**Exhibit 10.18**

 

**CHANGE OFCONTROL AGREEMENT**

**OriginallyEntered Into on March 30, 2005**

**Amended andRestated November 29, 2007**

 

This Change of Control Agreement (this “Agreement”)which was originally entered into as of the 30th day of March,2005, and hereby amended and restated as of November 29, 2007, by andbetween HickoryTech Corporation, a Minnesota corporation (the “Company”), andLane C. Nordquist (the “Executive”).

 

**WITNESSETH:**

 

WHEREAS, the Executive will devote substantial skilland effort to the affairs of the Company, and the Board of Directors of theCompany desires to recognize the significant personal contribution that theExecutive will make to further the best interests of the Company; and

 

WHEREAS, it is desirable and in the best interests ofthe Company and its stockholders to continue to obtain the benefits of theExecutive’s services and attention to the affairs of the Company, and

 

WHEREAS, it is desirable and in the best interests ofthe Company and its stockholders to provide inducement for the Executive (1) toremain in the service of the Company in order to facilitate an orderlytransition in the event of a change in control of the Company and (2) toremain in the service of the Company in the event of any threatened oranticipated change in control of the Company; and

 

WHEREAS, it is desirable and in the best interests ofthe Company and its stockholders that the Executive be in a position to makejudgments and take actions with respect to a proposed change in control of theCompany without regard to the possibility that his or her employment may beterminated without compensation in the event of certain changes in control ofthe Company; and

 

WHEREAS, the Executive desires to be protected in theevent of certain changes in control of the Company; and

 

WHEREAS, for the reasons set forth above, the Companyand the Executive desire to enter into this Agreement.

 

NOW, THEREFORE, in consideration of the facts recitedabove and the mutual covenants and agreements contained herein, the Company andthe Executive agree as follows:

 

1.             Rightto Payment. If (A) the Executive’s employment with the Company or itsSuccessor is terminated within three (3) years following an Event (asdefined in Paragraph 2 below) for any reason other than a reason specified inParagraph 3(a) through (d) below, or (B) the Executivevoluntarily terminates his or her employment within a period of thirty (30)days following the first anniversary of an Event, then the Executive shall beentitled to receive the Benefits set out in Paragraph 4 below. If a subsequentEvent occurs, and if the Executive is an employee of the Company or itsSuccessor, without limiting any rights the Executive may have, Executive shallhave all rights provided by the first sentence of this Paragraph 1 relating tosuch subsequent event.

 

2.             Changeof Control Events.  An “Event” shallbe deemed to have occurred if:

 

(a)           Amajority of the directors of the Company shall be persons other than persons

 

(1)           forwhose election proxies shall have been solicited by the Board of Directors ofthe Company; or

 

(2)           whoare then serving as directors and who were initially appointed or elected bythe Board of Directors to fill vacancies on the Board of Directors caused bydeath or resignation (but not by removal), or to fill newly createddirectorships 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 voting stock of the Company or all or substantiallyall of the assets or stock of the Company is acquired or beneficially owned (asdefined in Rule 13d-3 under the Securities and Exchange Act of 1934, asamended, or any successor rule thereto), directly or indirectly, by anyPerson (other than by the Company, a subsidiary of the Company, an employeebenefit plan (or related trust) sponsored or maintained by the Company or oneor more of its subsidiaries, or by the Employee or a group of persons,including the Employee, acting in concert) or group of Persons, acting inconcert, whether by acquisition of assets, merger, consolidation, statutoryshare exchange (other than a merger, consolidation or statutory share exchangedescribed in clause (c)(i) or (ii), below), tender offer, exchange offer,or otherwise;

 

(c)           TheCompany is merged into or consolidated with another corporation (other than asubsidiary of the Company) or a statutory share exchange for the Company’soutstanding voting stock of any class is consummated unless (i) a majorityof the voting power of the voting stock of the surviving corporation is,immediately following the merger, consolidation or statutory share exchange, beneficiallyowned, directly or indirectly, by the Employee (or a group of Persons,including the Employee, acting in concert) or (ii) immediately followingthe merger, consolidation or statutory share exchange, more than 70% of thevoting power of the voting stock of the surviving corporation is beneficiallyowned, directly or indirectly, by the persons who beneficially owned votingstock of the Company immediately prior to such merger, consolidation orstatutory share exchange in substantially the same proportion as theirownership of the voting stock of the Company immediately prior to such merger,consolidation or statutory share exchange; or

 

(d)           Theshareholders of the Company approve the complete liquidation or dissolution ofthe Company.

 

3.             TerminationNot Entitling Executive to Benefits. The Executive shall not be entitled tothe Benefits set out in Paragraph 4 if his or her employment is terminatedduring the three (3) year period following an Event for any of thefollowing reasons:

 

(a)           Death.The Executive’s death.

 

(b)           Disability.The Executive’s disability. “Disability” shall mean the inability of theExecutive to perform the duties and responsibilities of his or her employmentby reasons of illness or other physical or mental impairment or condition, ifsuch inability continues for an uninterrupted period of ninety (90) calendardays or more. A period of inability shall be “uninterrupted” unless and untilthe Executive is no longer considered disabled by the Company’s Long TermDisability Insurer.

 

(1)           Thedetermination of whether the Executive is suffering from a “disability” asdefined herein shall be made. The determination of whether the Executive isdisabled shall be on the same basis as the Company provided Long-TermDisability benefit, which is a fully insured benefit provided by an independentthird party. If the Executive meets the disability criteria for long termdisability benefits under this Company provided benefit, the Executive willalso be considered disabled under this Agreement.

 

(2)           TheExecutive agrees to make himself or herself available for and to submit toexaminations by such physicians as may be requested by the Company or theCompany’s Long Term Disability Insurer. The Executive’s failure to submit toexaminations by such physicians as may be requested shall disqualify Executivefrom receiving Benefits under this Agreement.

 

(c)           VoluntaryTermination. Except as provided in paragraph 1(B), the Executive’svoluntary retirement or voluntary termination of employment. However, theExecutive’s retirement or termination of employment shall not be consideredvoluntary if, following the Event and subject to the provisions fornotification set forth below, one or more of the following has occurred withoutExecutive’s express written consent and results in a material negative changeto Executive:

 

(1)           Therehas been a failure to provide the Executive with substantially equivalentreporting responsibilities, titles, offices or positions, or Executive has beenremoved from, or has not been re-elected to, any of such positions, which hasthe effect of materially diminishing the Executive’s responsibility orauthority;

 

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(2)           Therehas been a failure to provide the Executive with: (a) the same basesalary, or (b) substantially equivalent (or greater) total salaryopportunity, or (c) employee benefits which are, in the aggregate,substantially equivalent to those provided to the Executive at the time of theEvent;

 

(3)           Therehas been a failure to provide the Executive with substantially equivalentoffice space or administrative support; or

 

(4)           Executivehas been required to perform his or her services in a location that is morethan fifty (50) miles from the Executive’s regularly assigned office locationat the time of the Event, or Executive is required to undertake substantiallymore 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 within 30days, then none of the occurrences specified in subparagraphs (1) through (4) abovemay be relied upon by Executive to characterize his/her retirement ortermination as not voluntary.

 

(d)           InvoluntaryTermination For Cause. The Executive’s involuntary termination “for cause.”“For cause” shall mean:

 

(1)           Apersistent failure by the Executive to perform the duties and responsibilitiesof his or her job, which failure is willful and deliberate on the Executive’spart and is not remedied within a reasonable period of time after the Executive’sreceipt of written notice from the Company or its Successor specifying the actor omission constituting such failure;

 

(2)           Acriminal act or acts undertaken by the Executive and intended to result insubstantial gain or personal enrichment of the Executive at the expense of theCompany or its Successor;

 

(3)           Unlawfulconduct or gross misconduct that is willful and deliberate on the Executive’spart and that, in either event, is materially injurious to the Company or its Successor;or

 

(4)           Theconviction of the Executive of a felony.

 

(e)           SubsequentOccurrences. If the Executive’s employment is terminated undercircumstances in which Executive would be entitled to Benefits as defined inParagraph 4, and thereafter there is an occurrence that would have justifiedthe termination of the Executive’s employment with no entitlement to Benefits(such as the Executive’s death, disability, voluntary termination, orinvoluntary termination for cause [all as defined above in this Paragraph]),that subsequent occurrence shall not disqualify the Executive (or the Executive’slegal representative) from receiving or continuing to receive the Benefitsprovided under this Agreement. If the Executive’s employment is terminatedunder circumstances in which the Executive would be entitled to Benefits asdefined in Paragraph 4, and thereafter the executive is re-employed by theCompany, the Executive would be entitled to continue to receive paymentsprovided under this Agreement.

 

4.             Benefits.  If the Executive’s employment is terminatedunder circumstances entitling the Executive to Benefits, the Executive shallreceive the following:

 

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(a)           LumpSum Payment. The Executive shall be entitled to a lump sum cash payment inthe amount of One Month’s Salary times 24. One Month’s Salary shall be determined by taking the Executive’s highestannual compensation for a calendar year (including base salary, the HickoryTechExecutive Incentive Plan Annual and Long Term Performance Award bonuses paid inthat calendar year, Annual Supplemental Retirement Plan contributions, stockgrants under the Long Term Executive Incentive Program and any other incentivepayments with the exception of stock options) during the five-year period priorto the Executive’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)           thebonus percentage for which the Executive is eligible, calculated at the targetpayout as indicated in the Hickory Tech Executive Incentive Plan, divided bytwelve (12); or

 

(2)           theactual bonus payment received, or calculated at the close of the fiscal yearbut not yet received due to timing of the payout as indicated in theHickoryTech Executive Incentive Plan, divided by twelve (12).

 

This lump sum paymentshall be made by the Company or its Successor on the first regular business dayfollowing the six (6) month anniversary of the Executive’s termination ofemployment, and shall be subject to withholding of all taxes and other amountsrequired by law to be withheld or paid to others.

 

(b)           Inthe event it shall be determined that any payment or distribution by theCompany or other amount with respect to the Company to or for the benefit ofthe Executive, whether paid or payable or distributed or distributable pursuantto the terms of this Agreement or otherwise, (a “Payment”) is (or will be)subject to the excise tax imposed by Section 280G of the Internal RevenueCode or any interest or penalties are (or will be) incurred by the Executivewith respect to the excise tax imposed by Section 280G of the InternalRevenue Code with respect to the Company (the excise tax, together with anyinterest and penalties, are hereinafter collectively referred to as the “ExciseTax”), the Executive shall be entitled to receive an additional cash payment (a“Gross-Up Payment”) from the Company in an amount equal to the sum of theExcise Tax and an amount sufficient to pay the cumulative Excise Tax and allcumulative income taxes (including any interest and penalties imposed withrespect to such taxes) relating to the Gross-Up Payment so that the net amountretained by the Executive is equal to all payments received pursuant to theterms of this Agreement or otherwise (prior to income taxes with respect tosuch payments).

 

(c)           Alldeterminations required to be made to determine whether and when a Gross-UpPayment is required and the amount of such Gross-Up Payment and the assumptionsto be utilized in arriving at the determination shall be made by a nationallyrecognized certified public accounting firm designated by the Executive (the “AccountingFirm”), which shall provide detailed supporting calculations both to theCompany and the Executive within 30 days after the receipt of notice from theExecutive that there has been a Payment, or such earlier time as is requestedby the Company. In the event that at any time relevant to this Agreement the AccountingFirm is serving as accountant or auditor for the individual, entity or group orPerson effecting the Change in Control, the executive shall appoint anothernationally recognized certified public accounting firm to make thedeterminations required hereunder (which accounting firm shall then be referredto as the “Accounting Firm” hereunder). All fees and expenses of the Accounting Firm shall be borne solely bythe Company.  Any Gross-Up Payment, asdetermined in accordance with this Section (and reimbursement for fees andexpenses of the Accounting Firm having been paid by the Executive, if any),shall be paid by the Company to the Executive within five days after thereceipt of the Accounting Firm’s determination. If the Accounting Firmdetermines that no Excise Tax is payable by the Executive, it shall so indicateto the Executive in writing. Any determination by the Accounting Firm shall bebinding upon the Company and the Executive.

 

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(d)           ContinuedInsurance Coverage. The Executive shall be entitled to continuation of his orher Company-provided insurance coverage (health, life, dental, accidental deathand dismemberment, and any other applicable insured health and welfare benefitprograms, excluding short and long-term disability) for two years after theExecutive’s employment termination, at the same levels and coverage and on thesame terms and conditions as if the Executive were still an active employee ofthe Company or its Successor throughout such period, including the right (ifprovided to active employees) to elect spousal or family coverage. In the eventthat the participation of the Executive in any such insurance plan or programis barred, 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.

 

(e)           Continuationof any other benefits or perquisites being received by the Executive at thetime of the Executive’s employment termination will be negotiated with theCompany or its Successor.

 

5.             BenefitsOffset By Other Severance Payments. The lump sum payment provided insubparagraph 4(a) shall be in addition to any salary or other remunerationotherwise payable to the Executive on account of the Executive’s employment bythe Company or its Successor. This payment shall be in lieu of any severancepayments under any other agreement resulting from his or her termination ofemployment with the Company or its Successor.

 

6.             NoDuty to Mitigate. The Executive shall not be required to mitigate theamount of any payment or other benefit provided for in Paragraph 4 by seeking otheremployment or otherwise, nor (except as specifically provided in subparagraph 4(d) above)shall the amount of any payment or other benefit provided for in Paragraph 4 bereduced by any compensation earned by the Executive as the result of employmentafter the Executive’s employment termination.

 

7.             Definitionof Certain Terms.

 

(a)           Successor.“Successor” means any Person that succeeds to the business of the Companythrough merger, consolidation, or acquisition, including any Person acquiringall or substantially all of the assets or stock of the Company.

 

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

 

8.             Successorsand Assigns.

 

(a)           ThisAgreement shall be binding upon and inure to the benefit of the legalrepresentatives, successors, and assigns of the parties hereto; provided,however, that the Executive shall not have any right to assign, pledge, orotherwise dispose of or transfer any interest in this Agreement or any paymentshereunder, whether directly or indirectly or in whole or in part, without thewritten consent of the Company or its Successor.

 

(b)           TheCompany will require any Successor, by agreement in form and substancesatisfactory to the Executive, to assume expressly and agree to perform thisAgreement in the same manner and to the same extent that the Company would berequired to perform it if no such succession had taken place.

 

9.             Attorneys’Fees, Costs and Interest. If the Executive (or the Executive’s legalrepresentative) successfully challenges, in whole or in part, the refusal ofthe 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)           Alllegal fees, costs, disbursements, and expenses incurred as a result of therefusal to provide Benefits or to abide by the other provisions of theAgreement; and

 

(b)           Intereston any funds (or on the fair market value of any benefits) that were wrongfullywithheld by the Company or its Successor, calculated by reference to the primerate as in effect during the applicable period.

 

10.           GoverningLaw. This Agreement shall be construed in accordance with the laws of theState of Minnesota, without giving effect to principles of conflicts of laws.

 

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11.           Notices.All notices, requests, and demands given to or made pursuant hereto shall be inwriting and be either hand-delivered or mailed to any such party at its addresswhich:

 

(a)           Inthe case of the Company shall be:

 

HickoryTech Corporation

221 East Hickory Street

P.O. Box 3248

Mankato, MN  56002-3248

 

(b)           Inthe case of the Executive shall be:

 

Lane C. Nordquist

165 Fairway Drive

Mankato, MN 56001

 

Either party may, bynotice hereunder, designate a changed address. Any notice, if properly addressed and sent prepaid by registered orcertified mail shall be deemed dispatched on the registered date or that stampedon the certified mail receipt, and shall be deemed received within the secondbusiness day thereafter or when it is actually received, whichever is sooner.Any notice sent regular mail or hand-delivered shall be deemed received when itis actually received by the other party.

 

12.           Severability.In the event that any portion of this Agreement may be held to be invalid orunenforceable for any reason, such invalidity or unenforceability shall notaffect the other portions of this Agreement, and any court of competentjurisdiction may so modify the objectionable provision as to make it valid,reasonable, and enforceable.

 

13.           IncentiveCompensation Plan and Stock Options. In the case of a payment being due asdescribed in Paragraph 1, the Executive’s benefits under the Annual Award andLong Term Performance Award of the HickoryTech Corporation Executive IncentivePlan shall become immediately payable and any outstanding stock options andunvested restricted shares shall be immediately vested. Any Restricted Stock orPerformance Stock Awards under the Long Term Executive Incentive Program whichare payable due to achievement of Performance Objectives through the year inwhich the payment under this Agreement becomes due will be paid and fullyvested immediately upon the audited close of the fiscal year financials, but inno case later than March 15 of the year following when the payment becomesdue under this Agreement. The Long Term Executive Incentive Program Awards thatare not earned based on results at the close of the fiscal year in which thepayment under this Agreement becomes due will not be payable. Awards issued tothe Executive shall immediately have all restrictions removed.

 

14.           Amendmentor Termination of this Agreement.

 

(a)           Priorto the Occurrence of an Event. Prior to the occurrence of an Event, theCompany, by resolution of the Compensation Committee of the Board of Directors,has the unilateral power to amend or terminate this Agreement at any time andfor any reason, and may do so without the Executive’s consent. Notwithstandingthe foregoing, however:

 

(1)           Nosuch amendment or termination of this Agreement shall be effective with respectto the Executive until two weeks following the date that Executive is providedwith written notice of the change.

 

(2)           Nosuch amendment or termination of this Agreement shall be effective with respectto the Executive, unless otherwise agreed by the Executive, if an Event occursduring the one-year period following the date of adoption of the resolutionamending or terminating this Agreement.

 

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(b)           Afterthe Occurrence of an Event. After the occurrence of an Event, the Company,by resolution of the Compensation Committee of the Board of Directors, mayamend or terminate this Agreement, but no such amendment or termination of thisAgreement 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.

 

IN WITNESS WHEREOF, the parties hereto have executedthis Agreement as of the date set out above.

 
| EXECUTIVE                    |   | HICKORYTECH CORPORATION |
|------------------------------|--------|-------------------------|
|                         |   |                    |   |
|  /s/ Lane C.  Nordquist |   | By:                     |  /s/ John W.  Finke |
| Lane C. Nordquist            |   |                    |   |
|                         |   |                    |   |
|                         |   | Its:                    | President and Chief Executive Officer |

 

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