Exhibit 10-u
PACIFIC TELESIS
GROUP
1996 EXECUTIVE
DEFERRED COMPENSATION PLAN
(Amended Effective November 20,
2008)
PACIFIC TELESIS GROUP
1996 EXECUTIVE DEFERRED
COMPENSATION PLAN
(Adopted Effective December 1,
1995)
SECTION
1.
Purpose .
The Pacific
Telesis Group 1996 Executive Deferred Compensation Plan (the
“Plan”) provides certain Officers of the Company with
an opportunity to defer compensation and accrue earnings on a
pre-tax basis and with an opportunity to receive employer matching
contributions that cannot be provided to them under the Pacific
Telesis Group Supplemental Retirement and Savings Plan for Salaried
Employees ("the Savings Plan") because of the limitations imposed
by section 401(a)(17) of the Internal Revenue Code of 1986, as
amended (“the Code”).
SECTION
2.
Eligibility to Participate .
The following
employees are eligible to participate in the Plan:
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Officers of
Pacific Telesis Group and/or Pacific Bell;
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The Officers of
any Affiliate of Pacific Telesis Group who are specifically
designated to participate by the PTG Board and the Board of
Directors or other governing body of such Affiliate.
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SECTION
3.
Plan Accounts .
3.1
Establishment of Account . An account shall be established
for each eligible employee who elects to become a participant in
the Plan in accordance with the procedures set forth in Section 4
of the Plan. The account shall be credited with allocations and
earnings under Sections 4, 5 and 6 and debited with distributions
under Section 7 of the Plan.
3.2
No Funding or Assignment . For income tax purposes under the
Code and for purposes of Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), it is intended that
this Plan constitute an unfunded deferred compensation arrangement.
The amounts credited to Plan accounts for employees of each
participating Company shall be held in the general funds of such
participating Company. All amounts in such accounts, including all
Compensation deferred by an employee, shall remain an asset of the
participating Company. A participating Company shall not be
required to reserve or otherwise set aside funds for the payment of
amounts credited to Plan accounts. The obligation of a
participating Company to pay benefits under the Plan constitutes a
mere promise to make benefit payments in the future, and shall be
unfunded as to the employee, whose rights shall be those of a
general unsecured creditor. Title to and beneficial ownership of
any assets which a participating Company may set aside or otherwise
designate to make payments under the Plan shall at all times remain
in the participating Company, and the employee shall not have any
property interest in any specific assets of a participating
Company. The rights of an employee or his or her beneficiary to
benefit payments under the Plan are not subject in any manner to
assignment, alienation, pledge or garnishment by
creditors.
SECTION 4.
Deferred Compensation .
4.1
Annual Deferral and Distribution Election . An eligible
employee may elect to participate in the Plan prior to the
beginning of any calendar year, or within 30 days of first becoming
eligible to participate in the Plan, or within 30 days of becoming
eligible to participate in a feature of the Plan with respect to
such Plan feature. An employee's election shall direct that
compensation in one or more of the following categories
(collectively “Compensation”) be deferred and credited
to an account under the Plan, subject to the limitations and
effectiveness prescribed for each category of Compensation, and
shall direct that such Compensation, together with all other
amounts credited under the Plan with respect to such Compensation
under Section 5 (Company Match) and Section 6 (Earnings), shall be
distributed in accordance with a distribution option set forth in
Section 7.
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Salary . An employee may elect to defer part of his or
her base annual compensation (“Salary”) otherwise
payable for services performed in a calendar year, but not less
than $2,500 nor more than 80% of salary. Such election shall become
effective for Salary otherwise payable for services performed in
the payroll period beginning, (i) in the case of an employee who
makes an election within 30 days of first becoming eligible to
participate in the Plan, immediately subsequent to the election or
(ii) in all other cases, on the first day of the calendar year to
which the election applies. An election related to Salary otherwise
payable for services performed in any calendar year shall become
irrevocable, (x) in the case of an election made within 30 days of
first becoming eligible to participate in the Plan, on the last day
before the applicable payroll period for which the election becomes
effective, or (y) in all other cases, on the last day prior to the
beginning of such calendar year.
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STIP .
An employee may elect to defer all or part, but not less than
$5,000, of his or her awards under the Pacific Telesis Group Short
Term Incentive Plan, or a similar or successor incentive
compensation plan or program of Pacific Telesis Group or an
Affiliate (“STIP”), for services performed in a
calendar year and otherwise payable in the calendar year following
such calendar year. Such election may be made with respect to
services to be performed (i) in the remainder of the year in which
the employee first becomes eligible to participate in the Plan,
provided the election is made prior to October 1st of such year,
which election shall become effective for STIP earned with respect
to services performed beginning with the payroll period immediately
subsequent to the election, or (ii) in the next following calendar
year, which election on shall become effective on the first day of
the calendar year to which the election applies in all other cases.
An election related to the STIP award for services performed in a
calendar year shall become irrevocable (x) in the case of an
election made within 30 days of first becoming eligible to
participate in the Plan, on the last day before the applicable
payroll period for which the election becomes effective, or (y) in
all other cases, on the last day prior to the beginning of such
calendar year.
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LTIP .
An employee may elect to defer all or part, but not less than
$5,000, of his or her awards under the Pacific Telesis Group Senior
Management Long Term Incentive Plan or a similar or successor long
term incentive compensation plan of Pacific Telesis Group or an
Affiliate (“LTIP”), for services performed in a
multiple-year performance period and otherwise payable in a
calendar year following such performance period. An election
related to the LTIP award otherwise payable for services performed
in a performance period shall become irrevocable on the last day
prior to the beginning of the performance period applicable to that
LTIP award.
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Other
Awards . An employee may
elect to defer all or part of his or her awards under any other
bonus, special award, or any other similar form of compensation
(“Other Awards”) otherwise payable to him or her by a
participating Company with respect to services performed in a
calendar year. An election related to Other Awards otherwise
payable in a calendar year shall become irrevocable on the last day
prior to the beginning of such calendar year.
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Notwithstanding
the foregoing, in no event shall deferrals under the Plan include
that portion of Compensation required for all applicable tax,
Social Security and employee benefit plan withholding, whether or
not such withholding requirement is related to this
Plan.
4.2
Form of Election, Modification or Termination . An
employee's election or written notice of modification or
termination of any prior election shall be made in accordance with
procedures established by the Plan Administrator, in the form of a
document approved by the Plan Administrator, executed by the
employee and filed with the Plan Administrator or his or her
designee. An election which has not become irrevocable may be
modified, terminated or reinstated by the employee prior to the
time such election would have become irrevocable as provided in
Section 4.1. An election with respect to Salary, STIP or Other
Awards for services performed in a calendar year and/or with
respect to LTIP for services performed in a multiple-year
performance period shall be deemed irrevocably terminated when the
employee, whether by transfer or termination of employment, ceases
to be eligible to participate in the Plan during such calendar year
and/or such multiple-year performance period (as
applicable).
4.3
Modification of Irrevocable Election by the Committee . Upon
receipt of a written request made by or on behalf of an employee,
the Committee in its sole discretion may modify or terminate the
employee's election with respect to Compensation otherwise payable
in a calendar year as it deems necessary to prevent extreme
financial hardship to the employee, notwithstanding that the
election has become effective and irrevocable as provided in
Section 4.1.
4.4
Allocation to Accounts . Deferred amounts related to
Compensation which would otherwise have been paid by a
participating Company shall be credited to the employee's account
as of the date the Compensation would otherwise have been paid.
Deferred amounts related to Compensation which would otherwise have
been distributed in Pacific Telesis Group common shares shall be
credited to the employee's account as deferred Pacific Telesis
Group shares as of the date such Pacific Telesis Group shares would
otherwise have been transferred to the employee.
SECTION
5.
Company Match .
5.1
Eligibility for Company Match . An employee who (A) elects
to defer Compensation under the Plan for a calendar year, and (B)
has made the maximum elective deferral under the Savings Plan
permitted by section 402(g) of the Code for such calendar year
(except to the extent that a further limitation is required by
section 401 (k)(3) and/or section 415 of the Code), shall be
eligible to have additional amounts based on Compensation deferred
pursuant to this Plan ("Company Match") credited to his or her
account hereunder.
5.2
Amount of Company Match . The Company Match credited to an
employee's account under this Plan with respect to Compensation
deferred during a calendar year shall be equal to
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the amount of
Compensation deferred into the employee's Plan account, multiplied
by
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the percentage
in effect for that calendar year at which the employee's Basic
Contributions to the Savings Plan are matched by employing Company
contributions;
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provided,
however, that the maximum Company Match credited to the employee's
account under this Plan shall not exceed
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6% of the
employee's Savings Plan Salary, multiplied by
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the percentage
in effect for that calendar year at which the employee's Basic
Contributions to the Savings Plan are matched by employing Company
contributions, reduced by
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the total
amount of matching Company contributions credited to the employee's
account under the Savings Plan.
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For purposes of
determining the amount of Compensation deferred into the employee's
Plan account, deferred Pacific Telesis Group common shares shall be
valued by multiplying the number of shares deferred by the Price of
Pacific Telesis Group common shares on the deferral
date.
5.3
Allocation to Account . Until fully credited for the
calendar year, and subject to the delay provided in Section 5.4,
Company Match shall be credited to an employee's account under this
Plan as of each date that deferred Compensation is credited to the
employee's account under this Plan.
5.4
Maximum Pre-Tax Savings Plan Deferrals Required . No Company
Match shall be credited to an employee's account for a calendar
year until the employee has made before-tax contributions under the
Savings Plan equal to the maximum elective deferrals permitted
under section 402(g) of the Code, as further limited by section 401
(k)(3) of the Code. Thereafter, the employee's account shall
immediately be credited with an amount equal to the Company Match
that would otherwise have been previously credited under Section
5.3.
5.5
Savings Plan Provisions Prevail . The provisions of this
Section 5 shall not limit or affect the application of the
provisions regarding matching Company contributions in the Savings
Plan, which shall take precedence over the provisions of this
Section 5.
SECTION
6.
Earnings on Accounts .
6.1
Interest Allocations to Accounts . Deferred amounts related
to Compensation which would otherwise have been paid in cash shall
bear interest from the date the Compensation would otherwise have
been paid. Interest shall be applied to Company Match credited to
an employee's account as if such Company Match had been credited to
the employee's account at the same time that the related amounts of
Compensation deferred hereunder were credited to the employee's
account. The interest credited to an account shall be compounded
annually at the end of each calendar year.
6.2
Rate of Interest . The rate of interest to be applied to an
employee's aggregate account balance under the Plan for a calendar
year shall be determined by the Committee from time to time, and
promptly communicated to eligible employees in advance of its
application, but in no event shall (A) the interest rate be
decreased below the average 10-Year Treasury note rate, (B) any
reduction apply to interest already credited to Plan accounts for
periods prior to the Committee's action, or (C) any interest rate
previously guaranteed for a given period and communicated to
eligible employees be reduced during such period except as may be
equitable in light of any change in applicable law which
substantially increases the burden to the participating Companies
of paying such guaranteed interest.
6.3
Retroactive Limitation of Interest Accrual in Case of Early
Separation . Notwithstanding Section 6.2, an employee whose
Separation occurs before he or she attains age 55 will receive
interest on all deferred cash Compensation and Company Match for
all years of participation in the Plan based on the average 10-Year
Treasury note rate, rather than the rate of interest established by
the Committee for any particular calendar year.
6.4
Dividends and Adjustments for Pacific Telesis Group Shares .
An employee's account credited with deferred Pacific Telesis Group
shares shall be credited on each subsequent dividend payment date
for Pacific Telesis Group shares with an amount equivalent to the
dividend payable on the number of Pacific Telesis Group common
shares equal to the number of deferred Pacific Telesis Group shares
in the employee's account on the record date for such dividend.
Such amount shall then be converted to a number of additional
deferred Pacific Telesis Group shares, determined by dividing such
amount by the Price of Pacific Telesis Group common shares
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