EXHIBIT 10.5
EARLY RETIREMENT & CONSULTING AGREEMENT
THIS AGREEMENT is made by and between Dakota Cooperative
Telecommunications, Inc. a South Dakota corporation having its principle
place of business at Irene, South Dakota, together with all of its
affiliates, and subsidiary enterprises (collectively, "DAKOTA"), and Xxxxxx
X. XxXxxx, an individual person, residing at Hurley, South Dakota
("XXXXXX"). Reference here to "Board of Directors" and "President" refers
to the Board of Directors and President of the Board of Directors of
DAKOTA.
WITNESSETH:
WHEREAS: DAKOTA provides telecommunications and other services in
South Dakota; and
WHEREAS: XXXXXX has served DAKOTA in various capacities, most recently
as the General Manager, and in that position he has performed under a
General Manager's Contract dated May 24, 1993 ("GM Contract"); and
WHEREAS: Both XXXXXX and DAKOTA mutually desire to terminate the GM
Contract; and
WHEREAS: DAKOTA recognizes the need to continue its activities in an
orderly manner while making allowances for personal needs and desires of
XXXXXX; and
WHEREAS: Under current rules XXXXXX will be eligible for retirement on
November 5, 1997, and for receiving retirement plan benefits;
NOW, THEREFORE; In consideration of the mutual promises of the parties
and the mutual benefits they will gain by the performance thereof, all in
accordance with the provisions hereinafter set forth,
IT IS AGREED:
1. XXXXXX hereby resigns as General Manager of DAKOTA, effective
immediately.
2. XXXXXX shall be classified as an employee through November 5,
1997, but will only provide off-premises technical consulting work for cost
study purposes. Such services will be provided only when and as requested
in writing by the Board of Directors of DAKOTA. During this time period
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XXXXXX shall not have any real or apparent authority with regard to any
matters relating to DAKOTA nor shall XXXXXX contact, either directly or
indirectly, any employee of DAKOTA without the prior written consent of the
Board of Directors. In consideration of the foregoing, DAKOTA shall pay to
XXXXXX the sum of two hundred thousand and no/100 ($200,000.00) dollars,
which sum shall be divided into equal monthly payments, subject to all
appropriate tax and payroll deductions, and paid monthly from the date of
resignation as General Manager until November 5, 1997. DAKOTA shall make
payment for earned salary through October 16, 1995, but no payments shall
be made for accrued vacation or sick leave, nor will vacation or sick leave
accrue during the time period of October 6, 1995 through November 5, 1997.
Except for National Telephone Cooperative Association ("NTCA") provided
life insurance, no further payments or premiums shall be made or paid by
DAKOTA on any life insurance on XXXXXX or for his benefit, or for the
benefit of his family, heirs or beneficiaries. In addition DAKOTA will
transfer ownership of the Jeep vehicle and the cellular phone equipment now
used by XXXXXX to XXXXXX.
3. Except as contemplated herein, XXXXXX shall not engage in, be
employed in, or in any way be related to, directly or indirectly, or be
part of or consultant to any telephone CATV, cellular, PCS, or any other
telecommunications business or activity, whether public, private, or
governmental, within the State of South Dakota for a period of two years
following the date of this Agreement. XXXXXX further agrees that he will
not communicate to any person, firm, corporation, or other entity any
information relating to customers, prices, trade or other secrets,
advertising, employee information, employment practices of DAKOTA, or any
confidential knowledge or information that XXXXXX may have acquired with
respect to DAKOTA. All books, records, and accounts relating in any manner
to DAKOTA are the exclusive property of DAKOTA and shall be returned
immediately to DAKOTA. Except as specified above, all telecommunications
equipment, including cellular phones and mobile radios, and any other items
which are the property of DAKOTA, shall be returned immediately to DAKOTA.
4. Until November 5, 1997, all required retirement plan
contributions will continue to be paid by DAKOTA on behalf of XXXXXX in
accordance with the terms, limitations and requirements of DAKOTA, Rural
Utilities Services of the United States Department of Agriculture ("RUS"),
and the National Telephone Cooperative Association ("NTCA"), and provided
further, that XXXXXX may maintain, at DAKOTA's expense, participation in
DAKOTA's medical insurance and NTCA life insurance plans to the extent
allowed by DAKOTA's insurance carrier.
5. In the event of a sale, merger, consolidation or reorganization
involving DAKOTA this Agreement shall continue in force and become an
obligation of DAKOTA's successor or successors.
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6. If the Board of Directors determines that XXXXXX fails to meet
the requirements of or breaches any part of this Agreement, it may take
whatever action it deems appropriate, including but not limited to
cancellation of this Agreement and any unpaid amounts due or accrued
hereunder.
7. XXXXXX'x rights and benefits under this Agreement are personal to
him, and no such rights or benefits shall be subject to involuntary
alienation, assignment or transfer, in whole or in part, except by
operation of law in the event of death or disability. It is expressly
agreed that the rights and benefits described in Paragraphs two (2) and
four (4) above may not be bequeathed by XXXXXX, and that said rights and
benefits shall terminate in the event of his death.
8. XXXXXX, as an experienced manager, understands and is aware of
the various federal and state laws, rules and regulations which do or may
have an impact on employee termination, resignations and retirement. To
the extent permitted by law, XXXXXX hereby voluntarily and knowingly
waives, releases and discharges DAKOTA and its predecessors, successors,
subsidiaries and affiliates (collectively, "DAKOTA") as well as all of
their employees, officers, shareholders, directors, owners and agents from
all claims, liabilities, demands or causes of action known or unknown,
whether now existing or hereafter arising, fixed or contingent, which he
may have or claim to have against any of them relating to or arising out of
XXXXXX'x employment and/or separation from employment, except for claims
for breach of any provisions of this Agreement. XXXXXX agrees not to
assert or litigate any such claims, except breach of this Agreement.
XXXXXX specifically understands and agrees that the waiver, release and
discharge includes, but is not limited to: (a) all claims arising under
federal, state, or local laws prohibiting employment discrimination,
including Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act, and the South Dakota Human Rights Act; (b) claims for
breach of contract; (c) claims for personal injury, harm or damages,
whether intentional or unintentional; (d) claims growing out of any legal
restrictions on the right to terminate employees, including any claim for
wrongful discharge; and (e) claims for benefits including without
limitation, those arising under the Employees Retirement Income Security
Act, for worker's compensation, for unemployment compensation, or for any
work-related disabilities.
9. XXXXXX understands and agrees that he has the right to discuss
all aspects of this Agreement and in particular the waiver, release and
discharge by him specified in paragraph eight (8) above with his personal
attorney, and has been encouraged to do so by DAKOTA, and has done so to
the extent that he desires. Further XXXXXX has up to twenty-one (21) days
to sign this Agreement after XXXXXX receives it in order to consider all of
its terms fully. Notwithstanding this time period, XXXXXX shall
immediately remove himself from the premise of DAKOTA. This Agreement
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shall be fully enforceable from the date of XXXXXX'x signature on it,
except for Paragraph 8(a), waiver of any age discrimination claims.
XXXXXX'x waiver of any age discrimination claims may be revoked by him in
writing to DAKOTA within seven (7) days after XXXXXX signs this Agreement,
and his waiver of such claims, if any, shall not become effective or
enforceable until the revocation period has expired. Should XXXXXX revoke
the waiver of such claims during said revocation period, this entire
agreement shall be deemed null and void.
10. XXXXXX agrees to never institute a claim or charge of employment
discrimination with any agency, or xxx DAKOTA, or those associated with
DAKOTA concerning any claim he may have related to his employment with
DAKOTA or the termination of that employment. If XXXXXX violates this
release by suing DAKOTA, or those associated with DAKOTA, he agrees that he
will pay all costs and expenses of defending against the suit incurred by
DAKOTA or those associated with DAKOTA, including reasonable attorney fees.
11. This Agreement constitutes the entire understanding between
DAKOTA and XXXXXX. XXXXXX agrees there are no understandings, agreements,
representations, oral or written which are not fully expressed in this
Agreement. No provision of this Agreement may be modified, waiver or
discharged unless such waiver, modification or discharge is agreed to in
writing, signed by XXXXXX and the duly authorized representative of DAKOTA.
XXXXXX and DAKOTA are, however, aware that this Agreement may require the
approval of RUS and other lenders of DAKOTA, and that RUS and other lenders
may require modification to the terms of this Agreement. Notwithstanding
any changes so made to the benefits, consideration and promises herein,
XXXXXX'x immediate removal from the premises of DAKOTA shall occur.
12. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of South Dakota,
without regard to conflicts of laws.
13. XXXXXX agrees that the terms of this Agreement and the
correspondence and communications giving rise to this Agreement shall
remain confidential and shall not be discussed with any DAKOTA officers,
agents or employees other than those involved in the negotiation,
preparation, and review of this Agreement other than his wife and his
attorney.
14. XXXXXX represents and agrees that he has thoroughly and
completely read this Agreement in its entirety and fully and completely
understands its meaning and effect.
FURTHERMORE, it is hereby agreed that all representations and
agreements contained in the GM Contract are hereby waived in full by both
parties.
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Executed this 16th day of October, 1995 in multiple copies.
DAKOTA
By /S/ XXXXX X. XXXXXX /S/ XXXXXX X. XXXXXX
President Xxxxxx X. XxXxxx
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