TDS Amended and Restated Compensation Plan for Non-Employee Directors, dated December 7, 2017

EX-10.4 2 tdsexhibit10_4.htm EX-10.4

 


Exhibit 10.4

 

TELEPHONE AND DATA SYSTEMS, INC.
Amended and Restated Compensation Plan for Non-Employee Directors

 

Dated December 7, 2017
 

Recitals

The Board of Directors and shareholders of Telephone and Data Systems, Inc. (the “Company”) previously adopted a Restated Compensation Plan for Non-Employee Directors dated as of March 8, 2013 (the “2013 Restated Plan”). 

 

On December 7, 2017, the Board of Directors of the Company approved amendments to the 2013 Restated Plan (as amended, the “2017 Restated Plan”), to increase the Stock Award (as defined below) from $80,000 to $100,000, effective as of March 1, 2017, and, subject to shareholder approval, to increase the number of the Company’s Common Shares that may be issued under such plan. 

 

The purpose of the 2017 Restated Plan is to provide appropriate compensation to non-employee directors for their service to the Company and to ensure that qualified persons serve as non-employee members of the Board of Directors.

 

The 2017 Restated Plan was approved pursuant to the authority granted in Section 2.22 of Article II of the Company’s By-Laws, which provides that the Board of Directors shall have authority to establish reasonable compensation of directors, including reimbursement of expenses incurred in attending meetings of the Board of Directors.

 

The 2017 Restated Plan shall be submitted for approval by shareholders of the Company.

 

Effectiveness of 2017 Restated Plan

 

The increase in the Stock Award (as defined below) from $80,000 to $100,000 approved by the Board of Directors on December 7, 2017 is effective as of March 1, 2017.   The 2017 Restated Plan shall be submitted to the shareholders of the Company for approval at the 2018 Annual Meeting of shareholders and, if approved, the increase in the number of the Company’s Common Shares that may be issued under such plan shall become effective as of the date of such approval. 

 

Board Service

 

Each director of the Company who is not an employee of the Company, TDS Telecommunications Corporation, United States Cellular Corporation or any other subsidiary of the Company (“non-employee director”) will receive:

 

  1. An annual director’s retainer fee, paid in cash (“Cash Retainer”), (i) in the case of the Chairperson of the Board of Directors, of $100,000, and (ii) in the case of non-employee directors other than the Chairperson of the Board of Directors, of $80,000.

 

  1. An annual award of $100,000 paid in the form of the Company’s Common Shares (“Stock Award”), which shall be distributed in March on or prior to March 15 of each year, for services performed during the 12 month period that commences on March 1 of the immediately preceding calendar year and ends on the last day of February of the calendar year of payment.  The number of shares shall be determined on the basis of the closing price of the Company’s Common Shares, as reported in the New York Stock Exchange Composite Transaction section of the Wall Street Journal, for the first trading day in the month of March of the calendar year of payment. 

 

  1. A director’s meeting fee of $1,750 for each meeting attended and reimbursement of reasonable expenses incurred in connection with attendance at meetings of the Board of Directors, paid in cash.

 



 

 

 


 


Audit Committee Service

 

Each non-employee director who serves on the Audit Committee, other than the Chairperson, will receive an annual committee retainer fee of $11,000, a committee meeting fee of $1,750 for each meeting attended and reimbursement of reasonable expenses incurred in connection with attendance at meetings of the Audit Committee.  The Audit Committee Chairperson will receive an annual committee retainer fee of $22,000, a committee meeting fee of $1,750 for each meeting attended and reimbursement of reasonable expenses incurred in connection with attendance at such meetings.

 

Compensation Committee Service

 

Each non-employee director who serves on the Compensation Committee, other than the Chairperson, will receive an annual committee retainer fee of $7,000, a committee meeting fee of $1,750 for each meeting attended and reimbursement of reasonable expenses incurred in connection with attendance at meetings of the Compensation Committee.  The Compensation Committee Chairperson will receive an annual committee retainer fee of $14,000, a committee meeting fee of $1,750 for each meeting attended and reimbursement of reasonable expenses incurred in connection with attendance at such meetings.


 

 

 


 


Corporate Governance and Nominating Committee Service

 

Each non-employee director who serves on the Corporate Governance and Nominating Committee, other than the Chairperson, will receive an annual committee retainer fee of $5,000, a committee meeting fee of $1,750 for each meeting attended and reimbursement of reasonable expenses incurred in connection with attendance at meetings of the Corporate Governance and Nominating Committee.  The Corporate Governance and Nominating Committee Chairperson will receive an annual committee retainer fee of $10,000, a committee meeting fee of $1,750 for each meeting attended and reimbursement of reasonable expenses incurred in connection with attendance at such meetings.

 

Other Meetings or Activities of Non-Employee Directors

 

The Board of Directors may also authorize the payment of fees and reimbursement of reasonable expenses incurred in connection with other meetings (such as meetings of the independent directors) or activities of the non-employee directors.

 

Miscellaneous

 

Under the 2017 Restated Plan, annual retainers will be paid in cash on a quarterly basis, as of the last day of each calendar quarter, and will compensate the non-employee director for services performed during such calendar quarter.

 

Fees for meetings of the board, all committee meetings and other meetings and activities will be paid in cash on a quarterly basis, as of the last day of each calendar quarter, and will compensate the non-employee director for meetings and activities attended during such calendar quarter.

 

Non-employee directors shall timely submit for reimbursement their reasonable expenses incurred in connection with meeting attendance or other activities, and the Company shall reimburse such expenses within two weeks after submission.

The directors of the Company shall have the authority without further shareholder approval to further amend this 2017 Restated Plan from time to time, including amendments to increase the amount of the compensation payable in Common Shares from time to time, provided that the total number of Common Shares issued under the 2016 Restated Plan shall not exceed the number previously approved by shareholders of the Company.

 

Shareholders of the Company previously approved the issuance of Common Shares under the 2013 Restated Plan, 85,393 of which remain unissued as of the above date. 

 

Subject to approval by shareholders of the Company, the total number of Common Shares that may be issued under the 2017 Restated Plan shall be increased by 200,000 Common Shares.

 

Subject to shareholder approval and effectiveness of the 2017 Restated Plan, pursuant to Section 303A.08 of the New York Stock Exchange Listed Company Manual, the authorization to issue Common Shares under the 2017 Restated Plan shall expire ten years after the date of such shareholder approval, unless reapproved by shareholders. If for any reason shares cannot be issued pursuant to the requirements of the New York Stock Exchange or otherwise, the value of such shares that cannot be issued shall be paid in the form of cash.