Exhibit 10.26
UNITED STATES CELLULAR CORPORATION
EXECUTIVE DEFERRED COMPENSATION
AGREEMENT
THIS AGREEMENT, entered into this 31(st) day of December, 1997, by and
between Xxxxx Gab 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 3 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 January 31. The deferral percentage
selected by the Executive will also be applied to all normal bonus
payments.
(b) Commencing on February 28, 1998, 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.
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(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-twelfth (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) / / Retirement; or
ii) /X/ Specific Date: 2010 (must be greater than one year from the date
of this agreement)
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(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 Code
Section 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.
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(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
-----------------------------------
Xxxxxxx X. Xxxxxx
EXECUTIVE:
BY: /S/ XXXXX GAB XXXXXXXX
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Xxxxx Gab Xxxxxxxx
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