**Exhibit 10.1**

 

**SEVERANCE,NON-DISCLOSURE AND RELEASE AGREEMENT**

 

**PARTIES**

 

The parties to this Agreement (“Agreement”) are SureWestCommunications, and its affiliates and all of its subsidiaries (collectivelyreferred 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 andEmployee was Senior Vice President and Chief Technology Officer at the time ofthis Agreement.  I have agreed tovoluntarily terminate my employment with the Company.  I understand that the purpose and intent ofthis Agreement is to ensure confidentiality of information to which I have hadaccess in the course of my employment with the Company, and also to fully andfinally settle and resolve any and all Claims, as defined herein, known orunknown, that I may have against Company arising out of or related to myemployment with Company, including the resignation of my employment.

 

**TERMS OF AGREEMENT**

 

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

 

2.                                       Severance.

 

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

 

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

 

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

 

If an event described in (i) occurs withintwelve 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 employeesbase salary as of June 30, 2010, plus (2) two times his 2010 annualtarget incentive award, such payment to made within 30 days of the datedescribed 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 employeesbase salary as of June 30, 2010 plus (2) two times the employees 2010target incentive award, multiplied by a fraction, the numerator of which is thenumber 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 30days of the date described in (ii).

 

If an event described in (iii) occurs withintwelve months of June 30, 2010, then employee shall be entitled to apayment of (1) two times his base salary as of June 30, 2010, plus (2) twotimes his 2010 annual target incentive award, such payment to be made within 30days 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 apayment 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 afraction, the numerator of which is the number of days remaining between thedate described in (iii) and June 30, 2012, and the denominator ofwhich is 365.

 

3.                                       ConfidentialInformation and Non-Disclosure.  Employee shall preserve as confidential allConfidential Information (as defined below) in accordance with thisAgreement.  Employee shall not directlyor indirectly use Confidential Information for the benefit of Employee or anythird party or disclose it to others.  IfEmployee is required to disclose Confidential Information pursuant to asubpoena or as part of the discovery process authorized by a court orgovernmental entity, then Employee shall first give notice to Company so thatit will have a reasonable opportunity to protect its rights in 

 

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

 

4.                                       Return ofCompany Property and Confidential Material.  I agree to promptly return to the Company allfiles, memoranda, documents, and records of any nature, including anyConfidential Information or information pertaining to my employment, all copiesof 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 anytangible materials or electronically stored data containing or pertaining toany Confidential Information that I produced, acquired or obtained access toduring the course of my employment. Before signing this Agreement, I have not made unauthorizeddisclosures to any third party relating to Company, have not disclosed anyConfidential Information and have not provided originals or copies of documentsbelonging to the Company to any third party, except my attorney.Notwithstanding the foregoing, I can retain copies of documents thatrelate specifically to my employment with Company that the law entitles me topossess, such as materials relating to my participation in the Company’sbenefit plans.

 

5.                                       Non-Disparagement.  Employee agrees to refrain from anypublication, oral or written, of a defamatory, disparaging or otherwisederogatory manner pertaining to the Released Parties or to Employee’semployment relationship with or resignation from Company.

 

6.                                       Release.  Employee hereby waives andreleases 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 thisAgreement is executed by Employee (collectively referred to as “Claims”) whicharise out of or are related to Employee’s employment with Company, or Employee’sresignation from employment, or Employee’s separation from service (hereafterreferred to as “Release”).  This Releaseincludes, but is not limited to, the following:

 

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

 

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(b)                                 Claims whichare based upon or arise under any state or federal laws, including, but notlimited 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 ProtectionAct (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); 29U.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. LaborCode §§ 1025 and 1101 et seq. (employment discrimination and unlawfulemployment practices); and

 

(c)                                  Claims basedupon any tort or contract, including, but not limited to, any employmentagreement.

 

(d)                                 This generalrelease is intended to apply to all claims, known or unknown, disclosed orundisclosed.  Therefore, Employeeexpressly waives any and all rights under Civil Code section 1542 which statesas follows:  “A general release does notextend to claims which the creditor does not know or suspect to exist in hisfavor at the time of executing the release, which if known by him must havematerially affected his settlement with the debtor.”

 

This Release does not release or waive any Claimswhich may arise after the date this Agreement is executed by Employee.  This Release also does not release or waiveany rights or claims which controlling law clearly states may not be releasedor waived by settlement.  I understandthat I am releasing claims I may not know about and I understand that I amreleasing and waiving such claims.  Irepresent that I do not currently have pending any complaints or charges filedagainst 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 Claimreleased by this Release, and I am hereby releasing and forever waiving anyprivate right to sue that may be issued by any state or federal agency relatedto events that have occurred as of the effective date of this Agreement. Iunderstand that this Agreement does not prohibit me from filing a Charge ofDiscrimination 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.                                       Employeefurther expressly acknowledges and agrees that:

 

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

 

(b)                                 Employee isknowingly and voluntarily agreeing to all of the terms set forth in thisAgreement, and knowingly and voluntarily intends to be legally bound by thesame.

 

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

 

(d)                                 Employee hasbeen advised in writing to consider the terms of this Agreement and to consultwith an attorney of his choice before signing this Agreement and has hadsufficient time and opportunity to do so.

 

(e)                                  Employeeunderstands that rights or claims under the Age Discrimination in EmploymentAct of 1967 (29 U.S.C. § 621 et seq.) that may arise after the date of thisAgreement is executed are not waived.

 

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

 

(g)                                 Employeeacknowledges receiving this Agreement and was informed that Employee has 45days following receipt to consider whether to sign this Agreement.  By signing on any date prior to theexpiration of the 45 day period, Employee voluntarily elects to forego waiting45 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 noticeby Company.

 

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

 

SureWest Communications

8150 Industrial Avenue

Building A

Roseville, CA 95678

ATTN:  KarlynOberg

Vice President, Human Resources

**k.oberg@surewest.com**

 

8.                                       Modification ofEmployee Benefit Plans. Various Company sponsored employee health and welfare benefit plans,including all medical and health care plans, allow Company to modify oreliminate coverage and other benefits and I understand that this Agreement doesnot restrict Company’s right to modify or eliminate the coverage or any otherbenefits under any employee benefit plan.

 

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9.                                       DisputeResolution:  Except asprovided in Section 10(e) below, any dispute between the partieswhich is covered by, arises out of or is based upon this Agreement shall besettled by final and binding arbitration. Any award or determination rendered by the arbitrator may be entered asa judgment in California state court having jurisdiction thereof.  The arbitration is subject to the following:

 

 

(a)                                  The arbitrationshall be administered by the American Arbitration Association (“AAA”) inaccordance with its Employment Dispute Resolution Rules (“Rules”) ineffect at the time of the arbitration.

 

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

 

(c)                                  The arbitratorshall have the authority to award any remedy or relief that a state or federalcourt having jurisdiction over the persons and subject matter is authorized togrant including attorney fees and costs.

 

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

 

(e)                                  Enforcement.  Employee acknowledges and agrees that therestrictive covenants contained in this Agreement are reasonable and necessaryto protect the business and interests of the Company, do not create any unduehardship for him, and that any violation of these restrictions would causeCompany substantial irreparable injury. Accordingly, Employee agrees that a remedy at law for any breach of therestrictive covenants or other obligations in this Agreement would beinadequate and that Company, in addition to any other obligations in thisAgreement, shall be entitled to obtain preliminary and permanent injunctiverelief to secure specific performance of such covenants and to prevent a breachor contemplated or threatened breach of this Agreement without the necessity ofproving 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 andprofits received by him as a result of or in connection with a breach of thisAgreement.  In any legal proceedingcommenced under this Paragraph 10(e), Employee agrees that Company shall beentitled to recover its reasonable attorneys’ fees and costs if it prevails inany action to enforce this Agreement.

 

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

 

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

 

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

 

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

 

13.                                 Successors andAssigns.  This Agreement shall bebinding upon and inure to the benefit of the parties hereto and theirrespective successors and assigns. Employee consents to any assignment by the Company of this Agreement.

 

14.                                 AdequateConsideration:  The partiesagree that this Agreement and each provision herein is supported and containsvaluable and adequate consideration.

 

15.                                 Signatures.  The undersigned acknowledge that they havethe 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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