EXHIBIT 10-h
SBC Communications Inc.
SALARY AND
INCENTIVE AWARD DEFERRAL PLAN
Effective: January 1, 1984
Revisions Effective: November 19, 1999
6
SALARY AND
INCENTIVE AWARD DEFERRAL PLAN
TABLE OF CONTENTS
Section Subject Page
1. Purpose............................ 1
2. Definitions........................ 1
3. Eligibility........................ 1
4. Participation...................... 1
5. Deferred Accounts.................. 2
6. Distribution....................... 3
7. Amendment and Termination.......... 6
8. Miscellaneous...................... 6
SBC SALARY AND
INCENTIVE AWARD DEFERRAL PLAN
1. Purpose. The purpose of the Salary and Incentive Award Deferral Plan
(the "Plan") is to provide Eligible Employees with a means for deferring
the receipt of income.
2. Definitions. For purposes of this Plan, the following words and phrases
shall have the meanings indicated, unless the context clearly indicates
otherwise:
Base Salary. "Base Salary" or "Salary" shall mean the Eligible
Employee's annual base salary, excluding commissions, lump-sum merit
payments in lieu of salary, and TEAM Awards, and before reduction due
to any contribution pursuant to this Plan or reduction pursuant to
any other deferral plan of SBC.
Chairman. "Chairman" shall mean the Chairman of the Board of SBC
Communications Inc.
Committee. "Committee" shall mean the Human Resources Committee of
the Board of SBC Communications Inc.
Eligible Employee. "Eligible Employee" shall mean an Officer or a
non-Officer employee of any SBC company who is designated by the
Chairman as eligible to participate in the Plan.
Officer. "Officer" shall mean an individual who is designated by
the Chairman as eligible to participate in the Plan who is an
elected officer of SBC or of any SBC subsidiary (direct or
indirect).
SBC. "SBC" shall mean SBC Communications Inc.
SBC Shares. "SBC Shares" shall mean shares of SBC common stock.
3. Eligibility. Each Eligible Employee shall be eligible to participate in
the Salary and Incentive Award Deferral Plan (the "Plan").
4. Participation.
(a) Prior to the beginning of any calendar year, an Eligible Employee may
elect to participate in the Plan by directing that up to 50% of his
or her Base Salary and/or all or part of his or her short-term and/or
long-term awards under the Short Term Incentive Plan and/or under the
Senior Management Long Term Incentive Plan and/or its successor plan,
the 1996 Stock and Incentive Plan, which would otherwise be paid
currently to the employee in such calendar year, shall be credited to
a deferred account subject to the terms of the Plan. In no event,
however, shall the part of Salary or of any award credited to the
Plan during any calendar year be less than $1,000 (which in the case
of an award shall be based on valuation at the time the award would
otherwise be paid). Any Base Salary deferral hereunder is conditioned
upon a 30% Base Salary deferral election in the Stock Savings Plan.
(b) Such an election to participate in the Plan shall be in the form of a
document executed by the employee and filed with SBC. An election
related to Salary or awards otherwise payable currently in any
calendar year shall become irrevocable on the last day prior to the
beginning of such calendar year. A new election to participate in the
Plan shall be made annually.
5. Deferred Accounts.
(a) Deferred amounts related to Salary or awards which would otherwise
have been distributed to the Eligible Employee in cash shall be
credited to the employee's account and shall bear interest at the
applicable Declared Rate on the balance from month-to-month in such
account. The interest will be credited monthly to the account at
one-twelfth of the annual Declared Rate for that calendar year
compounded quarterly. The Declared Rate for each calendar year will
be determined by the Senior Vice President-Human Resources, with the
concurrence of the Senior Vice President, Treasurer and Chief
Financial Officer, and will be announced on or before January 1 of
the applicable calendar year. However, in no event will the Declared
Rate for any calendar year be less than the Moody's Corporate Bond
Yield Average-Monthly Average Corporates as published by Moody's
Investor's Service, Inc. (or any successor thereto for the month of
September before the calendar year in question, or, if such yield is
no longer published, a substantially similar average selected by the
Senior Vice President-Human Resources).
In addition, if the employee's account under the Bell System Senior
Management Incentive Award Deferral Plan ("Predecessor Plan") was
transferred to an account under this Plan as of January 1, 1984, the
effective date of this Plan, then the employee's account under this
Plan shall be credited as of such date with the amount credited to
the employee's account under the Predecessor Plan as of December 31,
1983, and such amount shall bear interest in accordance with the
terms of this Plan.
(b) Deferred amounts related to awards which would otherwise have been
distributed in SBC shares shall be credited to the employee's account
as deferred SBC Shares. The employee's account shall also be credited
on each dividend payment date for SBC Shares with an amount
equivalent to the dividend payable on the number of SBC Shares equal
to the number of deferred SBC Shares in the employee's account on the
record date for such dividend. Such amount shall then be converted to
a number of additional deferred SBC shares determined by dividing
such amount by the price of SBC Shares, as determined in the
following sentence. The price of SBC Shares related to any dividend
payment date shall be the closing price on the New York Stock
Exchange ("NYSE") for SBC Shares on the dividend payment date, or the
trading day immediately preceding such dividend payment date if the
NYSE is closed on the dividend payment date.
(c) In the event of any SBC common stock dividend or split occurring
after January 1, 1987, employees' accounts will automatically be
credited with additional SBC Shares necessary to reflect such stock
dividend or split. In the event of any other change in outstanding
SBC common stock by reason of any recapitalization, merger,
consolidation, combination or exchange of shares or other similar
corporate change, the Board of Directors shall make such adjustments,
if any, that it deems appropriate in the number of deferred SBC
Shares then credited to employees' accounts. Any and all such
adjustments shall be conclusive and binding upon all parties
concerned.
6. Distribution.
(a) At the time an Eligible Employee makes an election to participate in
the Plan, the employee shall also make an election with respect to
the distribution (during the employee's lifetime or in the event of
the employee's death) of the amounts to be credited to the employee's
deferred account during the upcoming calendar year. Such an election
related to awards otherwise payable currently in any calendar year
shall become irrevocable on the last day prior to the beginning of
such calendar year. Amounts credited as cash plus accumulated
interest shall be distributed in cash; amounts credited as deferred
SBC Shares shall be distributed in the form of an equal number of SBC
Shares; provided, however, any fractional shares shall be credited as
federal tax withholding.
(b) An employee may elect to receive the amounts credited to the
employee's account with respect to Salary or with respect to each
award to be paid in the upcoming calendar year in one payment or in
some other number of approximately equal annual installments (not
exceeding 15). The first installment (or the single payment if the
employee has so elected) shall be paid within 60 days following the
date specified in such election.
(c) Notwithstanding an election pursuant to Paragraph (b) of this Section
6, all amounts then credited to the employee's accounts shall be paid
immediately in a single payment if an employee is discharged for
cause by his or her employing company, or if an employee otherwise
ceases to be employed by his or her employing company and engages in
competition with SBC or any direct or indirect subsidiary thereof or
with any business with which a subsidiary of SBC or an affiliated
company has a substantial interest (collectively referred to herein
as an "Employer Business"), or becomes employed by a governmental
agency having jurisdiction over the activities of SBC or any of its
subsidiaries. For purposes hereof, engaging in competition with any
Employer business shall mean engaging by the employee in any business
or activity in the same geographical market where the same or
substantially similar business or activity is being carried on as an
Employer business. Such term shall not include owning a
nonsubstantial publicly traded interest as a shareholder in a
business that competes with an Employer business. However, engaging
in competition with an Employer business shall include representing
or providing consulting services to, or being an employee of, any
person or entity that is engaged in competition with any Employer
business or that takes a position adverse to any Employer business.
Further, engaging in competition with an Employer business would
result if the employee either engages directly in competitive
activity or in any capacity in any location becomes employed by,
associated with, or renders service to any company, or parent or
affiliate thereof, or any subsidiary of any of them, if any of them
is engaged in competition with an Employer business, regardless of
the position or duties the employee takes and regardless of whether
or not the employing company, or the company that the employee
becomes associated with or renders service to, is itself engaged in
direct competition with an Employer business.
(d) An employee may designate pursuant to the SBC Rules for Employee
Beneficiary Designations as may hereafter be amended from time to
time ("Rules") that, in the event the employee should die before full
payment of all amounts credited to the employee's accounts, the
balance of all deferred amounts shall be distributed in one payment
or in some other number of approximately equal annual installments
(not exceeding 5) to the beneficiary or beneficiaries designated in
writing by the employee. If no designation has been made or if all
designated beneficiaries predecease the employee or die prior to
complete distribution of all of the employee's amounts hereunder,
then the balance of such amounts be shall be distributed according to
the Rules. The first installment (or single payment if the employee
has so elected) shall be paid within 60 days following the month of
death.
(e) Installments subsequent to the first installment to the employee, or
to a beneficiary, shall be paid on the date established in 6(b) or
6(d) in each succeeding calendar year until the entire amount
credited to the employee's deferred account shall have been paid.
Deferred amounts held pending distribution shall continue to be
credited with interest or additional deferred SBC Shares, as
applicable, determined in accordance with Section 5(a) or 5(b).
(f) The obligation to make distribution of deferred amounts credited to
an employee's account during any calendar year, plus the additional
amounts credited on such deferred amounts pursuant to Section 5(a) or
5(b), shall be borne by SBC or the applicable employing company which
otherwise would have paid the related award currently. However, the
obligation to make distributions with respect to deferred amounts
which are related to amounts credited to an employee's account as of
the effective date of the Plan pursuant to Section 5(a), and with
respect to which no SBC company would otherwise have paid the related
award currently, shall be borne by the company which employed the
employee on the effective date of the Plan.
(g) For the purpose of this Section 6, an election described in Paragraph
(a) or a beneficiary designation described in Paragraph (d) made
under the comparable provisions of the Predecessor Plan shall be
considered as an election or beneficiary designation, respectively,
made under this Section 6.
(h) Notwithstanding the previous provisions of this Section 6, at any
time during the calendar year prior to the calendar year during which
an award deferred under the provisions of the Plan is scheduled for
distribution, a participant my change his or her previous election(s)
applicable to such award to further defer the commencement of
distribution of such award to a subsequent calendar year, and in such
case to also change the number of installments applicable to the
distribution of the award. Amounts with respect to which the
participant's election(s) are modified in accordance with the
provisions of this Section 6(h) shall continue to be subject to all
provisions of this Plan including further distribution modifications
in accordance with the provisions of this Section 6(h).
7. Amendment and Termination. This Plan may be modified or terminated at any
time in accordance with the provision of SBC's Schedule of Authorizations,
but such changes or termination shall not adversely affect the rights of
any Eligible Employee, without his or her consent, to any benefit under
the Plan to which such employee may have previously become entitled prior
to the effective date of such change or termination.
8. Miscellaneous.
(a) Unsecured General Creditor. The amounts deferred hereunder shall
be held in the general funds of SBC. SBC shall not be required to
reserve, or otherwise set aside, funds for the payment of such
amounts.
(b) Non-Assignability. The rights of an employee to any deferred amounts
plus the additional amounts credited pursuant to Section 5(a), 5(b)
and 5(c) shall not be subject to assignment by the employee.
(c) Administration. The Committee shall be the sole administrator of the
Plan and will administer the Plan, interpret, construe and apply its
provisions in accordance with its terms. The Committee shall further
establish, adopt or revise such rules and regulations as it may deem
necessary or advisable for the administration of the Plan. All
decisions of the Committee shall be binding unless the Board of
Directors should determine otherwise.