## ** **

## **Exhibit 10.21**

## ** **

## **HICKORYTECHCORPORATION**

**EXECUTIVE INCENTIVE PLAN**

**(Amended & Restated as of January 1,2009)**

** **

**Section I. Establishment and Purpose**

 

A.                                   Establishment

 

HickoryTech Corporation,a Minnesota corporation (the “Company”), has established, effective January 1,1989, the HICKORYTECH EXECUTIVE INCENTIVE PLAN, which has since been amended(the “Plan”).

 

B.                                     Purpose

 

The purpose of this Plan is to provide a meanswhereby key executives of the Company may be rewarded according to their impacton, and contribution to, the operating success of the Company and its componentorganizations.  It is also the purpose ofthis Plan to motivate such executives to achieve a continuing, high level ofpersonal effectiveness.

 

**Section II. Definitions, Gender and Number**

 

A.                                   Definitions

 

As used in this Plan, thefollowing terms are defined as indicated unless the context clearly requires adifferent meaning:

 

1.               “Adjusted Cash Flow” means EBITDAless CAPEX, debt principal repayment required by the Company’s debt agreements,interest and taxes.  Taxes are the actualcash payment of taxes versus the GAAP/book accrual concept.

 

2.               “Annual Award” means the totalannual cash award earned under the provisions of this Plan.

 

3.               “Board of Directors” or “Board”means the Board of Directors of the Company.

 

4.               “Chair” means the Chair of theBoard of the Company.

 

5.               “Committee” or “CompensationCommittee” means a committee appointed by and responsible to the Board toadminister this Plan, among other things, and whose  members shall be ineligible to participate inthis Plan.

 

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6.               “Company” means Hickory TechCorporation, a Minnesota corporation and any successor thereto, including allSubsidiaries.

 

7.               “EBITDA” means earnings before interestexpense, income taxes, depreciation, and amortization, and it includes employeeTeam Award expense.

 

8.               “EBITDA Minus CAPEX” means EBITDA minus the capital andexpenditures for   property, plant andequipment, and capitalized software and any other capitalized expendituresapproved by the Compensation Committee to be included in this definition.

 

9.               “Net Income” means after-tax netincome as defined by Generally Accepted Accounting Principles.

 

10.         “Participant” means an executiveof the Company who has been selected to participate in the Plan.

 

11.         “Performance Account” means anaccount maintained in the name of a Participant with credits in Company stock.

 

12.         “Plan” means the HickoryTechExecutive Incentive Plan, as stated herein and as further amended from time totime.

 

13.         “Plan Year” means any fiscal yearof the Company for which the Plan is in effect.

 

14.         “Retirement” means termination forany reason (other than death or permanent and total disability) after attainingage 55 with ten years of service or after attaining age 62 irrespective ofservice.

 

15.         “Return on Invested Capital” meansearnings before interest and taxes divided by total capital (debt and equity).

 

16.         “Revenue” means operatingrevenues, and excludes other income from such sources as interest anddividends.  For purposes of this plan,the intercompany transactions between or among its Subsidiaries are consideredto be at an arms length (i.e., at fair market value), and thus are not eliminated.

 

17.         “Subsidiary” means a corporation,the majority of whose stock is owned by the Company.

 

18.         “Trustee” means Trustee for theTrust under the HickoryTech Corporation Executive Plan.  This Trust holds shares of Company Stock forthe eligible Participants’ Performance Award Accounts.

 

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B.                                     Gender and Number

 

Except when otherwiseindicated by the context, any masculine terminology when used in the Plan shallalso include the feminine gender, and the definition of any term herein in thesingular shall also include the plural.

 

**Section III. Summary of Plan**

 

A.                                   Annual Award Opportunity

 

Each fiscalyear, an award opportunity will be established for each Plan Participant,expressed as a percent of the Participant’s fiscal-year base salary earnings.  (See Attachment A)

 

B.                                     Performance Goals

 

Performance goals, bywhich Participant’s performance will be measured for Plan purposes, will beestablished at the beginning of the fiscal year.  Such goals will relate to Company, Subsidiaryor division organizational performance.

 

C.                                     Award Determination

 

At fiscal year-end theorganizational performance will be evaluated, and a percentage achievement willbe determined.  An incentive award,called an Annual Award, will be determined, such being the total of the awardsearned.

 

D.                                    Disposition of Awards

 

Annual Awards will bepaid in cash as soon as is practicable following the end of the fiscal year butno later than March 15 of the following calendar year.

 

E.                                      Shareholder Protection

 

It is the policy of the Company to establishfiscal goals under this Plan which will provide, first, for the protection ofthe shareholders.  Accordingly, no awardswill be paid which, by their payment, would cause the Company to experienceAdjusted Cash Flow of less than 50% of HickoryTech’s budgeted Adjusted CashFlow for the fiscal year.

 

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#  

# **Section IV. Eligibility**

#  

A.                                   Eligibility

 

Executives who, by virtueof their position, exert a significant impact on Company performance are eligibleto participate in this Plan. Participation is at the recommendation of the President/CEO, with theapproval of the Board of Directors.

 

# **Section V. Annual Plan**

#  

A.                                   Basis of Awards Earned

 

Awards earned under this Plan are earned on afiscal-year basis.

 

B.                                     Annual Award Opportunity

 

An annual target awardopportunity will be assigned to each Participant, expressed as a percent offiscal year base salary earnings.  Thiswill establish the dollar award target for the executive, as follows:

 

| ** **   | ** ** | **Base**   | ** ** | **Target** | ** ** | **Target** | ** ** |
|--------------|------------|------------|------------|------------|------------|------------|------------|
| **Position** | ** ** | **Salary** | ** ** | **Award%** | ** ** | **Award**  | ** ** |
| Executive A  |       | $          | 140,000    |       | 40         | %          | $          | 56,000 |   |
| Executive B  |       | $          | 90,000     |       | 30         | %          | $          | 27,000 |   |
| Executive C  |       | $          | 60,000     |       | 25         | %          | $          | 15,000 |   |

 

C.                                     Annual Award Make-up

 

1.               Annual Award make-up will reflect theimpact of the Participant’s position and performance on the operating resultsof the Company.  As such, award make-upmay vary among positions.

 

Example

 

| ** **   | ** ** | **Percent of Award Relating to Organizational Performance** | ** ** |
|--------------|------------|-------------------------------------------------------------|------------|
| ** **   | ** ** | **Corporate**                                               | ** ** | **Subsidiary or Division** | ** ** |
| **Position** | ** ** | **Financial Results**                                       | ** ** | **Financial Results** | ** ** |
| Executive A  |       | 100%                                                        |       | — |   |
| Executive B  |       | 25%                                                         |       | 75% |   |
| Executive C  |       | 45%                                                         |       | 55% |   |

 

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2.                                       Each award segment will be determinedseparately, and the resulting awards will be aggregated into a total award.

 

3.                                       Organizational performance will reflectequally on Participant awards.

 

D.                                    Organizational Goals

 

1.               Organizational goals will be established in the areasof financial achievement or operational achievement.  These areas will be weighted and the weightingswill be reviewed annually and may be adjusted at the time of review.

 

2.               Goals will be established prior to the start of thefiscal year for purposes of the Plan and approved by the Board of Directors.  Such goals will relate to, but may not necessarilybe, the Company’s annual operating budget goals.

 

E.                                      Award Calculations

 

1.             Organizational Awards

 

a.                                       Organizational performance will beevaluated in terms of actual versus planned results for each result area.

 

(i)                                     The target award for the results areawill be reduced 3% for each 1% by which actual performance is less than plannedperformance.

 

(ii)                                  The target award for each organizationalresults area, except for the EBITDA results area, will be increased 3% for each1% by which actual performance exceeds planned performance.

 

(iii)                               The target award for the EBITDA resultsarea will be increased 3% for each 1% by which actual performance exceedsplanned performance up to 101%. The target award for the EBITDA results areawill be increased by 10% for each 1% by which actual performance exceedsplanned performance for EBITDA achievement over 101%.

 

(iv)                              No award will be paid for the Net Incomeresults area unless actual performance is at least 100% of plannedperformance.  For other organizationalawards, no award will be paid for a results area if actual performance is lessthan 85% of planned performance.

 

b.                                      The sum of awards for all results areaswill be payable as the organizational award.

 

c.                                       Award calculations will be interpolatedwhere actual results are other than even percentages of the planned amount.

 

d.                                      There will be a cap, or maximum, foraward payments as a result of actual performance that exceeds the plannedamount.  This cap shall be 200% payoutmaximum for each award segment.

 

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                Example:

 

 

 
| ** **            | ** ** | **(Assume $5,000 target organizational award)** | ** ** |
|-----------------------|------------|-------------------------------------------------|------------|
| ** **            | ** ** | **Net  Income**                                 | ** ** | **Revenue** | ** ** | **EBITDA** | ** ** | **Return on  Invested  Capital** | ** ** | ** ** | ** ** |
| ** **            | ** ** | **(20%)**                                       | ** ** | **(30%)** | ** ** | **(25%)** | ** ** | **(25%)** | ** ** | **Total  Award** | ** ** |
| Target Award          |       | $                                               | 1,000      |   | $ | 1,500 |   | $ | 1,250 |   | $ | 1,250 |   |   |   |
| Actual % of Plan      |       | 98                                              | %          | 250 | % | 110.7 | % | 95 | % |   |   |
| Adjustment to  Target |       |                                            |       | 200 | % | 200 | % | 85 | % |   |   |
| Award                 |       | $                                               | 0          |   | $ | 3,000 |   | $ | 2,500 |   | $ | 1,062.50 |   | $ | 6,562.50 |   |
|                  |       |                                            |       |   |   |   |   |   |   | (131 | %) |
|                       |            |                                                 |            |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

e.                                       A review of the award payouts will bemade by the Compensation Committee.  In theevent that a one-time occurrence affects the year-end organization’sperformance, the Compensation Committee may review and adjust award payouts, ifdetermined appropriate.

 

F.                                      Total Award

 

Organizationalawards are combined into a total annual award. (See Attachment A)

 

Example:

 
|                   |   | **Executive  A** | ** ** | **Executive  B** | ** ** | **Executive  C** |   |
|------------------------|--------|------------------|------------|------------------|------------|------------------|--------|
| Organization  Award I  |   | $                | 45,000     |             | —     |             | $      | 2,500 |   |
|                   |   |             |       |             |       |             |   |
| Organization  Award II |   | —           |       | 19,500           |       | 5,000            |   |
|                   |   |             |       |             |       |             |   |
| Total Award            |   | $                | 45,000     |             | $          | 19,500           |   | $ | 7,500 |   |
|                        |        |                  |            |                  |            |                  |        |  |  |  |

 

G.                                     Payment of Awards

 

1.               Board Approval

 

Awards earnedunder this Plan are payable only with the approval of the Board ofDirectors.  In the event of a Change ofControl, as defined in the Participant’s Change of Control Agreement, and tothe extent provided in Section VI (G), awards will be payable without theBoard of Directors’ approval required.

 

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2.               Time and Manner of Payment

 

Annual Awards willbe payable with respect to each fiscal year within thirty (30) days followingcompletion of the final audited financial report for the year, no later than March 15of the following calendar year.  Awardswill be paid in cash, subject  to allrequired withholdings such as state and federal taxes.

 

# **Section VI. Long-Term Performance Account**

#  

A.                                   Performance Account

 

The PerformanceAccount holds shares of company stock that were previously issued under thisPlan.  No additional awards will begranted to this account after the 2002 fiscal year awards, but shares in theaccount will continue to receive interest at a value equal to the dividend asdescribed in VI (B).

 

B.                                     Valuation of Performance Account

 

Inlieu of dividends on Shares held in a Participant’s Performance Account, theCompany shall issue, pursuant to its 1993 Stock Award Plan, additional Shareshaving a Fair Market Value as of the applicable dividend record date as wouldotherwise be paid on the Shares in the Participant’s Performance Account onthat date.

 

C.                                     Vesting

 

                All shares in the PerformanceAccount are fully vested.

 

D.                                    Effect of a Participant’s Death,Retirement, or Disability

 

1.               A deceased Participant’s Performance Account shall bedistributed beginning no later than March 15 of the following calendaryear, according to the provisions in Section VI (F), to the Participant’sdesignated beneficiary. A Participant may, by written notice to the Company inthe form of Attachment B, designate a beneficiary to receive any payments madeafter his death.  The Participant mayselect as his beneficiary any person or entity, including a trust.  The Participant may designate multiple,successive or contingent beneficiaries and may change his designation at anytime.  If a Participant dies withouthaving any valid beneficiary designation in effect, his estate shall be thebeneficiary.

 

2.               The Performance Account value for a Participant whoterminates employment by reason of Retirement or who becomes permanently andtotally disabled, shall be distributed beginning no later than March 15 ofthe calendar year following such termination or disability, according to theprovisions of Section VI (F).

 

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E.                                      Effect of Other Termination of Employment

 

1.               If a Participant’s employment with the Company is terminatedfor any reason other than his death, retirement, or permanent and totaldisability, such Participant’s participation in the Plan immediately ceases,and any applicable Performance Award shall be distributed beginning no laterthan 90 days following such termination of employment, according to the provisionsof Section VI (F).

 

2.               If a Participant becomes ineligible for the Plan basedon a change of position within the Company where the new position is not eligiblefor participation in the Plan, any applicable Participant’s Performance Accountvalue shall be distributed commencing no later than March 15 of thecalendar year following such change.

 

F.                                      Method of Payment and Value ofPerformance Account

 

1.               APerformance Account will be distributed in three, approximately equal annualinstallments, commencing as specified in Section VI (D) or (E) above.

 

2.               ThePerformance Account will be paid out in shares of company stock following theParticipant’s termination of employment with the company.

 

G.                                     Payment in the Event of a Change ofControl of the Company

 

1.               If a Change of Control in the Company occurs, asdefined in a Participant’s Change of Control Agreement, the target Annual Awardfor the calendar year in which the Change of Control occurs will becomeimmediately payable. The full target Annual Award will be automatically andimmediately payable to the Participant.

 

2.               If a payment becomes due to a Participant under aChange of Control Agreement, the Annual Award would become immediately payableat the target annual award amount. The full target Annual Award will beautomatically and immediately payable to the Participant.

 

3.               If a payment shall become due to the Participant undera Change of Control Agreement, all applicable Performance Awards shallimmediately become distributable to the Participant.  Performance Awards will be paid to theParticipant within thirty (30) days after the date of the Participant’s paymentbeing due under a Change of Control Agreement and will be subject to all normalwithholding of state and federal taxes.

 

4.               The provisions of this Section VI (G), shall takeprecedence over all other provisions of this Plan.

 

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H.                                    Withholding

 

All payments anddistributions shall be subject to applicable withholding requirements.

 

**Section VII. Administrationof the Plan**

 

A.                                   Authority of Board of Directors

 

This Plan will beadministered by the Compensation Committee of the Board of Directors, appointedby and accountable to the Board and whose members are not eligible for awardsunder the Plan.  The Committee mayestablish rules and regulations from time to time that are notinconsistent with the provisions of this Plan.

 

B.                                     Authority of the Chair

 

The Chair and/orhis appointee shall be responsible to the Committee for the administration ofthis Plan.

 

C.                                     Amendment and Termination

 

TheBoard of Directors may amend this Plan in any respect at any time and mayterminate the Plan in whole or in part at any time, subject to the following:

 

                                                1.                                       Fiscal-year performance goals may not bealtered, amended, suspended or discontinued during any Plan Year with respectto that Plan Year without the approval of the Compensation Committee.

 

                                                2.                                       Amendment or termination may notadversely affect the value of any earned Annual Awards.

 

D.                                    Denial of Annual Performance Awards

 

Any Participantwho voluntarily terminates employment except as provided in paragraph (E) below,or who is involuntarily discharged for any reason whatsoever prior to the lastday of a Plan Year, with the exception of a Change of Control of the Company,will not be entitled to an award for that Plan Year unless such exception isapproved by the Committee.  In the eventof a Change of Control in the Company, Section VI (G) will apply.

 

E.                                      Pro-Rata Awards

 

AParticipant whose employment is terminated prior to the last day of a Plan Yearby reason of death, Retirement, or permanent and total disability, shall beentitled to a pro-rata Annual Award through the date of such termination of aParticipant’s employment.

 

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F.                                      Status of Participants’ Claims

 

All distributionsunder this Plan are made from the general assets of the Company or the fundsheld by the Trustee, as applicable.  ThePlan does not create any lien on or security interest in any property of theCompany, and no person may assert any rights under the Plan superior to therights of an unsecured general creditor of the Company.

 

G.                                     Nonalienability

 

Rights under thisPlan are not subject to voluntary or involuntary assignment or alienation. Anyattempted assignment or alienation will be disregarded by the Company.

 

H.                                    Severability

 

If any provisionof this Plan is determined to be invalid or illegal, the remaining provisionsshall be effective and shall be interpreted as if the invalid or illegalprovision did not exist, unless the continuance of the Plan in suchcircumstances would defeat its purposes.

 

I.                                         Employment Rights

 

Nothing in thePlan shall confer upon any Participant the right to continue in the employmentof the Company or any subsidiary or affect any right which the Company or anysubsidiary may have to terminate the employment of the Participant with orwithout cause.

 

J.                                        Headings

 

All headings inthis Plan are for reference only and are not to be utilized to construe itsterms.

 

K.                                    Governing Law

 

This Plan isgoverned in all respects by the laws of the State of Minnesota.

 

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**AttachmentA**

 

**HICKORYTECHCORPORATION**

# Annual Award Calculation

### Worksheet Example

###  

| Name:                            |   | Plan Year: |   |
|----------------------------------|--------|------------|--------|
|                             |   |       |
| Position Title:                  |   |
|                             |   |       |
| 1. Fiscal Base Salary  Earnings: |   | $          |   |   |
|                             |   |       |   |   |
| 2. Target Incentive:             |   | %          | $      |   |   |
|                                  |        |            |        |  |  |  |  |  |  |  |

 

----

 

3.  Organizational Award I:

 
|   | a.     | Target Amount (           %  of Line 2) |            |       |     |   |   |   | $      |   |
|--------|--------|-------------------------------------------------------------------------------------------|-----------------|------------|----------|--------|--------|--------|--------|--------|
|   |   |                                                                                      |            |       |     |   |   |   |   |   |
|   | b.     | Performance Adjustment:                                                                   |            |       |     |   |   |   |   |   |
|   |   |                                                                                      |            |       |     |   |   |   |   |   |
|   |   |                                                                                      | **Net  Income** | ** ** | **ROIC** |   |   |   |
|   |   |                                                                                      |            |       |     |   |   |   |   |   |
|   |   |                                                                                      | o               | Target     | $        |   |   | $      |   |   |   |   |
|   |   |                                                                                      |            |       |     |   |   |   |   |   |   |   |
|   |   |                                                                                      | o               | % of Plan  | $        |   |   | $      |   |   |   |   |
|   |   |                                                                                      |            |       |     |   |   |   |   |   |   |   |
|   |   |                                                                                      | o               | Factor     | $        |   |   | $      |   |   |   |   |
|   |   |                                                                                      |            |       |     |   |   |   |   |   |
|   | c.     | Award                                                                                     | $               |       | +        | $      |   |   | = $    |   |
|   |   |                                                                                      |            |       |     |   |   |   |   |   |
|        |        |                                                                                           |                 |            |          |        |        |        |        |        |  |  |  |

----

 

4.  Organizational Award II:

 
|   | a.     | Target Amount (           %  of Line 2) |                 |       |                  |   |   |   | $      |   |
|--------|--------|-------------------------------------------------------------------------------------------|----------------------|------------|-----------------------|--------|--------|--------|--------|--------|
|   |   |                                                                                      |                 |       |                  |   |   |   |   |   |
|   | b.     | Performance Adjustment:                                                                   |                 |       |                  |   |   |   |   |   |
|   |   |                                                                                      |                 |       |                  |   |   |   |   |   |
|   |   |                                                                                      | **Division  EBITDA** | ** ** | **Division  Revenue** |   |   |   |
|   |   |                                                                                      |                 |       |                  |   |   |   |   |   |
|   |   |                                                                                      | o                    | Target     | $                     |   |   | $      |   |   |   |   |
|   |   |                                                                                      |                 |       |                  |   |   |   |   |   |   |   |
|   |   |                                                                                      | o                    | % of Plan  | $                     |   |   | $      |   |   |   |   |
|   |   |                                                                                      |                 |       |                  |   |   |   |   |   |   |   |
|   |   |                                                                                      | o                    | Factor     | $                     |   |   | $      |   |   |   |   |
|   |   |                                                                                      |                 |       |                  |   |   |   |   |   |
|   | c.     | Award                                                                                     | $                    |       | +                     | $      |   |   | = $    |   |
|   |   |                                                                                      |                 |       |                  |   |   |   |   |   |

 

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| Total Annual Award (3c  + 4c) |   |   |   |   |   |   |   |   | $ |   |
|-------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|---|--------|

 

 

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**AttachmentB**

 

##### **HICKORYTECH CORPORATION**

#####  

ExecutiveIncentive Plan

 

# Designation ofBeneficiary

#  

| Participant’s Name: |   | Social Security Number: |   |
|--------------------------|--------|-------------------------|--------|
|                     |   |                    |
| Home Address:            |   |

 

If I die prior to thepayment of all or a portion of any amount payable to me under the HickoryTechCorporation Executive Incentive Plan, the balance of the amount payable shallbe paid to the following person(s):

 

Instructions:  List each beneficiary who is to share in any payment due under theplan.  State specifically what percentageof the total amount to be paid is to be received by each beneficiary.  Use first, middle and last names (such asMary Alice Jones not Mrs. William Jones).

 

## ** **

| **Primary**              |   |               |   |            |   |         |   |    |
|--------------------------|--------|--------------------|--------|-----------------|--------|--------------|--------|---------|
| Beneficiary(s) Name |   | Beneficiary (s)    |   | Beneficiary (s) |   | Relationship |   | Percent |
|                     |   | Social Security  # |   | Address         |   |         |   |    |
|                     |   |               |   |            |   |         |   |    |
| 1.                       |   |               |   |            |   |         |   |    |   |
|                     |   |               |   |            |   |         |   |    |   |
| 2.                       |   |               |   |            |   |         |   |    |   |
|                     |   |               |   |            |   |         |   |    |   |
| 3.                       |   |               |   |            |   |         |   |    |   |
|                     |   |               |   |            |   |         |   |    |   |
| 4.                       |   |               |   |            |   |         |   |    |   |

 

## ** **

## ** **

| **Contingent** |   |   |   |   |   |   |   |   |
|----------------|--------|--------|--------|--------|--------|--------|--------|--------|
| ** **     |   |   |   |   |   |   |   |   |
| 1.             |   |   |   |   |   |   |   |   |   |
|           |   |   |   |   |   |   |   |   |   |
| 2.             |   |   |   |   |   |   |   |   |   |
|           |   |   |   |   |   |   |   |   |   |
| 3.             |   |   |   |   |   |   |   |   |   |
|           |   |   |   |   |   |   |   |   |   |
| 4.             |   |   |   |   |   |   |   |   |   |

 

In the event that all ofthe above-named beneficiaries shall predecease me, or if there is doubt as tothe right of any beneficiary, HickoryTech Corporation shall make payments,which would otherwise have been made to such beneficiary, to my estate, and insuch event HickoryTech Corporation shall not be under any further liability.

 

This beneficiarydesignation cancels and supersedes any previous designation that I may havewith respect to this Plan.  Thedesignation is effective as of the date this form is signed by me.  I have the right to change this beneficiarydesignation at any time by filing a new beneficiary designation form with theCompany.

 

 
|                          |   |   |
|-------------------------------|--------|--------|
| Participant’s  Signature |   | Date   |

 

 

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