Amendment to Employment Agreement Between Otelco Inc. and Jerry C. Boles (Section 409A Compliance)

Summary

Otelco Inc. and its Vice President, Jerry C. Boles, have agreed to amend Boles's employment agreement to comply with IRS Section 409A regulations. The amendment specifies that any severance payment due upon termination will be paid as a lump sum within six months, but no later than March 14 of the year following termination. This change ensures the severance is exempt from certain deferred compensation tax rules, avoiding potential penalties. Both parties have signed to confirm their agreement to this amendment.

EX-10.11 4 ex10-11.htm EXHIBIT 10.11 ex10-11.htm

Exhibit 10.11

December 16, 2008

Memorandum


To:	Mr. Jerry Boles
	Vice President
From:	Curtis Garner, CFO
Re:	Otelco Employment Agreement and IRS Section 409A Compliance

Dear Jerry:

In order to comply with recent changes to the final Treasury Regulations issued under Internal Revenue Code Section 409A, your employment agreement must be amended by December 31, 2008. By amending the agreement as described below, any severance payments under the agreement will be exempt from the 409A deferred compensation rules. In order to avoid the application of these rules, your agreement must be amended to specifically state that any severance to be paid must be paid no later than March 15 of the year following your termination. Currently, the agreement does not specify that the amounts will be paid within a certain time period. By making this change, your agreement will comply with the rules under 409A that make it exempt from their application. I have attached a copy of your current agreement for your reference. Failure to amend the agreement by December 31, 2008, to be exempt from 409A, could result in the amounts being subject to a 20% penalty tax.

Please sign and return to me by December 31, 2008, this letter evidencing your agreement with the following amendment to your employment agreement:

Section 5(a)(iii) is amended to read as follows: “The Company shall pay to the Employee a lump sum in the amount of one-half (1/2) of his Annual Base Salary within six (6) months following termination but not later than March 14 of the calendar year following termination; and”


	Otelco Inc.
	/s/ Curtis L. Garner
	Curtis L. Garner, Chief Financial Officer

I hereby agree to the above amendment to my employment agreement.


/s/ Jerry C. Boles		December 17, 2008
Jerry C. Boles