Document:

Exhibit 10.18

 

CHANGE OF
CONTROL AGREEMENT

Originally
Entered Into on March 30, 2005

Amended and
Restated November 29, 2007

 

This Change of Control Agreement (this “Agreement”)
which was originally entered into as of the 30th day of March,
2005, and hereby amended and restated as of November 29, 2007, by and
between HickoryTech Corporation, a Minnesota corporation (the “Company”), and
Lane C. Nordquist (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 (A) the Executive’s employment with the Company or its
Successor is terminated within three (3) 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, or (B) the Executive
voluntarily terminates his or her employment within a period of thirty (30)
days following the first anniversary of an Event, 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

 

1

 

(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 70% 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 three (3) 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. Except as provided in paragraph 1(B), 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:

 

(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

 

(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.  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 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 Executive’s highest
annual compensation for a calendar year (including base salary, the HickoryTech
Executive Incentive Plan Annual and Long Term Performance Award bonuses paid in
that calendar year, Annual Supplemental Retirement Plan contributions, stock
grants under the Long Term Executive Incentive Program and any other incentive
payments with the exception of stock options) during the five-year period prior
to the Executive’s termination and dividing that amount by twelve (12).  For executives who have not yet been eligible
to receive a payment under the HickoryTech Executive Incentive Plan, or who
have only been eligible for one bonus payment under the HickoryTech Executive
Incentive Plan due to their time in the position or with the Company, One Month’s
Salary will be determined by taking one month of current base salary and adding
it to the greater of:

 

(1)           the
bonus percentage for which the Executive is eligible, calculated at the target
payout as indicated in the Hickory Tech Executive Incentive Plan, divided by
twelve (12); or

 

(2)           the
actual bonus payment received, or calculated at the close of the fiscal year
but not yet received due to timing of the payout as indicated in the
HickoryTech Executive Incentive Plan, divided by twelve (12).

 

This lump sum payment
shall be made by the Company or its Successor on the first regular business day
following the six (6) month anniversary 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)           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”), the Executive shall be entitled to receive an additional cash payment (a
“Gross-Up Payment”) from the Company in an amount equal to the sum of the
Excise Tax and an amount sufficient to pay the cumulative Excise Tax and all
cumulative income taxes (including any interest and penalties imposed with
respect to such taxes) relating to the Gross-Up Payment so that the net amount
retained by the Executive is equal to all payments received pursuant to the
terms of this Agreement or otherwise (prior to income taxes with respect to
such payments).

 

(c)           All
determinations required to be made to determine whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at the determination shall be made by a nationally
recognized certified public accounting firm designated by the Executive (the “Accounting
Firm”), which shall provide detailed supporting calculations both to the
Company and the Executive within 30 days after the receipt of notice from the
Executive that there has been a Payment, or such earlier time as is requested
by the Company. In the event that at any time relevant to this Agreement the Accounting
Firm is serving as accountant or auditor for the individual, entity or group or
Person effecting the Change in Control, the executive shall appoint another
nationally recognized certified public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the “Accounting Firm” hereunder). 
All fees and expenses of the Accounting Firm shall be borne solely by
the Company.  Any Gross-Up Payment, as
determined in accordance with this Section (and reimbursement for fees and
expenses of the Accounting Firm having been paid by the Executive, if any),
shall be paid by the Company to the Executive within five days after the
receipt of the Accounting Firm’s determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall so indicate
to the Executive in writing. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive.

 

4

 

(d)           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 coverage 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(d) 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.

 

(e)           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(d) 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:

 

Lane C. Nordquist

165 Fairway Drive

Mankato, MN 56001

 

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 and
Long Term Performance 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.

 

6

 

(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.

 

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

 

	
  EXECUTIVE

  	
   

  	
  HICKORYTECH CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   /s/ Lane C.
  Nordquist

  	
   

  	
  By:

  	
   /s/ John W.
  Finke

  
	
  Lane C. Nordquist

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President and Chief Executive Officer

  

 

7Exhibit 10.19

 

CHANGE OF
CONTROL AGREEMENT

Originally
Entered Into on March 30, 2005

Amended and
Restated November 29, 2007

 

This Change of Control Agreement (this “Agreement”)
which was originally entered into as of the 30th day of March,
2005, and hereby amended and restated as of November 29, 2007, by and
between HickoryTech Corporation, a Minnesota corporation (the “Company”), and
Mary T. Jacobs (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 (A) the Executive’s employment with the Company or its
Successor is terminated within three (3) 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, or (B) the Executive
voluntarily terminates his or her employment within a period of thirty (30)
days following the first anniversary of an Event, 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

 

1

 

(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 70%
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 three (3) 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. Except as provided in paragraph 1(B), 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:

 

(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

 

(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.  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 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 Executive’s highest annual compensation for a calendar
year (including base salary, the HickoryTech Executive Incentive Plan Annual
and Long Term Performance Award bonuses paid in that calendar year, Annual
Supplemental Retirement Plan contributions, stock grants under the Long Term
Executive Incentive Program and any other incentive payments with the exception
of stock options) during the five-year period prior to the Executive’s
termination and dividing that amount by twelve (12). For executives who have
not yet been eligible to receive a payment under the HickoryTech Executive
Incentive Plan, or who have only been eligible for one bonus payment under the
HickoryTech Executive Incentive Plan due to their time in the position or with
the Company, One Month’s Salary will be determined by taking one month of
current base salary and adding it to the greater of:

 

(1)           the
bonus percentage for which the Executive is eligible, calculated at the target
payout as indicated in the Hickory Tech Executive Incentive Plan, divided by
twelve (12); or

 

(2)           the
actual bonus payment received, or calculated at the close of the fiscal year
but not yet received due to timing of the payout as indicated in the
HickoryTech Executive Incentive Plan, divided by twelve (12).

 

This lump sum payment
shall be made by the Company or its Successor on the first regular business day
following the six (6) month anniversary 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)           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”),
the Executive shall be entitled to receive an additional cash payment (a “Gross-Up
Payment”) from the Company in an amount equal to the sum of the Excise Tax and
an amount sufficient to pay the cumulative Excise Tax and all cumulative income
taxes (including any interest and penalties imposed with respect to such taxes)
relating to the Gross-Up Payment so that the net amount retained by the
Executive is equal to all payments received pursuant to the terms of this
Agreement or otherwise (prior to income taxes with respect to such payments).

 

(c)           All
determinations required to be made to determine whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at the determination shall be made by a nationally
recognized certified public accounting firm designated by the Executive (the “Accounting
Firm”), which shall provide detailed supporting calculations both to the
Company and the Executive within 30 days after the receipt of notice from the
Executive that there has been a Payment, or such earlier time as is requested
by the Company. In the event that at any time relevant to this Agreement the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group or Person effecting the Change in Control, the executive shall appoint
another nationally recognized certified public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the “Accounting Firm” hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
in accordance with this Section (and reimbursement for fees and expenses
of the Accounting Firm having been paid by the Executive, if any), shall be
paid by the Company to the Executive within five days after the receipt of the
Accounting Firm’s determination. If the Accounting Firm determines that no Excise
Tax is payable by the Executive, it shall so indicate to the Executive in
writing. Any determination by the Accounting Firm shall be binding upon the
Company and the Executive.

 

4

 

(d)           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 coverage 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(d) 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.

 

(e)           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(d) 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:

 

Mary T. Jacobs

20 Taza Drive

Mankato, MN 56001

 

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 and
Long Term Performance 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/ Mary T.
  Jacobs

  	
   

  	
  By:

  	
   /s/ John W.
  Finke

  
	
  Mary T. Jacobs

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President and Chief Executive Officer

  

 

7

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