AT&T MID-CAREER PENSION PLAN
AT&T Corp.
and
Such of its Subsidiary Companies which are
Participating Companies
Amended and Restated as of October 1, 1996
AT&T MID-CAREER PENSION PLAN
Table of Contents
1. BACKGROUND AND
PURPOSE......................................................1
2.
DEFINITIONS.................................................................2
2.1.
ADEA.................................................................2
2.2.
ADMINISTRATOR........................................................2
2.3. AFFILIATED
CORPORATION...............................................2
2.4. AT&T CONTROLLED
GROUP................................................2
2.5.
BOARD................................................................2
2.6.
CODE.................................................................2
2.7.
COMMITTEE............................................................2
2.8.
COMPANY..............................................................2
2.9.
COMPENSATION.........................................................2
2.10.
D-BAND..............................................................2
2.11.
E-BAND..............................................................3
2.12. INTERCHANGE
AGREEMENT...............................................3
2.13. INTERCHANGE
COMPANY.................................................3
2.14. MANDATORY RETIREMENT
AGE............................................3
2.15. MID-CAREER PENSION
CREDITS..........................................3
2.16. NORMAL RETIREMENT
AGE...............................................3
2.17. PARTICIPATING
COMPANY...............................................3
2.18. PENSION
PLAN........................................................4
2.19.
PLAN................................................................4
2.20. PLAN
YEAR...........................................................4
2.21.
SUBSIDIARY..........................................................4
2.22. TERM OF
EMPLOYMENT..................................................4
2.23. TRANSFERRED
INDIVIDUAL..............................................4
3.
ADMINISTRATION..............................................................5
3.1.
ADMINISTRATION.......................................................5
3.2. ROLE OF THE
COMMITTEE................................................5
3.3. CLAIMS
PROCEDURE.....................................................5
(a) Benefit
Claims....................................................5
(b) Benefit
Appeals...................................................5
(c) Final
Review......................................................6
3.4.
INDEMNIFICATION......................................................6
3.5. NAMED
FIDUCIARIES....................................................6
3.6. ALLOCATION OF
RESPONSIBILITIES.......................................6
3.7. MULTIPLE
CAPACITIES..................................................6
4.
BENEFITS....................................................................7
4.1.
PARTICIPANT..........................................................7
4.2.
ELIGIBILITY..........................................................7
(a)
Employee..........................................................7
(b) Service and Disability
Benefit....................................8
(c) Deferred
Benefit..................................................8
(d) Contingent
Benefits...............................................8
4.3. BENEFIT
AMOUNTS......................................................8
(a) Calculation of Monthly Pension
Benefit............................8
(b) Early Retirement
Discount........................................10
(c) Deferred Benefit
Amount..........................................10
(d) Management Pension
Enhancement...................................10
(e) Special
Increases................................................11
4.4. TREATMENT DURING SUBSEQUENT
EMPLOYMENT..............................11
4.5. COMMENCEMENT AND DURATION OF
PAYMENTS...............................11
(a) Service or Disability
Benefit....................................11
(b) Deferred
Benefit.................................................11
4.6. FORFEITURE OF
BENEFITS..............................................11
5. GENERAL
PROVISIONS.........................................................13
5.1. NO GUARANTEE OF
EMPLOYMENT..........................................13
5.2. ASSIGNMENT OR
ALIENATION............................................13
5.3. BREAKS IN
SERVICE...................................................13
5.4. LEAVE OF
ABSENCE....................................................13
5.5. METHOD OF
PAYMENT...................................................13
5.6. AMOUNTS ACCRUED PRIOR TO
DEATH......................................13
5.7. FACILITY OF
PAYMENT.................................................13
5.8. OPTION DURING
DISABILITY............................................14
5.9. PAYMENTS UNDER
LAW..................................................14
5.10. BINDING
EFFECT.....................................................14
5.11.
SEVERABILITY.......................................................15
5.12.
HEADINGS...........................................................15
5.13. ENTIRE
PLAN........................................................15
6. PLAN
MODIFICATION..........................................................16
6.1. AMENDMENT AND
TERMINATION...........................................16
7. SOURCE OF
PAYMENT..........................................................17
7.1. SOURCE OF
PAYMENTS..................................................17
7.2. UNFUNDED
STATUS.....................................................17
8. DISPOSITION OF PARTICIPATING
COMPANY.......................................18
8.1. SALE, SPIN-OFF, OR OTHER DISPOSITION OF PARTICIPATING
COMPANY.......18
DISPOSITION OF PARTICIPATING COMPANY
AT&T MID-CAREER PENSION PLAN
AMENDED AND RESTATED effective October 1, 1996.
Article 8
1. Background and Purpose
The purpose of the AT&T Mid-Career Pension Plan is to provide certain
unfunded single life pension payments, as set forth more fully herein, to
eligible employees of the Company and such other subsidiaries of the Company
that become Participating Companies. The Plan is intended to constitute an
unfunded pension plan for a select group of management or highly compensated
employees for purposes of Title I of the Employee Retirement Income Security Act
of 1974, as amended.
Except as expressly provided below, this amended and restated plan
document applies only to Employees who terminate employment on or after October
1, 1996. For former Employees who terminated employment before
October 1, 1996 ,
the provisions of the AT&T Mid-Career Pension Plan in effect at
termination of
the former Employee's employment governs.
Effective October 1, 1996, Lucent Technologies Inc.
established the
Lucent Technologies Inc. Mid-Career Pension Plan as a
successor to the AT&T
Mid-Career Pension Plan, in effect as of September 30, 1996,
with respect to
Transferred Individuals (as defined in Article 2).
Accordingly, the AT&T
Mid-Career Pension Plan relinquished to the Lucent Technologies Inc. Mid-Career
Pension Plan all liabilities as of September 30, 1996 relating to Transferred
Individuals, and the Lucent Technologies Inc. Mid-Career Pension Plan assumed
and is solely responsible for all such liabilities. Except to the extent
required by law or Article 8 of this Plan, the Plan shall not recognize service
and compensation before October 1, 1996 with respect to Transferred Individuals.
Effective as of the date an individual becomes a "Transition Individual" (as
defined in Section 1.38(a) or (d) of the Management Interchange Agreement or
Section 1.30(a) or (d) of the Occupational Interchange Agreement), the Plan
shall also assume and be solely responsible for all liabilities relating to such
Transition Individuals.
Article
2. Definitions
Unless the context clearly indicates otherwise, the following terms
have the meanings described below when used in this Plan and references to a
particular Article or Section shall mean the Article or Section so delineated in
this Plan.
2.1. ADEA
The Age Discrimination in Employment Act of 1967, as amended from time
to time.
2.2. Administrator
The "Pension Plan Administrator" under the Pension Plan.
2.3. Affiliated Corporation
Any corporation of which more than 50 percent of the voting stock is
owned directly or indirectly by the Company.
2.4. AT&T Controlled Group
The "AT&T Controlled Group" within the meaning of the Pension Plan.
2.5. Board
The Board of Directors of the Company.
2.6. Code
The Internal Revenue Code of 1986, as amended from time to time. Any
reference to a particular section of the Code includes any applicable
regulations promulgated under that section.
2.7. Committee
The Employees' Benefit Committee appointed by the Company
to administer
the Pension Plan.
2.8. Company
AT&T Corp., a New York corporation, or its successors.
2.9. Compensation
"Compensation" within the meaning of the Pension Plan.
2.10. D-band
"D-band," formerly D-level, Fourth level and SG-10 and SG-11, shall
mean the level directly above C-band, or any equivalent salary grade or level as
determined by the Company.
2.11. E-band
"E-band," formerly E-Level, Fifth level and SG-12 through SG-14, shall
mean the level directly above D-band, or any equivalent salary grade or level as
determined by the Company.
2.12. Interchange Agreement
An "Interchange Agreement" within the meaning of the Pension Plan.
2.13. Interchange Company
An "Interchange Company" within the meaning of the Pension Plan.
2.14. Mandatory Retirement Age
Age 65 for those employees referred to in ADEA ss. 12(c)(1) or at such
later time as may first be permissible under such section of the ADEA. For those
employees for whom age is a bona fide occupational qualification within the
meaning of ADEA ss. 4(f)(1), the Mandatory Retirement Age shall be as may be
applicable under the ADEA.
2.15. Mid-Career Pension Credits
(a)......For those employees hired or rehired by a Participating
Company at E-band or above, and all of whose Term of Employment is at E-band or
above, Mid-Career Pension Credits is the difference between 35 years and the
Term of Employment that could accrue if the employee worked to the later of
Normal Retirement Age, retirement or termination of employment, provided that
the Mid-Career Pension Credits shall not exceed the actual Term of Employment
and shall not include any part-time service if the employee was hired on or
after November 18, 1981.
(b)......For those employees hired or rehired by a Participating
Company at D-band or above, and whose Term of Employment includes service at
D-band or below, Mid-Career Pension Credits is computed by multiplying the
employee's Mid-Career Pension Credits as defined in Section 2.15(a), by a
fraction, the numerator of which shall be the number of years and months of
service completed at E-band and above, and the denominator of which shall be the
actual Term of Employment at termination of employment, provided, however, that
for any employee on the active roll as of August 29, 1991, his or her benefit
under this Plan shall equal the greater of the benefit calculated under the
definition of Mid-Career Pension Credits in this Section 2.15(b) as of the
employee's retirement or termination of employment or the benefit accrued under
the AT&T Mid-Career Pension Plan in effect as of August 29, 1991.
2.16. Normal Retirement Age
"Normal Retirement Age" within the meaning of the Pension
Plan.
2.17. Participating Company
The Company or any subsidiary of the Company which is a
Participating
Company under the Pension Plan.
2.18. Pension Plan
The AT&T Management Pension Plan.
2.19. Plan
This AT&T Mid-Career Pension Plan.
2.20. Plan Year
The Plan Year for the Plan shall be January 1 through December 31.
2.21. Subsidiary
Any corporation of which more than 80% of the voting stock is owned
directly or indirectly by the Company.
2.22. Term of Employment
"Term of Employment" within the meaning of the Pension Plan for
purposes of calculating the amount of an employee's benefit, except that "Term
of Employment" shall not include any period of part-time employment completed
after November 18, 1981, in the case of an employee hired or rehired by a
Participating Company on or after November 18, 1981.
2.23. Transferred Individual
A "Transferred Individual" within the meaning of the
Employee Benefits
Agreement between the Company and Lucent Technologies Inc. dated
as of February
1, 1996, as amended.
Article
3. Administration
3.1. Administration
The Company shall be the "plan administrator" and the
"sponsor" of the
Plan as those terms are defined in ERISA.
3.2. Role of the Committee
(a)......The Committee shall have the specific powers elsewhere herein
granted to it and shall have such other powers as may be necessary in order to
enable it to administer the Plan, except for powers herein granted or provided
to be granted to others.
(b)......The procedures for the adoption of by-laws and rules of
procedure and for the employment of a secretary and assistants shall be the same
as are set forth in the Pension Plan.
3.3. Claims Procedure
(a) Benefit Claims
All claims for benefit payments under the Plan shall be submitted in
writing by the Participant or any individual duly authorized by him ("Claimant"
for purposes of Section 3.3) to the Administrator. The Administrator shall
notify the Claimant in writing within 90 days after receipt as to whether the
claim has been granted or denied. This period may be extended for up to an
additional 90 days in unusual cases provided that written notice of the
extension is furnished to the Claimant prior to the commencement of the
extension. In the event the claim is denied, such notice shall (i) set forth the
specific reasons for denial, (ii) make reference to the pertinent Plan
provisions on which the denial is based, (iii) describe any additional material
or information necessary before the Claimant's request may be acted upon, and
(iv) explain the procedure for appealing the adverse determination.
(b) Benefit Appeals
A Claimant whose claim for benefits has been denied, in whole or in
part, may, within 60 days of receipt of any adverse benefit determination,
appeal such denial to the Committee. All appeals shall be in the form of a
written statement and shall (i) set forth all of the reasons in support of
favorable action on the appeal, (ii) identify those provisions of the Plan upon
which the Claimant is relying, and (iii) include copies of any other documents
or materials which may support favorable consideration of the claim. The
Committee shall decide the issues presented within 60 days after receipt of such
request, but this period may be extended for up to an additional 60 days in
unusual cases provided that written notice of the extension is furnished to the
Claimant prior to the commencement of the extension. The decision of the
Committee shall be set forth in writing, include specific reasons for the
decision, refer to pertinent Plan provisions on which the decision is based, and
shall be final and binding on all persons affected thereby.
Any Claimant whose claim for benefits has been denied shall have such
further rights of review as are provided in ERISA ss. 503, and the Committee anD
Administrator shall retain such right, authority, and discretion as is provided
in or not expressly limited by ERISA ss. 503.
(c) Final Review
The Committee shall serve as the final review committee, under the Plan
and ERISA, for the review of all appeals by Claimants whose initial claims for
benefits have been denied, in whole or in part, by the Administrator. The
Committee shall have the authority to determine conclusively for all parties any
and all questions arising from administration of the Plan, and shall have sole
and complete discretionary authority and control to manage the operation and
administration of the Plan, including, but not limited to, authorizing
disbursements according to the Plan, the determination of all questions relating
to eligibility for participation and benefits, interpretation of all Plan
provisions, determination of the amount and kind of benefits payable to any
Participant, and the construction of disputed and doubtful terms. Such decisions
by the Committee shall be conclusive and binding on all parties and not subject
to further review.
3.4. Indemnification
Neither the Administrator, any member of the Board or of the Committee,
nor each other employee or officer to whom any duty or power relating to the
administration or interpretation of the Plan may be allocated or delegated,
shall be personally liable by reason of any contract or other instrument
executed by such individual or on his or her behalf in his or her capacity as
the Administrator or as a member of the Board or of the Committee, nor for any
mistake of judgment made in good faith, and the Company shall indemnify and hold
harmless the Administrator, each member of the Board, each member of the
Committee, and each other employee or officer to whom any duty or power relating
to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including attorneys' fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person's
own fraud or bad faith.
3.5. Named Fiduciaries
The Committee, the Administrator and each Participating Company is each
a named fiduciary as that term is used in ERISA with respect to the particular
duties and responsibilities allocated to each of them.
3.6. Allocation of Responsibilities
The Company may allocate responsibilities for the operation and
administration of the Plan consistent with the Plan's terms, including
allocation of responsibilities to the Committee and the other Participating
Companies. The Company and other named fiduciaries may designate in writing
other persons to carry out their respective responsibilities under the Plan, and
may employ persons to advise them with regard to any such responsibilities.
3.7. Multiple Capacities
Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan.
Article
4. Benefits
4.1. Participant
An individual is a Participant in this Plan if (a) the individual was
hired or rehired by a Participating Company at age 35 or older and, (b) the
individual was hired or rehired at D-band or above, and (c) the individual's
Term of Employment includes at least one year of continuous employment for a
Participating Company at D-band or above, provided, however, that if an
individual was hired or rehired on or after November 18, 1981, such continuous
employment was on a full-time basis (as classified by the Company), and (d) the
individual terminates employment at E-band or above.
4.2. Eligibility
(a) Employee
For purposes of this Article 4, the word "Employee" shall mean (a) a
Participant, as defined in Section 4.1 and (b) who (i) if hired or rehired by a
Participating Company before November 18, 1981, has completed a Term of
Employment of at least five years for one or more Participating Companies at
E-band or above, prior to the last day of the month in which he or she reaches
Normal Retirement Age, or (ii) if hired or rehired by a Participating Company on
or after November 18, 1981, has completed a Term of Employment of at least five
years, classified by the Company as full-time, for one or more Participating
Companies at E-band or above, prior to the last day of the month in which he or
she reaches Normal Retirement Age, provided, however, that unless approved by
the Board, or its delegate, an individual is not an Employee if:
(i) the individual (ineligible to
participate in this Plan
because he or she was hired after age 35 and/or he or
she was hired
below D-band) terminates employment with a
Participating Company, and
is rehired by a Participating Company within one year
of his or her
termination of employment;
(ii) the individual terminates employment with
a company with
which a Participating Company has an Interchange
Agreement, and is
hired by a Participating Company within one year of
termination of
employment, if the individual has not waived coverage
pursuant to the
terms of the applicable Interchange Agreement;
(iii) the individual terminates employment
with a company in
which a Participating Company has an ownership
interest, and is hired
or rehired by a Participating Company within one year of
termination of
employment, unless he or she was a Participant in the
Plan prior to
employment with the AT&T non-Controlled Group
company or the
nonparticipating AT&T Controlled Group company; or
(iv) the individual is employed by a company
which is acquired
by a Participating Company.
(b) Service and Disability Benefit
Any Employee shall be eligible for a service benefit or a
disability benefit pursuant to this Plan if he or she is eligible for a service
or a disability pension pursuant to the Pension Plan, including an Employee who
is eligible for a service pension as the result of a Transition Leave of Absence
or a Transition to Retirement as set forth in the Pension Plan.
(c) Deferred Benefit
Any Employee is eligible for a deferred benefit pursuant to
this Plan if the Employee is not eligible for either a service or a disability
pension under the Pension Plan.
(d) Contingent Benefits
An Employee whose job category has been reclassified during the
Grandfathering Period, defined below, from E-band to a salary grade level below
E-band, and who has completed a Term of Employment of at least five years at (1)
E-band or above, or (2) the reclassified level below E-band prior to the end of
the Grandfathering period, shall be entitled to a frozen benefit under this Plan
based upon the terms of this Plan and his or her Term of Employment as of the
last day of the Grandfathering Period, provided, however, that such Employee
shall not be entitled to a benefit under this Plan if he or she has been demoted
for performance subsequent to job reclassification and prior to attainment of
the requisite number of years of benefit eligibility. The Grandfathering Period
shall be January 1, 1986 through the later of December 31, 1988 or the last day
of the calendar year in which the job has been reclassified. If an Employee
whose job has been reclassified, as described in this Section 4.2(d), is
promoted to E-band or above, his or her benefit under this Plan shall be
calculated as if his or her job had never been reclassified.
4.3. Benefit Amounts
(a) Calculation of Monthly Pension Benefit
(i) Formula
The annual benefit amount will equal:
[GRAPHIC OMITTED]
+
[GRAPHIC OMITTED]
Where:
A = Mid-Career Pension Credits;
B = One-half of the Pension Plan Base Formula
Multiplier;
C = Average Base Period Compensation x Term of
Employment to
the end of the Base Period divided by
Total Term of
Employment;
D = One-half of the AT&T Non-Qualified Pension
Plan ("NQPP")
Base Formula Multiplier;
E = NQPP Average Base Period
Compensation x Term of
Employment to the end of the Base Period
divided by Total
Term of Employment;
F = One-half of the Pension Plan Post-Base
Formula Multiplier;
G = Post-Base Period Compensation divided by
Total Term of
Employment;
H = One-half of the NQPP Post-Base Formula
Multiplier;
I = NQPP Post-Base Period Compensation divided
by Total Term
of Employment.
(ii) Mid-Career Pension Credits
For purposes of determining A in Section 4.3(b)(i), "Mid-Career Pension
Credits" is defined in Section 2.15(a) or (b), as applicable.
(iii) Base Period
For purposes of determining B and C in Section 4.3(a)(i), "Base Period"
shall be the pay base averaging period as is set forth in the Pension Plan
effective August 1, 1994, provided, however, that if an Employee's benefit under
the Pension Plan is determined under an earlier pay base averaging period, such
other pay base averaging period shall be used for determining B & C in Section
4.3(a)(i). For purposes of determining D and E in Section 4.3(a)(i), "Base
Period" shall be the 1989 Base Period as is set forth in the Basic Formula of
the NQPP.
(iv) Base Formula Multiplier
For purposes of determining B in Section 4.3(a)(i), the "Pension Plan
Base Formula Multiplier" shall be the numerical percentage which is multiplied
by the Employee's average annual Compensation for the Base Period, in the
calculation of the Employee's accrued pension benefit under the Pension Plan.
For purposes of determining D in Section 4.3(a)(i), the "NQPP Base Formula
Multiplier" shall be the numerical percentage which is multiplied by the
Employee's average annual Short Term Incentive Awards for the Base Period, in
the calculation of the Employee's accrued pension benefit under the Basic
Formula of the NQPP.
(v) Average Base Period Compensation
For purposes of determining C in Section 4.3(a)(i), "Average Base
Period Compensation" shall be the Employee's average annual Compensation for the
Base Period, in the calculation of the Employee's accrued pension benefit under
the Pension Plan, except that Compensation shall be defined for this purpose as
not being limited by Code ss. 401(a)(17). For purposes of determining E in
Section 4.3(a)(i), "NQPP Average Base Period Compensation" shall be the average
annual Short Term Incentive Awards for the Base Period in the calculation of the
Employee's accrued pension benefit under the Basic Formula of the NQPP.
(vi) Total Term of Employment
For purposes of determining C, E, G & I in Section 4.3(a)(i), "Total
Term of Employment" shall be the Employee's actual Term of Employment as of
retirement or termination of employment.
(vii) Post-Base Formula Multiplier
For purposes of determining F in Section 4.3(a)(i), "Pension Plan
Post-Base Formula Multiplier" shall be the numerical percentage which is
multiplied by the Employee's Compensation for periods after the Base Period, in
the calculation of the Employee's accrued pension benefit under the Pension
Plan. For purposes of determining H in Section 4.3(a)(i), the "NQPP Post-Base
Formula Multiplier" shall be the numerical percentage which is multiplied by the
Employee's Short Term Incentive Awards for periods after the Base Period, in the
calculation of the Employee's accrued pension benefit under the Basic Formula of
the NQPP.
(viii) Post-Base Period Compensation
For purposes of determining G in Section 4.3(a)(i), "Post-Base Period
Compensation" shall be the Employee's Compensation after the Base Period, in the
calculation of the Employee's accrued pension benefit under the
Pension Plan,
except that Compensation shall be defined for this purpose as not being limited
by Code ss. 401(a)(17). For purposes of determining I in Section 4.3(a)(i),
"NQPP Post-Base Period Compensation" shall be the Employee's Short Term
Incentive Awards for periods after the Base Period, in the calculation of the
Employee's accrued pension benefit under the Basic Formula of the NQPP.
(b) Early Retirement Discount
Where an Employee terminates from service under the age of 55 years and
commences a service pension under the Pension Plan, his or her monthly service
benefit, as set forth in Section 4.2(b), shall be reduced in the same manner as
is set forth in the Pension Plan in the case of service pensions.
(c) Deferred Benefit Amount
The monthly benefit amount for each person eligible for a deferred
benefit under the provisions of Section 4.2(c) shall be calculated exclusively
in accordance with the provisions specified as applicable to those receiving a
benefit under Section 4.2(b) effective as of the date his or her benefit
payments commence pursuant to Section 4.5(b). No recomputation of the benefit
shall be made after such date or as a result of amendments made to this Plan
subsequent to such date.
(d) Management Pension Enhancement
The calculation of benefit amounts and eligibility for a benefit amount
shall be determined without regard to the Management Pension Enhancement set
forth in the Pension Plan.
(e) Special Increases
Monthly service and disability benefit payments, as determined in
Section 4.3(a), of retired Employees shall be increased by the same percentage
and pursuant to the same terms and conditions as are set forth in the Pension
Plan.
4.4. Treatment During Subsequent Employment
Notwithstanding any other provision of this Plan, employment with any
Participating Company or with any Interchange Company (if the Employee is
covered by the applicable Interchange Agreement and, if applicable, has not
waived coverage pursuant to the terms of the Interchange Agreement), subsequent
to retirement or termination of employment with entitlement to any type of
benefit described heretofore shall result in the permanent suspension of the
benefit for the period of such employment or reemployment. Notwithstanding any
other provision of this Plan, employment with any AT&T Controlled Group company
which is not a Participating Company subsequent to retirement or termination of
employment with entitlement to any type of benefit described heretofore shall
result in the permanent suspension of the benefit for the period of such
employment or reemployment if the Employee's benefit under the Pension Plan is
suspended by reason of such employment.
4.5. Commencement and Duration of Payments
Except for the reasons specified in Section 4.6, or as may be otherwise
determined by the Company, benefits granted under this Plan shall commence as
follows:
(a) Service or Disability Benefit
Payment of a service or disability benefit under this Plan shall
commence to an Employee at the same time as the Employee's service or disability
pension benefits commence under the Pension Plan and shall continue to the
Employee's date of death, or, in the case of a disability benefit, until
termination of disability pension payments under the Pension Plan, if earlier,
subject to Section 4.4 of this Plan.
(b) Deferred Benefit
(i) Payment of a deferred benefit under this Plan shall
commence to an Employee at the same time as the Employee's deferred vested
pension benefits commence under the Pension Plan and shall continue to the
Employee's date of death, subject to Section 4.4 of this Plan.
(ii) Eligibility for a deferred benefit payable before Normal
Retirement Age in reduced amounts shall be pursuant to the same terms and
conditions as are set forth in the Pension Plan with respect to deferred vested
pensions.
4.6. Forfeiture of Benefits
(a) Notwithstanding Section 4.5, all or a portion of benefits for which
an Employee would be otherwise eligible hereunder may be forfeited under the
following circumstances, at the discretion of the Board or its delegate:
(i) The Employee is discharged by a
Participating Company for
cause. For purposes of this Plan, cause shall mean:
(A) The Employee's conviction
(including a plea of
guilty or nolo contendere) of a felony or any
crime of theft,
dishonesty or moral turpitude;
(B) Gross omission or gross
dereliction of any
statutory or common law duty of loyalty to the Company.
(ii) Determination by the Board or its
delegate that the
Employee engaged in misconduct in connection with
the Employee's
employment with a Participating Company or with any
other entity of
which the Company has an ownership interest.
(iii) The Employee, without the consent of the
Board, violates the AT&T Non-Competition Guideline.
(b)......The portion of the benefit subject to forfeiture under the
conditions described in this Section 4.6(a), are as follows:
(i) The total benefit, or any unpaid benefit
if the former
Employee is in pay status, is subject to forfeiture,
except as provided
in Section 4.6(b)(ii).
(ii) In the case of an Employee who is retiring
at his or her
Mandatory Retirement Age, as defined in ADEA, the
provisions of Section
4.6(b)(i) shall not apply to that portion of the
benefits computed
under Section 4 of this Plan which, when added to
the retirement
payments payable under the Pension Plan (prior to any
reduction for the
cost of a survivor annuity) and the AT&T
Excess Benefit and
Compensation Plan, does not exceed the nonforfeitable
retirement income
requirement of ADEA ss. 12(c)(i).
Article
5. General Provisions
5.1. No Guarantee of Employment
Neither the Plan nor any action taken hereunder shall be construed as
(i) a contract of employment or deemed to give any Participant the right to be
retained in the employment of a Participating Company, the right to any level of
compensation, or the right to future participation in the Plan; or (ii)
affecting the right of a Participating Company to discharge or dismiss any
Participant at any time.
5.2. Assignment or Alienation
No service, disability, or deferred benefit under this Plan or any
right or interest in such service, disability, or deferred benefit shall be
assignable or subject in any manner to anticipation, alienation, sale, transfer,
claims of creditors, garnishment, pledge, execution, attachment or encumbrance
of any kind, including, but not limited to, pursuant to any domestic relations
order (within the meaning of ERISA ss. 206(d)(3) and Code ss. 414(p)(1)(B)) or
judgment or claims for alimony, support, separate maintenance, and claims in
bankruptcy proceedings, and any such attempted disposition shall be null and
void.
5.3. Breaks in Service
For purposes of this Plan a break in service shall be defined and
treated in the same manner as is set forth in the Pension Plan.
5.4. Leave of Absence
For purposes of this Plan, a leave of absence shall be defined and
administered in the same manner as is set forth in the Pension Plan.
5.5. Method of Payment
Payments under this Plan shall be made in the same manner as is set
forth under the Pension Plan.
5.6. Amounts Accrued Prior to Death
Benefit amounts accrued but not actually paid at the time of death of a
former employee or retiree shall be paid in accordance with the standards and
procedures set forth in the Pension Plan.
5.7. Facility of Payment
If the Administrator shall find that any person to whom any amount is
or was payable under the Plan is unable to care for his or her affairs because
of illness or accident, then any payment, or any part thereof, due to such
person (unless a prior claim therefor has been made by a duly appointed legal
representative), may, if the Administrator so directs the Company, be paid to
the same person or institution that the benefit with respect to such person is
paid or to be paid under the Pension Plan, or to the Participant's lawful
spouse, a child, a relative, or institution maintaining or having custody of
such person, or any other person deemed by the Administrator to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payments made pursuant to this Section 5.7 shall be in complete discharge of the
liability of the Company, the Board, the Committee, the Administrator, and the
Participating Company therefor. If any payment to which a Participant or
beneficiary is unclaimed, such payment shall be forfeited after a period of two
years from the date the first such payment was payable and shall not escheat to
any state or revert to any party; provided, however, that any such payment or
payments shall be restored if any person otherwise entitled to such payment or
payments makes a valid claim.
5.8. Option During Disability
For an employee who has left the service of a Participating Company and
has elected to continue receiving disability benefits which he or she had been
receiving prior to his or her termination of employment (including disability
benefits under the AT&T Senior Manager Long Term Disability and Survivor
Protection Plan) and to defer receiving pension payments under the Pension Plan
to which he or she is eligible, benefits under this Plan shall be deferred until
such time as the employee begins to receive payments under the Pension Plan.
5.9. Payments Under Law
In case any benefit which the Committee shall determine to be of the
same general character as a payment provided by the Plan that is payable to a
former employee of a Participating Company under any law now in force or
hereafter enacted, the excess only, if any, of the amount prescribed in the Plan
the amount of such payment prescribed by law shall be payable under the Plan;
provided, however, that no benefit payable under this Plan shall be reduced by
reason of any governmental benefit or pension payable on account of military
service, or by reason of any benefit which the recipient would be entitled to
receive under the Social Security Act or the Railroad Retirement Act. In those
cases where, because of differences in the beneficiaries, or differences in the
time or methods of payment, or otherwise, whether or not there is such excess is
not ascertainable by mere comparison but adjustments are necessary, the
Committee has discretion to determine whether or not in fact any such excess
exists and to make the adjustments necessary to carry out in a fair and
equitable manner the spirit of the provision for the payment of such excess.
Further, in determining whether or not there is an excess, to the extent any
payments under any law are considered in determining whether there is any excess
payable to an employee under the Pension Plan, the amount of such payments under
law shall not be considered under this Plan.
5.10. Binding Effect
The Plan shall be binding upon and inure to the benefit of each
Participating Company and its successors and assigns, and to each Participant,
his or her successors, designees, beneficiaries, designated annuitants, and
estate. The Plan shall also be binding upon any successor corporation or
organization succeeding to substantially all of the assets and business of a
Participating Company. Nothing in the Plan shall preclude a Participating
Company from merging or consolidating into or with, or transferring all or a
portion of all of its assets to, another corporation which assumes the Plan or a
portion of the Plan and all or a portion of the obligations of a Participating
Company hereunder. Each Participating Company agrees that it will make
appropriate provision for the preservation of the rights of Participants and
beneficiaries under the Plan in any agreement or plan or reorganization into
which it may enter to effect any merger, consolidation, reorganization into
which it may enter to effect any merger, consolidation, reorganization, or
transfer of assets. Upon such a merger, consolidation, reorganization, or
transfer of assets, the term "Participating Company" shall refer to such other
corporation and the Plan shall continue in full force and effect.
5.11. Severability
If any section, clause, phrase, provision, or portion of this Plan or
the application thereof to any person or circumstance shall be invalid or
unenforceable under any applicable law, such event shall not affect or render
invalid or unenforceable the remainder of this Plan and shall not affect the
application of any section, clause, provision, or portion hereof to other
persons or circumstances.
5.12. Headings
The captions preceding the sections and articles hereof have been
inserted solely as a matter of convenience and shall not in any manner define or
limit the scope or intent of any provisions of the Plan.
5.13. Entire Plan
This written Plan document is the final and exclusive statement of the
terms of this Plan, and any claim of right or entitlement under the Plan shall
be determined in accordance with its provisions pursuant to the procedures
described in Article 3. Unless otherwise authorized by the Board or its
delegate, no amendment or modification to this Plan shall be effective until
reduced to writing and adopted pursuant to Section 6.1.
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6. Plan Modification
6.1. Amendment and Termination
Pursuant to ERISA ss. 402(b)(3), the Board or its delegate, (acting
pursuant to the Board's delegations of authority then in effect) may from time
to time amend, modify or change the Plan at any time as set forth in this
document, and the Board or its delegate (acting pursuant to the Board's
delegations of authority then in effect) may terminate the Plan at any time.
Plan amendments may include, but are not limited to, elimination or reduction in
the level or type of benefits provided to employees. Any and all Plan amendments
may be made without the consent of any employee. Notwithstanding the foregoing,
no such amendment, suspension or termination shall retroactively impair or
otherwise adversely affect the accrued benefit of any employee as of the date of
such action.
Article
7. Source of Payment
7.1. Source of Payments
Benefits arising under this Plan and all costs, charges, and expenses
relating thereto will be payable from the Company's general assets. The Company
may, however, establish a trust to pay such benefits and related expenses,
provided such trust does not cause the Plan to be "funded" within the meaning of
ERISA. To the extent trust assets are available, they may be used to pay
benefits arising under this Plan and all costs, charges, and expenses relating
thereto. To the extent that the funds held in the trust, if any, are
insufficient to pay such benefits, costs, charges and expenses, the Company
shall pay such benefits, costs, charges, and expenses from its general assets.
In addition, the Company may, in its sole discretion, purchase and distribute
one or more commercial annuity contracts, or cause the trustee of the trust to
purchase and distribute one or more commercial annuity contracts, to make
benefit payments required under this Plan, to any Senior Manager, as defined in
the AT&T Non-Qualified Pension Plan, or the Surviving Spouse of any Senior
Manager, provided, however, that the purchase and distribution of any such
annuity contracts shall be no sooner than the expiration of any forfeiture
provisions applicable to the Senior Manager under the AT&T Non-Competition
Guidelines. Such annuity contracts may be purchased from a commercial insurer
acceptable to the Executive Vice President - Human Resources. Further, the
Executive Vice President - Human Resources, may determine, in his sole
discretion, to pay additional sums to any Senior Manager, from the Company's
general assets or from the trust, if any, to reimburse the Senior Manager for
additional federal and state income taxes estimated to be incurred by reason of
the distribution of any such annuity contracts. The Executive Vice President
Human Resources shall establish a methodology or methodologies for determining
the amount of such additional sums. The methodology or methodologies selected
shall be those that the Executive Vice President - Human Resources determines,
in his sole discretion, to be the most effective and administratively feasible
for the purpose of producing after tax periodic benefit payments that
approximate the after tax periodic benefit payments that would have been
received by Senior Managers in the absence of the distribution of the annuity
contract.
7.2. Unfunded Status
The Plan at all times shall be entirely unfunded for purposes of the
Code and ERISA and no provision shall at any time be made with respect to
segregating any assets of a Participating Company for payment of any benefits
hereunder. Funds that may be invested through a trust described in Section 7.1
shall continue for all purposes to be part of the general assets of the
Participating Companies which invested the funds. The Plan constitutes a mere
promise by the Participating Companies to make benefit payments under this Plan
in the future. No Participant shall have any interest in any particular assets
of a Participating Company by reason of the right to receive a benefit under the
Plan and to the extent the Participant acquires a right to receive benefits
under this Plan, such right shall be no greater than the right of any unsecured
general creditor of a Participating Company.
Article
8. Disposition of Participating Company
8.1. Sale, Spin-Off, or Other Disposition of Participating
Company
(a)......Subject to Section 5.10, in the event the Company sells, spins
off, or otherwise disposes of a Subsidiary or an Affiliated Corporation, or
disposes of all or substantially all of the assets of a Subsidiary or an
Affiliated Corporation such that one or more Participants terminate employment
for the purpose of accepting employment with the purchaser of such stock or
assets, any person employed by such Subsidiary or Affiliated Corporation who
ceases to be an employee as a result of the sale, spin-off, or disposition shall
be deemed to have terminated his or her employment with a Participating Company
and be eligible for a Mid-Career Pension benefit commencing at the same time as
his or her benefit, if any, commences under the Pension Plan.
(b)......Notwithstanding the foregoing provisions of this Section 8.1,
and subject to Section 5.10, if, as part of the sale, spin-off, or other
disposition of the stock or assets of a Subsidiary or Affiliated Corporation,
the Subsidiary or Affiliated Corporation, its successor owner, or any other
party agrees in writing to assume the liability for the payment of the
Mid-Career Pension benefit to which the Participant would have been entitled
under the Plan but for such sale, spin-off, or other disposition, then the
entitlement of the Participant to a Mid-Career Pension benefit under this Plan
shall terminate. Any subsequent entitlement of the former Participant to the
Mid-Career Pension benefit shall be the sole responsibility of the assuming
party. Upon the assumption of the liability for the payment of a Mid-Career
Pension benefit by Lucent Technologies Inc. pursuant to Section 7.1 of the
Management Interchange Agreement or Section 3.1 of the Occupational Interchange
Agreement, both dated as of April 8, 1996, between Lucent Technologies Inc. and
AT&T Corp., the entitlement of a Transition Individual (as defined in Section
1.38(b) or (c) of the Management Interchange Agreement or Section 1.30(b) or (c)
of the Occupational Interchange Agreement), to a Mid-Career Pension benefit
under this Plan shall terminate.