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CHANGE OF CONTROL AGREEMENT

Change of Control Agreement

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This Change of Control Agreement involves

HECTOR COMMUNICATIONS CORP

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Title: CHANGE OF CONTROL AGREEMENT
Date: 7/10/2006
Industry: COMSRV    

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Exhibit 10

Exhibit 10.4

HECTOR COMMUNICATIONS CORPORATION

CHANGE OF CONTROL AGREEMENT

This Agreement is made as of the         day of                  , 2006 between Hector Communications Corporation, a Minnesota corporation (the “Company”) and                                                 (“Employee”).

WHEREAS, from time to time the Company is faced with the possibility of a Change of Control (as defined herein), and the Board of Directors of the Company (the “Board”) recognizes that both the possibility and the occurrence of a Change in Control can distract the Employee from performing his or her duties and can cause the Employee to consider alternative employment opportunities.

WHEREAS, the Board believes it is in the best interests of the Company to provide the Employee with incentives to continue his or her employment and to further motivate the Employee to faithfully perform his or her duties on behalf of the Company notwithstanding the possibility, threat or occurrence of a Change of Control.

NOW THEREFORE, in consideration of the foregoing and the provisions of this Agreement, the parties hereto agree as follows:

1.                                       Definitions. For purposes of this Agreement, in addition to other capitalized terms defined in Schedule A, the following capitalized terms have the following meanings:

“Change of Control” shall mean (i) the closing of the sale of all or substantially all of the assets of the Company; (ii) the closing of a merger, reorganization or other corporate transaction that results in the stockholders of the Company immediately prior to such transaction owning less than 50% of the combined voting power of the Company’s capital stock immediately following such transaction; and (iii) other events described to in the definition of Change of Control in Schedule A hereto.

“Change of Control Date” shall mean the date on which a Change of Control occurs.

“Retention Amount” shall mean $                    .

“Severance Amount” shall mean $                    .

“COBRA Cost Supplement Payment” shall mean $                    .

2.                                       Payment of Retention Amount.

(a)                                  Subject to the provisions of Section 4 below, Employee will be paid one-third of the Retention Amount on the Change of Control Date.

(b)                                 Subject to the provisions of Section 4 below, Employee will be paid one-third of the Retention Amount on the day that is 90 calendar days immediately following the Change of Control Date.

(c)                                  Subject to the provisions of Section 4 below, Employee will be paid one-third of the Retention Amount on the day that is 180 calendar days immediately following the Change of Control Date.

 



 

3.                                       Payment of the Severance Amount; Other Severance Benefits.

(a)                                  If within two years following the Change in Control Date, Employee’s employment is terminated by the Company for any reason other than for Cause or is terminated by the Employee for Good Reason, the Company shall pay Employee the Severance Amount and any unpaid portion of the Retention Amount in cash within five (5) business days following the date of such termination.

(b)                                 If Employee is paid the Severance Amount and is eligible for and elects COBRA or state continuation of the Company’s health, dental and group life insurance benefits, the Company shall pay the COBRA Cost Supplement Payment simultaneously with its payment of the Severance Amount.

4.                                       Effect of Termination of Employment on Rights and Obligations under this Agreement.

(a)                                  If, prior to the Change of Control Date, the Company terminates Employee’s employment with the Company, with or without Cause, or Employee voluntarily terminates his or her employment, Employee shall have no rights and the Company shall have not obligations under this Agreement.

(b)                                 If Employee voluntarily terminates his or her employment during the first two years following the Change of Control Date other than for Good Reason, Employee will forfeit his or her right to receive (i) any portion of the Retention Amount not already paid, (ii) any Severance Amount and (iii) the COBRA Cost Supplement Payment.

5.                                       Amendment or Termination.

The Company reserves the authority, without Employees consent, to terminate or amend this Letter Agreement at any time after June 30, 2006 upon at least six months’ written notice specifying the date of termination or amendment; provided, however, that if a Change in Control occurs during the term of this Letter Agreement, no termination or amendment shall be effective earlier than the second anniversary of that Change in Control.

6.                                       A

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