To: Mr. Jerry Boles Vice President From: Curtis Garner, CFO Re: Otelco Employment Agreement and IRS Section 409A Compliance
Exhibit 10.11
December
16, 2008
Memorandum
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To:
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Xx.
Xxxxx Xxxxx
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Vice
President
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From:
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Xxxxxx
Xxxxxx, CFO
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Re:
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Otelco
Employment Agreement and IRS Section 409A
Compliance
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Dear
Xxxxx:
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”
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/s/
Xxxxxx X. Xxxxxx
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Xxxxxx
X. Xxxxxx, Chief Financial
Officer
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I hereby
agree to the above amendment to my employment agreement.
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/s/
Xxxxx X. Xxxxx
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December
17, 2008
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Xxxxx
X. Xxxxx
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