**Exhibit10(c)(8)**

 

**AGREEMENT**

 

This Agreement, dated March 8, 2002, is made by and between ALLTELCorporation, a Delaware corporation (as hereinafter defined, the“Corporation”), and Scott H,. Settelmyer (as hereinafter defined, the“Executive”).

 

**WHEREAS**, the Corporation recognizes that thepossibility of a Change in Control (as hereinafter defined) of the Corporationexists and that such possibility, and the uncertainty it may cause, may resultin the departure or distraction of key management employees of the Corporationor of a Subsidiary to the detriment of the Corporation and its stockholders;and

 

**WHEREAS**, the Executive is a key managementemployee of the Corporation or of a Subsidiary; and

 

**WHEREAS**, the Corporation desires to encouragethe continued employment of the Executive by the Corporation or a Subsidiaryand the continued dedication of the Executive to the Executive’s assignedduties without distraction as a result of the circumstances arising from thepossibility of a Change in Control;

 

**NOW THEREFORE**, in consideration of the premises andthe mutual covenants herein contained, the Corporation and the Executive herebyagree as follows:

 

1.  **Defined Terms**.  For purposes of this Agreement, thefollowing terms shall have the meanings indicated below:

 

(A)“ALLTEL Group”shall mean, collectively, the Corporation and each Subsidiary of theCorporation from time to time, and a “member” of the ALLTEL Group shall meanthe Corporation or any of such entities.

 

(B)“Board” shallmean the Board of Directors of  theCorporation, as constituted from time to time.

 

(C)“Cause” fortermination by the Corporation of the Executive’s employment shall mean(i) the willful failure by the Executive substantially to perform theExecutive’s duties with the Corporation or a Subsidiary, other than any failureresulting from the Executive’s incapacity due to physical or mental illness orany actual or anticipated failure after the issuance of a Notice of Terminationfor Good Reason by the Executive in accordance with paragraph (A) ofSection 6, that continues for at least 30 days after the Board delivers tothe Executive a written demand for performance that identifies specifically andin detail the manner in which the Board believes that the Executive willfullyhas failed substantially to perform the Executive’s duties, or (ii) thewillful engaging by the Executive in misconduct that is demonstrably andmaterially injurious to the Corporation or any Subsidiary, monetarily orotherwise, or (iii) a breach by the Executive of any of the Executive’scovenants set forth in Section 7. For purposes of

 

----

 

clause (i)and clause (ii) of this definition, no act, or failure to act, on theExecutive’s part shall be deemed “willful” unless done, or omitted to be done,by the  Executive not in good faith andwithout reasonable belief that the Executive’s act, or failure to act, was inthe best interest of the Corporation and its Subsidiaries.

 

(D)A “Change inControl” shall mean, if subsequent to the date of this Agreement:

 

(i)Any “person,” asdefined in Section 13(d) and 14(d) of the Securities Exchange Act of 1934,as amended (the “Exchange Act”), other than the Corporation, any of itssubsidiaries, or any employee benefit plan maintained by the Corporation or anyof its subsidiaries, becomes the “beneficial owner” (as defined inRule l3d-3 under the Exchange Act) of (A) l5% or more, but no greaterthan 50%, of the outstanding voting capital stock of the Corporation, unlessprior thereto, the Continuing Directors approve the transaction that results inthe person becoming the beneficial owner of 15% or more, but no greater than50%, of the outstanding voting capital stock of the Corporation or(B) more than 50% of the outstanding voting capital stock of theCorporation, regardless whether the transaction or event by which the foregoing50% level is exceeded is approved by the Continuing Directors;

 

(ii)At any timeContinuing Directors no longer constitute a majority of the directors of theCorporation; or

 

(iii)A record dateis fixed for determining stockholders entitled to vote upon (A) a mergeror consolidation of the Corporation, statutory share exchange, or other similartransaction with another corporation, partnership, or other entity orenterprise in which either the Corporation is not the surviving or continuingcorporation or shares of common stock of the Corporation are to be convertedinto or exchanged for cash, securities other than common stock of theCorporation, or other property, (B) a sale or disposition of all orsubstantially all of the assets of the Corporation, or (C) the dissolutionof the Corporation; or

 

(iv)TheCorporation enters into an agreement with any Person, the consummation of whichwould result in the occurrence of an event described in clause (i), (ii)or (iii) above of this paragraph (D).

 

(E)“Code” shallmean the Internal Revenue Code of 1986, as amended from time to time.

 

(F)“ContinuingDirectors” means directors who were directors of the Corporation at thebeginning of the 12–month period ending on the date the determination ismade  or whose election, or nominationfor election by the Corporation’s stockholders, was approved by at least amajority of the directors who are in office at the time of the election ornomination and who either (i) were directors at the beginning of theperiod, or (ii) were elected, or nominated for election, by at least amajority of the directors who

 

2

----

 

were in office atthe time of the election or nomination and were directors at the beginning ofthe period.

 

(G)“Corporation”shall mean ALLTEL Corporation and any successor to its business or assets, byoperation of law or otherwise.

 

(H)“Date ofTermination” shall have the meaning stated in paragraph (B) of Section 6hereof.

 

(I)“Disability”shall be deemed the reason for the termination by the Corporation of theExecutive’s employment, if, as a result of the Executive’s incapacity due tophysical or mental illness, the Executive shall have been absent from the full–timeperformance of the Executive’s duties with the Corporation or a Subsidiary fora period of six consecutive months, the Corporation shall have given theExecutive a Notice of Termination for Disability, and, within 20 businessdays after the Notice of Termination is given, the Executive shall not havereturned to the full–time performance of the Executive’s duties.

 

(J)“Executive”shall mean the individual named in the first paragraph of this Agreement.

 

(K)“Good Reason”for termination by the Executive of the Executive’s employment shall mean theoccurrence, without the Executive’s express written consent, of any one of thefollowing:

 

(i)a substantialadverse alteration in the nature or status of the Executive’s responsibilitiesfrom those in effect immediately prior to the Change in Control;

 

(ii)a reduction bythe Corporation in the Executive’s annual base salary to any amount less thanthe Executive’s annual base salary as in effect immediately prior to the Changein Control;

 

(iii)theCorporation’s requiring the Executive to be based more than 35 miles fromthe location of the Executive’s principal office immediately prior to theChange in Control, except for required business travel to an extentsubstantially consistent with the Executive’s business travel obligationsimmediately prior to the Change in Control;

 

(iv)if theExecutive was based at the principal executive offices of the Corporation or ofa Subsidiary, as the case may be, immediately prior to the Change in Control,the Corporation’s requiring the Executive to be based anywhere other than theprincipal executive offices of the Corporation or Subsidiary, as the case maybe, except for required business travel to an extent substantially consistentwith the Executive’s business travel obligations immediately prior to theChange in Control;

 

(v)the failure bythe Corporation to pay to the Executive any portion of the

 

3

----

 

Executive’scurrent compensation, or to pay to the Executive any deferred compensation underany deferred compensation program of the Corporation, within five days afterthe date the compensation is due or to pay or reimburse the Executive for anyexpenses incurred by the Executive for required business travel;

 

(vi)the failure bythe Corporation to continue in effect any compensation plan in which theExecutive participates immediately prior to the Change in Control that ismaterial to the Executive’s total compensation, including but not limited to,stock option, restricted stock, stock appreciation right, incentivecompensation, bonus, and other plans, unless an equitable alternativearrangement embodied in an ongoing substitute or alternative plan has beenmade, or the failure by the Corporation to continue the Executive’sparticipation therein (or in a substitute or alternative plan) on a basis notmaterially less favorable, both in terms of the amount of compensation providedand the level of the Executive’s participation relative to other participants,than existed immediately prior to the Change in Control;

 

(vii)the failureby the Corporation to continue to provide the Executive with benefitssubstantially similar to those enjoyed by the Executive under any of theCorporation’s pension, profit-sharing, life insurance, medical, health and accident,disability, or other employee benefit plans in which the Executive wasparticipating immediately prior to the Change in Control; the failure by theCorporation to continue to provide the Executive any material fringe benefit orperquisite enjoyed by the Executive immediately prior to the Change in Control;or the failure by the Corporation to provide the Executive with the number ofpaid vacation days to which the Executive is entitled in accordance with theCorporation’s normal vacation policy in effect immediately prior to the Changein Control; or

 

(viii)anypurported termination by the Corporation of the Executive’s employment that isnot effected in accordance with a Notice of Termination satisfying therequirements of paragraph (A) of Section 6 hereof.

 

(L)“Notice ofTermination” shall have the meaning stated in paragraph (A) ofSection 6 hereof.

 

(M)“PaymentTrigger” shall mean the occurrence of a Change in Control during the term ofthis Agreement coincident with or followed at any time before the end of the12th month immediately following the month in which the Change in Controloccurred, by the termination of the Executive’s employment with the Corporationor a Subsidiary for any reason other than (A) by the Executive withoutGood Reason, (B) by the Corporation as a result of the Disability of theExecutive or with Cause, or (C) as a result of the death of the Executive.

 

(N)  “Person” shall have the meaning given inSection 3(a)(9) of the Securities Exchange Act of 1934, as amended fromtime to time, as modified and used in Sections 13(d) and 14(d) thereof;except that, a Person shall not include (i) the 

 

4

----

 

Corporation or anySubsidiary, (ii) a trustee or other fiduciary holding securities under anemployee benefit plan of the Corporation or any Subsidiary, or (iii) anunderwriter temporarily holding securities pursuant to an offering of suchsecurities.

 

(O)”Subsidiary”shall mean any corporation or other entity or enterprise, whether incorporatedor unincorporated, of which at least a majority of the securities or otherinterests having by their terms ordinary voting power to elect a majority ofthe board of directors or others serving similar functions with respect to suchcorporation or other entity or enterprise is owned by the Corporation or otherentity or enterprise of which the Corporation directly or indirectly ownssecurities or other interests having all the voting power.

 

2.  **Term of Agreement**.  This Agreement shall become effective on thedate hereof and, subject to the second sentence of this Section 2, shallcontinue in effect until the earliest of (i) a Date of Termination inaccordance with Section 6 or the death of the Executive shall have occurredprior to a Change in Control, (ii) if a Payment Trigger shall haveoccurred during the term of this Agreement, the performance by the Corporationof all its obligations, and the satisfaction by the Corporation of all itsobligations and liabilities, under this Agreement, (iii) any date theCorporation may, in its sole and absolute discretion, designate which is on orafter the third year anniversary of the date on which notice in writing isgiven by ALLTEL to the Executive in accordance with Section 11 that thisAgreement will so terminate (hereinafter, the “Nonrenewal Date”), if, as of the Nonrenewal Date, a Change inControl shall not have occurred and be continuing, or (iv) in the event,as of the Nonrenewal Date, a Change in Control shall have occurred and becontinuing, either the expiration of such period thereafter within which aPayment Trigger does not or can not occur or the ensuing occurrence of aPayment Trigger and the performance by the Corporation of all of itsobligations and liabilities under this Agreement.  Any Change in Control during the term of this Agreement that forany reason ceases to constitute a Change in Control or is not followed by aPayment Trigger shall not effect a termination or lapse of this Agreement.

 

3.  **General Provisions**.

 

(A)The Corporationhereby represents and warrants to the Executive as follows:  The execution and delivery of this Agreementand the performance by the Corporation of the actions contemplated hereby havebeen duly authorized by all necessary corporate action on the part of the Corporation.  This Agreement is a legal, valid and legallybinding obligation of the Corporation enforceable in accordance with itsterms.  Neither the execution ordelivery of this Agreement nor the consummation by the Corporation of theactions contemplated hereby (i) will violate any provision of thecertificate of incorporation or bylaws (or other charter documents) of theCorporation, (ii) will violate or be in conflict with any applicable lawor any judgment, decree, injunction or order of any court or governmentalagency or authority, or (iii) will violate or conflict with or constitutea default (or an event of which, with notice or lapse of time or both, wouldconstitute a default) under or will result in the termination of, acceleratethe performance required by, or result in the creation of any lien, securityinterest, charge or encumbrance

 

5

----

 

upon any of theassets or properties of the Corporation under, any term or provision of thecertificate of incorporation or bylaws (or other charter documents) of theCorporation or of any contract, commitment, understanding, arrangement,agreement or restriction of any kind or character to which the Corporation is aparty or by which the Corporation or any of its properties or assets may bebound or affected.  The Corporationshall not at any time assert that any provision of this Agreement is invalid orunenforceable in any respect or to any extent, irrespective of the outcome ofany action, suit, or proceeding.

 

(B)No amount orbenefit shall be payable under Section 4 or Section 5 unless there shall haveoccurred a Payment Trigger during the term of this Agreement.  In no event shall payments in accordancewith this Agreement be made in respect of more than one Payment Trigger.  Any transfer of the Executive’s employmentfrom the Corporation to a Subsidiary, from a Subsidiary to the Corporation, orfrom one Subsidiary to another Subsidiary shall not constitute a termination ofthe Executive’s employment for purposes of this Agreement and shall not limit,reduce or terminate any of the Executive’s rights or benefits under thisAgreement.

 

(C)This Agreementshall not be construed as creating an express or implied contract ofemployment, and, except to the extent (if any) otherwise agreed in writingbetween the Executive and the Corporation, the Executive shall not have anyright to be retained in the employ of the Corporation or of a Subsidiary andthe Corporation and any Subsidiary may in its sole and absolute discretion atany time terminate the Executive’s employment for any reason (but theCorporation shall be obligated, subject to the provisions of this Agreement, tomake the payments described in Section 4 and Section 5 if a Payment Triggeroccurred during the term of this Agreement, including, without limitation, aPayment Trigger that occurs as a result of any such termination of theExecutive’s employment).  Notwithstanding the immediately preceding sentence or any otherprovision of this Agreement, no purported termination of the Executive’semployment that is not effected in accordance with a Notice of Terminationsatisfying paragraph (A) of Section 6 shall be effective for purposesof this Agreement.  The Executive’sright, following the occurrence of a Change in Control, to terminate theExecutive’s employment under this Agreement for Good Reason shall not beaffected by the Executive’s Disability or incapacity.  The Executive’s continued employment shall not constitute consentto, or a waiver of rights with respect to, any act or failure to actconstituting Good Reason under this Agreement.

 

4.  **Payments Due Upon a Payment Trigger**.

 

(A)The Corporationshall pay to the Executive the payments described in this Section 4 upon theoccurrence of a Payment Trigger during the term of this Agreement.

 

(B)Upon theoccurrence of a Payment Trigger during the term of this Agreement, theCorporation shall pay to the Executive a lump sum payment, in cash, equal tothe product of:

 

6

----

 

(i)one multipliedby

 

(ii)the sum of —

 

(a)the higher ofthe Executive’s annual base salary in effect immediately prior to theoccurrence of the Change in Control or the Executive’s annual base salary ineffect immediately prior to the Payment Trigger, plus

 

(b)the higher ofthe aggregate maximum amounts payable to the Executive pursuant to allincentive compensation plans for the fiscal year or other measuring periodcommencing coincident with or most recently prior to the date on which the Changein Control occurs or the aggregate maximum amounts payable to the Executivepursuant to all incentive compensation plans for the fiscal year or othermeasuring period commencing coincident with or most recently prior to the dateon which the Payment Trigger occurs, in each case, assuming that the Executivewere continuously employed by the Corporation or a Subsidiary on the terms andconditions, including, without limitation, the terms of the incentive plans, ineffect immediately prior to the Change in Control or Payment Trigger, whicheverapplies, until the last day of that fiscal year or other measuring period.

 

The amountdetermined under the foregoing provisions of this paragraph (B) shall bereduced by any cash severance benefit otherwise paid to the Executive under anyapplicable severance plan or other severance arrangement.  For purposes of this paragraph (B),amounts payable to the Executive pursuant to an incentive compensation plan forthe fiscal year or other measuring period commencing coincident with or mostrecently prior to the date on which the Change of Control or Payment Trigger,as applicable, occurs (the “applicable year/period”) shall not include amountsattributable to a fiscal year or other measuring period that commenced prior tothe applicable year/period and that become payable during the applicableyear/period.  For purposes of thisparagraph (B), incentive compensation plans shall include, withoutlimitation, the ALLTEL Corporation Performance Incentive Compensation Plan asin effect from time to time, the ALLTEL Corporation Long-Term PerformanceIncentive Compensation Plan as in effect from time to time, and any incentivebonus plan or arrangement that provides for payment of cash compensation, andshall exclude, without limitation, the ALLTEL Corporation Executive DeferredCompensation Plan as in effect from time to time, any plan qualified orintended to be qualified under Section 401(a) of the Code and any plansupplementary thereto, executive fringe benefits, and any plan or arrangementunder which stock, stock options, stock appreciation rights, restricted stockor similar options, stock, or rights are issued.

 

(C)Notwithstandingany provision of any incentive compensation plan, including, withoutlimitation, any provision of any incentive plan requiring continued employmentafter the completed fiscal year or other measuring period, the Corporationshall pay to the Executive a lump sum amount, in cash, equal to the amount ofany incentive compensation that has been allocated or awarded to the Executivefor a completed fiscal year or other measuring period preceding the occurrenceof a Payment Trigger under any

 

7

----

 

incentivecompensation plan but has not yet been paid to the Executive.

 

(D)The paymentsprovided for in paragraphs (B) and (C) of this Section 4 shall bemade not later than the fifth day following the occurrence of a PaymentTrigger, unless the amounts of such payments cannot be finally determined on orbefore that day, in which case, the Corporation shall pay to the Executive onthat day an estimate, as reasonably determined in good faith by theCorporation, of the minimum amount of the payments to which the Executive isclearly entitled and shall pay the remainder of the payments (together withinterest at the rate provided in Section 1274(b)(2)(B) of the Code) assoon as the amount thereof can be determined but in no event later than thethirtieth day after the occurrence of a Payment Trigger.  In the event the amount of the estimatedpayments exceeds the amount subsequently determined to have been due, theexcess shall constitute a loan by the Corporation to the Executive, payable onthe fifth business day after demand by the Corporation (together with interestat the rate provided in Section l274(b)(2)(B) of the Code).  At the time that payments are made underthis Section 4, the Corporation shall provide the Executive with a writtenstatement setting forth the manner in which the payments were calculated andthe basis for the calculations including, without limitation, any opinions orother advice the Corporation has received from outside counsel, auditors orconsultants (and any opinions or advice that are in writing shall be attachedto the statement).

 

5.  **Gross-Up Payments**.

 

(A)ThisSection 5 shall apply if a Payment Trigger shall have occurred during theterm of this Agreement.

 

(B)In the event itshall be determined that any payment or distribution by the Corporation orother amount with respect to the Corporation to or for the benefit of theExecutive, whether paid or payable or distributed or distributable pursuant tothe terms of this Agreement or otherwise, but determined without regard to anyadditional payments required under this Section 5 (a “Payment”), is (orwill be) subject to the excise tax imposed by Section 4999 of the Code orany interest or penalties are (or will be) incurred by the Executive withrespect to the excise tax imposed by Section 4999 of the Code with respectto the Corporation (the excise tax, together with any interest and penalties,are hereinafter collectively referred to as the “Excise Tax”), the Executiveshall be entitled to receive an additional cash payment (a “Gross-Up Payment”)from the Corporation in an amount equal to the sum of the Excise Tax and anamount sufficient to pay the cumulative Excise Tax and all cumulative incometaxes (including any interest and penalties imposed with respect to such taxes)relating to the Gross-Up Payment so that the net amount retained by the Executiveis equal to all payments received pursuant to the terms of this Agreement orotherwise less income taxes (but not reduced by the Excise Tax).

 

(C)Subject to theprovisions of paragraph (D) of this Section 5, all determinationsrequired to be made under this Section 5, including whether and when aGross-Up

 

8

----

 

Payment isrequired and the amount of such Gross-Up Payment and the assumptions to beutilized in arriving at the determination, shall be made by a nationallyrecognized certified public accounting firm designated by the Executive (the“Accounting Firm”) which shall provide detailed supporting calculations both tothe Corporation and the Executive within 30 days after the receipt ofnotice from the Executive that there has been a Payment, or such earlier timeas is requested by the Corporation.  Inthe event that at any time relevant to this Agreement the Accounting Firm isserving as accountant or auditor for the individual, entity or group or Personeffecting the Change in Control, the Executive shall appoint another nationallyrecognized certified public accounting firm to make the determinations requiredhereunder (which accounting firm shall then be referred to as the AccountingFirm hereunder).  All fees and expensesof the Accounting Firm shall be borne solely by the Corporation.  Any Gross-Up Payment, as determined inaccordance with this Section 5, shall be paid by the Corporation to theExecutive within five days after the receipt of the Accounting Firm’sdetermination.  If the Accounting Firmdetermines that no Excise Tax is payable by the Executive, it shall so indicateto the Executive in writing.  Any determinationby the Accounting Firm shall be binding upon the Corporation and the Executive.  As a result of uncertainty in theapplication of Section 4999 of the Code at the time of the initialdetermination by the Accounting Firm, it is possible that Gross-Up Paymentsthat the Corporation should have made will not have been made (an “Underpayment”),consistent with the calculations required to be made hereunder.  In the event the Corporation exhausts itsremedies in accordance with paragraph (D) of this Section 5 and theExecutive thereafter is required to make a payment of any Excise Tax, theAccounting Firm shall determine the amount of Underpayment that has occurredand the Underpayment shall be promptly paid by the Corporation to or for thebenefit of the Executive.

 

(D)The Executiveshall notify the Corporation in writing of any claim by the Internal RevenueService that, if successful, would require a Gross-Up Payment (that has notalready been paid by the Corporation). The notification shall be given as soon as practicable but no later thanten business days after the Executive is informed in writing of the claim andshall apprize the Corporation of the nature of the claim and the date on whichthe claim is requested to be paid.  TheExecutive shall not pay the claim prior to the expiration of the 30-day periodfollowing the date on which the Executive gives notice to the Corporation orany shorter period ending on the date that any payment of taxes with respect tothe claim is due.  If the Corporationnotifies the Executive in writing prior to the expiration of the 30-day periodthat it desires to contest the claim, the Executive shall:

 

(i)give theCorporation any information reasonably requested by the Corporation relating tothe claim;

 

(ii)take anyaction in connection with contesting the claim as the Corporation shallreasonably request in writing from time to time, including, without limitation,accepting legal representation with respect to the claim by an attorneyreasonably selected by the Corporation;

 

9

----

 

(iii)cooperatewith the Corporation in good faith in order effectively to contest the claim;and

 

(iv)permit theCorporation to participate in any proceedings relating to the claim.

 

The Corporationshall bear and pay directly all costs and expenses (including additional interestand penalties) incurred in connection with the contest and shall indemnify andhold the Executive harmless, on an after-tax basis, for any Excise Tax orincome tax (including interest and penalties with respect thereto) imposed as aresult of the representation and payment of costs and expenses.  Without limitation of the foregoingprovisions of this Section 5, the Corporation shall control allproceedings taken in connection with the contest and, at its sole option, maypursue or forego any and all administrative appeals, proceedings, hearings, andconferences with the taxing authority in respect of the claim and may, at itssole option, either direct the Executive to pay the tax claimed and sue for arefund or contest the claim in any permissible manner, and the Executive agreesto prosecute the contest to a determination before any administrative tribunal,in a court of initial jurisdiction and in one or more appellate courts, as theCorporation shall determine.  If theCorporation directs the Executive to pay the claim and sue for a refund, theCorporation shall advance the amount of the payment to the Executive, on aninterest-free basis, and shall indemnify and hold the Executive harmless, on anafter-tax basis, from any Excise Tax or income tax (including interest orpenalties with respect thereto) imposed with respect to the advance or withrespect to any imputed income with respect to the advance; and any extension ofthe statute of limitations relating to payment of taxes for the taxable year ofthe Executive with respect to which the contested amount is claimed to be dueshall be limited solely to the contested amount.  The Corporation’s control of the contest shall be limited toissues with respect to which a Gross-Up Payment would be payable hereunder andthe Executive shall be entitled to settle or contest, as the case may be, anyother issue raised by the Internal Revenue Service or any other taxingauthority.

 

(E)If, after thereceipt by the Executive of an amount advanced by the Corporation pursuant toparagraph (D) of this Section 5, the Executive becomes entitled toreceive any refund with respect to the claim, the Executive shall, subject tothe Corporation’s compliance with the requirements of paragraph (D) ofthis Section 5, promptly pay to the Corporation the amount of the refund(together with any interest paid or credited thereon after taxes applicablethereto).  If, after the receipt by theExecutive of an amount advanced by the Corporation pursuant toparagraph (D) of this Section 5, a determination is made that theExecutive shall not be entitled to any refund with respect to the claimand  the Corporation does not notify theExecutive in writing of its intent to contest the denial of refund prior to theexpiration of 30 days after the determination, then the advance shall beforgiven and shall not be required to be repaid and the amount of the advanceshall offset, to the extent thereof, the amount of Gross-Up Payment required tobe paid.

 

10

----

 

(F)Notwithstandingany other provision of this Section 5, to the extent that the Executive isentitled to a tax “gross-up” payment with respect to a Payment from theCorporation, any Subsidiary, or any affiliate of the Corporation under anyother agreement, the foregoing provisions of this Section 5 shall notapply to that Payment.

 

 

6.  **Termination Procedures**.

 

(A)During the termof this Agreement, any purported termination of the Executive’s employment(other than by reason of death) shall be communicated by written Notice ofTermination from one party hereto to the other party hereto in accordance withSection 11 hereof.  For purposes ofthis Agreement, a “Notice of Termination” shall mean a written notice thatindicates any provision in this Agreement relied upon, and, if applicable, thenotice shall set forth in reasonable detail the facts and circumstances claimedto provide a basis for termination of the Executive’s employment under theprovision so indicated.  Further, aNotice of Termination for Cause shall include a copy of a resolution dulyadopted by the affirmative vote of not less than a majority of the entiremembership of the Board at a meeting of the Board that was called and held forthe purpose of considering the termination finding that, in the informed,reasonable, good faith judgment of the Board, the Executive was guilty ofconduct set forth in the definition of Cause in Section 1(C), andspecifying the particulars thereof in detail.

 

(B)“Date ofTermination” with respect to any purported termination of the Executive’semployment during the term of this Agreement (other than by reason of death)shall mean (i) if the Executive’s employment is terminated for Disability,20 business days after Notice of Termination is given (provided that theExecutive shall not have returned to the full-time performance of theExecutive’s duties during that 20 business day period) and (ii) if theExecutive’s employment is terminated for any other reason, the date specifiedin the Notice of Termination, which, in the case of a termination by theCorporation, shall not be less than ten business days except in the case of atermination for Cause, and, in the case of a termination by the Executive,shall not be less than ten business days nor more than 20 business days,respectively, after the date such Notice of Termination is given.

 

7.  **Protective Covenants By The Executive**.

 

(A)Return ofProperty.  Within five days after thedate of termination of the Executive’s employment with the ALLTEL Group, theExecutive shall deliver to the Corporation all of the ALLTEL Group’s propertyin the Executive’s possession, custody or control, including, withoutlimitation, all keys and credit cards, all computers and fax machines, and allfiles, documents, data and information in any medium relating in any way to theALLTEL Group or its employees, suppliers, customers or business.

 

11

----

 

(B)Non-Disclosure.  The Executive acknowledges that in thecourse of the Executive’s employment with the ALLTEL Group he has had and willhave access to confidential information and trade secrets proprietary to ALLTELGroup, including but not limited to, information relating to the ALLTEL Group’sproducts, suppliers, and customers, the sources, nature, processes, costs andprices of the ALLTEL Group’s products, the names, addresses, contact persons,purchasing and sales histories, and preference of the ALLTEL Group’s suppliersand customers, the ALLTEL Group’s business plans and strategies, and the namesand addresses of, amounts of compensation paid to, and the trading and salesperformance of the ALLTEL Group’s employees and agents (hereinafter referred toas the “Confidential Information”).  TheExecutive further acknowledges that the Confidential Information is proprietaryto the ALLTEL Group, that the unauthorized disclosure of any of theConfidential Information to any person or entity could result in immediate andirreparable competitive injury to the ALLTEL Group, that could not adequatelybe remedied by an award of monetary damages. Accordingly, the Executive shall not disclose at any time anyConfidential Information to any person or entity who is not properly authorizedby the Corporation to receive the information, without the prior writtenpermission of the Corporation’s Chief Executive Officer.

 

(C)Non-Interference.  The Executive shall not during theExecutive’s employment with the ALLTEL Group and thereafter until theexpiration of 12 calendar months immediately following the calendar month inwhich occurs the Executive’s termination of employment with the ALLTEL Groupknowingly employ, or knowingly assist any person or entity other than theALLTEL Group in employing, any employee of any member of the ALLTEL Group.  The Executive shall not during the term ofthe Executive’s employment with the ALLTEL Group and thereafter until theexpiration of 12 calendar months immediately following the calendar monthin which occurs the Executive’s termination of employment with the ALLTEL Groupknowingly solicit, or knowingly assist any person or entity to solicit, anyemployee of any member of the ALLTEL Group to leave the ALLTEL Group’semployment or to become employed by any entity that is not a member of theALLTEL Group.

 

(D)HarmfulStatements.  The Executive shall not atany time knowingly disseminate any information or knowingly make anystatements, whether written, oral or otherwise, that are negative, disparagingor critical of the Corporation, any other member of the ALLTEL Group, or any oftheir parents, subsidiaries, affiliates, or their respective officers,directors, employees, shareholders, trustees, administrators, or employeebenefit plans, or the representatives, employees, agents, predecessors,successors, heirs, or assigns of any of the foregoing (hereinafter, the “ALLTELParties”), or their business or operations, or that place any of the ALLTELParties in a bad light, other than any such statement or information that ismade or disseminated by the Executive in a good faith belief as to their truthor accuracy and is either required by law or is reasonably necessary to theenforcement by the Executive of any right the Executive has related to theExecutive’s employment with the ALLTEL Group.

 

12

----

 

(E)Resignations.  Within five days after the termination ofthe Executive’s employment with the ALLTEL Group, the Executive shall executeand deliver to the Chief Executive Officer of the Corporation such resignationsas a director and officer of the Corporation and any other members of theALLTEL Group, in such form, as may be reasonably requested by the Corporation’sChief Executive Officer.

 

(F)Challenge toValidity.  The Executive shall not atany time assert that any provision of this Agreement is invalid orunenforceable in any respect or to any extent, irrespective of the outcome ofany action, suit or proceeding.

 

(G)ExecutiveAssistance.  If a Payment Trigger occursduring the term of this Agreement and if the Corporation is not in breach ofany of the Corporation’s covenants set forth in this Agreement, the Executiveshall, until the expiration of 12 calendar months immediately followingthe calendar month in which the Payment Trigger occurred, provide suchinformation and assistance as the Corporation may reasonably request asnecessary or appropriate to assist any ALLTEL Group member in the arbitrationor litigation or potential arbitration or litigation of any claim, action, suitor proceeding by any person or entity other than the Executive against anyALLTEL Group member arising from events occurring during the Executive’semployment with the ALLTEL Group, if the Corporation pays all out-of-pocketexpenses incurred by the Executive in complying with this paragraph (G).  The Executive shall not, however, berequired to provide assistance that would interfere with any activity forremuneration or profit in which the Executive is then actively engaged.

 

8.  **No Mitigation**.  The Executive shall not be required to seekother employment or to attempt in any way to reduce any amounts payable to theExecutive by the Corporation pursuant to this Agreement.  Further, the amount of any payment orbenefit provided for in this Agreement shall not be reduced by any compensationearned by the Executive as the  resultof employment by another employer, by retirement benefits, by offset againstany amount claimed to be owed by the Executive to the Corporation or aSubsidiary, or otherwise.

 

9.  **Disputes; Remedies**.

 

(A)If a dispute orcontroversy arises out of or in connection with this Agreement, the partiesshall first attempt in good faith to settle the dispute or controversy bymediation under the Commercial Mediation Rules of the American ArbitrationAssociation before resorting to arbitration or litigation.  Thereafter, any remaining unresolved disputeor controversy arising out of or in connection with this Agreement shall, upona written notice from the Executive to the Corporation either before suitthereupon is filed or within 20 business days thereafter, be settledexclusively by arbitration in accordance with the Commercial Arbitration Rulesof the American Arbitration Association in a city located within thecontinental United States designated by the Executive.  Judgment may be entered on the arbitrator’saward in any court having jurisdiction. Notwithstanding the foregoing provisions of this paragraph (A):

 

13

----

 

(i)The Executiveshall be entitled to seek specific performance of the Corporation’s obligationshereunder during the pendency of any dispute or controversy arising under or inconnection with this Agreement; and

 

(ii)TheCorporation shall be entitled to seek the injunctive relief described inparagraph (E) of this Section 9 during the pendency of any dispute orcontroversy arising under or in connection with this Agreement.

 

(B)Any legalaction concerning this Agreement, other than a mediation or an arbitrationdescribed in paragraph (A) of this Section 9, whether instituted bythe Corporation or the Executive, shall be brought and resolved only in a statecourt of competent jurisdiction located in the territory that encompasses thecity, county, or parish in which the Executive’s principal residence is locatedat the time such action is commenced. The Corporation hereby irrevocably consents and submits to and shalltake any action necessary to subject itself to the personal jurisdiction ofthat court and hereby irrevocably agrees that all claims in respect of theaction shall be instituted, heard, and determined in that court. TheCorporation agrees that such court is a convenient forum, and herebyirrevocably waives, to the fullest extent it may effectively do so, the defenseof an inconvenient forum to the maintenance of the action.  Any final judgment in the action may beenforced in other jurisdictions by suit on the judgment or in any other mannerprovided by law.

 

(C)The Corporationshall pay all costs and expenses, including attorneys’ fees and disbursements,of the Corporation and, at least monthly, all reasonable costs and expenses,including reasonable attorney’s fees and disbursements, of the Executive inconnection with any legal proceeding (including arbitration), whether or notinstituted by the Corporation or the Executive, relating to the interpretationor enforcement of any provision of this Agreement.  The Corporation shall pay prejudgment interest on any moneyjudgment obtained by the Executive as a result of any such proceeding, calculatedat the rate provided in Section 1274(b)(2)(B) of the Code.  Notwithstanding the foregoing provisions ofthis paragraph (C):

 

(i)If theExecutive instituted the legal proceeding and the judge, arbitrator, or otherindividual  presiding over theproceeding affirmatively finds that the Executive instituted the proceeding inbad faith, no reimbursement pursuant to this paragraph (C) shall be due to theExecutive, the Executive shall repay the Corporation for any amounts previouslypaid by it pursuant to this paragraph (C), and the Executive shall pay allreasonable costs and expenses, including reasonable attorney’s fees anddisbursements, of the Corporation in connection with the proceeding;

 

(ii)With respectto any dispute in which the Executive challenges the validity or enforceabilityof any provision of this Agreement in any respect or to any extent, noreimbursement or no further reimbursement pursuant to this paragraph (C) shallbe due to the Executive, and the Executive shall repay the Corporation for anyamounts previously paid by it pursuant to this paragraph (C); and

 

14

----

 

(iii)With respectto any dispute or controversy regarding the provisions of Section 7, otherthan a dispute to which the immediately preceding clause (ii) applies, if theExecutive does not prevail (after exhaustion of all available remedies), nofurther reimbursement pursuant to this paragraph (C) shall be due to theExecutive, and the Executive shall repay the Corporation for any amountspreviously paid by it pursuant to this paragraph (C) in respect of suchdispute.

 

(D)The Executiveacknowledges and agrees that the Executive’s sole and exclusive remedy withrespect to any and all claims arising under this Agreement or for breach hereofby the Corporation shall be the right to receive such amounts as are providedfor under Section 4, Section 5, and paragraph (C) of thisSection 9, to which the Executive is otherwise entitled pursuant to theterms and conditions of this Agreement.

 

(E)The Executiveacknowledges and agrees that each and every covenant contained inSection 7 (hereinafter, the “Protective Covenants”) is reasonable and isnecessary to protect the trade secrets, confidential information, and otherbusiness interests of the ALLTEL Group and that the Executive’s compliance witheach of the Protective Covenants is necessary to protect the ALLTEL Group fromunfair injury.  The Executiveacknowledges that the Protective Covenants are a principal inducement for thewillingness of the Corporation to enter into this Agreement and make thepayments and provide the benefits to the Executive under this Agreement andthat the Corporation and the Executive intend the Protective Covenants to bebinding upon and enforceable against the Executive in accordance with their terms,notwithstanding any common or statutory law to the contrary.  Notwithstanding any other provision of thisAgreement, the obligations of the Corporation under this Agreement areconditioned upon compliance by the Executive with each of the Protective Covenants,and failure by the Executive to comply, in all material respects, with theProtective Covenants shall entitle the Corporation to all rights and remediesavailable at law or in equity.  TheExecutive acknowledges that a breach, in any material respect, of theProtective Covenants could result in irreparable and continuing harm and damageto the ALLTEL Group for which there may be no adequate remedy at law.  In the event of a breach, in any materialrespects, of any of the Protective Covenants, each and every member of theALLTEL

 

Group shall beentitled to injunctive relief in addition to any other remedy or relief towhich any of them may be entitled.

 

10.  **Successors; Binding Agreement**

 

(A)In addition toany obligations imposed by law upon any successor to the Corporation, theCorporation shall require any successor (whether direct or indirect, bypurchase, merger, consolidation, or otherwise) to all or substantially all ofthe business or assets of the Corporation expressly to assume and agree to performthis Agreement in the same manner and to the same extent that the Corporationwould be required to perform it if no such succession had taken place.  Failure of the Corporation to obtain the

 

15

----

 

assumption andagreement prior to the effectiveness of any succession shall be a breach ofthis Agreement and shall entitle the Executive to compensation from theCorporation in the same amount and on the same terms as the Executive would beentitled to hereunder if the Executive were to terminate the Executive’semployment for Good Reason immediately after a Change in Control and during theterm of this Agreement, except that, for purposes of implementing theforegoing, the date on which any succession becomes effective shall be deemedthe Payment Trigger occasioned by the foregoing deemed termination ofemployment for Good Reason immediately following a Change in Control.  The provisions of this Section 10 shallcontinue to apply to each subsequent employer of the Executive bound by thisAgreement in the event of any merger, consolidation, or transfer of all orsubstantially all of the business or assets of that subsequent employer.

 

(B)This Agreementshall inure to the benefit of and be enforceable by the Executive’s personal orlegal representatives, executors, administrators, successors, heirs,distributees, devisees, and legatees. If the Executive shall die while any amount would be payable to theExecutive hereunder if the Executive had continued to live, the amount, unlessotherwise provided herein, shall be paid in accordance with the terms of thisAgreement to the executors, personal representatives, or administrators of theExecutive’s estate.

 

11.  **Notices**.  For the purpose of this Agreement, notices and all othercommunications provided for in the Agreement shall be in writing and shall bedeemed to have been duly given when delivered or mailed by United Statesregistered mail, return receipt requested, postage prepaid, addressed to therespective addresses set forth below, or to such other address as either partymay have furnished to the other in writing in accordance herewith, except thatnotice of change of address shall be effective only upon actual receipt:

 
| To  the Corporation: |                                   |
|----------------------|----------------------------------------|
|                 |                                   |
|                 | ALLTEL  Corporation                    |
|                 | One Allied Drive                       |
|                 | Little  Rock, Arkansas  72202     |
|                 | Attention:  Chairman of the Board |
|                 |                                   |
| To  the Executive:   |                                   |
|                 |                                   |
|                 | Scott  H. Settelmyer                   |
|                 | 5  Bonaparte Circle                    |
|                 | Little  Rock, AR 72211                 |

 

16

----

 

12.  **Miscellaneous**.  No provision of this Agreement may bemodified, waived, or discharged unless such waiver, modification, or dischargeis agreed to in writing and signed by the Executive and an officer of theCorporation specifically designated by the Board.  No waiver by either party hereto at any time of any breach by theother party hereto of, or compliance with, any condition or provision of thisAgreement to be performed by such other party shall be deemed a waiver ofsimilar or dissimilar provisions or conditions at the same or at any prior orsubsequent time.  No agreements orrepresentations, oral or otherwise, express or implied, with respect to thesubject matter hereof have been made by either party which are not expresslyset forth in this Agreement.  The validity,interpretation, construction, and performance of this Agreement shall begoverned by the laws of the State of Delaware. All references to sections of the Exchange Act or the Code shall bedeemed also to refer to any successor provisions to such sections.  Any payments provided for hereunder shall bepaid net of any applicable withholding required under federal, state, or locallaw and any additional withholding to which the Executive has agreed.

 

13.  **Validity**.  The invalidity or unenforceability of any provision of thisAgreement shall not affect the validity or enforceability of any otherprovision of this Agreement, which shall remain in full force and effect.

 

14.  **Counterparts**.  This Agreement may be executed in several counterparts, each ofwhich shall be deemed to be an original but all of which together willconstitute one and the same instrument.

 

**IN WITNESS WHEREOF**, the parties have signed this Agreementas of the date set forth above.

 
| **ALLTEL  CORPORATION**  |
|--------------------------|
|                     |
| Attest:                  |
|                     |
| /s/ Frank O’Mara    | By: | /s/ Scott Ford |   |
| Name:Name:               |
| Title:Title:             |
|                     |
| Witness: /s/ Nancy Wyatt |
|                     |
| /s/ Scott Settelmyer     |   |
| Scott H. Settelmyer      |

 

17

----