**Exhibit 10.2**

 

**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 Fred A. Arcuri (referred to as “I,” “me,” or “Employee”).

 

**BASIS**

 

Employee has been employed by the Company since October 20, 1975 and Employee is Senior Vice President and Chief Operating 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 (1) provide me with certain severance payments and payments that I would not be entitled to if I did not enter into this agreement, (2) to ensure confidentiality of information to which I have had access in the course of my employment with the Company, and (3) 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 April 15, 2011 (“Exit Date”).  Employee agrees not to seek re-employment with Company or any of its subsidiaries or affiliates.  Employee agrees that any application or request for reinstatement or for future employment with Company 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 two   hundred nineteen thousand two hundred thirty-one dollars ($219,231)   (“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 period set forth elsewhere in this Agreement has elapsed. |
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| (b)    | Any unvested, time-based restricted shares or restricted share   grants or awards pursuant to any restricted stock award agreement entered   into prior to April 15, 2011 shall become fully vested as of the date   this executed agreement becomes irrevocable. Any unvested, performance-                                                                                                                                                                                                                                                                                                                         |

 

 

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|   | based restricted shares or restricted share grants or awards   pursuant to any restricted stock award agreement entered into prior to   April 15, 2011 having a vesting date within 90 days of Exit Date, shall   become fully vested as of the scheduled vesting date if the metric set out   for the scheduled vesting date is met. Company agrees to execute any   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(d) 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 April 15, 2011, 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 April 15, 2011, plus (2) two times his 2011 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 April 15, 2012 but before April 15, 2013, 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 April 15, 2011 plus (2) two times the Employees 2011 target incentive award, multiplied by a fraction, the numerator of which is the number of days remaining between the date described in (i) and April 15, 2013, 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 April 15, 2011, then Employee shall be entitled to a payment of (1) two times his base salary as of April 15, 2011, plus (2) two times his 2011 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 April 15, 2012 but before April 15, 2013, then Employee shall be entitled to a payment of (1) two times his annual base salary as of April 15, 2011, plus (2) two times his 2011 annual target incentive award, multiplied by a

 

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fraction, the numerator of which is the number of days remaining between the date described in (iii) and April 15, 2013, 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 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.

 

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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 |
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| (c)    | Claims based upon any tort or contract, including, but not limited   to, any employment agreement, or any other agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| (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.”                                                                                                                                                                                                                                                            |
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| (e)    | This Release, and in particular the Release of Claims based on age   in paragraph (6)(b) above, means that I am releasing any Claim I might   have against Company on the basis of age discrimination, or that I have been   the victim of any employment decision relating to this Agreement on the basis   of age.                                                                                                                                                                                                                                                                                                                                                                                                                    |

 

This Release does not release or waive any Claims which may arise after the date this Agreement is executed by Employee including any Claim based on age discrimination arising out of events occurring after the date of this Agreement.  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

 

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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.                                                                                                                                                                                                                                                                                                                                                                                                            |
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| (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, and in particular, the benefits described and set forth in paragraph   2(a) and 2(b).                                                                                                                                                                                                                                                                                                                              |
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| (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. Employee has   not asked for additional time.                                                                                                                                                                                                                                        |
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| (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.                                                                                                                                                                                                                                                                                        |
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| (f)    | Employee acknowledges receiving this Agreement and was informed that   Employee has 21 days following receipt to consider whether to sign this   Agreement. By signing on any date prior to the expiration of the 21 day   period, Employee voluntarily elects to forego waiting 21 full days to sign   the Agreement and release. If Employee fails to execute this Agreement during   the 21 day period, then the Agreement is automatically withdrawn without   further action or notice by Company. |
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| (g)    | 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                                                                |

 

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Oberg, Vice President, Administration, at the following address:

 

SureWest Communications

8150 Industrial Avenue

Building A

Roseville, CA  95678

ATTN:  Karlyn Oberg

Vice President, Administration

**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.

 

9.             Dispute Resolution:  Except as provided in Section 9(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.                                                                                                                                                                                                                                                                                                                                                                |
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| (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.                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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| (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.                                                                                                                                                                                                                                                                                                                                                                        |
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| (d)    | The Company shall pay all of the costs and/or fees charged by AAA   and the arbitrator.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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| (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 |

 

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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 9(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 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 and Employee acknowledges that Company has made no promises or representations relating to this Agreement that are not specifically and expressly set forth in 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.           Waiver.  No waiver of any right, term, or condition set forth in this Agreement shall operate as a waiver of any other right, term, or condition, or a waiver of any further or future rights under the Agreement, even if such waiver pertains to the same term or condition.

 

12.           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.

 

13.           Amendment.  Any amendment to this Agreement shall be in writing and signed by both parties and no amendment shall be valid unless made in writing and signed.

 

14.           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.

 

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

 

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

 

 
| **COMPANY**          |                |   | **EMPLOYEE**       |                |
|----------------------|---------------------|--------|--------------------|---------------------|
|                 |                |   |               |                |
|                 |                |   |               |                |
| /s/ KIRK C. DOYLE    | March 31, 2011 |   | /s/ FRED A. ARCURI | March 31, 2011 |
| Chairman             | Date                |   | Employee Signature | Date                |
|                 |                |   |               |                |
| /s/ STEVEN C. OLDHAM | March 31, 2011 |   |               |                |
| President and CEO    | Date                |   |               |                |

 

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