Exhibit 10.27
EMBARQ SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN
(as amended and restated as of January 1,
2009)
SECTION 1
ESTABLISHMENT AND
PURPOSE
1.1 Establishment . In
accordance with Section 4 of the Employee Matters Agreement
dated May 17, 2006 by and between Sprint Nextel Corporation
(“Sprint Nextel”) and Embarq Corporation, the Company
(as defined below) established, effective as of May 17, 2006
(“Effective Date”), the Plan (as defined below)
(i) for certain eligible Employees (as defined below), and
(ii) in order to assume responsibility for all liabilities and
obligations relating to certain employees who were participants in
the Sprint Supplemental Executive Retirement Plan immediately prior
to the Effective Date who transferred from Sprint Nextel to the
Company or a Subsidiary (as defined below) in connection with
Sprint Nextel’s distribution of Company common stock to
Sprint Nextel stockholders. The Company has amended and restated
this Plan effective as of January 1, 2009 to comply with
Section 409A of the Code (as defined below).
1.2 Purpose . The Plan was
established to supplement the benefits of any Participant (as
defined below) whose retirement income under the Qualified Pension
Plan (as defined below) is limited in accordance with
Section 415 or 401(a)(17) of the Code or whose benefit under
such a plan is reduced by his or her Deferred Compensation Plan
Deferrals (as defined below). The Plan is intended to restore such
a Participant’s overall retirement income to the level which
would have been payable under the Qualified Pension Plan absent
either such limitation under the Code or such deferrals.
It is intended that the Plan qualify
as an unfunded plan which is maintained primarily for the purpose
of providing deferred compensation for a select group of management
or highly compensated employees and, to the extent applicable, an
unfunded excess benefit plan, so as to qualify for the various
applicable exceptions and exemptions to the requirements otherwise
imposed by ERISA (as defined below) on employee pension benefit
plans.
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SECTION 2
DEFINITIONS AND
CONSTRUCTION
2.1 Definitions . The
following terms, when capitalized as shown below, shall have the
following respective meanings, unless the context clearly indicates
otherwise.
“Benefit Commencement
Date” means the
date that a Participant begins receiving benefits under the Plan,
whether by reason of Separation from Service, attainment of age 55,
upon a Disability or on such other date as set forth in
Section 5.3 and Appendix A attached hereto.
“Board”
means the Board of Directors of the
Company. Any authority given to the Board under this Plan may be
exercised by the Compensation Committee of the Board without
additional direction.
“Code”
means the Internal Revenue Code of
1986, as amended from time to time. References to any provision of
the Code herein shall include any successor provisions
thereto.
“Committee” means the committee established pursuant to
Section 7.
“Company”
means Embarq Corporation, a Delaware
corporation (“Embarq”) and its successor or
successors.
“Deferred Compensation Plan
Deferrals” means
the amount of compensation deferred by a Participant in the Sprint
Executive Deferred Compensation Plan or any nonqualified deferred
compensation plan established by the Company to the extent such
compensation would have been compensation for purposes of
determining a Participant’s benefit under the Qualified
Pension Plan had the amount not been deferred; provided, however,
that a Deferred Compensation Plan Deferral shall not include any
amount deferred for which the Participant receives a pension
make-up benefit as such term is defined in the Sprint Executive
Deferred Compensation Plan or other nonqualified deferred
compensation plan established by the Company.
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“Disability” means, in accordance with Section 409A of
the Code, a Participant has been determined to be totally disabled
by the Social Security Administration. For purposes of this
definition, a Participant will have incurred a Disability on the
date of the correspondence that the Social Security Administration
issues to the Participant determining that such Participant is
totally disabled.
“Employee”
means any person employed by an
Employer who receives regular stated compensation other than a
pension, retainer or fee under contract.
“Employer”
means the Company or any Subsidiary
of the Company which participates in the Qualified Pension
Plan.
“Enhanced
Benefit” means, for
a Participant whose Separation from Service is due to an
Involuntary Termination without Cause, the monthly amount of
benefit payable to a Participant, determined as follows: First,
determine the single life annuity beginning on the
Participant’s Normal Retirement Date, as the excess of
(a) over (b) and (c), where:
(a) equals the
Participant’s monthly retirement income benefit under the
Qualified Pension Plan as of the first day of the 25
th
month following the
Participant’s Separation from Service, payable in the form of
a single life annuity beginning on such Participant’s Normal
Retirement Date, as determined under the terms and conditions of
such plan, except that (i) such determination shall disregard
the restrictions on retirement income benefits under such plan
which are imposed in accordance with Sections 415 and 401(a)(17) of
the Code; and (ii) compensation for purposes of such
determination shall include any Deferred Compensation Plan
Deferrals and any severance pay received by the Participant during
such period;
(b) equals such
Participant’s actual monthly retirement income benefit under
such Qualified Pension Plan as of the first day of the 25
th
month following a
Participant’s Separation from Service, payable in the form of
a single life annuity beginning on such Participant’s Normal
Retirement Date, as determined under the terms and conditions of
such plan, including the restrictions on retirement income benefits
under such plan which are imposed in accordance with sections 415
and 401(a)(17) of the Code and excluding any Deferred Compensation
Plan Deferrals from compensation for purposes of such
determination;
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(c) equals the amount of the Vested
Benefit at the date of the Participant’s Separation from
Service.
The Enhanced Benefit
equals the Equivalent Actuarial Value of that amount plus the
amount of any increase in the Equivalent Actuarial Value of the
benefit actually being paid under the Plan as of the date of the
Participant’s Separation from Service, both determined on the
first day of the 25 th month following the
Participant’s Separation from Service as if the Participant
had continued to be employed through the end of the period during
which severance is actually paid.
“Equivalent Actuarial
Value” means a
benefit or amount that replaces another and has the same value as
the benefit or amount it replaces, based on actuarial assumptions
as set forth in Exhibits 1, 2, 3 and 4 to this Plan.
“ERISA”
means the Employee Retirement Income
Security Act of 1974, as amended from time to time. References to
any provision of ERISA herein shall include any successor
provisions thereto.
“Gross
Misconduct” occurs
if the Committee determines that the Participant has engaged in a
willful, deliberate, or gross act of commission or omission which
is injurious to the finances or reputation of the Company or any
Subsidiary or other affiliate.
“Involuntary Termination
without Cause” means a Participant’s Separation from
Service from the Company and all Subsidiaries, if involuntary and
not for reasons of Gross Misconduct, including but not limited to,
Separation from Service due to a job elimination pursuant to a
reduction-in-force.
“Normal Retirement
Date” means the
first day of the calendar month coincident with or next following
the 65th birthday of the Participant.
“Participant”
means an Employee who has satisfied
the requirements of Section 3.1 for participation in the Plan
or a former Employee entitled to benefits hereunder.
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“Plan”
means the Embarq Supplemental
Executive Retirement Plan, as set forth herein and as amended from
time to time.
“Plan
Administrator” means the plan administrator appointed by the
Committee under Section 7.2.
“Qualified Pension
Plan” means the
Embarq Retirement Pension Plan.
“Separation from
Service” means a
Participant’s separation from service with an Employer within
the meaning of Section 409A of the Code. Separation from
Service for purposes of the Plan shall be determined as
follows:
(a) A Separation from Service occurs
when the facts and circumstances indicate that the Employer and the
Participant reasonably anticipate that no further services will be
performed after a certain date or that the level of services the
Participant will perform after such date will permanently decrease
to no more than 20% of the average level of services performed over
the immediately preceding 36-month period, in accordance with
Section 409A of the Code.
(b) If a Participant ceases active
service with an Employer by reason of a bona fide leave of absence,
including sick leave or disability, and there is a reasonable
expectation that the Participant will return to active service with
the Employer or as otherwise permitted by Section 409A of the
Code, the Participant’s employment relationship will be
treated as continuing intact while the Participant is on leave of
absence, if the leave of absence does not exceed six months or, if
longer, so long as the Participant retains a right to reemployment
by statute or by contract. If the Participant does not return to
active service with the Employer at an earlier date, the
Participant will be considered to have a Separation from Service
for purposes of the Plan upon the first to occur of (i) the
end of the leave of absence or (ii) six months after the
commencement of the leave of absence, or as otherwise permitted
under Section 409A of the Code.
“Subsidiary” means (a) a member of a controlled group of
corporations of which an Employer is a member, (b) an
unincorporated trade or business which is under common control with
an Employer as determined in accordance with Section 414(c) of
the Code or (c) a member of an affiliated service group of
which an Employer is a member as determined in accordance with
Section 414(m) of the Code. For purposes hereof, a
“controlled group of corporations” means a controlled
group of corporations as defined in Section 1563(a) of the
Code, determined without regard to Sections 1563(a)(4) and
1563(e)(3)(C).
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2.2 Construction . Unless the
context clearly indicates otherwise, terms not defined in
Section 2.1 or throughout the Plan shall have the meaning
specified in the Qualified Pension Plan under which the Participant
is entitled to a benefit (if defined therein). In addition, except
when otherwise clearly indicated by the context, the plural shall
include the singular and the singular shall include the
plural.
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SECTION 3
PARTICIPATION
Any Employee:
(a) who is not a member of a
collective bargaining unit; and
(b) whose benefits under the
Qualified Pension Plan are limited by the restrictions on
retirement income benefits under such plan that are imposed in
accordance with Sections 415 or 401(a)(17) of the Code;
or
(c) whose Deferred Compensation Plan
Deferrals cause a reduction in his or her benefit under the
Qualified Pension Plan;
is a covered employee. A covered
employee will become a Participant in this Plan as of the date in
which the covered employee’s benefits are first limited or
reduced as described in clause (b) or
(c) above.
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SECTION 4
BENEFIT RESTORATION
AMOUNTS
4.1 Computation of Benefit.
Except as otherwise provided herein as to an Enhanced Benefit
, the monthly amount of benefit restoration payable to a
Participant under this Plan, when expressed in the form of a single
life annuity beginning on the Participant’s Normal Retirement
Date, shall be equal to the excess of (a) over
(b) where:
(a) equals the Participant’s
monthly retirement income benefit under the Qualified Pension Plan
as of the Participant’s Separation from Service, payable in
the form of a single life annuity beginning on such
Participant’s Normal Retirement Date, as determined under the
terms and conditions of such plan, except that (i) such
determination shall disregard the restrictions on retirement income
benefits under such plan which are imposed in accordance with
Sections 415 and 401(a)(17) of the Code and (ii) compensation
for purposes of such determination shall include any Deferred
Compensation Plan Deferrals; and
(b) equals such Participant’s
actual monthly retirement income benefit under such Qualified
Pension Plan as of a Participant’s Separation from Service,
payable in the form of a single life annuity beginning on such
Participant’s Normal Retirement Date, as determined under the
terms and conditions of such plan, including the restrictions on
retirement income benefits under such plan which are imposed in
accordance with sections 415 and 401(a)(17) of the Code and
excluding any Deferred Compensation Plan Deferrals from
compensation for purposes of such determination.
4.2 Vesting and Forfeiture for
Cause. A Participant shall be vested in the benefit restoration
payable under this Plan calculated in accordance with
Section 4.1 above to the same degree that the Participant is
vested in his or her retirement income benefits under the Qualified
Pension Plan (the “Vested Benefit”). A Participant
shall be vested in the Enhanced Benefit to the same degree that the
Participant is vested in his or her retirement income benefits
under the Qualified Pension Plan (the “Vested Enhanced
Benefit”).
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Notwithstanding the foregoing, however, any
Vested Benefit or survivor benefits payable under this Plan shall
be forfeited, and a Participant, together with any of his or her
beneficiaries, shall have no right to such benefits if:
(a) such Participant has engaged in Gross Misconduct, or
(b) the Participant, without the consent of the Committee,
while employed by the Company or a Subsidiary or after Separation
from Service, becomes associated with, employed by, renders
services to, or owns any interest in (other than any
non-substantial interest, as determined by the Committee), any
business that is in competition with the Company or with any
business in which the Company has a substantial interest as
determined by the Committee. The restriction from competition after
Separation from Service described in the preceding sentence shall
not apply to a Participant in the event he or she has an
Involuntary Termination without Cause.
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SECTION 5
BENEFIT COMMENCEMENT DATE
AND
FORM OF PAYMENT
5.1 Benefit Commencement Date
– Later of Separation from Service or Attainment of Age
55 .
(a) Payment of the
Equivalent Actuarial Value of a Participant’s Vested Benefit
shall commence within 60 days after the later of: (i) the
first day of the month coincident with or next following the date
of the Participant’s Separation from Service with an
Employer; or (ii) the first day of the month coincident with
or next following the Participant’s 55
th
birthday; provided,
however, if a Participant is a “Specified Employee” as
such term is defined in Section 409A(a)(2)(A) of the Code, no
distribution may be made before the earlier of (i) the date
which is six months after the date of the Participant’s
Separation from Service from the Company or, (ii) the date of
the Participant’s death.
(b) If the
Participant’s Separation from Service is due to an
Involuntary Termination without Cause, the Participant shall be
entitled to the Equivalent Actuarial Value of his or her Vested
Enhanced Benefit, which shall commence to be paid within 60 days
after the later of: (i) the first day of the 25
th
month following the
Participant’s Separation from Service with the Employer or
(ii) the first day of the month coincident with or next
following the Participant’s 55 th birthday.
5.2 Benefit Commencement Date
– Disability . Notwithstanding anything in the Plan to
the contrary, if a Participant incurs a Disability, whether prior
to or after the Participant’s Separation from Service, as a
result of a condition that arose prior to the
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Participant’s Separation from Service and
the Participant had 10 years of Continuous Service at the time of
Separation from Service, the Participant shall receive a benefit
equal to the excess of the benefit calculated pursuant to
Section 4.1 above, provided that such benefit shall not be
reduced for the Equivalent Actuarial Value, over the benefit, if
any, then actually being provided by reason of the
Participant’s Separation from Service (the “Disability
Benefit”). A Participant’s Disability Benefit shall
begin to be paid within 60 days after the first day of the month
coincident with or next following the date of the
Participant’s Disability; provided that the Participant
remits the letter from the Social Security Administration within 10
business days following the Participant’s receipt of such
letter.
5.3 Benefit Commencement Date
– Terminated Participants .
(a) Notwithstanding anything in the
Plan to the contrary, and except as provided in subsection
(b) below, if a Participant (a) has terminated employment
with an Employer on or prior to December 31, 2008,
(b) has not begun receiving benefits hereunder on or prior to
December 31, 2008, and (c) has attained age 55 on or
before March 1, 2009, the Participant shall begin to receive
the Equivalent Actuarial Value of his or her Vested Benefit on
March 1, 2009 under Exhibit 2, attached hereto, based
on the Participant’s age on March 1, 2009.
(b) Notwithstanding anything in the
Plan to the contrary, if a Participant (a) has terminated
employment with an Employer on or prior to December 31, 2008,
(b) is entitled to receive or is receiving severance benefits
as of January 1, 2009 as a result of such termination of
employment, and (c) has not begun receiving benefits hereunder
on or prior to December 31, 2008, such Participant shall begin
to receive the equivalent actuarial value of his or her Vested
Benefit on the dates set forth in Appendix A attached
hereto. For purposes of this Section 5.3(b) and
notwithstanding anything in the Plan to the contrary, the
Participant’s benefit hereunder shall
be calculated as of the respective Benefit
Commencement Date listed on Appendix A .
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5.4 Form of Payment .
Benefits payable to a Participant under the Plan shall be
distributed
