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Exhibit 10.1    

 

EMPLOYMENT, CONSULTING AND GENERAL RELEASE AGREEMENT

 

 

            This Employment, Consulting and General Release Agreement (“Agreement”) is entered into by and between United States Cellular Corporation and its subsidiaries, partnerships, affiliates, business units and related entities (“the Company”) and Jay M. Ellison (“the Executive”).

 

            WHEREAS, the Company is in the business of providing cellular telephone, personal  communication, and other communication services to its customers;

 

            WHEREAS, the Executive is an employee of the Company and holds the position of Executive Vice President and Chief Operating Officer;

 

            WHEREAS, the Executive has acquired extensive knowledge of and experience in the Company’s business during his employment at the Company;

 

            WHEREAS, the Executive and the Company desire to continue their employment relationship until the end of the day on December 31, 2009, when the Executive will resign from the Company;

 

            WHEREAS, the Executive and the Company desire the Executive to act as an independent contractor between January 1, 2010 until the end of the day on March 31, 2010, providing certain consulting services to the Company;

 

            NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement and for other good and valuable consideration, the adequacy and receipt of which the parties expressly acknowledge, the Executive and the Company agree as follows:

 

Employment Period and Responsibilities.  The Company will continue to employ the Executive as Executive Vice President and Chief Operating Officer until the end of the day on December 31, 2009 (the “Resignation Date”), and Executive hereby resigns from the Company effective as of the end of the day on December 31, 2009.

Performance Standards.  Through the Resignation Date, the Executive agrees to fully and continuously carry out the duties and responsibilities of his position to the best of his abilities. 

Base Salary.  The Company will continue to pay the Executive his current annual base salary in accordance with the Company’s regular payroll practices through the Resignation Date. 

Employment Benefits.  Except as otherwise provided herein, the Company will maintain all of the Executive’s current Company employment benefits until the Resignation Date when they will cease in accordance with the terms of the respective benefit plans.  Thereafter, at his 

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election and sole cost, the Executive will be permitted to participate in the Telephone and Data Systems Inc. (“TDS”) Retiree Health Plan (“Pre-65 Plan”) until age 65 on the same terms and conditions as other Pre-65 Plan USCC participants.  If the Executive elects to participate in the Pre-65 Plan, the Executive will also be eligible to participate at his sole cost in the TDS Medicare Supplement Plan (the “Post-65 Plan”) on the same terms and conditions as other Post-65 Plan USCC participants.  Any participation of the Executive in the Pre-65 Plan or Post-65 Plan pursuant to this Paragraph 4 shall be governed by the terms and conditions of the applicable plan document, which may be amended from time to time at the Company’s sole discretion.

Stock Options.  Subject to approval by the Stock Option Compensation Committee of the Board of Directors of the Company (the “Committee”) on or before November 17, 2009, (i) the portion of those options granted the Executive under the United States Cellular Corporation 2005 Long-Term Incentive Plan (the “LTIP”) in 2006, 2007, 2008 and 2009 that would otherwise become exercisable in April 2010 if the Executive remained employed by the Company through such time, as more fully described on Exhibit A, will become exercisable immediately prior to the Resignation Date, and (ii) exercisable options held by the Executive as of the Resignation Date may be exercised by the Executive for a period ending on the earlier of (i) 90 days after the date on which the Company’s 2009 Form 10-K is filed with the Securities and Exchange Commission (“SEC”), or (ii) the tenth anniversary of the grant of such option.  Unexercisable options held by the Executive as of the Resignation Date will forfeit on the Resignation Date per the terms of the LTIP and the agreements applicable thereto.  The Executive will not be entitled to receive any additional awards of stock options on or after December 31, 2009.

Restricted Stock.  Subject to approval by the Committee on or before November 17, 2009, the Restricted Stock Units granted under the LTIP to the Executive in 2007 that would otherwise vest in April 2010 if the Executive remained employed by the Company through such time, as more fully described on Exhibit A, will vest immediately prior to the Resignation Date.  Other outstanding Restricted Stock Units held by the Executive as of the Resignation Date will forfeit on the Resignation Date per the terms of the LTIP and the agreements applicable thereto.  The Executive will not be entitled to receive any additional awards of restricted stock on or after December 31, 2009.

Bonus.  After December 31, 2009 and on or before March 15, 2010, the Company will pay the Executive a bonus for 2009 performance under the 2009 Executive Officer Annual Incentive Plan (the “Incentive Plan”).  This bonus will be calculated as if the Executive was employed on the date in 2010 that 2009 bonuses will be paid in the normal course, and shall be consistent with the Incentive Plan, except to the extent adjustments are made by the Chairman of the Company for the benefit of all participants, in which case the same adjustments shall be applicable to the calculation of the Executive’s bonus.  The Executive will not participate in the Incentive Plan for the 2010 performance year or thereafter.  

Vacation Days.  Shortly after Executive’s Resignation Date, the Executive will be paid for any unused vacation days he has accrued on or prior to December 31, 2009.  The Executive will not accrue any vacation days after December 31, 2009.

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Pension, 401(k), SERP Payments.  Company will pay the Executive his vested balances in the Telephone and Data Systems, Inc. Tax-Deferred Savings Plan (“401(k) Plan”), the Telephone and Data Systems, Inc. Pension Plan (“Pension Plan”) and the Telephone and Data Systems, Inc. Supplemental Executive Retirement Plan (“SERP”) in accordance with the terms of the applicable plans.  The Company will make a Pension Plan contribution and a SERP account crediting on behalf of the Executive for the year 2009 but will not thereafter make any further Pension contributions or SERP account crediting on behalf of the Executive.  

Consulting.  

            (a)        Services.  From January 1, 2010 until March 31, 2010 (the “Consulting Period”), the Executive shall perform the following specialized services for the Company as a nonemployee, independent contractor:

            (i) he will attend the Company annual talent review meeting currently scheduled for January 24 to 27, 2010; 

 

            (ii) he will complete all performance reviews for direct reports and submit them to the Senior Vice President of Human Resources; 

 

            (iii) he will meet with and/or speak with the Executive Vice President – Operations and provide him with an in-depth understanding of the Company’s business operations; 

 

            (iv) he will meet with and/or speak with the Executive Vice President – Operations and provide him with an in-depth understanding of the Company’s current long-term strategy plan; and 

 

            (v) he will perform such other duties as reasonably may be authorized or directed by the President.

 

            It is expected and agreed that the services specified in this Paragraph 10 will require the Executive to devote to the Company approximately 25% to 35% of his available work time during the Consulting Period.

 

            (b)        Payment for Services.  On July 1, 2010, the Executive will be paid $72,700 for the consulting services specified in Paragraph 10(a), plus a one-time payment of $5,000 as the sole reimbursement for any miscellaneous business expenses incurred during the Consulting Period, such as telephone, internet and postage, but excluding any travel expenses which shall be separately reimbursed in accordance with the Company’s expense policies.  The Executive acknowledges and agrees that he is solely responsible for any federal and state income taxes and social security taxes due in connection with such payments for consulting services.

 

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Covenants.  

            (a)        General.  The Executive and the Company understand and agree that the purpose of the provisions of this Paragraph 11 is to protect legitimate business interests of the Company, as more fully described below, and is not intended to impair or infringe upon the Executive’s right to work, earn a living, or acquire and possess property from the fruits of his labor.  The Executive hereby acknowledges that the post-employment restrictions set forth in this Paragraph 11 are reasonable and that they do not, and will not, unduly impair his ability to earn a living after the resignation of his employment with the Company.  Therefore, subject to the limitations of reasonableness imposed by law upon restrictions set forth herein, the Executive shall be subject to the restrictions set forth in this Paragraph 11.  

 

            (b)        Non-Competition.  The Executive shall not work for any other person or entity during the Consulting Period and, continuing through the period ending January 1, 2012, the Executive shall not work for any entity which is a wireless service carrier that operates in any market within the continental United States in which the Company operates.  For purposes of the foregoing, “wireless carrier” includes any wireless carrier holding a license granted by the Federal Communications Commission, as well as any reseller or MVNO.  “Work for” includes, whether paid or unpaid, as an employee, officer, director, consultant or advisor.  

 

            (c)        Restriction on Disclosure and Use of Confidential Information.  For the period ending three (3) years after the end of the Consulting Period, the Executive shall maintain in strict confidence all aspects of the Company’s business, including, but not limited to, the Company’s plans relating to Human Coverage and the Strategic Operations Program (“Confidential Information”).  Anything herein to the contrary notwithstanding, the Executive shall not be restricted from disclosing or using Confidential Information that:  (i) is or becomes generally available to the public other than as a result of an unauthorized disclosure by the Executive or his agent; (ii) becomes available to the Executive in a manner that is not in contravention of applicable law from a source (other than the Company or one of its or their officers, employees, agents or representatives) that is not known by the Executive to be bound by a confidential relationship with the Company or by a confidentiality or other similar agreement; (iii) was known to the Executive on a non-confidential basis and not in contravention of applicable law or a confidentiality or other similar agreement before its disclosure to the Executive by the Company; or (iv) is required to be disclosed by law, court order or other legal process; provided, however, that in the event disclosure is required by law, court order or legal process, the Executive shall provide the Company with prompt notice of such requirement so that the Executive may seek an appropriate protective order prior to any such required disclosure by the Executive.

 

            (d)        Non-solicitation of Protected Employees.  The Executive agrees that during the Consulting Period, and for a two-year period thereafter, he shall not directly or indirectly on his own behalf, or on behalf of someone else, solicit any Company associate or employee of TDS or a subsidiary thereof, at or above the manager level, to terminate his/her employment with the Company or TDS.  Solicitation of any persons who respond to the placement of general advertisements of employment shall not be deemed a breach of this obligation.

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            (e)        Payment for Obligations.  On each of January 3, 2011 and January 2, 2012, the Executive will be paid $125,000 in consideration for the obligations set forth in Paragraph 11 and elsewhere in this Agreement.

            (f)        Breach of Agreement.  Any failure by the Executive to provide the services specified in Paragraph 10(a), any violation by the Executive of the noncompetition, confidentiality or nonsolicitation provisions specified in this Paragraph 11, any failure by Executive to cooperate as required by Paragraph 14, any failure by Executive to comply with the communications requirements of Paragraph 16 or any failure by Executive to comply with the covenants not to sue and other covenants in Paragraph 17 (including a failure to sign on December 31, 2009 the General Release and Covenant Not to Sue attached hereto as Exhibit E, or a subsequent revocation thereof), shall be deemed a breach of the Agreement and the Company shall be entitled to cease providing the Executive with the consulting payments specified in Paragraph 10(b), not pay the Executive the bonus specified in Paragraph 7, seek recovery of some or all of such consulting payments and/or bonus and any payments pursuant to Paragraph 11(e) paid to the Executive prior to such breach and to terminate the Executive’s participation pursuant to Paragraph 4, if any, in the Pre-65 Plan.

            (g)        Acknowledgements and Authorizations.  The Executive acknowledges that the covenants in Paragraph 11 have a unique, very substantial and immeasurable value to the Company.  The Executive recognizes, acknowledges and agrees that the business of the Company is, and is expected to continue to be, conducted throughout the continental United States and that the geographical limitations in the non-competition covenant set forth in Paragraph 11(b) are therefore appropriate.  The Executive further acknowledges and agrees that the covenant not to compete set forth in Paragraph 11(b) and its geographic coverage and duration of time are reasonable in scope.  The Executive hereby authorizes the Company to notify his actual or prospective future employers of the terms of this Paragraph 11 and his responsibilities hereunder.

            (h)        Injunctive Relief.   Without limiting the rights of the Company to pursue and obtain any other legal and/or equitable remedy available to it for any breach by the Executive of the covenants contained in Paragraph 11, the Executive further acknowledges that a breach of those covenants would cause a loss to the Company which could not reasonably or adequately be compensated in damages in an action at law, that remedies other than injunctive relief could not fully compensate the Company for a breach of those covenants and that, accordingly, the Company shall be entitled to injunctive relief to prevent or stop any breach or continuing breaches of the Executive’s covenants set forth in Paragraph 11.  The Executive and the Company intend that if, in any action before any Court empowered to enforce those covenants, the Court finds any term, restriction, covenant or promise to be unenforceable, then such term, restriction, covenant or promise shall be deemed modified to the extent necessary to make it enforceable by such Court.

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Return of Company Property.  The Executive agrees to return on or before December 31, 2009 to the Company all of the Company’s information and property in his possession, provided that any such property necessary to carry out the Executive’s consulting services may be retained until the end of the Consulting Period.  The Executive hereby represents to the Company that he maintains no Company information or property on his home personal computer, personal laptop (if any) or personal email accounts.  This information and property includes, but is not limited to, the Company’s mailing lists, reports, files, memoranda, records, computer hardware, software, credit cards, door and file keys, computer access codes or disks and instructional manuals, and other physical or personal property which he received or prepared or helped prepare in connection with his employment with the Company.  The Executive further agrees that he will not retain any copies, duplicates, reproductions or excerpts of this property.

Resignation From Offices and Committees.  Effective as of the end of the day on December 31, 2009, the Executive hereby resigns from any and all offices and positions he may hold with the Company and from membership on any committees of the Company.

Cooperation.  The Executive agrees to cooperate with the Company regarding any pending or subsequently filed litigation, proceeding, claim or other disputed item involving the Company that relates to the matters within his knowledge or responsibility during his employment, provided, however, that such cooperation will not be required if a conflict of interest exists between the Company and the Executive, or he is precluded by law or legal order from cooperating with the Company.  Without limiting the foregoing, he agrees (i) to meet with the Company’s representatives, its counsel or other designees at mutually convenient times and places with respect to any items within the scope of this paragraph; (ii) to provide truthful testimony before any court, agency or other legal authority; and (iii) to notify the Company when permitted to do so by law within three (3) business days if he is contacted by any adverse party or legal authority or by any representative of an adverse party or legal authority.  Should it become necessary to meet with the Company’s representatives, its counsel or other designees, the Executive will receive reimbursement for actual lost wages and actual expenses that are reasonable and customary under the Company’s expense policies and its by-laws relating to indemnification.  Such reimbursement shall occur as soon as administratively practicable following the date such expenses or lost wages are incurred (subject to your request for reimbursement in accordance with the Company’s expense policies).  In no event, however, shall such reimbursement occur earlier than July 1, 2010, or later than the last day of the calendar year following the calendar year during which the expenses or lost wages are incurred.  The reimbursement of expenses or lost wages in one calendar year shall not affect the amounts eligible for reimbursement in any other calendar year.

Disclosure.  The Company and the Executive will issue the attached press release (Exhibit B) and communications to employees (Exhibit C) regarding the Executive’s resignation.  The Executive acknowledges and agrees that the Company is required to disclose the Executive’s resignation and the terms of this Agreement, including the filing of a copy of this Agreement, pursuant to requirements of the Securities and Exchange Commission, the New York Stock Exchange and/or other laws, rules or regulations.  Nothing herein shall restrict in any way any disclosure by the Company or the Executive pursuant to any laws, rules or regulations.

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Communications.  The Executive agrees that he has not and will not directly or indirectly make any disparaging communication, or release any information or encourage others to make any communication or release any information, that is designed to embarrass or disparage the Company or the Company’s policies or practices to any person, including the Company’s investors, customers, vendors, competitors, associates or employees, former associates or employees, potential associates or employees or the press or other media in any country; provided, that it will not be a violation of this paragraph for him to make truthful statements when required by legal process to do so by a court of law, by any governmental agency having supervisory authority over the business of the Company or by any administrative or legislative body (including a committee thereof) with the jurisdiction to order the Executive or his agents to divulge, disclose or make accessible such information.  Similarly, the Company agrees that it will respond to reference requests about the Executive by providing the reference letter from Jeffrey Childs, attached hereto as Exhibit D.  The Company further agrees to provide a reference in keeping with the tone and information contained in such letter in response to any request for a reference for the Executive.  Any contact by the Executive or the Company with others, including the media, with respect to each other, the Company’s policies or practices or facts and circumstances giving rise to this arrangement will be in keeping with the information contained in the Press Release and communication to employees, Exhibits B and C attached hereto; provided however that so long as the Executive does not disparage the Company, nothing in this Agreement precludes the Executive from discussing his prior experience, his accomplishments and his future plans with any person, including the media.  The Executive and the Company agree that any violation of this paragraph shall constitute a material breach of this Agreement.

General Release and Covenant Not to Sue.

a.         In consideration of the payments and benefits provided and actions taken by the Company as set forth in this Agreement, the Executive knowingly and voluntarily agrees not to sue, waives and releases forever whatever claims he may have against the Company as of the date of this Agreement, including its or their respective officers, directors, partners, shareholders, employees, associates, agents, and representatives (collectively referred to as the “Released Parties”), including but not limited to: claims based upon or relating to his hire by the Company; any aspect of the work he performed; any aspect of his employment relationship with the Company, including his compensation; any oral or written agreements regarding his employment relationship with the Company; or the separation of his employment or the facts relating to or surrounding any aspect of that separation, except for any claims that he may have under the Agreement.  This release and waiver includes, without limitation, any claims he may have, whether known or unknown, in connection with any rights under federal, state or local law, including, but not limited to, claims of breach of contract, wrongful termination, unjust dismissal, defamation, libel or slander, or under any federal, state or local law dealing with discrimination based on age, race, sex, national origin, handicap, religion, disability or sexual preference.  This release of claims includes, but is not limited to, all claims arising under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Family and Medical Leave Act, state fair employment, human rights and/or civil rights laws, and all other federal, state and local labor and 

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anti-discrimination laws, the common law and any other purported restriction on an employer’s right to terminate the employment of employees.

b.         The Executive’s signature below constitutes his representation and warranty that he has not suffered an on the job or occupational injury or incurred any wage or overtime claims, including without limitation, any claims pursuant to the Fair Labor Standards Act, that could be asserted against any Released Party.  Moreover, the Executive expressly waives his right to recovery of any type, including damages, reinstatement or attorneys’ fees, in any administrative or court action, whether federal, state, local or whether brought by him on his behalf, related to any of the matters actually released herein.  He also waives and releases any right to become, and promises not to consent to become, a member of any class or collective action in a case in which claims are asserted against any Released Party.  If the Executive is made a member of a class or collective action in any proceeding without his prior knowledge or consent, he agrees to opt out of the class or collective action at the first opportunity.

c.         The Executive acknowledges and agrees that the payments and benefits set forth in this Agreement shall be in lieu of any other severance benefits that may be payable to him upon his termination of employment with the Company.  In consideration for such payments and benefits, the Executive hereby waives any severance benefits to which he otherwise might be entitled.

d.         The Executive acknowledges and agrees to sign on December 31, 2009 the General Release and Covenant Not to Sue attached hereto as Exhibit E.

Resolution of All Claims.  The Executive acknowledges and agrees that all disputes between himself and the Released Parties have been fully and finally settled to his complete satisfaction, leaving no disputes, controversies, claims or grievances of any kind between the Executive and the Released Parties.  The Executive therefore covenants and agrees that, except as may be compelled by law, he will not raise or in any way pursue any claims which are being released and discharged in this Agreement in any forum of any kind, including, without limitation, the federal, state or local courts, or federal, state or local agencies or offices of any kind, be they administrative, regulatory, judicial, quasi-judicial, or otherwise.

Acknowledgment of Sufficient Time to Consider this Agreement and to Consult With a Lawyer.  The Executive expressly acknowledges that he has been informed that he may consult with a lawyer of his choice, that he has consulted with his lawyer and that he has had sufficient time to consult with his lawyer prior to executing this Agreement.  The Executive acknowledges that he is not waiving rights or claims that may arise after the date this Agreement is executed.  The Executive further acknowledges that he has been informed that he is entitled to a period of at least twenty-one (21) days within which to consider this Agreement, but that he may execute this Agreement at any time prior to the expiration of the 21-day period.

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Revocation Right.  Within seven (7) days following the date of the Executive’s execution of this Agreement, the Executive shall have the right to revoke this Agreement by serving within such 7-day period written notice of his revocation upon Jeffrey Childs, Senior Vice President and Chief Human Resources Officer, United States Cellular Corporation, 8410 West Bryn Mawr Avenue, Chicago, IL  60631.  If the Executive does not revoke this Agreement during this seven (7) day period, this Agreement shall become effective on the eighth day after the date of the Executive’s execution of this Agreement and Executive shall have no further right to revoke this Agreement, provided, however, that if the Committee (i) affirmatively declines, on or before November 17, 2009, to approve the modifications of award under the LTIP contemplated in Sections 5 and 6, or (ii) fails to approve such modifications on or before November 17, 2009, then the Executive shall have a further right to revoke this Agreement upon written notice to Jeffrey Childs within two (2) days following the earlier of (a) the date of the Committee’s refusal to approve the proposed modifications, or (b) November 17, 2009.

Knowing and Voluntary Release.  The Executive acknowledges that in releasing and waiving any claims and rights that he has or may have against the Released Parties, including those under the Age Discrimination in Employment Act, he does so knowingly and voluntarily, after the opportunity to consult with legal counsel, in exchange for consideration in addition to anything of value to which he already is entitled.

Notices.  All notices and other communications required or permitted under this Agreement shall be deemed to have been duly given and made if in writing and if served personally on the party for whom intended or by being deposited, postage prepaid, certified or registered mail, return receipt requested, in the United States mail bearing the address shown below for each such party or such other address as that party may designate in writing hereafter 

	
(a)

	
If to the Company:

Jeffrey Childs

Senior Vice President and Chief

    Human Resources Officer

United States Cellular Corporation

8410 West Bryn Mawr Avenue

Chicago, IL  60631

	

(b)

 

	
If to the Executive:

Jay M. Ellison

565 Cherokee Road

Highland Park, IL  60035

		

with a copy with shall not

constitute notice to:

		

with a copy which shall not 

constitute notice to:
		

Stephen P. Fitzell		 
		Sidley Austin LLP		 
		1 South Dearborn Street		 
		Chicago, IL  60603		 

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Non-admission.  Nothing herein shall be deemed to constitute an admission of wrongdoing by the Executive, the Company or any of the other Released Parties.  Neither this Agreement nor any of its terms shall be used as an admission or introduced as evidence as to any issue of law or fact in any proceeding, suit or action, other than an action to enforce this Agreement.  

Waiver.  The Company’s future waiver of a breach by the Executive of any provision of this Agreement or failure to enforce any such provision with respect to him shall not operate or be construed as a waiver of any subsequent breach by the Executive of any such provision or of the Company’s right to enforce any such provision with respect to the Executive.  No act or omission of the Company shall constitute a waiver of any of its rights hereunder except for a written waiver signed by the Company’s Chairman.  

Entire Agreement/Ratification.  The terms contained in this Agreement constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior negotiations, representations or agreements relating thereto whether written or oral and that, in the event of conflict, this Agreement will govern. Not in limitation of the generality of the foregoing, this Agreement shall supersede any existing oral or written agreements between the Executive and the Company with respect to the subject matter hereof.  The Executive represents that in executing this Agreement, he has not relied upon any representation or statement not set forth herein.  No amendment or modification of this Agreement shall be valid or binding upon the parties unless in writing and signed by both parties.

Governing Law.  

            (a)        This Agreement shall be construed in accordance with, and governed by, the internal Laws of the State of Illinois without giving effect to principles of conflicts of law.  Each party agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement, whether in tort or contract or at law or in equity, exclusively in the United States District Court for the Northern District of Illinois or the courts of the State of Illinois (the “Chosen Courts”) and (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts for purposes of any such action or proceedings, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party and (iv) agrees that service of process upon such party in any such action or proceeding shall be effective if notice, including the original or a copy of such process, is given and receipt thereof evidenced in accordance with Section 22. 

 

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            (b)        The parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement.

 

 

THE EXECUTIVE AND THE COMPANY EXPRESSLY STATE THAT THEY HAVE READ THIS EMPLOYMENT, CONSULTING AND GENERAL RELEASE AGREEMENT, THAT THEY UNDERSTAND EACH OF ITS TERMS, AND THAT THEY HAVE ENTERED INTO IT VOLUNTARILY AND INTEND TO BE BOUND THEREBY.

 

 

	JAY M. ELLISON		UNITED STATES CELLULAR CORPORATION
	 		 
	By: 	 		By:	 
		Jay M. Ellison		Its:	President and CEO 
	 		 
	Date:   November 3, 2009		Dated:   November 3, 2009

 

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EXHIBIT A

 

 

Stock Options

 

 

	
Grant Date

	
Exercise Price

	
Shares Exercisable

	
Future Vesting

	
4/1/2009

	
$34.10

	
0

	
20,550 on 4/1/2010

	
4/1/2008

	
$57.19

	
20,417

	
20,416 on 4/1/2010

	
4/2/2007

	
$73.84

	
20,050

	
10,025 on 4/2/2010

	
4/3/2006

	
$59.43

	
18,638

	
9,319 on 4/3/2010

	
3/31/2005

	
$45.63

	
 8,600

	
 

	
9/1/2000

	
$75.00

	
 4,613

	
 

 

 

 

RSU’s

 

 

	
Grant Date

	
Shares Granted

	
Shares Outstanding

	
Future Vesting

	
4/2/2007

	
7,281

	
7,281

	
7,281 on 4/2/2010

 

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EXHIBIT B

 

 

 

 

Contact:  Jane McCahon, Vice President of Corporate Relations

               (312) 592-5379 jane.mccahon@teldta.com

 

 

FOR RELEASE:  IMMEDIATE

 

U.S. CELLULAR TO PROMOTE ALAN D. FERBER TO 

EXECUTIVE VICE PRESIDENT OPERATIONS

 

JAY M. ELLISON TO RETIRE

 

CHICAGO – [Month Day], 2009 – United States Cellular Corporation [NYSE: USM] today announced that it plans to appoint Alan D. Ferber as executive vice president, operations, effective January 1, 2010. Ferber is currently vice president of sales operations and chief marketing officer for U.S. Cellular®.  Jay M. Ellison, executive vice president and COO, is retiring at year-end. 

 

“Alan Ferber is an integral part of the senior leadership team at U.S. Cellular.” said John E. Rooney, U.S. Cellular president and CEO.  “His oversight of the company’s advertising, merchandising, marketing and branding strategies have helped U.S. Cellular become a leading wireless carrier in customer satisfaction and loyalty.  He brings a valuable, in-depth understanding of the company’s sales and distribution channels to his role as executive vice president of operations.”

 

”On behalf of all the associates at U.S. Cellular, I want to thank Jay Ellison for his substantial role in helping to build this company,” added Rooney.  “He developed the best operations team I have ever been associated with and ensured that our associates are uniquely focused on the highest level of customer satisfaction and business results.  His relentless demand for excellence has enabled U.S. Cellular to build and retain a highly competitive position in the market place while ensuring that our entire team stayed committed to our strong values- based culture.”

 

Ferber has been with U.S. Cellular since 2001 and leads the company’s branding, advertising, retail merchandising, product development and sales operations.  In 2008 Ferber helped lead the launch of a new brand image for the company encouraging wireless consumers to Believe in Something Better.SM  Ferber has more than 17 years experience in the wireless industry and prior to joining U.S. Cellular he was a co-founder of Traq-wireless and held leadership positions at Ameritech. He holds a B.A. in economics from the University of Michigan and an M.B.A. in finance and marketing from the Kellogg School of Management at Northwestern University.

 

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About U.S. Cellular

United States Cellular Corporation, the nation’s fifth-largest, full-service wireless carrier, provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to approximately 6.1 million customers in 26 states. The Chicago-based company employed approximately 8,700 full-time equivalent associates as of Sept. 30, 2009.

 

###

 

 

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EXHIBIT C

 

 

To all associates,

 

It is with mixed emotion that I inform you of Jay Ellison’s decision to retire from U.S. Cellular at the end of the year. And at the same time I have the pleasure to announce that Alan Ferber will become Executive Vice President of Operations when Jay leaves us.  

 

I have worked side by side with Jay Ellison for more than 17 years.  He has been my support and my coach and my devil’s advocate.  Most importantly, he has been one of the finest executives I have ever worked with.   Much of our success as a company has been the result of his wise counsel and unrelenting passion in building our culture and driving our business results.

 

We will miss Jay. He has made us cry, and he has made us laugh.  But most of all, he made us better.  

 

Let us all wish him all the best as he moves into the next phase of his life.  And let us continue to make him proud by being the best cellular company there is.

 

As we say goodbye to Jay, let’s also open our arms and hearts to Alan. We are very fortunate to have such a strong successor as Alan; he is one of our most effective, experienced, and knowledgeable team members, and he will move into this role with grace and energy.

 

Every healthy organization needs transitions like this: that is part of what it means to be dynamic.  A culture as strong as the D.O., with its constant focus on leadership development, always has the next leader ready to pick up the torch and carry it to the next level. I am looking forward to my partnership with Alan as we move into an exciting future.  I ask that you join me in giving him your full support.  

 

--Jack

 

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EXHIBIT D

 

 

 

Re:      Jay Ellison

 

 

To Whom it May Concern:

 

I am honored to author this recommendation for Jay Ellison.

 

Jay Ellison was employed by U.S. Cellular from September 5, 2000 until his retirement on December 31, 2009.  At the time of his retirement, Jay held the position of Executive Vice President and Chief Operating Officer.

 

Jack Rooney, U.S. Cellular’s President and CEO, worked with Jay for many years prior to U.S. Cellular. Jay has been one of the finest executives with whom we ever worked.  Much of our success as a company has been the result of his leadership, wise counsel and unrelenting passion in building our culture and driving our business results.  

 

During his tenure at U.S. Cellular, Jay played a substantial role in helping to build the company.  He developed the best operations team we have ever had and ensured that our associates would be uniquely focused on the highest level of customer satisfaction and business results.  His relentless demand for excellence enabled U.S. Cellular to build and retain a highly competitive position in the marketplace while ensuring that our entire team stayed committed to our strong values-based culture.  

 

Should you need any further information, please do not hesitate to give me a call. Jay is a real winner.

 

Very truly yours,

 

 

Jeffrey J. Childs

 

16

 

EXHIBIT E

 

 

GENERAL RELEASE AND COVENANT NOT TO SUE

            This General Release and Covenant Not to Sue (the “Release”) confirms the following understanding and agreements between United States Cellular Corporation on behalf of itself and its subsidiaries, partnerships, affiliates, business units and related entities (“the Company”) and Jay M. Ellison (“the Executive”).

 

General Release and Covenant Not to Sue.

a.         In consideration of the payments and benefits provided and actions taken by the Company as set forth in the Confidential Agreement dated November 3, 2009 (“the Agreement”), the Executive knowingly and voluntarily agrees not to sue, waives and releases forever whatever claims he may have against the Company as of the date of this Agreement, including its or their respective officers, directors, partners, shareholders, employees, associates, agents, and representatives (collectively referred to as the “Released Parties”), including but not limited to: claims based upon or relating to his hire by the Company; any aspect of the work he performed; any aspect of his employment relationship with the Company, including his compensation; any oral or written agreements regarding his employment relationship with the Company; or the separation of his employment or the facts relating to or surrounding any aspect of that separation, except for any claims that he may have under the Agreement.  This release and waiver includes, without limitation, any claims he may have, whether known or unknown, in connection with any rights under federal, state or local law, including, but not limited to, claims of breach of contract, wrongful termination, unjust dismissal, defamation, libel or slander, or under any federal, state or local law dealing with discrimination based on age, race, sex, national origin, handicap, religion, disability or sexual preference.  This release of claims includes, but is not limited to, all claims arising under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Family and Medical Leave Act, state fair employment, human rights and/or civil rights laws, and all other federal, state and local labor and anti-discrimination laws, the common law and any other purported restriction on an employer’s right to terminate the employment of employees.

b.         The Executive’s signature below constitutes his representation and warranty that he has not suffered an on the job or occupational injury or incurred any wage or overtime claims, including without limitation, any claims pursuant to the Fair Labor Standards Act, that could be asserted against any Released Party.  Moreover, the Executive expressly waives his right to recovery of any type, including damages, reinstatement or attorneys’ fees, in any administrative or court action, whether federal, state, local or whether brought by him on his behalf, related to any of the matters actually released herein.  He also waives and releases any right to become, and promises not to consent to become, a member of any class or collective action in a case in which claims are asserted against any Released Party.  If the Executive is made a member of a class or 

17

collective action in any proceeding without his prior knowledge or consent, he agrees to opt out of the class or collective action at the first opportunity.

c.         The Executive acknowledges and agrees that the payments and benefits referred to in this Release shall be in lieu of any other severance benefits that may be payable to him upon his termination of employment with the Company.  In consideration for such payments and benefits, the Executive hereby waives any severance benefits to which he otherwise might be entitled.

Acknowledgment of Sufficient Time to Consider this Agreement and to Consult With a Lawyer.  The Executive expressly acknowledges that he has been informed that he may consult with a lawyer of his choice, that he has consulted with his lawyer and that he has had sufficient time to consult with his lawyer prior to executing this Release.  The Executive acknowledges that he is not waiving rights or claims that may arise after the date this Release is executed.  The Executive further acknowledges that he has been informed that he is entitled to a period of at least twenty-one (21) days within which to consider this Release, but that he may execute this Release at any time prior to the expiration of the 21-day period.

Revocation Right.  Within seven (7) days following the date of the Executive’s execution of this Release, the Executive shall have the right to revoke this Release by serving within such 7-day period written notice of his revocation upon Jeffrey Childs, Senior Vice President and Chief Human Resources Officer, United States Cellular Corporation, 8410 West Bryn Mawr Avenue, Chicago, IL  60631.  If the Executive does not revoke this Release during this seven (7) day period, this Release shall become effective on the eighth day after the date of the Executive’s execution of this Release and Executive shall have no further right to revoke this Release, provided, however that any subsequent revocation of the Agreement in accordance with its terms also shall constitute a revocation of this Release.

Knowing and Voluntary Release.  The Executive acknowledges that in releasing and waiving any claims and rights that he has or may have against the Released Parties, including those under the Age Discrimination in Employment Act, he does so knowingly and voluntarily, after the opportunity to consult with legal counsel, in exchange for consideration in addition to anything of value to which he already is entitled.

Notices.  All notices and other communications required or permitted under this Agreement shall be deemed to have been duly given and made if in writing and if served personally on the party for whom intended or by being deposited, postage prepaid, certified or registered mail, return receipt requested, in the United States mail bearing the address shown below for each such party or such other address as that party may designate in writing hereafter

18

	
(a)

	
If to the Company:

Jeffrey Childs

Senior Vice President and Chief

    Human Resources Officer

United States Cellular Corporation

8410 West Bryn Mawr Avenue

Chicago, IL  60631

	

(b)

 

	
If to the Executive:

Jay M. Ellison

565 Cherokee Road

Highland Park, IL  60035

		

with a copy with shall not

constitute notice to:

		

with a copy which shall not 

constitute notice to:
		

Stephen P. Fitzell		 
		Sidley Austin LLP		 
		1 South Dearborn Street		 
		Chicago, IL  60603		 

            

Non-admission.  Nothing herein shall be deemed to constitute an admission of wrongdoing by the Executive, the Company or any of the other Released Parties.  Neither this Agreement nor any of its terms shall be used as an admission or introduced as evidence as to any issue of law or fact in any proceeding, suit or action, other than an action to enforce this Agreement.  

Waiver.  The Company’s future waiver of a breach by the Executive of any provision of this Agreement or failure to enforce any such provision with respect to him shall not operate or be construed as a waiver of any subsequent breach by the Executive of any such provision or of the Company’s right to enforce any such provision with respect to the Executive.  No act or omission of the Company shall constitute a waiver of any of its rights hereunder except for a written waiver signed by the Company’s President and Chief Executive Officer.  

Reaffirmation.  The terms contained in this Release supplements the Confidential Agreement, General Release and Covenant Not to Sue dated November 3, 2009.  All terms of that Agreement remain in effect and are hereby reaffirmed.  The Executive represents that in executing this Release, he has not relied upon any representation or statement not set forth herein.  No amendment or modification of this Release shall be valid or binding upon the parties unless in writing and signed by both parties.

Governing Law.  

            (a)        This Agreement shall be construed in accordance with, and governed by, the internal Laws of the State of Illinois without giving effect to principles of conflicts of law.  Each party agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement, whether in tort or contract or at law or in equity, exclusively in the United States District Court for the Northern District of Illinois or the courts of the State of Illinois (the “Chosen Courts”) and (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts for purposes of any such action or proceedings, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party and (iv) agrees that service of process upon 

 

19

 

such party in any such action or proceeding shall be effective if notice, including the original or a copy of such process, is given and receipt thereof evidenced in accordance with Section 23.

 

            (b)        The parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement.

 

 

THE EXECUTIVE AND THE COMPANY EXPRESSLY STATE THAT THEY HAVE READ THIS GENERAL RELEASE AND COVENANT NOT TO SUE, THAT THEY UNDERSTAND EACH OF ITS TERMS, AND THAT THEY HAVE ENTERED INTO IT VOLUNTARILY AND INTEND TO BE BOUND THEREBY.

 

 

	JAY M. ELLISON		UNITED STATES CELLULAR CORPORATION
	 		 
	By: 	 		By:	 
		Jay M. Ellison		Its:	President and CEO 
	 		 
	Date:   December 31, 2009		Dated:   December 31, 2009

 

20ex10-6.htm

    
      

       

      Exhibit
10.6

       

       

      EMPLOYMENT
AGREEMENT

       

      This
EMPLOYMENT AGREEMENT (this “Agreement”) is
entered into as of this 31st day
of July, 2009 by and between Dynex Capital, Inc., a Virginia corporation (the
“Company”), and
Thomas B. Akin (“Executive”).

       

       

      W1TNESSETH:

       

      WHEREAS,
Executive commenced employment with the Company on February 4,
2008;

       

      WHEREAS,
the Company desires to continue to employ and secure the exclusive services of
Executive on the terms and conditions set forth in this Agreement;
and

       

      WHEREAS,
Executive desires to accept such employment on such terms and
conditions.

       

      NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
promises contained herein and for other good and valuable consideration, the
Company and Executive hereby agree as follows:

       

      1. Agreement to
Employ.  Upon the terms and subject to the conditions of this
Agreement, the Company hereby agrees to continue to employ Executive, and
Executive hereby accepts such continued employment with the Company.

       

      2. Term; Position and
Responsibilities; Location.

       

      (a) Term of
Employment.  Unless Executive’s employment shall sooner
terminate pursuant to Section 7, the Company shall continue to employ Executive
on the terms and subject to the conditions of this Agreement from the date first
written above through February 5, 2010 (the “Employment
Period”).

       

      (b) Position and
Responsibilities.  During the Employment Period, Executive
shall serve as Chief Executive Officer (“CEO”) and shall have
such duties and responsibilities as are customarily assigned to individuals
serving in such position and such other duties consistent with Executive’s title
and position as the Board of Directors (or any committee thereof) of the Company
(the Board or such committee referred to as the “Board”) specifies
from time to time (it being understood by the parties that, notwithstanding the
foregoing, the Company is free, at any time and from time to time, to reorganize
its business operations, and that Executive’s duties and scope of responsibility
may change in connection with such reorganization).  Executive agrees
that during his employment with the Company, Executive shall devote as much of
his skill, knowledge, commercial efforts and business time as the Board shall
reasonably require to

       

      
        
          
            1821793v4

          

           

        

        
           

          
            

          

        

        
           

        

      

      (c) the
conscientious and good faith performance of his duties and responsibilities to
the Company to the best of his ability.

       

      (d) Location.  During
the Employment Period, Executive’s services shall be performed primarily in the
San Francisco, California metropolitan area.  However, Executive may
be required to travel in and outside of such area as the needs of the Company’s
business dictate.  Executive will also work from time-to-time out of
the Company’s office in Richmond, Virginia.

       

      3. Base
Salary.  During the Employment Period, the Company shall pay
Executive a base salary at an annualized rate of $300,000, payable in
installments on the Company’s regular payroll dates but not less frequently than
monthly.  The Board shall review Executive’s base salary annually
during the Employment Period and may increase (but not decrease) such base
salary from time to time, based on its periodic review of Executive’s
performance in accordance with the Company’s regular policies and
procedures.  The annual base salary payable to Executive from time to
time under this Section 4 shall hereinafter be referred to as the “Base
Salary.”  Until the Company and the Executive decide otherwise,
the Base Salary shall be paid in shares of unrestricted common stock of the
Company issued under the Company’s stock incentive plan in effect at the time of
payment, provided that the portion of the Base Salary attributable to payroll
deductions and tax withholdings shall always be paid in cash.  The
number of shares of unrestricted common stock to be paid to the Executive shall
be based on the fair market value of the common stock (as defined in the
applicable stock incentive plan) on the applicable payroll
date.  Notwithstanding the above, all payments of Base Salary shall be
paid in cash on any payroll date on which (i) the Company’s stock incentive plan
does not allow for the issuance of unrestricted common stock, or (ii) the Executive’s
ownership position in the Company exceeds amounts authorized by the Company’s
Articles of Incorporation or its Bylaws, as they both may be amended or restated
from time to time, unless such ownership limits have been waived or revised by
the Board of Directors specifically for the Executive, in which case Executive’s
ownership position cannot exceed the revised
limits.  All payments of Base Salary paid after the
Executive’s termination of employment under Section 7 shall be paid in
cash.

       

      4. Annual Incentive
Compensation.  The Company has established an annual bonus
program based on the return on adjusted equity of the Company (the “ROAE
Bonus”).  The Company also has established a bonus pool for
2009 related to the capital raising activities of the Company (the “Capital Bonus
Pool”).  For the duration of this Agreement, the Executive will
be eligible for the ROAE Bonus and will participate in the Capital Bonus Pool
and any other bonus programs for executives.  Eligibility and
participation by the Executive in the bonus programs shall be subject to the
terms of the bonus programs adopted by the Compensation Committee of the Board
of Directors.

       

      5. Employee
Benefits.

       

      (a) General.  During
the Employment Period, Executive will be eligible to participate in the employee
and executive benefit plans and programs maintained by the Company from time to
time in which executives of the Company at

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (b) Executive’s
grade level are eligible to participate, including to the extent maintained by
the Company, life, medical, dental, accidental and disability insurance plans
and retirement, deferred compensation and savings plans, in accordance with the
terms and conditions thereof as in effect from time to time.

       

      (c) Vacation.  During
the Employment Period, Executive shall be entitled to vacation on an annualized
basis of four (4) weeks per year, without carry-over
accumulation.  Executive shall also be entitled to Company-designated
holidays.

       

      6. Expenses.

       

      (a) Business Travel,
Lodging.  During the Employment Period, the Company will
reimburse Executive for reasonable travel, lodging, meal and other reasonable
expenses incurred by him in connection with the performance of his duties and
responsibilities hereunder upon submission of evidence satisfactory to the
Company of the incurrence and purpose of each such expense, provided that such
expenses are permitted under the terms and conditions of the Company’s business
expense reimbursement policy.

       

      7. Termination of
Employment.

       

      (a) Termination for Any
Reason.  Executive’s employment may be terminated by the
Company or the Executive for any reason.  In the event that
Executive’s employment is terminated, no termination benefits shall be payable
to or in respect of Executive except as provided in Section 7(c).

       

      (b)  Notice of Termination; Date
of Termination.

       

      (i) Notice of
Termination.  Any termination of Executive’s employment by the
Company or by Executive (other than as a result of Executive’s death) shall be
communicated by a written Notice of Termination addressed to the other party to
this Agreement.  A “Notice of
Termination” shall mean a notice stating that Executive or the Company,
as the case may be, is electing to terminate Executive’s employment with the
Company (and thereby terminating the Employment Period), stating the proposed
effective date of such termination, indicating the specific provision of this
Section 7 under which such termination is being effected and, if applicable,
setting forth in reasonable detail the circumstances claimed to provide the
basis for such termination.

       

      (ii) Date of
Termination.  The term “Date of Termination”
shall mean (i) if Executive’s employment is terminated by his death, the date of
his death, (ii) if Executive’s employment is terminated by Executive, a date
which is at least 30 days following the issuance of the Notice of Termination
and (iv) if Executive’s employment is terminated for any other reason, the
effective date of termination specified in such Notice of
Termination.  The Employment Period shall expire on the Date of
Termination.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (iii) Payments
Upon Certain Terminations.

       

      (iv) In the
event of a termination of Executive’s employment, the Company shall pay to
Executive, within thirty (30) days of the Date of Termination, his Base Salary
through the Date of Termination, to the extent not previously paid,
reimbursement for any unreimbursed business expenses incurred by Executive prior
to the Date of Termination that are subject to reimbursement pursuant to Section
7(a) and payment for vacation time accrued as of the Date of Termination but
unused (the “Accrued
Obligations”).  In addition, in the event of any such
termination of Executive’s employment unless such termination was for Cause (as
defined in Section 7(e) below), if Executive executes and delivers to the
Company a Separation Agreement and General Release substantially in the form
approved by the Company, Executive shall be entitled to the following payments
and benefits:

       

      (A) the
portion of the ROAE Bonus for the calendar year of the Company during which
Executive was employed that includes the Date of Termination, such portion to
equal the product (such product, the “Pro-Rata ROAE Bonus”)
of the ROAE Bonus that would have been payable to Executive for such calendar
year had Executive remained employed for the entire calendar year, determined
based on the extent to which the Company actually achieves the performance goals
for such year, multiplied by a fraction, the numerator of which is equal to the
number of days in such calendar year that precede the Date of Termination and
the denominator of which is equal to 365, such amount to be payable to Executive
at the time such bonus would otherwise have been paid under the terms of the
ROAE Bonus program if the Executive was still employed (the “Bonus Payment
Date”);

       

      (B) to the extent not already paid, the portion
of the Capital Bonus Pool due the Executive under the terms of the Capital Bonus
Pool for a Determination Date (as that term is defined in the Capital Bonus Pool
governing document) that precedes the Date of Termination (the “Unpaid Capital
Bonus”) payable in cash on the Bonus Payment Date;

       

      (C) to the
extent any other incentive stock awards such as stock options, stock
appreciation rights, restricted stock, or similar which were awarded to
Executive during the Employment Period and which have not vested as of the Date
of Termination, such incentive stock awards will immediately become 100% vested
and exercisable and will be payable at the times and in the forms provided in
the individual award agreements; and

       

      Executive
shall not have a duty to mitigate the costs to the Company under this Section
7(c)(i), nor shall any payments from the Company to Executive under items (A),
(B) or (C) of this Section 7(c)(i) be reduced, offset or canceled by any
compensation or fees earned by (whether or not paid currently) or offered to
Executive by a subsequent employer or other Person (as defined in below) for
which Executive performs services, including but not limited to consulting
services.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Except as
specifically set forth in this Section 7(c), no termination benefits shall be
payable to or in respect of Executive’s employment with the
Company.

       

      (c) For
purposes of this Agreement, “Cause” means (i) a
material breach by Executive of any provision of this Agreement; (ii) a material
and willful violation by Executive of any of the Company Policies; (iii) the
failure by Executive to reasonably and substantially perform the duties of his
position (other than as a result of physical or mental illness or injury); (iv)
Executive’s willful misconduct or gross negligence that has caused or is
reasonably expected to result in material injury to the business, reputation or
prospects of the Company; (v) Executive’s fraud or misappropriation of funds; or
(vi) the commission by Executive of a felony or other serious crime involving
moral turpitude; provided that in the case of any breach of clauses (i), (ii) or
(iii) that is curable, no termination there under shall be effective unless the
Company shall have given Executive notice of the event or events constituting
Cause and Executive shall have failed to cure such event or events within thirty
(30) business days after receipt of such notice.

       

      8. Code Section 409A
Compliance.

       

      (a)           The
intent of the parties is that payments and benefits under this Agreement comply
with Section 409A of the Internal Revenue Code of 1986, as amended, and
applicable guidance thereunder (“Code Section 409A”) or comply with
an exemption from the application of Code Section 409A and, accordingly, all
provisions of this Agreement shall be construed in a manner consistent with the
requirements for avoiding taxes or penalties under Code Section
409A.

       

      (b)           Neither
the Executive nor the Company shall take any action to accelerate or delay the
payment of any monies and/or provision of any benefits in any matter which would
not be in compliance with Code Section 409A.

       

      (c)           A
termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the form or timing of payment of
any amounts or benefits upon or following a termination of employment unless
such termination is also a “separation from service” (within the meaning of Code
Section 409A) and, for purposes of any such provision of this Agreement under
which (and to the extent) deferred compensation subject to Code Section 409A is
paid, references to a “termination” or “termination of employment” or like
references shall mean separation from service.  If the Executive is
deemed on the date of separation from service with the Company to be a
“specified employee”, within the meaning of that term under Code Section
409A(a)(2)(B) and using the identification methodology selected by the Company
from time to time, or if none, the default methodology, then with regard to any
payment or benefit that is required to be delayed in compliance with Code
Section 409A(a)(2)(B), such payment or benefit shall not be made or provided
prior to the earlier of (i) the expiration of the six- month period measured
from the date of the Executive’s separation from service or (ii) the date of the
Executive’s death.  In the case of benefits required to be delayed
under Code Section 409A, however, the Executive may pay the cost of benefit
coverage, and thereby obtain benefits, during

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      such six
month delay period and then be reimbursed by the Company thereafter when delayed
payments are made pursuant to the next sentence.  On the first day of
the seventh month following the date of the Executive’s separation from service
or, if earlier, on the date of the Executive’s death, all payments delayed
pursuant to this Section 8(c) (whether they would have otherwise been payable in
a single sum or in installments in the absence of such delay) shall be paid or
reimbursed to the Executive in a lump sum, and any remaining payments and
benefits due under this Agreement shall be paid or provided in accordance with
the normal payment dates specified for them herein.

       

      (d)           With
regard to any provision herein that provides for reimbursement of expenses or
in-kind benefits subject to Code Section 409A, except as permitted by Code
Section 409A, (i) the right to reimbursement or in-kind benefits is not subject
to liquidation or exchange for another benefit, and (ii) the amount of expenses
eligible for reimbursement, or in-kind benefits, provided during any taxable
year shall not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year, provided that the foregoing
clause (ii) shall not be violated with regard to expenses reimbursed under any
arrangement covered by Code Section 105(b) solely because such expenses are
subject to a limit related to the period the arrangement is in
effect.  All reimbursements shall be reimbursed in accordance with the
Company’s reimbursement policies but in no event later than the calendar year
following the calendar year in which the related expense is
incurred.

       

      (e)           If
under this Agreement, an amount is to be paid in two or more installments, for
purposes of Code Section 409A, each installment shall be treated as a separate
payment.

       

      (f)           When,
if ever, a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within ten (10) days
following the date of termination”), the actual date of payment within the
specified period shall be within the sole discretion of the
Company.”

       

      (g)           Notwithstanding
any of the provisions of this Agreement, the Company shall not be liable to the
Executive if any payment or benefit which is to be provided pursuant to this
Agreement and which is considered deferred compensation subject to Code Section
409A otherwise fails to comply with, or be exempt from, the requirements of Code
Section 409A.

       

      9. Restrictive
Covenants.  Each of the Company and Executive agrees that the
Executive will have a prominent role in the management of the business, and the
development of the goodwill, of the Company, and will establish and develop
relations and contacts with customers and counterparties of the Company, all of
which constitute valuable goodwill of, and could be used by Executive to compete
unfairly with, the Company.  In addition, Executive recognizes that he
will have access to and become familiar with or exposed to Confidential
Information (as such term is defined below), in particular, trade secrets,
proprietary information, customer lists, counterparty lists and other valuable
business information of the Company pertaining or related to the
speciality

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      10. finance
industry, specifically as it relates to being a mortgage real estate investment
trust (the “Business
of the Company”).  Executive agrees that Executive could cause
grave harm to the Company if he, among other things, worked for the Company’s
competitors, solicited the Company’s employees away from the Company, solicited
the Company’s customers or business counterparties upon the termination of
Executive’s employment with the Company, or misappropriated or divulged the
Company’s Confidential Information; and that as such, the Company has legitimate
business interests in protecting its goodwill and Confidential Information; and,
as such, these legitimate business interests justify the following restrictive
covenants:

       

      (a) Confidentiality and
Non-Disclosure Covenant.

       

      (i) Executive
acknowledges and agrees that the terms of this Agreement, including all
addendums and attachments hereto, are confidential.  Except as
required by law or the requirements of any stock exchange, Executive agrees not
to disclose any information contained in this Agreement to anyone, other than to
Executive’s lawyer, financial advisor or immediate family members.  If
Executive discloses any Information contained in this Agreement to his lawyer,
financial advisor or immediate family members as permitted herein, Executive
agrees to immediately tell each such individual that he or she must abide by the
confidentiality restrictions contained herein and keep such information
confidential as well.

       

      (ii) Executive
agrees that during his employment with the Company and thereafter, Executive
will not, directly or indirectly (A) disclose any Confidential Information to
any Person (other than, only with respect to the period that Executive is
employed by the Company, to an employee or outside advisor of the Company who
requires such information to perform his or her duties for the Company), or (B)
use any Confidential Information for Executive’s own benefit or the benefit of
any third party.  “Confidential
Information” means confidential, proprietary or commercially sensitive
information relating to (i) the Company or members of its management or boards
or (ii) any third parties who do business with the
Company.  Confidential Information includes, without limitation,
marketing plans, business plans, financial information and records, operation
methods, personnel information, drawings, designs, information regarding product
development, customer lists, or other commercial or business information and any
other information not available to the public generally.  The
foregoing obligation shall not apply to any Confidential Information that has
been previously disclosed to the public or is in the public domain (other than
by reason of a breach of Executive’s obligations to hold such Confidential
Information confidential).  If Executive is required or requested by a
court or governmental agency to disclose Confidential Information, Executive
must notify the Chief Operating Officer of the Company of such disclosure
obligation or request no later than three (3) business days after Executive
learns of such obligation or request, and permit the Company to take all lawful
steps it deems appropriate to prevent or limit the required
disclosure.

       

      (b) Non-Competition
Covenant.  Executive agrees that during his employment with the
Company, Executive shall devote as much of his skill, knowledge, commercial
efforts and business time as the Board shall reasonably require to

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c) the
conscientious and good faith performance of his duties and responsibilities to
the Company to the best of his ability.  The Company acknowledges that
Executive is the managing general partner of Talkot Capital LLC and shall
continue to function in that regard during his employment with the
Company.  Except for Talkot Capital, Executive shall not, directly or
indirectly, be employed by, render services for, engage in business with or
serve as an agent or consultant to any Person other than the
Company.  Executive further agrees that during his employment with the
Company and for the period of one (1) year following any termination of his
employment with the Company, Executive shall not, directly or indirectly, become
employed by, render services for, engage in business with, serve as an agent or
consultant to, or become a partner, member, principal, stockholder or other
owner, or Board member of, any Person or entity that engages in the Business of
the Company, provided that
Executive shall be permitted to hold a ten percent (10%) or less interest in the
equity or debt securities of any publicly traded company.

       

      (d) Non-Solicitation of
Employees.  During the period of Executive’s employment with
the Company and for the one (1)-year period following the termination of his
employment, Executive shall not, directly or indirectly, by himself or through
any third party, whether on Executive’s own behalf or on behalf of any other
Person or entity, (i) solicit or induce or endeavor to solicit or induce,
divert, employ or retain, (ii) interfere with the relationship of the Company
with, or (iii) attempt to establish a business relationship of a nature that is
competitive with the business of the Company with, any Person that is or was
(during the last twelve (12) months of Executive’s employment with the Company)
an employee of the Company or engaged to provide services to it.

       

      11. Work
Product.  Executive agrees that all of Executive’s work product
(created solely or jointly with others, and including any intellectual property
or moral rights in such work product), given, disclosed, created, developed or
prepared in connection with Executive’s employment with the Company, whether
ensuing during or after Executive’s employment with the Company (“Work Product”) shall
exclusively vest in and be the sole and exclusive property of the Company and
shall constitute “work made for hire” (as that term is defined under Section 101
of the U.S. Copyright Act, 17 U.S.C. § 101) with the Company being the person
for whom the work was prepared.  In the event that any such Work
Product is deemed not to be a “work made for hire” or does not vest by operation
of law in the Company, Executive hereby irrevocably assigns, transfers and
conveys to the Company, exclusively and perpetually, all right, title and
interest which Executive may have or acquire in and to such Work Product
throughout the world, including without limitation any copyrights and patents,
and the right to secure registrations, renewals, reissues, and extensions
thereof.  The Company or its designees shall have the exclusive right
to make full and complete use of, and make changes to all Work Product without
restrictions or liabilities of any kind, and Executive shall not have the right
to use any such materials, other than within the legitimate scope and purpose of
Executive’s employment with the Company.  Executive shall promptly
disclose to the Company the creation or existence of any Work Product and shall
take whatever additional lawful action may be necessary, and sign whatever
documents the Company may require, in order to secure and vest in the Company or
its designee all right, title and

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      12. interest
in and to all Work Product and any intellectual property rights therein
(including full cooperation in support of any Company applications for patents
and copyright or trademark registrations).

       

      13. Return of Company
Property.  In the event of termination of Executive’s
employment for any reason, Executive shall return to the Company all of the
property of the Company and its Affiliates, including without limitation all
materials or documents containing or pertaining to Confidential Information, and
including without limitation, all computers (including laptops), cell phones,
keys, PDAs, Blackberries, credit cards, facsimile machines, televisions, card
access to any Company building, customer lists, computer disks, reports, files,
e-mails, work papers, Work Product, documents, memoranda, records and software,
computer access codes or disks and instructional manuals, internal policies, and
other similar materials or documents which Executive used, received or prepared,
helped prepare or supervised the preparation of in connection with Executive’s
employment with the Company.  Executive agrees not to retain any
copies, duplicates, reproductions or excerpts of such material or
documents.

       

      14. Compliance With Company
Policies.  During Executive’s employment with the Company,
Executive shall be governed by and be subject to, and Executive hereby agrees to
comply with, all Company policies, procedures, codes, rules and regulations
applicable to all employees and to executive officers of the Company, as they
may be amended from time to time in the Company’s sole discretion (collectively,
the “Policies”).

       

      15. Injunctive Relief with
Respect to Covenants: Forum, Venue and Jurisdiction.  Executive
acknowledges and agrees that a breach by Executive of any of Section of the
Agreement is a material breach of this Agreement and that remedies at law may be
inadequate to protect the Company in the event of such breach, and, without prejudice to any
other legal or equitable rights and remedies otherwise available to the
Company, Executive agrees to the granting of injunctive relief in the
Company’s favor in connection with any such breach or violation without proof of
irreparable harm.  Executive further agrees that if the Company is
entitled to receive from Executive its attorneys’ fees and costs to enforce the
provisions of this Agreement.  Executive further acknowledges and
agrees that the Company’s obligations to pay Executive any amount or provide
Executive with any benefit or right pursuant to Section 7 is subject to
Executive’s compliance with Executive’s obligations under Sections 8 through 10
inclusive, and that in the event of a breach by Executive of any of Section 8
through 10, the Company shall immediately cease paying such benefits and
Executive shall be obligated to immediately repay to the Company all amounts
theretofore paid to Executive pursuant to Section 7.  In addition, if
not repaid, the Company shall have the right to set off from any amounts
otherwise due to Executive any amounts previously paid pursuant to Section 7(c)
(other than the Accrued Obligations).  Executive further agrees that
the foregoing is appropriate for any such breach inasmuch as actual damages
cannot be readily calculated, the amount is fair and reasonable under the
circumstances, and the Company would suffer irreparable harm if any of these
Sections were breached.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      16. Assumption of
Agreement.  The Company shall require any Successor thereto, by
agreement in form and substance reasonably satisfactory to Executive, to
expressly assume 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.  Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle Executive to compensation from the Company in
the same amount and on the same terms as Executive would be entitled hereunder
if the Company had terminated Executive’s employment Without Cause as described
in Section 7, except that for purposes of implementing the foregoing, the date
on which any such succession becomes effective shall be deemed the Date of
Termination.

       

      17. Indemnification.  The
Company agrees both during and after the Employment Period to indemnify
Executive to the fullest extent permitted by its Certificate of Incorporation
(including payment of expenses in advance of final disposition of a proceeding)
against actions or inactions of Executive during the Employment Period as an
officer, director or employee of the Company or any of its Subsidiaries or
Affiliates or as a fiduciary of any benefit plan of any of the
foregoing.  The Company also agrees to provide Executive with
Directors and Officers insurance coverage both during and, with regard to
matters occurring during the Employment Period, after the Employment
Period.  Such coverage shall be at a level at least equal to the level
being maintained at such time for the then current officers and directors or, if
then being maintained at a higher level with regard to any prior period
activities for officers or directors during such prior period, such higher
amount with regard to Executive’s activities during such prior
period.

       

      18. Entire
Agreement.  This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter
hereof.  All prior correspondence and proposals (including but not
limited to summaries of proposed terms) and all prior promises, representations,
understandings, arrangements and agreements relating to such subject matter
(including but not limited to those made to or with Executive by any other
Person and those contained in any prior employment, consulting or similar
agreement, including the Original Agreement, entered into by Executive and the
Company or any predecessor thereto or Affiliate thereof) are merged herein and
superseded hereby.

       

      19. Survival.  The
following Sections shall survive the termination of Executive’s employment with
the Company and of this Agreement.

       

      20. Miscellaneous.

       

      (a) Binding Effect;
Assignment.  This Agreement shall be binding on and inure to
the benefit of the Company and its Successors and permitted
assigns.  This Agreement shall also be binding on and inure to the
benefit of Executive and his heirs, executors, administrators and legal
representatives.  This Agreement shall not be assignable by any party
hereto without the prior written consent of the other parties hereto, provided, however,
that the Company may effect such an assignment

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (b) without
prior written approval of Executive upon the transfer of all or substantially
all of its business and/or assets (by whatever means), provided that the
Successor to the Company shall expressly assume and agree to perform this
Agreement in accordance with the provisions of Section 14.

       

      (c) Choice of Forum and
Governing Law.  The parties agree that:  (i) any
litigation involving any noncompliance with or breach of the Agreement, or
regarding the interpretation, validity and/or enforceability of the Agreement,
shall be filed and conducted in the state or federal courts in Richmond,
Virginia; and (ii) the Agreement shall be interpreted in accordance with and
governed by the laws of the Commonwealth of Virginia, without regard for any
conflict of law principles.

       

      (d) Taxes.  The
Company may withhold from any payments made under this Agreement all applicable
taxes, including but not limited to income, employment and social insurance
taxes, as shall be required by law.

       

      (e) Amendments.  No
provision of this Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is approved in writing by the Board or a
Person authorized thereby and is agreed to in writing by
Executive.  No waiver by any party hereto at any time of any breach by
any other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No waiver of any provision of this Agreement shall
be implied from any course of dealing between or among the parties hereto or
from any failure by any party hereto to assert its rights hereunder on any
occasion or series of occasions.

       

      (f) Severability.  In
the event that any one or more of the provisions of this Agreement shall be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.  In the event that one or more terms or provisions
of this Agreement are deemed invalid or unenforceable by the laws of Virginia or
any other state or jurisdiction in which it is to be enforced, by reason of
being vague or unreasonable as to duration or geographic scope of activities
restricted, or for any other reason, the provision in question shall be
immediately amended or reformed to the extent necessary to make it valid and
enforceable by the court of such jurisdiction charged with interpreting and/or
enforcing such provision.  Executive agrees and acknowledges that the
provision in question, as so amended or reformed, shall be valid and enforceable
as though the invalid or unenforceable portion had never been included
herein.

       

      (g) Notices.  Any
notice or other communication required or permitted to be delivered under this
Agreement shall be (i) in writing, (ii) delivered personally, by courier service
or by certified or registered mail, first-class postage prepaid and return
receipt requested, (iii) deemed to have been received on the date of delivery
or, if mailed, on the third business day after the mailing thereof, and (iv)
addressed as follows (or to such other address as the party entitled to notice
shall hereafter designate in accordance with the terms hereof):

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (h) If to the
Company, to it at:

       

      Chief
Operating Officer

      Dynex
Capital, Inc.

      4991 Lake
Brook Drive, Suite 100

      Glen
Allen, VA 23060

       

      (A) If to
Executive, to his residential address as currently on file with the
Company.

       

      (i) Voluntary Agreement; No
Conflicts.  Executive represents that he is entering into this
Agreement voluntarily and that Executive’s employment hereunder and compliance
with the terms and conditions of this Agreement will not conflict with or result
in the breach by Executive of any agreement to which he is a party or by which
he or his properties or assets may be bound.

       

      (j) Counterparts/Facsimile.  This
Agreement may be executed in counterparts (including by facsimile), each of
which shall be deemed an original and all of which together shall constitute one
and the same instrument.

       

      (k) Headings.  The
section and other headings contained in this Agreement are for the convenience
of the parties only and are not intended to be a part hereof or to affect the
meaning or interpretation hereof.

       

      (l) Certain
other Definitions.

       

      “Affiliate”: with
respect to any Person, means any other Person that, directly or indirectly
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with the first Person, including but not limited to a Subsidiary
of any such Person.

       

       

       “Control” (including,
with correlative meanings, the terms “Controlling”, “Controlled by” and “under
common Control with”): with respect to any Person, shall mean the possession,
directly or indirectly, of 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.

       

      “Person”: any natural
person, firm, partnership, limited liability company, association, corporation,
company, trust, business trust, governmental authority or other
entity.

       

      “Subsidiary”: with
respect to any Person, each corporation or other Person in which the first
Person owns or Controls, directly or indirectly, capital stock or other
ownership interests
representing fifty percent (50%) or more of the combined voting power of the
outstanding voting stock or other ownership interests of such corporation or
other Person.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “Successor”: of a
Person means a Person that succeeds to the first Person’s assets and liabilities
by merger, liquidation, dissolution or otherwise by operation of law, or a
Person to which all or substantially all the assets and/or business of the first
Person are transferred.

       

      

       

      IN
WITNESS WHEREOF, the Company has duly executed this Agreement by its authorized
representatives, and Executive has hereunto set his hand, in each case effective
as of the date first above written.

       

      DYNEX
CAPITAL, INC.

      

      By:          /s/ Barry Igdaloff            

      

      Its:           Chairman of the Compensation Committee   

      

      

      Thomas B.
Akin:

      

      
                        /s/ Thomas B. Akin                  

      SIGNATURE

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