6.                “ Company ” means Hickory Tech Corporation, a Minnesota corporation and any successor thereto, including all Subsidiaries.

7.                “ EBITDA ” means earnings before interest expense, income taxes, depreciation, and amortization, and it includes employee Team Award expense.

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

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

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

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

12.          “ Plan ” means the HickoryTech Executive Incentive Plan, as stated herein and as further amended from time to time.

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

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

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

16.          “ Revenue ” means operating revenues, and excludes other income from such sources as interest and dividends.  For purposes of this plan, the intercompany transactions between or among its Subsidiaries are considered to 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 the Trust under the HickoryTech Corporation Executive Plan.  This Trust holds shares of Company Stock for the eligible Participants’ Performance Award Accounts.

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B.                                      Gender and Number

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

Section III. Summary of Plan

A.                                    Annual Award Opportunity

Each fiscal year, 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, by which Participant’s performance will be measured for Plan purposes, will be established at the beginning of the fiscal year.  Such goals will relate to Company, Subsidiary or division organizational performance.

C.                                      Award Determination

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

D.                                     Disposition of Awards

Annual Awards will be paid in cash as soon as is practicable following the end of the fiscal year but no later than March 15 of the following calendar year.

E.                                       Shareholder Protection

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

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Section IV. Eligibility

A.                                    Eligibility

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

Section V. Annual Plan

A.                                    Basis of Awards Earned

Awards earned under this Plan are earned on a fiscal-year basis.

B.                                      Annual Award Opportunity

An annual target award opportunity will be assigned to each Participant, expressed as a percent of fiscal year base salary earnings.  This will establish the dollar award target for the executive, as follows:

C.                                      Annual Award Make-up

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

Example

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

3.                                        Organizational performance will reflect equally on Participant awards.

D.                                     Organizational Goals

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

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

E.                                       Award Calculations

1.             Organizational Awards

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

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

(ii)                                   The target award for each organizational results area, except for the EBITDA results area, will be increased 3% for each 1% by which actual performance exceeds planned performance.

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

(iv)                               No award will be paid for the Net Income results area unless actual performance is at least 100% of planned performance.  For other organizational awards, no award will be paid for a results area if actual performance is less than 85% of planned performance.

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

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

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

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                Example :