Document:

ex10-1.htm

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”), dated as of April 4, 2011, (the “Effective Date”), is entered into by and between HICKORYTECH CORPORATION, a Minnesota corporation (the “Company”), and CAROL WIRSBINSKI (“Executive”).

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

WHEREAS, the Company desires to employ Executive, and Executive desires to commence employment with the Company subject to the terms and conditions of this Agreement.

 

WHEREAS, the parties acknowledge that: (i) Executive was not employed by the Company prior to her execution of this Agreement; and (ii) execution of this Agreement is a condition precedent to the beginning of an employment relationship.

 

WHEREAS, in light of the foregoing, the Company has offered to employ Executive as the Chief Operating Officer of the Company, 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 employs Executive as the Chief Operating Officer.  In this capacity, Executive will report to and perform such duties as shall reasonably be assigned by the Company’s Chief Executive Officer or his delegate.  Executive shall perform such duties on a full time basis, and carry out Executive’s responsibilities hereunder faithfully and to the best of Executive’s ability.  Executive confirms that she is under no contractual obligations which would preclude or restrict her: (i) performance of her duties and responsibilities in her position with the Company; or (ii) execution of this Agreement.

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 and Twenty Thousand and no/100 Dollars ($220,000.00) to be paid in bi-weekly installments, in arrears (the “Base Salary”).  The Base Salary shall be subject to periodic review and adjustment.

(b) Annual Incentive Compensation.  Executive shall be 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.  Executive shall be eligible to receive an annual cash incentive award of 55% of her Base Salary for “at target” performance, subject to the terms of the EIP.  Executive’s incentive award eligibility is subject to periodic review and adjustment.  For the first year of employment, any EIP award earned will be pro-rated based on the Executive’s hire date.

 

  

  

  

 

     (c) Stock Compensation

 

(i)  Executive shall be a participant in the HickoryTech Corporation Long-Term Executive Incentive Program (the “LTEIP”) and shall be eligible to receive stock awards granted under the 1993 Stock Award Plan, as amended, in accordance with the terms of the LTEIP, as they may be amended or modified from time to time.  Executive will be eligible for existing Program Periods under the LTEIP as follows:  A)  No eligibility for the 2009-2011 Program Period; B) Eligible for the 2010-2012 Program Period pro-rated at two-thirds (2/3) of any earned award; and C) Full eligibility for the 2011-2013 Program Period and future Program Periods that may be initiated under the LTEIP.  Executive’s incentive award eligibility is subject to periodic review and adjustment.

 

(ii)  Executive will receive a one-time grant of options to acquire 10,000 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 April 4, 2011.

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 232 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, but such amount will be prorated for 2011 based on the date of hire, and Executive will be eligible for 174 hours of paid time off in 2011.

2.3           Expenses.  The Company will pay or reimburse Executive for all reasonable and necessary out-of-pocket expenses incurred by Executive in the performance of her duties under this Agreement including mileage reimbursement for travel associated with business. 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.

2.4           Executive Perquisites.  During the term of her employment under this Agreement, the Company shall:

(a) Provide Executive with a cellular telephone for her business use per Company’s policy.

 

(b) Provide for Executive’s periodic executive physical examination in accordance with the Company’s guidelines for executive physical examinations.

 

2.5           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:

 

 

  

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

 

          (i) the material neglect, 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 and a period of twenty-one (21) days following written notice to cure such deficiency;

 

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

 

          (iii) any conduct, act or omission that intended or likely 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 plea of nolo contendere) of a felony or any crime involving fraud, dishonesty, misrepresentation or moral turpitude whether relating to employment or otherwise;

 

          (v) the material breach by Executive of this Agreement (including, without limitation, the Employment Covenants set forth in Section 4 of this Agreement) or any other Agreement between Executive and the Company 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 Chief Executive Officer or his delegate, which is not cured within twenty-one (21) days after Executive has received written notice 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.

(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 in the context of Executive’s voluntary termination of employment:

 

          (i) Company, without Executive’s consent, effects a material and substantial 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 her consent, move her regular office to a location more than one hundred (100) miles from Executive’s  current regularly assigned Company office location;

 

 

  

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      (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 any material term 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 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 herself available for and to submit to examinations by such physicians as may be requested by the Company or the Company’s 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.

  

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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 in an amount equal to the greater of: (i) eighteen (18) months of Executive’s then current Base Salary, or (ii) eighteen (18) months of Executive’s Base Salary as of execution of this Agreement (or $220,000),  payable in one lump sum on the 70th day following the Date of Termination, provided that Executive has signed the Release described in Section 3.4(b) and the revocation and rescission period described in such Release has expired without revocation or rescission.  Notwithstanding the foregoing, the Company shall, 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) 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 all claims on 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.

 

3.5           Set Off.  The Company shall have the absolute right to offset against any and all payments or consideration due Executive under Section 3.4 above for any damages to which the Company is entitled due to Executive’s breach of the covenants set forth in Section 4 below.

 

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, and the severance payment to be provided subject to the limitations of Section 3.4(a), Executive agrees as follows:

(a) Executive acknowledges that: (i) during her employment with the Company, she will be exposed to and entrusted with Confidential Information (defined below); and (ii) such Confidential Information will be disclosed to her in confidence and for the sole benefit of the Company.  Therefore, commencing on the date of this Agreement, Executive will both during the course of employment and after the termination of employment: (iii) diligently protect the confidentiality of all Confidential Information, (iv) not disclose or communicate any Confidential Information to any third party without the written consent of the Company or as may be required by law, and (v)  not make use of Confidential Information on her 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 will receive during such employment, Executive agrees that any unauthorized use, or disclosure 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 forever.

 

  

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As used in this Agreement, “Confidential Information” shall mean one or more of the following types of information concerning the Company, whether in written, oral or electronic form: (i) trade secrets, (ii) any confidential, proprietary or secret designs, programs, processes, formulae, plans, devices or material (whether or not patented or patentable) directly or indirectly useful in any aspect of the business of the Company, (iii) any customer or supplier lists, (iv) any confidential, proprietary or secret development or research work, (v) any strategic or other business, marketing or sales plans, including proposals prepared for any customers or prospective customers, (vi) any financial data or plan that is not publicly reported, (vii) any software, regardless of the stage of its development, (viii) any information relating to the compensation or benefits generally made available to employees of the Company, and specifically, the compensation and benefits received by any employee other than Executive; (ix) any information provided to or entrusted to the Company by one of its customers that is not in the public domain; and/or, (x) any and all other confidential or proprietary information, or secret aspects of the business of the Company. All information originated by Executive, or disclosed to Executive, or to which Executive otherwise gains access, during the period of Executive’s employment with the Company, or that is characterized or treated by the Company as being Confidential Information, or that would be of economic value to a third-party, shall be presumed to be Confidential Information.

 

(b) During the term of this Agreement and continuing through the period ending on a date that is eighteen (18) months following the Date of Termination, regardless of the reason for termination, Executive agrees she will not:

 

             (i) 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, joint venturer, 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, planned 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 Agreement: (A) “Conflicting Organization” means any person, corporation, partnership or other entity that develops, manufactures, sells or provides products, services or equipment that competes with or replaces products, services or equipment provided by the Company; and (B) “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 or facility of the Company (including administrative, executive, technical, sales, and service offices) in which the Company, as of the Date of Termination, is engaged in or actively planning to engage in the sale or provision of products, services or equipment;

 

             (ii) assist any other person or legal entity of any kind, in the Territory to establish a conflicting business that is or would be competitive in any way with any facet of the Company’s business, or to enhance or augment an existing business that is or would be competitive with any facet of the Company’s business;

 

             (iii)  obtain employment with or provide services to a customer or prospective customer of the Company, unless provided written permission to do so by the Company’s Chief Executive Officer or his designee;

 

             (iv) directly or indirectly assist, solicit, entice, or induce (or assist any other person or entity in soliciting, enticing, or inducing) any customer or vendor, supplier, or other business affiliate 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;

 

             (v) 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 working with the Company at any time prior to the twelve (12) months preceding Executive’s own termination 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 and agrees: (i) 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; and (ii) 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           No Prior Restrictions. Executive affirmatively represents and warrants to the Company that: (i) Executive is not a party to any agreement restricting in any way her ability to be employed by the Company or to perform the services contemplated in conjunction with her employment; (ii) she will not use or bring to the performance of work on behalf of the Company any information subject to any confidentiality or non-disclosure agreement Executive entered with any prior employer; and (iii) if the Executive has entered into such agreement with a prior employer, a copy of such agreement has been provided to the Company prior to accepting employment. Nevertheless, it remains the Executive’s full and total responsibility to remain in compliance with any such agreement and the Company does not intend for Executive to breach that agreement.

4.5           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.

4.6           Exclusivity of Employment.  Executive shall not directly or indirectly, without prior approval of the Company’s CEO, 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 Chief Executive Officer, 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.

  

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4.7           Remedies and Judicial Enforcement.

(a) Executive acknowledges and agrees that: (i) a breach or threatened breach of any portion of this Section 4 will cause irreparable harm to the Company, it would be impossible to measure in money the damages which will accrue to the Company by reason of a failure by Executive to perform her obligations under this Section 4, and thus, the Company’s damages could not be compensated by money damages; (ii) the Company’s remedy at law for any breach of the provisions of this Section 4 will be inadequate; and (iii) in any action to enforce the provisions of Section 4, Executive shall and does hereby waive the right to claim that the Company has an adequate remedy at law.  Accordingly, in addition to damages and any other rights and remedies of the Company herein or otherwise, the Executive specifically agrees that the Company shall be entitled to injunctive relief and / or specific performance 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 covenant enforceable against the Executive, and shall then enforce the same to that more limited extent.

(c) In the event the Company obtains an injunction to enforce its rights under this Section 4, the agreement not to compete or solicit shall be extended for the longer period of: (i) six months, or (ii) the number of months the Executive was engaged in such solicitation in violation of this Agreement after the date the prohibition on solicitation was to expire hereunder and, if expired, shall apply for such additional period after the date on which such injunction is obtained.

(d) In addition to the foregoing, the Company shall be entitled to collect from Executive any attorney’s fees and costs incurred in bringing any action against Executive for violation of this Section 4 , as well as any attorney’s fees and costs for the collection of any judgments in the Company’s favor arising out of this Agreement.

Section 5.  General Terms

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:

  

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    To Company:                    Hickory Tech Corporation

221 East Hickory Street

P.O. Box 3248

Mankato, Minnesota  56002-3248

Attention:  Vice President of Human Resources

	
To Executive:

	
Carol Wirsbinski

	
  

	
Eagan, MN  55123

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 expressly referenced herein, contains 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.

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.  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, provided the assignee assumes all of the Company’s obligations hereunder.  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.

  

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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.

5.10           Affiliates.  For the purposes of this Agreement, the rights, benefits, and protections granted to the Company shall also be granted to the Company’s Affiliates.  “Affiliates” mean any other means an individual, partnership, corporation, limited liability company, or other entity, trust, or joint venture (“Person”) who directly or indirectly controls, is controlled by, or is under direct or indirect common control with the Company, and any Person in like relation to an Affiliate.  A Person shall be deemed to control a Person if such Person possesses, directly or indirectly, the power to appoint a majority of the board of directors of or the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the term “controlled” shall have a similar meaning.

 

5.11           Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original, but all of which, when taken together, will be deemed to constitute one and the same agreement.

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

 

	HICKORYTECH CORPORATION

 

	
By: /s/ John W. Finke

	
Its:  President and Chief Executive Officer

	
/s/ Carol Wirsbinski

	Carol Wirsbinski  
	
 

 

 

  

10ex10-2.htm

Exhibit 10.2

Originally Entered into as of April 4, 2011

 

           This Change of Control Agreement (this “Agreement”) was orginally entered into as of the 4th day of April, 2011, by and between HickoryTech Corporation, a Minnesota corporation (the “Company”), and Carol Wirsbinski (the “Executive”).

 

WITNESSETH:

 

           WHEREAS, the Executive will devote substantial skill and effort to the affairs of the Company, and the Board of Directors of the Company desires to recognize the significant personal contribution that the Executive will make to further the best interests of the Company; and

 

           WHEREAS, it is desirable and in the best interests of the Company and its stockholders to continue to obtain the benefits of the Executive’s services and attention to the affairs of the Company, and

 

           WHEREAS, it is desirable and in the best interests of the Company and its stockholders to provide inducement for the Executive (1) to remain in the service of the Company in order to facilitate an orderly transition in the event of a change in control of the Company and (2) to remain in the service of the Company in the event of any threatened or anticipated change in control of the Company; and

 

           WHEREAS, it is desirable and in the best interests of the Company and its stockholders that the Executive be in a position to make judgments and take actions with respect to a proposed change in control of the Company without regard to the possibility that his or her employment may be terminated without compensation in the event of certain changes in control of the Company; and

 

           WHEREAS, the Executive desires to be protected in the event of certain changes in control of the Company; and

 

           WHEREAS, for the reasons set forth above, the Company and the Executive desire to enter into this Agreement.

 

           NOW, THEREFORE, in consideration of the facts recited above and the mutual covenants and agreements contained herein, the Company and the Executive agree as follows:

 

	
1.

	
Right to Payment.  If the Executive’s employment with the Company or its Successor is terminated within two (2) years following an Event (as defined in Paragraph 2 below) for any reason other than a reason specified in Paragraph 3(a) through (d) below, then the Executive shall be entitled to receive the Benefits set out in Paragraph 4 below.  If a subsequent Event occurs, and if the Executive is an employee of the Company or its Successor, without limiting any rights the Executive may have, Executive shall have all rights provided by the first sentence of this Paragraph 1 relating to such subsequent event.

 

	
2.

	
Change of Control Events.  An “Event” shall be deemed to have occurred if:

 

	
  

	
(a)

	
A majority of the directors of the Company shall be persons other than persons

 

	
  

	
(1)

	
for whose election proxies shall have been solicited by the Board of Directors of the Company; or

 

	
  

	
(2)

	
who are then serving as directors and who were initially appointed or elected by the Board of Directors to fill vacancies on the Board of Directors caused by death or resignation (but not by removal), or to fill newly created directorships created by the Board of Directors;

 

provided, however, that a person shall not be deemed to be a director subject to clause (1) or (2), above, if his or her initial assumption of office occurs as a result of an actual or threatened election contest with respect to the threatened election or removal of directors (or other actual or threatened solicitation of proxies or consents) by or on behalf of any person other than the Board of Directors of the Company; or

 

  

  

  

 

	
  

	
(b)

	
30% or more of the outstanding voting stock of the Company or all or substantially all of the assets or stock of the Company is acquired or beneficially owned (as defined in Rule 13d-3 under the Securities and Exchange Act of 1934, as amended, or any successor rule thereto), directly or indirectly, by any Person (other than by the Company, a subsidiary of the Company, an employee benefit plan (or related trust) sponsored or maintained by the Company or one or more of its subsidiaries, or by the Employee or a group of persons, including the Employee, acting in concert) or group of Persons, acting in concert, whether by acquisition of assets, merger, consolidation, statutory share exchange (other than a merger, consolidation or statutory share exchange described in clause (c)(i) or (ii), below), tender offer, exchange offer, or otherwise;

 

	
  

	
(c)

	
The Company is merged into or consolidated with another corporation (other than a subsidiary of the Company) or a statutory share exchange for the Company’s outstanding voting stock of any class is consummated unless (i) a majority of the voting power of the voting stock of the surviving corporation is, immediately following the merger, consolidation or statutory share exchange, beneficially owned, directly or indirectly, by the Employee (or a group of Persons, including the Employee, acting in concert) or (ii) immediately following the merger, consolidation or statutory share exchange, more than 50% of the voting power of the voting stock of the surviving corporation is beneficially owned, directly or indirectly, by the persons who beneficially owned voting stock of the Company immediately prior to such merger, consolidation or statutory share exchange in substantially the same proportion as their ownership of the voting stock of the Company immediately prior to such merger, consolidation or statutory share exchange; or

 

	
  

	
(d)

	
The shareholders of the Company approve the complete liquidation or dissolution of the Company.

 

	
3.

	
Termination Not Entitling Executive to Benefits.  The Executive shall not be entitled to the Benefits set out in Paragraph 4 if his or her employment is terminated during the two (2) year period following an Event for any of the following reasons:

 

	
  

	
(a)

	
Death.  The Executive’s death.

 

	
  

	
(b)

	
Disability.  The Executive’s disability.  “Disability” shall mean the inability of the Executive to perform the duties and responsibilities of his or her employment 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.

 

	
  

	
(1)

	
The determination of whether the Executive is suffering from a “disability” as defined herein shall be made.  The determination of whether the Executive is disabled shall be 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 disabled under this Agreement.

 

	
  

	
(2)

	
The Executive agrees to make himself or herself available for and to submit to examinations by such physicians as may be requested by the Company or the Company’s Long Term Disability Insurer.  The Executive’s failure to submit to examinations by such physicians as may be requested shall disqualify Executive from receiving Benefits under this Agreement.

 

	
  

	
(c)

	
Voluntary Termination.  The Executive’s voluntary retirement or voluntary termination of employment.  However, the Executive’s retirement or termination of employment shall not be considered voluntary if, following the Event and subject to the provisions for notification set forth below, one or more of the following has occurred without Executive’s express written consent and results in a material negative change to Executive:

 

  

2

  

 

	
  

	
(1)

	
There has been a failure to provide the Executive with substantially equivalent reporting responsibilities, titles, offices or positions, or Executive has been removed from, or has not been re-elected to, any of such positions, which has the effect of materially diminishing the Executive’s responsibility or authority;

 

	
  

	
(2)

	
There has been a failure to provide the Executive with: (a) the same base salary, or (b) substantially equivalent (or greater) total salary opportunity, or (c) employee benefits which are, in the aggregate, substantially equivalent to those provided to the Executive at the time of the Event;

 

	
  

	
(3)

	
There has been a failure to provide the Executive with substantially equivalent office space or administrative support; or

 

	
  

	
(4)

	
Executive has been required to perform his or her services in a location that is more than fifty (50) miles from the Executive’s regularly assigned office location at the time of the Event, or Executive is required to undertake substantially more job -related traveling.

 

In the event of an occurrence of the type enumerated in subparagraphs (1) through (4) above, Executive shall, within ten (10) days following Executive’s actual knowledge of such occurrence, notify the Company in writing of the specific occurrence which Executive believes would render his/her retirement or termination not voluntary and, following receipt of such notice, the Company shall be afforded a period of thirty (30) days within which to remedy such occurrence. If the Company fails to timely remedy, the occurrences specified in subparagraphs (1) through (4) above may be relied upon by Executive to characterize his/her retirement or termination as not voluntary, provided that such termination shall occur no later than sixty (60) days following the occurances specified in subparagraphs (1) through (4) above.  In the event that Executive fails to provide such notice or to afford such opportunity to remedy the occurrence, or in the event the Company does remedy the occurrence within thirty (30) days, then none of the occurrences specified in subparagraphs (1) through (4) above may be relied upon by Executive to characterize his/her retirement or termination as not voluntary.

 

	
  

	
(d)

	
Involuntary Termination For Cause.  The Executive’s involuntary termination “for cause.”  “For cause” shall mean:

 

	
  

	
(1)

	
A persistent failure by the Executive to perform the duties and responsibilities of his or her job, which failure is willful and deliberate on the Executive’s part and is not remedied within a reasonable period of time after the Executive’s receipt of written notice from the Company or its Successor specifying the act or omission constituting such failure;

 

	
  

	
(2)

	
A criminal act or acts undertaken by the Executive and intended to result in substantial gain or personal enrichment of the Executive at the expense of the Company or its Successor;

 

	
  

	
(3)

	
Unlawful conduct or gross misconduct that is willful and deliberate on the Executive’s part and that, in either event, is materially injurious to the Company or its Successor; or

 

	
  

	
(4)

	
The conviction of the Executive of a felony.

 

	
  

	
(e)

	
Subsequent Occurrences.  If the Executive’s employment is terminated under circumstances in which Executive would be entitled to Benefits as defined in Paragraph 4, and thereafter there is an occurrence that would have justified the termination of the Executive’s employment with no entitlement to Benefits (such as the Executive’s death, disability, voluntary termination, or involuntary termination for cause [all as defined above in this Paragraph]), that subsequent occurrence shall not disqualify the Executive (or the Executive’s legal representative) from receiving or continuing to receive the Benefits provided under this Agreement.  If the Executive’s employment is terminated under circumstances in which the Executive would be entitled to Benefits as defined in Paragraph 4, and thereafter the executive is re-employed by the Company, the Executive would be entitled to continue to receive payments provided under this Agreement.

 

	
4.

	
Benefits.  If the Executive’s employment is terminated under circumstances entitling the Executive to Benefits, the Executive shall receive the following:

 

  

3

  

 

	
  

	
(a)

	
Lump Sum Payment.  The Executive shall be entitled to a lump sum cash payment in the amount of One Month’s Salary times 24.  One Month’s Salary shall be determined by taking the sum of: (i) the Executive’s then-current annual base salary for the year in which the termination occurs; (ii) the bonus that the Executive would have earned under the HickoryTech Annual Executive Incentive Plan for the year in which the termination occurs had “target” goals been achieved; and (iii) the target bonus dollar amount awarded to the Executive under the Long-Term Executive Incentive Program for the performance period that begins in the year in which the termination occurs; and dividing that sum by twelve (12).  The foregoing sum shall be determined without regard to any reduction in pay under subparagraph 3(c).  This lump sum payment shall be made by the Company or its Successor at the time of the Executive’s termination of employment, and shall be subject to withholding of all taxes and other amounts required by law to be withheld or paid to others.

 

	
  

	
(b)

	
Section 280G Parachute Tax.  In the event it shall be determined that any payment or distribution by the Company or other amount with respect to the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, (a “Payment”) is (or will be) subject to the excise tax imposed by Section 280G of the Internal Revenue Code or any interest or penalties are (or will be) incurred by the Executive with respect to the excise tax imposed by Section 280G of the Internal Revenue Code with respect to the Company (the excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), and if a reduction in the Payment sufficient to avoid the Excise Tax would result in an increase in the total amount of Payment net of all applicable taxes, then, and only then, the Payment shall be reduced to the amount that, when combined with all other payments and transfers of property required to be taken into account under Section 280G of the Internal Revenue Code, is $1 less than the smallest sum that would subject the Executive to the Excise Tax.

 

	
  

	
(c)

	
Continued Insurance Coverage.  The Executive shall be entitled to continuation of his or her Company-provided insurance coverage (health, life, dental, accidental death and dismemberment, and any other applicable insured health and welfare benefit programs, excluding short and long-term disability) for two years after the Executive’s employment termination, at the same levels and coverages and on the same terms and conditions as if the Executive were still an active employee of the Company or its Successor throughout such period, including the right (if provided to active employees) to elect spousal or family coverage.  In the event that the participation of the Executive in any such insurance plan or program is barred, the Company or its Successor, at its sole cost and expense, shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise be entitled to receive under such plans and programs.  Notwithstanding the foregoing, however, the Company or its Successor shall not be required to provide any continuation coverage under this subparagraph 4(c) to the extent that such coverage is duplicative of any coverage the Executive is receiving under any other policy provided at the expense of the Company.

 

 

  

4

  

 

	
  

	
(d)

	
Continuation of any other benefits or perquisites being received by the Executive at the time of the Executive’s employment termination will be negotiated with the Company or its Successor.

 

	
5.

	
Benefits Offset By Other Severance Payments.  The lump sum payment provided in subparagraph 4(a) shall be in addition to any salary or other remuneration otherwise payable to the Executive on account of the Executive’s employment by the Company or its Successor.  This payment shall be in lieu of any severance payments under any other agreement resulting from his or her termination of employment with the Company or its Successor.

 

	
6.

	
No Duty to Mitigate.  The Executive shall not be required to mitigate the amount of any payment or other benefit provided for in Paragraph 4 by seeking other employment or otherwise, nor (except as specifically provided in subparagraph 4(c) above) shall the amount of any payment or other benefit provided for in Paragraph 4 be reduced by any compensation earned by the Executive as the result of employment after the Executive’s employment termination.

 

	
7.

	
Definition of Certain Terms.

 

	
  

	
(a)

	
Successor.  “Successor” means any Person that succeeds to the business of the Company through merger, consolidation, or acquisition, including any Person acquiring all or substantially all of the assets or stock of the Company.

 

	
  

	
(b)

	
Person.  “Person” means an individual, partnership, corporation, estate, trust, or other entity.

 

	
8.

	
Successors and Assigns.

 

	
  

	
(a)

	
This Agreement shall be binding upon and inure to the benefit of the legal representatives, successors, and assigns of the parties hereto; provided, however, that the Executive shall not have any right to assign, pledge, or otherwise dispose of or transfer any interest in this Agreement or any payments hereunder, whether directly or indirectly or in whole or in part, without the written consent of the Company or its Successor.

 

	
  

	
(b)

	
The Company will require any Successor, by agreement in form and substance satisfactory to the Executive, to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

 

	
9.

	
Attorneys’ Fees, Costs and Interest.  If the Executive (or the Executive’s legal representative) successfully challenges, in whole or in part, the refusal of the Company or its Successor to provide Benefits under this Agreement or to abide by any other provision of this Agreement, then the Company or its Successor shall pay to the Executive (or the Executive’s legal representative):

 

	
  

	
(a)

	
All legal fees, costs, disbursements, and expenses incurred as a result of the refusal to provide Benefits or to abide by the other provisions of the Agreement; and

 

	
  

	
(b)

	
Interest on any funds (or on the fair market value of any benefits) that were wrongfully withheld by the Company or its Successor, calculated by reference to the prime rate as in effect during the applicable period.

 

	
10.

	
Governing Law.  This Agreement shall be construed in accordance with the laws of the State of Minnesota, without giving effect to principles of conflicts of laws.

 

  

5

  

 

	
11.

	
Notices.  All notices, requests, and demands given to or made pursuant hereto shall be in writing and be either hand-delivered or mailed to any such party at its address which:

 

 

	
  

	
(a)

	
In the case of the Company shall be:

 

HickoryTech Corporation

221 East Hickory Street

P.O. Box 3248

Mankato, MN  56002-3248

	
  

	
(b)

	
In the case of the Executive shall be:

 

Carol Wirsbinski

Eagan, MN  55123

Either party may, by notice hereunder, designate a changed address.  Any notice, if properly addressed and sent prepaid by registered or certified mail, shall be deemed dispatched on the registered date or that stamped on the certified mail receipt, and shall be deemed received within the second business day thereafter or when it is actually received, whichever is sooner.  Any notice sent regular mail or hand-delivered shall be deemed received when it is actually received by the other party.

 

	
12.

	
Severability.  In the event that any portion of this Agreement may be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the other portions of this Agreement, and any court of competent jurisdiction may so modify the objectionable provision as to make it valid, reasonable, and enforceable.

 

	
13.

	
Incentive Compensation Plan and Stock Options.  In the case of a payment being due as described in Paragraph 1, the Executive’s benefits under the Annual Award of the HickoryTech Corporation Executive Incentive Plan shall become immediately payable and any outstanding stock options and unvested restricted shares shall be immediately vested.  Any Restricted Stock or Performance Stock Awards under the Long Term Executive Incentive Program which are payable due to achievement of Performance Objectives through the year in which the payment under this Agreement becomes due will be paid and fully vested immediately upon the audited close of the fiscal year financials, but in no case later than March 15 of the year following when the payment becomes due under this Agreement.  The Long Term Executive Incentive Program Awards that are not earned based on results at the close of the fiscal year in which the payment under this Agreement becomes due will not be payable.  Awards issued to the Executive shall immediately have all restrictions removed.

 

	
14.

	
Amendment or Termination of this Agreement.

 

	
  

	
(a)

	
Prior to the Occurrence of an Event.  Prior to the occurrence of an Event, the Company, by resolution of the Compensation Committee of the Board of Directors, has the unilateral power to amend or terminate this Agreement at any time and for any reason, and may do so without the Executive’s consent.  Notwithstanding the foregoing, however:

 

	
  

	
(1)

	
No such amendment or termination of this Agreement shall be effective with respect to the Executive until two weeks following the date that Executive is provided with written notice of the change.

 

	
  

	
(2)

	
No such amendment or termination of this Agreement shall be effective with respect to the Executive, unless otherwise agreed by the Executive, if an Event occurs during the one-year period following the date of adoption of the resolution amending or terminating this Agreement.

 

	
  

	
(b)

	
After the Occurrence of an Event.  After the occurrence of an Event, the Company, by resolution of the Compensation Committee of the Board of Directors, may amend or terminate this Agreement, but no such amendment or termination of this Agreement shall be effective unless the Executive consents thereto in writing.  Any waiver by an Executive of rights of any benefits due under this agreement for any reason (rehire or other) must be express and in writing.

 

  

6

  

 

           IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set out above.

 

	EXECUTIVE 	HICKORYTECH CORPORATION 

 

	
/s/ Carol Wirsbinski

	
By: /s/ John W. Finke

	
Carol Wirsbinski

	Its: President and Chief Executive Officer  
	  	
 

  

7

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