D&E COMMUNICATIONS,
INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN
This amended and restated D&E
Communications, Inc. Supplemental Executive Retirement Plan (the
“SERP”) is hereby adopted and made effective this 30
th day of October, 2008.
WITNESSETH:
WHEREAS, D&E Communications,
Inc. (the “Company”) desires to continue to obtain all
of the benefits which flow from maintaining a strong management
team by providing to executive and upper level management employees
a supplemental retirement benefit and by offering benefits that
will assist in attracting and retaining executive and upper level
management employees of outstanding ability;
WHEREAS, effective 23 rd
day of February, 2005, D&E established the SERP
(“Original SERP”) which is an unfunded plan maintained
by the Company primarily for the purpose of providing deferred
compensation for a select group of management and highly
compensated employees as described in section 201(2), 301(3) and
401(l) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”);
WHEREAS, the benefits provided under
the SERP are intended to be in addition to other employee
retirement benefits provided by the Company under the D&E
Communications, Inc. Employees’ Retirement Plan, a
tax-qualified retirement plan sponsored by the Company (the
“Qualified Retirement Plan”); and
The Company now desires to amend and
restate the Original SERP, replacing the Original SERP, for the
limited purpose of complying with certain restrictions that are now
applicable under section 409A of the Internal Revenue Code (the
“Code”) to nonqualified deferred compensation
arrangements, to avoid the adverse individual tax consequences that
would result from non-compliance with Code section 409A, on the
terms and conditions contained in this SERP.
NOW, THEREFORE, the Company hereby
establishes the SERP as set forth herein.
ARTICLE I.
COVERAGE
1.1
Eligible Individuals . The SERP shall cover such individuals
(hereinafter referred to collectively as the “Members”
and individually as a “Member”) as the Board of
Directors of the Company may from time to time hereafter designate
for participation, either by resolution of such Board or by Board
approval of a written Employment Agreement that provides for SERP
participation.
ARTICLE II.
BENEFIT AMOUNT AND
VESTING
2.1
Benefit Amount and Vesting . The amount of the accrued
annual retirement benefit of each Member hereunder at any point in
time shall be equal to the difference between the benefit amount of
the Member’s then-determined accrued annual retirement
benefit under the Qualified Retirement Plan and the qualified
retirement benefit the Executive would have accrued under the
Qualified Retirement Plan if the Executive had remained employed by
D&E through the end of the Initial Term, any applicable
Extended Term, or any applicable Transition Date, as such terms are
defined in the Member’s Employment Agreement (hereinafter
referred to as the “Supplemental Retirement Benefit”).
The Supplemental Retirement Benefit shall be an amount payable to
the Member as a life annuity commencing the first day of the month
after the Member’s sixty fifth birthday or, if later, the
first day of the month after the Member’s termination of
employment with the Company. The Supplemental Retirement Benefit
shall be vested and become payable only if the Member’s
employment with the Company is terminated (i) by the Company
“Without Cause” (as defined in the Member’s
Employment Agreement), (ii) by the Member for “Good
Reason” (as defined in the Member’s Employment
Agreement), or (iii) by the Member without “Good
Reason” following a “Change of Control” (as
defined in the Member’s Employment Agreement) under
conditions that qualify the Member for payment of the
“transition Amount” (as defined in the Member’s
Employment Agreement), provided that in any such case the
termination constitutes a separation from service for purposes of
Internal Revenue Code Section 409A. The Supplemental Retirement
Benefit shall be payable pursuant hereto independent of and in
addition to the Member’s Qualified Retirement Plan
benefit.
2.2
Liability of Company . The SERP constitutes a mere promise
by the Company to make the benefit payments in the future. The
right of any Member to receive one or more payments under the SERP
shall be an unsecured claim against the general assets of the
Company. Any liability of the Company to any Member with respect to
a right to payment shall be based solely upon contractual
obligations created by the SERP. The Company, the Board of
Directors of the Company and/or any other individual or entity
shall not be deemed to be a trustee of any amounts to be paid under
the SERP. Nothing contained in the SERP, and no action taken
pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship, between the
Company and a Member, or any other individual or entity. In no
event shall any employee, officer, director, or stockholder of the
Company be liable to any individual or entity on account of any
claim arising by reason of the SERP provisions or any instrument or
instruments implementing its provisions, or for the failure of any
Member or other individual or entity to be entitled to any
particular tax consequences with respect to the SERP or any credit
or payment thereunder.
ARTICLE III.
DISTRIBUTION OF
BENEFITS
3.1
Form of Benefit . The Supplemental Retirement Benefit of a
Member shall be an annual payment made on the Commencement Date
hereinafter defined and on each subsequent anniversary of the
Commencement Date occurring prior to the date of the Member’s
death. The
Member’s election under the Qualified
Retirement Plan of any optional form of payment of the Qualified
Retirement Plan benefit (with the val
