EXHIBIT 10-o
SBC Communications Inc.
STOCK SAVINGS PLAN
Plan Effective: January 1, 1991
As amended through January 1, 2000
INDEX
Section 1 - Statement of Purpose..................................1
Section 2 - Definitions...........................................1
Section 3 - Administration of the Plan............................5
Section 4 - Participation.........................................5
4.1 Election to Commence a Savings Unit....................5
4.2 Termination of Election................................6
Section 5 - Pre-Tax Contributions/After-Tax Contributions/Company Match 6
5.1 After-Tax and/or Pre-Tax Account(s)....................6
5.2 Company Matching Account...............................6
5.3 Dividends..............................................7
5.4 Vesting of Matching Account............................7
5.5 Statement of Accounts..................................7
Section 6 - Retirement Alternative................................8
6.1 Retirement Distribution................................8
6.2 Termination Distribution...............................9
6.2(a) Termination of Employment Before Retirement....9
6.2(b) Termination of a Savings Unit..................9
6.2(c) Loss of Eligibility............................9
6.3 Disability.............................................9
6.4 Survivor Distribution.................................10
Section 7 - Specified Date Alternative...........................11
7.1 Specified Date Distribution...........................11
7.2 Termination Distribution..............................12
7.2(a) Termination of Employment Prior to Specified Date 12
7.2(b) Termination of a Savings Unit.................12
7.2(c) Loss of Eligibility...........................12
7.3 Disability............................................12
7.4 Survivor Distribution.................................12
Section 8 - Beneficiary Designation..............................13
Section 9 - Options..............................................13
9.1 Grants................................................13
9.2 Term of Options.......................................13
9.3 Exercise Price........................................14
9.4 Issuance of Options...................................14
9.5 Exercise and Payment of Options.......................15
9.6 Restrictions on Exercise and Transfer.................16
9.7 Termination by Death..................................16
9.8 Termination by Disability.............................16
9.9 Retirement or Other Termination of Employment.........17
Section 10 - Discontinuation, Termination, Amendment.............17
10.1 Company's Right to Discontinue Offering Savings Units17
10.2 Company's Right to Terminate Plan....................17
10.3 Amendment............................................17
Section 11 - Miscellaneous.......................................18
11.1 Additional Benefit....................................18
11.2 Small Distribution....................................18
11.3 Emergency Distribution................................18
11.4 Commencement of Payments..............................19
11.5 Tax Withholding.......................................19
11.6 Reserved..............................................19
11.7 Transfer to a RWAC....................................19
11.8 Leave of Absence......................................19
11.9 Ineligible Participant................................20
11.10Unsecured General Creditor............................20
11.11Offset................................................20
11.12Non-Assignability.....................................21
11.13Employment Not Guaranteed.............................21
11.14Gender, Singular and Plural...........................21
11.15Captions..............................................21
11.16Applicable Law........................................21
11.17Validity..............................................21
11.18Notice................................................21
11.19Successors and Assigns................................21
11.20Limitations and Adjustments...........................22
11.21Distribution Alternative..............................22
Section 12 - Participation in Other Plan(s)......................23
12.1 Participation in Predecessor Plans....................23
12.2 Pacific Telesis Group 1996 Executive Deferred Compensation Plan or
the Pacific Telesis Group Non-Qualified Savings Plan..23
STOCK SAVINGS PLAN
Section 1 - Statement of Purpose
The purpose of the Stock Savings Plan ("Plan") is to increase employee
stock ownership and to provide retirement and short-term savings
distributions to a select group of management employees consisting of
Eligible Employees of SBC Communications Inc. (the "Company") and its
Subsidiaries ("Participating Companies").
Section 2 - Definitions
For the purposes of this Plan, the following words and phrases shall have
the meanings indicated, unless the context clearly indicates otherwise:
After-Tax Account. "After-Tax Account" means the account maintained on an
after-tax basis on the books of account of the Company for each
Participant for each Savings Unit to which After-Tax Amounts are credited.
After-Tax Accounts are available only for Savings Units commenced prior to
January 1, 1995.
After-Tax Amount. "After-Tax Amount" means contributions made on an
After-Tax basis with respect to a Savings Unit commenced prior to January
1, 1995 under this Plan.
Agreement. "Agreement" means the written agreement entitled "Stock Savings
Plan Enrollment Form" and/or, effective on or after January 1, 1995, the
written agreement entitled "Short Term Contribution Form" that shall be
entered into by the Company and a Participant to carry out the Plan with
respect to such Participant. The Company may adopt any form for such use
or modify any such form.
Base Compensation. "Base Compensation" is comprised of the following types
of the Employee's compensation, before reduction due to any contribution
pursuant to this Plan or reduction pursuant to any deferral plan of
Employer, including but not limited to a plan that includes a qualified
cash or deferred arrangement under Section 401(k) of the Internal Revenue
Code ("Code"), all as determined by the Company:
(a) annual base salary;
(b) commissions; and
(c)the annual award identified as a "Team Award" by the Company,
including any individual award identified by the Company as an
"Individual Discretionary Award" made in connection therewith (the
"IDA"), or any comparable awards, if any, identified by the Company to
be used in lieu of the Team Award and the IDA.
Notwithstanding the foregoing, Base Compensation does not include:
(a) zone allowances or any other geographical differential and (b)
payments made for unused vacation or other paid days off that were
not used.
Beneficiary. "Beneficiary" means the person or persons designated as
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such in accordance with Section 8 of this Plan.
Chairman. "Chairman" means the Chairman of the Board of SBC
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Communications Inc.
Company Match Rate Expressed as a Percent. "Company Match Rate Expressed
as a Percent" means eighty percent (80%), or such higher percentage as may
be determined by the HRC, in its sole discretion, at any time, or such
lower percentage as may be determined by the HRC, in its sole discretion,
and announced to affected Eligible Employees prior to the Unit Start Date
with respect to a Savings Unit.
Disability. "Disability" means inability to work due to being
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physically disabled.
Eligible Employee. "Eligible Employee" means an Employee of Employer who
(a) is in active service on a regular, full-time salaried basis (excluding
term or contract Employees), (b) is, as determined by the Company, a
member of Employer's "select group of management or highly compensated
employees" within the meaning of the Employment Retirement Income Security
Act of 1974, as amended, and regulations thereunder ("ERISA"), (c) (i)
holds a 3rd level or higher management position, all as determined by the
Company, and satisfies any employment status required by the HRC or the
Chairman, or (ii) has an employment status which has been approved by the
Chairman to be eligible to participate in this Plan, and (d) continuously
maintains the employment status upon which eligibility to participate in
this Plan was based; provided, however, the HRC or the Chairman may, from
time to time, include or exclude any Employee or group of Employees from
being deemed an "Eligible Employee" under this Plan.
In addition, any Employee that holds options to acquire shares of AirTouch
Communications, Inc., or ordinary shares or American Depository Shares of
Vodafone AirTouch plc (or any similar rights), under the Pacific Telesis
Group Stock Option and Stock Appreciation Rights Plan or any other stock
option plan of Employer as of December 15 of a particular year shall not
be eligible to participate in this Plan for the following calendar year,
and any previously executed Agreement shall be voided. Any employee of
Ameritech Corporation, or any corporation, partnership, venture or other
entity in which Ameritech Corporation holds at least a 50% interest, shall
not be an Eligible Employee until otherwise provided by the HRC or the
Chairman.
Employee. "Employee" means any person employed by Employer on a regular
full-time salaried basis, excluding Employees hired for a fixed maximum
term and excluding Employees who are neither citizens nor permanent
residents of the United States, all as determined by the Company.
Employer. "Employer" means SBC Communications Inc. or any of its
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Subsidiaries.
Fair Market Value or FMV. "Fair Market Value" or "FMV" means the closing
price on the New York Stock Exchange ("NYSE") for the Stock on the
relevant date, or if such date was not a trading day, the next preceding
trading date, all as determined by the Company. A trading day is any day
that the Stock is traded on the NYSE. In lieu of the foregoing, the HRC
may select any other index or measurement to determine the FMV of the
Stock under the Plan.
HRC. "HRC" means the Human Resources Committee of the Board of
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Directors of SBC.
Options. "Options" shall mean the options to purchase Stock which shall
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be issued to a Participant pursuant to Section 9.
Participant. "Participant" means an Employee or former Employee
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participating in the Plan.
Plan Year. "Plan Year" means the calendar year.
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Pre-Tax Account. "Pre-Tax Account" means the account maintained on a
pre-tax basis on the books of account of the Company for each Participant
for each Savings Unit to which Pre-Tax Amounts are credited.
Pre-Tax Amount. "Pre-Tax Amount" means the contributions made by a
Participant on a pre-tax basis with respect to a Savings Unit under this
Plan.
Retirement. "Retirement" means the termination of a Participant's
employment with Employer, for reasons other than death, on or after the
earlier of the following dates: (1) the date Participant is eligible to
retire with an immediate pension pursuant to the SBC Supplemental
Retirement Income Plan ("SRIP"); or (2) the date the Participant has
attained one of the following combinations of age and service at
termination of employment on or after April 1, 1997, except as otherwise
indicated below:
Net Credited Service Age
10 years or more 65 or older
20 years or more 55 or older
25 years or more 50 or older
30 years or more Any age
With respect to a Participant who is granted an EMP Service Pension under
and pursuant to the provisions of the SBC Pension Benefit Plan -
Nonbargained Program upon termination of Employment, the term "Retirement"
shall include such Participant's termination of employment.
Retirement Alternative. "Retirement Alternative" means, with respect to
any Savings Unit, the distributions described in Section 6 that the Plan
provides based upon a selection of such alternative.
Retirement Distribution. "Retirement Distribution" means the
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distribution described in Section 6.1.
Rotational Work Assignment Company. "RWAC" shall mean any entity with
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which SBC Communications Inc. or any of its Subsidiaries may have an
agreement to provide an employee for a rotational work assignment.
Savings Unit. "Savings Unit" means the Participant's Pre-Tax Amount and/or
After-Tax Amount, and associated Company matching contributions, which
provide stated distributions pursuant to Section 6 or Section 7 of this
Plan in accordance with the Participant's Agreement for such Savings Unit.
Shares. "Shares" means an accounting entry representing a number of
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equivalent shares of Stock
Short Term Incentive Award. An award paid under the Short Term Incentive
Plan or an award under a similar plan intended by the Committee to be in
lieu of an award under such Short Term Incentive Plan, including (a) the
Key Executive Officer Short Term Award paid under the 1996 Stock and
Incentive Plan and (b) payments made in 1998 under the Pacific Telesis
Group Short Term Incentive Plan ("PTGSTIP") to persons identified as
"Officer level employees" by the HRC for purposes of this Plan.
Specified Date. "Specified Date" means, with respect to any Savings Unit
for which the Participant elects the Specified Date Alternative, the fixed
date specified in the Agreement on which the Specified Date Distribution
will commence.
Specified Date Alternative. "Specified Date Alternative" means, with
respect to any Savings Unit, the distributions described in Section 7 that
the Plan provides based upon a selection of such alternative.
Specified Date Distribution. "Specified Date Distribution" means the
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distribution described in Section 7.1.
Stock. "Stock" means the common stock of SBC Communications Inc.
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Subsidiary. A "Subsidiary" of the Company is any corporation, partnership,
venture or other entity in which the Company has at least a 50% ownership
interest. The HRC may at its sole discretion designate any other
corporation, partnership, venture or other entity a Subsidiary for the
purpose of participating in this Plan.
Team Award. The annual award identified as a "Team Award" by the Company
(or any comparable award identified by the Company as a replacement
therefor), excluding any individual award made in connection therewith.
Payments under the PTGSTIP made during 1998 to persons who are not
identified as "Officer level employees" by the HRC for purposes of this
Plan shall be deemed Team Awards under this Plan.
Unit Period. "Unit Period" means the calendar year with respect to which
the Participant elects to participate in the Plan on a pre-tax basis
and/or an after-tax basis. The Unit Period for a Savings Unit will
commence on the Unit Start Date and end upon the earliest to occur of the
following: (i) the last day of the calendar year which includes the Unit
Start Date, (ii) when the Participant terminates employment or ceases to
be an Eligible Employee, or (iii) upon termination of the Savings Unit.
Unit Start Date. "Unit Start Date" means the date for commencement of a
given Savings Unit. The Unit Start Date will be January 1, and for a
Savings Unit comprised of all or a portion of a Participant's Short Term
Incentive Award, the Unit Start Date shall be the day the Award would
otherwise have been paid.
Section 3 - Administration of the Plan
The HRC 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 HRC 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 HRC shall be final and binding.
Section 4 - Participation
4.1 Election to Commence a Savings Unit. Any Eligible Employee may elect
to commence a Savings Unit on a pre-tax basis by filing a completed
Agreement with the Company prior to the Unit Start Date. Pursuant to said
Agreement, the Eligible Employee shall elect the percentage of Base
Compensation that shall comprise Participant's Pre-Tax Amount. Such
percentage shall remain in effect for the duration of the Unit Period even
if Base Compensation should change. Such Agreement shall continue to be
regarded as, and shall apply as, the Eligible Employee's election to
commence each successive Savings Unit until the Company is advised in
writing in accordance with the aforesaid time requirements by the Eligible
Employee to the contrary. In the Agreement, the Participant shall also
elect either the Retirement Alternative or the Specified Date Alternative
and the timing of distribution of Stock.
The Participant's percentage of Base Compensation applicable to a Savings
Unit shall be a whole percentage and must be at least six percent (6%) and
not more than thirty percent (30%).
A Participant shall be permitted to contribute all or a portion of his
Short Term Incentive Award as follows. A Participant's election to
contribute all or a portion of his Short Term Incentive Award which may be
paid to a Participant by an Employer, shall be filed with the Company (on
a form to be provided by the Company for such purpose) prior to the
beginning of the calendar year during which such Award is earned (for
Savings Units with Unit Start Date of January 1, 1998, or later, and for
PTGSTIP payments that constitute Short Term Incentive Awards, the election
must be filed prior to the beginning of the calendar year during which
such Award is paid), or such earlier time as may be established by the
Chairman. The contribution shall be deemed to have taken place on the day
the Award would otherwise have been paid. In the Agreement relating to the
Award, the Participant shall also elect either the Retirement Alternative
or the Specified Date Alternative and the timing of distribution of Stock.
This election is independent of the election for distribution of
contributions associated with deferrals of Base Compensation. Such
contribution of all or a portion of Participant's Short Term Incentive
Award shall comprise a separate Savings Unit. Notwithstanding the
foregoing, Short Term Incentive Awards or any portion thereof contributed
to the Plan prior to January 1, 1995, shall be credited into a 1994 or
prior Savings Unit(s) as specified by the Participant.
4.2 Termination of Election. A Participant's election to participate in
the Plan for the duration of the Unit Period is irrevocable upon the
filing of his Agreement with the Company; provided, however, such election
may be terminated with respect to Base Compensation not yet paid by mutual
agreement in writing between the Participant and the Company. Such
termination if approved shall be effective beginning the first day of the
month following the execution of such mutual agreement.
Section 5 - Pre-Tax Contributions/After-Tax Contributions/Company Match
5.1 After-Tax and/or Pre-Tax Account(s). The Company shall establish and
maintain a separate After-Tax Account (for contributions pursuant to
Savings Units commenced prior to January 1, 1995 only) and/or Pre-Tax
Account for each Participant for each Savings Unit. On the first business
day of each month, the Company shall credit each Participant's Pre-Tax
Account with the number of Shares found by dividing the Participant's
Pre-Tax Amount for the previous month by the FMV on the last day of such
previous month. Annual base salary shall be deemed contributed when
earned; all other amounts shall be deemed contributed when paid.
Shares credited to Participant's Pre-Tax Account and/or After-Tax Account
are 100% vested at all times.
Such Pre-Tax Account and/or After-Tax Account, as applicable, shall be
reduced by the number of Shares corresponding to the number of shares of
Stock distributed by the Company to the Participant or the Participant's
Beneficiary with respect to such Savings Unit pursuant to this Plan.
5.2 Company Matching Account. The Company shall also establish and
maintain a separate Matching Account for each Participant. The Matching
Account will hold the Company's matching contribution to the Plan.
Immediately following the computation of the Shares to be added to each
Participant's Pre-Tax Account each month, the Company shall credit each
Participant's Matching Account with the number of Shares found by taking
the Company Match Rate Expressed as a Percent times the Participant's
Pre-Tax Amount for the previous month, and dividing the resulting figure
by the FMV of the Stock on the last day of such previous month; provided,
however, if the Participant is concurrently participating in this Plan and
(a) the match eligible (basic) portion of the SBC Savings Plan or (b) the
match eligible portion of any other qualified plan of Employer, the
matching contribution shall be credited, pursuant to this Plan, with
respect to no more than six percent (6%) of the Participant's monthly Base
Compensation less the basic (match eligible) election percentage in such
plan; and provided further, however, Company matching contributions shall
be paid, pursuant to this Plan and all plans of Employer combined, with
respect to no more than six percent (6%) of Participant's monthly Base
Compensation. Company Match shall only be paid on Base Compensation.
5.3 Dividends. Additional Shares shall be credited to each Participant's
Pre-Tax Account, After-Tax Account, and Matching Account, respectively,
for dividends on Stock, on the basis of the number of Shares credited to
each such Account on the record date for such dividend.
The number of additional Shares to be credited to each Account for any
dividend payment date shall be determined by dividing the total dividends
which would have otherwise been payable on the number of Shares recorded
in each Account, by the FMV on the last day of the month containing the
dividend record date. The additional Shares shall be credited to each
Account, as appropriate, on the last day of the month containing the
dividend record date.
5.4 Vesting of Matching Account. A Participant's interest in his Matching
Account shall vest at such time as Participant shall have five (5) years
of service as reflected on the records of Employer; provided, however, the
Matching Account of any Participant who was employed by Employer on
December 31, 1988 shall be 100% vested at all times. Shares in the
Matching Account relating to a Savings Unit shall not be available for
distribution to the Participant until vested and: (i) for ten (10) years
after the Unit Period for such Savings Unit has ended and until the
Participant is at least fifty-five (55) years of age, or (ii) until
Participant's Retirement or other termination of employment (including
death). Upon termination of employment, all unvested Shares shall be
forfeited.
5.5 Statement of Accounts. Each Participant will receive annual statements
in such form as the Company deems desirable setting forth the balance of
Shares standing to the credit of each of the Participant's Pre-Tax,
After-Tax and Matching Accounts.
Section 6 - Retirement Alternative
Section 6 shall apply to the portions of all Savings Units for which the
Retirement Alternative is elected. (Section 7 shall have no application to
such portions of such Savings Units.) The distributions specified in this
Section 6 shall be provided under the Retirement Alternative.
6.1 Retirement Distribution. Upon Retirement or, effective for Savings
Units commenced on or after January 1, 1995, the calendar year following
Retirement if so elected by the Participant, with respect to a Savings
Unit, the Company shall distribute to the Participant each year for up to
fifteen (15) years, the number of years to be selected by Participant in
his Agreement, beginning on the first day of the month next following the
date of Retirement or during February of the year following Retirement if
the calendar year following Retirement is elected for commencing
distribution of Savings Units commenced on or after January 1, 1995, and
annually on such date thereafter, from Participant's Pre-Tax Account,
After-Tax Account, and Matching Account, shares of Stock corresponding to
the number of Shares in each such Account on such date divided by the
number of distributions to be made immediately prior to each such
distribution. During the payout period, each such Account shall be
credited with dividends in accordance with Section 5.3.
The Participant shall elect the number of years of distribution of a
Retirement Distribution no later than the end of the calendar year
immediately preceding the first distribution. If a Participant's Agreement
fails to show an election as to the number of years of distribution of a
Retirement Distribution, and an election is not made no later than the end
of the calendar year immediately preceding the first distribution, such
Participant will receive distribution in two annual installments beginning
on the first of the month next following the date of Retirement or during
February of the year following Retirement, whichever commencement date was
previously elected by the Participant.
In the event that a final determination shall be made by the Internal
Revenue Service or any court of competent jurisdiction that, by reason of
Retirement, a Participant has recognized gross income for Federal income
tax purposes in excess of the Retirement Distribution installment actually
distributed by the Company to which such gross income is attributable, the
Company shall make a lump sum distribution to the Participant of shares of
Stock corresponding to the remaining Shares of his Pre-Tax, After-Tax and
Matching Accounts for any affected Savings Units. If a distribution is
made to a Participant pursuant to this paragraph for any Savings Unit, no
other distributions shall thereafter be made under this Plan with respect
to such Savings Unit.
Notwithstanding any election made by the Participant, the Company will
distribute the Participant's Retirement Distribution in the form of a lump
sum distribution if the FMV of his Pre-Tax plus After-Tax plus Matching
Accounts for a Savings Unit is less than $10,000 when distribution of the
Retirement Distribution for such Savings Unit would otherwise commence.
6.2 Termination Distribution.
6.2(a) Termination of Employment Before Retirement. Upon any termination
of employment of the Participant for reasons other than death or
Disability or Retirement, the Company shall distribute to the Participant,
with respect to a Savings Unit, in a lump sum, shares of Stock
corresponding to the vested portion of the Shares standing credited to his
Pre-Tax, After-Tax and Matching Accounts for such Savings Unit determined
as of the date of such termination of service ("Termination
Distribution").
6.2(b) Termination of a Savings Unit. A Participant shall terminate a
Savings Unit if he terminates his election to participate in the Plan with
respect to a Savings Unit pursuant to Section 4.2. Notwithstanding any
other provision of the Plan, upon such discontinuance, the Participant
shall immediately cease to be eligible for any distribution other than his
Termination Distribution with respect to that Savings Unit (which shall be
distributed upon his severance of employment) except as provided under
Section 11.1. The Participant shall continue to be credited with dividends
on the Shares standing credited to his Pre-Tax, After-Tax and Matching
Accounts as provided under Section 5.3 and to vest in Shares as provided
under Section 5.4 while he remains in employment with the Employer until
payment of his Termination Distribution. However, no further Participant
pre-tax or after-tax or Company contributions to this Plan shall be made
pursuant to Sections 5.1 or 5.2 with respect to a Savings Unit after a
Participant terminates such Savings Unit.
6.2(c) Loss of Eligibility. In the event that the Participant ceases to be
an Eligible Employee by reason of a change to an employment status which
is not eligible to participate in this Plan, the Participant shall
nevertheless continue participation in this Plan while he remains in
employment with Employer; however, no further Participant pre-tax
contributions or after-tax contributions, or Company matching
contributions shall be made to this Plan pursuant to Sections 5.1 or 5.2
subsequent to the date of such loss of eligibility.
6.3 Disability. In the event that a Participant suffers a Disability,
pre-tax contributions and/or after-tax contributions and Company matching
contributions that otherwise would have been credited to Participant's
Pre-Tax Account, After-Tax and Matching Accounts, as applicable, in
accordance with Sections 5.1 and 5.2 will continue to be credited to such
Accounts out of his disability payments (as used in this Plan, disability
payments and disability benefits shall refer to only to Employer payments)
at the same time and in the same amounts as they would have been credited
if the Participant had not suffered a Disability for as long as he is
eligible to receive monthly disability benefits equal to 100 percent of
his monthly base salary at the time of his Disability. At such time as the
Participant is not eligible to receive monthly disability benefits equal
to 100 percent of his monthly Base Compensation at the time of his
Disability, Participant pre-tax contributions and/or after-tax
contributions and Company matching contributions that otherwise would have
been credited to the Accounts of the Participant in accordance with
Section 5.1 and 5.2 shall cease.
If the Participant recovers from his Disability and returns within sixty
(60) days thereafter to employment with Employer in an employment status
which would make him eligible to participate in this Plan and prior to the
end of the original Unit Period, the Participant shall continue or resume
making pre-tax contributions and/or after-tax contributions, as the case
may be, in accordance with Section 5.1 and the Company shall continue or
resume making matching contributions, as the case may be, in accordance
with Section 5.2 until the end of the original Unit Period.
If the Participant recovers from his Disability, the Participant shall be
treated as terminating service with Employer on the date of his recovery,
unless within sixty (60) days thereafter he returns to employment with
Employer in an employment status which makes him eligible to participate
in this Plan.
If a Participant's Disability terminates by reason of his death, the
rights of his Beneficiary shall be determined pursuant to Section 6.4 as
if the Participant had not been disabled but rather had been in service on
the date of his death and died on such date. If a Participant's Disability
terminates by reason of attainment of age 65, the Participant shall upon
the attainment of age 65 be entitled to a Retirement Distribution
determined pursuant to Section 6.1. If a Participant's Disability
terminates by reason of Retirement, the Participant shall be treated as
having a Retirement on the date elected by the Participant and shall be
entitled to a Retirement Distribution determined pursuant to Section 6.1.
6.4 Survivor Distribution.
6.4(a) If a Participant dies while in service with Employer (or while
suffering from a Disability) prior to eligibility for Retirement with
respect to a Savings Unit, upon the Participant's death the Company will
distribute to the Participant's Beneficiary with respect to such Savings
Unit, shares of Stock corresponding to all of the Shares in Participant's
Pre-Tax, After-Tax and Matching Accounts. Distribution shall occur in the
month following the date of death.
6.4(b) If a Participant dies while in service after eligibility for
Retirement with respect to a Savings Unit, but prior to commencement of
distribution of a Retirement Distribution with respect to such Savings
Unit, the Company will distribute to the Participant's Beneficiary the
Stock that such Participant's Beneficiary would have received with respect
to such Savings Unit had the Participant retired and commenced to receive
a Retirement Distribution on the day prior to such Participant's death.
Such distributions shall be made in accordance with the number of
installments which the Participant had elected for distribution of his
Retirement Distribution.
6.4(c) If a Participant dies after Retirement but before commencement of
distribution of a Retirement Distribution with respect to a Savings Unit,
the Company will distribute to the Participant's Beneficiary the
installments that Participant would have received with respect to such
Savings Unit had the Participant survived. Payments will commence
effective with the Participant's death. Such distributions shall be made
in accordance with the method of distribution which the Participant had
elected for distribution of his Retirement Distribution.
6.4(d) If a Participant dies after the commencement of payment of a
Retirement Distribution with respect to a Savings Unit, the Company will
distribute to the Participant's Beneficiary the remaining installments
that would have been distributed to the Participant had the Participant
survived.
Section 7 - Specified Date Alternative
Section 7 shall apply to the portions of all Savings Units for which the
Specified Date Alternative is elected. (Section 6 shall have no
application to such portions of such Savings Units.) The distributions
specified in this Section 7 shall be provided under the Specified Date
Alternative.
7.1 Specified Date Distribution. If a Participant elects the Specified
Date Alternative with respect to a Savings Unit, the Company shall
distribute to the Participant each year for up to four (4) years, the
number of years to be selected by Participant in his Agreement, beginning
on the first day of the month selected in his Agreement for commencement
of distributions, and annually on such date thereafter, from Participant's
Pre-Tax Account, After-Tax Account, and Matching Account (to the extent
available for distribution), shares of Stock corresponding to the number
of Shares in each such Account on such date divided by the number of
distributions to be made immediately prior to each such distribution.
During the payout period, each such Account shall be credited with
dividends in accordance with Section 5.3. Shares of Stock corresponding to
Shares in the Matching Account which are not immediately available for
distribution shall be distributed to the Participant in a lump sum
distribution as soon as practicable after such Shares become available for
distribution. While such Shares remain in the Matching Account, such
Account shall be credited with dividends on such Shares in accordance with
Section 5.3.
A Participant may elect, as the Specified Date for a Savings Unit, the
first day of any month after the January following the calendar year
during which the Savings Unit commences. If the Participant elects an
annual distribution, the Savings Unit shall be paid out in February
following the end of the Unit Period or as soon thereafter as is
practicable.
Notwithstanding any election made by the Participant, the Company will
distribute the Participant's Specified Date Distribution in the form of a
lump sum distribution if the FMV of his Pre-Tax plus After-Tax plus
Matching Accounts for a Savings Unit is less than $10,000 when
distribution of a Specified Date Distribution for such Savings Unit would
otherwise commence.
7.2 Termination Distribution.
7.2(a) Termination of Employment Prior to Specified Date. Upon any
termination of employment of the Participant for reasons other than death
or Disability or Retirement before the Specified Date selected for a
Savings Unit, the Company shall distribute to the Participant, with
respect to such Savings Unit, in a lump sum, shares of Stock corresponding
to the vested portion of the Shares standing credited to his Pre-Tax,
After-Tax and Matching Accounts for such Savings Unit determined as of the
date of such termination of service ("Termination Distribution").
7.2(b) Termination of a Savings Unit. The provisions of Section 6.2(b)
shall apply with respect to the termination of any Savings Unit for which
the Specified Date Alternative is selected.
7.2(c) Loss of Eligibility. The provisions of Section 6.2(c) shall apply
with respect to the loss of eligibility under any Savings Unit for which
the Specified Date Alternative is selected.
7.3 Disability. In the event that a Participant suffers a Disability, the
provisions of Section 6.3 shall apply except that the provisions of the
following paragraphs shall govern.
If a Participant's Disability terminates by reason of his death prior to
the Specified Date, the rights of his Beneficiary shall be determined
pursuant to Section 7.4 as if the Participant had not been disabled but
rather had been in service on the date of his death and died on such date.
If a Participant suffering from a Disability attains the Specified Date
for a Savings Unit, the Participant shall be entitled to the Specified
Date Distribution determined pursuant to Section 7.1.
7.4 Survivor Distribution.
7.4(a) If a Participant dies prior to the commencement of distribution of
the Specified Date Distribution with respect to a Savings Unit, upon the
Participant's death the Company will distribute to the Participant's
Beneficiary with respect to such Savings Unit, shares of Stock
corresponding to all of the Shares in Participant's Pre-Tax, After-Tax and
Matching Accounts. Distribution shall occur in the month following the
date of death.
7.4(b) If a Participant dies after the commencement of payment of an
Specified Date Distribution with respect to a Savings Unit, the Company
will distribute to the Participant's Beneficiary the remaining
installments of any such distribution that would have been distributed to
the Participant had the Participant survived.
Section 8 - Beneficiary Designation
Each Participant shall have the right, at any time, to designate pursuant
to the SBC Rules for Employee Beneficiary Designations as may hereafter be
amended from time to time ("Rules"), which Rules shall apply hereunder and
are incorporated herein by this Reference, any person or persons as his
Beneficiary or Beneficiaries (both primary as well as contingent) to whom
distributions of Stock under this Plan shall be made in the event of his
death prior to complete distribution to Participant of the distributions
due him under the Plan. Each Beneficiary designation shall become
effective only when filed in writing with the Company during the
Participant's lifetime on a form prescribed by the Company with written
acknowledgment of receipt.
The filing of a new Beneficiary designation form will cancel all
Beneficiary designations previously filed. The spouse of a married
Participant domiciled in a community property jurisdiction shall join in
any designation of Beneficiary or Beneficiaries other than the spouse.
If a Participant fails to designate a Beneficiary as provided above, or if
all designated Beneficiaries predecease the Participant or die prior to
complete distribution of the Participant's distributions, then the Company
shall direct the distribution of such distributions according to the
Rules.
Section 9 - Options
9.1 Grants. The HRC shall determine at its discretion whether the Options
issued pursuant to this Plan shall be non-qualified stock Options or
incentive stock Options within the meaning of Section 422 of the Code. Any
Options issued hereunder shall be non-qualified Options unless the HRC
specifies prior to the Unit Start Date that they shall be incentive stock
Options. Notwithstanding any other provision of the Plan, any incentive
stock Options issued under this Plan shall be issued and exercised in
accordance with Section 422 of the Code. The Options may be issued in
definitive form or recorded on the books and records of the Company for
the account of the Participant, at the discretion of the Company. If the
Company elects not to issue the Options in definitive form, they shall be
deemed issued, and the Participants shall have all rights incident thereto
as if they were issued on the dates provided herein, without further
action on the part of the Company or the Participant. In addition to the
terms herein, all Options shall be subject to such additional provisions
and limitations as provided in any Administrative Procedures adopted by
the HRC prior to the issuance of such Options. The number of Options
issued to a Participant shall be reflected on the Participant's annual
statement of account.
9.2 Term of Options. The Options may only be exercised: (a) after the
earlier of (i) the expiration of one year from date of issue or (ii) the
Participant's termination of employment (only for Options issued on or
after August 1, 1998), and (b) no later than the tenth anniversary of
their issue, and shall be subject to earlier termination as provided
herein.
9.3 Exercise Price. The price per share of Stock purchasable under an
Option shall be the Fair Market Value of the Stock on the date of
issuance of the Options.
9.4 Issuance of Options. February 1 and August 1 of each year shall each
be an Option issuance date, unless Stock is not traded on the NYSE on such
day in which event the immediate following day in which Stock is so traded
shall be the Option issuance date. On each Option issuance date, each
Participant shall receive two Options, or such higher number as may be
determined by the HRC, in its sole discretion, at any time, or such lower
number as may be determined by the HRC, in its sole discretion, and
announced to Participants prior to the Unit Start Date with respect to a
Savings Unit, for each Share credited to the Participant's Pre-Tax Account
during the preceding six month periods. The number of Options to be
received shall be determined by multiplying the number of Shares by the
number of Options to be received for each Share and rounding up to the
next whole number; provided, however, that no more than 200,000 Options
shall be issued to any individual during the calendar year. No Share may
be counted more than once for the issuance of Options and Options shall
only be issued for Shares credited to a Savings Unit with respect to its
Unit Period.
In addition to the foregoing, the HRC may, at any time and in any manner,
limit the number of Options which may be acquired as a result of the Short
Term Incentive Award being contributed to the Plan. Further, except as
otherwise provided by the HRC, in determining the number of Options to be
issued to a Participant with respect to a Participant's contribution of a
Short Term Incentive Award to the Plan and subsequent crediting of Shares,
Options may be issued only with respect to an amount which does not exceed
the target amount of such award (or such other portion of the award as may
be determined by the HRC).
Accordingly, the following rules shall apply:
Options To Be Issued With Respect To A Short Term Incentive Award
Contributed To The Plan.
A Participant shall be permitted to contribute his Short Term
Incentive Award, although paid after Retirement, into the Stock
Savings Plan; and, subject to application of the rule in the
following sub paragraph, Options may be issued thereon and on the
dividends that would accumulate thereon applicable to the calendar
year when the Short Term Award was placed into the Plan.
Participants Who Retire, Terminate Employment Or Terminate A
Savings Unit.
Options are calculated on August 1 and February 1, in each case for
the preceding six month periods based on the Shares posted to the
Participant's accounts. The August 1 options are for January through
June contributions plus 1st quarter and 2nd quarter dividend
equivalents. The February 1 options are for July through December
contributions plus the 3rd quarter and 4th quarter dividend
equivalents. If a Participant retires, terminates employment or
terminates a Savings Unit during an ongoing savings period, since the
Unit Period ends upon Retirement, termination, etc., a dividend
equivalent shall be treated as being paid with respect to a Unit
Period (i.e., for purposes of receiving Options on such dividend
equivalent) only if the Participant is employed on any day of the
last month of the quarter preceding payment of the dividend, e.g.,
one must be employed at least one day in December in order to receive
Options on the fourth quarter dividend equivalent paid the following
February 1. A retiree shall thus receive Options on dividends issued
with respect to his/her last quarter if he or she worked at any time
during the last month of such quarter. The same shall apply if a
Savings Unit is terminated. However, if a Participant terminates
employment other than as a result of Retirement or for any reason
other than death or Disability, no further options shall be issued to
the Participant on or after the last day of employment.
9.5 Exercise and Payment of Options. Options shall be exercised by
providing notice to the designated agent selected by the Company (if no
such agent has been designated, then to the Company), in the manner and
form determined by the Company, which notice shall be irrevocable, setting
forth the exact number of shares of Stock with respect to which the Option
is being exercised and including with such notice payment of the Exercise
Price. When Options have been transferred, the Company or its designated
agent may require appropriate documentation that the person or persons
exercising the Option, if other than the Participant, has the right to
exercise the Option. No Option may be exercised with respect to a fraction
of a share of Stock.
The Exercise Price shall be paid in full at the time of exercise. No Stock
shall be issued or transferred until full payment has been received
therefor.
Payment may be made:
(a) in cash, or
(b) unless otherwise provided by the Committee at any time, and subject to
such additional terms and conditions and/or modifications as the Committee
or the Company may impose from time to time, and further subject to
suspension or termination of this provision by the Committee or the
Company at any time, by:
(i) delivery of Stock owned by the Participant in partial (if in
partial payment, then together with cash) or full payment; provided,
however, as a condition to paying any part of the Exercise Price in
Stock, at the time of exercise of the Option, the Participant must
establish to the satisfaction of the Company that the Stock tendered
to the Company must have been held by the Participant for a minimum
of six (6) months preceding the tender; or
(ii) if the Company has designated a stockbroker to act as the
Company's agent to process Option exercises, issuance of an exercise
notice to such stockbroker together with instructions irrevocably
instructing the stockbroker: (A) to immediately sell (which shall
include an exercise notice that becomes effective upon execution of a
limit order) a sufficient portion of the Stock to pay the Exercise
Price of the Options being exercised and the required tax
withholding, and (B) to deliver on the settlement date the portion of
the proceeds of the sale equal to the Exercise Price and tax
withholding to the Company. In the event the stockbroker sells any
Stock on behalf of a Participant, the stockbroker shall be acting
solely as the agent of the Participant, and the Company disclaims any
responsibility for the actions of the stockbroker in making any such
sales. No Stock shall be issued until the settlement date and until
the proceeds (equal to the Exercise Price and tax withholding) are
paid to the Company.
If payment is made by the delivery of Stock, the value of the Stock
delivered shall be equal to the Fair Market Value of the Stock on the day
preceding the date of exercise of the Option.
Restricted Stock may not be used to pay the Option exercise price.
9.6 Restrictions on Exercise and Transfer. During the optionee's lifetime
(for purposes of Paragraphs 9.6 through 9.9, "optionee" shall only refer
to the original recipient of an Option), the optionee's Options shall be
exercisable only by the optionee or by the optionee's guardian or legal
representative. After the death of the optionee, except as otherwise
provided by the Company's Rules for Employee Beneficiary Designations, an
Option shall only be exercised by the holder thereof (including, but not
limited to, an executor or administrator of a decedent's estate) or his or
her guardian or legal representative.
No Option shall be transferable except: (a) upon the death of the optionee
in accordance with the Company's Rules for Employee Beneficiary
Designations; and (b) in the case of any holder after the optionee's
death, only by will or by the laws of descent and distribution.
9.7 Termination by Death. If an optionee's employment with Employer
terminates by reason of death, the Option may thereafter be exercised, to
the extent then exercisable, for a period of three (3) years from the date
of such death or until the expiration of the stated term of such Option,
whichever period is shorter.
9.8 Termination by Disability. If an optionee's employment with Employer
terminates by reason of Disability, any Option held by such optionee may
thereafter be exercised, to the extent it was exercisable at the time of
such termination (or on such accelerated basis as the HRC shall determine
at the time of grant), for a period of three (3) years from the date of
such termination of employment or the expiration of the stated term of
such Option, whichever period is shorter.
9.9 Retirement or Other Termination of Employment. Except as otherwise
provided in this paragraph, if an optionee's employment with Employer
terminates as a result of Retirement or for any reason other than death or
Disability, the Option may be exercised until the earlier of three months
(one year for options granted on or after August 1, 1998) from the date of
termination or three years (five years for options granted on or after
August 1, 1998) from the date of Retirement, as applicable, or the
expiration of the term of such Option; provided, however, that a transfer
to a RWAC shall not be considered a termination of employment to the
extent the term of employment at a RWAC is equal to or less than five
years.
Section 10 - Discontinuation, Termination, Amendment
10.1 Company's Right to Discontinue Offering Savings Units. The HRC or the
Chairman may at any time discontinue offerings of additional Savings Units
with respect to any or all future Plan Years. Any such discontinuance
shall have no effect upon the pre-tax contributions or after-tax
contributions or the terms or provisions of this Plan as applicable to any
then previously existing Savings Units.
10.2 Company's Right to Terminate Plan. No Savings Unit may be commenced
after December 31, 2004. The HRC may terminate the Plan at any earlier
time. Termination of the Plan shall mean that (1) there shall be no
further offerings of additional Savings Units with respect to any future
Plan Year; (2) pre-tax contributions and after-tax contributions shall
prospectively cease with respect to all Savings Units for the then Plan
Year and thereafter; and (3) all then currently existing Savings Units
shall be treated as follows:
The Participant's Matching Accounts shall be 100% vested. The
Participant shall receive or continue to receive all distributions
under this Plan at such time as provided in and pursuant to the terms
and conditions of his Agreement(s) and as described in this Plan;
provided, however, any distributions under a Savings Unit that is not
completed due to a termination of the Plan under this Section 10.2
shall be based upon only the actual pre-tax contributions plus
after-tax contributions plus Company contributions made with respect
to such Savings Unit prior to such termination, and dividends on same
thereafter.
10.3 Amendment. The HRC may at any time amend the Plan in whole or in part
including, but not limited to, changing the formulas for determining the
amount of Company contributions under Section 5 or the number of Options
to be issued under Section 9; provided, however, that no amendment,
including an amendment to this Section 10, shall be effective, without the
written consent of a Participant, to alter, to the detriment of such
Participant, the distributions described in this Plan as applicable to a
Savings Unit of the Participant or to decrease the number of Shares
standing credited to such Participant's Pre-Tax, After-Tax and Matching
Accounts under the Plan. For purposes of this Section 10.3, an alteration
to the detriment of a Participant shall mean a reduction in the period of
time over which stock is distributable under a Participant's Agreement, or
any reduction in the number of Options, increase in Exercise Price or
decrease in the term of an Option. Written notice of any amendment shall
be given to each Participant.
Notwithstanding anything to the contrary contained in this section of the
Plan, the HRC may modify this Plan with respect to any person subject to
the provisions of Section 16 of the Securities Exchange Act of 1934 as
amended ("Exchange Act") to place additional restrictions on the exercise
of any Option or the transfer of any Stock not yet issued under the Plan.
Section 11 - Miscellaneous.
11.1 Additional Benefit. The reduction of any benefit payable under the
SBC Pension Benefit Plan (or comparable plan identified by the Company as
a replacement therefore), which results from participation in this Plan,
will be restored as an additional benefit ("make-up piece") under this
Plan. The Participant shall elect prior to commencement of payment of the
make-up piece whether to receive such benefit in cash in a lump sum
(consisting of the present value equivalent of the pension retirement
benefit (life annuity) make-up piece) or such benefit in an annuity form
of payment. Notwithstanding the proceeding provisions of this Section
11.1, if all or a portion of the make-up piece is paid pursuant to SRIP or
another non-qualified plan, then such amount shall not be payable pursuant
to this Plan.
11.2 Small Distribution. Notwithstanding any election made by the
Participant, the Company will distribute any shares of Stock corresponding
to Shares in the form of a lump sum distribution if the Shares in
Participant's Pre-Tax Account plus After-Tax Account plus Matching Account
have a FMV of less than $10,000 when such distribution would otherwise
commence.
11.3 Emergency Distribution. In the event that the HRC, upon written
petition of the Participant, determines in its sole discretion, that the
Participant has suffered an unforeseeable financial emergency, the Company
shall distribute to the Participant, as soon as practicable following such
determination, Stock corresponding to the number of Shares ordered by the
HRC from his Pre-Tax, After-Tax and Matching Accounts for one or more
Savings Units as necessary to meet the emergency (the "Emergency
Distribution"). For purposes of this Plan, an unforeseeable financial
emergency is an unexpected need for cash arising from an illness, casualty
loss, sudden financial reversal, or other such unforeseeable occurrence.
Cash needs arising from foreseeable events such as the purchase of a house
or education expenses for children shall not be considered to be the
result of an unforeseeable financial emergency. Upon receipt of an
Emergency Benefit, a Participant shall not be permitted to commence a new
Savings Unit until the next enrollment after one whole year has elapsed.
11.4 Commencement of Payments. Except as otherwise provided in this Plan,
commencement of a distribution under this Plan shall begin sixty (60) days
following the event which entitles a Participant (or a Beneficiary) to
such distribution, or at such earlier date as may be determined by the
HRC.
11.5 Tax Withholding. Upon distribution of Stock, including but not
limited to, shares of Stock issued upon the exercise of an Option, the
Company shall withhold sufficient shares of Stock having a Fair Market
Value on the date the taxes are determined necessary to satisfy the
minimum amount of Federal, state, and local taxes required by law to be
withheld as a result of such distribution.
Any fractional share of Stock payable to a Participant shall be withheld
as additional Federal withholding, or, at the option of the Company, paid
in cash to the Participant.
Unless otherwise determined by the Committee, when the method of payment
for the Exercise Price is from the sale by a stockbroker pursuant to
Section 9.5(b)(ii), hereof, of the Stock acquired through the Option
exercise, then the tax withholding shall be satisfied out of the proceeds.
For administrative purposes in determining the amount of taxes due, the
sale price of such Stock shall be deemed to be the Fair Market Value of
the Stock.
11.6 Reserved
11.7 Transfer to a RWAC. If a Participant transfers to a RWAC, all of the
Participant's Savings Units shall be frozen upon transfer, unless
otherwise determined by the Company. No further Participant pre-tax
contributions, after-tax contributions or Company contributions shall be
made subsequent to the transfer. During the period of employment at a RWAC
(for a period not to exceed five (5) years), the Participant shall
continue to be credited with dividends on his Pre-Tax, After-Tax and
Matching Accounts, as applicable, as provided under Section 5.3 and to
vest in such amounts as provided under Section 5.4, and all distributions
shall continue to be payable to the Participant and his Beneficiaries in
accordance with Section 6 and/or Section 7 hereof, as applicable. If the
Participant has not resumed employment with Employer in an employment
status which makes him eligible to participate in this Plan within five
(5) years from the date of transfer, a Termination Distribution based on
the amounts credited to the Participant's Pre-Tax, After-Tax and Matching
Accounts, as applicable, shall be paid upon termination of employment with
a RWAC or the expiration of such five (5) year period, whichever is
earlier.
11.8 Leave of Absence. If a Participant absents himself from employment on
a formally granted leave of absence (i.e., the absence is with formal
permission in order to prevent a break in the continuity of the Employee's
term of employment, which permission is granted in conformity with the
rules of the Employer which employs the individual, as adopted from time
to time), all of the Participant's Savings Units shall automatically be
frozen upon such leave of absence, unless otherwise determined by the HRC.
No Participant pre-tax contributions or after-tax contributions or Company
contributions shall be made during the leave of absence. However, during
the leave of absence, the Participant shall continue to be credited with
dividends on his Pre-Tax, After-Tax and Matching Accounts, as applicable,
as provided under Section 5.3 and to vest in such amounts as provided
under Section 5.4, and all distributions shall continue to be payable to
the Participant and his Beneficiaries in accordance with Section 6 and/or
Section 7 hereof, as applicable. If the Participant returns to employment
with Employer in an employment status which makes him eligible to
participate in this Plan before completion of or immediately upon the
expiration of the leave of absence, Participant pre-tax contributions and
Company matching contributions will resume until the end of the original
Unit Period. If the Participant has not resumed employment with Employer
in an employment status which makes him eligible to participate in this
Plan before completion of or immediately upon the expiration of the leave
of absence, a Termination Distribution based on the amounts credited to
the Participant's Pre-Tax, After-Tax and Matching Accounts shall be paid
to the Participant.
This Section 11.8 shall not apply with respect to any period during which
a Participant is suffering from a Disability, and such period of
Disability shall not be included under this Section 11.8 as a portion of a
period of leave of absence.
11.9 Ineligible Participant. Notwithstanding any other provisions of this
Plan to the contrary, if any Participant is determined not to be a
"management or highly compensated employee" within the meaning of ERISA,
such Participant will not be eligible to participate in this Plan and
shall receive an immediate lump sum distribution of shares of Stock
corresponding to the vested portion of the Shares standing credited to his
Pre-Tax plus After-Tax plus Matching Accounts. Upon such payment no other
distribution shall thereafter be payable under this Plan either to the
Participant or any Beneficiary of the Participant, except as provided
under Section 11.1.
11.10 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors, and assigns shall have no legal or equitable rights,
interest, or claims in any property or assets of Employer. No assets of
Employer shall be held under any trust for the benefit of Participants,
their Beneficiaries, heirs, successors, or assigns, or held in any way as
collateral security for the fulfilling of the obligations of Employer
under this Plan. Any and all of the Employer's assets shall be, and
remain, the general, unpledged, unrestricted assets of Employer. The only
obligation of Employer under the Plan shall be merely that of an unfunded
and unsecured promise of the Company to distribute shares of Stock
corresponding to Shares, and Options, under the Plan in the future.
11.11 Offset. If a Participant becomes entitled to a distribution of Stock
under the Plan, the Company may offset against the amount of Stock
otherwise distributable, any claims to reimbursement for intentional
wrongdoing by the Participant against the Employer or an affiliate as well
as any overpayment made under this Plan. Such determination shall be made
by the Company.
11.12 Non-Assignability. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage, or otherwise encumber, transfer, hypothecate or convey in
advance of actual receipt, shares of Stock corresponding to Shares under
the Plan, if any, or any part thereof, which are, and all rights to which
are, expressly declared to be unassignable and non-transferable. No part
of the Stock distributable shall, prior to actual distribution, be subject
to seizure or sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any other person,
nor be transferable by operation of law in the event of a Participant's or
any other person's bankruptcy or insolvency.
11.13 Employment Not Guaranteed. Nothing contained in this Plan nor any
action taken hereunder shall be construed as a contract of employment or
as giving any Employee any right to be retained in the employ of Employer
or to serve as a director.
11.14 Gender, Singular and Plural. All pronouns and any variations there
of shall be deemed to refer to the masculine or feminine, as the identity
of the person or persons may require. As the context may require, the
singular may be read as the plural and the plural as the singular.
11.15 Captions. The captions of the articles, sections, and paragraphs of
this Plan are for convenience only and shall not control nor affect the
meaning or construction of any of its provisions.
11.16 Applicable Law. This Plan shall be governed and construed in
accordance with the laws of the State of Texas, to the extent not
preempted by ERISA. Any action seeking to enforce an Employee's or
Beneficiary's rights under this Plan, including but not limited to the
terms of any Agreement or Option issued hereunder, may only be brought in
Bexar County, Texas.
11.17 Validity. In the event any provision of this Plan is held invalid,
void, or unenforceable, the same shall not affect, in any respect
whatsoever, the validity of any other provision of this Plan.
11.18 Notice. Any notice or filing required or permitted to be given to
the Company under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail, to the principal
office of the Company, directed to the attention of the Vice
President-Human Resources of the Company. Such notice shall be deemed
given on the date of delivery or, if delivery is made by mail, on the date
shown on the postmark on the receipt for registration or certification.
11.19 Successors and Assigns. This Plan shall be binding upon the Company
and its successors and assigns.
11.20 Limitations and Adjustments. The number of shares of Stock which may
be distributed pursuant to the Plan, exclusive of Section 9, is 6,500,000.
The number of stock Options and shares of Stock which may be issued
pursuant to Section 9 of the Plan is 10,500,000 each. Of the foregoing
stock options, the number of incentive stock Options which may be issued
pursuant to the Plan is 10,500,000.
In the event of a merger, reorganization, consolidation, recapitalization,
separation, liquidation, stock dividend, stock split, share combination,
or other change in the corporate structure of the Company affecting the
shares of Stock, such adjustment shall be made in the number and class of
shares of Stock which may be delivered under the Plan, and in the number
and class of and/or price of shares of Stock subject to outstanding
Options granted under the Plan, as may be determined to be appropriate and
equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights.
11.21 Distribution Alternative. Effective November 17, 1995,
notwithstanding the provisions of Section 6 and of Section 7, at any time
during the calendar year prior to the calendar year during which a
distribution(s) pursuant to a Savings Unit is scheduled to commence, a
Participant may change his or her previous election(s) applicable to such
Savings Unit to further defer the commencement of the distribution(s)
pursuant to such Savings Unit to a subsequent calendar year, and in such
case to also change the number of installments applicable to the
distribution of the Savings Unit as follows: (a) the new election(s)
applicable to such Savings Unit must conform with either Section 6, if the
Retirement Alternative is the new selection for such Savings Unit, or
Section 7, if the Specified Date Alternative is the new selection for such
Savings Unit; (b) either the Retirement Alternative or the Specified Date
Alternative may be selected for the new election(s) for a Savings Unit
irrespective of the Alternative originally selected for such Savings Unit;
(c) the commencement date for payments pursuant to such Savings Unit may
be delayed to any point in time in a subsequent calendar year - the
commencement date for payments may not be advanced to an earlier point in
time; and (d) any number of installments may be selected pursuant to the
new election(s) for a Savings Unit irrespective of the number of
installments originally selected for such Savings Unit. Provided, however,
in the event a Participant is involuntarily terminated from employment
(which shall be deemed to include termination by reason of death), and
such termination is for a reason other than for cause (i.e., willful and
gross misconduct on the part of the Participant that is materially and
demonstrably detrimental to the Company or any subsidiary thereof), and
such termination is a Retirement (or in the case of Participant's death,
Participant was Retirement eligible), then Participant (or Participant's
Beneficiary(ies)) may make the change(s) to Participant's previous
election(s) pursuant to this Section 11.21 at the time of Participant's
termination of employment. Amounts with respect to which the Participant's
election(s) are modified in accordance with the provisions of this Section
11.21 shall continue to be subject to all provisions of this Plan
including further distribution modifications in accordance with the
provisions of the Section 11.21.
Section 12 - Participation in Other Plan(s)
12.1 Participation in Predecessor Plans. Effective November 21, 1997, the
plans of the Stock Savings Program shall be merged into the Stock Savings
Plan. All Savings Units under the Stock Based Savings Plan or the
Management Stock Savings Plan shall be transferred to this Plan as of that
date and shall be governed by the terms of this Plan.
12.2 Pacific Telesis Group 1996 Executive Deferred Compensation Plan or
the Pacific Telesis Group Non-Qualified Savings Plan. If an Eligible
Employee elects to participate in this Plan with respect to contributions
during 1998, the Employee may not defer, under the Pacific Telesis Group
1996 Executive Deferred Compensation Plan or the Pacific Telesis Group
Non-Qualified Savings Plan, any compensation otherwise payable in 1998,
and such election under this Plan shall operate as a termination of
participation in such Pacific Telesis Group plans to the extent it relates
to any deferrals of compensation otherwise payable in 1998.