Vice President, Finance Employment Agreement

EXHIBIT 10.7


EMPLOYMENT AGREEMENT


THIS AGREEMENT entered into as of the 22nd day of January, 1999 ("Effective Date"), by and between Rural Cellular Corporation ("RCC" or "Company") and Wesley E. Schultz (the "Employee").


WHEREAS, Employee has heretofore been employed by RCC in the position of Sr. Vice President, Finance and Administration and Chief Financial Officer and is experienced in the business of RCC; and


WHEREAS, Employee desires to continue to be employed by RCC in the same position; and


WHEREAS, the parties desire by this writing to set forth the employment relationship of RCC and the Employee.


NOW, THEREFORE, it is AGREED as follows:


1. EMPLOYMENT.


(a) TITLE/DUTIES. The Employee is employed in the capacity of
Sr. Vice President, Finance and Administration and Chief Financial
Officer for RCC, to perform the duties customarily performed by
persons situated in a similar executive capacity. The Employee shall
also promote, by entertainment or otherwise, as and to the extent
permitted by law, the business of RCC. The Employee's other duties
shall be such as the President/CEO may from time to time reasonably
direct.


(b) LOCATION. The Employee's principal place of employment shall
be at the Company's offices in Alexandria, Minnesota.


2. BASE COMPENSATION. RCC agrees to pay the Employee during the term of this Agreement a salary which shall be at the initial rate of Two Hundred Fifty-Four Thousand Dollars ($254,000.00) per annum beginning on the Effective Date, payable not less frequently than every two weeks; PROVIDED, that the rate of such salary shall be reviewed not less often than annually, and Employee shall be entitled to receive an increase at such percentage or in such an amount, if any, as may be determined from time to time. The Employee's salary may not be decreased below the rate in effect on any date during the term of this Agreement, except that, in the event that the salaries of other senior management employees have been generally reduced, Employee's salary may be reduced in a similar manner, except that any such reduction following a "Change in Control" (as defined in Appendix A hereto) shall be subject to the provisions of Section 11(b) hereof.


3. DISCRETIONARY AND INCENTIVE BONUS; STOCK OPTIONS. The Employee shall be entitled to participate in an equitable manner with all other senior management employees of RCC in discretionary and incentive bonuses, including, but not limited to stock option and restricted stock awards and other cash and non-cash compensation plans that may be authorized and declared by the Board of Directors to its senior management employees from time to time.


4. OTHER BENEFITS.


(a) PARTICIPATION IN EMPLOYEE BENEFIT PLANS. The Employee shall
be entitled to participate in any plan of RCC relating to compensation,
profit sharing, retirement, medical coverage or other employee benefits
as RCC may adopt for the benefit of its senior management employees.


(b) FRINGE BENEFITS; EXPENSES. The Employee shall be eligible to
participate in any fringe benefits which may be or may become
applicable to RCC's senior management employees, including by example,
participation in any stock option or incentive plans adopted by the
Board of Directors, and any other benefits adopted by RCC. RCC shall
reimburse Employee for all reasonable out-of-pocket expenses which
Employee shall incur in connection with his service for RCC which are
documented in accordance with RCC's policies as set forth from time to
time.


(c) CAR ALLOWANCE. The Employee shall be required to have and
maintain a personal automobile for use in the performance of his duties
under this Agreement and a valid drivers license to operate RCC
vehicles. RCC shall pay the Employee an allowance at an initial rate
of $6,000.00 per year to compensate him for all expenses incurred by
him in complying with these requirements. In addition, RCC shall
reimburse the Employee at current IRS allowable mileage rates for the
use of his personal automobile on RCC business.


5. TERM. The term of employment of Employee under this Agreement shall be for the period commencing on the Effective Date and ending December 31, 2001; PROVIDED, that commencing on December 31, 1999, and on each December 31 thereafter, the term of Employee's employment shall automatically be extended for one additional year, so that the remaining term of his employment shall never be less than two years, unless either party gives written notice to the other of its intention not to so extend the term of the Employee's employment.


6. LOYALTY; NONCOMPETITION.


(a) The Employee shall devote his full business time and attention
to the performance of his employment under this Agreement. During the
term of Employee's employment under this Agreement, the Employee shall
not engage in any business or activity contrary to the business affairs
or interests of RCC.


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(b) Nothing contained in this Section 6 shall be deemed to prevent
or limit the right of Employee to invest in the capital stock or other
securities of any business dissimilar from that of RCC or, solely as a
passive or minority investor, in any business.


7. STANDARDS. The Employee shall perform his duties under this Agreement in accordance with the reasonable standards customarily expected of employees with comparable positions in comparable organizations, or in accordance with such other standards as may reasonably be established from time to time by the President/CEO or the Board of Directors.


8. PAID TIME OFF. The Employee shall be entitled, without loss of pay, to absent himself voluntarily from the performance of the duties of his employment under this Agreement, with all such voluntary absences to count as paid time off, in accordance with the following:


(a) The Employee shall be entitled to not less than nineteen (19)
days per calendar year of paid time off for vacation, personal illness,
emergency situations such as family illness, and for any other reason
that time off must be taken during a regular scheduled work day that is
not covered by other Company policies (such as jury duty). Such paid
time off shall be taken in accordance with then current Company
policies.


(b) The Employee shall take at least five consecutive business days
of vacation in each calendar year.


(c) The Employee shall not be entitled to receive any additional
compensation from RCC on account of his failure to take paid time off,
and Employee shall be entitled to accumulate unused paid time off in
accordance with then current Company policy (as of the end of 1999 only
120 hours of paid time off can be carried over into the following
year).


(d) In addition to the aforesaid paid time off, the Employee shall
be entitled, without loss of pay, to absent himself voluntarily from
the performance of his employment with RCC for such additional periods
of time and for such other valid and legitimate reasons as the Board of
Directors in its discretion may determine.


(e) The Employee shall also be entitled to any other paid or unpaid
time off as may be provided by Company policies. Further, the Board of
Directors shall be entitled to grant to the Employee a leave or leaves
of absence with or without pay at such time or times and upon such
terms and conditions as the Board of Directors in is discretion may
determine.


(f) The Employee is encouraged to participate in related industry
and professional organizations and activities provided that the
assumption of any


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significant responsibilities for such outside activities or
organizational participation shall be approved in advance by the
President/CEO.


9. TERMINATION AND TERMINATION PAY. The Employee's employment under this Agreement may be terminated upon any of the following occurrences:


(a) The death of the Employee during the term of this Agreement,
in which event the Employee's estate shall be entitled to receive the
compensation due the Employee through the last day of the calendar
month in which Employee's death shall have occurred, plus all accrued
but unused paid time off for such calendar year, and PRO RATA payment
of all bonuses or incentive payments earned or to be awarded for such
calendar year.


(b) The Board of Directors may terminate the Employee's employment
at any time, but any termination by the Board of Directors other than
termination for Just Cause, as defined below, shall not prejudice the
Employee's right to compensation or other benefits under this
Agreement. The Employee shall have no right to receive compensation or
other benefits for any period after termination for Just Cause, except
to the extent specifically provided under the terms of any benefit plan
or program of RCC or as may otherwise be required by law. Termination
shall be for "Just Cause" if the Employee


(i) has been convicted of a felony or


(ii) has intentionally engaged in conduct that is
demonstrably and materially injurious to the Company, monetarily or
otherwise;


PROVIDED, HOWEVER, that no termination of Employee's
employment shall be for Just Cause as set forth in clause (ii)
above until


(A) there shall have been delivered to the Employee a copy
of a written notice setting forth that the Employee was
guilty of the conduct set forth in clause (ii) and
specifying the particulars thereof in detail;


(B) the Employee shall have been provided an opportunity to
be heard by the Board of Directors (with the assistance
of the Employee's counsel if the Employee so desires);
and


(C) such conduct is not discontinued within a reasonable
period of time after receipt of the written notice
provided in clause (A).


No act or failure to act on the Employee's part shall be considered
"intentional" unless he has acted or failed to act with an absence of
good faith and without a


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reasonable belief that his action or failure to act was in the best
interest of the Company. Notwithstanding anything contained in this
Agreement to the contrary, no failure to perform by the Employee
after notice of termination has been given by the Employee will
constitute Just Cause for purposes of this Agreement.


(c) Except as provided pursua ...