Document:

GlaxoSmithKline plc S-8

 

Exhibit 4.14

 

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GLAXOSMITHKLINE
PLC

 

RULES
OF THE GLAXOSMITHKLINE 2017

DEFERRED ANNUAL BONUS PLAN 

	 	 
	Shareholder
    approval	4
    May 2017
	 	 
	Expiry
    Date:	3
    May 2027

 

 

 

	Linklaters
LLP

        One
Silk Street

        London
EC2Y 8HQ
	 
	 	 
	Telephone
    (+44) 20 7456 2000	 
	Facsimile
    (+44) 20 7456 2222	 
	 	 
	Reference:
    Neil Sharpe	 

 

     

     

    

 

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Table
of Contents 

 

	Contents	Page
	 	 	 
	1	Meaning
    of words used	1
	 	 	 
	2	Granting
    Awards	2
	 	 	 
	3	Dividends
    and dividend equivalents	3
	 	 	 
	4	Vesting
    of Awards	4
	 	 	 
	5	Malus
    and Clawback	5
	 	 	 
	6	Leaving
    employment	6
	 	 	 
	7	Corporate
    Events	6
	 	 	 
	8	Tax	8
	 	 	 
	9	General
    Terms	8
	 	 	 
	10	Amendment
    and termination of the Plan	11
	 	 	 
	11	Governing
    Law	12
	 	 	 
	Schedule 1 United States	13

  

 

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		1	Meaning
                                         of words used

 

In
these Rules:

 

“Award”
means a conditional right to acquire Shares (which may be a Conditional Award or a Nil-Cost Option) which is granted in respect
of annual bonus foregone, as described in rule 2.3;

 

“Award
Date” means the date on which an Award is granted or any other date which the Committee sets in relation to an Award;

 

“Committee”
means the remuneration committee of the board of directors of the Company or any person or group of persons to whom some or all
of such body’s functions under the Plan are delegated;

 

“Company”
means GlaxoSmithKline plc;

 

“Conditional
Award” means a conditional right to acquire Shares following Vesting;

 

“Dealing
Restrictions” means any restriction on dealing in securities imposed by regulation, statute, order or any code adopted
by the Company as varied from time to time;

 

“Dividend
Equivalents” means a right to cash or Shares as described in rule 3.2;

 

“Executive”
means an executive director of the Company or any member of the Corporate Executive Team of the Company;

 

“Grantor”
means the Member of the Group or other entity which has agreed to satisfy an Award as required by these rules or, if no entity
has so agreed, the Company;

 

“Market
Value” means, in respect of any day, the closing price of a Share quoted on the London Stock Exchange for the immediately
preceding day (or such other day selected by the Committee or the average closing price of consecutive days selected by the Committee)
on which the relevant market was open or, in the case of an American depositary share, the closing price quoted on the New York
Stock Exchange for that same immediately preceding day (or such other day selected by the Committee or the average closing price
of consecutive days selected by the Committee);

 

“Member
of the Group” means the Company, its subsidiaries from time to time or any other company which the Committee determines
should be treated as a Member of the Group for some or all purposes;

 

“Nil-Cost
Option” means a conditional right to acquire Shares following exercise;

 

“Participant”
means a person who has been granted an Award or, following the death of a Participant, his personal representatives;

 

“Plan”
means this plan known as “The GlaxoSmithKline 2017 Deferred Annual Bonus Plan” as amended from time to time;

 

“Recoupment
Policy” means the Company’s policy from time to time on the recoupment of value from employees which is applicable
to the Participant;

 

“Shares”
means a fully paid ordinary share in the capital of the Company, and, where the context requires, includes an American depositary
share representing Shares;

 

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“Short
Term Deferral Period” means the period ending on 15 March after the end of the calendar year in which Vesting occurs;

 

“Takeover”
has the meaning given to it in rule 7.1;

 

“Vesting”
means a Participant becoming entitled to receive the Shares comprised in his Award and “Vest” shall be construed
accordingly;

 

“Vesting
Date” means the date on which an Award would normally Vest which will be set by the Committee on the grant of the Award
under rule 2.2.

 

		2	Granting
                                         Awards

 

		2.1	Selection
                                         of Participants

 

The
Committee may select any employee (including an executive director) of any Member of the Group to be granted an Award.

 

		2.2	Things
                                         to be decided when an Award is granted

 

When
granting an Award the Committee will decide:

 

		2.2.1	the
                                         proportion of annual bonus which an employee will forgo in return for the grant of an
                                         Award;

 

		2.2.2	the
                                         Vesting Date or Vesting Dates;

 

		2.2.3	the
                                         terms of any conditions;

 

		2.2.4	whether
                                         the Award will take the form of a Nil-Cost Option (and if the Committee does not so decide,
                                         the Award will take the form of a Conditional Award);

 

		2.2.5	if
                                         the Award is in the form of a Nil-Cost Option, whether the Award will be exercisable
                                         for a period shorter than the period from Vesting up to the tenth anniversary of the
                                         Award Date except where Rule 6 (Leavers) or Rule 7.1 (Takeover) applies (and if the Committee
                                         does not so decide, the Nil-Cost Option will be exercisable for such period);

 

		2.2.6	whether
                                         or not the Award will carry Dividend Equivalents and, if it does, whether or not they
                                         will be on a notional re-investment basis (see rule 3.2);

 

		2.2.7	if
                                         the Award will Vest on a date other than the Vesting Date if the Participant leaves employment
                                         (see Rule 6.1); and

 

		2.2.8	which
                                         (if any) Schedules to the Plan will apply to the Award.

 

		2.3	Size
                                         of Awards

 

The
Grantor will grant to the Participant an Award over a number of Shares with a Market Value on the Award Date equal to the gross
amount of bonus foregone (or, if the Committee so decides, the net amount of bonus foregone).

 

Additional
Shares may be made subject to the Award in order to compensate the Participant for having agreed to pay or repay any employer
social security liability.

 

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		2.4	Timing
                                         of Awards

 

Awards
may not be granted after 3 May 2027.

 

The
Award Date for an Award must be within the 42 days starting on any of the following:

 

		2.4.1	the
                                         day after the announcement of the Company’s results for any period; or

 

		2.4.2	any
                                         day on which the Committee resolves that exceptional circumstances exist which justify
                                         the grant of Awards; or

 

		2.4.3	any
                                         day on which changes to the legislation or regulations affecting share plans are announced,
                                         effected or made; or

 

		2.4.4	the
                                         lifting of Dealing Restrictions which prevented the granting of Awards during any period
                                         specified above.

 

		2.5	Documentation
                                         of Awards

 

Each
Award will be granted by deed. Each Participant will receive or be directed to a certificate or statement (electronically or in
hard copy) summarising the principal terms of the Award.

 

		2.6	Overseas
                                         schedules

 

The
Committee may establish additional schedules to the Plan for the benefit of employees outside the UK, based on the Plan but modified
to take account of local tax, exchange control or securities laws in overseas territories.

 

		3	Dividends
                                         and dividend equivalents

 

		3.1	No
                                         rights to dividends

 

A
Participant shall not be entitled to vote, to receive dividends or to have any other rights of a shareholder in respect of Shares
subject to an Award unless and until the Shares are issued or transferred to the Participant.

 

		3.2	Dividend
                                         Equivalents

 

If
an Award carries Dividend Equivalents:

 

		3.2.1	unless
                                         the Committee decides otherwise, with effect from the payment date of each ordinary dividend
                                         declared on Shares between the Award Date and the date of Vesting, the number of Shares
                                         subject to the Award will be increased by the number of Shares which could be bought
                                         with the amount of the dividend payable on that number of Shares (including any previously
                                         added under this rule 3.2) on the basis of the market value of a Share on the payment
                                         date; or

 

		3.2.2	if
                                         the Committee decides that Dividend Equivalents would not be on a notional reinvestment
                                         basis as described in rule 3.2.1, as soon as practicable after Vesting (and in any event
                                         no later than the date on which the Short Term Deferral Period expires), the Grantor
                                         will pay to the Participant an amount (in cash or Shares) equal to the total ordinary
                                         dividends paid between the Award Date and the date of Vesting on the number of Shares
                                         then Vesting; or

 

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		3.2.3	the
                                         Committee may decide that the Dividend Equivalents may be calculated on any other basis
                                         which, in the opinion of the Committee, is reasonable.

 

For
the avoidance of doubt, the amount of a dividend, for these purposes, does not include the tax credit.

 

For
the purposes of this rule 3, “market value” means Market Value or, if the Committee so decides, the closing price
of a share quoted on the London Stock Exchange for the dividend payment date or, in the case of an American depositary share,
the closing price quoted on the New York Stock Exchange for that day.

 

This
will not apply to any dividend in respect of which an adjustment is made under rule 7.4.

 

For
the avoidance of doubt, a Participant is not entitled to receive Dividend Equivalents with respect to the time period between
the date of Vesting and the date that the relevant Shares are issued or transferred to the Participant.

 

		4	Vesting
                                         of Awards

 

		4.1	Normal
                                         Vesting

 

Subject
to rules 4.6, 5, 6 and 7, an Award will Vest on the Vesting Date (or, if there is more than one, as to the relevant number of
Shares on each of the Vesting Dates).

 

		4.2	Consequences
                                         of Vesting – Conditional Award

 

Subject
to rules 4.5 and 4.6.2, as soon as practicable after the Vesting of an Award (and in any event no later than the date on which
the Short Term Deferral Period expires) which takes the form of a Conditional Award, the Grantor shall procure that:

 

		4.2.1	the
                                         number of Shares in respect of which the Award has Vested are issued or transferred to
                                         the Participant; and

 

		4.2.2	the
                                         Participant is paid any amount due under rule 3.2.2 (dividend equivalents).

 

		4.3	Consequences
                                         of Vesting – Nil-Cost Options

 

A
Nil-Cost Option will become exercisable, in respect of the number of Shares in respect of which it has Vested, from the date on
which it Vests for a period up to the tenth anniversary of the Award Date, unless the Grantor determined on the Award Date that
a shorter period should apply or if rules 6 (leavers) or 7.1 (takeovers) apply.

 

The
Grantor will procure that the Participant is paid any amount due under rule 3.2.2 (dividend equivalents) as soon as practicable
after the date of Vesting (and in any event no later than the date on which the Short Term Deferral Period expires).

 

A
Nil-Cost Option may be exercised by the Participant giving written notice to the Company in such form as the Company may prescribe.
A Nil-Cost Option will be deemed exercised on the last business day before the date on which it will lapse by virtue of this rule
4.3.

 

Subject
to rules 4.5 and 4.6.2, within 30 days of the receipt of the notice (or of the deemed exercise), the Grantor shall procure that
the number of Shares in respect of which the Nil-Cost Option has been exercised are issued or transferred to the Participant.

 

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		4.4	No
                                         Fractional Shares

 

Any
fractional number of Shares accrued as a result of rule 3.2 (or any other reason) shall be aggregated as at the date of Vesting,
and rounded up to the nearest whole Share, unless the Committee determines otherwise.

 

		4.5	Cash
                                         alternative

 

The
Committee may decide to satisfy an Award or the exercise of a Nil-Cost Option by paying to the Participant an amount equal to
the Market Value of the number of Shares which would otherwise be issued or transferred on the date of Vesting (or exercise, in
the case of a Nil-Cost Option).

 

The
Committee may grant an Award on the basis that it will always be satisfied as described in this rule 4.5.

 

		4.6	Delay
                                         for Dealing Restrictions

 

		4.6.1	If
                                         the Vesting of an Award is prevented on any date by a Dealing Restriction, the Award
                                         will Vest on the first date on which it is no longer so prevented.

 

		4.6.2	If
                                         the issue or transfer of Shares is prevented by a Dealing Restriction on any date set
                                         out in rules 4.2 or 4.3, the period for issue or transfer of Shares under those rules
                                         will start (or continue) to run from the first date on which it is no longer so prevented.

 

		5	Malus
                                         and Clawback

 

		5.1	Delay
                                         for investigations

 

The
Committee may decide to delay the Vesting or exercise of an Award held by a Participant and/or the delivery of Shares to such
Participant in circumstances where there is any internal or external investigation or action which relates to, or may relate to,
the Participant.

 

When
the Committee has become aware of the outcome of and/or significance of any such investigation or action then it may decide to:

 

		5.1.1	reduce
                                         the number of Shares subject to the Award or to be delivered to the Participant in whole
                                         or in part;

 

		5.1.2	impose
                                         additional conditions on the Vesting or exercise of the Award or the delivery of the
                                         Shares;

 

		5.1.3	determine
                                         the timing of any Vesting or exercise of the Award or any delivery of the Shares.

 

Where
there is a delay under this Rule 5.1 the following provisions will apply:

 

		5.1.4	if
                                         a Participant leaves employment after the date on which the Award would have Vested but
                                         for the delay then, unless the Committee decides otherwise, Rule 6 (leaving employment)
                                         will not apply. The Award will continue and Vest to the relevant extent (subject to any
                                         further adjustment under this Rule 5) under this Rule 5.1;

 

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		5.1.5	Vesting
                                         or exercise of the Award or delivery of Shares will not be delayed beyond any date on
                                         which Vesting, exercise or delivery would otherwise occur under rule 7 (Corporate Events).

 

The
Vesting of an Award may also be delayed under the Recoupment Policy.

 

		5.2	Reduction
                                         or lapse of Awards

 

The
Committee (or, if appropriate, the Recoupment Committee of the Company) may decide that an Award which has not Vested (or a Nil-Cost
Option which has not been exercised) will lapse wholly or in part:

 

		5.2.1	pursuant
                                         to the terms of the Recoupment Policy; or

 

		5.2.2	if
                                         it considers that the Participant has engaged in conduct which is contrary to the legitimate
                                         expectations of the Company.

 

		6	Leaving
                                         employment

 

		6.1	General
                                         rules on leaving employment

 

		6.1.1	Subject
                                         to Rule 6.1.2, if a Participant leaves employment before the Vesting Date then his Award
                                         will continue and Vest on the Vesting Date unless the Committee decided on the Award
                                         Date that a different date for Vesting would apply in such circumstances.

 

		6.1.2	If
                                         a Participant leaves employment:

 

		(i)	by
                                         reason of termination for gross misconduct; or

 

		(ii)	in
                                         circumstances where his employer is entitled to summarily terminate his employment and
                                         the Committee decides that this Rule 6.1.2 will apply

 

then
his Award will lapse on the date he leaves employment.

 

		6.1.3	A
                                         Nil-Cost Option which Vests on or after a Participant leaving employment will, subject
                                         to Rule 7, be exercisable for a period of twelve months following such Vesting and shall
                                         be automatically exercised at the end of that period to the extent it remains unexercised.

 

		6.1.4	A
                                         Nil-Cost Option which is already exercisable on a Participant leaving employment will,
                                         unless Rule 6.1.2 or 7 applies, continue to be exercisable for a period of twelve months
                                         following such leaving and shall be automatically exercised at the end of that period
                                         to the extent it remains unexercised.

 

		6.2	Meaning
                                         of “leaving employment”

 

For
the purposes of this rule, a Participant will be treated as ‘leaving employment’ when he is no longer an employee
or executive director of any Member of the Group and not before.

 

		7	Corporate
                                         Events

 

		7.1	Takeover

 

If
there is a Takeover, each Award will Vest on the date of the Takeover.

 

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Any
Nil-Cost Option which Vests or is already exercisable on the date of the Takeover will be exercisable for a period of six weeks
following such date and shall be automatically exercised at the end of that period to the extent it is unexercised.

 

Alternatively,
the Committee may decide that some or all Awards will be automatically exchanged in accordance with rule 7.2 or may allow the
Participant to choose Vesting or exchange.

 

There
is a “Takeover” if:

 

		7.1.1	a
                                         person (or a group of persons acting in concert) obtains Control of the Company as a
                                         result of making an offer to acquire Shares; or

 

		7.1.2	a
                                         court sanctions a compromise or arrangement under section 895 of the Companies Act 2006
                                         in connection with the acquisition of Shares.

 

“Control”
has the meaning given to it by Section 995 of the Income Tax Act 2007.

 

		7.2	Exchange
                                         of Awards on a Takeover

 

If
an Award is to be exchanged, the following provisions will apply:

 

		7.2.1	The
                                         new award will be in respect of shares in any body corporate determined by the company
                                         offering the exchange.

 

		7.2.2	The
                                         new award shall have equivalent terms to those of the Award that was exchanged.

 

		7.2.3	The
                                         new award will be treated as having been acquired at the same time as the Award that
                                         was exchanged and will Vest in the same manner and at the same time.

 

		7.2.4	The
                                         new award will be subject to the rules as they last had effect in relation to the Award
                                         that was exchanged.

 

		7.2.5	With
                                         effect from the exchange, the rules will be construed in relation to the new award as
                                         if references to Shares were references to the shares over which the new award is granted
                                         and references to the Company were references to the body corporate determined under
                                         rule 7.2.1.

 

		7.3	Demergers
                                         or other corporate events

 

If
the Committee becomes aware that the Company is or is expected to be affected by any variation in share capital, demerger, distribution
(other than an ordinary dividend) or other transaction (other than a Takeover) which, in the opinion of the Committee could affect
the current or future value of Shares, the Committee may allow Awards to Vest in whole or in part, subject to any conditions the
Committee may decide to impose, or may require them to be exchanged under rule 7.2.

 

		7.4	Rights
                                         issues and changes in share capital

 

If
there is:

 

		7.4.1	a
                                         variation in the equity share capital of the Company, including a capitalisation or rights
                                         issue, sub-division, consolidation or reduction of share capital;

 

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		7.4.2	a
                                         demerger (in whatever form) or exempt distribution by virtue of Section 1075 of the Corporation
                                         Tax Act 2010;

 

		7.4.3	a
                                         special dividend or distribution, or

 

		7.4.4	any
                                         other corporate event which might affect the current or future value of any Award,

 

the
Committee may adjust the number or class of Shares or the identity of the securities subject to the Award in such manner as it
see fit.

 

		7.5	Committee

 

In
this rule 7, “Committee” means those people who were members of the Committee immediately before the event
by virtue of which this rule applies.

 

		8	Tax

 

The
Participant will be responsible for all taxes, social security contributions or other levies arising in connection with an Award
and will, if required to do so, agree the transfer of liability for employer social security contributions to him.

 

The
Company, any employing company or trustee of any employee benefit trust, will withhold any amounts or make such arrangements as
it considers necessary to meet any liability it has to pay or account for any such taxation or social security contributions or
other levies. These arrangements may include the sale of or reduction in number of Shares to which a Participant would otherwise
be entitled or the deduction of the amount of the liability from any cash amount payable to the Participant under the Plan or
otherwise.

 

The
Participant will promptly do all things necessary to facilitate such arrangements and, notwithstanding anything to the contrary
in the Plan, Vesting or the issue or transfer of Shares may be delayed until he does so.

 

		9	General
                                         Terms

 

		9.1	Source
                                         of Shares

 

Awards
may be satisfied with newly issued Shares, treasury Shares or Shares purchased in the market in conjunction with an employee benefit
trust.

 

		9.2	Limits
                                         on use of new issue and treasury shares

 

The
number of Shares which may be allocated under the Plan on any day will not exceed 10% of the ordinary share capital of the Company
in issue immediately before that day, when added to the total number of Shares which have been allocated in the previous 10 years
under the Plan and any other employee share scheme adopted by the Company.

 

The
number of Shares which may be allocated under the Plan on any day will not exceed 5% of the ordinary share capital of the Company
in issue immediately before that day when added to the total number of Shares which have been allocated in the previous 10 years
under the Plan and any other discretionary share scheme adopted by the Company.

 

“Allocate”
means granting a right to acquire unissued Shares or the issue and allotment of Shares. Rights which have lapsed or been surrendered
will not count towards these limits.

 

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For
so long as recommended by the Investment Association, the transfer of treasury Shares shall be treated as the issue of new Shares
for the purposes of this limit.

 

		9.3	Transfer
                                         of Awards

 

A
Participant may not transfer, assign or otherwise dispose of an Award or any rights in respect of it. This rule 9.3 does not apply
to the transmission of an Award on the death of a Participant to his personal representatives.

 

		9.4	Company
                                         Documents

 

The
Company is not required to send to any Participant a copy of any documents which the Company is required to send to its shareholders.

 

		9.5	Discretionary
                                         nature of the Plan

 

		9.5.1	Nothing
                                         in this Plan or the operation of the Plan will form part of the contract of employment
                                         or other relationship between any Member of the Group and any employee, Participant or
                                         any other person (“Employee”).

 

		9.5.2	The
                                         fact that one or more Awards have been made or offered to an Employee does not create
                                         any right to, or expectation of, continued employment.

 

		9.5.3	No
                                         Employee is entitled to participate in, or be considered for participation in, the Plan
                                         at all or at a particular level or to be granted an annual bonus. The payment of an annual
                                         bonus or the grant of Awards on any particular basis in one or over any number of years
                                         does not imply any right to be paid an annual bonus or be granted or considered for Awards
                                         on that or any other basis in any other year.

 

		9.5.4	The
                                         terms of the Plan do not entitle the Employee to the exercise of any discretion in his
                                         favour.

 

		9.5.5	No
                                         Employee will have any right to compensation or damages or any other sum or benefit in
                                         respect of the Plan, including, without limitation, in relation to:

 

		(i)	his
                                         eligibility to participate, or ceasing to be eligible to participate, or ceasing to participate
                                         in the Plan;

 

		(ii)	any
                                         exercise of a discretion or a decision taken in relation to the Plan or the Plan’s
                                         operation (whether or not this disadvantages the Employee concerned and including, without
                                         limitation, the exercise of any discretion under rule 5); and

 

		(iii)	any
                                         loss or reduction of any rights or expectations under the Plan in any circumstances or
                                         for any reason (including lawful or unlawful termination of employment or the employment
                                         relationship).

 

		9.5.6	Participation
                                         in the Plan is permitted only on the basis that any rights that are not expressly set
                                         out in this Plan, or any applicable schedule, are excluded. Each Participant will be
                                         required to waive any such excluded rights in consideration for, and as a condition to,
                                         participating in the Plan.

 

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		9.5.7	Nothing
                                         in this Plan confers any benefit, right or expectation on a person who is not an Employee.
                                         No such third party will have any rights under the Contracts (Rights of Third Parties)
                                         Act 1999 to enforce any term of this Plan. But this does not affect any other right or
                                         remedy of a third party which exists or is available.

 

		9.5.8	For
                                         the avoidance of doubt, this rule applies throughout the employment of any Employee,
                                         after the termination of the employment, and during any period when the Employee has
                                         given or received notice to terminate his employment (whether such termination is lawful
                                         or unlawful).

 

		9.6	Committee’s
                                         decisions final and binding

 

The
decision of the Committee in connection with any interpretation of the rules of the Plan or in any dispute relating to any matter
relating to the Plan will be final and conclusive.

 

		9.7	Regulations

 

The
Committee has power from time to time to make or vary regulations for the administration and operation of the Plan.

 

		9.8	Awards
                                         non-pensionable

 

Awards
do not form part of a Participant’s remuneration for the purpose of determining entitlement to any benefit of employment
including any pension or retirement benefit, life assurance, permanent health insurance or other similar benefit, whether existing
or subsequently introduced.

 

		9.9	Consents

 

All
issues or transfers of Shares will be subject to any necessary consents under any relevant enactments or regulations for the time
being in force and it will be the Participant’s responsibility to comply with any requirements to be fulfilled in order
to obtain or obviate the necessity for any such consent.

 

		9.10	Notices

 

Any
notice or other document which has to be given to a Participant under or in connection with the Plan may be delivered or sent
by post to him at his home address according to the records of his employing company or sent by e-mail or fax to any e-mail address
or fax number which according to the records of his employing company is used by him, or in either case such other address which
the Company considers appropriate.

 

Any
notice or other document which has to be given to the Company or other duly appointed agent under or in connection with the Plan
may be delivered or sent by post to it at its respective registered office (or such other place as the Committee or duly appointed
agent may from time to time decide and notify to Participants) or sent by e-mail or fax to any e-mail address or fax number notified
to the sender.

 

Notices
sent by post will be deemed to have been given on the second day after the date of posting. However, notices sent by or to a Participant
who is working outside the United Kingdom and outside the United States of America will be deemed to have been given on the seventh
day after the date of posting.

 

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Notices
sent by e-mail or fax, in the absence of evidence to the contrary, will be deemed to have been received on the day after sending.

 

		9.11	Data
                                         protection

 

By
participating in the Plan each Participant consents to the holding and processing of personal data provided by such Participant
to the Company, any Member of the Group and any other persons or entities for all purposes relating to the operation of the Plan.
These include, but are not limited to:

 

		9.11.1	administering
                                         and maintaining the Participant’s records;

 

		9.11.2	providing
                                         information to trustees of any employee benefit trust, registrars, brokers or third party
                                         administrators of the Plan;

 

		9.11.3	providing
                                         information to future purchasers of the Company or the business in which the Participant
                                         works; and

 

		9.11.4	transferring
                                         information about the Participant to any country or territory (including outside the
                                         European Economic Area).

 

		10	Amendment
                                         and termination of the Plan

 

		10.1	Directors’
                                         powers

 

Except
as described in the rest of this rule 10, the Committee may at any time change the Plan in any way. Changes may affect Awards
already granted.

 

		10.2	Shareholder
                                         approval

 

		10.2.1	Except
                                         as described in rule 10.2.2, the Company in general meeting must approve in advance by
                                         ordinary resolution any proposed change to the Plan to the advantage of present or future
                                         Participants, which relates to:

 

		(i)	the
                                         persons to or for whom Shares may be provided under the Plan;

 

		(ii)	the
                                         limits on the number of Shares which may be issued under the Plan;

 

		(iii)	the
                                         individual limit for any Participant under the Plan;

 

		(iv)	the
                                         basis for determining a Participant’s entitlement to, and terms of, securities,
                                         cash or other benefits under the Plan and for the adjustment thereof in the event of
                                         a capitalisation issue, rights issue or open offer, sub-division or consolidation of
                                         shares or reduction or any other variation of capital of the Company; or

 

		(v)	the
                                         terms of this rule 10.2.1.

 

		10.2.2	The
                                         Committee can change the Plan and the adjustment thereof and need not obtain the approval
                                         of the Company in general meeting for any minor changes:

 

		(i)	to
                                         benefit the administration of the Plan;

 

		(ii)	to
                                         comply with or take account of the provisions of any proposed or existing legislation;

 

		(iii)	to
                                         take account of any changes to legislation; or

 

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		(iv)	to
                                         obtain or maintain favourable tax, exchange control or regulatory treatment of the Company,
                                         any Subsidiary or any present or future Participant.

 

		10.3	Notice

 

The
Committee is not required to give notice of any changes made to any Participant affected.

 

		10.4	Termination
                                         of the Plan

 

The
Committee may terminate the Plan at any time but it will terminate automatically on 3 May 2027. The termination of the Plan will
not affect existing Awards.

 

		11	Governing
                                         Law

 

The
Plan will be governed by and construed in accordance with English law. Any Member of the Group and all Participants shall submit
to the exclusive jurisdiction of the English Courts as regards any matter arising under the Plan.

 

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Schedule
1

United States

 

		1	Application
                                         of Schedule

 

The
rules of this Schedule are made under and amend and supplement (as applicable) the terms of the Plan and any related Schedules.
The rules of this Schedule apply to those Participants who are employees of a Member of the Group subject to US taxation (“US
Participants”). In the event of any conflict, this Schedule shall override or modify (as applicable) the rules of the Plan
and/or any other applicable Schedule.

 

		2	Definitions

 

The
words and expressions used in this Schedule which have capital letters have the same meaning as they have in the rules of the
Plan and/or any other applicable Schedule unless modified by this Schedule.

 

		3	Dividend
                                         Equivalents

 

If
an Award carries Dividend Equivalents, with effect from the payment date of each ordinary dividend declared on Shares between
the Award Date and the date an Award is paid, the number of Shares subject to the Award will be increased by the number of Shares
which could be bought with the amount of the dividend payable on that number of Shares (including any previously added under this
rule 3) on the basis of the Market Value of a Share on the payment date of such dividend.

 

		4	Vesting
                                         of Awards

 

Subject
to rule 5 of the Plan and rules 5 and 6 of this Schedule, on the date immediately following the Vesting Date determined by the
Committee on the Award Date and set out in the deed of award (or as soon as reasonably practicable thereafter, but in any event
no later than the date on which the Short Term Deferral Period expires) (the “Payment Date”), the number of Shares
in respect of an Award will be issued or transferred to the Participant. The Committee may decide to satisfy an Award by paying
to the Participant an amount of cash equal to the Market Value of the number of Shares which would otherwise be issued or transferred
on the Payment Date. Awards made under this Schedule 1 are intended to comply with Section 409A of the US Internal Revenue Code
of 1986, as amended (“Code”).

 

		5	Leaving
                                         Employment

 

		5.1	Subject
                                         to rule 5.2 and 7 of this Schedule, and notwithstanding rule 6.1 of the Plan, if a Termination
                                         of Employment occurs before the Payment Date, the number of Shares in respect of an Award
                                         will be issued or transferred to the Participant on the date set out in the deed of award
                                         and communicated to the Participant (or as soon as reasonably practicable thereafter,
                                         but in any event no later than the date on which the Short Term Deferral Period expires).
                                         For purposes of this Schedule, “Termination of Employment” means any cessation
                                         of a Participant’s employment by a Member of the Group that constitutes a “separation
                                         from service” within the meaning of US Treas. Reg. 1.409A-1(h).

 

		5.2	Subject
                                         to rule 7 of this Schedule, if a Participant’s Termination of Employment is other
                                         than in the circumstances where his Award will lapse under rule 6.1.2 of the Plan, the
                                         number of Shares in respect of an Award will be issued or transferred to the Participant
                                         on the date set out in the deed of award and communicated to the Participant (or as soon
                                         as reasonably practicable thereafter, but in any event no later than the date on which
                                         the Short Term Deferral Period expires).

 

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		6	Takeover
                                         

 

Rules
7.1 through 7.3 of the Plan shall not apply to US Participants. If a Takeover constitutes, within the meaning of US Treas. Reg.
1.409A-3(i)(5), a change in the ownership or effective control of the Company, or a change in the ownership of a substantial portion
of the assets of the Company, upon such Takeover (or as soon as reasonably practicable thereafter, but in any event no later than
the date on which the Short Term Deferral Period expires), the number of Shares in respect of an Award will be issued or transferred
to the Participant.

 

		7	Specified
                                         Employees

 

To
the extent compliance with the requirements of US Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary
to avoid the application of an additional tax under Section 409A of the Code to payments due to the Participant upon or following
his Termination of Employment, then notwithstanding any other provision of the Plan or this Schedule (or any otherwise applicable
plan, policy, deed, agreement or arrangement), any such payments that are otherwise due within six months following the Participant’s
Termination of Employment will be deferred (without interest) and paid to the Participant in a lump sum immediately following
that six month period.

 

    14Exhibit 10.1 

 

FIRST
AMENDED AND 

RESTATED
EMPLOYMENT AGREEMENT

 

This First Amended
and Restated Employment Agreement, dated as of December 19, 2019 (this “Agreement”), is by and between OTELCO
INC., a Delaware corporation (“Otelco” or the “Company”), and RICHARD CLARK (the “Employee”).

 

WHEREAS, the
Employee and the Company have entered into that certain Employment Agreement dated October 15, 2018 (the “Prior Agreement”).

 

WHEREAS, the
Company and the Employee desire to amend and restate the terms of the Prior Agreement.

 

NOW THEREFORE,
in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.     
Effective Date.

 

This Agreement shall
become effective on January 1, 2020 (the “Effective Date”).

 

Section 2.     
Employment Period.

 

Subject to Section
4, the Company hereby agrees to employ the Employee, and the Employee hereby agrees to be employed by the Company, in accordance
with the terms and provisions of this Agreement, for the period from the Effective Date through the Termination Date (the “Employment
Period”).

 

Section 3.     
Terms of Employment.

 

(a)  Duties
and Position. During the Employment Period, the Employee shall serve as the Chief Executive Officer and President of the Company
and certain of its subsidiaries (collectively, the “Company Entities”) and shall report to the Board of Directors
of the Company (the “Board”) and each such subsidiary. The Employee shall have supervision and control over,
and responsibility for, the management and operational functions of the Company Entities and shall have such other powers and duties
(consistent with the customary powers and duties of a chief executive officer) as may from time to time be prescribed by the Board.

 

(b)   Full
Time. During the Employment Period, and excluding any periods of vacation and sick leave to which the Employee may be entitled,
the Employee agrees to devote his full business time and efforts, to the best of his ability, experience and talent, to the business
and affairs of the Company. During the Employment Period, it shall not be a violation of this Agreement for the Employee to serve
on corporate, civic or charitable boards or committees or manage personal investments (including serving as a member of boards
of directors or similar bodies of entities not engaged in competition with the Company (as determined by the Board in its reasonable
discretion)), in each case, so long as such activities do not interfere with the performance of the Employee’s responsibilities
as an employee of the Company in accordance with this Agreement.

 

(c)   Compensation.

 

(i)            
Base Salary. During the Employment Period, the Employee shall receive an annual base salary of $350,000, subject to increase
by the Company (as so increased, the “Annual Base Salary”). The Annual Base Salary shall be paid in accordance
with the customary payroll practices of the Company, subject to withholding and other payroll taxes.

 

(ii)              Bonus.
In fiscal year 2020 and each fiscal year during the Employment Period thereafter, the Employee shall be eligible for a
discretionary incentive bonus of up to 60% of the Annual Base Salary (the “Bonus”). The Bonus shall
be based upon the Company achieving operating and/or financial goals to be established by the Board or any duly appointed
committee thereof in good faith, in its sole discretion. The Bonus will be paid either in cash, Class A common stock, par
value $0.01 per share, of the Company (“Stock”) or a combination of cash and Stock, as determined by the
Board; provided, however, that at least 33% of any Bonus earned will be paid in cash. Any Bonus paid pursuant
to this Section 3(c)(ii) shall be subject to withholding and other payroll taxes and will be paid at a time and in a
manner consistent with the Company’s payment of bonus compensation to the Company’s executives, generally.

 

     

     

    

 

(iii)           
Equity Participation. Upon the Effective Date, the Employee shall receive options to purchase 50,000 shares of Stock, subject
to the terms and conditions of the 2018 Stock Incentive Plan of the Company, which will vest in equal annual installments over
a five-year period following the Effective Date.

 

(iv)          
Benefits. During the Employment Period, the Employee shall be eligible to participate in all employee benefit plans or programs
offered generally to other executives of the Company, to the extent that the Employee’s position, tenure, salary, health
and other qualifications make the Employee eligible to participate. Without limiting the foregoing, the Employee shall be eligible
to participate in any incentive, savings and retirement plans, and any group life, health, dental or accident insurance or any
such other plan or policy that may be in effect or that may hereafter be adopted by the Company for the benefit of its employees
generally. The Employee’s participation in such benefits shall be subject to the terms of the applicable plans, as the same
may be amended from time to time. The Company does not guarantee the adoption or continuance of any particular employee benefit
during the Employee’s employment, and nothing in this Agreement is intended to, or shall in any way restrict the right of
the Company to, amend, modify or terminate any of its benefits.

 

(v)           
Automobile. During the Employment Period, the Company shall provide the Employee with the use of a Company automobile (or,
at the Company’s option, shall lease an automobile for the Employee’s use) and shall reimburse the Employee for all
reasonable expenses incurred by the Employee in connection with the use and maintenance of such automobile.

 

(vi)          
Expenses. The Employee shall be entitled to receive reimbursement for all reasonable expenses incurred by the Employee during
the Employment Period in connection with the performance of his duties hereunder, in accordance with the policies, practices and
procedures of the Company as in effect from time to time.

 

(vii)         
Vacation and Holidays. During the Employment Period, the Employee shall be entitled to paid holidays and up to five weeks’
vacation per year, in each case, in accordance with the policies of the Company generally applicable to other executives of the
Company.

 

Section 4.     
Termination of Employment.

 

(a)   Death
or Disability. The Employee’s employment shall terminate automatically upon the Employee’s death. If the Company
intends to terminate the Employee’s employment due to Disability, the Company shall give to the Employee written notice of
its intention to terminate the Employee’s employment. In such event, the Employee’s employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the Employee if, within the 30 days after such receipt, the
Employee shall not have returned to full-time performance of the Employee’s duties. For purposes of this Agreement, “Disability”
shall mean the Employee’s inability to perform the essential functions of his position, with or without accommodation, for
any 90 days during a period of 180 consecutive days due to mental or physical incapacity as determined by a physician selected
by the Company or its insurers.

 

(b)   Termination
by the Employee. The Employee may terminate his employment with the Company at any time, without prior written notice (other
than a Notice of Termination (as defined below)), for Good Reason. “Good Reason” shall mean that the Company
relocates its corporate headquarters and asks the Employee to relocate to an area greater than 35 miles from the location of the
Company’s corporate headquarters as of the date hereof. The Employee may also terminate his employment Without Good Reason
at any time. “Without Good Reason” shall mean a termination by the Employee of his employment during the Employment
Period for any reason other than a termination based upon Good Reason. Employee will provide at least 60 days prior written notice
in advance of a termination Without Good Reason. The Company may elect, without incurring liability for payments under Section
5(a), to waive the notice period at its option and accept the termination Without Good Reason to be effective immediately or at
some other point during the notice period.

 

    2

     

    

 

(c)   Termination
by the Company. The Company may terminate the Employee’s employment with the Company at any time, for Cause or Without
Cause. “Cause” will mean that any of the following will have occurred: (i) the Employee has failed to competently
perform his duties and responsibilities; (ii) the Employee has violated any of the rules, policies, regulations, guidelines, directions
or restrictions of the Company; (iii) the Employee has breached his other duties or obligations to the Company and has not cured
or remedied such breach to the Company’s satisfaction within 10 days after the Employee receives written notice from the
Company of such breach; (iv) the Employee has engaged in any theft, embezzlement or misappropriation of the Company’s property;
or (v) the Employee has breached the terms of this Agreement. “Without Cause” shall mean a termination by the
Company of the Employee’s employment during the Employment Period for any reason other than a termination based upon Cause,
death or Disability or following the Employee’s notice of termination Without Good Reason as set forth in Section 4(b).

 

(d)   Notice
of Termination. Any termination by the Company for Cause or Without Cause or by the Employee for Good Reason or Without Good
Reason shall be communicated by Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice
of Termination” means a written notice which (i) indicates the specific termination provision(s) in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee’s employment under the provision(s) so indicated and (iii) if the date of termination is other
than the date of receipt of such notice, specifies the termination date (the “Termination Date”).

 

(e)   Separation
from Service. The term “termination” or “termination of employment” when used in this Agreement shall
mean a “Separation from Service” as such term is defined using the default rules in Treasury Regulation Section
1.409A-1(h).

 

Section 5.     
Obligations of the Company upon Termination.

 

(a)   Without
Cause; Death or Disability; by the Employee for Good Reason. If, during the Employment Period, the Company terminates the Employee’s
employment Without Cause or due to death or Disability, or if the Employee terminates his employment with the Company for Good
Reason, then the Company will provide the Employee with the following severance payments and/or benefits:

 

(i)             The
Company shall pay to the Employee a lump sum in the amount of the Employee’s accrued but unpaid Annual Base Salary through
the Termination Date (“Accrued Obligations”);

 

(ii)           
To the extent the Employee and, if applicable, members of his family participate in any medical, prescription drug, dental, vision
or other “group health plan” of the Company immediately prior to the Termination Date, the Company shall pay to the
Employee a lump sum in the amount equal to the premium cost to the Employee of continued coverage for the Employee and, if applicable,
members of his family that would be incurred for continuation coverage under such plans in accordance with Section 4980B of the
Internal Revenue Code of 1986, as amended, and Part 6 of Title 1 of the Employee Retirement Income Security Act of 1974, as amended,
through the end of the fiscal year in which the Termination Date occurs;

 

(iii)          
The Company shall pay to the Employee a lump sum in a gross amount equal to his Annual Base Salary within six (6) months following
termination but not later than March 14 of the calendar year following termination; and

 

(iv)         
The Company shall pay to the Employee a lump sum amount equal to the Bonus the Employee would have received had he remained employed
by the Company through the end of the fiscal year in which the termination occurred, pro rated for the number of days the Employee
was employed by the Company during such fiscal year, to be paid at the same time that similar bonuses are paid to the Company’s
other employees.

 

(b)   Cause;
by the Employee Without Good Reason. If the Employee’s employment shall be terminated by the Company for Cause or
by the Employee Without Good Reason, then the Company shall have no further payment obligations to the Employee (or his heirs
or legal representatives) other than for (i) payment of Accrued Obligations and (ii) the continuance of the Employee’s
and, if applicable, members of his family’s participation in the Company’s welfare and benefit plans through the
Termination Date.

 

    3

     

    

 

(c)   Condition;
Release. The Employee acknowledges and agrees that the Company’s obligations to make payments under Section 5(a) will
be conditioned on the Employee executing and delivering a customary general release in form and substance reasonably satisfactory
to the Company. The Company shall provide to the Employee a form of release of claims no later than three days following the Employee’s
date of Separation from Service. The Employee must execute and deliver the release of claims within 50 days after the Employee’s
date of Separation from Service. If the Employee does not timely execute and deliver to the Company such release, or if the Employee
does so, but then revokes it if permitted by and within the time required by applicable law, the Company will have no obligation
to pay severance compensation to the Employee.

 

(d)   Delay
for Specified Employees. If the Employee is a “Specified Employee” within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended (“Section 409A”), and determined pursuant to procedures adopted by
the Company at the time of the Employee’s Separation from Service and any amount that would be paid to the Employee during
the six-month period following Separation from Service constitutes deferred compensation (within the meaning of Section 409A),
such amount shall not be paid to the Employee until six months following the Employee’s Separation from Service. On
the first regular payroll date following the expiration of such six-month period (or if the Employee dies during the six-month
period, the first payroll date following death), all payments that were delayed pursuant to the preceding sentence shall be paid
to the Employee in a single lump sum and thereafter all payments shall be made as if there had been no such delay. In addition,
if the Employee becomes entitled to severance compensation, such payments shall be considered, and are hereby designated as, a
series of separate payments for purposes of Section 409A. Further, all severance compensation payable under this Agreement
shall be paid by, and no further severance compensation shall be paid or payable after, December 31 of the second calendar year
following the year in which the Employee’s Separation from Service occurs.

 

(e)   Section
409A Compliance. To the extent applicable, it is intended that the compensation arrangements under this Agreement be in
full compliance with Section 409A. This Agreement shall be construed in a manner to give effect to such intention. In
no event whatsoever shall the Company or any of its Affiliates be liable for any tax, interest or penalties that may be imposed
on the Employee under Section 409A. Neither the Company nor any of its Affiliates have any obligation to indemnify or otherwise
hold the Employee harmless from any or all such taxes, interest or penalties, or liability for any damages related thereto.

 

Section 6.     
Nondisclosure and Nonuse of Confidential Information.

 

(a)   The
Employee shall not disclose or use at any time, either during the Employment Period or thereafter, any Confidential Information
(as hereinafter defined) of which the Employee is or becomes aware as a consequence of or in connection with his employment with
the Company, whether or not such information is developed by him, except (i) to the extent that such disclosure or use is in furtherance
of the Employee’s performance in good faith of his duties as the Company’s Chief Executive Officer and President, or
(ii) to the extent required by law or legal process; provided that (A) the Employee agrees to provide the Company with prompt
written notice of any such law or legal process and to assist the Company, at the Company’s expense, in asserting any legal
challenges to or appeals of such law or legal process that the Company in its sole discretion pursues, and (B) in complying with
any such law or legal process, the Employee shall limit his disclosure only to the Confidential Information that is expressly required
to be disclosed by such law or legal process. The Employee will take all commercially reasonable steps to safeguard Confidential
Information and to protect it against disclosure, misuse, espionage, loss and theft. The Employee shall deliver to the Company
on the Termination Date, or at any time the Company may request, all memoranda, notes, plans, records, reports, computer tapes
and software and other documents and data (and copies thereof) relating to the Confidential Information or the Work Product (as
hereinafter defined) of the Company which the Employee may then possess or have under his control.

 

(b)  
The Employee agrees that all Work Product belongs in all instances to the Company Entities. The Employee will promptly
disclose such Work Product to the Board and perform all actions reasonably requested by the Board (whether during or after
the Employment Period) to establish and confirm the Company Entities’ ownership of the Work Product (including, without
limitation, the execution and delivery of assignments, consents, powers of attorney and other instruments) and to provide
reasonable assistance to the Company Entities (whether during or after the Employment Period), at the Company’s sole
expense, in connection with the prosecution of any applications for patents, trademarks, trade names, service marks or
reissues thereof or in the prosecution or defense of interferences relating to any Work Product. The Employee recognizes and
agrees that the Work Product, to the extent copyrightable, constitutes works for hire under the copyright laws of the United
States.

 

    4

     

    

 

(c)   “Confidential
Information” means information that is not generally known to the public and that is used, developed or obtained by the
Company Entities in connection with their business, including, but not limited to, information, observations and data obtained
by the Employee while employed by the Company or any predecessors thereof (including those obtained prior to the date of this Agreement)
concerning (i) the business or affairs of Otelco or its Affiliates and (ii) products, services, fees, costs, pricing structures,
analyses, drawings, photographs and reports, computer software (including operating systems, applications and program listings),
data bases, accounting and business methods, inventions, devices, new developments, methods and processes (whether patentable or
unpatentable and whether or not reduced to practice), customers and clients and customer and client lists, all technology and trade
secrets, and all similar and related information in whatever form. Confidential Information will not include any information that
(A) is or becomes generally available to the public other than through disclosure by the Employee in violation of this Section
6, (B) was provided to the Employee prior to the date hereof on a non-confidential basis from a Person who was not otherwise
bound by a confidentiality agreement or duty to Otelco or its Affiliates or (C) becomes available to the Employee on a non-confidential
basis from a Person who is not otherwise bound by a confidentiality agreement with or duty to Otelco or its Affiliates or is not
otherwise prohibited from transmitting the information to the Employee.

 

(d)   “Work
Product” means all inventions, innovations, improvements, technical information, systems, software developments, methods,
designs, analyses, drawings, reports, service marks, trademarks, trade names, trade dress, logos and all similar or related information
(whether patentable or unpatentable) which relates to the Company’s or any of its Affiliate’s actual or anticipated
business, research and development or existing or future products or services and which are conceived, developed or made by the
Employee (whether or not during usual business hours and whether or not alone or in conjunction with any other Person) during the
Employment Period together with all patent applications, letters patent, trademark, trade name and service mark applications or
registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing.

 

(e)    Notwithstanding
any other provision of this Agreement, the Company hereby notifies the Employee, pursuant to the Defend Trade Secrets Act, that
he will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret
that: (i) is made (x) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney;
and (y) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other
document that is filed under seal in a lawsuit or other proceeding. The Company further notifies the Employee that if he files
a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Employee may disclose the Company’s
trade secrets to his attorney and use the trade secret information in the court proceeding if he: (i) files any document containing
the trade secret under seal; and (ii) does not disclose the trade secret, except pursuant to court order. The Employee further
understands that certain whistleblower laws permit him to communicate directly with governmental or regulatory authorities about
possible violations of law. The Employee acknowledges that he is not required to seek the Company’s permission or notify
the Company of any communications made in compliance with applicable whistleblower laws, and that the Company will not consider
such communications to violate this Agreement or any prior agreements between the Employee and the Company.

 

Section 7.     
Non-Compete and Non-Solicit.

 

(a)  
The Employee acknowledges that, in the course of the Employee’s employment with the Company, the Employee has become
familiar, or will become familiar, with Otelco’s and its Affiliates’ trade secrets and with other Confidential
Information concerning Otelco and its Affiliates and that his services have been and will be of special, unique and
extraordinary value to Otelco and its Affiliates. Therefore, the Employee agrees that, during the Employment Period and for
12 months thereafter (the “Restricted Period”), the Employee shall not directly or indirectly (i) engage,
within the Restricted Territory, in any telephone or communications business, including, but not limited to, incumbent local
exchange carrier, competitive local exchange carrier, broadband, long distance telephone business, cable television, Internet
access, wireless or other business that Otelco or any of its Affiliates is engaged in during the Employee’s employment
by the Company (the “Company Business”), (ii) compete or participate as agent, employee, consultant,
advisor, representative or otherwise in any enterprise engaged in a business which has any operations engaged in the Company
Business within the Restricted Territory or (iii) compete or participate as a stockholder, partner, member or joint venturer,
or have any direct or indirect financial interest, in any enterprise which has any material operations engaged in the Company
Business within the Restricted Territory; provided, however, that nothing contained herein will prohibit the
Employee from (A) owning, operating or managing any business, or acting upon any business opportunity, after obtaining
approval of a majority of the Board or (B) owning no more than five percent (5%) of the equity of any publicly traded entity
with respect to which the Employee does not serve as an officer, director, employee, consultant or in any other capacity
other than as an investor. The term “Restricted Territory” means all states within the United States in
which Otelco or any of its Affiliates conducts or is pursuing or analyzing plans to conduct Company Business as of the
Termination Date.

 

    5

     

    

 

(b)   As
a means reasonably designed to protect Confidential Information and the Company’s good will, the Employee agrees that, during
the period commencing on the Effective Date and ending on the expiration of the Restricted Period, the Employee will not (i) solicit
or make any other contact with, directly or indirectly, any customer of Otelco or any of its Affiliates as of the date that the
Employee ceases to be employed by the Company with respect to the provision of any service to any such customer that is the same
or substantially similar to any service provided to such customer by Otelco or any of its Affiliates or (ii) solicit or make any
other contact with, directly or indirectly, any employee of Otelco or any of its Affiliates on the date that the Employee ceases
to be employed by the Company (or any Person who was employed by Otelco or any of its Affiliates at any time during the three-month
period prior to the Termination Date) with respect to any employment, services or other business relationship.

 

Section 8.     
Remedies.

 

The Employee acknowledges
that irreparable damage to the Company would occur in the event of a breach of the provisions of Section 6 or Section
7 by the Employee. Therefore, the Employee agrees that, in addition to any other remedy to which it is entitled at law or in
equity, the Company shall have the right to enforce the provisions of Sections 6 and 7 by applying for and obtaining
temporary and permanent restraining orders or injunctions from a court of competent jurisdiction, without the necessity of filing
a bond, in order to prevent breaches of such Sections of this Agreement and to enforce specifically the terms and provisions thereof.

 

Section 9.     
Definitions.

 

“Accrued
Obligations” has the meaning set forth in Section 5(a)(i).

 

“Affiliate”
means, with respect to any Person, any other Person that is controlled by, controlling or under common control with, such Person.
Notwithstanding anything to the contrary contained herein, with respect to Otelco, the term “Affiliate” will include,
without limitation, each Person with an ownership interest in Otelco (and each member, stockholder or partner of each such Person)
and each Person in which any stockholder of Otelco (and each member, stockholder or partner of each such Person) holds or has the
right to acquire, collectively, more than 10% of the voting equity interests.

 

“Agreement”
has the meaning set forth in the Caption.

 

“Annual Base
Salary” has the meaning set forth in Section 3(c)(i).

 

“Board”
has the meaning set forth in Section 3(a).

 

“Bonus”
has the meaning set forth in Section 3(c)(ii).

 

“Business
Day” means any day that is not a Saturday, Sunday, legal holiday or other day on which banks are required to be closed
in New York, New York.

 

“Cause”
has the meaning set forth in Section 4(c).

 

“Company”
has the meaning set forth in the Caption.

 

    6

     

    

 

“Company
Business” has the meaning set forth in Section 7(a).

 

“Confidential
Information” has the meaning set forth in Section 6(c).

 

“Disability”
has the meaning set forth in Section 4(a).

 

“Effective
Date” has the meaning set forth in Section 1.

 

“Employee”
has the meaning set forth in the Caption.

 

“Employment
Period” has the meaning set forth in Section 2.

 

“Good Reason”
has the meaning set forth in Section 4(b).

 

“Otelco”
has the meaning set forth in the Caption.

 

“Notice of
Termination” has the meaning set forth in Section 4(d).

 

“Person”
means an individual, partnership, corporation, limited liability company, trust or unincorporated organization, or a government
or agency or political subdivision thereof.

 

“Restricted
Period” has the meaning set forth in Section 7(a).

 

“Restricted
Territory” has the meaning set forth in Section 7(a).

 

“Section
409A” has the meaning set forth in Section 5(d).

 

“Separation
from Service” has the meaning set forth in Section 4(e).

 

“Stock”
has the meaning set forth in Section 3(c)(iii).

 

“Termination
Date” has the meaning set forth in Section 4(d).

 

“Without
Cause” has the meaning set forth in Section 4(c).

 

“Without
Good Reason” has the meaning set forth in Section 4(b).

 

“Work Product”
has the meaning set forth in Section 6(d).

 

Section 10.  General
Provisions.

 

(a)   Severability.
It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular
provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of
this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing,
if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall,
as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.

 

(b)   Entire
Agreement. This Agreement embodies the complete agreement and understanding among the parties hereto with respect to the subject
matter hereof. This Agreement supersedes and preempts any prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.

 

    7

     

    

 

(c)   Survival.
Notwithstanding anything to the contrary contained herein, the provisions of Section 6, Section 7 and Section
8 shall survive the termination of this Agreement.

 

(d)   Counterparts.
This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.

 

(e)   Successors
and Assigns; Beneficiaries. This Agreement is personal to the Employee and without the prior written consent of the Company
shall not be assignable by the Employee other than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Employee’s heirs and legal representatives and the successors and assigns of
the Company. The Company reserves the right to assign this Agreement in whole or in part to any of its Affiliates and upon any
such assignment, the term “Company” will be deemed to be such Affiliate.

 

(f)   
Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING,
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH
JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY
APPLY.

 

(g)   Waiver
of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF.

 

(h)   Amendment
and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Employee
and the Company and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as
a waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof.

 

(i)    
Notices. All notices, requests, demands, claims, consents and other communications which are required or otherwise delivered
hereunder shall be in writing and shall be deemed to have been duly given if (i) personally delivered or transmitted by electronic
mail, (ii) sent by nationally recognized overnight courier, (iii) mailed by registered or certified mail with postage prepaid,
return receipt requested, or (iv) transmitted by facsimile (with a copy of such transmission concurrently transmitted by registered
or certified mail with postage prepaid, return receipt requested), to the parties hereto at the following addresses (or at such
other address for a party as shall be specified by like notice):

 

If to the Board or the
Company, to:

 

Otelco Inc.

505 Third Avenue East

Oneonta, Alabama 35621

Attention: Curtis L. Garner, Jr.

Telephone No: ((205) 625-3571

Facsimile No: (205) 274-8999

Electronic Mail: curtis@otelco.com

 

    8

     

    

 

with a copy to:

 

Troutman Sanders LLP

875 Third Avenue

New York, NY 10022

Attention: Steven Khadavi, Esq.

Telephone No: (212) 704-6207

Facsimile No: (212) 704-6288

Electronic Mail: steven.khadavi@troutman.com

 

If to the Employee to:

 

Richard Clark

[Address on file

with Human Resources]

 

or to such other address as the party to
whom such notice or other communication is to be given may have furnished to each other party in writing in accordance herewith.
Any such notice or communication shall be deemed to have been received (i) when delivered, if personally delivered or transmitted
by electronic mail, with receipt acknowledgment by the recipient by return electronic mail, (ii) when sent, if sent by facsimile
on a Business Day during normal business hours (or, if not sent on a Business Day during normal business hours, on the next Business
Day after the date sent by facsimile), (iii) on the next Business Day after dispatch, if sent by nationally recognized, overnight
courier guaranteeing next Business Day delivery and (iv) on the fifth Business Day following the date on which the piece of mail
containing such communication is posted, if sent by mail.

 

(j)    
Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute
a part of this Agreement.

 

(k)   Construction.
Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be
deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used
in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party.

 

(l)   
Nouns and Pronouns. Whenever the context may require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice-versa.

 

[Signature page follows]

 

    9

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this First Amended and Restated Employment Agreement as of the date first written above.

 

	 	OTELCO inc.
	 	 
	 	By:	
        /s/ Curtis L. Garner Jr.

	 	 	
        Name: Curtis L. Garner Jr.

        Title: Chief Financial Officer

	 	 	 
	 	employee
	 	 
	 	 	
        /s/ Richard Clark

	 	 	Richard Clark

 

    10

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