Document:

Exhibit 10.4

 

 

STRICTLY CONFIDENTIAL

 

June 15, 2010

 

Lindon
Fellows

c/o
Cubist Pharmaceuticals, Inc.

65
Hayden Avenue

Lexington,
MA 02421

 

Re:          Separation Agreement and
Release

 

Dear
Lindon:

 

As
we have discussed, your employment with Cubist Pharmaceuticals, Inc.
(alternatively, “Cubist” or the “Company”) will end on June 18, 2010 (the “Departure
Date”).

 

1.     Effect
of Departure.  On your
Departure Date, you will be paid all wages and other compensation due,
including payment for all accrued but unused vacation, through the Departure
Date. Except as set forth below, your participation in all of the Company’s
employee benefit plans will end as of your Departure Date, in accordance with
the terms of those plans.

 

2.     Severance
Pay and Other Benefits

 

(a)           In accordance with your
Retention Letter dated as of October 9, 2007, and upon the effective date
of this Separation Agreement and Release (this “Agreement”) following the seven
(7) day revocation date specified below, the Company will provide you with
severance pay in the amount of eighteen (18) months’ salary (“Separation Pay”).
As set forth in your Retention Letter, the Separation Pay will be payable in
accordance with our normal payroll cycles in twelve (12) equal semi-monthly
installments. You will not be able to make any
salary deferrals for contribution to the Cubist 401(k) plan from the
Separation Pay.

 

(b)           The “qualifying event” under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”)
shall be deemed to have occurred on the Departure Date. As also set forth in
your Retention Letter, upon 

 

 

completion of the
appropriate COBRA election forms, and subject to all the requirements of COBRA, for the
eighteen (18) month period following the Departure Date (the “Continuation
Period”) you will remain eligible to participate in the Company’s health
and dental insurance plans under the same terms and conditions applicable to
active, full-time employees.  During the
Continuation Period, you will be responsible for paying the portion of the
premiums required for active, full-time employees.  Your
portion of the premiums will be paid to the Company via payroll during the
period in which you are receiving Severance Pay and by you by personal check to
the Company during the period of the Continuation Period in which you are not
receiving Severance Pay.  After the
Continuation Period, you will have the right to continue your medical
and dental insurance, subject to the requirements of COBRA, at your own cost
(as described in the COBRA qualifying notice to be provided to you under
separate cover).

 

(c)           Cubist will provide you with
a six (6)-month “Career Transition” program offered by Clear Rock to begin on a
mutually agreeable date.

 

(d)           Pursuant to the Company’s
Amended and Restated 2000 Equity Incentive Plan (the “2000 Plan”) and equity
incentive award notices that you have received, vesting of any options granted
to you during your employment with the Company will cease as of the Departure
Date.  In accordance with the discretion
afforded the Compensation Committee of Cubist’s Board of Directors (the “Compensation
Committee) in the 2000 Plan, the Compensation Committee has elected to extend
the period during which you can exercise the vested portion of any stock
options that was exercisable on the Departure Date from 90 days after the
Departure Date to November 30, 2011. 
Except as specifically set forth in the immediately preceding sentence,
all of your stock options and other equity incentive awards will continue to be
governed by the 2000 Plan and equity incentive award notices between you and
the Company.

 

(e)           All payments set forth in
this Section 2 shall be subject to all applicable federal, state and/or
local withholding and/or payroll taxes, and Cubist may withhold from any
amounts payable to you (including any amounts payable pursuant to this
Agreement) in order to comply with such withholding obligations. You further
authorize Cubist to deduct any health insurance premiums that you are required
to pay under Section 2(b) from your Severance Pay and to otherwise
offset any amounts owed by you to Cubist.

 

3.     Reference
Requests.  Cubist will
respond to any reference requests from potential employers by having a member
of the Human Resources department provide the dates that you worked at Cubist
only.  You agree to inform any potential
employers seeking references that all such requests should be directed to the
Human Resources Department.

 

4.     Accord
and Satisfaction.  You agree that
the Separation Pay and other benefits described in this Agreement shall be in
full and complete payment and satisfaction of any and all monetary sums and
other obligations which are now, or might hereafter have become, owing to you
for services rendered by you during your employment or in connection with your
termination of employment including, without limitation, all claims for back
wages, salary, commissions, vacation pay, sick 

 

 

pay,
draws, incentive pay, bonuses, commissions, intellectual property rights,
equity incentives, stock options, severance pay, any and all other forms of
compensation or benefits, attorney’s fees, or other costs or sums of any kind
or nature.  You agree that your
separation from the Company is final and that the Company has no obligation to
consider you for rehire or reinstatement.

 

5.     Your
Continuing Obligations

 

(a)           You acknowledge you have had
access to information concerning the Company, its clients and its affiliates,
which is confidential or proprietary in nature (the “Confidential Information”).  You hereby acknowledge and agree that you
will continue to protect the Confidential Information in accordance with the
provisions of the employee confidentiality agreement that you signed when you
commenced employment with the Company (the “Employee Confidentiality Agreement”).  By executing this Agreement, you reaffirm all
of your obligations under the Employee Confidentiality Agreement, including,
without limitation, those obligations and restrictive covenants that relate to
Confidential Information, inventions and non-solicitation, except to the extent
that there is a conflict between the provisions of this Section 5 and the
Employee Agreement, in which case the provisions of this Section 5 shall
prevail.

 

(b)           You further agree you will
not, without the prior written consent of the Company’s General Counsel,
directly or indirectly, either as principal, partner, stockholder, officer,
director, member, employee, consultant, business or scientific advisory board
member, agent, representative or in any other capacity, own, manage, operate or
control, or be engaged by, employed by, or otherwise associated with, or have a
financial interest in, (i) ACS Dopfar S.p.A. or any of its direct or
indirect affiliates or subsidiaries, (ii) Teva Pharmaceuticals Industries, Ltd.
or any of its direct or indirect affiliates or subsidiaries, including without
limitation Teva Parenteral Medicines, Inc. and Teva Pharmaceuticals USA, Inc.
or any agents, advisors or consultants to any of such entities, including
without limitation any organizations or entities that are manufacturing
daptomycin in connection with any Abbreviated New Drug Application (“ANDA”)
filed with the U.S. Food and Drug Administration (“FDA”) by Teva Parenteral
Medicines, Inc., or, (ii) until such time as a generic daptomycin has
been approved by the FDA and such approval is not being contested by the
Company or its affiliates in any manner, any other company or organization, or
their affiliates or subsidiaries, that has filed or is contemplating filing an
ANDA with the FDA or taking any other legal or regulatory action with respect
to daptomycin and/or is manufacturing daptomycin in connection with any such
ANDA or other legal or regulatory action on behalf of any such company or
organization or any agents, advisors or consultants to any organization or
entity covered by this Subsection (iii).

 

(c)           You further agree that for a
period of eighteen (18) months following the Departure Date you will not,
without the prior written consent of the Company’s General Counsel, directly or
indirectly, either as principal, partner, stockholder, officer, director,
member, employee, consultant, business or scientific advisory board member,
agent, representative or in any other capacity, own, manage, operate or
control, or be engaged by, employed by, or otherwise associated with, or have a

 

 

financial
interest in, any business which engages directly or indirectly in the research,
development, manufacture, distribution, license and commercialization of
antiinfective drugs that are or would be competitive with daptomycin or other
drugs under development by Cubist anywhere in the United States or in any other
country where the Company conducts business.

 

(d)           You further agree that for a period of eighteen (18)
months following the Departure Date you will not solicit, or provide any
information, advice or recommendation or take any other action intended (or
that a reasonable person acting in like circumstances would expect) to have the
effect of causing any customer of the Cubist to terminate an existing business
or commercial relationship with Cubist.

 

(e)           You further agree that for a
period of eighteen (18) months following the Departure Date you will not
directly or indirectly, alone or as a consultant, partner, officer, director,
employee, joint venturer, lender or stockholder of any entity, recruit or
solicit for hire any Cubist employee, agent, representative or consultant, or
any such person who has terminated his/her relationship with the Company within
six months of your departure from the Company.

 

6.     Confidentiality
of Agreement.  You further
agree that the terms and existence of this Agreement shall remain strictly
confidential except to the extent required to obtain legal or accounting advice
or to comply with legal obligations, provided if you believe you are legally
required to disclose the existence or any contents of this Agreement, you shall
provide the Company’s General Counsel with at least ten (10) business days’
advance written notice before making any disclosure and, if the Company desires
to take action to object to the disclosure of the existence or contents of this
Agreement, to cooperate with the Company in such efforts.

 

7.     Non-Disparagement.  You agree that you will not
disparage the Company or any of the people or organizations associated with it
and that you will not otherwise do or say anything that would harm its business
or reputation.

 

8.     Return
of Documents.  In signing this
Agreement, you agree that you will return to the Company any and all documents,
materials and information related to the business (including all electronic
versions), whether present or otherwise, of the Company and its affiliates, and
all copies, and all keys, credit cards, computers, phones, handheld devices and
other tangible property of the Company and its affiliates, in your possession
or control.

 

9.     Cooperation

 

(a)           In signing this Agreement,
you agree that you will cooperate fully with Cubist’s employees and business
partners in smoothly, effectively, and completely transitioning your work as
the Company may designate. You further agree that you will make yourself
available to the Company for reasonable periods of time, either by telephone
or, if you and the Company believes necessary, in person upon reasonable
notice, to assist the Company in connection with any matter relating to
services performed by you on behalf of the Company, and in the defense or
prosecution of any claims or actions now in existence or which may be brought
or threatened in the future 

 

 

against
or on behalf of the Company, its directors, shareholders, officers, or
employees.  The Company shall reimburse
you for reasonable documented travel expenses incurred should your presence be
required in person.  You further agree
that should you be contacted (directly or indirectly) by any individual or any
person representing an individual or entity that is or may be legally or
competitively adverse to the Company in connection with any actual or potential
claims or legal or regulatory proceedings, including without limitation Teva
Pharmaceuticals Industries, Ltd., Teva Parenteral Medicines, Inc. and
Teva Pharmaceuticals USA, Inc. and any of their direct or indirect
affiliates or subsidiaries, you will promptly notify the Company’s General
Counsel of that fact in writing, but in no event later than the third business
day after you are contacted, and you hereby represent and warrant that you have
not been so contacted as of the date you signed this Agreement (the “Execution
Date”).  Such notification shall include
a reasonable description of the content of the communication with the
representative of the legally or competitively adverse individual or entity.

 

(b)           Nothing herein shall
prohibit or bar you from providing truthful testimony in any legal proceeding
or in communicating with any governmental agency or representative or from
making any truthful disclosure required, authorized or permitted under law;
provided however, that in providing such testimony or making such disclosures
or communications, you will use your best efforts to ensure that this Section 9
is complied with to the maximum extent possible.

 

10.  Release
of Claims

 

The
Company wants to be certain that this Agreement will resolve any and all
concerns that you might have and therefore requests that you carefully consider
the terms of this Agreement, including the release of claims set forth below,
which, as set forth in your Retention Letter, is a specific condition to your
receipt of the Severance Pay and other benefits set forth in this
Agreement.  As a result, the Company
encourages you to seek the advice of an attorney before you sign this
Agreement.

 

(a)           In exchange for the
Separation Pay and other benefits to be provided you under this Agreement and
pursuant to the Retention Letter, you and your respective agents, heirs,
legatees, successors and assigns (collectively hereinafter “you”), except as
set forth below, hereby unconditionally and irrevocably release, remise, and
forever discharge Cubist,(1) and all persons acting by, through, under or in
concert with Cubist, of and from any and all actions, causes of actions, suits,
debts, charges, complaints, claims, liabilities, obligations, promises,
agreements, controversies, damages, and expenses (including attorney fees and
costs actually incurred), of any nature whatsoever, in law or equity
(collectively “Claims”), which you had, now 

 

(1)   For purposes of this
Section, “Cubist Pharmaceuticals, Inc.” includes Cubist
Pharmaceuticals, Inc., and any of its divisions, affiliates (which means
all persons and entities directly or indirectly controlling, controlled by or
under common control with Cubist Pharmaceuticals, Inc.), subsidiaries and
all other related entities, and its and their directors, officers, employees,
trustees, attorneys, agents, representatives successors and assigns.

 

 

have,
or hereafter may have against the
Company from the beginning of time through the Execution Date.  Without limiting the generality of the
foregoing waiver and release of claims, you specifically waive and release
Cubist from any Claim including, without limitation:

 

(1)           Claims under any federal,
state (including, without limitation, Massachusetts)
or local discrimination, fair employment practices or other employment related
statute, regulation or executive order (as they may have been amended through
the Execution Date) prohibiting discrimination or harassment based upon any
status protected by law,  including,
without limitation, those laws and regulations that prohibit discrimination or
harassment based on age, race, national origin, gender, marital status,
disability, veteran status or sexual orientation.  Without limitation, specifically included in
this paragraph are any Claims arising under the Title VII, the Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act, the
Civil Rights Acts of 1866 and 1871, Title VII of the Civil Rights Act of 1964,
the Civil Rights Act of 1991, the Equal Pay Act, the Americans with
Disabilities Act, and Massachusetts General Laws Chapter 151B;

 

(2)           Claims under any other
federal, state (including, without limitation, Massachusetts) or local
employment-related statute, regulation or executive order (as they may have
been amended through the Execution Date) relating to wages, hours or any other
terms and conditions of employment (including, without limitation, the Fair
Labor Standards Act, the National Labor Relations Act, the Employee Retirement
Income Security Act of 1974, the Consolidated Omnibus Budget Reconciliation Act
of 1985 and any similar statute the Worker Adjustment and Retraining Notification
Act and any similar federal, state or local statute, regulation, or executive
order);

 

(3)           Claims under any federal,
state (including, without limitation, Massachusetts) or local common law theory
including, without limitation, wrongful discharge, breach of express or implied
contract, promissory estoppel, unjust enrichment, breach of a covenant of good
faith and fair dealing, violation of public policy, torts, defamation,
interference with contractual relations, intentional or negligent infliction of
emotional distress, invasion of privacy, misrepresentation, deceit, fraud or
negligence;

 

(4)           Claims under any federal,
state (including, without limitation, Massachusetts and Delaware) or local
securities law, including, without limitation, the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, and any similar
statute;

 

(5)           Claims under the Federal
False Claims Act, any state or local false claims act or any federal, state or
local qui tam provisions of false claims or false statements statutes; and

 

(6)           All other claims of any kind
or nature.

 

Notwithstanding
the foregoing, this paragraph shall not release Cubist from any obligation
expressly set forth in this Agreement and shall not act as a waiver or release
of any Claims that you cannot by law waive or release, including, without
limitation, 

 

 

workers’
compensation claims.  You acknowledge and
agree that, but for providing this waiver and release of Claims, you would not
be receiving the Separation Pay or other benefits being provided to you under
the terms of this Agreement.

 

(b)           You further agree, to the
fullest extent permitted by law, that you will not sue or commence any
proceeding (judicial or administrative), or participate in any action, suit or
proceeding (unless compelled by legal process or court order), against Cubist
with respect to any Claim you have released the Company from under this
Agreement.  You also warrant and represent that as of the Execution Date,
you have not taken or engaged in any of the acts described in the foregoing
sentences.  If, notwithstanding the foregoing promises, you violate this
provision, you shall be required, to the maximum extent permitted by law, to
indemnify and hold harmless Cubist from and against any and all demands, assessments,
judgments, costs, damages, losses and liabilities, and attorneys’ fees and
other expenses which result from, or are incident to, such violation.

 

(c)           It is
the Company’s desire and intent to make certain that you fully understand the
provisions and effects of this Agreement. 
To that end, you have been encouraged and given the opportunity to
consult with legal counsel for the purpose of reviewing the terms of this
Agreement.  Also, because you are over
the age of 40, and consistent with the provisions of the Age Discrimination in
Employment Act (“ADEA”), which prohibits discrimination on the basis of age,
the Company is providing you with at least twenty-one (21) days in which to
consider and accept the terms of this Agreement by signing below and returning
it to Maureen Powers at Cubist, 65 Hayden Avenue, Lexington, MA 02421.  You understand that you do not waive any
rights or claims under the ADEA that may arise after the date this Agreement is
executed.  In addition, you may rescind
your assent to this Agreement if, within seven (7) days after you sign
this Agreement, you deliver by hand or send by mail (certified, return receipt
and postmarked within such 7-day period) a notice of rescission to Maureen
Powers at the above-referenced address.

 

(d)           Consistent with the federal
discrimination laws, nothing in this release shall be deemed to prohibit you
from challenging the validity of this release under the federal discrimination
laws or from filing a charge or complaint of employment related discrimination
with the Equal Employment Opportunity Commission (“EEOC”) or from participating
in any investigation or proceeding conducted by the EEOC.  Further, nothing in this release or Agreement
shall be deemed to limit the Company’s right to seek immediate dismissal of
such charge or complaint on the basis that your signing of this Agreement
constitutes a full release of any individual rights under the federal
discrimination laws, or to seek restitution to the extent permitted by law of
the economic benefits provided to you under this Agreement in the event you
successfully challenge the validity of this release and prevail in any claim
under the federal discrimination laws.

 

(e)           You acknowledge and agree
that: (i) you have not been subject to any undue or improper influence
interfering with the exercise of your free will in deciding whether to execute
this Agreement; (ii) you have carefully read and fully understand all of
the provisions of this Agreement; (iii) you knowingly and voluntarily
agree to all of the terms set forth in this Agreement; (iv) in entering
into this Agreement, you are not relying on any representation, promise or
inducement made by Cubist with the exception of those 

 

 

promises
contained in this Agreement; and (v) any revisions to this Agreement will
not affect or extend the calculation of the 21 day period provided in
subsection 10(c) above.

 

11.  Representations
and Governing Law

 

(a)           This Agreement sets forth
the complete and sole agreement between the parties and supersedes any and all
other agreements or understandings, whether oral or written, except the
Employee Confidentiality Agreement, which shall remain in full force and effect
in accordance with their terms.  This
Agreement may not be changed, amended, modified, altered or rescinded except
upon the express written consent of both you and an authorized Cubist
officer.  Any waiver of any provision of
this Agreement shall not constitute a waiver of any other provision of this
Agreement unless expressly so indicated otherwise.  The language of all parts of this Agreement
shall in all cases be construed as a whole according to its fair meaning and
not strictly for or against any of the parties.

 

(b)           This Agreement shall be
deemed to be made and entered into in the Commonwealth of Massachusetts.  This Agreement and any claims arising out of
this Agreement (or any other claims arising out of the relationship between the
parties) shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts and shall in all respects be interpreted,
enforced and governed under the internal and domestic laws of such
Commonwealth, without giving effect to the principles of conflicts of laws of
such Commonwealth.  Any claims or legal
actions by one party against the other shall be commenced and maintained in any
state or federal court located in such Commonwealth, and you hereby submit to
the jurisdiction and venue of any such court. In any such proceeding you agree
to waive trial by jury and consent to have all legal and factual matters
decided by a judge.

 

12.  Remedies
Upon Breach

 

If
you commit a breach, or threaten to commit a breach, of any of the provisions
of this Agreement that impose obligations upon you, including, without
limitation, Sections 5, 6, 7, 8, 9, 10(a) and 10(b), the Company shall
have the following rights and remedies:

 

(a)           The right and remedy to have
the provisions of this Agreement specifically enforced by any court having
equity jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach shall cause irreparable injury to the Company and that money
damages shall not provide an adequate remedy to the Company;

 

(b)           The right and remedy to
require you to account for and pay over to the Company all Separation Pay and
any shares of Cubist common stock that you come to own as a result of
exercising your stock options during the option extension exercise period set
forth in Section 2 (the “Clawback Compensation”) and you hereby agree to
account for and pay over such Clawback Compensation to the Company; and

 

 

(c)           The right and remedy to
immediately stop the Company’s payment of all Severance Pay and/or benefits
described in this Agreement and terminate the exercise period for your Cubist
stock options.

 

Each
of the rights and remedies set forth above shall be independent of the other,
and shall be severally enforceable, and all of such rights and remedies shall
be in addition to, and not in lieu of, any other rights and remedies available
to the Company under law or in equity.

 

You
further agree to indemnify and hold the Company harmless from and against any
and all loss, cost, damage, or expense, including, but not limited to,
reasonable attorneys’ fees, incurred by the Company arising out of any action
at law or equity, or any other proceeding, they find necessary to enforce any
of the terms, covenants or conditions of this Agreement.

 

13.  Effective
Date.  For a period of seven (7) days
following the Execution Date, you may revoke this Agreement and this Agreement
shall not become effective or enforceable until this revocation period has
expired.

 

14.  Severability
of Agreement Provisions.  The
provisions of this Agreement, including, without limitation, Section 5 of
the Agreement, are severable. In the event that any one or more of the
provisions, or the application thereof in any circumstances is held invalid,
illegal, or unenforceable in any respect for any reason, the validity and
enforceability of any such provision in every other respect and of the
remaining provisions of this Agreement shall not be in any way impaired or
affected, it being intended that all of the rights and privileges contained in
this Agreement shall be enforceable to the fullest extent permitted by law, it
is expressly agreed that the Company shall then be entitled to the maximum
relief allowable by law as to geography, duration and scope of relief.

 

 

15.  Return
Date.  If the terms of this
Agreement are acceptable to you, please sign both copies of this Agreement and
return one copy to me no later than  twenty-one
(21) days from the date hereof.  If you wish to waive the 21 day period to
consider this offer, an appropriate waiver form is attached for your use.

 

 

	
  Very
  truly yours,

  	
   

  
	
   

  	
   

  
	
  /s/
  Maureen H. Powers

  	
   

  
	
   

  	
   

  
	
  Maureen
  H. Powers

  	
   

  
	
  Vice
  President, Human Resources

  	
   

  

 

 

I,
LINDON FELLOWS, REPRESENT THAT I HAVE READ THE FOREGOING AGREEMENT, THAT I
FULLY UNDERSTAND THE TERMS AND CONDITIONS OF SUCH AGREEMENT AND THAT I AM
VOLUNTARILY EXECUTING THE SAME.  IN
ENTERING INTO THIS AGREEMENT, I DO NOT RELY ON ANY REPRESENTATION, PROMISE
OR INDUCEMENT MADE BY THE RELEASEES WITH THE EXCEPTION OF THE CONSIDERATION
DESCRIBED IN THIS DOCUMENT.

 

 

	
  /s/
  Lindon Fellows

  	
   

  
	
  Lindon
  Fellows

  	
   

  
	
  Dated:
  June 15, 2010

  	
   

  

 

 

IF YOU DO NOT WISH TO USE THE 21-DAY PERIOD,

PLEASE CAREFULLY REVIEW AND SIGN THIS DOCUMENT

 

I,
Lindon Fellows, acknowledge that I was informed and understand that I have
21 days within which to consider the attached Separation Agreement and
Release (the “Agreement”), have been advised of my right to consult with an
attorney regarding such Agreement and have considered carefully every provision
of the Agreement, and that after having engaged in those actions, I prefer
to and have requested that I enter into the Agreement prior to the expiration
of the 21 day period.

 

 

	
  /s/
  Lindon Fellows

  	
   

  
	
  Lindon
  Fellows

  	
   

  
	
  Dated:
  June 15, 2010Exhibit 10.1

 

SEVERANCE,
NON-DISCLOSURE AND RELEASE AGREEMENT

 

PARTIES

 

The parties to this Agreement (“Agreement”) are SureWest
Communications, and its affiliates and all of its subsidiaries (collectively
referred to as “Company”), and Bill DeMuth (referred to as “I,” “me,” or “Employee”).

 

BASIS

 

Employee has been employed by the Company since May 10, 1976 and
Employee was Senior Vice President and Chief Technology Officer at the time of
this Agreement.  I have agreed to
voluntarily terminate my employment with the Company.  I understand that the purpose and intent of
this Agreement is to ensure confidentiality of information to which I have had
access in the course of my employment with the Company, and also to fully and
finally settle and resolve any and all Claims, as defined herein, known or
unknown, that I may have against Company arising out of or related to my
employment with Company, including the resignation of my employment.

 

TERMS OF AGREEMENT

 

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

 

2.                                       Severance.

 

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

 

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

 

 

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

 

If an event described in (i) occurs within
twelve months of June 30, 2010, and if the event described in (ii) occurs,
then employee shall be entitled to a payment of (1) two times employees
base salary as of June 30, 2010, plus (2) two times his 2010 annual
target incentive award, such payment to made within 30 days of the date
described in (ii).

 

If an event described in (i) occurs after June 30,
2011 but before June 30, 2012, and if the event described in (ii) occurs,
then employee shall be entitled to a payment of (1) two times employees
base salary as of June 30, 2010 plus (2) two times the employees 2010
target incentive award, multiplied by a fraction, the numerator of which is the
number of days remaining between the date described in (i) and June 30,
2012, and the denominator of which is 365, such payment to be made within 30
days of the date described in (ii).

 

If an event described in (iii) occurs within
twelve months of June 30, 2010, then employee shall be entitled to a
payment of (1) two times his base salary as of June 30, 2010, plus (2) two
times his 2010 annual target incentive award, such payment to be made within 30
days of the actual change of control.

 

If an event described in (iii) occurs after June 30,
2011 but before June 30, 2012, then employee shall be entitled to a
payment of (1) two times his annual base salary as of June 30, 2010,
plus (2) two times his 2010 annual target incentive award, multiplied by a
fraction, the numerator of which is the number of days remaining between the
date described in (iii) and June 30, 2012, and the denominator of
which is 365.

 

3.                                       Confidential
Information and Non-Disclosure.  Employee shall preserve as confidential all
Confidential Information (as defined below) in accordance with this
Agreement.  Employee shall not directly
or indirectly use Confidential Information for the benefit of Employee or any
third party or disclose it to others.  If
Employee is required to disclose Confidential Information pursuant to a
subpoena or as part of the discovery process authorized by a court or
governmental entity, then Employee shall first give notice to Company so that
it will have a reasonable opportunity to protect its rights in 

 

2

 

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

 

4.                                       Return of
Company Property and Confidential Material.  I agree to promptly return to the Company all
files, memoranda, documents, and records of any nature, including any
Confidential Information or information pertaining to my employment, all copies
of the foregoing, credit cards, keys, and any other property of the Company,
its subsidiaries or its affiliates in my possession.  I will not retain or take with me any
tangible materials or electronically stored data containing or pertaining to
any Confidential Information that I produced, acquired or obtained access to
during the course of my employment. 
Before signing this Agreement, I have not made unauthorized
disclosures to any third party relating to Company, have not disclosed any
Confidential Information and have not provided originals or copies of documents
belonging to the Company to any third party, except my attorney.
Notwithstanding the foregoing, I can retain copies of documents that
relate specifically to my employment with Company that the law entitles me to
possess, such as materials relating to my participation in the Company’s
benefit plans.

 

5.                                       Non-Disparagement.  Employee agrees to refrain from any
publication, oral or written, of a defamatory, disparaging or otherwise
derogatory manner pertaining to the Released Parties or to Employee’s
employment relationship with or resignation from Company.

 

6.                                       Release.  Employee hereby waives and
releases Company and its officers, directors, agents, attorneys, and employees
(collectively referred to as “Released Parties”) from any claims, rights,
contracts or causes of action which have arisen on or before the date this
Agreement is executed by Employee (collectively referred to as “Claims”) which
arise out of or are related to Employee’s employment with Company, or Employee’s
resignation from employment, or Employee’s separation from service (hereafter
referred to as “Release”).  This Release
includes, but is not limited to, the following:

 

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

 

3

 

(b)                                 Claims which
are based upon or arise under any state or federal laws, including, but not
limited to: 42 U.S.C. §2000e et seq. (Civil Rights Act); 29 U.S.C. §621 et seq.
(Age Discrimination in Employment Act); the Older Workers Benefit Protection
Act (OWBPA); 29 U.S.C. §1001 et seq. (Employee Retirement Income Security Act);
29 U.S.C. §2101 et seq. (Worker Adjustment and Retraining Notification Act); 29
U.S.C. §2601 et seq. (Family Medical Leave Act); 42 U.S.C. §12101 et seq.
(Americans with Disabilities Act); and Cal. Govt. Code § 12940, and Cal. Labor
Code §§ 1025 and 1101 et seq. (employment discrimination and unlawful
employment practices); and

 

(c)                                  Claims based
upon any tort or contract, including, but not limited to, any employment
agreement.

 

(d)                                 This general
release is intended to apply to all claims, known or unknown, disclosed or
undisclosed.  Therefore, Employee
expressly waives any and all rights under Civil Code section 1542 which states
as follows:  “A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.”

 

This Release does not release or waive any Claims
which may arise after the date this Agreement is executed by Employee.  This Release also does not release or waive
any rights or claims which controlling law clearly states may not be released
or waived by settlement.  I understand
that I am releasing claims I may not know about and I understand that I am
releasing and waiving such claims.  I
represent that I do not currently have pending any complaints or charges filed
against Released Parties with any agency or court.  I promise never to seek any damages,
remedies, or other relief for myself personally with respect to any Claim
released by this Release, and I am hereby releasing and forever waiving any
private right to sue that may be issued by any state or federal agency related
to events that have occurred as of the effective date of this Agreement. I
understand that this Agreement does not prohibit me from filing a Charge of
Discrimination with the U.S. Equal Employment Opportunity Commission (“EEOC”)
or limit my right to testify, assist, or participate in an investigation,
hearing or other proceeding conducted by the EEOC.

 

7.                                       Employee
further expressly acknowledges and agrees that:

 

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

 

(b)                                 Employee is
knowingly and voluntarily agreeing to all of the terms set forth in this
Agreement, and knowingly and voluntarily intends to be legally bound by the
same.

 

4

 

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

 

(d)                                 Employee has
been advised in writing to consider the terms of this Agreement and to consult
with an attorney of his choice before signing this Agreement and has had
sufficient time and opportunity to do so.

 

(e)                                  Employee
understands that rights or claims under the Age Discrimination in Employment
Act of 1967 (29 U.S.C. § 621 et seq.) that may arise after the date of this
Agreement is executed are not waived.

 

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

 

(g)                                 Employee
acknowledges receiving this Agreement and was informed that Employee has 45
days following receipt to consider whether to sign this Agreement.  By signing on any date prior to the
expiration of the 45 day period, Employee voluntarily elects to forego waiting
45 full days to sign the Agreement and release. 
If Employee fails to execute this Agreement during the 45 day period,
then the Agreement is automatically withdrawn without further action or notice
by Company.

 

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

 

SureWest Communications

8150 Industrial Avenue

Building A

Roseville, CA 95678

ATTN:  Karlyn
Oberg

Vice President, Human Resources

k.oberg@surewest.com

 

8.                                       Modification of
Employee Benefit Plans. 
Various Company sponsored employee health and welfare benefit plans,
including all medical and health care plans, allow Company to modify or
eliminate coverage and other benefits and I understand that this Agreement does
not restrict Company’s right to modify or eliminate the coverage or any other
benefits under any employee benefit plan.

 

5

 

9.                                       Dispute
Resolution:  Except as
provided in Section 10(e) below, any dispute between the parties
which is covered by, arises out of or is based upon this Agreement shall be
settled by final and binding arbitration. 
Any award or determination rendered by the arbitrator may be entered as
a judgment in California state court having jurisdiction thereof.  The arbitration is subject to the following:

 

 

(a)                                  The arbitration
shall be administered by the American Arbitration Association (“AAA”) in
accordance with its Employment Dispute Resolution Rules (“Rules”) in
effect at the time of the arbitration.

 

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

 

(c)                                  The arbitrator
shall have the authority to award any remedy or relief that a state or federal
court having jurisdiction over the persons and subject matter is authorized to
grant including attorney fees and costs.

 

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

 

(e)                                  Enforcement.  Employee acknowledges and agrees that the
restrictive covenants contained in this Agreement are reasonable and necessary
to protect the business and interests of the Company, do not create any undue
hardship for him, and that any violation of these restrictions would cause
Company substantial irreparable injury. 
Accordingly, Employee agrees that a remedy at law for any breach of the
restrictive covenants or other obligations in this Agreement would be
inadequate and that Company, in addition to any other obligations in this
Agreement, shall be entitled to obtain preliminary and permanent injunctive
relief to secure specific performance of such covenants and to prevent a breach
or contemplated or threatened breach of this Agreement without the necessity of
proving actual damage and without the necessity of posting bond or security,
which Employee expressly waives. 
Employee will provide Company a full accounting of all proceeds and
profits received by him as a result of or in connection with a breach of this
Agreement.  In any legal proceeding
commenced under this Paragraph 10(e), Employee agrees that Company shall be
entitled to recover its reasonable attorneys’ fees and costs if it prevails in
any action to enforce this Agreement.

 

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

 

6

 

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

 

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

 

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

 

13.                                 Successors and
Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. 
Employee consents to any assignment by the Company of this Agreement.

 

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

 

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

 

 

	
  COMPANY

  	
   

  	
   

  	
  EMPLOYEE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ STEVEN C. OLDHAM

  	
  June 22, 2010

  	
   

  	
  /s/ BILL DEMUTH

  	
  June 22, 2010

  
	
  President and CEO

  	
  Date

  	
   

  	
  Employee Signature

  	
  Date

  

 

7

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