respect to the Company (the excise tax,together with any interest and penalties, are hereinafter collectively referredto as the “Excise Tax”), and if a reduction in the Payment sufficient to avoidthe Excise Tax would result in an increase in the total amount of Payment netof all applicable taxes, then, and only then, the Payment shall be reduced tothe amount that, when combined with all other payments and transfers ofproperty required to be taken into account under Section 280G of theInternal Revenue Code, is $1 less than the smallest sum that would subject theExecutive to the Excise Tax.

 

(c)                                  Continued Insurance Coverage. The Executive shall be entitled tocontinuation of his or her Company-provided insurance coverage (health, life,dental, accidental death and dismemberment, and any other applicable insuredhealth and welfare benefit programs, excluding short and long-term disability)for two years after the Executive’s employment termination, at the same levelsand coverage and on the same terms and conditions as if the Executive werestill an active employee of the Company or its Successor throughout suchperiod, including the right (if provided to active employees) to elect spousalor family coverage.  In the event thatthe participation of the Executive in any such insurance plan or program isbarred, the Company or its Successor, at its sole cost and expense, shallarrange to provide the Executive with benefits substantially similar to thosewhich the Executive would otherwise be entitled to receive under such plans andprograms. Notwithstanding the foregoing, however, the Company or its Successorshall not be required to provide any continuation coverage under thissubparagraph 4(d) to the extent that such coverage is duplicative of anycoverage the Executive is receiving under any other policy provided at theexpense of the Company.

 

(d)                                 Continuation of any other benefits orperquisites being received by the Executive at the time of the Executive’semployment termination will be negotiated with the Company or its Successor.

 

5.                                       Benefits Offset By Other SeverancePayments. Thelump sum payment provided in subparagraph 4(a) shall be in addition to anysalary or other remuneration otherwise payable to the Executive on account ofthe Executive’s employment by the Company or its Successor. This payment shallbe in lieu of any severance payments under any other agreement resulting fromhis or her termination of employment with the Company or its Successor.

 

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6.                                       No Duty to Mitigate. The Executive shall not be required tomitigate the amount of any payment or other benefit provided for in Paragraph 4by seeking other employment or otherwise, nor (except as specifically providedin subparagraph 4(d) above) shall the amount of any payment or otherbenefit provided for in Paragraph 4 be reduced by any compensation earned bythe Executive as the result of employment after the Executive’s employmenttermination.

 

7.                                       Definition of Certain Terms.

 

(a)                                  Successor. “Successor” means any Person that succeeds to thebusiness of the Company through merger, consolidation, or acquisition,including any Person acquiring all or substantially all of the assets or stockof the Company.

 

(b)                                 Person. “Person” means an individual, partnership,corporation, estate, trust, or other entity.

 

8.                                       Successors and Assigns.

 

(a)                                  This Agreement shall be binding upon andinure to the benefit of the legal representatives, successors, and assigns ofthe parties hereto; provided, however, that the Executive shall not have anyright to assign, pledge, or otherwise dispose of or transfer any interest inthis Agreement or any payments hereunder, whether directly or indirectly or inwhole or in part, without the written consent of the Company or its Successor.

 

(b)                                 The Company will require any Successor,by agreement in form and substance satisfactory to the Executive, to assumeexpressly and agree to perform this Agreement in the same manner and to thesame extent that the Company would be required to perform it if no suchsuccession had taken place.

 

9.                                       Attorneys’ Fees, Costs and Interest. If the Executive (or the Executive’slegal representative) successfully challenges, in whole or in part, the refusalof the Company or its Successor to provide Benefits under this Agreement or toabide by any other provision of this Agreement, then the Company or itsSuccessor shall pay to the Executive (or the Executive’s legal representative):

 

(a)                                  All legal fees, costs, disbursements, andexpenses incurred as a result of the refusal to provide Benefits or to abide bythe other provisions of the Agreement; and

 

(b)                                 Interest on any funds (or on the fairmarket value of any benefits) that were wrongfully withheld by the Company orits Successor, calculated by reference to the prime rate as in effect duringthe applicable period.

 

10.                                 Governing Law. This Agreement shall be construed inaccordance with the laws of the State of Minnesota, without giving effect toprinciples of conflicts of laws.

 

11.                                 Notices. All notices, requests, and demands given to or madepursuant hereto shall be in writing and be either hand-delivered or mailed toany such party at its address which:

 

(a)                                  In the case of the Company shall be:

 

HickoryTech Corporation

221 East Hickory Street

P.O. Box 3248

Mankato, MN  56002-3248

 

(b)                                 In the case of the Executive shall be:

 

Damon D. Dutz

507 Riverhills Road

Mankato, MN 56001

 

Either party may, bynotice hereunder, designate a changed address. Any notice, if properlyaddressed and sent prepaid by registered or certified mail shall be deemeddispatched on the registered date or that stamped on the certified mailreceipt, and shall be deemed received within the second business day thereafteror when it is actually received, whichever is sooner. Any notice sent regularmail or hand-delivered shall be deemed received when it is actually received bythe other party.

 

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12.                                 Severability. In the event that any portion of thisAgreement may be held to be invalid or unenforceable for any reason, suchinvalidity or unenforceability shall not affect the other portions of thisAgreement, and any court of competent jurisdiction may so modify theobjectionable provision as to make it valid, reasonable, and enforceable.

 

13.                                 Incentive Compensation Plan and StockOptions. In thecase of a payment being due as described in Paragraph 1, the Executive’sbenefits under the Annual Award of the HickoryTech Corporation ExecutiveIncentive Plan shall become immediately payable and any outstanding stockoptions and unvested restricted shares shall be immediately vested. AnyRestricted Stock or Performance Stock Awards under the Long Term ExecutiveIncentive Program which are payable due to achievement of PerformanceObjectives through the year in which the payment under this Agreement becomesdue will be paid and fully vested immediately upon the audited close of thefiscal year financials, but in no case later than March 15 of the yearfollowing when the payment becomes due under this Agreement. The Long TermExecutive Incentive Program Awards that are not earned based on results at theclose of the fiscal year in which the payment under this Agreement becomes duewill not be payable. Awards issued to the Executive shall immediately have allrestrictions removed.

 

14.                                 Amendment or Termination of thisAgreement.

 

(a)                                  Prior to the Occurrence of an Event. Prior to the occurrence of an Event,the Company, by resolution of the Compensation Committee of the Board ofDirectors, has the unilateral power to amend or terminate this Agreement at anytime and for any reason, and may do so without the Executive’s consent.Notwithstanding the foregoing, however:

 

(1)                                  No such amendment or termination of thisAgreement shall be effective with respect to the Executive until two weeksfollowing the date that Executive is provided with written notice of thechange.

 

(2)                                  No such amendment or termination of thisAgreement shall be effective with respect to the Executive, unless otherwiseagreed by the Executive, if an Event occurs during the one-year periodfollowing the date of adoption of the resolution amending or terminating thisAgreement.

 

(b)                                 After the Occurrence of an Event. After the occurrence of an Event, theCompany, by resolution of the Compensation Committee of the Board of Directors,may amend or terminate this Agreement, but no such amendment or termination ofthis Agreement shall be effective unless the Executive consents thereto inwriting.  Any waiver by an Executive ofrights of any benefits due under this agreement for any reason (rehire orother) must be express and in writing.

 

INWITNESS WHEREOF, the parties hereto have executed this Agreement as of the dateset out above.

 

 
| EXECUTIVE         |   | HICKORYTECH CORPORATION |
|-------------------|--------|-------------------------|
|              |   |                    |   |
| /s/ Damon D. Dutz |   | By:                     |  /s/ John W.  Finke |
| Damon D. Dutz     |   |                    |   |
|              |   | Its:                    |  President and  Chief Executive Officer |

 

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