8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): February 23, 2010

Warwick Valley Telephone Company
__________________________________________
(Exact name of registrant as specified in its charter)

New York	0-11174	14-1160510
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
47 Main Street, Warwick , New York		10990
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 845-986-8080

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On February 23, 2010, Warwick Valley Telephone Company (the "Company’) issued a press release announcing that the Company entered into new employment agreements with Duane W. Albro, its President and Chief Executive Officer and Kenneth H. Volz, its Executive Vice President, Chief Financial Officer and Treasurer on February 17, 2010.

The press release is attached as Exhibit 99.1 to this Form 8-K.

The following summary of the new employment agreements with Messrs. Albro and Volz is qualified in its entirety by reference to the full text of each employment agreement, which the Company anticipates filing as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

Duane W. Albro

Mr. Albro’s employment agreement provides for a two year term beginning April 11, 2010. The agreement will automatically be renewed for successive one-year periods unless the Company or Mr. Albro gives written notice of non-renewal to the other at least 60 days before the expiration of the initial term or any subsequent renewal period.

Mr. Albro will receive an annual base salary of $270,000, subject to annual increases as the Company may determine. Mr. Albro is eligible to receive an annual cash bonus and incentive compensation in the form of equity-based awards (stock options and restricted stock) under the Company’s 2008 Long-Term Incentive Compensation Plan each year in accordance with an applicable plan approved by the board or the compensation committee for such year. Mr. Albro’s cash bonus plan for 2010 is targeted at 60% of his base salary and the incentive compensation component is targeted at 45,500 stock options and 9,000 shares of restricted stock, provided certain financial performance criteria are met in 2010. The elements of performance and the weighting associated with each financial metric will determine the applicable payout factor that will be used to calculate both the annual cash bonus and incentive compensation amounts. The board or the compensation committee of the board, in its sole discretion, may determine subsequent measurement metrics for 2010 and each subsequent year, and may also, in its sole discretion, change or eliminate the applicable plan at any time. In order to be eligible to receive a cash bonus and/or incentive compensation, Mr. Albro must be employed with the Company on the respective payment date.

The Company will provide Mr. Albro with a $2,000 per month housing and travel allowance for the duration of his employment under the agreement. The Company will also pay Mr. Albro a tax gross-up benefit on his housing and travel allowance so that, after the withholding of all federal and state income and employment taxes with respect to the housing and travel allowance and the tax gross-up benefit, Mr. Albro will be in the same after-tax economic position that he would have been in had the housing and travel allowance not been subject to such taxes. Mr. Albro is eligible to participate in and receive benefits under the Company’s 401(k) saving plan, health and welfare plans, including medical and dental insurance, life insurance, and short-term and long-term disability insurance.

Mr. Albro’s employment may be terminated at any time for any reason by the Company or Mr. Albro upon written notice. Mr. Albro will be entitled to compensation and benefits depending on the circumstances of the termination of employment. If Mr. Albro’s employment is terminated without cause and not in connection with a change of control, Mr. Albro will be entitled to a severance payment equal to 100% of his annual base salary in effect as of the date of his termination of employment. He will also receive the target amount of his annual cash bonus for the year in which the termination of employment occurs. Both of these amounts will be paid in a lump sum payment. Mr. Albro will also be entitled to the continuation of benefits for a period of one year following termination at the same cost he was charged for such benefits at the time of his termination.

In the event that Mr. Albro is terminated due to a change in control (which is generally defined as a consummation of a reorganization, merger, statutory share exchange or similar corporate transaction or a sale of substantially all of the Company’s assets where, as a result, the Company’s then existing shareholders no longer own 50% of the surviving entity), he will be entitled to the same compensation and benefits listed in the above paragraph except that he will be entitled to receive a cash payment equal to 150% of his annual base salary and target cash bonus. Both of these amounts will be paid in a lump sum payment. Mr. Albro will also be entitled to the continuation of benefits for a period of one year following termination at the same cost he was charged for such benefits at the time of his termination. In addition, any unvested or restricted equity compensation such as stock options and restricted stock will im mediately vest.

This agreement between Mr. Albro and the Company supersedes the prior employment agreement between them.

Kenneth H. Volz

Mr. Volz’s employment agreement provides for a two year term beginning April 11, 2010. The agreement will automatically be renewed for successive one-year periods unless the Company or Mr. Volz gives written notice of non-renewal to the other at least 60 days before the expiration of the initial term or any subsequent renewal period.

Mr. Volz will receive an annual base salary of $250,000, subject to annual increases as the Company may determine. Mr. Volz is eligible to receive an annual cash bonus and incentive compensation in the form of equity-based awards (stock options and restricted stock) under the Company’s 2008 Long-Term Incentive Compensation Plan each year in accordance with an applicable plan approved by the board or the compensation committee for such year. Mr. Volz’s cash bonus plan for 2010 is targeted at 50 % of his base salary and the incentive compensation component is targeted at 25,000 stock options and 5,000 shares of restricted stock, provided certain financial performance criteria are met in 2010. The elements of performance and the weighting associated with each financial metric will determine the applicable payout factor that will be used to calculate both the annual cash bonus and incentive compensation amounts. The board or the compensation committee of the board, in its sole discretion may determine subsequent measurement metrics for 2010 and each subsequent year, and may also, in its sole discretion, change or eliminate the applicable plan at any time. In order to be eligible to receive a cash bonus and/or incentive compensation, Mr. Volz must be employed with the Company on the respective payment date.

The Company will provide Mr. Volz with a $4,800 per month housing and travel allowance for the duration of his employment under the agreement. The Company will also pay Mr. Volz a tax gr oss-up benefit on his housing and travel allowance so that, after the withholding of all federal and state income and employment taxes with respect to the housing and travel allowance and the tax gross-up benefit, Mr. Volz will be in the same after-tax economic position that he would have been in had the housing and travel allowance not been subject to such taxes. Mr. Volz is eligible to participate in and receive benefits under the Company’s 401(k) saving plan, health and welfare plans, including medical and dental insurance, life insurance, and short-term and long-term insurance.

Mr. Volz’s employment may be terminated at any time for any reason by the Company or Mr. Volz upon written notice. Mr. Volz will be entitled to compensation and benefits depending on the circumstances of the termination of employment. If Mr. Volz’s employment is terminated without cause and not in connection with a change of control, Mr. Volz will be entitled to a severance payment equal to 100% of h is base salary in effect as of the date of his termination of employment. He will also receive the target amount of his annual cash bonus for the year in which the termination of employment occurs. Both of these amounts will be paid in a lump sum payment. Mr. Volz will also be entitled to the continuation of benefits for a period of one year following termination at the same cost he was charged for such benefits at the time of his termination.

In the event that Mr. Volz is terminated due to a change in control (which is generally defined as a consummation of a reorganization, merger, statutory share exchange or similar corporate transaction or a sale of substantially all of the Company’s assets where, as a result, the Company’s then existing shareholders no longer own 50% of the surviving entity), he will be entitled to the same compensation and benefits listed in the above paragraph except that he will be entitled to receive a cash payment equal to 150% of his annual base salary an d target cash bonus. Both of these amounts will be paid in a lump sum payment. Mr. Volz will also be entitled to the continuation of benefits for a period of one year following termination at the same cost he was charged for such benefits at the time of his termination. In addition, any unvested or restricted equity compensation such as stock options and restricted stock will immediately vest.

This agreement between Mr. Volz and the Company supersedes the prior employment agreements between them.

Item 9.01 Financial Statements and Exhibits.

Exhibit 99.1. Press release entitled, "Warwick Valley Telephone Company Renews CEO and CFO Contracts," dated February 23, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Warwick Valley Telephone Company
February 23, 2010	By:	Duane W. Albro
		Name: Duane W. Albro
		Title: President & CEO

Exhibit Index

Exhibit No.	Description
99.1	Press release entitled, “Warwick Valley Telephone Company Renews CEO and CFO Contracts,” dated February 23, 2010.

EX-99.1

Warwick Valley Telephone Company Renews CEO and CFO Contracts

(Warwick, NY, February 23, 2010) Warwick Valley Telephone Company (Nasdaq: WWVY) (the “Company”) announced today that the Company entered into a new employment agreement with Duane W. Albro, President and Chief Executive Officer and with Kenneth H. Volz, Executive Vice President, Chief Financial Officer and Treasurer on February 17, 2010 respectively.

Mr. Albro said, “Ken Volz and I have agreed to an early renewal of our respective employment agreement as a sign of our commitment and belief in the strategic direction of our Company whereby we are significantly expanding our competitive telecom operations throughout New York State and northern New Jersey while maintaining our quality local telecom services in our Warwick Valley franchise areas.”

Mr. Albro first joined WVT Communications in May 2007 as the President and CEO. Prior to that, he was President and CEO of Refinish LP, a privately held company in the cellular phone refurbishing business. He has extensive experience in the telecommunications and cable TV industry having served as Operations Vice President at Cablevision, a metro-NY cable operator; President and COO of Net2000 Communications, a northeast US-based CLEC; Operations Vice President at Bell Atlantic-New York, a predecessor company to Verizon; and Group Vice President at Nynex-New York, also a predecessor company to Verizon.

Mr. Albro has been active in supporting the positive impact of telecommunications used in education, having served on a White House Advisory Council on Technology in Education and provided testimony to Congress on the benefits of technology used in education. He has also served on the Boards of New York Medical College, New York Institute of Technology, Empire State College and Purchase College. Mr. Albro has demonstrated his commitment to workforce issues as the founder, Chairman and President of the Long Island Works Coalition, a major non-profit organization dedicated to enhancing the available workforce for technology industries. He has also demonstrated support for communities with personal philanthropic grants that provide funds for the use of technology to improve human services, education and business development. Currently, Mr. Albro serves on the boards of the St. Anthony Community Hospital Foundation, Warwick Development Coalition, Warwick Valley Chamber of Commerce, Orange County Chamber of Commerce, Orange County Partnership and is President of the Albert Wisner Public Library Foundation. He also serves on the board of Lakeland Industries where he is Chairman of the Compensation Committee. Mr. Albro is a member of American Mensa Society and holds an MBA degree from New York Institute of Technology.

Kenneth H. Volz joined WVT Communications in June 2007 as Executive Vice President, Chief Financial Officer and Treasurer after serving as Interim Executive Vice President, CFO and Treasurer for five months. Mr. Volz has over 30 years experience in finance, business development, planning and marketing in U.S. and international communications markets. Prior to joining WVT, Mr. Volz served as a principal of the Telecom Expert Group, an international telecom consulting firm which provides consulting for all functions of a telecom operating company. Mr. Volz also has served as a consultant to SBC Communications, Vice President of Marketing and Business Development at Ameritech Information Industry Services, Vice President of Business Development at Ameritech Development, and Vice President of Strategic Investments at Ameritech International. He has served as Treasurer and board member of MagyarCom, the Ameritech and Deutsche Telecom holding company. Mr. Volz is a Certified Public Accountant and received a Bachelor of Science degree in Industrial Engineering from the University of Illinois and a Masters of Business in Administration from the Kellogg School of Management.

Contact: Warwick Valley Telephone Co.
Duane W. Albro
President & CEO
(845) 986-2100