Document:

Exhibit 10.22

 

HAWAIIAN TELCOM HOLDCO, INC. 
 EXECUTIVE SEVERANCE PLAN

 

(amended and restated effective June 12, 2015)

 

INTRODUCTION

 

The purpose of the Hawaiian Telcom Holdco, Inc. Executive Severance Plan (the “Plan”) is to retain key employees and to encourage such employees to use their best business judgment in managing the affairs of Hawaiian Telcom Holdco, Inc. and its subsidiaries and affiliates (the “Company”). Therefore, Hawaiian Telcom Holdco, Inc. is willing to provide the severance benefits described below to protect these employees in the event of an involuntary termination. It is further intended that this Plan will complement other compensation program components to assure a sound basis upon which the Company will retain key employees.

 

Article 1 
 Definitions and Exclusions

 

Whenever used in this Plan, the following words and phrases shall have the meanings set forth below. When the defined meaning is intended, the term is capitalized:

 

1.1.                            “Base Salary” means the total amount of base salary payable to a participant at the salary rate in effect immediately prior to the participant’s Separation from Service with the Company. Base Salary does not include bonuses, reimbursed expenses, credits or benefits under any plan of deferred compensation, to which the Company contributes, or any additional cash compensation or compensation payable in a form other than cash.

 

1.2.                            “Board of Directors” shall mean the Board of Directors of Hawaiian Telcom Holdco, Inc..

 

1.3.                            “Cause” to terminate a participant’s employment shall include any of the following facts or circumstances:

 

(a)         the participant’s failure to follow a legal order of the Board of Directors, other than any such failure resulting from the participant’s Disability, and such failure is not remedied within 30 days after receipt of written notice;

 

(b)         the participant’s gross or willful misconduct in the performance of duties that causes or is reasonably likely to cause damage to the Company;

 

(c)          the participant’s conviction of felony or crime involving material dishonesty or moral turpitude;

 

(d)         the participant’s fraud or, other than with respect to a de minimis amount, personal dishonesty involving the Company’s assets; or

 

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(e)          the participant’s unlawful use (including being under the influence) or possession of illegal drugs on the Company’s premises or while performing the participant’s duties and responsibilities to the Company.

 

Prior to a termination pursuant to subsection 1.3(c) above, the Company shall conduct a reasonable investigation to determine, based on the information reasonably available to the Company, whether Cause for termination exists.

 

1.4.                            “Compensation Committee” means the Compensation Committee of the Board of Directors.

 

1.5.                            “Disability” shall mean the absence of a participant from the participant’s duties to the Company on a full-time basis for a total of 6 months during any 12-month period as a result of incapacity due to mental or physical illness, which determination is made by a physician selected by the Company and acceptable to the participant or the participant’s legal representative (such agreement as to acceptability not to be withheld unreasonably). Notwithstanding the foregoing, a Disability shall not be “incurred” hereunder until, at the earliest, the last day of the 6th month of such absence and in no event shall the participant be determined to be Disabled unless such physician determines that such illness can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

 

1.6.                            “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

1.7.                            “General Release” means a full and complete general waiver and release of all claims that a participant may have against the Company or persons affiliated with the Company in the form provided by the Company.

 

1.8.                            “Good Reason” means a participant’s resignation due to the occurrence of any of the following conditions which occurs without the participant’s written consent, provided that the requirements regarding advance notice and an opportunity to cure set forth below are satisfied:

 

(a)                                 a material diminution in the authority, duties or responsibilities of the participant or the supervisor to whom the participant is required to report;

 

(b)                                 the Company’s material breach of this Plan or the participant’s employment offer letter or employment agreement (including, without limitation, the Company’s material failure to provide payments or benefits required under this Plan or the participant’s employment offer letter or employment agreement); or

 

(c)                                  the relocation of the participant’s principal office, without his or her consent, to a location that is in excess of 100 miles from Honolulu, Hawaii.

 

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In order for a participant to resign for Good Reason, the participant must provide written notice to Hawaiian Telcom Holdco, Inc. of the existence of the Good Reason condition within 90 days of the initial existence of such Good Reason condition. Upon receipt of such notice,  Hawaiian Telcom Holdco, Inc. will have 30 days during which it may remedy the Good Reason condition. If the Good Reason condition is not remedied within such 30 day period, the participant may resign based on the Good Reason condition specified in the notice effective no later than 30 days following the expiration of Hawaiian Telcom Holdco, Inc.’s 30-day cure period.

 

1.9.                            “Involuntary Separation from Service” shall have the meaning set forth in Treasury Regulation 1.409A-1(n).

 

1.10.                     “Separation from Service” shall have the meaning set forth in Treasury Regulation 1.409A-1(h).

 

Article 2 
 Eligibility for Benefits

 

2.1.                            Eligibility. The Company’s executives at the Senior Vice President and higher level, hired by the Company after December 7, 2012, are eligible for Plan benefits. Exceptions (additions or deletions) to the eligibility requirements can be made only by Hawaiian Telcom Holdco, Inc.’s Chief Executive Officer (“CEO”), with the approval of the Compensation Committee.

 

2.2.                            Benefits.  If a participant experiences (a) a Separation from Service as a result of the participant’s death or Disability or (b) an Involuntary Separation from Service by the Company without Cause or as a result of the participant’s resignation for Good Reason, the Company shall pay to the participant the severance benefits described in Section 3.2.  Notwithstanding anything stated herein or in any other plan, program, arrangement or agreement otherwise, a participant receiving benefits under this Plan shall not be eligible for severance benefits under any other severance plan, policy or arrangement sponsored by the Company or any other written agreement by and between the Company and the participant, including without limitation, any employment offer letter or employment agreement, whether entered into before or after this Plan is adopted by the Company.

 

2.3.                            Notice of Termination.  Any termination of a participant’s employment by the Company or by the participant (other than termination that occurs as a result of the participant’s death) shall be communicated by a written notice to the other party indicating the specific basis for the termination, referencing the applicable provisions of this Plan, and specifying a termination date.  Any notice of termination submitted by a participant shall specify a termination date that is at least 30 days following the date of such notice; provided, however, the Company may, in its sole discretion, change the termination date to any date following the Company’s receipt of the notice of termination. Except as set forth below with respect to a termination as a result of a participant’s Disability, any notice of termination submitted by the Company may provide for any termination date (e.g., the date the participant receives the notice of termination, or any date thereafter specified by the Company in its sole discretion). Any notice of termination submitted by the Company where the basis for the termination is a participant’s Disability shall specify a termination date that is 30 days after receipt of such notice by the participant, and participant’s termination shall be effective as of such date, 

 

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provided that, within the 30 days after such receipt, the participant shall not have returned to the full-time performance  of his or her duties.  This Section 2.3 shall be construed in a manner consistent with the requirements of the Americans with Disabilities Act and Hawaii Employment Practices law. The failure by a participant or the Company to set forth in the notice of termination any fact or circumstance that contributes to a showing of Cause or Good Reason shall not waive any right of the participant or the Company or preclude the participant or the Company from asserting such fact or circumstance in enforcing the participant’s or the Company’s rights.

 

2.4.                            Plan Administration. The Compensation Committee, or such other committee as may be appointed by the Board of Directors from time to time, shall administer this Plan (the “Plan Administrator”). The Plan Administrator is responsible for the general administration and management of this Plan and shall have all powers and duties necessary to fulfill its responsibilities, including, but not limited to, the discretion to interpret and apply this Plan and to determine all questions relating to eligibility for benefits. This Plan shall be interpreted in accordance with its terms and their intended meanings. However, the Plan Administrator and all plan fiduciaries shall have the discretion to interpret or construe ambiguous, unclear, or implied (but omitted) terms in any fashion they deem to be appropriate in their sole discretion, and to make any findings of fact needed in the administration of this Plan. The validity of any such interpretation, construction, decision, or finding of fact shall not be given de novo review if challenged in court, by arbitration, or in any other forum, and shall be upheld unless clearly arbitrary or capricious.

 

Article 3 
 Severance Benefits

 

3.1.                            Termination for Cause or Resignation without Good Reason.  If a participant’s employment is terminated by the Company for Cause, or by participant without Good Reason, the participant shall not be entitled to any severance payments or benefits.

 

3.2.                            Termination.

 

(a)         Termination upon Death or Disability.  If a participant experiences a Separation from Service as a result of such participant’s death or Disability, such participant (or the participant’s estate) will receive the following severance payments and benefits from the Company:

 

(i)             Severance Pay.  The Company will continue to pay, in separate and distinct equal installment payments in accordance with the Company’s regular payroll practice at the time of the participant’s Separation from Service, the participant’s Base Salary for the period beginning on the date of such Separation from Service and ending, (a) for the CEO, on the twelve (12) month anniversary of the date of the CEO’s Separation from Service, and (b) for participants other than the CEO, on the six (6) month anniversary of the date of the participant’s Separation from Service.

 

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(ii)          Performance Compensation Plan Award Severance.  The Company will pay the participant a pro-rated amount of his or her annual award under the Company’s Performance Compensation Plan for the year of termination, with such prorated amount equal to the award the participant would have received had he or she continued to be employed by the Company until the date such awards are paid multiplied by a fraction, the numerator of which is the total number of days the participant was employed by the Company during the calendar year and the denominator of which is 365, based on actual performance in relation to the performance targets set forth in the Performance Compensation Plan (such amount to be determined in good faith by the Compensation Committee and paid in the calendar year following the calendar year in which the participant’s Separation from Service occurs at such time as awards are paid to other executive officers who participate in the Performance Compensation Plan).

 

(b) Termination without Cause or Resignation for Good Reason. If a participant experiences an Involuntary Separation from Service by the Company without Cause or as a result of the participant’s resignation for Good Reason, the participant will receive the following severance payments and benefits from the Company:

 

(i)             Severance Pay.

 

(A)                   The Company will continue to pay, in separate and distinct equal installment payments in accordance with Company’s standard payroll procedures at the time of the participant’s Separation from Service, (1) to the CEO, 150% of the CEO’s Base Salary, and (2) to participants other than the CEO, the participant’s Base Salary, in each case for the period beginning on the date of such Separation from Service and ending on the earliest to occur of (a)(i) for the CEO, the eighteen (18) month anniversary of the date of the CEO’s Separation from Service, and (ii) for participants other than the CEO, the twelve (12) month anniversary of the date of the participant’s Separation from Service, (b) the first date the participant violates any restrictive covenant that may be described in his or her employment offer letter or employment agreement, including, without limitation, any non-competition, non-solicitation, non-disparagement or confidentiality covenant, (c) the fifth day following the date of the participant’s termination in the event the Company has not received by that date a General Release executed by the participant and the participant’s voluntary waiver of any review period, or (d) the first date of the participant’s revocation of the General Release (such period ending on the earliest of such dates, the “Severance Period”).

 

(ii)          Health Insurance.  Continued coverage (at the Company’s expense), for the Severance Period, for the participant and any dependents under the Company group health plan in which the participant and any dependents were entitled to participate immediately prior to the Separation from Service, excluding Exec-U-Care or similar supplemental coverage policies for senior executives. If the foregoing coverage is not available, and if the participant elects to continue his or her health insurance coverage (excluding Exec-U-Care or similar supplemental coverage policies for senior executives) under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), then the Company will pay 100% of the participant’s monthly premiums due for such COBRA coverage from the first date on which the participant loses health coverage as an employee of the Company (with any payments commencing after such date being made retroactively to such date) through the date the Company has paid for COBRA premiums for a length of time equal to the Severance Period or, if earlier, the expiration of the participant’s coverage under COBRA or the date when the participant receives substantially equivalent health insurance coverage in connection with new employment or self-employment.

 

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(iii)       Performance Compensation Plan Award Severance.  The Company will pay the participant a pro-rated amount of his or her annual award under the Company’s Performance Compensation Plan for the year of termination, with such prorated amount equal to the award the participant would have received had he or she continued to be employed by the Company until the date such awards are paid multiplied by a fraction, the numerator of which is the total number of days the participant was employed by the Company during the calendar year and the denominator of which is 365, based on actual performance in relation to the performance targets set forth in the Performance Compensation Plan (such amount to be determined in good faith by the Compensation Committee and paid in the calendar year following the calendar year in which the participant’s Separation from Service occurs at such time as awards are paid to other executive officers who participate in the Performance Compensation Plan).

 

3.3.                            Code Section 409A. For purposes of Section 409A of the Internal Revenue Code of 1986, as amended, the regulations and other guidance there under and any state law of similar effect (collectively “Section 409A”), each payment that is paid pursuant to this Plan is hereby designated as a separate payment.  The parties intend that all payments made or to be made under this Plan comply with, or are exempt from, the requirements of Section 409A so that none of the payments or benefits will be subject to the adverse tax penalties imposed under Section 409A, and any ambiguities herein will be interpreted to so comply or be so exempt.  Specifically, any severance payments made in connection with the participant’s Separation from Service under this Plan and paid on or before the 15th day of the 3rd month following the end of the participant’s first tax year in which the participant’s Separation from Service occurs or, if later, the 15th day of the 3rd month following the end of the Company’s first tax year in which the participant’s Separation from Service occurs, shall be exempt from Section 409A to the maximum extent permitted pursuant to Treasury Regulation Section 1.409A-1(b)(4) and any additional severance provided in connection with the participant’s Separation from Service under this Plan shall be exempt from Section 409A to the maximum extent permitted pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii) (to the extent it is exempt pursuant to such section it will in any event be paid no later than the last day of the participant’s 2nd taxable year following the taxable year in which the participant’s Separation from Service occurs).  Notwithstanding the foregoing, if any of the payments provided in connection with the participant’s Separation from Service do not qualify for any reason to be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(4), Treasury Regulation Section 1.409A-1(b)(9)(iii), or any other applicable exemption and the participant is, at the time of the participant’s Separation from Service, a “specified employee,” as defined in Treasury Regulation Section 1.409A-1(i), each such payment will not be made until the first regularly scheduled payroll date of the 7th month after the participant’s Separation from Service and, on such date (or, if earlier, the date of the participant’s death), the participant will receive all payments that would have been paid during such period in a single lump sum.  Any lump sum payment of delayed payments pursuant to the preceding sentence shall be paid with interest to reflect the period of delay, with such interest to accrue at the prime rate in effect at Citibank, 

 

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N.A. at the time of the participant’s Separation from Service. Any remaining payments due under the Plan shall be paid as otherwise provided herein. The determination of whether the participant is a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i) as of the time of such Separation from Service shall made by the Company in accordance with the terms of Section 409A.

 

Article 4 
 Employment Status

 

4.1.                            Right to Terminate Employment. This Plan shall not be deemed to constitute an employment contract between the Company and any participant. Nothing contained herein shall give any participant the right to be retained in the employ of the Company or to interfere with the right of the Company to discharge the participant at any time, nor shall it give the Company the right to require the participant to remain in its employ or to interfere with the participant’s right to terminate employment at any time.

 

4.2.                            Status During Benefit Period. Commencing upon the date of the participant’s Separation from Service, the participant shall cease to be an employee of the Company for any purpose. The payment of severance benefits under this Plan shall be payments to a former employee.

 

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Article 5 
 Claims and Review Procedures

 

5.1.                            Claims Procedure. Severance benefits will be provided to each participant in the amount determined hereunder by Hawaiian Telcom Holdco, Inc.  If a participant believes he or she has not been provided with the severance pay benefits to which he or she is entitled under this Plan, then the participant may file a request for review within 90 days after the date he or she should have received such benefits according to the Plan.  The request for review must be submitted to the Plan Administrator.  The Plan Administrator will respond to the request for review within 90 days after it is received, setting forth the reasons for its determination in writing.  If the participant’s request for review is denied, the participant or the participant’s duly authorized representative may, within 60 days after receiving written notice of such denial, file a written appeal with the Plan Administrator setting forth the reasons for disagreeing with the initial determination including any documents or records which support the participant’s appeal.  The Plan Administrator shall respond to this appeal within 60 days after it is received, setting forth the reasons for its determination in writing.  The participant may review pertinent Plan documents and his or her employment records, and as part of the written request for review may submit issues and comments concerning the claim.

 

5.2.                            Authority. In determining whether to approve or deny any claim or any appeal from a denied claim, the Plan Administrator shall exercise its discretionary authority to interpret the Plan and the facts presented with respect to the claim, and its discretionary authority to determine eligibility for benefits under the Plan. Any approval or denial shall be final and conclusive upon all persons.

 

5.3.                            Exhaustion of Remedies. Except as required by applicable law, no action at law or equity shall be brought to recover a benefit under the Plan unless and until the claimant has: (a) submitted a claim for benefits, (b) been notified by the Plan Administrator that the benefits (or a portion thereof) are denied, (c) filed a written request for a review of denial with the Plan Administrator, and (d) been notified in writing that the denial has been affirmed.

 

Article 6 
 Information Required by ERISA

 

6.1.                            Plan Information.  The Plan is administered by Hawaiian Telcom Holdco, Inc.  The Plan sponsor’s and Plan Administrator’s name, address, telephone number, employer identification number and Plan number are as follows:

 

	
Plan Name:
    	
Hawaiian Telcom Holdco, Inc. Executive   Severance Plan
    
	
 
    	
 
    
	
Plan Sponsor/
    	
Hawaiian Telcom Holdco, Inc.
    
	
Administrator:
    	
c/o Compensation Committee
    
	
 
    	
1177 Bishop Street
    
	
 
    	
Honolulu, Hawaii   96813
    
	
 
    	
 
    
	
Telephone No.:
    	
(808) 546-4511
    
	
Employer I.D. No.:
    	
16-1710376
    
	
 
    	
 
    
	
Plan No.:
    	
507
    
	
Plan Year:
    	
January 1 through December 31
    
	
Effective Date:
    	
December 17, 2012
    

 

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6.2.                            Type of Plan.                       This is an unfunded welfare benefit severance plan.  The Company provides benefits from its general assets.

 

6.3.                            Agent for Service of Legal Process. The name and address of the person designated as agent for service of legal process is the same as the name and address of the Plan Administrator.

 

6.4.                            Statement of ERISA Rights.  Participants in this Plan are entitled to certain rights and protections under ERISA.  ERISA provides that all Plan participants shall be entitled to:

 

(a)        Examine, without charge, at the Plan Administrator’s office, all Plan documents, including the Plan instrument (which is this document) and copies of all documents filed by the Plan Administrator with the Department of Labor.

 

(b)        Copies of all Plan documents and other Plan information may also be obtained upon written request to the Plan Administrator; provided, however, that a reasonable charge may be made for copies.

 

In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of this Plan.  The people who operate the Plan have a duty to do so prudently and in the interest of Plan participants and beneficiaries.  However, employees and agents of the Company carrying out their responsibilities with respect to the Plan are acting as representatives of the Company and not as fiduciaries in their own right.  No one, including a participant’s employer or any other person, may fire a participant or otherwise discriminate against a participant in any way to prevent a participant from obtaining benefits or exercising the participant’s rights under ERISA.  If a participant’s claim for benefits is denied in whole or in part, the participant must receive a written explanation of the reason for this denial.  A participant has the right to have the Plan Administrator review and reconsider the participant’s claim, as described elsewhere in this document.

 

Under ERISA, there are several steps a participant can take to enforce the above rights.  For instance, if a participant requests certain materials required to be furnished by the Plan and the participant does not receive them within 30 days, a participant may file suit in federal court.  In such a case, the court may require that the participant be provided with the materials and may fine the Company up to $100 a day until the participant receives them, unless the materials were not sent because of reasons beyond the Plan Administrator’s control.  If a participant has a claim for benefits which is denied or ignored in whole or in part, the participant may file suit in a state or federal court.  If a participant is discriminated against for asserting the participant’s rights, the participant may seek assistance from the United States Department of Labor or the participant may file suit in federal court.  The court will decide who should pay the court costs and legal fees.  If a participant is successful, the court may order the person the participant has sued to pay these  costs and fees.  If a participant loses, the court may order the participant to pay these costs and fees if, for example, it finds the participant’s claim is frivolous.

 

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If any participant has any questions about this Plan, the participant should contact the Plan Administrator.  If any participant has any questions about this statement or about the participant’s rights under ERISA, the participant should contact the nearest office of the Labor-Management Services Administration, United States Department of Labor.

 

6.5.                            Plan Administration and Interpretations.  Hawaiian Telcom Holdco, Inc. is the named fiduciary, which has the authority to control and manage the operation and administration of the Plan.  Hawaiian Telcom Holdco, Inc. shall make such rules, regulations and computations and shall take such other actions to administer the Plan as it may deem appropriate.  Hawaiian Telcom Holdco, Inc. shall have sole and complete discretion to interpret and administer the terms of the Plan and to determine eligibility for benefits and the amount of any such benefits pursuant to the terms of the Plan.  In administering the Plan, Hawaiian Telcom Holdco, Inc. shall act in a nondiscriminatory manner to the extent legally required and shall at all times discharge its duties with respect to the Plan in accordance with the standards set forth in Section 404(a)(1) and other applicable sections of ERISA.

 

Article 7 
 Amendment and Termination

 

It is intended that the Plan shall continue from year to year, subject to an annual review by the Board of Directors or the Compensation Committee. However, the Board of Directors and the Compensation Committee reserves the right to modify, amend or terminate the Plan at any time; provided, that no amendment or termination shall be made that would materially and adversely affect the rights of any participant without his or her consent.

 

Article 8 
 Miscellaneous

 

8.1.                            Benefits Non-Assignable. No right or interest of a participant in this Plan shall be assignable or transferable, in whole or in part, either directly or by operation of law or otherwise, including but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy, assignments for the benefit of creditors, receiverships, or in any other manner, excluding transfer by operation of law as a result solely of mental incompetency.

 

8.2.                            Withholding and Required Deductions. The severance benefits payable under this Plan are subject to all withholding and any other deductions required by applicable law.

 

8.3.                            Applicable Law. This Plan is a welfare plan subject to ERISA and it shall be interpreted, administered, and enforced in accordance with that law.

 

8.4.                            Severability. If any provision of this Plan is held invalid or unenforceable by a court of competent jurisdiction, all remaining provisions shall continue to be fully effective.

 

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8.5.                            Binding Agreement. This Plan shall be binding upon and inure to the benefit of the Company, its successors and assigns, and the participants and their heirs, executors, administrators and legal representatives.

 

IN WITNESS WHEREOF, Hawaiian Telcom Holdco, Inc. has caused this amended and restated Plan to be executed by its duly authorized officer effective as of the 12th day of June, 2014.

 

 

	
 
    	
HAWAIIAN TELCOM HOLDCO, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Eric K.   Yeaman
    
	
 
    	
 
    	
Eric K. Yeaman
    
	
 
    	
 
    	
Its President   and Chief Executive Officer
    

 

11Exhibit 10.1  (10-Q 06.30.15)

Exhibit 10.1

AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
OF
TENNESSEE VALLEY  AUTHORITY

Effective October 1, 1995
(Amended effective May 1, 2015)

1

TABLE OF CONTENTS
Page
	
			
	SECTION 1

	PURPOSE AND SCOPE........................................................................................................
	4
	

	1.1     Establishment............................................................................................................
	4
	

	1.2     Purpose.....................................................................................................................
	4
	

	SECTION 2
	 

	DEFINITIONS........................................................................................................................
	4
	

	2.1     Accrued Benefit.........................................................................................................
	4
	

	2.2     Actuarial Equivalent...................................................................................................
	4
	

	2.3     Approved Termination................................................................................................
	4
	

	2.4     Average Compensation.............................................................................................
	5
	

	2.5     Beneficiary.................................................................................................................
	5
	

	2.6     Board.........................................................................................................................
	5
	

	2.7     Compensation...........................................................................................................
	5
	

	2.8     Credited Service .......................................................................................................
	5
	

	2.9     Date of Benefit Commencement...............................................................................
	5
	

	2.10   Normal Retirement Date............................................................................................
	5
	

	2.11   Participants................................................................................................................
	5
	

	2.12   Plan Year...................................................................................................................
	5
	

	2.13   Prior Employer Offset................................................................................................
	6
	

	2.14   Qualified Plan............................................................................................................
	6
	

	2.15   Qualified Plan Offset..................................................................................................
	6
	

	2.16   Retirement Committee..............................................................................................
	6
	

	2.17   Separation from Service............................................................................................
	6
	

	2.18   Social Security Offset................................................................................................
	6
	

	2.19   Unapproved Termination...........................................................................................
	7
	

	2.20   TVA's Nonelective Contributions...............................................................................
	7
	

	SECTION 3
	 

	PARTICIPATION....................................................................................................................
	7
	

	3.1     Tier One Eligibility......................................................................................................
	7
	

	3.2     Tier Two Eligibility......................................................................................................
	7
	

2

	
			
	SECTION 4

	BENEFIT ELIGIBILITY AND CALCULATION.........................................................................
	7
	

	4.1     Vesting.......................................................................................................................
	7
	

	4.2     Accrued Benefit.........................................................................................................
	7
	

	4.3     Benefit Payable for Approved Termination................................................................
	8
	

	4.4     Benefit Payable for Death Prior to Date of Benefit Commencement.........................
	8
	

	4.5     Benefit Payable for Unapproved Termination............................................................
	8
	

	4.6     Benefit Payable for Change in Role..........................................................................
	9
	

	SECTION 5

	PAYMENT OF BENEFITS......................................................................................................
	9
	

	5.1     Terms and Conditions of Benefit Payments...............................................................
	9
	

	5.2     Payment to Beneficiary..............................................................................................
	10
	

	5.3     Alienation of Benefits Prohibited................................................................................
	10
	

	5.4     Incapacity...................................................................................................................
	10
	

	SECTION 6

	GENERAL PROVISIONS.......................................................................................................
	10
	

	6.1     Funding.....................................................................................................................
	10
	

	6.2     Right to Amend, Suspend, or Terminate....................................................................
	11
	

	6.3     Right to Benefit..........................................................................................................
	11
	

	6.4     Administration of the Plan..........................................................................................
	11
	

	6.5     Titles..........................................................................................................................
	12
	

	6.6     Governing Law..........................................................................................................
	12
	

	6.7     Separability................................................................................................................
	12
	

	6.8     Authorized Officers....................................................................................................
	12
	

	6.9     Certain Rights and Limitations..................................................................................
	12
	

	6.10   Compliance with Section 409A..................................................................................
	12
	

3

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective May 1, 2015

1.    PURPOSE AND SCOPE

1.1    Establishment. The Tennessee Valley Authority (TVA) hereby establishes, effective October 1, 1995, an unfunded supplemental retirement plan for selected employees and their beneficiaries as described herein, which shall be known as the "Supplemental Executive Retirement Plan" (the "Plan").

		
	1.2
	Purpose.  The purpose of the Plan is: (a) to provide a competitive retirement benefit level that cannot be delivered solely through TVA’s qualified retirement plans due to IRS limitations and (b) to provide a benefit level (as a percentage replacement of pre-retirement pay) that is more comparable to that of employees who are not subject to the IRS limitations.

2.    DEFINITIONS

Wherever used herein, the following terms have the meaning set forth below, unless a different meaning is clearly required by the context:

		
	2.1
	"Accrued Benefit" means an annual benefit commencing at the later of (a) the Normal Retirement Date or (b) the Participant's age at the time of Separation from Service, and continuing during the expected lifetime of the Participant based on the applicable mortality table used by the TVA Retirement System.

		
	2.2
	"Actuarial Equivalent" means a benefit of equal value to a benefit otherwise payable in a different form or at a different time under the Plan, when computed on the basis of the mortality and interest rate used by the TVA Retirement System as in effect on the date distribution is made.

		
	2.3
	"Approved Termination" means termination of employment with TVA due to (a) retirement on or after the Participant's Normal Retirement Date, (b) retirement on or after attainment of actual age 55, if such retirement has the approval of the Board or its delegatee, (c) death in service as an employee, (d) disability (as such term is defined under the Rules and Regulations of the TVA Retirement System) as determined by the Retirement Committee, or (e) any other circumstances approved by the Board or its delegatee.

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	2.4
	"Average Compensation" means the highest average of Compensation during three consecutive Plan Years.   If a Participant has been an employee of TVA for less than three Plan Years, the average shall be determined based on the period of employment.

		
	2.5
	"Beneficiary" shall mean the person or persons, designated in writing by a Participant, who are to receive a benefit under this Plan in the event of a Participant's death. In the absence of any designated beneficiary or in the event that the designated beneficiary is deceased, then the beneficiary shall be the Participant's estate.

		
	2.6
	"Board" means the Board of Directors of TVA.

		
	2.7
	"Compensation" means the sum of annual salary, unreduced by contributions under Internal Revenue Code sections 125, 132 and 402 (a)(8), plus annual incentive award.

		
	2.8
	"Credited Service" means actual service with TVA plus any additional service which the Board, or its delegatee, approves under this Plan.

		
	2.9
	"Date of Benefit Commencement" means the date benefit payments begin upon the later of (a) the date the Participant turns age 55, or (b) the date of the Participant’s Separation from Service. 

		
	2.10
	"Normal Retirement Date" shall mean the first of the month coincident with or next following the date on which the Participant has attained age 62.

		
	2.11
	"Participants" shall mean those employees participating in the Plan as provided in section 3.

		
	2.12
	"Plan Year" is TVA's fiscal year, October 1 to September 30.

		
	2.13
	"Prior Employer Offset" means the Actuarial Equivalent of the benefit earned under a prior employers' qualified defined benefit pension plan or plans attributable to prior employer service, which is included in Credited Service under this Plan, assuming benefit payments are to begin at the Normal Retirement Date. A Prior Employer Offset shall only apply if all or a portion of the period of service during which such benefit was earned is included in Credited Service. The Board or its delegatee may, in its sole discretion, waive all or part of the Prior Employer Offset for any Participant.

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	2.14
	"Qualified Plan" means the retirement plan under which a Participant accrues benefits for his or her TVA service and may be any of the TVA Retirement System, the Civil Service Retirement System, or the Federal Employees Retirement System.

		
	2.15
	“Qualified Plan Offset” means, in the absence of separate authorized TVA documentation defining the Qualified Plan offset, the Actuarial Equivalent of the Participant’s benefit, calculated as follows, and assuming the maximum benefit with no survivor elections and benefit payments beginning at the Normal Retirement Date:  

2.15.1 For an employee who first becomes a participant in the TVA Retirement System, Civil Service Retirement System, or Federal Employees Retirement System before July 1, 2014, the product of (a) the Participant’s average compensation (as defined under the Rules and Regulations of the TVA Retirement System), times (b) Credited Service (not to exceed 24 years), times (c) 1.3 percent.

2.15.2 For an employee who first becomes a participant in the TVA Retirement System, Civil Service Retirement System, or Federal Employees Retirement System on or after July 1, 2014, the Participant’s Hypothetical Deferral Plan Account.  Hypothetical Deferral Plan Account shall mean the sum of: (a) TVA’s nonelective contributions, and (b) hypothetical interest on TVA’s nonelective contributions at the rate of 6% per year, applied at the end of each plan year.  This hypothetical interest of 6% per year will in no way be affected by the actual investment return experienced by the Participant with respect to his/her nonelective contributions.

		
	2.16
	"Retirement Committee" means a group of three persons appointed by the Board or its delegatee to administer the Plan.

		
	2.17
	"Separation from Service" or "separates from service" means the same as the term "separation from service" as defined in 26 CFR §1.409A-1(h) of the Internal Revenue Code, Section 409A, final regulations.

2.18   "Social Security Offset" means the primary benefit amount, commencing at the Participant's Normal Retirement Date, that would be calculated under the Social Security Act as in effect at the time of the Participant's Separation from Service. In the event of an Unapproved Termination, the calculation shall be made assuming that the Participant 

6

continued to earn covered compensation until the Participant’s Normal Retirement Date at a rate equal to the maximum taxable wage base.  In the event of an Approved Termination, the calculation shall be made assuming no further compensation is earned.  The Board or its delegatee may, in its sole discretion, waive all or part of the Social Security Offset for any Participant.  

		
	2.19
	"Unapproved Termination" means a termination of employment with TVA that does not constitute an Approved Termination as such term is defined in section 2.3.

		
	2.20
	“TVA’s nonelective contributions” shall have the same definition as found in the Provisions of the Tennessee Valley Authority Savings and Deferral Retirement Plan.

3.    PARTICIPATION

The Board, or its delegatee, shall select individual employees as Participants.  Each Participant so selected shall be designated as a Tier One or a Tier Two Participant.

3.1    Tier One Eligibility.  Effective May 1, 2015, and prospectively only, eligibility to participate in Tier One shall be limited to include the Chief Executive Officer, his or her direct reports at the Executive Vice President, Senior Vice President levels, Chief Nuclear Officer or individual employees designated as participants by the Board or its delegatee.

3.2    Tier Two Eligibility.  Effective May 1, 2015, and prospectively only, eligibility to participate in Tier Two shall be limited to include positions at the Senior Vice President level who are in managerial roles or individual employees designated as participants by the Board or its delegatee.    

4.    BENEFIT ELIGIBILITY AND CALCULATION

		
	4.1
	Vesting. A Participant will vest in his/her Accrued Benefit (a) after five (5) years of actual TVA service, unless otherwise waived by the Board or its delegatee, (b) upon death in service as an employee, or (c) upon disability (as such term is defined under the Rules and Regulations of the TVA Retirement System) as determined by the Retirement Committee.

		
	4.2
	Accrued Benefit.  A Participant's Accrued Benefit is calculated at the time of the Participant's Separation from Service as set forth below:

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	4.2.1
	Tier One Participants. The Accrued Benefit for Tier One Participants shall be equal to (a) the lesser of (i) 2.5 percent of Average Compensation times years of Credited Service and (ii) 60 percent of Average Compensation, minus (b) the sum of the Qualified Plan Offset, the Prior Employer Offset, and the Social Security Offset.

		
	4.2.2
	Tier Two Participants. The Accrued Benefit for Tier Two Participants shall be equal to (a) 1.3 percent, times (b) years of Credited Service, times (c) the difference of (i) Average Compensation minus (ii) earnable compensation as defined in the Qualified Plan.

		
	4.3
	Benefit Payable for Approved Termination.  In the event of an Approved Termination, the Participant shall be eligible to receive a benefit equal to the Accrued Benefit subject to the reduction below. In the event the Participant separates from service prior to the Normal Retirement Date, the Accrued Benefit shall be reduced by 5/12 percent for each month that the Date of Benefit Commencement precedes the Normal Retirement Date; however, in no event shall the benefit be reduced by more than 35 percent.

		
	4.4
	Benefit Payable for Death Prior to Date of Benefit Commencement.  In the event of a Participant's death prior to the Date of Benefit Commencement, the Participant's Beneficiary shall receive a lump-sum benefit that is the Actuarial Equivalent of the Accrued Benefit that would have been payable had the Participant separated from service on the date of death and elected a joint and 50 percent survivor benefit.

		
	4.5
	Benefit Payable for Unapproved Termination.  In the event of an Unapproved Termination, the Participant shall receive a benefit equal to the Accrued Benefit subject to the reductions below.

4.5.1   In the event the Participant has less than ten (10) years of Credited Service at the time of Separation from Service, the Accrued Benefit shall be reduced by 10 percent for each full year of Credited Service less than ten (10) years.

4.5.2   In the event the Participant separates from service prior to the Normal Retirement Date, the Accrued Benefit, as reduced in section 4.5.1 above, shall be further reduced by 10/12 percent for each month that the Date of Benefit Commencement precedes the Normal 

8

Retirement Date; however, in no event shall the Accrued Benefit, as reduced in section 4.5.1 above, be reduced further by more than 70 percent.

		
	4.6
	Benefit Payable for Change in Role.  Effective May 1, 2015, and prospectively only, in the event a Participant’s eligibility under the Plan changes due to a change in role, the Participant shall receive a benefit as explained below unless otherwise approved by the Board or its delegatee. 

		
	4.6.1
	Tier One Participant.  In the event the Participant no longer meets eligibility requirements to be included in Tier One, benefits will be frozen and credited service for Tier One benefits will end effective the date of the change in role.  If the new role is eligible for Tier Two, the Participant will begin accruing Tier Two benefits effective the date of the change in role.  If the new role is not eligible for Tier Two, benefits will be frozen effective the date of the change in role, and no further benefits will accrue under the Plan.  

		
	4.6.2
	Tier Two Participants.  In the event a Tier Two participant becomes a Tier One participant, all SERP benefits will be paid as Tier One for the participant’s total credited service. If a new role is not eligible for Tier One or Tier Two, benefits will be frozen effective the date of the change in role, and no further benefits will accrue under the Plan.  

5.    PAYMENT OF BENEFITS

		
	5.1
	Terms and Conditions of Benefit Payments. The benefit calculated under section 4 above will be paid as follows:

		
	5.1.1
	For Participants in the Plan prior to January 1, 2009, the benefit calculated under section 4 will be paid in the Actuarial Equivalent form of five (5) annual installments, unless a Participant has validly elected pursuant to IRS transition rules prior to January 1, 2009, to receive payments in the Actuarial Equivalent form of ten (10) annual installments.  

		
	5.1.2
	For Participants first in the Plan on or after January 1, 2009, the benefit calculated under section 4 will be paid in the Actuarial Equivalent form of five (5) annual installments, unless a Participant has validly elected under IRS rules within thirty (30) days of becoming a participant in the Plan, to receive payments in the Actuarial Equivalent form of ten (10) annual installments.

9

		
	5.1.3
	The first annual installment pursuant to sections 5.1.1 and 5.1.2 above will be paid on the Date of Benefit Commencement, and subsequent annual installments will be paid in January of each succeeding year.

		
	5.2
	Payment to Beneficiary.  In the event the Participant dies following the Date of Benefit Commencement but prior to the final annual installment, the remaining unpaid benefit due the Participant will be paid to the Participant's Beneficiary following the Participant's death in a lump sum calculated to be the Actuarial Equivalent of the remaining unpaid benefit due the Participant.

		
	5.3
	Alienation of Benefits Prohibited. No benefit payable at any time under the Plan shall be subject in any manner to alienation, anticipation, sale, transfer, assignment, pledge, attachment, or encumbrance or any kind, except as required by law. No benefit payable at any time under the Plan shall be subject in any manner to the debts or liabilities of any person entitled to such benefit, and TVA shall not be required to make any payments toward such debts or liabilities.

		
	5.4
	Incapacity. In the event that any benefit hereunder is, or becomes, payable to a minor, to a person under a legal disability, or to a person not judicially declared incompetent but who by reason of illness or mental or physical disability is, in the opinion of the Retirement Committee, incapable of personally receiving and giving valid receipt for such payment, then, unless and until claim therefor shall have been made by a duly appointed guardian or other legal representative of such person, the Retirement Committee may provide for such payment or any part thereof to be made to any person or institution then contributing toward or providing for the care and maintenance of such person. Any such payment shall be a payment for such person and shall constitute a complete discharge of the liability of TVA therefor.

6.    GENERAL PROVISIONS

		
	6.1
	Funding. The Plan is intended as an unfunded plan of supplementary retirement benefits for selected employees of TVA. TVA may establish appropriate reserves for the Plan on its books of account in accordance with generally accepted accounting principles. TVA may set up a trust or trusts to manage these reserves. Such reserves shall be, for all purposes, part of the general assets of TVA, and no Participant, Beneficiary, or other person claiming a right under the Plan shall have any interest, right, or title to such reserves except as provided by the 

10

terms of any trust established to hold such reserves.  In all events, it is the intent of TVA that the Plan be treated as unfunded for tax purposes.

		
	6.2
	Right to Amend, Suspend, or Terminate. TVA reserves the right at any time and from time to time to amend or terminate the Plan by action of the Board or its delegatee without the consent of any Participant, Beneficiary or other person. However, no such amendment may decrease a Participant's Accrued Benefit as of the time of such amendment.  In the event of Plan termination, a Participant shall be entitled to receive his or her Accrued Benefit, determined as of the date of Plan termination, in the form and manner as set forth in the Plan as of the date of Plan termination.  Plan amendments may be approved and implemented by the Retirement Committee except that the Board or its delegatee reserves the right to approve any Plan amendments which could change the amount of the benefits payable under the Plan.

		
	6.3
	Right to Benefit.  No person shall have any right to a benefit under the Plan except as such benefit has become payable in accordance with the terms of the Plan, and such right shall be no greater than the rights of any unsecured general creditor of TVA.  Notwithstanding any other provision of this Plan, if an employee shall be discharged for reasons of acts of fraud, dishonesty, larceny, misappropriation, or embezzlement committed against TVA, all of such employee's rights to benefits under this Plan shall be forfeited.

		
	6.4
	Administration of the Plan. Except as otherwise specifically provided in the Plan, the Retirement Committee shall be the administrator of the Plan. The Retirement Committee as plan administrator shall have full authority in its discretion to determine all questions arising in connection with the Plan, including the interpretation of the Plan, and may adopt Plan amendments (subject to section 6.2) and procedural rules and may rely on such legal counsel, actuaries, accountants, and agents as it may deem advisable to assist in the administration of the Plan. The Retirement Committee may establish such rules and procedures as it deems appropriate to carry out the intent and purpose of the Plan. Decisions of the Retirement Committee as plan administrator shall be conclusive and binding on all Participants and Beneficiaries. The Retirement Committee may delegate in writing to one or more persons any of its duties as plan administrator and may revoke in writing any such designation previously made.

11

		
	6.5
	Titles. The cover page of this Plan, the Table of Contents, and the titles of the sections herein are included for convenience of reference only and shall not be construed as part of this Plan or have any effect upon the meaning of the provisions hereof.  Unless the context requires otherwise, the singular shall include the plural and the masculine shall include the feminine; such words as "herein," "hereafter," "hereof," and "hereunder" shall refer to this instrument as a whole and not merely to the subdivision in which such words appear.

		
	6.6
	Governing Law.  TVA is a corporate agency and instrumentality of the United States, and this Plan shall be governed by and construed under Federal law. In the event Federal law does not provide a rule of decision for any matter or issue under the Plan, the law of the State of Tennessee shall apply; provided, however, in no event shall Tennessee’s choice of law provisions apply.  The Plan and payment of Awards are intended to be interpreted, operated, and administered in a manner consistent with the short-term deferral exemption from Section 409A of the Internal Revenue Code and official guidance thereunder.

		
	6.7
	Separability.  If any term or provision of this Plan as presently in effect or amended from time to time, or the application thereof to any payments or circumstances, shall to any extent be invalid or unenforceable, the remainder of the Plan, and the application of such term or provision to payments or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term or provision of the Plan shall be valid and enforced to the fullest extent permitted by law.

		
	6.8
	Authorized Officers. Whenever TVA under the terms of the Plan is permitted or required to do or to perform any act or matter or thing, it shall be done and performed by a duly authorized officer of TVA.

		
	6.9
	Certain Rights and Limitations. The establishment of the Plan shall not be construed as conferring any legal rights upon any employee or other person for a continuation of employment, nor shall it interfere with the rights of TVA to discharge any employee and to treat any employee without regard to the effect that such treatment might have upon that employee as a participant in the Plan.

		
	6.10
	Compliance with Section 409A. At all times, to the extent Internal Revenue Code Section 409A and its implementing regulations (collectively, "Section 409A") applies to amounts deferred under this Plan: (a) this Plan shall be operated in accordance with the requirements of Section 409A; (b) any action that may be taken (and, to the extent possible, any action actually taken) by the Board or its 

12

delegatee, the Retirement Committee, and the Participants or their Beneficiaries shall not be taken (or shall be void and without effect), if such action violates the requirements of Section 409A; (c) any provision in this Plan that is determined to violate the requirements of Section 409A shall be void and without effect; and (d) any provision that is required by Section 409A to appear in this Plan that is not expressly set forth shall be deemed to be set forth herein, and this Plan shall be administered in all respects as if such provision were expressly set forth herein.

IN WITNESS WHEREOF, this instrument has been executed this  __18th___ day 
of _May__________, 20_15____.

Tennessee Valley Authority

By:   /s/ William D. Johnson                    
William D. Johnson
President and Chief Executive Officer

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