UNITED STATES CELLULAR CORPORATION
EXECUTIVE DEFERRED COMPENSATION
AGREEMENT
THIS AGREEMENT, entered into this 15th day of July, 1996, by and
between Xxxxxxx Xxxxxxxx, (hereinafter referred to as "Executive") and
United States Cellular Corporation, (hereinafter referred to as "Company"),
a Delaware corporation, located at 0000 Xxxx Xxxx Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, XX, 00000-0000.
W I T N E S S E T H:
WHEREAS, the Executive is now and will in the future be rendering
valuable services to the Company, and the Company desires to ensure the
continued loyalty, service and counsel of the Executive; and
WHEREAS, the Executive desires to defer a portion of his or her salary
and bonus until retirement, resignation, disability or death, or to a specific
date greater than one year from the date of this agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
set forth, and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto covenant and agree as follows:
1. Deferred Compensation Agreement. The Company agrees to
establish and maintain a book reserve (the "Deferred
Compensation Account") for the purpose of measuring the amount
of deferred compensation payable under this Agreement. Credits
shall be made to the Deferred Compensation Account as follows:
(a) On each issuance of the Executive's semi-monthly
payroll check, (scheduled for the 15th and the last
day of each month), during the Executive's continued
active employment with the Company, there shall be
deducted an amount equivalent to twenty percent of
the Executive's gross compensation for the pay period
which will be credited to the Deferred Compensation
Account. The first deduction will occur on the
Executive's semi-monthly payroll check dated August
15,1996. The deferral percentage selected by the
Executive will also be applied to all normal bonus
payments.
(b) Commencing on September 30, 1996, and on the last day
of each month thereafter during the
Executive's continued employment with the Company,
there shall be credited to the Deferred Compensation
Account (before any amount is credited for the month
then ending pursuant to paragraph 1(a)), interest
compounded monthly computed at a rate equal to
one-twelfth (1/12) of the sum of (a) the average
thirty (30) year Treasury
Bond rate of interest (as
published in the Wall Street Journal for the last day
of the preceding month) plus (b) 1.25 percentage
points. Quarterly reports which specify the amount
credited to the Executive's Deferred Compensation
Account during the previous period (amount deferred
plus interest) and the then current balance, shall be
provided to the Executive.
(c) The Deferred Compensation percentage elected in
section 1(a) shall be deducted and credited to the
Deferred Compensation Account for all compensation
paid to the Executive, including bonus and
retroactive pay increases.
(d) The Executive may terminate participation in the
Agreement with respect to the deferral of future
compensation at any time. In the event the Executive
elects to make such a discontinuance, he or she shall
remain eligible to receive the benefits under Section
2 with respect to amounts already deferred.
Previously deferred amounts are not payable until
retirement, resignation, disability, death or the
date specified by the Executive in paragraph 2 (g)
(ii). After a discontinuance, Executive may not again
elect to participate with respect to future deferrals
until a subsequent calendar year.
(e) The Deferred Compensation percentage selected in 1(a)
shall be in effect for the entire plan year unless
participation is terminated. The Executive may not
elect to change the percentage until a new plan year
commences.
2. Payment of Deferred Compensation.
(a) In the event the Executive terminates his/her
employment for whatever reason, the Company must
compute the "Ending Balance" in the Deferred
Compensation Account. This Ending Balance shall
include all deferrals and interest as of the last day
of the preceding month, and any deferrals made in the
current month. In the event that the Executive
becomes disabled, his/her employment shall for these
purposes be deemed to terminate on the first day of
the month in which he/she begins to receive long term
disability payments provided by the Company's
insurance carrier (thus, the Ending Balance shall be
computed as of the preceding month). Payment of
deferred compensation under these events will be in
accordance with the Executive's payment method
election in paragraph 2(e).
(b) The Executive must elect the payment method for
receiving his/her Ending Balance either in a lump sum
or in an indicated number of installments. This
determination must be made at the time of execution
of the agreement in Section 2(e) and will apply to
all deferrals. Any amendment changing the method of
payment must be made at least two (2) years prior to
the selected payment date or (2) years prior to
termination of employment, whichever occurs first, to
be considered effective.
(c) In the event the Executive chooses the installment
option, the Executive must inform the Company of the
number of installments he or she wishes to receive.
The installments will be paid quarterly (not to
exceed 20 quarters) commencing with the
fifteenth day of the quarter following the quarter in
which the date specified in 2(g)occurs.. Installments
will then be paid on the fifteenth day of each
succeeding calendar quarter until the Ending Balance
and all accrued interest, which includes
interest earned during the installment period, has
been paid. If the Executive chooses the lump sum
option, such sum must be paid within forty-five (45)
days after the date specified in 2(g).
(d) If the Executive dies prior to the total distribution
of the Ending Balance, the Company shall pay an
amount equal to the then current balance including
accrued interest in the Deferred Compensation Account
in a lump sum within forty-five (45)days following
the Executive's death to the Executive's Designated
Beneficiary (as hereinafter defined). However, if the
Executive is married at the time of death, the
Executive may designate (at the time of entering this
Agreement or upon a subsequent marriage) that the
payments specified in 2(c) shall continue to the
spouse. If such spouse dies before all payments are
made, the procedures in 3(a) and 3(b) shall apply.
(e) Payment of Deferred Compensation Election (choose one
option):
i) _____ Lump sum distribution; or
ii) __X__ Installment method. The amount of each
installment shall be equal to one-twentieth
(cannot be less than one-twentieth) of the
Ending Balance plus accrued interest
compounded monthly for the preceding
calendar quarter.
(f) The Executive must elect the deferral date for
receiving his/her Ending Balance. This date is to be
either retirement, or a specific date greater than
one year from the date of this agreement. This
determination must be made at the time of execution
of the agreement in Section 2(g) and will apply to
all deferrals.
(g) Election of Deferral Date (choose one option):
i) __X__ Retirement; or
ii) _____ Specific Date: (must be greater than
one year from the date of this agreement)
(h) In the event of an unforeseeable emergency, the
Executive may make withdrawals from the Deferred
Compensation Account in an amount equal to that which
is reasonably necessary to satisfy the emergency. An
unforeseeable emergency means a severe financial
hardship to the Executive resulting from a sudden and
unexpected illness or accident of the Executive or of
a dependent (as defined in Internal Revenue Codess.
152(a)) of the Executive, loss of the Executive's
property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the
Executive. The circumstances that will constitute an
emergency will depend upon the facts of each case,
but, in any case, payment may not be made to the
extent that such hardship is or may be relieved (a)
through reimbursement or compensation by insurance or
otherwise; (b) by liquidation of the Executive's
assets, to the extent the liquidation of such assets
would not itself cause severe financial hardship; or
(c) by cessation of deferrals under this
Agreement. Examples of what are not considered to be
unforeseeable emergencies include the need to send an
Executive's child to college or the desire to
purchase a home.
In the event the Company approves the payment of a
withdrawal due to an unforeseeable emergency, such
payment shall be made by the Company to the Executive
in a lump sum within forty-five (45) days after
approval of such request.
3. Designation of Beneficiaries.
(a) The Executive may designate a beneficiary to receive
any amount payable pursuant to paragraph 2(c) (the
"Designated Beneficiary") by executing or filing with
the Company during his/her lifetime, a Beneficiary
Designation in the form attached hereto. The
Executive may change or revoke any such designation
by executing and filing with the Company during his/
her lifetime a new Beneficiary Designation. If the
Executive is married and names someone other than
his/her spouse (e.g., child) as beneficiary, the
spouse must consent by signing the designated area of
the Beneficiary Designation form in the presence of
a Notary Public.
(b) If any Designated Beneficiary predeceases the
Executive, or if any corporation, partnership, trust
or other entity which is a Designated Beneficiary is
terminated, dissolved, becomes insolvent, is
adjudicated bankrupt prior to the date of the
Executive's death, or if the Executive fails to
designate a beneficiary, then the following persons
in the order set forth below shall receive the entire
amount specified in paragraph 2(c) above, which the
previous Designated Beneficiary would have been
entitled to receive:
i) Executive's spouse, if living; otherwise
ii) Executive's then living descendants, per
stirpes; and otherwise;
iii) Executive's estate
4. Miscellaneous.
(a) The right of the Executive or any other person to any
payment of benefits under this Agreement may not be
assigned, transferred, pledged or encumbered.
(b) If the Company finds that any person to whom any
amount is payable under this Agreement is unable to
care for his/her affairs because of illness or
accident, or is under any legal disability which
prevents the Executive from caring for his or her
affairs, any payment due (unless a prior claim
therefor shall have been made by a duly
appointed guardian, committee or other legal
representative) may be made to the spouse, a child,
a parent, or a brother or sister of such person, or
to any party deemed by the Company to have incurred
expenses for such person otherwise entitled to
payment, in such manner and proportions as the
Company may determine. Any such lump sum payment, as
discussed in 2(d), shall be a complete discharge of
the liability of the Company under this Agreement for
such payment.
(c) This Agreement shall be construed in accordance with
and governed by the laws of the State of Illinois.
(d) The Executive is considered to be a general unsecured
creditor of the Company with regard to the deferred
compensation amounts to which this Agreement
pertains.
(e) The deferred amounts under this Agreement are
unfunded for tax and ERISA purposes.
(f) The Company must deduct from all payments made
hereunder all applicable federal or state taxes
required to be withheld from such payments.
(g) This Agreement contains the entire understanding of
the Company and the Executive with respect to the
subject matter hereof.
(h) In the event any provision of this Agreement is held
illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of
the Agreement, and the Agreement must be construed
and enforced as if the illegal or invalid provision
had not been included.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
UNITED STATES CELLULAR CORPORATION
("COMPANY"):
By: /s/ Xxxxxxx X. Xxxxxx
EXECUTIVE:
By: /s/ Xxxxxxx Xxxxxxxx
