Exhibit 10.9
TELEPHONE AND DATA SYSTEMS, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
TELEPHONE AND DATA SYSTEMS, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
PAGE
SECTION 1 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Title and Purpose. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Gender and Number. . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2 ELIGIBILITY AND BENEFITS . . . . . . . . . . . . . . . . . . . . . 4
2.1 Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Earnings and Other Adjustments . . . . . . . . . . . . . . . . . . 5
SECTION 3 PAYMENT OF BENEFITS. . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Vesting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Commencement of Payments . . . . . . . . . . . . . . . . . . . . . 7
3.3 Schedule of Payments . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Survivor Benefits. . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Distributions to Minor and Disabled Persons. . . . . . . . . . . . 10
3.6 Small Benefits Paid in Lump Sum. . . . . . . . . . . . . . . . . . 10
SECTION 4 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Employment Rights. . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Rights Not Secured . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Administration . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.4 Effect on Other Plans. . . . . . . . . . . . . . . . . . . . . . . 12
4.5 Interests Not Transferable . . . . . . . . . . . . . . . . . . . . 12
4.6 Adoption by Employers. . . . . . . . . . . . . . . . . . . . . . . 12
4.7 Tax Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.8 Controlling Law. . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 6 AMENDMENT AND TERMINATION. . . . . . . . . . . . . . . . . . . . . 15
6.1 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
TELEPHONE AND DATA SYSTEMS, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(EFFECTIVE JANUARY 1, 1994)
SECTION 1
INTRODUCTION
1.1 TITLE AND PURPOSE. The title of this Plan shall be the
"Telephone and Data Systems, Inc. Supplemental Executive Retirement Plan". This
Plan is established by Telephone and Data Systems, Inc. (the "Company") to
supplement the benefits under the Telephone and Data Systems, Inc. Employees'
Pension Trust I (the "TDS Plan") and the United States Cellular Corporation
Money Purchase Pension Plan (the "USCC Plan"), each of which is intended to
operate as a "qualified" plan as defined under Section 401 of the Internal
Revenue Code of 1986, as amended (the "Code"). Qualified plans must comply with
Section 401(a)(17) of the Code, which limits the annual compensation of each
employee which can be taken into account under a qualified plan. This Plan is
established to offset the Code mandated reduction of benefits caused by the
limitation on annual employee compensation to be considered under Section
401(a)(17) of the Code for eligible employees participating in the TDS Plan and
the USCC Plan. This Plan is intended to be unfunded and maintained primarily
for the purpose of providing deferred compensation for a select group of
management or highly compensated employees.
1.2 DEFINITIONS. All capitalized terms used herein shall have the
meanings set forth below, except as otherwise provided in the preamble to or
text of this Plan:
(a) "BENEFICIARY" means the beneficiary designated by the Participant
or otherwise entitled to payment of benefits hereunder. If no separate
designation is made by a Participant under this Plan, the Beneficiary shall be
his beneficiary under the Company Pension Plan.
(b) "BENEFITS DEPARTMENT" means the employee benefits department of
the Company, located at 8401 Greenway Boulevard, Post Office Box 628010,
Middleton, Wisconsin 53562-8010.
(c) "CAUSE" means (i) the continued failure by a Participant to
substantially perform the Participant's duties with the Company or an Employer,
or (ii) the willful engaging by the Participant in conduct which is clearly
injurious to the Company or USCC or any of their respective affiliates,
monetarily or otherwise. For purposes of clause (ii) of this definition, no
act, or failure to act, on the Participant's part shall be deemed "willful"
unless done, or omitted to be done, by the Participant not in good faith or
without reasonable belief that such act, or failure to act, was in the best
interest of the Company or an Employer.
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(d) "COMMITTEE" means, unless otherwise appointed by the Board of
Directors of the Company, the Trustees of the TDS Plan, who shall administer the
Plan.
(e) "COMPANY PENSION PLAN" means the TDS Plan with respect to a
Participant who participates in the TDS Plan and the USCC Plan with respect to a
Participant who participates in the USCC Plan.
(f) "EMPLOYER" means the Company, USCC, and any other entity that
participates in the TDS Plan or the USCC Plan and adopts this Plan pursuant to
Section 4.6.
(g) "PARTICIPANT" means any employee who meets the eligibility for
participation requirements set forth in Section 2.1.
(h) "PLAN" means this Telephone and Data Systems, Inc. Supplemental
Executive Retirement Plan, as from time to time amended.
(i) "PLAN YEAR" means the calendar year.
(j) "USCC" means United States Cellular Corporation, a Delaware
corporation, and any corporation which shall succeed to the business of such
corporation and adopt this Plan pursuant to Section 4.6.
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(k) "YEAR OF SERVICE" means, with respect to a Participant who
participates in the TDS Plan, a Year of Vesting Service as defined in Article 2
of the TDS Plan, and with respect to a Participant who participates in the USCC
Plan, a Year of Service as defined in Article 2 of the USCC Plan.
1.3 GENDER AND NUMBER. Where the context permits, words in the
masculine shall include the feminine and neutral; words in the plural shall
include the singular and the singular shall include the plural.
SECTION 2
ELIGIBILITY AND BENEFITS
2.1 ELIGIBILITY. An employee who is a participant under the TDS Plan
or the USCC Plan shall commence participation under this Plan as a Participant
if his compensation (as defined in the Company Pension Plan) for the Plan Year
exceeds the limit set forth in Section 401(a)(17) of the Code for such Plan Year
(adjusted for changes in the cost of living pursuant to Section 401(a)(17)).
2.2 BENEFITS. If Employer contributions that would otherwise have
been made on behalf of the Participant under the provisions of the Company
Pension Plan are limited in a Plan Year because of Section 401(a)(17) of the
Code, such Employer shall credit to an account for the Participant as of the
last day of such Plan
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Year, for bookkeeping purposes only, an amount equal to the difference between
(i) the amount of Employer contributions that would have been allocated to the
Participant's account under the Company Pension Plan without regard to Section
401(a)(17) of the Code for such Plan Year and (ii) the amount of Employer
contributions actually allocated to the Participant's account under the Company
Pension Plan for that Plan Year. When calculating the amount described in part
(i) of the previous sentence with respect to TDS Plan benefits based on a
Participant's compensation in excess of the limitation under Section 401(a)(17)
of the Code, amounts credited to the account for such Participant for prior plan
years must be considered. For calculating benefits under this Section, the
actuarial assumptions and methods from the TDS Plan will be applied.
2.3 EARNINGS AND OTHER ADJUSTMENTS. For bookkeeping purposes only,
the account established for each Participant pursuant to Section 2.2 shall be
adjusted at the end of each Plan Year to reflect (i) an assumed rate of earnings
on all items other than the contributions for the current Plan Year equal to the
interest rate on ten year United States Treasury Bills on the first business day
of each Plan Year, as quoted in THE WALL STREET JOURNAL, plus 100 basis points
and (ii) any payments made pursuant to Section 3.
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SECTION 3
PAYMENT OF BENEFITS
3.1 VESTING. (a) TERMINATION OF EMPLOYMENT UNDER CIRCUMSTANCES
ENTITLING THE PARTICIPANT TO DISTRIBUTION OF HIS FULL ACCOUNT. A Participant
shall be entitled to distribution of his entire account balance under the Plan
if the Participant's employment is terminated, without Cause, after either of
the following events:
(i) his attainment of age 65; or
(ii) his completion of at least fifteen Years of Service, with Years
of Service being determined without regard to Years of Service
completed prior to the year in which he attained age 43.
(b) TERMINATION OF EMPLOYMENT UNDER CIRCUMSTANCES RESULTING IN
COMPLETE OR PARTIAL FORFEITURE OF THE PARTICIPANT'S ACCOUNT. If a Participant
terminates employment under circumstances other than those set forth in
paragraph (a) above, without Cause, the Participant shall be entitled to
distribution of the following percentage of his account balance, with Years of
Service described below being determined without regard to Years of Service
completed prior to the year in which the Participant attained age 43:
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Nonforfeitable
Years of Service Percentage
---------------- --------------
Less than 1 0%
At least 1, but less than 2 5%
At least 2, but less than 3 10%
At least 3, but less than 4 15%
At least 4, but less than 5 20%
At least 5, but less than 6 25%
At least 6, but less than 7 30%
At least 7, but less than 8 35%
At least 8, but less than 9 40%
At least 9, but less than 10 45%
At least 10, but less than 11 50%
At least 11, but less than 12 60%
At least 12, but less than 13 70%
At least 13, but less than 14 80%
At least 14, but less than 15 90%
15 years or more 100%
If a Participant's employment is terminated for Cause, such
Participant shall be entitled to no portion of his account balance under this
Plan.
3.2 COMMENCEMENT OF PAYMENTS. The nonforfeitable portion of the
Participant's account determined under Section 3.1, adjusted for the assumed
rate of earnings in the manner described in Section 2.3 (including periods after
the Participant's termination of employment), shall be payable to the
Participant, beginning on the first day of the month next following the later of
his termination of employment and his completion of all forms and applications
requested by the Committee.
3.3 SCHEDULE OF PAYMENTS. The nonforfeitable portion of the
Participant's account determined under Section 3.1,
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adjusted each Plan Year (including periods after any annual installment payments
begin) for the assumed rate of earnings in the manner described in Section 2.3
and reduced for annual installments previously paid under the Plan, shall be
payable in one of the forms described in the following sentence selected by the
Participant on the date he first becomes a Participant and shall commence being
paid on the date determined pursuant to Section 3.2. The forms available for
payment hereunder are the following: (a) a single lump sum payment; or (b)
annual installments over a period of 5, 10, 15, 20 or 25 years. Notwithstanding
the Participant's selection of the payment method on the date he becomes a
Participant, the Participant may make a one-time request that payments be made
in accordance with a different form provided under this Section, provided that
such form results in payments over a shorter period than the period formerly
selected by him. This request shall be irrevocable, must be made to the
Committee prior to the date of the first payment under Section 3.2 and shall be
subject to the approval of the Committee. The approval of the request shall be
at the sole discretion of the Committee. If a Participant fails to designate a
payment schedule in accordance with this Section, the nonforfeitable portion of
his account shall be paid in annual installments for a period of ten years.
Notwithstanding anything contained herein to the contrary, in the
event that the Participant owes any amount to an Employer (an "Obligation"), the
payments due hereunder shall be
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used to offset any Obligation in accordance with the payment schedule selected
by the Participant. Any amounts not used to offset an Obligation shall be paid
to the Participant or his Beneficiary.
3.4 SURVIVOR BENEFITS. If a Participant dies before payment of his
account balance commences, his Beneficiary shall receive the nonforfeitable
portion of his account balance determined under Section 3.1 (after offset of any
Obligation as provided in Section 3.3) in the form selected by the Participant
for payment of his account. If a Participant dies after payment of his account
balance commences, his Beneficiary shall receive the remaining portion of the
Participant's account balance to which the Participant would have been entitled
had he survived, payable in the same form as payments would have been made to
the Participant had he survived. Notwithstanding the preceding two sentences, a
Beneficiary entitled to payment under this Section may make a one-time request
that payments be made in accordance with a different form provided under Section
3.3, provided that such form results in payments over a shorter period than the
period formerly selected by the Participant. This request shall be irrevocable,
must be made to the Committee prior to the date of the first payment to the
Beneficiary and shall be subject to the approval of the Committee in the same
manner as provided in Section 3.3.
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3.5 DISTRIBUTIONS TO MINOR AND DISABLED PERSONS. If a distribution
is to be made to a minor or to a person who, in the opinion of the Committee, is
unable to manage his affairs by reason of illness or mental incompetency, such
distribution may be made to or for the benefit of any such person in such of the
following ways as the Committee shall direct: (a) directly to any such minor
person if, in the opinion of the Committee, he is able to manage his affairs,
(b) to the legal representative of any such person, (c) to a custodian under a
Uniform Gifts to Minors Act for any such minor person, or (d) to some near
relative of any such person to be used for the latter's benefit. Neither the
Committee nor the Employer shall be required to see to the application by any
third party of any distribution made to or for the benefit of a Participant or
Beneficiary pursuant to this Section.
3.6 SMALL BENEFITS PAID IN LUMP SUM. Notwithstanding any provision
in the Plan to the contrary, if the amount of a Participant's account balance to
be distributed under Article 3 is not more than $10,000, such amount shall be
distributed, as soon as administratively feasible on or after the date on which
such Participant's termination of service occurs, by payment in a lump sum.
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SECTION 4
GENERAL PROVISIONS
4.1 EMPLOYMENT RIGHTS. This Plan shall not be construed to give any
Participant the right to be retained in the employ of any Employer nor any right
to benefits not specifically provided for in this Plan.
4.2 RIGHTS NOT SECURED. All payments to be made pursuant to this
Plan shall be an obligation of the general assets of the Employers, and no
Employer shall be required to segregate any of its assets in order to provide
for the satisfaction of the obligations hereunder or to make any investment of
assets. Although the amounts credited to each Participant's account shall be
reflected in the Employers' accounting records, this Plan shall not be construed
to create a trust, custodial, or escrow account nor shall the Participant have
any right, title, or interest in any specific investment reserves, accounts,
funds or a trust that any Employer may accumulate or establish to aid it in
providing benefits under this Plan. Nothing contained in this Plan shall create
a trust or fiduciary relationship between any Employer and any Participant or
Beneficiary. Neither a Participant nor his Beneficiary shall acquire any
interest greater than that of an unsecured creditor.
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4.3 ADMINISTRATION. This Plan shall be administered by the
Committee. The Committee shall have the same rights and duties with respect to
this Plan as the plan administrator of the TDS Plan has with respect to the TDS
Plan. The Committee will apply uniform rules to all Participants similarly
situated. The determination of the Committee as to any question arising under
this Plan shall be final and binding upon all persons. The expenses of
administering the Plan shall be borne by the Employers.
4.4 EFFECT ON OTHER PLANS. Amounts credited or paid under this Plan
shall not be considered to be compensation for the purposes of any qualified
plan maintained by any Employer.
4.5 INTERESTS NOT TRANSFERABLE. Except as provided in Section 3.3
with respect to an Obligation, the interests of the Participants and their
Beneficiaries under the Plan are not subject to the claims of their creditors
and may not be voluntarily or involuntarily assigned or encumbered in any way,
including any assignment, division or awarding of property under state domestic
relations law (including community property law).
4.6 ADOPTION BY EMPLOYERS. Any corporation which is or becomes an
"Employer" under the Company Pension Plan may, with the consent of the Company,
become an Employer in this Plan by delivery to the Company of a resolution of
its board of directors or duly authorized committee to such effect, which
resolution
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shall specify the first Plan Year for which this Plan shall be effective in
respect of the employees of such corporation.
4.7 TAX LIABILITY. An Employer may withhold from any payment under
this Plan any taxes required to be withheld plus such sums as such Employer may
reasonably estimate to be necessary to cover any taxes for which the Employer
may be liable and which may be assessed with regard to such payment.
4.8 CONTROLLING LAW. The law of Illinois and, where applicable, the
provisions of the Employee Retirement Income Security Act of 1974, as amended,
shall be controlling in all matters relating to the Plan.
SECTION 5
CLAIMS PROCEDURE
If any Participant or Beneficiary believes he is entitled to benefits
in an amount greater than those which he is receiving or has received, he may
file a claim with the Benefits Department. Such a claim shall be in writing and
state the nature of the claim, the facts supporting the claim, the amount
claimed and the address of the claimant. The Benefits Department shall review
the claim and, unless special circumstances require an extension of time, within
90 days after receipt of the claim, give written notice by registered or
certified mail to the claimant of its decision with respect to the claim. If
special
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circumstances require an extension of time, the claimant shall be so advised in
writing within the initial 90-day period and in no event shall such an extension
exceed 90 days. The notice sent by the Benefits Department shall be written in
a manner calculated to be understood by the claimant and, if the claim is wholly
or partially denied, set forth the specific reasons for the denial, specific
references to the pertinent Plan provisions on which the denial is based, a
description of any additional material or information necessary for the claimant
to perfect the claim and an explanation of why such material or information is
necessary, and an explanation of the claim review procedure under this Plan.
The Benefits Department shall also advise the claimant that he or his duly
authorized representative may request a review by the Committee of the denial by
filing with the Committee within 60 days after notice of the denial has been
received by the claimant, a written request for such review. The claimant shall
be informed that he may have reasonable access to pertinent documents and submit
comments in writing to the Committee within the same 60-day period. If a
request is so filed, review of the denial shall be made by the Committee and the
claimant shall be given written notice of the Committee's final decision within
sixty days after receipt of such request, unless special circumstances require
an extension of time. If special circumstances require an extension of time,
the claimant shall be so advised in writing within the initial 60-day period and
in no event shall such an extension exceed 60 days. The notice of the
Committee's final decision shall include specific reasons for the
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decision and specific references to the pertinent Plan provisions on which the
decision is based and shall be written in a manner calculated to be understood
by the claimant.
SECTION 6
AMENDMENT AND TERMINATION
6.1 AMENDMENT. The Company may amend this Plan at any time by
resolution duly adopted by its board of directors. No such amendment shall
reduce or otherwise adversely affect the rights of Participants or Beneficiaries
with respect to amounts accrued hereunder as of the date of such amendment.
6.2 TERMINATION. Although the Company expects to continue this Plan
indefinitely, it must necessarily reserve the right to terminate this Plan at
any time by a resolution duly adopted by its board of directors.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
executed on December 27, 1994, by its duly authorized officer to be effective as
of January 1, 1994.
TELEPHONE AND DATA SYSTEMS, INC.
By: /s/ LeRoy T. Carlson, Jr.
----------------------------
LeRoy T. Carlson, Jr.
ATTEST:
By: /s/ Michael G. Hron
----------------------------
Secretary
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