Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 1996 Ptg Annual Report 130 471K
2: EX-3.B By-Laws of Ptg, as Amended April 1, 1996. 9 37K
3: EX-4.A Rights Agreement 4 24K
4: EX-10.AA Ptg Short Term Incentive Plan 1 10K
5: EX-10.GG Ptg 1996 Deferred Compensation Plan for Nonempoyee 5 21K
Directors
6: EX-10.II Description of Ptg Plan for Nonemployee Directors' 1 8K
Travel Accident Insurance
7: EX-10.KK Ptg Exec. Supp. Cash Balance Pension Plan 32 144K
8: EX-10.MM Description of Ptg Personal Umbrella Liability 1 9K
Insurance
9: EX-10.NN Ptg 1996 Executive Deferred Compensation Plan 13 59K
10: EX-10.PP(VII) Agreements for Certain Senior Officers of Ptg 23 83K
11: EX-10.QQ Ptg 1996 Director's Deferred Compensation Plan 6 22K
12: EX-10.UU(IV) Amendment to Trust Agreement No. 1 3 16K
13: EX-10.WW(I) Amendment to Trust Agreement No. 3 Eff. 11/22/96 3 16K
14: EX-11 Computation of Earnings Per Common Share 1 9K
15: EX-12 Ratio of Earnings to Fixed Charges 1 9K
16: EX-18 Preferability Letter on Discretionary Accounting 1 9K
Change
17: EX-21 >Subsidiaries of Pacific Telesis Group 1 8K
18: EX-23 Consent of Independent Accountants 1 10K
19: EX-24 Power of Attorney 2 13K
20: EX-27 Financial Data Schedule 2 9K
EX-10.PP(VII) — Agreements for Certain Senior Officers of Ptg
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Exhibit 10pp(vii)
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AGREEMENT FOR SERVICES
This AGREEMENT FOR SERVICES ("Agreement"), entered into as of March 28,
1997, by and between PHILIP J. QUIGLEY (the "Officer") and SBC
Communications Inc., a Delaware corporation ('SBC'),
WITNESSETH:
WHEREAS the Officer and Pacific Telesis Group ("Pacific") entered into
an Employment Agreement effective April 1, 1994 (the "1994 Agreement'),
which, among other things, provides for the payment by Pacific to officer of
various amounts under various circumstances in the event of the termination
of Officer's employment; and
WHEREAS SBC is desirous of having the Officer continue working for
Pacific as President and Chief Executive Officer of Pacific following the
merger of SBC Communications (NV) Inc. into Pacific (the "Merger" or 'the
closing of the Merger'); to serve as Vice Chairman of SBC; to serve on the
SBC Board; and to enter into an agreement to provide certain consulting
services to SBC in the event of any early conclusion of the Officer's
employment as an officer of Pacific; all as described herein; and
WHEREAS the Officer and SBC wish to confirm the details pertaining to
Officer's services for SBC:
NOW, THEREFORE, the parties hereby agree as follows:
1. Except as provided herein, this Agreement shall not affect or limit
the 1994 Agreement. Accordingly, Officer's employment by Pacific shall
continue to be subject to the terms of the 1994 Agreement as clarified by
the terms of this Agreement.
2. Officer agrees to continue to work for Pacific following the Merger
as President and Chief Executive Officer of Pacific, such employment to be
pursuant to the terms of the 1994 Agreement as clarified by the terms of
this Agreement. Such employment will continue through the close of business
on a date that is thirty-six months following the close of the Merger at
which time Officer's employment with Pacific shall terminate unless extended
by mutual agreement of the parties. Officer's base and incentive
compensation during such employment shall be as follows:
-- Officer's starting base shall be at the annual rate of $845,000.
-- Effective January 1, 1998, Officer's short term incentive target awards
and long term incentive grants shall be as determined by the Human
Resources Committee of SBC ("HRC'), but shall not be less than $675,000
and $740,000, respectively. Such incentive awards shall be subject to
and in accordance with the terms and provisions of the SBC 1996 Stock
and Incentive Plan as may be amended from time to time, a copy of which
has been provided to Officer, or any successor plan (collectively, the
" 1996 Plan'). SBC acknowledges that Officer's short term incentive
target award for 1997 is $675,000.
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-- Officer's base salary, short term target awards and long term incentive
grants shall be subject to appropriate increases year-to-year during
Officer's employment at the discretion of the HRC and shall be paid
pursuant to the 1994 Agreement and in lieu of any like compensation
referred to in such 1994 Agreement.
Further, the parties hereby mutually agree to the following pertaining to
the application of this Agreement and the 1994 Agreement:
2.1 Officer's termination of employment with Pacific will be
treated solely for purposes of application of the 1994 Agreement
as an involuntary termination without Cause within three years
after the occurrence of a Change in Control (as the terms 'Cause"
and "Change in Control" are utilized in such 1994 Agreement);
2.2 upon Officer's termination of employment, Pacific will treat
this Agreement as Officer's written notice describing and
requesting payment of amounts under the 1994 Agreement in
connection with an involuntary termination without Cause within
three years after the occurrence of a Change in Control which
notice is required pursuant to Section 12(c) of such 1994
Agreement; and
2.3 payments pursuant to Sections 6 and 7 of the 1994 Agreement
and pursuant to Paragraph 5 hereof, if applicable, shall be the
only payments made to Officer upon Officer's termination of
employment other than pension and deferred compensation sums if
any. The Officer acknowledges that any amounts due under Section 6
and Section 7 of the 1994 Agreement are subject to the limitation
on payments provided under Section 8 of the 1994 Agreement such
that the aggregate present value of the payment due is maximized
without causing any of the payment to be nondeductible to Pacific
Telesis Group because of Section 280G of the Internal Revenue
Code, and the Officer further acknowledges that any payment
associated with the termination and cashout of units under the
Pacific Telesis Group Senior Management Long Term Incentive Plan
("LTIP") that may occur in connection with the closing the merger,
if the termination of the LTIP is approved by the Board of Pacific
Telesis Group) will be subject to the limitation under Code
Section 280G.
3. During the period following the Merger that Officer serves as
President and Chief Executive Officer of Pacific, Officer shall also serve
as Vice Chairman of SBC.
4. Upon the closing of the Merger, the HRC shall recommend to the
Board of Directors of SBC ('Board') that the Board should appoint Officer to
the Board and to appropriate committees of the Board and that so long as
Officer is employed/ renders consulting services pursuant to this Agreement,
the Board should nominate him for reelection to coincide with such
employment/consulting services, subject to approval by shareholders.
Officer will resign from the Board coincident with his ceasing
employment/consulting services; and execution of this Agreement shall
constitute notice of such resignation.
5. Notwithstanding any other provision of this Agreement, either party
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may after one year on 30 days written notice, terminate Officer's
employment. It is agreed that if Officer's employment shall terminate in
such fashion before the completion of thirty-six months, Officer's
compensation as an employee shall cease upon such termination; paragraphs
2.1, 2.2, and 2.3 hereof shall apply with respect to such termination; and
Officer shall, during the remainder of said original thirty-six month
period, continue to make himself available to provide consulting services to
SBC for compensation pursuant to and as described in the Agreement For
Consultant Services attached hereto as Attachment 1. The parties further
agree that the provisions of Section l(c) of the 1994 Agreement shall apply
if Officer's employment terminates before the completion of thirty-six
months due to Officer's death.
6. Following the completion of Officer's thirty-six month period of
employment/consulting for SBC, Officer shall be provided in San Francisco,
California, with office space, secretarial service, and any other amenities
consistent with amenities that have been provided to other former Chairmen
of Pacific upon their retirement from such service.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of SBC by its duly authorized officer, as of the day and year first
above written.
SBC COMMUNICATIONS INC.
By: _____________________
_________________________
Philip J. Quigley
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Attachment 1
AGREEMENT FOR CONSULTANT SERVICES
This Agreement for Consultant Services ("Agreement") entered into by
and between Philip J. Quigley ("Mr. Quigley") and SBC Communications Inc.
(the "Client Company"),
WITNESSETH:
WHEREAS Mr. Quigley and the Client Company have entered into an
Agreement For Services pursuant to which Mr. Quigley shall continue working
for Pacific Telesis Group ("Pacific") as President and Chief Executive
Officer of Pacific following the merger of SBC Communications (NV) Inc. into
Pacific (the "Merger" or "the closing of the Merger"); and in which it was
agreed that Mr. Quigley would provide certain consulting services to the
Client Company following the conclusion of Mr. Quigley's employment as an
officer of Pacific in the event such employment should be concluded before
the expiration of thirty-six months; and
WHEREAS Mr. Quigley and the Client Company wish to confirm the details
pertaining to any consulting services performed by Mr. Quigley for SBC:
NOW, THEREFORE, the parties hereby agree as follows:
1. Following the conclusion of his employment as President and Chief
Executive Officer of Pacific, Mr. Quigley shall hold himself available for
and shall provide consulting services to the Client Company concerning such
matters as directed by the Client Company ("Services") until thirty-six
months have elapsed following the closing of the Merger; thereafter, Mr.
Quigley shall continue to provide Services if and as mutually agreed by Mr.
Quigley and the Client Company. The Client Company shall pay Mr. Quigley
compensation of $(then current base salary/12) per month for such Services.
In addition, Mr. Quigley shall be reimbursed for reasonable business
expenses incurred at the request of the Client Company. During the period
Mr. Quigley provides such Services, the Client Company shall also reimburse
Mr. Quigley for the lease or rental of an automobile in the same manner as
provided to Mr. Quigley as President and Chief Executive Officer of Pacific,
including reimbursement for operating expenses, insurance and parking.
2. The Client Company shall provide Mr. Quigley with an office in
San Francisco, California, and with secretarial services to be used in
connection with providing Services to the Client Company.
3. In performing these Services, Mr. Quigley shall act as an
independent contractor and not as an agent or employee of the Client
Company. Although the Services will have to be completed to the
satisfaction of the Client Company and in accordance with this Agreement,
the actual details of the Services shall be under Mr. Quigley's control.
4. In the performance of his obligations under this Agreement, Mr.
Quigley may receive or have access to ideas, strategies, concepts, technical
information and other confidential business, customer or personnel
information or data, in written, oral or other form (collectively,
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"Information") owned by the Client Company or any subsidiary, affiliate or
parent of the Client Company. Such Information may contain material that is
proprietary or confidential or material that is subject to applicable laws
regarding secrecy of communications or trade secrets. Accordingly, Mr.
Quigley agrees:
a. that all Information so acquired by Mr. Quigley shall be and
shall remain the exclusive property of the Client Company, or any
subsidiary, affiliate or parent of the Client Company, as
applicable;
b. not to copy, publish, or disclose the information to others or
authorize anyone else to copy or publish or disclose such
Information to others without the written approval of the Client
Company, or any subsidiary, affiliate or parent of the Client
Company, as applicable;
c. to return any copies of such Information in written, graphic
or other tangible form to the Client Company, or any subsidiary,
affiliate or parent of the Client Company, as applicable, at its
request; and to use Information only for purposes of fulfilling
work or performing Services under this Agreement and for other
purposes only upon such terms as may be agreed upon between Mr.
Quigley and the Client Company, or any subsidiary, affiliate or
parent of the Client Company, as applicable, in writing.
5. Because of the sensitive nature of the work that Mr. Quigley will
be performing for the Client Company, or any subsidiary, affiliate or
parent, as applicable, the Client Company may, in its sole discretion,
terminate this Agreement upon giving Mr. Quigley 10 day's advance notice in
writing, in the event that Mr. Quigley becomes an employee or a director, or
if he is providing services as an independent contractor to, a competitor of
the Client Company, or any subsidiary, affiliate or parent. The Client
Company acknowledges that Mr. Quigley may undertake services for others
during the term of this Agreement provided there are no competing interests
or conflicts with Client Company, or any subsidiary, affiliate or parent.
This Agreement may also be terminated at any time by the mutual agreement of
Mr. Quigley and the Client Company.
6. The terms and conditions contained in this Agreement that by their
sense and context are intended to survive the termination or completion of
performance of obligations by either or both parties under this Agreement
shall so survive.
7. Mr. Quigley agrees that the obligations to perform the consulting
services required of him hereunder are personal and may not be assigned or
delegated by him in any manner whatsoever, nor are such obligations subject
to involuntary alienation, assignment or transfer. The Client Company may
not assign this Agreement or delegate any of its duties or obligations
hereunder, either in whole or in part, to any person or entity, without Mr.
Quigley's express written consent, except to a successor of the Client
Company which becomes obligated hereunder in accordance with the provisions
of Section 12.
This Agreement is for the benefit of the Client Company, its
subsidiaries, affiliates and any parent, and Mr. Quigley and not for any
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other person.
8. In the event of Mr. Quigley's death during the period for
performing Services hereunder, the consulting relationship created pursuant
to this Agreement will immediately terminate, and no further compensation
will be payable. However, the Client Company will be required to pay Mr.
Quigley's estate any unpaid compensation earned for Services rendered
through the date of his death, together with any unpaid reimbursements owed.
9. This Agreement shall be construed in accordance with the laws of
the State of Texas, irrespective of its choice of laws principles.
10. All notices and other communications shall be in writing and sent
by certified mail, return receipt requested, and shall be addressed to the
following representatives of the Client Company and Mr. Quigley (or to such
other representative or address as either party may from time to time
designate in writing):
TO: SBC Communications Inc. TO: Mr. P. J. Quigley
Attention: 130 Kearny Street
175 E Houston San Francisco, CA 94108
San Antonio, TX 78205
11. The invalidity or unenforceability of any provision of this
Agreement will not affect the validity or enforceability of any provision of
this Agreement, and such other provisions will accordingly remain in full
force and effect.
12. The provisions of this Agreement will inure to the benefit of and
be binding upon the Client Company, together with its successors and
assigns, and Mr. Quigley and the personal representative of his estate and
his heirs and legatees. Without in any manner limiting the foregoing,
should the Client Company be acquired by merger or stock or asset sale, the
acquiring entity will be bound by the terms and provisions of this Agreement
and will succeed to all of the Client Company's obligations and liabilities
hereunder.
13. This Agreement incorporates the entire agreement between
Mr. Quigley and the Client Company relating to his retention as a consultant
to the Client Company and supersedes all prior agreements and
understandings, whether written or oral, with respect to such subject
matter.
14. This Agreement may only be amended by written instrument signed by
Mr. Quigley and a duly-authorized officer of the Client Company.
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IN WITNESS THEREOF, the parties have caused two originals of this
Agreement to be executed by themselves or their respective duly authorized
representatives.
SBC COMMUNICATIONS INC.
By:
---------------------------------- -------------
Date
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Philip J. Quigley Date
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CONFIRMATION AGREEMENT
THIS CONFIRMATION AGREEMENT ("Agreement"), entered into as of December
6, 1996, by and between RICHARD W. ODGERS (the "Officer") and PACIFIC
TELESIS GROUP, a Nevada corporation ("Pacific"),
WITNESSETH:
Whereas the Officer and Pacific entered into an Employment Agreement
effective January 1, 1989 (the "1989 Agreement"), which, among other things,
provides for the payment by Pacific to Officer of various amounts under
various circumstances in connection with a termination of employment of the
Officer following a Change in Control (as such term is defined in such 1989
Agreement) and a Supplemental Benefit Agreement effective October 29, 1993,
which provides certain supplemental benefits in the event of termination of
employment (the "Supplemental Benefit Agreement"); and
Whereas the Officer by a show of interest letter agreement dated July
26, 1996 (the "Letter Agreement") has, among other things, agreed to
continue working for Pacific for twelve months following the closing of the
merger of SBC Communications (NV) Inc. into Pacific (the "Merger") and to
enter into an agreement to provide certain consulting services in the legal,
regulatory and external affairs area following the conclusion of the
Officer's employment as an officer of Pacific ; and
Whereas the Officer has been designated as eligible to participate in
the Officer Cashout Factor Extension Program, as described in the Officer
Acknowledgment Regarding Extension of Employment provided to the Officer on
July 26, 1996 (the "Officer CFEP"), provided the Officer executes such
Acknowledgment and returns it to Pacific by the date specified in such
Acknowledgment; and
Whereas Pacific is obligated under the terms of the Agreement and Plan
of Merger Among Pacific Telesis Group, SBC Communications Inc. and SBC
Communications (NV) Inc. dated as of April 1, 1996 to consult with SBC
Communications Inc. ("SBC") prior to implementing any retention programs
designed to prevent the loss of key employees; and
Whereas Pacific has consulted with SBC regarding this Agreement; and
Whereas the Officer and Pacific wish to confirm the meaning of various
terms of the Letter Agreement in order to avoid any possible ambiguities
between the 1989 Agreement, the Supplemental Benefit Agreement and the
Letter Agreement:
NOW, THEREFORE, the parties hereby agree as follows:
1. This Agreement shall not supersede or limit the 1989 Agreement or
the Supplemental Benefit Agreement. Accordingly, no terms of Officer's
employment by Pacific are affected by execution of this Agreement.
2. The Letter Agreement is hereby superseded and replaced by this
Agreement.
3. Officer agrees to continue to work for Pacific following the
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Merger, such employment continuing to be pursuant to the terms of the 1989
Agreement and the Supplemental Benefit Agreement. Such employment will
continue through the close of business on the date that is twelve months
following the closing of the Merger at which time Officer's employment with
Pacific shall terminate, unless such employment is terminated at an earlier
date at the mutual agreement of Pacific and Officer, but in no event earlier
than November 17, 1997 ("Officer's Termination Date"). The parties hereby
mutually agree that Officer's termination of employment upon the Officer's
Termination Date will be treated solely for purposes of application of the
1989 Agreement as an involuntary termination without Cause (as such term is
defined in such 1989 Agreement). Further, upon Officer's termination of
employment upon the Officer's Termination Date, Pacific will treat this
Agreement as Officer's written notice describing and requesting payment of
amounts under the 1989 Agreement in connection with an involuntary
termination without Cause, which notice is required pursuant to Section
12(c) of such 1989 Agreement.
4. The parties further agree that in connection with Officer's
termination of employment upon the Officer's Termination Date, the Officer
shall be provided with the benefits pursuant to the Officer CFEP, subject to
the terms and conditions thereof.
5. The parties agree that it is desirable to enter into an agreement
under which the Officer may provide consulting services in the form attached
hereto as Attachment 1.
IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of Pacific by its duly authorized officer, as of the day and
year first above written.
PACIFIC TELESIS GROUP
BY: /s/ Philip J. Quigley
Title: Chairman
/s/ Richard W. Odgers
SBC COMMUNICATIONS INC.
Concurred by: /s/ Edward E. Whitacre Date: 12/4/96
Title: Chairman of the Board
and Chief Executive Officer
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ATTACHMENT 1
AGREEMENT FOR CONSULTANT SERVICES
This agreement ("Agreement") between R. W. Odgers ("Mr. Odgers"), and
Pacific Telesis Group (the "Client Company"), sets forth the terms and
conditions under which Mr. Odgers agrees to provide consulting services to
the Client Company.
Terms and Conditions
1. Effective Date; Term. This Agreement shall be effective upon
execution by the parties, and shall continue in effect until terminated
as provided below in Section 10.
2. Services; Compensation. Pursuant to the terms of this Agreement,
following the conclusion of his employment as an officer of the Client
Company, Mr. Odgers shall provide consulting services to the Client
Company in the areas of legal, regulatory and external affairs
("Services") as requested by the Client Company and agreed to by Mr.
Odgers. The Client Company shall pay Mr. Odgers according to the
rates and charges set forth in Exhibit A. In addition, Mr. Odgers
shall be reimbursed for the actual cost of expenses described in
Exhibit A, upon presentation of appropriate documentation of such
expenses to the Client Company. The Client Company shall also continue
reimbursement of tax preparation services for Mr. Odgers in the same
manner as for Executive Vice Presidents of the Client Company during
the term of this Agreement, provided that such reimbursement shall not
exceed $2000 on an annual basis. The Client Company shall also
reimburse Mr. Odgers or provide access to services provided for the
lease or rental of an automobile in the same manner as an Executive
Vice President under the Pacific Telesis Group automobile policy during
the term of the Agreement, including reimbursement for operating
expenses, insurance, and parking. Mr. Odgers shall render an invoice
to the Client Company on a monthly basis to:
Pacific Telesis Group
130 Kearny Street, Room 3700
San Francisco, CA 94108
Attention: Philip J. Quigley
Payment will be made for the monthly retainer described in Exhibit A by
the 15th of the month following the month for which the retainer
applies. Payment for days or half-days of Services in excess of the
monthly retainer and reimbursement for expenses will be made within 30
days of receipt of Mr. Odgers' monthly invoice.
3. Facilities. The Client Company shall provide Mr. Odgers with an
office in San Francisco, the location of which is solely in the Client
Company's discretion, and with shared secretarial and receptionist
services (provided by personnel designated by the Client Company in its
sole discretion) for the term of this Agreement, the facilities and
secretarial and receptionist services to be used by Mr. Odgers solely
in providing Services to the Client Company.
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4. Independent Contractor.
a. In performing these Services, Mr. Odgers shall act as an
independent contractor and not as an agent or employee of the
Client Company. Although the Services will have to be completed
to the satisfaction of the Client Company and in accordance with
this Agreement, the actual details of the Services shall be under
Mr. Odgers' control.
b. Mr. Odgers shall comply at his expense with all applicable
provisions of workers' compensation laws, unemployment
compensation laws, federal social security law, the Fair Labor
Standards Act, and all other applicable federal, state and local
laws, regulations and codes relating to terms and conditions of
employment required to be fulfilled by employers. In the
performance of this Agreement, Mr. Odgers also agrees to comply
with all applicable federal, state and local laws, regulations and
codes and with such requirements or restrictions as may be
lawfully imposed by governmental authorities, including the
procurement of required permits and licenses.
5. Confidential and Proprietary Information. In the performance of his
obligations under this Agreement, Mr. Odgers may receive or have
access to ideas, strategies, concepts, technical information and other
confidential business, customer or personnel information or data, in
written, oral or other form (collectively, "Information") owned by the
Client Company or any subsidiary, affiliate or parent of the Client
Company. Such Information may contain material that is proprietary or
confidential or material that is subject to applicable laws regarding
secrecy of communications or trade secrets. Accordingly, Mr. Odgers
agrees:
a. that all Information so acquired by Mr. Odgers shall be and shall
remain the exclusive property of the Client Company, or any
subsidiary, affiliate or parent of the Client Company, as
applicable;
b. not to copy, publish, or disclose the Information to others or
authorize anyone else to copy or publish or disclose such
Information to others without the written approval of the Client
Company, or any subsidiary, affiliate or parent of the Client
Company, as applicable;
c. to return any copies of such Information in written, graphic or
other tangible form to the Client Company (or any subsidiary,
affiliate or parent of the Client Company, as applicable) at its
request; and
d. to use such Information only for purposes of fulfilling work or
Services performed under this Agreement and for other purposes
only upon such terms as may be agreed upon between Mr. Odgers and
the Client Company (or any subsidiary, affiliate or parent of the
Client Company, as applicable) in writing.
Because of the sensitive nature of the Services Mr. Odgers will be
performing for the Client Company(or its subsidiaries, affiliates or
2
parent, as applicable), Mr. Odgers will be required to notify the
Client Company if he becomes an employee or a director, or if he is
providing services as an independent contractor to, a competitor of the
Client Company (or its subsidiaries, affiliates or parent), and to
notify the competitor of this Agreement regarding the use of trade
secrets or Information (as well as similar provisions in Mr. Odgers'
employment agreement covering his employment as an Executive Vice
President of the Client Company). Mr. Odgers agrees that upon
receiving the notice described in the preceding sentence, the Client
Company may, in its sole discretion, terminate this Agreement upon 10
days' notice in accordance with Section 10 below .
6. Insurance. Mr. Odgers shall maintain at his expense workers'
compensation insurance to the extent required by applicable laws and
automobile liability insurance covering owned automobiles with limits
of not less than $1,000,000 combined single limit per occurrence. Mr.
Odgers shall also maintain commercial general liability insurance,
including contractual liability and personal injury liability, with
limits of not less than $1,000,000 combined single limit per
occurrence, to provide protection against any other claims and/or
liabilities, including, but not limited to, claims for bodily injury or
property damage, which may arise or result from this Agreement or the
performance of this Agreement. At the request of the Client Company,
Mr. Odgers shall cooperate with the Client Company to maintain lawyers
professional liability coverage that would cover the Services performed
for the Client Company (or its subsidiaries, affiliates or parent).
Mr. Odgers also agrees to notify Client Company thirty days in advance
of any change or lapse in any of the coverages required hereunder. Mr.
Odgers shall provide Client Company with certification by a properly
qualified representative of Mr. Odgers' insurer evidencing that
Mr. Odgers' insurance complies with this section. The Client Company
acknowledges that Mr. Odgers will be eligible for liability coverage
provided to retired officers of the Client Company and that to the
extent coverage under that program meets the requirements of this
Section 6, Mr. Odgers will not be required to provide further evidence
of coverage. Notwithstanding any of the foregoing, to the extent the
cost of maintaining insurance coverage required under this Section 6
exceeds $500 on an annual basis, Mr. Odgers shall be reimbursed for the
cost of such coverage in excess of $500 per year.
7. Conflict of Interest. The Client Company acknowledges that Mr. Odgers
may undertake services for others during the term of this Agreement.
In the event that Mr. Odgers undertakes services for others during the
term of this Agreement that could result in a conflict with the
interests of the Client Company, its subsidiaries, affiliates or
parent, Mr. Odgers will make full disclosure to all affected parties
and arrange a reasonable method to eliminate the conflict. If
necessary, Mr. Odgers will withdraw from representing clients or
providing consulting services to clients whose interests conflict with
those of the Client Company its subsidiaries, affiliates or parent.
8. Non-Assignment; No Third Party Beneficiaries. Mr. Odgers agrees that
the obligations to perform the consulting services required of him
hereunder are personal and may not be assigned or delegated by him in
any manner whatsoever, nor are such obligations subject to involuntary
alienation, assignment or transfer. The Client Company may not assign
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this Agreement or delegate any of its duties or obligations hereunder,
either in whole or in part, to any person or entity, without Mr.
Odgers' express written consent, except to a successor of the Client
Company which becomes obligated hereunder in accordance with the
provisions of Section 15.
This Agreement is for the benefit of the Client Company, its
subsidiaries, affiliates and parent, and Mr. Odgers and not for any
other person.
9. Records and Audits. Mr. Odgers shall maintain accurate and complete
financial records specifically relating to the Services provided in
accordance with generally accepted accounting principles and practices,
consistently applied. To the extent that such records may be relevant
in determining whether Mr. Odgers is complying with his obligations,
the Client Company may audit such records. Mr. Odgers shall retain
such records for a period of three years from the date of final payment
under this Agreement.
10. Termination; Survival. This Agreement may be terminated at any time by
the mutual agreement of Mr. Odgers and the Client Company. Mr. Odgers
or the Client Company may terminate this Agreement at any time by
giving the other party 60 days' advance notice in writing; provided,
however, that if Mr. Odgers provides notice to the Client Company that
he has become an employee or a director, or is providing services as an
independent contractor to, a competitor of the Client Company (or its
subsidiaries, affiliates or parent), the Client Company may, in its
sole discretion, terminate this Agreement by giving Mr. Odgers 10 days'
advance notice in writing.
The terms and conditions contained in this Agreement that by their
sense and context are intended to survive the termination or completion
of performance of obligations by either or both parties under this
Agreement shall so survive.
11. Death or Disability. Upon Mr. Odgers' death or disability, the
consulting relationship created pursuant to this Agreement will
immediately terminate, and no further compensation will be payable.
However, the Client Company will be required to pay Mr. Odgers or his
estate any unpaid compensation earned for services rendered through the
date of his death or disability, together with any unpaid
reimbursements owed.
For purposes of this Agreement, Mr. Odgers will be deemed to be
disabled if he is unable to engage in any substantial gainful activity
by reason of any medically-determinable physical or mental impairment
expected to result in death or to be of continuous duration of twelve
months or more.
12. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of California, irrespective of its choice of laws
principles.
13. Notices. All notices and other communications shall be in writing and
shall be addressed to these representatives of the Client Company and
Mr. Odgers (or to such other representative or address as either party
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may from time to time designate in writing):
Mr. Philip J. Quigley
Pacific Telesis Group
130 Kearny Street, Room 3716
San Francisco, CA 94108
Mr. R. W. Odgers
28 Eugene Street
Mill Valley, CA
14. Severability. The invalidity or unenforceability of any provision of
this Agreement will not affect the validity or enforceability of any
other provision of this Agreement, and such other provisions will
accordingly remain in full force and effect.
15. Successors and Assigns. The provisions of this Agreement will inure to
the benefit of and be binding upon the Client Company, together with
its successors and assigns, and Mr. Odgers and the personal
representative of his estate and his heirs and legatees. Without in
any manner limiting the foregoing, should the Client Company be
acquired by merger or stock or asset sale, the acquiring entity will be
bound by the terms and provisions of this Agreement and will succeed to
all of the Client Company's obligations and liabilities hereunder.
16. Entire Agreement. This Agreement incorporates the entire agreement
between Mr. Odgers and the Client Company relating to his retention as
a consultant to the business and supersedes all prior agreements and
understandings, whether written or oral, with respect to such subject
matter.
17. Amendment. This Agreement may only be amended by written instrument
signed by Mr. Odgers and a duly-authorized officer of the Client
Company.
IN WITNESS WHEREOF, the parties have caused two originals of this Agreement
to be executed by themselves or their respective duly authorized
representatives.
/s/ R. W. Odgers Date: 12/5/96
PACIFIC TELESIS GROUP
By: /s/ Philip J. Quigley Date: 12/6/96
SBC COMMUNICATIONS INC.
Concurred by: /s/ Edward E. Whitacre Date: 12/4/96
Chairman of the Board
and Chief Executive Officer
5
COMPENSATION FOR SERVICES
AND REIMBURSABLE EXPENSES
The following are the standards to be applied in providing compensation to
Mr. Odgers for Services rendered and in reimbursing Mr. Odgers for the
actual cost of expenses, provided that such expenses are incurred in the
performance of Services:
1. Compensation for Services: Specific Services shall be requested by the
Client Company. Mr. Odgers shall be entitled to cash compensation for
Services at the rate of $1,300 per half-day (time worked in a twenty-
four hour period of less than 4 hours) or $2,600 per day (time worked
in a twenty-four period of four hours or more) worked. The time to be
included in each day or half-day worked shall include time providing
Services and all travel time. A monthly retainer of $15,600 per month
shall be paid to Mr. Odgers. Payment for days or half-days of Services
provided in excess of the amount covered by the retainer shall be made
in accordance with the preceding rates.
2. Airfare and Travel: Mr. Odgers shall be entitled to reimbursement for
first-class airfare for himself (and his spouse where appropriate).
Mr. Odgers and his spouse shall be entitled to reimbursement for
reasonable travel from and returning to their California residence for
circumstances in which the participation of the spouse is appropriate.
3. Lodging and Meals: The Client Company will reimburse Mr. Odgers for
reasonable lodging and meal expenses when Mr. Odgers is away from his
California residence. Mr. Odgers shall be entitled to reimbursement
for meals purchased for persons other than Mr. Odgers in the reasonable
course of providing the Services contemplated under this Agreement.
4. Telecommunications Charges: The Client Company will reimburse Mr.
Odgers for all long distance and toll telephone calls and facsimile
charges for calls placed or received by Mr. Odgers when reasonably
necessary for Mr. Odgers' performance of Services under this
Agreement.
5. Delivery: The Client Company will reimburse Mr. Odgers for messenger
services, overnight delivery and other express mail type services.
6. Entertainment: The Client Company will reimburse Mr. Odgers for
reasonable entertainment expenses.
1
CONFIRMATION AGREEMENT
THIS CONFIRMATION AGREEMENT ("Agreement"), entered into as of December
6, 1996, by and between J.R. MOBERG (the "Officer") and PACIFIC TELESIS
GROUP, a Nevada corporation ("Pacific"),
WITNESSETH:
Whereas the Officer and Pacific entered into an Employment Agreement
effective January 1, 1989 (the "1989 Agreement"), which, among other things,
provides for the payment by Pacific to Officer of various amounts under
various circumstances in connection with a termination of employment of the
Officer following a Change in Control (as such term is defined in such 1989
Agreement); and
Whereas the Officer by a show of interest letter agreement dated July
26, 1996 (the "Letter Agreement") has, among other things, agreed to
continue working for Pacific for up to twelve months following the closing
of the merger of SBC Communications (NV) Inc. into Pacific (the "Merger")
and to enter into an agreement to provide certain consulting services
relating to the Telephone Pioneers of America following the conclusion of
the Officer's employment as an officer of Pacific; and
Whereas the Officer has been designated as eligible to participate in
the Officer Cashout Factor Extension Program, as described in the Officer
Acknowledgment Regarding Extension of Employment provided to the Officer on
July 26, 1996 (the "Officer CFEP"), provided the Officer executes such
Acknowledgment and returns it to Pacific by the date specified in such
Acknowledgment; and
Whereas Pacific is obligated under the terms of the Agreement and Plan
of Merger Among Pacific Telesis Group, SBC Communications Inc. and SBC
Communications (NV) Inc. dated as of April 1, 1996 to consult with SBC
Communications Inc. ("SBC") prior to implementing any retention programs
designed to prevent the loss of key employees; and
Whereas Pacific has consulted with SBC regarding this Agreement; and
Whereas the Officer and Pacific wish to confirm the meaning of various
terms of the Letter Agreement in order to avoid any possible ambiguities
between the 1989 Agreement and the Letter Agreement:
NOW, THEREFORE, the parties hereby agree as follows:
1. This Agreement shall not supersede or limit the 1989 Agreement.
Accordingly, no terms of Officer's employment by Pacific are affected by
execution of this Agreement.
2. The Letter Agreement is hereby superseded and replaced by this
Agreement.
3. Officer agrees to continue to work for Pacific following the
Merger, such employment continuing to be pursuant to the terms of the 1989
Agreement. Such employment will continue through the close of business on a
date that is up twelve months following the closing of the Merger at which
2
time Officer's employment with Pacific shall terminate, unless such
employment is terminated at an earlier date at the discretion of SBC after
having given Officer at least 30 days' prior written notice ("Officer's
Termination Date"). The parties hereby mutually agree that Officer's
termination of employment upon the Officer's Termination Date will be
treated solely for purposes of application of the 1989 Agreement as an
involuntary termination without Cause (as such term is defined in such 1989
Agreement). Further, upon Officer's termination of employment upon the
Officer's Termination Date, Pacific will treat this Agreement as Officer's
written notice describing and requesting payment of amounts under the 1989
Agreement in connection with an involuntary termination without Cause, which
notice is required pursuant to Section 12(c) of such 1989 Agreement.
4. The parties further agree that in connection with Officer's
termination of employment upon the Officer's Termination Date, the Officer
shall be provided with the benefits pursuant to the Officer CFEP, subject to
the terms and conditions thereof.
5. The parties agree that it is desirable to enter into an agreement
under which the Officer may provide consulting services in the form attached
hereto as Attachment 1.
IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of Pacific by its duly authorized officer, as of the day and
year first above written.
PACIFIC TELESIS GROUP
By: /s/ Philip J. Quigley
Title: Chairman
/s/ J. R. Moberg
SBC COMMUNICATIONS INC.
Concurred by:
/s/ Edward E. Whitacre, Jr. Date: 12/4/96
Chairman of the Board and
Chief Executive Officer
3
AGREEMENT FOR CONSULTANT SERVICES
This agreement ("Agreement") between J. R. Moberg ("Mr. Moberg"), and
Pacific Telesis Group (the "Client Company"), sets forth the terms and
conditions under which Mr. Moberg agrees to provide consulting services to
the Client Company.
Terms and Conditions
1. Effective Date; Term. This Agreement shall be effective upon
execution by the parties and shall continue in effect until terminated
as provided below in Section 10.
2. Services; Compensation. Pursuant to the terms of this Agreement,
following the conclusion of his employment as an officer of the Client
Company, Mr. Moberg shall provide consulting services to the Client
Company related to the Telephone Pioneers of America, including serving
as Vice President of such organization from July 1, 1997 through June
30, 1998 and as President of such organization from July 1, 1998
through June 30, 1999 ("Services"). The Client Company shall pay Mr.
Moberg compensation of $31,500 per month for such Services. In
addition, Mr. Moberg shall be reimbursed for the actual cost of
expenses described in Exhibit A, upon presentation of appropriate
documentation of such expenses to the Client Company. The Client
Company shall also continue reimbursement of tax preparation services
for Mr. Moberg in the same manner as for Executive Vice Presidents of
the Client Company during the term of this Agreement, provided that
such reimbursement shall not exceed $2000 on an annual basis. The
Client Company will also reimburse Mr. Moberg or provide access to
services provided for the lease or rental of an automobile in the same
manner as an Executive Vice President under the Pacific Telesis Group
automobile policy during the term of the Agreement, including
reimbursement for operating expenses, insurance, and parking.
3. Facilities. The Client Company shall provide Mr. Moberg with an
office in San Francisco, the location of which is solely in the Client
Company's discretion, and with shared secretarial and receptionist
services (provided by personnel designated by the Client Company in its
sole discretion) for the term of this Agreement, the facilities and
secretarial and receptionist services to be used by Mr. Moberg solely
in providing Services to the Client Company.
4. Independent Contractor.
a. In performing these Services, Mr. Moberg shall act as an
independent contractor and not as an agent or employee of the
Client Company. Although the Services will have to be completed
to the satisfaction of the Client Company and in accordance with
this Agreement, the actual details of the Services shall be under
Mr. Moberg's control.
b. Mr. Moberg shall comply at his expense with all applicable
provisions of workers' compensation laws, unemployment
compensation laws, federal social security law, the Fair Labor
Standards Act, and all other applicable federal, state and local
laws, regulations and codes relating to terms and conditions of
1
employment required to be fulfilled by employers. In the
performance of this Agreement, Mr. Moberg also agrees to comply
with all applicable federal, state and local laws, regulations and
codes and with such requirements or restrictions as may be
lawfully imposed by governmental authorities, including the
procurement of required permits and licenses.
5. Confidential and Proprietary Information. In the performance of his
obligations under this Agreement, Mr. Moberg may receive or have
access to ideas, strategies, concepts, technical information and other
confidential business, customer or personnel information or data, in
written, oral or other form (collectively, "Information") owned by the
Client Company or any subsidiary, affiliate or parent of the Client
Company. Such Information may contain material that is proprietary or
confidential or material that is subject to applicable laws regarding
secrecy of communications or trade secrets. Accordingly, Mr. Moberg
agrees:
a. that all Information so acquired by Mr. Moberg shall be and shall
remain the exclusive property of the Client Company, or any
subsidiary, affiliate or parent of the Client Company ,as
applicable;
b. not to copy, publish, or disclose the Information to others or
authorize anyone else to copy or publish or disclose such
Information to others without the written approval of the Client
Company, or any subsidiary, affiliate or parent of the Client
Company ,as applicable;
c. to return any copies of such Information in written, graphic or
other tangible form to the Client Company (or any subsidiary,
affiliate or parent of the Client Company, as applicable) at its
request; and
to use such Information only for purposes of fulfilling work or
Services performed under this Agreement and for other purposes
only upon such terms as may be agreed upon between Mr. Moberg and
the Client Company (or any subsidiary, affiliate or parent of the
Client Company, as applicable) in writing.
Because of the sensitive nature of the work that Mr. Moberg will be
performing for the Client Company (or its subsidiaries, affiliates or
parent, as applicable), Mr. Moberg will be required to notify the
Client Company if he becomes an employee or a director, or if he is
providing services as an independent contractor to, a competitor of the
Client Company (or its subsidiaries, affiliates or parent), and to
notify the competitor of this Agreement regarding the use of trade
secrets or Information (as well as similar provisions in Mr. Moberg's
employment agreement covering his employment as an Executive Vice
President of the Client Company). Mr. Moberg agrees that upon
receiving the notice described in the preceding sentence, the Client
Company may, in its sole discretion, terminate this Agreement upon 10
days' notice in accordance with the provisions of Section 10 below.
6. Insurance. Mr. Moberg shall maintain at his expense workers'
compensation insurance as required by applicable laws and automobile
2
liability insurance covering owned automobiles with limits of not less
than $1,000,000 combined single limit per occurrence. Mr. Moberg shall
also maintain commercial general liability insurance, including
contractual liability and personal injury liability, with limits of not
less than $1,000,000 combined single limit per occurrence, to provide
protection against any other claims and/or liabilities, including, but
not limited to, claims for bodily injury or property damage, which may
arise or result from this Agreement or the performance of this
Agreement. The Client Company agrees to assist Mr. Moberg in obtaining
such coverage. Mr. Moberg also agrees to notify Client Company thirty
days in advance of any change or lapse in any of the coverages required
hereunder. Mr. Moberg shall provide Client Company with certification
by a properly qualified representative of Mr. Moberg's insurer
evidencing that Mr. Moberg's insurance complies with this section. The
Client Company acknowledges that Mr. Moberg will be eligible for
liability coverage provided to retired officers of the Client Company
and that to the extent coverage under that program meets the
requirements of this Section 6, Mr. Moberg will not be required to
provide further evidence of coverage. Notwithstanding any of the
foregoing, to the extent the cost of maintaining insurance coverage
required under this Section 6 exceeds $500 on an annual basis, Mr.
Moberg shall be reimbursed for the cost of such coverage in excess of
$500 per year.
7. Conflict of Interest. The Client Company acknowledges that Mr. Moberg
may undertake services for others during the term of this Agreement.
In the event that Mr. Moberg undertakes services for others during the
term of this Agreement that could result in a conflict with the
interests of the Client Company, its subsidiaries, affiliates or
parent, Mr. Moberg will make full disclosure to all affected parties
and arrange a reasonable method to eliminate the conflict. If
necessary, Mr. Moberg will withdraw from representing clients or
providing consulting services to clients whose interests conflict with
those of the Client Company its subsidiaries, affiliates or parent.
8. Non-Assignment; No Third Party Beneficiaries. Mr. Moberg agrees that
the obligations to perform the consulting services required of him
hereunder are personal and may not be assigned or delegated by him in
any manner whatsoever, nor are such obligations subject to involuntary
alienation, assignment or transfer. The Client Company may not assign
this Agreement or delegate any of its duties or obligations hereunder,
either in whole or in part, to any person or entity, without Mr.
Moberg's express written consent, except to a successor of the Client
Company which becomes obligated hereunder in accordance with the
provisions of Section 15.
This Agreement is for the benefit of the Client Company, its
subsidiaries, affiliates and parent, and Mr. Moberg and not for any
other person.
9. Records and Audits. Mr. Moberg shall maintain accurate and complete
financial records specifically relating to the Services provided in
accordance with generally accepted accounting principles and practices,
consistently applied. To the extent that such records may be relevant
in determining whether Mr. Moberg is complying with his obligations,
the Client Company may audit such records. Mr. Moberg shall retain
3
such records for a period of three years from the date of final payment
under this Agreement.
10 Termination; Survival. This Agreement may be terminated at any time by
the mutual agreement of Mr. Moberg and the Client Company. Mr. Moberg
or the Client Company may terminate this Agreement at any time by
giving the other party 60 days' advance notice in writing; provided,
however, that if Mr. Moberg provides notice to the Client Company that
he has become an employee or a director, or is providing services as an
independent contractor to, a competitor of the Client Company (or its
subsidiaries, affiliates or parent), the Client Company may, in its
sole discretion, terminate this Agreement by giving Mr. Moberg 10
days' advance notice in writing.
The terms and conditions contained in this Agreement that by their
sense and context are intended to survive the termination or completion
of performance of obligations by either or both parties under this
Agreement shall so survive.
11. Death or Disability. Upon Mr. Moberg's death or disability, the
consulting relationship created pursuant to this Agreement will
immediately terminate, and no further compensation will be payable.
However, the Client Company will be required to pay Mr. Moberg or his
estate any unpaid compensation earned for services rendered through the
date of his death or disability, together with any unpaid
reimbursements owed.
For purposes of this Agreement, Mr. Moberg will be deemed to be
disabled if he is unable to engage in any substantial gainful activity
by reason of any medically-determinable physical or mental impairment
expected to result in death or to be of continuous duration of twelve
months or more.
12. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of California, irrespective of its choice of laws
principles.
13. Notices. All notices and other communications shall be in writing and
shall be addressed to these representatives of the Client Company and
Mr. Moberg (or to such other representative or address as either party
may from time to time designate in writing):
Mr. Philip J. Quigley
Pacific Telesis Group
130 Kearny Street, Room 3716
San Francisco, CA 94108
Mr. J. R. Moberg
760 El Cerrito Avenue
Hillsborough, CA
14. Severability. The invalidity or unenforceability of any provision of
this Agreement will not affect the validity or enforceability of any
other provision of this Agreement, and such other provisions will
accordingly remain in full force and effect.
4
15. Successors and Assigns. The provisions of this Agreement will inure to
the benefit of and be binding upon the Client Company, together with
its successors and assigns, and Mr. Moberg and the personal
representative of his estate and his heirs and legatees. Without in
any manner limiting the foregoing, should the Client Company be
acquired by merger or stock or asset sale, the acquiring entity will be
bound by the terms and provisions of this Agreement and will succeed to
all of the Client Company's obligations and liabilities hereunder.
16. Entire Agreement. This Agreement incorporates the entire agreement
between Mr. Moberg and the Client Company relating to his retention as
a consultant to the business and supersedes all prior agreements and
understandings, whether written or oral, with respect to such subject
matter.
17. Amendment. This Agreement may only be amended by written instrument
signed by Mr. Moberg and a duly-authorized officer of the Client
Company.
IN WITNESS WHEREOF, the parties have caused two originals of this Agreement
to be executed by themselves or their respective duly authorized
representatives.
/s/ J. R. Moberg Date: 12/6/96
PACIFIC TELESIS GROUP
By: /s/ Philip J. Quigley Date: 12/6/96
SBC COMMUNICATIONS INC.
Concurred by: /s/ Edward E. Whitacre Date: 12/4/96
5
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REIMBURSABLE EXPENSES
The following are the standards to be applied in reimbursing Mr. Moberg for
the actual cost of expenses, provided that such expenses are incurred in the
performance of Services:
1. Airfare and Travel: Mr. Moberg shall be entitled to reimbursement for
first-class airfare for himself (and his spouse where appropriate).
Mr. Moberg and his spouse shall be entitled to reimbursement for
reasonable travel from and returning to their California residence for
circumstances in which the participation of the spouse is appropriate.
2. Lodging and Meals: The Client Company will reimburse Mr. Moberg for
reasonable lodging and meal expenses when Mr. Moberg is away from his
California residence. Mr. Moberg shall be entitled to reimbursement
for meals purchased for persons other than Mr. Moberg in the reasonable
course of providing the Services contemplated under this Agreement.
3. Telecommunications Charges: The Client Company will reimburse Mr.
Moberg for all long distance and toll telephone calls and facsimile
charges for calls placed or received by Mr. Moberg when reasonably
necessary for Mr. Moberg's performance of Services under this
Agreement.
4. Delivery: The Client Company will reimburse Mr. Moberg for messenger
services, overnight delivery and other express mail type services.
5. Entertainment: The Client Company will reimburse Mr. Moberg for
reasonable entertainment expenses.
1
Dates Referenced Herein and Documents Incorporated by Reference
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