Exhibit 10-c
AT&T INC.
2006 INCENTIVE
PLAN
Plan Effective: May 1,
2006
Amended Through: January 1,
2010
AT&T INC.
2006 Incentive
Plan
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Establishment and Purpose
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Establishment of the Plan
. AT&T Inc., a
Delaware corporation (the “Company” or
“AT&T”), hereby establishes an incentive
compensation plan (the “Plan”), as set forth in this
document.
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Purpose of
the Plan . The
purpose of the Plan is to promote the success and enhance the value
of the Company by linking the personal interests of Participants to
those of the Company’s shareowners, and by providing
Participants with an incentive for outstanding
performance.
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Effective
Date of the Plan . The Plan was originally effective
on May 1, 2006, and is being hereby amended and restated effective
January 1, 2010.
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Definitions . Whenever used in the Plan, the
following terms shall have the meanings set forth below and, when
the meaning is intended, the initial letter of the word is
capitalized:
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(a) “Applicable
Law” means the legal requirements relating to the
administration of options and share-based or performance-based
awards under any applicable laws of the United States, any other
country, and any provincial, state, or local subdivision, any
applicable stock exchange or automated quotation system rules or
regulations, as such laws, rules, regulations and requirements
shall be in place from time to time.
(b)
“Award” means, individually or collectively, a grant or
award under this Plan of Stock Options, Restricted Stock (including
unrestricted Stock), Restricted Stock Units, Performance Units, or
Performance Shares.
(c) “Award
Agreement” means an agreement which may be entered into by
each Participant and the Company, setting forth the terms and
provisions applicable to Awards granted to Participants under this
Plan.
(d)
“Board” or “Board of Directors” means the
AT&T Board of Directors.
(e)
“Cause” shall mean willful and gross misconduct on the
part of an Employee that is materially and demonstrably detrimental
to the Company or any Subsidiary as determined by the Company in
its sole discretion.
(f) “Change in
Control” shall be deemed to have occurred if (i) any
“person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or
a corporation owned directly or indirectly by the shareowners of
the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the total voting power
represented by the Company’s then outstanding voting
securities, or (ii) during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of the Company and any new Director whose
election by the Board of Directors or nomination for election by
the Company’s shareowners was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who either
were Directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (iii) the consummation
of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) at least fifty percent (50%) of the total
voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or the shareowners of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the
Company’s assets.
(g) “Code”
means the Internal Revenue Code of 1986, as amended from time to
time.
(h)
“Committee” means the committee or committees of the
Board of Directors given authority to administer the Plan as
provided in Article 3.
(i)
“Director” means any individual who is a member of the
AT&T Board of Directors.
(j)
“Disability” shall mean absence of an Employee from
work under the relevant Company or Subsidiary long term disability
plan.
(k)
“Employee” means any employee of the Company or of one
of the Company’s
Subsidiaries. “Employment” means the
employment of an Employee by the Company or one of its
Subsidiaries. Directors who are not otherwise employed
by the Company shall not be considered Employees under this
Plan.
(l) “Exchange
Act” means the Securities Exchange Act of 1934, as amended
from time to time, or any successor Act thereto.
(m) “Exercise
Price” means the price at which a Share may be purchased by a
Participant pursuant to an Option, as determined by the
Committee.
(n) “Fair Market
Value” shall mean the closing price on the New York Stock
Exchange (“NYSE”) for a Share 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 Shares are traded on the NYSE. In lieu
of the foregoing, the Committee may, from time to time, select any
other index or measurement to determine the Fair Market Value of
Shares under the Plan, including but not limited to an average
determined over a period of trading days.
(o)
“Insider” shall mean an Employee who is, on the
relevant date, an officer, director, or ten percent (10%)
beneficial owner of the Company, as those terms are defined under
Section 16 of the Exchange Act.
(p)
“Option” means an option to purchase Shares from
AT&T.
(q)
“Participant” means an Employee or former Employee who
holds an outstanding Award granted under the Plan.
(r) “Performance
Unit” and “Performance Share” shall each mean an
Award granted to an Employee pursuant to Article 8
herein.
(s) “Plan”
means this 2006 Incentive Plan. The Plan may also be
referred to as the “AT&T 2006 Incentive Plan” or as
the “AT&T Inc. 2006 Incentive
Plan.”
(t)
“Retirement” or to “Retire” shall mean the
Participant’s Termination of Employment for any reason other
than death, Disability or for Cause, on or after the earlier of the
following dates, or as otherwise provided by the Committee: (1) for
Officer Level Employees (Participants deemed officer level
Employees for compensation purposes as indicated on the records of
AT&T), the date the Participant is at least age 55 and has five
(5) years of net credited service); or (2) the date the Participant
has attained one of the following combinations of age and service,
except as otherwise indicated below:
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Net Credited
Service
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Age
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65 or
older
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55 or
older
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50 or
older
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Any
age
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For purposes of
this Plan only, Net Credited Service shall be calculated in the
same manner as “Pension Eligibility Service” under the
AT&T Pension Benefit Plan – Nonbargained Program
(“Pension Plan”), as that may be amended from time to
time, except that service with an Employer shall be counted as
though the Employer were a “Participating Company”
under the Pension Plan and the Employee was a participant in the
Pension Plan.
(u) “Rotational
Work Assignment Company” (“RWAC”) shall mean any
entity with which AT&T Inc. or any of its Subsidiaries may
enter into an agreement to provide an employee for a rotational
work assignment.
(v)
“Shares” or “Stock” means the shares of
common stock of the Company.
(w)
“Subsidiary” shall mean any corporation, partnership,
venture or other entity in which AT&T holds, directly or
indirectly, a fifty percent (50%) or greater ownership
interest. The Committee may, at its sole discretion,
designate, on such terms and conditions as the Committee shall
determine, any other corporation, partnership, limited liability
company, venture other entity a Subsidiary for purposes of this
Plan. Unless otherwise provided by the Committee,
Cingular and its direct or indirect majority-owned subsidiaries
shall each be deemed a Subsidiary so long as AT&T holds a
direct or indirect twenty five percent (25%) or greater ownership
interest in Cingular Wireless LLC or its successor.
(x) “Termination
of Employment” or a similar reference shall mean the event
where the Employee is no longer an Employee of the Company or of
any Subsidiary, including but not limited to where the employing
company ceases to be a Subsidiary. With respect to any
Award that constitutes a “nonqualified deferred compensation
plan” within the meaning of Section 409A of the Code,
“Termination of Employment” shall mean a
“separation from service” as defined under Section 409A
of the Code.
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The
Committee . Administration of the Plan shall be
as follows:
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(a) With respect to
Insiders, the Plan and Awards hereunder shall be administered by
the Human Resources Committee of the Board or such other committee
as may be appointed by the Board for this purpose (each of the
Human Resources Committee and such other committee is the
“Disinterested Committee”), where each Director on such
Disinterested Committee is a “Non-Employee Director,”
as that term is used in Rule 16b-3 under the Exchange Act (or
any successor designation for determining the committee that may
administer plans, transactions or awards exempt under Section 16(b)
of the Exchange Act), as that rule may be modified from time to
time.
(b) With respect to
persons who are not Insiders, the Plan and Awards hereunder shall
be administered by each of the Disinterested Committee and such
other committee, if any, to which the Board may delegate such
authority (such other Committee shall be the “Non-Insider
Committee”), and each such Committee shall have full
authority to administer the Plan and all Awards hereunder, except
as otherwise provided herein or by the Board. The
Disinterested Committee may, from time to time, limit the authority
of the Non-Insider Committee in any way. Any Committee
may be replaced by the Board at any time.
(c) Except as
otherwise indicated from the context, references to the
“Committee” in this Plan shall be to either of the
Disinterested Committee or the Non-Insider Committee.
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Authority of
the Committee . The Committee shall have complete
control over the administration of the Plan and shall have the
authority in its sole discretion to (a) exercise all of the powers
granted to it under the Plan, (b) construe, interpret and
implement the Plan, grant terms and grant notices, and all Award
Agreements, (c) prescribe, amend and rescind rules and regulations
relating to the Plan, including rules governing its own operations,
(d) make all determinations necessary or advisable in administering
the Plan, (e) correct any defect, supply any omission and reconcile
any inconsistency in the Plan, (f) amend the Plan to reflect
changes in applicable law (whether or not the rights of the holder
of any Award are adversely affected, unless otherwise provided by
the Committee), (g) grant Awards and determine who shall receive
Awards, when such Awards shall be granted and the terms and
conditions of such Awards, including, but not limited to,
conditioning the exercise, vesting, payout or other term of
condition of an Award on the achievement of Performance Goals
(defined below), (h) unless otherwise provided by the Committee,
amend any outstanding Award in any respect, not materially adverse
to the Participant, including, without limitation, to (1)
accelerate the time or times at which the Award becomes vested,
unrestricted or may be exercised (and, in connection with such
acceleration, the Committee may provide that any Shares acquired
pursuant to such Award shall be Restricted Shares, which are
subject to vesting, transfer, forfeiture or repayment provisions
similar to those in the Participant’s underlying Award), (2)
accelerate the time or times at which shares of Common Stock are
delivered under the Award (and, without limitation on the
Committee’s rights, in connection with such acceleration, the
Committee may provide that any shares of Common Stock delivered
pursuant to such Award shall be Restricted Shares, which are
subject to vesting, transfer, forfeiture or repayment provisions
similar to those in the Grantee’s underlying Award), or (3)
waive or amend any goals, restrictions or conditions applicable
such Award, or impose new goals, restrictions and (i) determine at
any time whether, to what extent and under what circumstances and
method or methods (1) Awards may be (A) settled in cash, shares of
Stock, other securities, other Awards or other property
(in which event, the Committee may specify what other effects
such settlement will have on the Participant’s Award), (B)
exercised or (C) canceled, forfeited or suspended, (2) Shares,
other securities, cash, other Awards or other property and other
amounts payable with respect to an Award may be deferred either
automatically or at the election of the Participant or of the
Committee, or (3) Awards may be settled by the Company or any of
its Subsidiaries or any of its or their designees.
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No Award may be
made under the Plan more than ten years after April 30,
2016.
References to
determinations or other actions by AT&T or the Company, herein,
shall mean actions authorized by the Committee, the Chairman of the
Board of AT&T, the Senior Executive Vice President of AT&T
in charge of Human Resources or their respective successors or duly
authorized delegates, in each case in the discretion of such
person, provided, however, only the Disinterested Committee may
take action with respect to Insiders with regard to granting or
determining the terms of Awards or other matters that would require
the Disinterested Committee to act in order to comply with Rule
16b-3 promulgated under the Exchange Act.
All
determinations and decisions made by AT&T pursuant to the
provisions of the Plan and all related orders or resolutions of the
Board shall be final, conclusive, and binding on all persons,
including but not limited to the Company, its stockholders,
Employees, Participants, and their estates and
beneficiaries.
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Shares
Subject to the Plan .
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Number of
Shares . Subject to adjustment as provided
in Section 4.3 herein, the number of Shares available for
issuance under the Plan shall not exceed 90 million
Shares. The Shares granted under this Plan may be either
authorized but unissued or reacquired Shares. The
Disinterested Committee shall have full discretion to determine the
manner in which Shares available for grant are counted in this
Plan.
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Share
Accounting . Without limiting the discretion of
the Committee under this section, unless otherwise provided by the
Disinterested Committee, the following rules will apply for
purposes of the determination of the number of Shares available for
grant under the Plan or compliance with the foregoing
limits:
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(a) If an outstanding
Award for any reason expires or is terminated or canceled without
having been exercised or settled in full, or if Shares acquired
pursuant to an Award subject to forfeiture or repurchase are
forfeited or repurchased by the Company for an amount not greater
than the Participant’s original purchase price, the Shares
allocable to the terminated portion of such Award or such forfeited
or repurchased Shares shall again be available for issuance under
the Plan.
(b) Shares shall not
be deemed to have been issued pursuant to the Plan with respect to
any portion of an Award that is settled in cash, other than an
Option.
(c) Shares withheld or
reacquired by the Company in satisfaction of tax withholding
obligations under a Restricted Stock Award shall not again be
available for issuance under the Plan; however Shares withheld for
tax withholding from other awards shall be available for issuance
again.
(d) If the exercise
price of an Option is paid by tender to the Company, or attestation
to the ownership, of Shares owned by the Participant, or an Option
is settled without the payment of the exercise price, the number of
shares available for issuance under the Plan shall be reduced by
the gross number of shares for which the Option is
exercised.
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Adjustments
in Authorized Plan Shares . In the event of any merger,
reorganization, consolidation, recapitalization, separation,
liquidation, Stock dividend, split-up, Share combination, or other
change in the corporate structure of the Company affecting the
Shares, an adjustment shall be made in the number and class of
Shares which may be delivered under the Plan (including but not
limited to individual limits), and in the number and class of
and/or price of Shares subject to outstanding Awards granted under
the Plan, and/or the number of outstanding Options, Shares of
Restricted Stock, and Performance Shares (and Performance Units and
other Awards whose value is based on a number of Shares)
constituting outstanding Awards, as may be determined to be
appropriate and equitable by the Disinterested Committee, in its
sole discretion, to prevent dilution or enlargement of
rights.
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Eligibility
and Participation .
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Eligibility . All management Employees are
eligible to receive Awards under this Plan.
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Actual
Participation . Subject to the provisions of the
Plan, the Committee may, from time to time, select from all
eligible Employees, those to whom Awards shall be granted and shall
determine the nature and amount of each Award. No
Employee is entitled to receive an Award unless selected by the
Committee.
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Grant of
Options . Subject to the terms and provisions
of the Plan, Options may be granted to eligible Employees at any
time and from time to time, and under such terms and conditions, as
shall be determined by the Committee. In addition, the
Committee may, from time to time, provide for the payment of
dividend equivalents on Options, prospectively and/or
retroactively, on such terms and conditions as the Committee may
require. The Committee shall have discretion in
determining the number of Shares subject to Options granted to each
Employee; provided, however, that no single Employee may receive
Options under this Plan for more than one percent (1%) of the
Shares approved for issuance under this Plan during any calendar
year. The Committee may not grant Incentive Stock
Options, as described in Section 422 of the Code, under this
Plan.
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Form of
Issuance . Each Option grant may be issued in
the form of an Award Agreement and/or may be recorded on the books
and records of the Company for the account of the
Participant. If an Option is not issued in the form of
an Award Agreement, then the Option shall be deemed granted as
determined by the Committee. The terms and conditions of
an Option shall be set forth in the Award Agreement, in the notice
of the issuance of the grant, or in such other documents as the
Committee shall determine. Such terms and conditions
shall include the Exercise Price, the duration of the Option, the
number of Shares to which an Option pertains (unless otherwise
provided by the Committee, each Option may be exercised to purchase
one Share), and such other provisions as the Committee shall
determine.
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Exercise
Price . Unless
a greater Exercise Price is determined by the Committee, the
Exercise Price for each Option Awarded under this Plan shall be
equal to one hundred percent (100%) of the Fair Market Value of a
Share on the date the Option is granted.
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Duration of
Options . Each
Option shall expire at such time as the Committee shall determine
at the time of grant (which duration may be extended by the
Committee); provided, however, that no Option shall be exercisable
later than the tenth (10th) anniversary date of its
grant. In the event the Committee does not specify the
expiration date of an Option, then such Option will expire on the
tenth (10th) anniversary date of its grant, except as otherwise
provided herein.
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Vesting of
Options . Options shall vest at such times
and under such terms and conditions as determined by the Committee;
provided, however, unless another vesting period is provided by the
Committee at or before the grant of an Option, one-third of the
Options will vest on each of the first three anniversaries of the
grant; if one Option remains after equally dividing the grant by
three, it will vest on the first anniversary of the grant, if two
Options remain, then one will vest on each of the first two
anniversaries. The Committee shall have the right to
accelerate the vesting of any Option; however, the Chairman of the
Board or the Senior Executive Vice President-Human Resources, or
their respective successors, or such other persons designated by
the Committee, shall have the authority to accelerate the vesting
of Options for any Participant who is not an Insider.
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Exercise of
Options . Options granted under the Plan
shall be exercisable at such times and be subject to such
restrictions and conditions as the Committee shall in each instance
approve, which need not be the same for each grant or for each
Participant. Exercises of Options may be effect only on
days and during the hours that the New York Stock Exchange is open
for regular trading. The Company may change or limit the
times or days Options may be exercised. If an Option
expires on a day or at a time when exercises are not permitted,
then the Options may be exercised no later than the immediately
preceding date and time that the Options were
exercisable.
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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 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.
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Payment . Unless otherwise determined by the
Committee, the Exercise Price shall be paid in full at the time of
exercise. No Shares shall be issued or transferred until
full payment has been received.
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(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 Company at any time, by:
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(i)
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delivery of
Shares 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 Shares, 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 has been held by the Participant for a minimum of six (6)
months preceding the tender; or
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(ii)
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if the Company
has designated a stockbroker to act as the Company’s agent to
process Option exercises, issuance of an exercise notice together
with instructions to such stockbroker irrevocably instructing the
stockbroker: (A) to immediately sell (which shall include an
exercise notice that becomes effective upon execution of a sale
order) a sufficient portion of the Shares to be received from the
Option exercise 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 Shares
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 Shares shall be issued until the
settlement date and until the proceeds (equal to the Option Price
and tax withholding) are paid to the Company.
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If payment is
made by the delivery of Shares, the value of the Shares delivered
shall be equal to the then most recent Fair Market Value of the
Shares established before the exercise of the Option.
Restricted
Stock may not be used to pay the Exercise Price.
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Termination
of Employment . Unless otherwise provided by the
Committee, the following limitations on exercise of Options shall
apply upon Termination of Employment:
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(a)
Termination by Death or Disability . In the event
of the Participant’s Termination of Employment by reason of
death or Disability, all outstanding Options granted to that
Participant shall immediately vest as of the date of Termination of
Employment and may be exercised, if at all, no more than three (3)
years from the date of the Termination of Employment, unless the
Options, by their terms, expire earlier. However, in the
event the Participant was eligible to Retire at the time of
Termination of Employment, notwithstanding the foregoing, the
Options may be exercised, if at all, no more than five (5) years
from the date of the Termination of Employment, unless the Options,
by their terms, expire earlier.
(b)
Termination for Cause . In the event of the
Participant’s Termination of Employment by the Company for
Cause, all outstanding Options held by the Participant shall
immediately be forfeited to the Company and no additional exercise
period shall be allowed, regardless of the vested status of the
Options.
(c)
Retirement or Other Termination of Employment
. In the event of the Participant’s Termination of
Employment for any reason other than the reasons set forth in (a)
or (b), above:
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(i)
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If upon the
Participant’s Termination of Employment, the Participant is
eligible to Retire (and if the Participant is an officer level
employee for compensation purposes as determined by AT&T, the
employee must also be age 55 or older at Termination of
Employment), then all outstanding unvested Options granted to that
Participant shall immediately vest as of the date of the
Participant’s Termination of Employment;
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(ii)
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All outstanding
Options which are vested as of the effective date of Termination of
Employment may be exercised, if at all, no more than five (5) years
from the date of Termination of Employment if the Participant is
eligible to Retire, or three (3) months from the date of the
Termination of Employment if the Participant is not eligible to
Retire, as the case may be, unless in either case the Options, by
their terms, expire earlier; and
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(iii)
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In the event of
the death of the Participant after Termination of Employment, this
paragraph (c) shall still apply and not paragraph (a),
above.
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(d)
Options not Vested at Termination . Except as
provided in paragraphs (a) and (c)(i), above, all Options held by
the Participant which are not vested on or before the effective
date of Termination of Employment shall immediately be forfeited to
the Company (and the Shares subject to such forfeited Options shall
once again become available for issuance under the
Plan).
(e)
Notwithstanding the foregoing, the Committee may, in its sole
discretion, establish different, or waive, terms and conditions
pertaining to the effect of Termination of Employment on Options,
whether or not the Options are outstanding, but no such
modification shall shorten the terms of Options issued prior to
such modification or otherwise be materially adverse to the
Participant.
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Employee
Transfers . For purposes of the Plan, transfer
of employment of a Participant between the Company and any one of
its Subsidiaries (or between Subsidiaries) or between the Company
or a Subsidiary and a RWAC, to the extent the period of employment
at a RWAC is equal to or less than five (5) years, shall not be
deemed a Termination of Employment. Provided, however,
for purposes of this Article 6, termination of employment with a
RWAC without a concurrent transfer to the Company or any of its
Subsidiaries shall be deemed a Termination of Employment as that
term is used herein. Similarly, termination of an
entity’s status as a Subsidiary or as a RWAC shall be deemed
a Termination of Employment of any Participants employed by such
Subsidiary or RWAC.
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Restrictions on
Exercise and Transfer of Options. Unless otherwise
provided by the Committee:
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(a)
During the Participant’s lifetime, the Participant’s
Options shall be exercisable only by the Participant or by the
Participant’s guardian or legal
representative. After the death of the Participant,
except as otherwise provided by AT&T’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.
(b)
No Option shall be transferable except: (i) in the case of the
Participant, only upon the Participant’s death and in
accordance with the AT&T Rules for Employee Beneficiary
Designations; and (ii) in the case of any holder after the
Participant&rsqu
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