Exhibit 10.1


 


EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (the “Agreement”),
dated as of August 1, 2006 (the “Effective
Date”), is entered into by and between HICKORYTECH CORPORATION, a
Minnesota corporation (the “Company”), and
JOHN W. FINKE (“Executive”).


WHEREAS, Executive possesses certain skills, experience and expertise which will
be of use to the Company; and


WHEREAS, in light of the foregoing, the Company has
offered to employ Executive as its President and Chief Executive Officer, and
Executive has accepted such employment;


NOW, THEREFORE, in consideration of the promises and the
mutual covenants and agreements herein contained, the Company and Executive
hereby agree as follows:


Section 1. Employment Agreement


1.1           Employment
and Duties. The Company hereby employs Executive as its President and Chief
Executive Officer. In this capacity, Executive will report to and perform such
duties as shall reasonably be assigned by the Company’s Board of Directors (“Board”).
Executive shall perform such duties and carry out Executive’s responsibilities
hereunder faithfully and to the best of Executive’s ability.


Section 2. Compensation and Benefits


2.1           Compensation.


(a)           Base Salary.
The Company shall pay Executive a salary at an annual rate of Two Hundred Sixty
Thousand and no/100 Dollars ($260,000.00), to be paid in bi­weekly
installments, in arrears (the “Base Salary”).
The Base Salary shall be subject to periodic review and adjustment
by the Board.


(b)          Stock Compensation.


(i)             Executive
is a participant in the HickoryTech Corporation Long-Term Executive Incentive
Program (the “Incentive Program”) and
shall be eligible to receive stock awards granted under the 1993 Stock Award
Plan, as amended, in accordance with the terms of the Incentive Program, as
they may be amended or modified from time to time.


(ii)            Executive
will receive a one time grant of options to acquire 15,000 shares of
HickoryTech stock subject to the terms of the 1993 Stock Award Plan, as
amended, and the Stock Option Agreement. The grant date shall be September 1,
2006, and Executive will be responsible for associated taxes and withholdings.















 


 


(c)            Annual Incentive
Compensation. Executive is a participant in the HickoryTech Executive
Incentive Plan (the “EIP”) and shall
be eligible to receive an annual cash incentive award pursuant to the EIP in
accordance with its terms, as they may be amended or modified from time to
time.


2.2          Participation in Company Benefit Plans. Executive shall be entitled to participate in
all employee benefit plans or programs of the Company offered to other
employees to the extent that Executive’s position, tenure, salary, and other
qualifications make Executive eligible to participate in accordance with the
terms of such plans, except as otherwise expressly provided in this Agreement.
The Company does not guarantee the continuance of any particular employee benefit
plan or program except as expressly provided in this Agreement, and Executive’s
participation in any such plan or program shall be subject to all terms,
provisions, rules and regulations applicable thereto. Executive will be
entitled to 272 hours of earned paid time off per year, to be used and
administered in accordance with the Company’s paid time off policy as it may
change from time to time. For calendar year 2006, Executive’s entitlement to
earned paid time off shall be prorated at 255.25 hours.


2.3          Special Retirement Benefits.


(a)           Supplemental
Retirement Plan. As of the Effective Date, Executive and Company have also
entered into the Supplemental Retirement Agreement attached hereto as Exhibit
A.


(b)          Retiree
Medical Benefits. Notwithstanding any other provision of this Agreement to
the contrary, if at or after attainment of age 55 and completion of 15 years of
service with the Company, or any of its affiliates, subsidiaries, successors,
or assigns, Executive’s employment is terminated (voluntarily or involuntarily,
by retirement or otherwise) for any reason other than by the Company for Cause
(as defined below) (the “Separation”), the Company shall continue to provide
health care coverage for Executive, his spouse, and his eligible dependents
under the terms and conditions of the Company’s retiree group health plan
provided, however, that (i) during the period from Executive’s Separation until
Executive reaches the age of 62, the Company’s contribution to the cost of
Executive’s post-employment group coverage shall be fixed in an amount equal to
the Company’s contribution to such cost at the time of Executive’s Separation
and (ii) upon Executive’s attainment of the age of 62, the Company’s
contribution shall continue to be made in an amount equal to the Company’s
contribution for all other participants in the Company’s retiree group health
plan. For purposes of this Agreement, Executive’s years of service shall be calculated
from his Company hire date of June 10, 1996. Nothing in this Agreement shall be
construed to limit the Company’s right to amend, modify, reduce or otherwise
discontinue, in its sole discretion, benefits provided under the Company’s retiree
group health plan. In the event that the Company’s retiree group health plan should
be discontinued at any time following Executive’s Separation, the Company will make
a one time payment to Executive in an amount equal to the product of (i) the
annual amount paid by the Company for Executive’s group health care plan at the
time of his Separation multiplied by (ii) the number of years remaining until
both Executive and his spouse shall reach the age of eligibility for Medicare
or such other government



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subsidized
health care coverage as may be in effect at the time. Notwithstanding the
foregoing, if the Company and Executive determine that Executive’s continued
coverage under any health care plan as provided herein is subject to Section
409A of the Internal Revenue Code (“Code”), the continuation of such coverage
and the provision of payments shall be delayed or modified (as determined by
the Company) to the extent necessary to comply with Section 409A.


(c)            Additional
Insurance. The Company shall provide and pay for, and Executive shall
designate the beneficiary of, a life insurance policy on Executive in an amount
equal to One Hundred Seventy-Five Thousand Dollars ($175,000.00). In the event
of Executive’s Separation (as defined above) at or after attainment of age 55
and completion of 15 years of service, the Company shall continue to maintain
and pay the premiums with respect to such insurance policy for a period ending
upon the earlier of the date that Executive’s spouse shall become eligible for
Medicare or such other government subsidized health care coverage as may be in
effect at the time, or the date of her death; provided, however, that the
provision of premium payments after Separation shall be delayed or modified to
the extent necessary to comply with Section 409A of the Code. If Executive’s
employment is terminated by the Company for Cause, the Company shall have no
obligation to maintain and pay the premiums with respect to such insurance
policy after Executive’s termination of employment.


2.4          Expenses. The
Company will pay or reimburse Executive for all reasonable and necessary
out-of-pocket expenses incurred by Executive in the performance of his duties
under this Agreement. Executive shall provide to the Company detailed and
accurate records of such expenses for which payment or reimbursement is sought,
and Company payments shall be in accordance with the regular expense
reimbursement guidelines maintained by the Company from time to time, all
subject to the Board’s right of review.


2.5          Executive Perquisites.
During the term of his employment under this Agreement, the Company shall:


(a)           Continue
to provide Executive with an automobile of a similar quality and value as
Executive drives as of the Effective Date, for his business and personal use. Such
vehicle shall be replaced by the Company at approximately 75,000 miles or three
years in age. Executive acknowledges that he remains solely responsible for the
payment of all taxes owed by reason of his personal use of that vehicle;


(b)          Continue
to pay all dues and assessments for Executive’s full membership at the Mankato
Golf Club. All charges incurred by the Executive for personal (i.e., non- business-related)
use or services of the Club shall be the responsibility of Executive;


(c)           Continue
to provide for Executive’s periodic executive physical examination in
accordance with the Company’s guidelines for executive physical examinations.



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2.6           Withholding Taxes.
All compensation payments or benefits provided to, or for the benefit of,
Executive shall be made subject to withholding and otherwise treated and
reported by the Company as required to ensure compliance with all applicable
laws and regulations.


Section 3.  
Termination of Employment


3.1           Definitions.
As used in Section 3 of this Agreement, the following terms shall have the
meaning set forth for each below:


(a)           “Cause” shall mean any of the
following:


(i)              the
gross neglect or willful failure or refusal of Executive to perform Executive’s
duties hereunder (other than as a result of Executive’s death or Disability)
provided Executive has failed to cure such deficiency after having been given
written notice of such deficiency, an opportunity to be heard by the Board
Chairperson and/or Vice-Chairperson, and twenty-one (21) days following written
notice to cure such deficiency;


(ii)             perpetration
of an intentional and knowing fraud against or affecting the Company or any
affiliate, customer, supplier, agent or employee thereof;


(iii)            any
willful or intentional act that could reasonably be expected to injure the reputation,
financial condition, business or business relationships of the Company or
Executive’s reputation or business relationships;


(iv)           conviction
(including conviction on a nolo contendere plea)
of a felony or any crime involving fraud, dishonesty or moral turpitude;


(v)            the
material breach by Executive of this Agreement (including, without limitation,
the Employment Covenants set forth in Section 4 of this Agreement) which is not
cured within twenty-one (21) days after receipt of written notice from the
Company specifying the nature of the breach; or


(vi)           the
failure or continued refusal to carry out the directives of the Board which is
not cured within twenty-one (21) days after Executive has had the opportunity
to be heard by the Board Chairperson and/or Vice-Chairperson and has received
written notice from the Company specifying the nature of such failure or
refusal.


(b)          “Date of
Termination” shall mean the date specified in the Notice of Termination (as
hereinafter defined) except in the case of Executive’s death, in which case the
Date of Termination shall be the date of death.



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(c)           “Notice of
Termination” shall mean a written notice from the Company to Executive that
indicates the specific provision of Section 3 of this Agreement relied upon as
the basis for such termination and the Date of Termination.


(d)           “Good Reason” shall mean:


(i)              Company,
without Executive’s consent, effects a material reduction of Executive’s title,
position, total compensation as specified in Sections 2.1 and 2.2 above, authority
or duties;


(ii)             any
requirement that Executive, without his consent, move his regular office to a
location more than fifty (50) miles from Company’s current office location;


(iii)            the
material failure by Company, or its successor, if any, to pay compensation or
provide benefits or perquisites to Executive as and when required by the terms
of this Agreement; or


(iv)           any material breach by Company of this Agreement.


The Executive shall have Good Reason to terminate
Executive’s employment if (i) within ten (10) days following Executive’s actual
knowledge of the event which Executive determines constitutes Good Reason,
Executive notifies the Company in writing that Executive has determined a Good
Reason exists and specifies the event creating Good Reason, and (ii) following
receipt of such notice, the Company fails to remedy such event within
twenty-one (21) days. If either condition is not met, Executive shall not have
a Good Reason to terminate Executive’s employment.


3.2           Termination Upon
Death or Disability. This Agreement, and Executive’s employment hereunder,
shall terminate automatically and without the necessity of any action on the
part of the Company upon the death or Disability (as defined below) of
Executive. For purposes of this Section, “Disability” shall mean the inability
of the Executive to perform the duties and responsibilities of his or her
employment, with or without reasonable accommodation, by reasons of illness or
other physical or mental impairment or condition, if such inability continues
for an uninterrupted period of ninety (90) calendar days or more. A period of
inability shall be “uninterrupted” unless and until the Executive is no longer
considered disabled by the Company’s long term disability insurer.


(a)           The determination of
whether the Executive is suffering from a Disability shall be made on the same
basis as the Company provided long-term disability benefit, which is a fully
insured benefit provided by an independent third party. If the Executive meets
the disability criteria for long term disability benefits under this Company
provided benefit, the Executive will also be considered to have a Disability
under this Agreement.


(b)          The Executive agrees
to make himself available for and to submit to examinations by such physicians
as may be requested by the Company or the Company’s



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long
term disability insurer. The Executive’s failure to submit to examinations by
such physicians as may be requested shall result in a conclusive determination
that Executive does, in fact, have a Disability.


3.3          Company’s and
Executive’s Right to Terminate. This Agreement and Executive’s employment
hereunder may be terminated at any time by the Company for Cause or, if without
Cause, upon thirty (30) days prior written notice to Executive, subject to the
provisions of Section 3.4(b) below. In the event the Company should give
Executive a Notice of Termination without Cause, the Company may, at its
option, elect to provide Executive with salary in lieu of Executive’s continued
active employment during the notice period. This Agreement and Executive’s
employment hereunder may be terminated by Executive at any time for Good Reason
and, if without Good Reason, upon thirty (30) days prior written notice to the
Company.


3.4          Compensation Upon Termination.


(a)           Severance. In
the event the Company terminates this Agreement without Cause, or in the event
Executive terminates this Agreement for Good Reason, Executive shall be
entitled to receive: (i) Executive’s then current Base Salary through the Date
of Termination, and (ii) a severance payment equal to eighteen (18) months of
Executive’s then current Base Salary to be made in regular payroll installments
commencing upon the next regular payday following the expiration of the
revocation period in Executive’s Release (as provided in Section 3.4(c) below)
without any revocation having occurred. Notwithstanding the foregoing, the
Company shall, to the extent necessary and only to the extent necessary, modify
the timing of delivery of severance benefits to Executive if the Company
reasonably determines that the timing would subject the severance benefits to
any additional tax or interest assessed under Section 409A of the Code. In such
event, the delayed payments will be made in a lump sum as soon as practicable
without causing the severance benefits to trigger such additional tax or
interest under Section 409A of the Code, In the event this Agreement is
terminated for any reason other than by the Company without Cause, or by
Executive for Good Reason, Executive shall not be entitled to the continuation
of any compensation, bonuses or benefits provided hereunder, or any other
payments following the Date of Termination, other than the then current Base
Salary earned through such Date of Termination.


(b)          Change of Control.
Executive and the Company are parties to a Change of Control Agreement entered
into as of March 30, 2005 (the “COC Agreement”).
The COC Agreement, and any amendments thereto, will control the rights and
obligations of the parties in the event of a change of control of the Company
as defined by the terms of that COC Agreement provided, however, that,
notwithstanding any other provision of the COC Agreement, and in addition to
the terms of the COC Agreement:


(i)              the provisions of Sections 2.3(b)
and (c) of this Agreement shall remain in effect notwithstanding any change of
control of the Company; and



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(ii)             the “Benefit”
payable to Executive under Section 4(a) of the COC Agreement shall be in the
amount of one month’s salary (as defined in the COC Agreement) multiplied by
thirty-five and eighty-eight one hundredths (35.88).


(c)            Release.
Anything to the contrary contained herein notwithstanding, as a condition to
Executive receiving any severance benefits to be paid pursuant to this
Agreement, Executive shall execute and deliver to the Company a general release
of employment related claims in terms satisfactory to the Company. The Company
shall have no obligation to provide any severance benefits to Executive until
it has received the general release from Executive and any revocation or
rescission period applicable to the release shall have expired without
revocation or rescission.


Section 4.  
Employment Covenants


4.1           Restrictive
Covenants. As an essential inducement to the Company to enter into this
Agreement, and as consideration for the foregoing promises of the Company,
Executive agrees as follows:


(a)            Executive
acknowledges that during his employment with the Company, he has been and will
be exposed to and entrusted with Confidential Information as defined hereafter
in this subparagraph. Executive understands and agrees that such Confidential
Information has been and will be disclosed to him in confidence and for the
sole benefit of the Company. Executive agrees that commencing on the date of
this Agreement he (i) will diligently protect the confidentiality of all
Confidential Information, (ii) will not disclose or communicate any
Confidential Information to any third party without the consent of the Company
or as may be required by law, and (iii) will not make use of Confidential
Information on his own behalf or on behalf of any third party. In view of the
nature of Executive’s employment and the nature of the Confidential Information
which Executive has received and will receive during such employment, Executive
agrees that any unauthorized disclosure or use of such information to or on
behalf of third parties would cause irreparable harm to the confidential status
of such information and to the Company and that, therefore, the Company shall
be entitled to an injunction prohibiting Executive from any such disclosure,
use, or threatened disclosure or use. When Confidential Information becomes
generally available to the public by means other than Executive’s acts or
omissions, it is no longer subject to this Agreement. Executive expressly
acknowledges that the undertakings set forth in this subparagraph shall survive
the expiration or termination of other agreements or duties in this Agreement.
As used in this Agreement, “Confidential
Information” means information, whether in written, oral, electronic
or other form, not generally available to the public concerning (i) the Company’s
trade secrets, (ii) the contents or duration of the Company’s agreements with
third parties, (iii) the Company’s financial results or other financial
matters, (iv) the sales, pricing and marketing methods, practices and
strategies of the Company, or (v) its business plans.



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(b)            During the period ending on a date
that is twenty-four (24) months following the Date of Termination, regardless
of the reason for termination, Executive agrees:


(i)              that
he will not, directly or indirectly, render services to any Conflicting
Organization (as defined below) or otherwise engage in competition with the
Company in any manner or capacity within the Territory (as defined below), nor
direct any other individual or business enterprise to engage in competition
with the Company, e.g., as an advisor, principal, agent, partner, employee,
officer, director or shareholder (except by ownership of less than five percent
of the outstanding stock of a publicly held corporation), on any products or
services competitive with the Company’s existing or announced products or
services or any products or services which have not yet been offered or
announced but which were under active development by the Company as of the Date
of Termination. For purposes of this Section, “Conflicting
Organization” shall be defined as any person, corporation,
partnership or other entity that develops or provides products, services or
equipment that competes with or replaces products, services or equipment
provided by the Company. For the purposes of this Agreement, “Territory” shall be defined as: (i) the
states of Minnesota and Iowa, and (ii) any other location within a one hundred
(100) mile radius surrounding any existing or planned office of the Company
(including administrative, executive, sales, and service offices) in which the
Company, as of the Date of Termination, is engaged in or actively planning to
engage in the provision of services or sale of equipment;


(ii)             that he will not, directly or
indirectly, assist, solicit, entice, or induce (or assist any other person or
entity in soliciting, enticing, or inducing) any customer doing business with
the Company or any potential customer that has been or is being actively
solicited for business by the Company (or agent, employee, or consultant of any
customer or potential customer) during the period of Executive’s employment
with the Company, to deal with any competitor of the Company;


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



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4.2          Other Confidentiality Obligations. Executive
acknowledges that the Company may, from time to time, have agreements with
other persons or entities which impose confidentiality obligations or other
restrictions on the Company. Executive hereby agrees to be bound by all such
obligations and restrictions and shall take all actions necessary to discharge
the obligations of the Company thereunder, including, without limitation,
signing any confidentiality or other agreements required by such third parties.


4.3          Return of
Confidential Information. At any time during Executive’s employment with
the Company, upon the Company’s request, and in the event of Executive’s
termination of employment with the Company for any reason whatsoever, Executive
shall immediately surrender and deliver to the Company all records, materials,
notes, equipment, drawings, documents and data of any nature or medium, and all
copies thereof, relating to any Confidential Information (collectively the “Company Materials”) which is in Executive’s
possession or under Executive’s control. Executive shall not remove any of the
Company Materials from the Company’s business premises or deliver any of the
Company Materials to any person or entity outside of the Company, except as
required in connection with Executive’s duties of employment.


4.4          Other Obligations.
The terms of this Section 4 are in addition to, and not in lieu of, any
statutory or other contractual or legal obligation to which Executive may be
subject relating to the protection of Confidential Information.


4.5          Exclusivity of
Employment. Executive shall not directly or indirectly, without prior
approval of the Board, engage in any activity competitive with or adverse to
the Company’s business or welfare or render a material level of services of a
business, professional or commercial nature to any other person or firm,
whether for compensation or otherwise; provided, however, that Executive may
serve on various trade or industry boards or, with the prior approval of the
Board, serve on the boards of other unrelated corporations, as well as
participate in charitable and civic activities, provided that such activities
do not in any way interfere with the performance of Executive’s duties to the
Company.


4.6          Judicial Enforcement.


(a)           Executive
acknowledges that a breach or threatened breach of any portion of this Section
4 will cause irreparable harm to the Company and could not be compensated by
money damages. Accordingly, the Executive specifically agrees that the Company
shall be entitled to injunctive relief to enforce the provisions of this
Section 4 and that such relief may be granted without the necessity of proving
actual damages. The Company’s rights with respect to obtaining injunctive
relief, however, will not diminish its rights to pursue any other available
remedies for such breach or threatened breach, including the recovery of actual
damages.


(b)          Should any court of
competent jurisdiction determine that any of the covenants set forth in this
Section 4 are overbroad or otherwise invalid in any respect, the parties agree that
the court so holding shall revise such covenant in duration or in scope, or in
both, or in any other manner which the court determines sufficient to render
the



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covenant enforceable against
the Executive, and shall then enforce the same to that more limited extent.


Section 5.  
Miscellaneous


5.1          Notices. All
notices or other communications which are required or permitted hereunder shall
be deemed to be sufficient if contained in a written instrument given by
personal delivery or registered or certified mail, postage prepaid, return
receipt requested, addressed to such party at the address set forth below or
such other address as may thereafter be designated in a written notice from
such party to the other party:


	
  To Company:

  	
  Hickory Tech Corporation

  
	
   

  	
  221 East Hickory
  Street

  
	
   

  	
  P.O. Box 3248

  
	
   

  	
  Mankato,
  Minnesota 56002-3248 

  
	
   

  	
  Attention:
  Chairperson, Board of Directors

  
	
   

  	
   

  
	
  To Executive:

  	
  John Finke

  
	
   

  	
  160 Fairway Drive 

  
	
   

  	
  Mankato, Minnesota 56001

  



All
such notices and communications shall be deemed to have been delivered and
received (i) in the case of personal delivery, on the date of such delivery,
and (ii) in the case of mailing, on the third business day following such
mailing.


5.2          Headings. The
headings of the sections of this Agreement are inserted for convenience only
and shall not be deemed a part of or affect the construction or interpretation
of any provision hereof.


5.3          Modifications:
Waiver. No modification of any provision of this Agreement or waiver of any
right or remedy herein provided shall be effective for any purpose unless specifically
set forth in a writing signed by the party to be bound thereby. No waiver of
any right or remedy in respect of any occurrence or event on one occasion shall
be deemed a waiver of such right or remedy in respect of such occurrence or
event on any other occasion.


5.4          Entire Agreement.
This Agreement, together with the various plans, programs and policies
referenced herein, the Supplemental Retirement Agreement and the COC Agreement,
contain the entire agreement of the parties with respect to the subject matter
hereof and supersedes all other agreements, oral or written, heretofore made
with respect thereto.


5.5          Severability.
Any provision of this Agreement that may be prohibited by, or unlawful or
unenforceable under, any applicable law of any jurisdiction shall, as to such jurisdiction,
be ineffective without affecting any other provision hereof. To the full
extent, however, that the provisions of such applicable law may be waived, they
are hereby waived, to the end that this Agreement be deemed to be a valid and
binding agreement enforceable in accordance with its terms.



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5.6          Controlling Law.
This Agreement has been entered into by the parties in the State of Minnesota
and shall be enforced in accordance with the laws of Minnesota.


5.7          Arbitration.
Any controversy, claim, or breach arising out of or relating to this Agreement
or the breach thereof shall be settled by arbitration in the State of Minnesota
in accordance with the rules of the American Arbitration Association for
employment / commercial disputes and the judgment upon the award rendered shall
be entered by consent in any court having jurisdiction thereof; provided,
however, that this provision shall not preclude the Company from seeking
injunctive or similar relief from the courts to enforce its rights under the Employment
Covenants set forth in Section 4 of this Agreement. It is understood and agreed
that, in the event the Company provides a Notice of Termination to Executive for
Cause, and it should be finally determined in a subsequent arbitration that
Executive’s termination was not for Cause as defined in this Agreement, then
the remedy awarded to Executive shall be limited to such compensation and
benefits as Executive would have received in the event of Executive’s termination
other than for Cause at the same time as the original termination.


5.8          Assignments.
Subject to obtaining Executive’s prior approval, which shall not be unreasonably
withheld or delayed, and provided the assignee assumes all of the Company’s obligations
hereunder, the Company shall have the right to assign this Agreement and to
delegate all rights, duties and obligations hereunder to any entity that
controls the Company, that the Company controls or that may be the result of
the merger, consolidation, acquisition or reorganization of the Company and
another entity. Executive agrees that this Agreement is personal to Executive
and Executive’s rights and interest hereunder may not be assigned, nor may
Executive’s obligations and duties hereunder be delegated (except as to
delegation in the normal course of operation of the Company), and any attempted
assignment or delegation in violation of this provision shall be void.


5.9          Read and
Understood. Executive has read this Agreement carefully and understands
each of its terms and conditions. Executive has sought independent legal
counsel of Executive’s choice to the extent Executive deemed such advice
necessary in connection with the review and execution of this Agreement.


IN WITNESS WHEREOF, the parties have executed this Agreement as
of the Effective Date.


	
  

  	
  HICKORYTECH CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Starr J. Kirklin

  
	
   

  	
  Its: 

  	
  Chair of the
  Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John W. Finke

  
	
   

  	
  JOHN W. FINKE

  	
   

  
				



 



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EXHIBIT A 


SUPPLEMENTAL RETIREMENT AGREEMENT


This
Supplemental Retirement Agreement effective this first day of August, 2006 by
and between Hickory Tech Corporation, a Minnesota corporation (“HickoryTech”)
and John W. Finke (“Finke”).


By
mutual agreement of the parties and as part of the compensation package to be
paid to Finke by HickoryTech pursuant to the Employment Agreement between Finke
and HickoryTech dated August 1, 2006, as amended from time to time (“Employment
Agreement”), the parties agree as follows:


1.            Account.
HickoryTech will maintain a supplemental retirement account (“Account”) for
Finke on the books of HickoryTech. Amounts credited to the Account will earn interest
at a rate equal to the rate on ten year Treasury bonds as established at the
first Treasury auction held in January, which usually occurs on the second
Thursday of January and as reported in the Wall Street Journal. The interest
rate shall be adjusted each year as of January 1 and that interest rate shall
apply to the Account for that year. Interest will be earned from the day such amounts
are credited to the Account to the date of payment. Interest earned will be
credited to the Account at the end of each calendar year (or the date of final
payment, if earlier). If Finke becomes eligible for installment payments under
this Agreement, interest will continue to be credited on the unpaid balance not
yet distributed.


2.            Amounts Credited
to the Account. Each year on December 31, HickoryTech shall credit the
Account with an amount equal to ten percent (10%) of Finke’s Base Salary (as
defined in the Employment Agreement or any successor agreement thereto)
actually paid during the year (regardless of when such compensation is earned
or accrued). The Account shall be credited with such amounts each year during
the ten year period commencing January 1, 2007 and ending with a credit to the
Account on December 31, 2016.


3.            Commencement of
Payment. The payment of benefits to Finke under this Agreement shall become
payable upon the later of the following events:


(a)           the date that Finke
separates from service (either voluntarily or involuntarily) with HickoryTech
for reasons other than death or Disability; or


(b)           the date Finke attains age fifty five
(55).


The
benefits in the Account shall be paid to Finke in five (5) annual installments,
with the first installment to be paid on January 1 of the calendar year
following the later of the dates in (a) or (b) above (or as soon as
administratively practicable thereafter). The remaining installments shall be
paid on January 1 of each succeeding calendar year until the total benefits are
paid in full. Notwithstanding the foregoing, the first installment payable to
Finke on account of his









 



separation from service shall be delayed to
the extent necessary to satisfy Section 409 A of the Internal Revenue Code (“Code”)
(i.e., the first annual
installment payable on account of Finke’s separation from service shall
commence no earlier than six (6) months and one (1) day following Finke’s
separation, if Finke is then a specified employee within the meaning of Section
409A of the Code).


4.            Death.
Notwithstanding Section 3 above, in the event Finke should die (either while
employed or after a separation from service) before receiving the total number
of payments as specified herein, HickoryTech will pay to Finke’s designated
beneficiary a single lump sum equal to Finke’s Account balance at the time of
his death. The payment shall be made within thirty (30) days following Finke’s
death (or as soon as administratively practicable thereafter). In the event
Finke shall fail to designate one or more beneficiaries in writing prior to his
death, the balance of the payments shall be made to his spouse, if living, or
if no spouse is then living, to the personal representative of his estate.


5.            Disability.
Notwithstanding Section 3 above, in the event Finke should incur a Disability
while still employed by HickoryTech, HickoryTech will pay Finke the Account balance
at the time of Disability in five (5) annual installments. The payments shall
commence on January 1 of the calendar year following the date of Finke’s “Disability”
(or as soon as administratively practicable thereafter). The remaining
installments shall be paid on January 1 of each succeeding calendar year until
the total benefits are paid in full. For this purpose, the term “disability”
means that Finke is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three months under the
Company’s long-term disability plan. If there is no Company long-term
disability plan that covers Finke, then “Disability” means that Finke (i) is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months; or (ii) has been determined to be totally disabled by the Social
Security Administration. Notwithstanding the foregoing, the term “Disability”
shall at all times be interpreted in a manner so as not to violate Section 409A
of the Code.


6.            Installments.
As of the January 1 (or such later date if required under Section 409A) upon
which installments commence, a “principal payment” will be determined by dividing
the value of the Account balance by five (5). The first installment shall
consist solely of a principal payment. The remaining four (4) installments
shall each consist of a principal payment, plus the interest accrued on the
Account balance during the preceding year.


7.            Not a Contract of
Employment. This Agreement shall neither constitute a contract of employment,
nor shall any provisions hereof restrict the right of HickoryTech to discharge
Finke, or restrict the right of Finke to terminate his employment, consistent
with the Employment Agreement.



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8.            Plan Binding on Successors. In the event that
HickoryTech shall merge with another corporation, or reorganize, or sell
substantially all of its assets to another corporation, firm, or person,
HickoryTech will require the succeeding or continuing corporation, firm, or person
to expressly assume and agree to perform the obligations under this Agreement
in the same manner and to the same extent that HickoryTech would be required to
perform if no such succession had taken place.


9.            4Q9A Compliance.
The Company shall, to the extent necessary and only to the extent necessary,
modify the timing of delivery of the amounts due under this Agreement if the Company
determines that the timing would subject the amounts to any additional tax or
interest assessed under Section 409A of the Internal Revenue Code. In such event,
the payments will occur as soon as practicable without causing the benefits to
trigger such additional tax or interest under Section 409A of the Internal
Revenue Code.


10.          Miscellaneous Provisions.


(a)           Neither Finke nor
Finke’s beneficiaries shall have any right to assign, pledge, transfer or
otherwise hypothecate this Agreement or the payments hereunder, in whole or in
part. Benefits under this Agreement will not be subject to execution,
attachment or similar process.


(b)          This Agreement
constitutes HickoryTech’s unconditional promise to pay the amounts which become
payable pursuant to the terms hereof. Finke’s rights are solely those of an
unsecured creditor. This Agreement does not give Finke a security interest in
any specific assets of HickoryTech. The Account is for purposes of determining
the benefits HickoryTech is required to pay. The Account does not require any
segregation of assets.


(c)           This Agreement may
not be altered, amended or revoked except by a written agreement signed by
HickoryTech and Finke (or by the beneficiaries if Finke is no longer living).


(d)          The provisions of
this Agreement shall be construed and enforced according to the laws of
Minnesota.


IN WITNESS WHEREOF, the parties hereto execute this Agreement the day
and year first above written.


	
  

  	
  HICKORY TECH
  CORPORATION

  
	
   

  
	
   

  
	
   

  	
  By

  	
  /s/ Starr J.
  Kirklin

  
	
   

  	
   

  	
  Its

  	
  Chair of the
  Board

  
	
   

  	
   

  
	
   

  	
  /s/ John W.
  Finke

  
	
   

  	
  John W. Finke

  



 



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