AGREEMENT

 

                                  

 

                                                                   Exhibit 10hhh

 

                                    AGREEMENT

 

         THIS AGREEMENT is made and entered into this 29th day of July, 2005, by

and between BellSouth Corporation, a Georgia corporation ("Company"), and

Richard A. Anderson ("Executive"):

 

         Reasons for this Agreement. Company has identified Executive as an

individual with significant skills and experience critical to the business of

Company. In view of the significant and growing demand for executive talent and

the potential impact on Company's executives of the transformational changes

occurring within our industry and company, Company desires to provide Executive

through this Agreement with certain incentives to remain in Company's

employment. This Agreement is also designed to address potential long-term

employment concerns of Executive and to impose certain reasonable restrictions

on Executive's activities designed to protect Company's interests should

Executive's employment terminate.

 

         Executive has been employed by Company and its Affiliated Companies

since 1981 and during his tenure, has served in a variety of senior capacities.

Since January 1, 2005, Executive has served as Vice-Chairman Planning and

Administration, with responsibility for corporate planning, development,

compliance, public relations, human resources and diversity initiatives. From

January 1, 2000 until December 31, 2004, Executive served as Company's

President-Customer Markets, reporting to Company's Chairman, and having

responsibility for all sales, marketing and customer care activities across the

Company's domestic retail and carrier customer markets for voice, advanced data,

Internet and video services. From January 1, 1998 until January 1, 2000,

Executive served as Company's Group President-Complex Business Services and was

responsible for coordinating and marketing Company's large business efforts.

Prior to January 1, 1998, Executive served as Vice President-Marketing,

responsible for multi-product offerings, Company's competitive local exchange

carrier (CLEC), and its managed network solutions business operations.

 

         Executive acknowledges that Company and Affiliated Companies have

disclosed or made available and in the future will disclose and make available

Confidential Information to Executive which could be used by Executive to

Company's or Affiliated Companies' detriment. In addition, in connection with

his employment, Executive has developed and in the future will develop important

relationships and contacts with employees and customers valuable to Company and

Affiliated Companies.

 

         Executive further acknowledges that the covenant not to compete and

other restrictive covenants in this Agreement are fair and reasonable, that

enforcement of the provisions of this Agreement will not cause him undue

hardship, and that the provisions of this Agreement are reasonably necessary and

commensurate with the need to protect Company and Affiliated Companies and their

business interests and property from irreparable harm.

 

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         Executive and Company have previously entered into an agreement dated

October 18, 2000 (the "Prior Agreement"). Executive and Company now desire to

amend the Prior Agreement as provided herein and to restate the Prior Agreement

in its entirety.

 

         Agreement. In consideration of the mutual promises contained in this

Agreement including, among other things, substantial additional compensation and

benefits to Executive, and other good and valuable consideration, the receipt

and sufficiency of which are hereby acknowledged, Executive and Company agree as

follows:

 

         1. Prior Agreement. Executive and Company agree and acknowledge that

upon execution of this Agreement, this Agreement amends, supersedes and replaces

the Prior Agreement in its entirety, effective as of the date first above

written (the "Effective Date").

 

         2. Minimum SERP Benefits. In determining the amount of benefits payable

with respect to Executive under SERP, upon completion by Executive of at least

ten (10) additional years of "Net Credited Service" (as such term is defined in

SERP) after October 18, 2000 (the date of the Prior Agreement), Executive shall

be entitled to benefits equal to the greater of:

 

            (i)     an aggregate annual benefit based on (A) sixty percent (60%)

                   of "Included Earnings" (as such term is defined in SERP),

                   increased by two (2) percentage points for each such

                   additional year of "Net Credited Service" (as such term is

                   defined in SERP) in excess of ten (10) (such percentage not

                   to exceed, however, in the aggregate seventy percent (70%) of

                    Included Earnings), instead of the formula described in

                   section 4.4(a)(i)(A) of SERP, and (B) an early retirement

                   discount of one-quarter percent (0.25%) for each calendar

                   month by which Executive's "Pension Commencement Date" (as

                   such term is defined in SERP) precedes his sixty-second

                   (62nd) birthday, instead of the otherwise applicable early

                   retirement discount described in section 4.4(c) of SERP; and

 

            (ii)    the benefit provided to Executive under SERP without regard

                   to this Section 2.

 

Except as otherwise provided in this Section 2, all other terms and conditions

of SERP (including without limitation all benefit options and administrative

provisions) shall govern Executive's entitlement to benefits thereunder. In the

event SERP shall be amended or restated or redesigned, benefits payable with

respect to Executive under such amended, restated or redesigned plan shall

include a benefit enhancement designed to approximate as nearly as reasonably

possible the SERP benefit enhancement described in this Section 2.

 

         3. Termination Allowance Upon Involuntary Separation. In the event

Executive's employment is terminated under circumstances described below in this

Section 3, Company shall pay to Executive a termination allowance. The

termination allowance shall be an amount equal to the sum of (i) two hundred

percent (200%) of Executive's Base Salary in effect

 

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on the date of Executive's termination of employment, plus (ii) two hundred

percent (200%) of the standard award amount applicable to Executive under the

short-term incentive plan under which Executive is eligible for an annual cash

bonus for the year in which his date of termination occurs, less all applicable

withholdings, payable in a single lump sum payment. Payment of the termination

allowance shall be made as soon as practicable following Executive's termination

of employment under circumstances entitling him to such payment, and

satisfaction of all conditions described in this Agreement on Executive's

entitlement to such payment.

 

         Executive's employment shall be deemed to have been terminated under

circumstances described in this Section 3 only if all of the following

conditions are satisfied:

 

         (a)    Executive's employment is terminated either (1) by Company, other

than for Cause, or (2) by Executive for Good Reason; and

 

         (b)    Executive executes a release satisfying the terms of Section 7(b)

of this Agreement; and

 

         (c)    Executive is not transferred to or reemployed by an Affiliated

Company.

 

         4. SERP Benefit Upon Involuntary Separation. In the event Executive's

employment is terminated under circumstances described in Section 3 of this

Agreement, Executive shall be entitled to benefits under SERP determined by

using an early retirement discount of one-quarter percent (0.25%) for each

calendar month by which Executive's "Pension Commencement Date" (as such term is

defined in SERP) precedes his sixty-second (62nd) birthday, instead of the

otherwise applicable early retirement discount described in section 4.4(c) of

SERP. Moreover, if any such termination shall occur after the occurrence of a

"Change in Control" (as such term is defined in the CIC Agreement), for purposes

of this Section 4, in determining whether the conditions described in Section 3

of this Agreement have been satisfied, "Cause" and "Good Reason" shall have the

meanings ascribed to such terms in the CIC Agreement instead of the definitions

of such terms reflected in this Agreement. In the event SERP shall be amended or

restated or redesigned, benefits payable with respect to Executive under such

amended, restated or redesigned plan shall include a benefit enhancement

designed to approximate as nearly as reasonably possible the SERP benefit

enhancement described in this Section 4.

 

         5. Vesting of Executive Benefits Upon Involuntary Separation. In the

event Executive's employment is terminated under circumstances described in

Section 3 of this Agreement, all benefits of Executive under the BellSouth

Corporation Nonqualified Deferred Compensation Plan, the BellSouth Nonqualified

Deferred Income Plan, the BellSouth Split-Dollar Life Insurance Plan, the

BellSouth Supplemental Life Insurance Plan and the SERP shall be determined as

if Executive, upon his termination of employment, had been eligible for a

service pension under the terms and conditions of the BellSouth Personal

Retirement Account Pension Plan. This provision shall be disregarded in

determining benefits of (or with respect to) Executive under any other

Company-sponsored compensation or benefit plan or program, including without

limitation the Stock Plan and the Stock and Incentive Compensation Plan.

 

<PAGE>

 

 

         6. Non-Vested Stock Options Upon Involuntary Separation. In the event

Executive's employment is terminated under circumstances described in Section 3

of this Agreement, Company shall pay to Executive an amount with respect to all

Options (as such term is defined in the Stock Plan and the Stock and Incentive

Compensation Plan) to acquire Company stock under the terms of the Stock Plan or

the Stock and Incentive Compensation Plan which are forfeited by virtue of

having not been vested and exercisable at the time of such termination of

employment, determined:

 

         (a)    by multiplying the number of Options in each such grant by the

amount, if any, by which the Fair Market Value of Company's common stock subject

to the Option exceeds the exercise price of those Options; and

 

         (b)    by then multiplying the amount determined in (a) above with

respect to each such Option grant by a fraction, the numerator of which is the

number of whole calendar months which shall have elapsed from the grant date of

such Option through the date of Executive's employment termination date, and the

denominator of which is the number of calendar months in the full vesting period

applicable to such grant.

 

         Payment of the amount so determined, less all applicable withholdings,

shall be made in a single lump sum payment as soon as practicable following

Executive's termination of employment under circumstances entitling him to such

payment, and satisfaction of all conditions described in this Agreement on

Executive's entitlement to such payment.

 

         For purposes of this Agreement, "Fair Market Value" shall mean the

average of the high and low sales prices of one share of Company stock subject

to the Option on the New York Stock Exchange for the last business day (on which

the New York Stock Exchange operates and is open to the public for trading) of

each of the three (3) months preceding the month in which Executive's

termination of employment occurs.

 

         7. Discharge and Waiver.

 

         (a)    Executive fully releases and forever discharges Company and

Affiliated Companies, and any employee, officer, director, representative,

agent, successor or assign of Company and Affiliated Companies (both in their

personal and official capacities), and all persons acting by, through and under

or in concert with any of them, from any and all claims, demands, actions,

causes of action, remedies, suits, obligations, damages, losses, costs and

expenses of whatever kind or nature, whether under the common law, state law,

federal law (including but not limited to the Age Discrimination in Employment

Act of 1967) or otherwise, through the date of this Agreement, including those

arising from or in connection with the terms and conditions of employment with

Company (and Affiliated Companies). This paragraph is not intended to and shall

not affect benefits to which Executive may be entitled under any pension,

savings, health, welfare, or other benefit plan in which Executive is a

participant.

 

         (b)    Furthermore, Company's obligations under this Agreement upon

termination of Executive's employment, and Executive's entitlement to any such

benefits, are expressly conditioned upon execution by Executive, upon

termination of his employment, of a release

 

<PAGE>

 

 

agreement substantially in the form of the release agreement attached to this

Agreement as Exhibit A, which is incorporated herein by this reference.

 

         8. Covenant Not to Sue. Executive covenants and agrees not to make or

file any claim, demand or cause of action or seek any remedy of whatever nature,

whether under the common law, state law, federal law or otherwise, arising from

or in connection with the matters discharged and waived in Section 7 above.

Notwithstanding the foregoing, in the event Executive files a charge or lawsuit

under the Age Discrimination in Employment Act of 1967 ("ADEA") and thereby

challenges the validity of the release described in Section 7, such charge or

lawsuit will not be considered a breach of this Section 8.

 

         9. Confidential Information. Executive agrees to protect Confidential

Information from misuse or unauthorized disclosure. In addition to complying

with all applicable laws governing trade secret and confidential information

disclosure, Executive will not (i) use, except in connection with work for

Company or Affiliated Companies, or threaten to use, or (ii) disclose,

communicate or give others access to (orally, in writing, electronically or

digitally) or threaten to disclose, communicate or give other access to any

Confidential Information. For purposes of this Agreement, "Confidential

Information" shall mean information, whether generated internally or externally,

whether in written, oral, digital, electronic or any other form or format,

relating to Company's or Affiliated Companies' businesses that derives economic

value, actual or potential, from not being generally known to other Persons and

is the subject of efforts that are reasonable under the circumstances to

maintain its secrecy or confidentiality, including, but not limited to, studies

and analyses, technical or nontechnical data, programs, patterns, compilations,

devices, methods, models (including cost and/or pricing models and operating

models), techniques, drawings, processes, employee compensation data, and

financial data (including marketing information and strategies and personnel

data). After the period of three (3) years following termination of Executive's

employment with Company, for purposes of this Agreement, Confidential

Information shall be defined only as information meeting the criteria set forth

above that remains a trade secret under applicable law. Executive acknowledges

that any use of, reliance upon, disclosure or other misappropriation of

Confidential Information inconsistent with the terms of this Agreement

(including without limitation acceptance by Executive of a position in which the

inevitability of such use, reliance, disclosure or misappropriation is

reasonably anticipated) would result in material and irreparable damage and

injury to Company or Affiliated Companies.

 

         10. Limitation on Competition. In consideration of the additional

payments, benefits and other rights that are being provided to Executive under

this Agreement, while employed by Company or an Affiliated Company, and during

the eighteen (18) months after any termination of his employment, Executive

agrees not to provide any "Services" (as defined in the third paragraph of this

Section 10) to any Pe