**Exhibit10.1**

**SEPARATION AGREEMENT AND GENERALRELEASE**

This SeparationAgreement and General Release (the “Agreement”) is entered into by and betweenJohn Edward Duffy (the “Executive”) and Hickory Tech Corporation (the “Company”)as of this 2 day of June, 2006 (the “Execution Date”).

**WHEREAS,** Executive has tendered and the Company has accepted Executive’sresignation from his positions as an employee, officer and director of theCompany and its subsidiaries effective upon the close of business on June 30, 2006(the “Separation Date”); and

**WHEREAS,** Executive and theCompany desire to fully and finally settle all issues, differences and actualor potential claims between them, including, but in no way limited to, anyclaims that might arise out of Executive’s employment with the Company, and thecessation thereof;

**NOW THEREFORE,**in consideration of themutual promises contained herein, Executive and the Company agree as follows:

1.             **Resignation.** Executive represents,understands and agrees that his employment with the Company will end effectiveupon the close of business on the Separation Date, and that he ended hisemployment voluntarily by submitting his resignation. Executive furtheracknowledges his resignation as a director of the Company and from any other officeor position he may hold with the Company or any of its subsidiaries oraffiliates.

2.             **Separation Benefits.** The Company agreesto provide Executive the following payments and benefits:

A.            Within seven (7) days following theexpiration of the revocation periods specified in Section 4F of the Agreementbelow as well as in the General Release to be provided

----

by Executive pursuant toSection 4H below, Company will pay to Executive the gross sum of Two HundredForty-Five Thousand Dollars ($245,000.00) in a single, lump sum payment,subject to all applicable taxes, withholding and deductions.

B.            Executive acknowledges that he hasbeen notified of his rights to continue in effect certain employer-providedinsurance benefit coverages pursuant to COBRA. In the event that Executiveelects to continue his current group health and dental benefit coverage in effectpursuant to COBRA, the Company will pay the amounts due for continuationpremium payments on behalf of Executive for such coverage for a period endingupon the earlier of (i) the date Executive becomes eligible for group healthand dental coverage provided by another employer, or (ii) June 30, 2007.

C.            Executive shall also be paid allamounts remaining due for earned, unused vacation as of the Separation Date.

D.            The Company will continue to provideto Executive the communications services package currently provided by theCompany to Executive at his residence on the same basis as currently in effectfor so long as Executive continues to reside at that location or for a periodof twelve (12) months following the Separation Date, whichever is earlier.

E.             The payments and benefits to beprovided by the Company to Executive pursuant to this Section 2 of theAgreement shall be in lieu of, and shall discharge, any obligations of theCompany to the Executive for compensation, earned, unused vacation or any otherexpectation of remuneration on the part of the Executive.

3.             **Restrictive Covenants.** As an essentialinducement to the Company to enter into this Agreement, and as considerationfor the foregoing promises of the Company, Executive agrees as follows:

2

----

A.            Executive acknowledges that duringhis employment with the Company, he has been exposed to, or acquired,Confidential Information as defined hereafter in this subparagraph. Executiveunderstands and agrees that such Confidential Information has been disclosed tohim in confidence and for the sole benefit of the Company. Executive agreesthat commencing on the date of this Agreement he (i) will diligently protectthe confidentiality of all Confidential Information, (ii) will not disclose orcommunicate any Confidential Information to any third party without the consentof the Company, and (iii) will not make use of Confidential Information on hisown behalf or on behalf of any third party. In view of the nature of Executive’semployment and the nature of the Confidential Information which Executive receivedduring such employment, Executive agrees that any unauthorized disclosure oruse of such information to or on behalf of third parties would causeirreparable harm to the confidential status of such information and to theCompany and that, therefore, the Company shall be entitled to an injunctionprohibiting Executive from any such disclosure, use, or threatened disclosureor use. When Confidential Information becomes generally available to the publicby means other than Executive’s acts or omissions, it is no longer subject tothis Agreement. Executive expressly acknowledges that the undertakings setforth in this subparagraph shall survive the expiration or termination of otheragreements or duties in this Agreement. As used in this Agreement, “ConfidentialInformation” means information not generally available to the public concerning(i) the Company’s trade secrets, (ii) the contents or duration of the Company’sagreements with third parties, (iii) the Company’s financial results or otherfinancial matters, and (iv) the sales and marketing practices and strategies ofthe Company or its business plans.

B.            During the period ending on a datethat is two years following the Separation Date, Executive agrees:

3

----

(1)           that he will not, directly orindirectly, engage in any Competing Business Activity on his own behalf or as apartner, shareholder (except by ownership of less than five percent (5%) of theoutstanding stock of a publicly held corporation), director, trustee, principal,agent, officer, employee, consultant, or otherwise of any person or entitywhich is engaged in competition with the Company or any of its subsidiaries andis operating within the same geographical areas in which the Company or any ofits subsidiaries are operating as of the Separation Date. For purposes of thisAgreement, “Competing Business Activity” shall mean Executive’s involvement in,or supervision of others involved in, the provision, promotion, marketing orsales of products or services similar to those provided by the Company to anyof its current or prospective customers or within its existing sales andservice territories;

(2)           that he will not, directly orindirectly, assist, solicit, entice, or induce (or assist any other person orentity in soliciting, enticing, or inducing) any customer or potential customer(or agent, employee, or consultant of any customer or potential customer) withwhom the Executive had contact in the course of his employment with the Companyto deal with a competitor of the Company;

(3)           that he will not, directly orindirectly, in any manner, solicit, assist or encourage (or assist any otherperson or entity in soliciting or encouraging) any other officer or employee ofthe Company to work or otherwise provide services for the Executive or for any entityin which the Executive participates in the ownership, management, operation, orcontrol of, or is connected with in any manner as an independent contractor,consultant, or otherwise.

(4)           Executive acknowledges that a breachor threatened breach of any portion of this Section 3B will cause irreparableharm to the Company and could not be compensated by money damages. Accordingly,the Executive specifically agrees that the

4

----

Company shall be entitledto injunctive relief to enforce the provisions of this Section 3B and that suchrelief may be granted without the necessity of proving actual damages. TheCompany’s rights with respect to obtaining injunctive relief, however, will notdiminish its rights to pursue any other available remedies for such breach orthreatened breach, including the recovery of actual damages.

(5)           Should any court of competentjurisdiction determine that any of the covenants set forth in this Section 3Bare overbroad or otherwise invalid in any respect, the parties agree that thecourt so holding shall revise such covenant in time or in area, or in both, orin any other manner which the court determines sufficient to render thecovenant enforceable against the Executive, and shall then enforce the same tothat more limited extent.

4.             **Releaseof Claims by Executive.** Executive and the Company intend tosettle any and all claims that Executive may have against the Company as aresult of the Company’s hiring of Executive, Executive’s employment with theCompany, Executive’s compensation while employed with the Company, and thetermination of Executive’s employment with the Company. Executive agrees thatin exchange for the Company’s promises in this Agreement and in exchange forthe consideration paid to Executive by the Company as described above,Executive, on behalf of himself and his heirs, successors and assigns, herebyreleases and forever discharges the Company, its predecessors, successors,assigns, parent companies, affiliates, subsidiaries, and related companies, andtheir respective officers, directors, shareholders, agents, employees, andinsurers (the “Released Parties”), from all liability for damages and from allclaims that Executive may have against the Released Parties arising from orrelating to the Company’s hiring of Executive, Executive’s compensation whileemployed with the Company, Executive’s employment with the Company, the terminationof Executive’s employment with the

5

----

Company, and any otheractions, decisions, alleged omissions, or events occurring on or prior to theExecution Date.

A.            Executive understands and agreesthat his release of claims in this Agreement includes, but is not limited to,any claims he may have under Title VII of the Federal Civil Rights Act of 1964,as amended; the Americans with Disabilities Act, the Equal Pay Act, the FairLabor Standards Act, the Employee Retirement and Income Security Act, the Age Discriminationin Employment Act, the Family and Medical Leave Act, the Minnesota Human RightsAct, or any other federal, state, or local statute, ordinance, or law.

B.            Executive also understands that heis giving up all other claims, whether grounded in contract or tort theories,including, but not limited to, wrongful discharge, violation of Minn. Stat.§176.82, breach of contract, tortious interference with contractual relations, promissoryestoppel, detrimental reliance, breach of the implied covenant of good faithand fair dealing, breach of express or implied promise, breach of manuals orother policies, breach of fiduciary duty, assault, battery, fraud, invasion ofprivacy, intentional or negligent misrepresentation, defamation, includinglibel, slander, discharge defamation and self-publication defamation, dischargein violation of public policy, whistleblower, intentional or negligentinfliction of emotional distress, or any other theory, whether legal orequitable.

C.            Executive agrees that he will notinstitute any lawsuit against the Released Parties arising from or relating tothe Company’s hiring of Executive, Executive’s employment with the Company,Executive’s compensation while employed with the Company, the termination ofExecutive’s employment with the Company, or any other actions, decisions, allegedomissions, or events occurring prior to Executive’s signing of this Agreement.

6

----

D.            To the extent required by law,nothing contained in this Section 4 will be interpreted to prevent Executivefrom filing a charge with a governmental agency or participating in orcooperating with an investigation conducted by a governmental agency. However,Executive agrees that he is waiving the right to monetary damages or otherindividual legal or equitable relief awarded as a result of any such proceedingrelated to any claim against the Released Parties arising from or relating tothe Company’s hiring of Executive, Executive’s employment with the Company,Executive’s compensation while employed with the Company, the termination ofExecutive’s employment with the Company, or any other actions, decisions, allegedomissions, or events occurring prior to Executive’s signing of this Agreement.

E.             Notwithstanding any of theforegoing, the Executive’s release of claims shall not apply with respect toany rights or claims which Executive may have under the terms of this Agreementor to any rights or benefits Executive may have related to vested accruedbenefits under the terms of the Company’s benefit plans or to the Executive’sright to be indemnified by the Company pursuant to the terms of its bylaws andapplicable law.

F.             Executive may revoke his release ofclaims, insofar as it extends to potential claims under the Age Discriminationin Employment Act and/or the Minnesota Human Rights Act, by informing theCompany of his intent to revoke his release within fifteen (15) calendar daysfollowing his execution of this Agreement. Executive understands that any such revocationmust be stated in writing and delivered by hand or by certified mail-returnreceipt requested within the fifteen (15) day period to Mary Jacobs, VicePresident of Human Resources, Hickory Tech Corporation, 221 East HickoryStreet, P.O. Box 3248, Mankato, Minnesota 56002-3248. If Executive exerciseshis right to revoke or rescind, the Company may, at its option, either nullifythis Agreement in its entirety, or keep it in effect in all respects other thanas to that

7

----

portion of Executive’srelease of claims that he has revoked or rescinded. Executive understands that,if the Company chooses to nullify the Agreement in its entirety, the Companywill have no obligations under this Agreement to Executive or to others whoserights derive from Executive, and Executive will be required to repay to theCompany any payments made to him or any benefits conferred upon him pursuant tothe Agreement prior to the date of his revocation or rescission.

G.            This Agreement shall not becomeeffective or enforceable until the revocation period identified above, as wellas the revocation period contained in the General Release to be provided byExecutive pursuant to Section 4H below, have expired. The terms of thisAgreement shall be open for acceptance by Executive for a period of twenty-one(21) calendar days, during which time Executive has been advised to consultwith legal counsel of his choosing and to consider whether to accept theCompany’s offer and sign the Agreement.

H.            Further,in consideration of the terms of this Agreement and Executive’s continuingemployment through the Separation Date, Executive will also execute and returnto the Company a Mutual General Release in the form attached hereto as ExhibitA, covering any and all claims that Executive may have against the Company as aresult of any matter, fact or thing occurring during the period from theExecution Date through the Separation Date.

5.                **Releaseof Claims by Company.** The Company unconditionally releases anddischarges Executive, his agents, heirs, and representatives from any and allclaims, demands, actions, liability, damages or rights of any kind arising outof or resulting from any matter, fact or thing occurring prior to the ExecutionDate. Notwithstanding any of the foregoing, the Company’s release of claimsshall not apply with respect to any rights or claims which the Company may haveunder the terms of this Agreement or to any claims which the Company may

8

----

have as a result of anyregulatory or compliance matters or claims brought by third parties on thebasis of any facts or circumstances not previously disclosed by Executive tothe Board of Directors of the Company. Executive warrants and represents thathe has not engaged in any activities during his employment with the Companythat he reasonably believes would constitute a regulatory or compliance violationor provide the basis for a third party claim against the Company. Further, inconsideration of the terms of this Agreement, the Company will also execute andreturn to Executive a Mutual General Release in the form attached hereto asExhibit A, covering any and all claims that the Company may have againstExecutive as a result of any matter, fact or thing occurring during the periodfrom the Execution Date through the Separation Date.

6.             **CompanyProperty.** Executive agrees that, within five (5) business days followingthe Separation Date, he shall return to the Company all Company books, recordsor other property in his possession or under his control which to date has notalready been returned.

7.             **Conditionof Payments.** It is agreed that the payments and benefitsspecified in Section 2 of this Agreement to be provided by the Company toExecutive are subject to forfeiture in the event that Executive violates theobligations to the Company as specified in Section 3 of the Agreement above.

8.             **Confidentialityof Agreement.** Executive agrees that he will keep the terms ofthis Agreement strictly confidential, and that he will not disclose these termsto third persons except to the extent required by law. Notwithstanding theforegoing, Executive may disclose the terms of this Agreement to his spouse,attorney, tax advisor and, upon inquiry, may disclose the terms of Section 3 ofthe Agreement to prospective or future employers.

9

----

9.             **Entire Agreement.** This Agreement,together with the Mutual General Release to be provided pursuant to Section 4Habove, contain the entire understanding between the parties with respect toExecutive’s employment with the Company and his separation from employment withthe Company. Executive hereby affirms that his rights to payments or benefitsfrom the Employer by reason of such separation are specified exclusively andcompletely by this Agreement. Any modification of, or addition to, thisAgreement must be in writing signed by Executive and by an authorizedrepresentative of the Company.

10.           **Non-admission.** This Agreement shall not in any waybe construed as an admission by the Company that it has acted wrongfully withrespect to Executive or any other person, or that Executive has any rightswhatsoever against the Company. The Company specifically disclaims anyliability to, or wrongful acts against, Executive or any other person, on thepart of itself, its directors, its officers, its employees, investors,representatives or agents.

11.           **Non-assignability.** This Agreement ispersonal to Executive and may not be assigned by Executive without the writtenagreement of the Company. This Agreement shall be binding on the Company, itssuccessors and assigns.

12.           **ThirdParty Benefit.**Nothing in this Agreement, express or implied, isintended to confer upon any person any rights, remedies or entitlements of anynature whatsoever. However, if Executive is deceased prior to the Company’spayment to him in full of the cash amounts owed to him under this Agreement,any such amounts remaining due shall be paid by the Company to Executive’sestate.

13.           **Choiceof Law.** This Agreement shall be governed by, and interpreted in accordancewith, the laws of the State of Minnesota.

10

----

14.           **Executive’s Acknowledgement.**Executiveacknowledges and agrees that he has received and read this Agreement with theattached Exhibit A, that the provisions of the Agreement are understandable tohim, and that he fully appreciates and understands the meaning of the terms ofthis Agreement and their effect. Executive acknowledges and agrees that he hasbeen provided with a reasonable and sufficient period of twenty-one (21) dayswithin which to consider whether or not to accept this Agreement and that hehas been advised to, and is fully aware of his right to, consult with an attorneyfor advice in connection with this Agreement prior to signing the Agreement.Executive acknowledges that he has entered into this Agreement freely andvoluntarily.

INWITNESS WHEREOF, the parties have executed this Agreement by their signatures below.
|   | /s/ John Edward Duffy     |                  |
|--------|---------------------------|-----------------------|
|   | John Edward  Duffy        |
|   |                      |
|   |                      |
|   | Hickory Tech  Corporation |
|   |                      |
|   |                      |
|   | By                        | /s/ Starr J.  Kirklin |   |
|   |                      |                  |   |
|   | Its                       | Chairman              |   |

 

11

----