Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 1995 Ptg Annual Report 38 126K
2: EX-10.DD Executive Disability and Survivor Protection Plan 13 56K
3: EX-10.KK Executive Supplemental Pension Plan 23 98K
4: EX-10.NN Ptg Mid-Career Pension Plan 16 72K
5: EX-10.OO Ptg - Outside Directors' Deferred Stock Unit Plan 7 30K
6: EX-10.PP.V Supplemental Benefit Agreement 5 16K
7: EX-10.SS Ptg Outside Directors' Retirement Plan 5 19K
8: EX-11 Computation of Earnings Per Share 1 8K
9: EX-12 Ratio of Earnings to Fixed Charges 1 7K
10: EX-21 Subsidiaries of Pacific Telesis Group 1 6K
11: EX-23 Consent of Independent Accountants 1 8K
12: EX-24 Power of Attorney 2 10K
13: EX-27 FDS for Ptg 1995 Annual Report 2 7K
Exhibit 10kk
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PACIFIC TELESIS GROUP
EXECUTIVE SUPPLEMENTAL PENSION PLAN
(Adopted as of July 1, 1995)
TABLE OF CONTENTS
Page
SECTION 1. INTRODUCTION AND PURPOSE................................... 1
1.1 Introduction............................................... 1
1.2 Purpose.................................................... 1
SECTION 2. ELIGIBILITY ............................................... 1
2.1 Eligibility To Participate................................. 1
2.2 Mandatory Retirement....................................... 1
2.3 Eligibility For Executive Pension.......................... 2
SECTION 3. AMOUNT OF EXECUTIVE PENSION................................ 3
3.1 Formula for Executive Pension.............................. 3
3.2 Basic Benefit.............................................. 4
3.3 Officer Minimum Benefit.................................... 5
3.4 Special Minimum Benefit.................................... 6
3.5 Special Increases.......................................... 6
SECTION 4. PAYMENT OF EXECUTIVE PENSION............................... 7
4.1 Service and Vested Pensions................................ 7
4.2 Disability Pensions......................................... 7
4.3 Notification of and Application for Benefits............... 8
4.4 Actual Payment Date Following Pension Effective Date....... 8
4.5 Death Following Pension Effective Date..................... 8
SECTION 5. WELFARE BENEFITS FOR CERTAIN PARTICIPANTS.................. 8
5.1 Eligibility................................................ 8
5.2 Benefits................................................... 9
SECTION 6. SURVIVING SPOUSE BENEFITS.................................. 9
6.1 Amount..................................................... 9
6.2 Regular Surviving Spouse Benefit........................... 10
6.3 Special Surviving Spouse Benefit........................... 10
6.4 Form and Time of Payment................................... 10
SECTION 7. DEATH BENEFITS............................................. 11
7.1 Eligibility and Waiver..................................... 11
7.2 Benefits................................................... 11
7.3 No Right to Company Assets ................................ 7
PACIFIC TELESIS GROUP
MID-CAREER PENSION PLAN
(Amended and Restated as of July 1, 1995)
TABLE OF CONTENTS
Page
SECTION 8. RIGHTS TO BENEFITS......................................... 11
8.1 Entitlement to Benefits.................................... 11
8.2 Effect of Reemployment..................................... 11
8.3 Forfeiture for Misconduct.................................. 12
8.4 Waiver in Absence of Claims Release........................ 12
8.5 Waiver by Damage Claims or Suits........................... 13
8.6 Offset for Judgment or Settlement.......................... 13
8.7 Offset for Payments Under Law.............................. 13
SECTION 9. SOURCE OF BENEFIT PAYMENTS................................. 13
9.1 Participating Company Liability............................ 13
9.2 All Benefits Unfunded...................................... 14
9.3 No Right to Company Assets................................. 14
SECTION 10. ADMINISTRATION ............................................ 14
10.1 Plan Sponsor .............................................. 14
10.2 Plan Administrator ........................................ 14
10.3 Procedure to Approve and Deny Claims ...................... 15
10.4 Review Procedure .......................................... 15
10.5 Further ERISA Rights ...................................... 15
10.6 Named Fiduciaries ......................................... 15
10.7 Allocation of Responsibilities ............................ 16
10.8 Administrative Expenses ................................... 16
SECTION II. AMENDMENT AND TERMINATION.................................. 16
11.1 Plan Amendment............................................. 16
11.2 Plan Termination........................................... 16
SECTION 12. DEFINITIONS .............................................. 16
PACIFIC TELESIS GROUP
EXECUTIVE SUPPLEMENTAL PENSION PLAN
(Adopted as of July 1, 1995)
SECTION 1. INTRODUCTION AND PURPOSE
1.1 Introduction. The Pacific Telesis Group Executive Supplemental Pension
Plan (the "Plan") was adopted as of July 1, 1995 (the "Effective Date"), to
merge the Pacific Telesis Group Executive Non-Qualified Pension Plan (a
"Predecessor Plan") and the Pacific Telesis Group Supplemental Executive
Retirement Plan (a "Predecessor Plan") into a single plan and to include the
minimum pension and related welfare and surviving spouse benefits previously
provided by the Pacific Telesis Group Senior Management Long Term Disability
and Survivor Protection Plan (a "Predecessor Plan"). The benefits provided
by this Plan are substantially similar to the benefits provided by the
Predecessor Plans. Capitalized terms are defined in Section 12 of the Plan.
1.2 Purpose. The purpose of the Plan is to assist Participating Companies
in attracting and retaining highly competent senior managers by providing
certain unfunded pension benefits to eligible Executives. Together with the
benefits provided by the Qualified Pension Plan, the benefits provided by
the Plan are intended to provide the Executive with approximately the same
benefit that the Executive would have been entitled to receive under the
Qualified Pension Plan if the Qualified Pension Plan (a) recognized total
base pay (whether or not deferred) and short term incentive awards as
compensation for purposes of benefit calculation and (b) were not subject to
any legal limitations on the amount of benefits that could be paid. In
addition, the Plan provides minimum pensions and welfare benefits to certain
eligible Executives.
SECTION 2. ELIGIBILITY
2.1 Eligibility To Participate. An Executive or a former Executive who was
a participant in a Predecessor Plan immediately before the Effective Date
shall be a Participant in this Plan. Any other Employee shall become a
Participant in the Plan immediately upon becoming an Executive.
Participation shall cease upon Termination of Employment unless the
Participant is then eligible for benefits under the Plan.
2.2 Mandatory Retirement. Each Participant shall cease to be eligible for
continued employment by a Participating Company no later than the last day
of the month in which the Participant attains the Mandatory Retirement Age.
2.3 Eligibility For Executive Pension.
(a) Qualified Pension Benefit or Minimum Benefit Required. A
Participant shall be eligible for an Executive Pension:
(i) Upon Termination of Employment, if the Participant is
eligible for a pension under the Qualified Pension Plan without regard
to any minimum benefits or early retirement window benefits which
change the usual eligibility requirements for pensions under the
Qualified Pension Plan; or
1
(ii) Upon Termination of Employment, if the Participant is
eligible for an Officer Minimum Benefit under Section 3.3 or a Special
Minimum Benefit under Section 3.4 (even though he or she may not be
eligible for a pension under the Qualified Pension Plan); or
(iii) Before Termination of Employment, only if the Participant
is not subject to the Mandatory Retirement Age requirements and
therefore becomes eligible for an in-service pension under the
Qualified Pension Plan. In such a case, the Participant's Executive
Pension shall be redetermined upon Termination of Employment, as
provided under the Qualified Pension Plan.
(b) Type of Pension. The Executive Pension shall be paid:
(i) As a service pension, if the Participant's pension
under the Qualified Pension Plan is payable as a service pension; or
(ii) As a service pension, if the Participant's pension under
the Qualified Pension Plan is payable as an in-service pension; or
(iii) As a service pension, if the Executive Pension is based
on an Officer Minimum Benefit under Section 3.3 or a Special Minimum
Benefit under Section 3.4 (even if the Participant is not eligible for
a service pension under the Qualified Pension Plan); or
(iv) As a vested pension, if the Participant's Executive
Pension is not paid as a service pension and if the Participant's
pension under the Qualified Pension Plan is payable as a vested
pension; or
(v) As a disability pension, if the Participant's Executive
Pension is not paid as a service pension and if the Participant is
eligible for a disability pension under the Qualified Pension Plan.
(c) Continuation of Pensions Commenced Under Predecessor Plans.
All Participants who were retired or terminated former Executives as of the
Effective Date of this Plan shall continue to be entitled to receive the
benefits they were receiving or entitled to receive under the terms of the
Predecessor Plans.
SECTION 3. AMOUNT OF EXECUTIVE PENSION
3.1 Formula for Executive Pension.
(a) Participants Who Are Executives at Retirement. If a
Participant is an Executive at the time of his or her Termination of
Employment, the Participant's Executive Pension, expressed as a monthly
pension commencing on his or her Pension Effective Date, shall equal:
2
(i) The greatest of the:
(A) Basic Benefit under Section 3.2, if eligible
therefor; or
(B) Officer Minimum Benefit under Section 3.3, if
eligible therefor; or
(C) Special Minimum Benefit under Section 3.4, if
eligible therefor;
(ii) Reduced by the Qualified Pension Benefit.
If any benefit under Clause (i) above is subject to reduction for early
payment, the reduction shall be made as provided in Sections 3.2, 3.3 and
3.4, as applicable. The Participant's Qualified Pension Benefit under
Clause (ii) above shall include a reduction for early payment, if
appropriate. A Participant's Executive Pension shall be paid at the time
and in the form provided in Section 4 and may be subject to special
increases as provided in Section 3.5.
(b) Participants Who Are Not Executives At Retirement. If a
Participant is not an Executive at the time of the Participant's Termination
of Employment, but was an Executive during some previous period, the
Participant's Executive Pension shall be determined in the same manner as
set forth in Section 3.1(a) above, except that (i) the Years of Credited
Service under the Basic Benefit shall be determined as though the
Participant's Termination of Employment occurred on the date that he or she
ceased serving as an Executive, (ii) the Participant shall not be eligible
for either the Special Minimum Benefit or the Officer Minimum Benefit, and
(iii) the Executive Pension shall not be subject to special increases under
Section 3.5 below. The Participant's actual service and age shall be used
under Section 3.2(a)(iii) to determine the appropriate early payment
discount for the Regular Basic Benefit.
3.2 Basic Benefit. The Basic Benefit is the sum of the Participant's
Regular Basic Benefit and his or her Imputed Basic Benefit, as described in
Sections 3.2 (a) and (b) below. (The Basic Benefit was formerly provided by
(i) the restoration benefits and the short term award benefit available
under the Pacific Telesis Group Executive Non-Qualified Pension Plan, and
(ii) the excess benefits under sections 415 and 401(a)(17) of the Internal
Revenue Code, available under the Pacific Telesis Group Supplemental
Executive Retirement Plan.)
(a) Eligibility for and Amount of Regular Basic Benefit. A
Participant who is or was an Executive shall be eligible for a Regular Basic
Benefit if the Participant is eligible for a Qualified Pension Benefit. A
Participant's Regular Basic Benefit shall be a monthly pension equal to:
(i) 1.45% of the sum of the Participant's Final Average
Monthly Base Pay and his or her Final Average Monthly STIP Award;
multiplied by
(ii) The Participant's Years of Credited Service;
3
(iii) Adjusted for early payment as follows:
(A) No adjustment shall be made if the Participant's
Executive Pension is paid either as a disability pension or as a
service pension which is payable on account of total disability (as
provided under the Qualified Pension Plan);
(B) No adjustment shall be made if the Participant has
at least ten (10) Years of Officer Service and if, at the time of his
or her Termination of Employment, the Participant is at least 55 years
of age and is an Officer;
(C) No adjustment shall be made if the Participant's
Executive Pension is paid as a service pension and if, at the time of
his or her Termination of Employment, the Participant either has a Term
of Employment of at least 30 years or is at least 55 years of age;
(D) If the Participant's Executive Pension is paid as
a service pension in any other case, the Regular Basic Benefit shall be
reduced by one-half percent (0.5%) for each month or portion thereof
that the Participant's age is less than 55 on his or her Pension
Effective Date; or
(E) If the Participant's Executive Pension is paid as
a vested pension and if the Participant is less than 65 years of age on
the Pension Effective Date, the Regular Basic Benefit shall be reduced
in accordance with the early payment factor table for vested pensions
under the Qualified Pension Plan.
A Participant's Regular Basic Benefit shall not be increased for any minimum
or early retirement window benefit that may be available under the Qualified
Pension Plan, unless this Plan is amended accordingly. But in no event
shall a Participant's Regular Basic Benefit at his or her Pension Effective
Date be less than the Regular Basic Benefit accrued under the Plan at any
earlier time, determined as though the Participant had terminated employment
at that time and as though the Plan had always been in existence.
(b) Eligibility for and Amount of Imputed Basic Benefit. A
Participant who was a PacTel Employee before the Separation Date shall be
eligible for an Imputed Basic Benefit if he or she received allocations of
basic, variable or transition contributions under the PacTel Retirement Plan
while deferring compensation under the Pacific Telesis Group Executive
Deferral Plan. A Participant's Imputed Basic Benefit shall equal a monthly
life annuity whose Present Value on the Pension Effective Date is equal to:
(i) The sum of the amounts actually deferred under the
Pacific Telesis Group Executive Deferral Plan attributable to base
salary and Short Term Incentive Plan awards for each year between
January 1, 1987, and the Separation Date multiplied by the sum of the
basic, variable and transition contribution rates in effect under the
PacTel Retirement Plan for each of those years;
4
(ii) Plus Interest on such contributions to the Pension
Effective Date.
3.3 Officer Minimum Benefit. The Officer Minimum Benefit provides a
monthly pension to certain Executives who serve as Officers. (The Officer
Minimum Benefit was formerly provided under the Pacific Telesis Group
Executive Non-Qualified Pension Plan.)
(a) Eligibility for Officer Minimum Benefit. A Participant is
eligible for an Officer Minimum Benefit if:
(i) He or she became an Officer on or before January 24,
1992;
(ii) He or she completes at least 10 Years of Officer
Service;
(iii) At the time of his or her Termination of Employment, the
Participant is at least 55 years of age and is an Officer; and
(iv) In the case of Participants whose Years of Officer
Service were interrupted for any period of longer than six (6) months,
the Participant thereafter completed at least five (5) Years of Officer
Service.
(b) Amount of Officer Minimum Benefit. An eligible Participant's
Officer Minimum Benefit is a monthly pension equal to:
(i) 45% of the sum of the Officer's Final Average Monthly
Base Pay and Final Average Monthly STIP Award; reduced by
(ii) The sum of the Officer's:
(A) Mid-Career Benefit, if any;
(B) PacTel Account Benefit, if any; and
(C) PacTel Pension Benefit, if any.
If an Officer completes more than ten (10) Years of Officer Service, the
percentage in Clause (i) above shall be increased one percent (1%) for each
whole Year of Officer Service beyond ten years, up to a maximum of 50% for
15 or more Years of Officer Service. The benefit in Clause (i) above shall
not be adjusted for early payment.
3.4 Special Minimum Benefit. The Special Minimum Benefit provides a
monthly pension payable to eligible Executives for life. (The Special
Minimum Benefit was formerly provided by the minimum retirement benefit
provisions of the Pacific Telesis Group Senior Management Long Term
Disability and Survivor Protection Plan.)
(a) Eligibility for Special Minimum Benefit. A Participant shall
be eligible for a Special Minimum Benefit if, at his or her Termination of
Employment, the Participant is an Executive and either:
5
(i) Is eligible for a service pension under the Qualified
Pension Plan; or
(ii) Has reached his or her 62nd birthday and has a Term of
Employment of at least five years.
(b) Amount of Special Minimum Benefit. A Participant's Special
Minimum Benefit is a monthly pension equal to:
(i) One and one-quarter percent (1.25%) of the Participant's
Final Annual Pay; reduced by
(ii) The sum of the Participant's:
(A) Mid-Career Benefit, if any;
(B) PacTel Account Benefit, if any; and
(C) PacTel Pension Benefit, if any.
The benefit in Clause (i) above shall not be adjusted for early payment.
3.5 Special Increases. Unless the Committee determines otherwise,
Executive Pensions payable as monthly service or disability (but not vested)
pensions to retired Participants who were Executives at the time of their
Termination of Employment, or to their joint annuitants, shall be increased
by the same percentage and pursuant to the same terms and conditions set
forth in the Qualified Pension Plan for ad hoc increases to retired
participants or their joint annuitants.
SECTION 4. PAYMENT OF EXECUTIVE PENSION
4.1 Service and Vested Pensions.
(a) Time of Payment. A Participant's Executive Pension paid as a
service or vested pension shall commence on the date that the Participant's
benefits under the Qualified Pension Plan are paid or commence, subject to
the Committee's discretion to determine another time or times of payment.
(b) Form of Payment. Subject to the Committee's discretion to
determine another form of payment, a Participant may elect, before the date
of his or her Termination of Employment, one of the following forms of
payment for his or her Executive Pension paid as a service or vested
pension:
(i) Life Annuity. An annuity payable monthly for the life
of the Participant only, in the amount determined under Section 3
above, including any adjustment for early payment; or
6
(ii) Joint and Survivor Annuity. A reduced annuity payable
monthly for the life of the Participant and, upon the Participant's
death, 50% of such annuity payable for the life of the Participant's
surviving spouse to whom he or she was married at the Pension Effective
Date. The reduced annuity payable during the life of the Participant
shall be 90% of the amount of the life annuity determined in Clause (i)
above, except that it shall be increased to 100% of the life annuity if
the spouse dies before the Participant.
If the Participant does not elect one of these alternative forms of payment
before his or her Termination of Employment, or if the Committee does not
consent to the form of payment elected by the Participant, then the
Committee shall determine, in its sole discretion, the form of payment for
the Participant's Executive Pension and the appropriate adjustment to its
amount.
(c) Coordination With Mid-Career Pension. The foregoing
notwithstanding, a Participant's Executive Pension payable as a service or
vested pension shall be paid at the same time and in the same form as his or
her pension, if any, under the Pacific Telesis Group Mid-Career Pension
Plan.
4.2 Disability Pensions. If the Participant's Executive Pension is payable
as a disability pension as provided under Section 2.3(b), it shall be paid
monthly commencing as of the day following the Participant's Termination of
Employment and continuing until the Participant is no longer eligible for a
disability pension under the Qualified Pension Plan.
(a) Cessation Before Age 65. If the Participant's disability
pension ends prior to attaining age 65 and the Participant is not reemployed
by a Participating Company, he or she shall then be eligible to receive an
Executive Pension payable as a vested pension. The Participant may elect a
form of payment for the vested pension in the manner provided in Section
4.1(b) above, except that the election must be made before the termination
date for the disability pension or such other date as may be specified by
the Plan Administrator.
(b) Conversion at Age 65. If the Participant is receiving his or
her Executive Pension as a disability pension immediately before attaining
age 65, the disability pension shall then cease and the Participant shall
thereafter be eligible to receive the Executive Pension, in the same amount,
as a service pension. The Participant shall be entitled to elect a form of
payment for the service pension in the manner provided in Section 4.1(b)
above, except that the election must be made before the Participant's 65th
birthday.
4.3 Notification of and Application for Benefits. The Plan Administrator
may notify the Participant of the amount of his or her Executive Pension and
may require the Participant to apply for benefits under the Plan.
7
4.4 Actual Payment Date Following Pension Effective Date. If a
Participant's service pension under the Qualified Pension Plan does not
commence on the Pension Effective Date and thus the commencement of his or
her Executive Pension also is delayed, then the unpaid monthly benefits
under this Plan from the Pension Effective Date to the date that the
Executive Pension actually starts shall be paid to the Participant in a
single sum without interest.
4.5 Death Following Pension Effective Date. If a Participant dies before
the Executive Pension commences but after his or her Pension Effective Date
(so that a Surviving Spouse Benefit is not payable under Section 6.1), the
Participant's Executive Pension shall be paid in the form previously elected
under Section 4.1(b), as soon as practicable after the Participant's death,
unless the Committee determines another time and form of payment. If the
Participant had elected a life annuity, unpaid monthly benefits from the
Participant's Pension Effective Date to the date of death shall be payable
to the Participant's estate or to such other person or persons as are
entitled to the Participant's property under applicable law. If the
Participant had elected a Joint and Survivor Annuity, unpaid monthly
benefits from the Participant's Pension Effective Date to the date of death
shall be payable to the Participant's joint annuitant and the survivor
portion of such annuity shall be payable to the joint annuitant as of the
date of the Participant's death.
SECTION 5. WELFARE BENEFITS FOR CERTAIN PARTICIPANTS
5.1 Eligibility. A Participant is eligible for benefits under this Section
after his or her Termination of Employment if he or she is not eligible for
retiree welfare benefit coverage under the Company's group welfare benefit
plans but is:
(a) At least 62 years of age at Termination of Employment and has a
Term of Employment of at least five (5) years; or
(b) At least 55 years of age and an Officer at Termination of
Employment and has at least ten (10) Years of Officer Service.
5.2 Benefits. An eligible Participant under Section 5.1 above shall be
entitled to life insurance benefits which are equivalent to the benefits
which would have been provided to the Participant under the Company's group
life insurance plans if he or she had been eligible for a service pension
under the Qualified Pension Plan. In addition, an eligible participant
under Section 5.1(b) above shall be entitled to medical and dental benefits
which are equivalent to the benefits which would have been provided to the
Participant under the Company's group medical and dental benefit plans if he
or she had been eligible for a service pension under the Qualified Pension
Plan. (Welfare benefits were formerly provided to Executives eligible for
the minimum pension under the Pacific Telesis Group Long Term Disability and
Survivor Protection Plan and to certain Officers under the Pacific Telesis
Group Executive Non-Qualified Pension Plan and the Pacific Telesis Group
Mid-Career Pension Plan.)
8
SECTION 6. SURVIVING SPOUSE BENEFITS
6.1 Amount. The amount of the monthly Surviving Spouse Benefit payable for
the life of the surviving spouse shall be equal to the greater of the:
(a) Regular Surviving Spouse Benefit under Section 6.3, if eligible
therefor; or
(b) Special Surviving Spouse Benefit under Section 6.4, if eligible
therefor.
6.2 Regular Surviving Spouse Benefit.
(a) Eligibility. The surviving spouse of a Participant shall be
entitled to receive a Regular Surviving Spouse Benefit if the Participant
dies either before the Pension Effective Date or while receiving a
disability pension, and if the Participant's surviving spouse is eligible
for an automatic survivor annuity or other survivor annuity under the
Qualified Pension Plan. (The Regular Surviving Spouse Benefit was formerly
provided under the Pacific Telesis Group Supplemental Executive Retirement
Plan and the Pacific Telesis Group Executive Non-Qualified Pension Plan.)
(b) Amount. The monthly amount of the Regular Surviving Spouse
Benefit payable for the life of the surviving spouse shall be equal to the
survivor's portion of the Joint and Survivor Annuity that would have been
payable under this Plan if the Participant had commenced receiving an
Executive Pension as a service or vested pension in the form of a Joint and
Survivor Annuity under Section 4.1(b)(ii) on the day before his or her
death, including any adjustment for early payment, except that the Regular
Basic Benefit shall be determined without an adjustment for early payment if
the Participant then was then eligible for a service pension under Section
2.3(b) of the Plan or if the Participant's Term of Employment at the date of
death was at least 15 years.
(c) Special Increases. Unless the Committee determines otherwise,
Regular Surviving Spouse Benefits payable as monthly benefits to surviving
spouses who are eligible for automatic survivor annuities under the
Qualified Pension Plan shall be increased by the same percentage and
pursuant to the same terms and conditions set forth in the Qualified Pension
Plan for ad hoc increases to surviving spouses.
9
6.3 Special Surviving Spouse Benefit.
(a) Eligibility. The surviving spouse of a Participant shall be
entitled to receive a Special Surviving Spouse Benefit if, at the date of
the Participant's death:
(i) The Participant is an Executive; or
(ii) The Participant is a former Executive who, at his or her
Termination of Employment, was an Executive, either was eligible for a
service pension under the Qualified Pension Plan or had reached his or
her 62nd birthday and had a Term of Employment of at least five years,
and did not decline to elect a joint and survivor annuity form of
payment under the Qualified Pension Plan.
(The Special Surviving Spouse Benefit was formerly provided under the
Pacific Telesis Group Senior Management Long Term Disability and Survivor
Protection Plan.)
(b) Amount. The monthly amount of the Special Surviving Spouse
Benefit payable for the life of the surviving spouse shall be equal to:
(i) One and one-quarter percent (1 %) of the Participant's
Final Annual Pay; reduced by:
(ii) The sum of the monthly survivor annuities payable to the
surviving spouse under the Qualified Pension Plan and the Pacific
Telesis Group Mid-Career Plan, in the amounts that those benefits would
be payable as monthly benefits for life as of the first day they
actually are paid (regardless of other forms of payment available or
elected); plus the monthly amount (or equivalent) of any other lifetime
payments to the surviving spouse from the Company.
6.4 Form and Time of Payment. Subject to the Committee's discretion to
determine another time and form of payment, a Surviving Spouse Benefit shall
be payable as a monthly annuity for the life of the surviving spouse,
commencing as of the date that the surviving spouse's benefits under the
Qualified Pension Plan commence. Notwithstanding the foregoing, the
Surviving Spouse Benefit under this Plan shall be paid at the same time and
in the same form as the Surviving Spouse Benefit, if any, under the Pacific
Telesis Group Mid-Career Pension Plan.
SECTION 7. DEATH BENEFITS
7.1 Eligibility and Waiver. The beneficiary of a Participant who dies as
an Executive, or who dies after Termination of Employment if the Participant
was an Executive at the time of his or her Termination of Employment, shall
be eligible for a Death Benefit under this Plan if the beneficiary is
eligible for death benefits under the Qualified Pension Plan. If a
Participant is deemed to have waived a sickness or pensioner death benefit
under the Qualified Pension Plan, then the associated Death Benefit under
this Plan shall also be deemed to have been waived.
10
7.2 Benefits. Except as otherwise provided in this Section (or elsewhere
in this Plan), the Death Benefits provided by the Plan shall be determined
and administered in the same manner and are subject to the same terms and
conditions as the accident, sickness and pensioner death benefits provided
under the Qualified Pension Plan.
(a) Determination of Amount. The amount of a sickness, accident or
pensioner Death Benefit provided by this Plan shall be equal to:
(i) One times the Participant's Final Annual Pay;
(ii) Reduced by the sickness, accident or pensioner death
benefit payable with respect to the Participant under the Qualified
Pension Plan, as applicable.
In the case of a pensioner Death Benefit, the amount determined in clause
(i) above shall be subject to the same reductions, if any, which are applied
to the Participant's pensioner death benefit under the Qualified Pension
Plan.
(b) Form and Time of Payment. The Committee shall determine, in
its sole discretion, the time and form of payment for any Death Benefit paid
under this Plan.
(c) Beneficiary. The Participant's beneficiary for purposes of
this Section 7 shall be the beneficiary under the Qualified Pension Plan.
SECTION 8. RIGHTS TO BENEFITS
8.1 Entitlement to Benefits. A Participant's Executive Pension shall be
based on the terms of the Plan in effect at the Participant's Termination of
Employment. Entitlement to a Surviving Spouse Benefit or a Death Benefit
shall accrue on the date such benefit becomes payable. Except as otherwise
provided in the Plan, entitlement to other benefits described in the Plan
shall accrue on the date of the Participant's Termination of Employment.
(a) Assignment or Alienation. Assignment or alienation of pensions
or other benefits under this Plan will not be permitted or recognized except
as required by law.
(b) Payments to Others. Benefits payable to an individual unable
to execute a proper receipt may be paid to another person in accordance with
the standards and procedures established under the Qualified Pension Plan.
8.2 Effect of Reemployment. If a former Executive who is receiving an
Executive Pension again becomes an Employee of any Participating Company,
the monthly pension benefits otherwise payable under this Plan during the
period of reemployment shall be suspended and forfeited. At the Executive's
subsequent Termination of Employment, his or her Executive Pension shall be
recalculated, as determined by the Committee, in the manner prescribed under
the Qualified Pension Plan for redetermining pensions following reemployment
and for adjusting such pensions for prior Plan payments.
11
8.3 Forfeiture for Misconduct. Notwithstanding any other provision of the
Plan, all or a portion of the benefits that a Participant or his or her
surviving spouse, joint annuitant or beneficiaries would otherwise be
eligible to receive under this Plan may be forfeited, in the sole discretion
of the Company's Board of Directors, under the following circumstances:
(a) The Participant is discharged by a Participating Company for
cause; or
(b) A determination is made by the board of directors of a Partici-
pating Company that the Participant engaged in misconduct in connection with
his or her employment by that Participating Company.
8.4 Waiver in Absence of Claims Release. In case of an accident resulting
in the death of a Participant which entitles his or her beneficiaries to
Death Benefits under this Plan, the beneficiaries shall, prior to the
payment of any Death Benefits, sign a release releasing the Company or other
Participating Company, as applicable, from all claims and demands which the
Participant and the beneficiaries had or may have against it on account of
the accident, other than claims for benefits under this Plan or under any
other plan maintained by the Company or a Participating Company. If any
persons other than the beneficiaries under this Plan might legally assert
claims against a Participating Company on account of the death of the
Participant, no Death Benefit shall be due or payable until there have also
been delivered to the Committee good and sufficient releases of all claims,
arising from or growing out of the death of the Participant, which such
other persons might legally assert against the Participating Company. The
Committee, in its discretion, may require that the releases described above
also release any other company connected with the accident, including any
company participating in this Plan or the Qualified Pension Plan, and any
company with which arrangements have been made, directly or indirectly, for
the interchange of benefit obligations as described in the Qualified Pension
Plan. The determination of whether or not a death is due to accident for
purposes of this Section 8.4 shall be made by the Committee in the manner
provided in the Qualified Pension Plan.
8.5 Waiver by Damage Claims or Suits. Should a claim be presented or suit
brought against the Company or any Participating Company, other than under
the Plan, for damages on account of the death of an individual who was at
any time a Participant in the Plan, no Death Benefits shall be payable under
the Plan except as provided in Section 8.6 below or unless the Committee, in
its sole discretion and upon such terms as it may prescribe, waives this
provision after withdrawal of the claim or dismissal of the suit.
8.6 Offset for Judgment or Settlement. In case any judgment is recovered
against any Participating Company or any settlement is made of any claim or
suit on account of the death of an individual who was at any time a
Participant in the Plan, and the amount paid to the beneficiaries who would
have received Death Benefits under the Plan is less than what would
otherwise have been payable under the Plan, the difference between the two
amounts may, in the sole discretion of the Committee, be distributed to the
beneficiaries.
12
8.7 Offset for Payments Under Law. If any benefit becomes payable to a
Participant or his or her surviving spouse, joint annuitant or beneficiaries
under any law now in force or hereafter enacted, and if the Committee
determines that it is of the same general character as a benefit provided by
the Plan, then only the excess, if any, of the amount prescribed in the Plan
above the amount of the payment prescribed by law shall be payable under the
Plan. In those cases where the existence of an excess is not ascertainable
by mere comparison because of such factors as differences in the
beneficiaries or the time or methods of payment, the Committee shall have
sole discretion to determine whether or not any excess exists and to make
any adjustments necessary to carry out in a fair and equitable manner the
spirit of this provision. Notwithstanding the foregoing, no benefit payable
under this Plan shall be reduced by reason of any governmental benefit or
pension payable on account of military service, or by reason of any benefit
provisions of the Social Security Act other than those related to
disability.
SECTION 9. SOURCE OF BENEFIT PAYMENTS
9.1 Participating Company Liability. Where a Participant's Term of
Employment includes service with more than one Participating Company, or
with one or more Participating Companies and one or more non-participating
corporations or partnerships, the last Participating Company to employ the
Participant as an Executive prior to his or her Termination of Employment
with entitlement to a benefit hereunder shall be primarily liable for the
full benefit payable under the Plan. However, if for any reason the
primarily liable Participating Company fails to make timely payment of an
amount due to or on behalf of a Participant, the Company shall be
secondarily liable for the obligation to pay the amount due. A
Participating Company's withdrawal from participation shall not affect that
company's liability hereunder. In addition, the liability of a
Participating Company shall not be affected by any action or inaction (on
the part of the Participant, his or her surviving spouse, joint annuitant or
beneficiaries, or any company) with respect to amounts owed, including but
not limited to the granting of extensions of time or other indulgences, the
failure to make timely demand, the failure to make timely payment or the
failure to give notices of any type, other than as prescribed in Section
10.4.
9.2 All Benefits Unfunded. All benefits payable under the Plan shall be
paid from the Company's or Participating Company's operating expenses,
though the purchase of insurance from an insurance company, or through a
trust established by the Company and/or the other Participating Companies
for this purpose, as the Company may determine.
9.3 No Right to Company Assets. Neither an Executive nor any other person
shall acquire by reason of the Plan any right in or title to any assets,
funds or property of the Company or any other Participating Company,
including, without limiting the generality of the foregoing, any specific
funds, trust accounts or assets which any Participating Company, in its sole
discretion, may earmark or set aside in anticipation of a liability under
the Plan. A Participating Company's obligation to pay any amounts under the
Plan shall be unfunded as to the Executive, whose rights shall be those of a
general unsecured creditor.
13
SECTION 10. ADMINISTRATION
10.1 Plan Sponsor. The Company shall be the sponsor of the Plan as that
term is defined in ERISA.
10.2 Plan Administrator. The Executive Vice President-Human Resources of
the Company shall be the Plan Administrator as that term is defined in
ERISA. The Plan Administrator shall have the specific powers granted to him
elsewhere in the Plan and shall also have such other powers as may be
necessary in order to administer the Plan in his sole discretion, except for
those powers granted or provided to be granted to others by the Plan. The
Plan Administrator shall determine conclusively for all parties all
questions arising in the administration of the Plan and, insofar as
permitted by applicable law, any decision of the Plan Administrator shall
not be subject to further review.
10.3 Procedure To Approve and Deny Claims. The Committee shall have sole
discretion to determine the rights of Participants (or their surviving
spouses, joint annuitants or other beneficiaries) to benefits under the
Plan, and to authorize disbursements under the Plan. In all questions
relating to age and service for eligibility for any benefit under the Plan,
or relating to service and rates of pay for determining benefits payable
under the Plan, the decisions of the Committee, based upon this Plan and
upon the records of the Participating Companies employing the individual,
shall be final insofar as permitted by applicable law. The Committee may
adopt such rules of procedure as it may find appropriate. A claim for
benefits under the Plan shall be deemed denied unless the decision of the
Committee is sent within 90 days of its receipt of the claim (or within 180
days, if the Committee extends the time by notifying the claimant in writing
of the special circumstances requiring an extension and the date by which
the decision is expected). If a claim is denied in whole or part by the
Committee, it shall send a written decision stating (a) the specific reasons
for the denial, making specific reference to pertinent provisions of the
Plan; (b) what additional information, if any, would help perfect the claim
for benefits; and (c) what steps the claimant must take to submit the claim
for review.
10.4 Review Procedure. The Board of Directors of the Company shall serve as
the final review committee, under the Plan and ERISA, for the review of all
claims appealed by Participants (or their surviving spouses, joint
annuitants or other beneficiaries) whose initial claims for benefits have
been denied, in whole or in part, by the Committee. Within 60 days after
the date of a denial by the Committee, the claimant may file a written
request for the Board of Directors of the Company to review the denial.
Such request for review must be made in a timely manner for the purpose of
seeking any further review of a decision or determining any entitlement to a
benefit under the Plan. In such a case, the Board of Directors of the
Company shall conduct a full and fair review of the Committee's decision and
notify the claimant in writing of the review decision, specifying the
reasons for the decision and the Plan provisions on which it is based. A
claim shall be deemed denied unless the decision on appeal is sent within 60
days (or within 120 days, if the Board of Directors of the Company extends
the time to respond by notifying the claimant in writing of the special
circumstances requiring an extension of time).
14
10.5 Further ERISA Rights. Any Participant (or surviving spouse, joint
annuitant or other beneficiary) whose claim for benefits has been denied
upon review shall have such further rights as are provided in Section 503 of
ERISA and the regulations thereunder. The Company, the Board of Directors
of the Company, the Committee and the Executive Vice President-Human
Resources of the Company shall retain such rights, authority and discretion
as are provided or not expressly limited by section 503 of ERISA and the
regulations thereunder.
10.6 Named Fiduciaries. The Company, each Participating Company, the Board
of Directors of the Company, the Committee and the Executive Vice President-
Human Resources of the Company are each a named fiduciary as that term is
used in ERISA with respect to the particular duties and responsibilities
allocated to each of them. Any person or group of persons may serve in more
than one fiduciary capacity with respect to the Plan.
10.7 Allocation of Responsibilities. The Company, the Committee, the
Executive Vice President-Human Resources of the Company and each
Participating Company may designate in writing other persons to carry out
their respective responsibilities under the Plan and may employ persons to
advise them with regard to any such responsibilities.
10.8 Administrative Expenses. The expenses of administering the Plan shall
be apportioned among the Participating Companies, as determined by the Plan
Administrator.
SECTION 11. AMENDMENT AND TERMINATION
11.1 Plan Amendment. The Company may from time to time make any changes in
the Plan which it deems appropriate, with or without notice to Participants,
by appropriate action of its Board of Directors. In addition, the Plan
Administrator, with the approval of the Executive Vice President and General
Counsel of the Company, shall be authorized to make minor or administrative
changes to the Plan, as well as changes dictated by the requirements of
federal or state statutes applicable to the Company or authorized or made
desirable by such statutes. However, in recognition of the reliance placed
upon the Plan and its contractual nature in inducing the change in position
caused by retirement, any such change or modification shall not result in
the cessation or reduction of benefits to retired individuals or their
surviving spouses or joint annuitants, nor shall such modification affect
the rights of any individual to any benefit to which he or she may have
previously become entitled under the Plan.
11.2 Plan Termination. At any time, for any reason, and with or without
notice to Participants, the Company retains the right to terminate the Plan
in whole or in part by appropriate action of its Board of Directors, and
each Participating Company retains the right to withdraw from the Plan.
Neither termination of the Plan nor withdrawal by a Participating Company
shall result the cessation or reduction of benefits to any retired
Participant (or his or her surviving spouse, joint annuitant or other
beneficiary), or affect the rights of any individual to any benefit to which
he or she may have previously become entitled under the Plan. A Participat-
ing Company's withdrawal from participation shall not affect that company's
liability to provide benefits to a Participant as described in Section 9.1
of the Plan.
15
SECTION 12. DEFINITIONS
"Basic Benefit" is a benefit that is used in the determination of the
amount of the Executive Pension, as set forth in Section 3.2.
"Committee" means the Compensation and Personnel Committee of the Board
of Directors of the Company.
"Company" means Pacific Telesis Group, a Nevada corporation, or its
successors.
"Effective Date" means July 1, 1995.
"Employee" means a common law employee of the Company or any other
Participating Company.
"Employer Group" shall have the meaning set forth in the Qualified
Pension Plan.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time
"Executive" means an Officer of any Participating Company or any other
Employee who has been designated by the Committee to be within a Participat-
ing Company's executive group for purposes of the Plan.
"Executive Pension" means the pension provided pursuant to Section 3 of
this Plan.
"Final Annual Pay," which is used in determining the Special Minimum
Pension in Section 3.4(b)(i), the Special Surviving Spouse Benefit in
Section 6.3(b)(i) and the Death Benefit in Section 7.2(a)(i), means the
Participant's annual rate of base pay (whether or not deferred) on the last
day he or she was on the active payroll of a Participating Company plus the
Participant's annual Standard Award as determined under the Short Term
Incentive Plan on the last day he or she was on the active payroll.
"Final Average Monthly Base Pay," which is used in determining the
Regular Basic Benefit in Section 3.2(a)(i) and the Officer Minimum Benefit
in Section 3.3(b)(i), means the average of the Participant's monthly rates
of base pay, whether or not deferred, for the final 60 months in his or her
Term of Employment that is recognized for this purpose under the Qualified
Pension Plan.
16
"Final Average Monthly STIP Award," as used in Section 3.2(a)(i) for
the purpose of determining the Regular Basic Benefit and in Section
3.3(b)(i) for the purpose of determining the Officer Minimum Benefit, means
the average of the Participant's "Monthly STIP Awards" for the final 60
months in his or her Term of Employment that is recognized for this purpose
as set forth under the Qualified Pension Plan. "Monthly STIP Award" means,
for any month in a calendar year, 1/12 of the Participant's annual Standard
Award (whether or not deferred) as set forth under the Short Term Incentive
Plan for that calendar year. In the case of Participants who were Employees
on the Separation Date and who had participated in the PacTel Corporation
Short Term Incentive Plan, the "Monthly STIP Award" for any month before
April 1, 1994, during such participation means 1/12 of the Participant's
annual standard award under the PacTel Corporation Short Term Incentive
Plan, as adjusted for changes in position rate.
"Interest" means hypothetical earnings on an account balance, which
shall be calculated in the manner determined by the Committee in its sole
discretion. The Committee may, but is not required to, calculate Interest
based on the interest rate used to calculate Present Value as of a
Participant's Pension Effective Date.
"Joint Venture Employer" has the meaning set forth in the Qualified
Pension Plan.
"Mandatory Retirement Age" means age 65 for those Participants who meet
the requirements of section 12(c)(1) of the Age Discrimination in Employment
Act of 1967, as amended ("ADEA"); or as permitted under the ADEA, for those
Participants for whom age is a bona fide occupational qualification within
the meaning of section 4(f)(1) of the ADEA. There shall be no Mandatory
Retirement Age for other Participants, if any.
"Mid-Career Benefit" means the amount of the monthly pension, if any,
that would be payable as a life annuity under the Pacific Telesis Group Mid-
Career Pension Plan as of the Participant's Pension Effective Date, adjusted
for early payment if applicable. Any ad hoc or other increases to the Mid-
Career Benefit payable after the Participant's Pension Effective Date shall
be disregarded.
"Officer" means an individual elected or appointed to, and serving in,
one or more of the following positions:
(i) A position with the Company described in the bylaws of
the Company as that of an officer, other than an assistant officer
position; or
(ii) A position with Pacific Bell described in the bylaws of
Pacific Bell as that of an officer, other than an assistant officer
position; or
(iii) A position with any Participating Company for which
there is in effect a specific designation by the Committee that the
position shall be considered to be that of an Officer for purposes of
the benefit and retirement plans.
17
An "Officer" also means a named Employee of any Participating Company for
which there is in effect a specific designation by the Committee that the
named Employee shall be included in the definition of "Officer" for purposes
of the benefit and retirement plans.
"Officer Minimum Benefit" is a benefit that is used to determine the
amount of the Executive Pension, as set forth in Section 3.3.
"PacTel Account Benefit," which is used to reduce the Officer Minimum
Benefit and the Special Minimum Benefit in Sections 3.3(b) and 3.4(b) of the
Plan, means a monthly life annuity, commencing as of the Participant's
Pension Effective Date, whose Present Value equals the sum of the following
amounts:
(i) Value of the Basic Account under the PacTel Retirement
Plan on the Separation Date, plus Interest to the Pension Effective
Date;
(ii) Value of the Variable Account under the PacTel
Retirement Plan on the Separation Date, plus Interest to the Pension
Effective Date;
(iii) Value of the Transition Account under the PacTel
Retirement Plan on the Separation Date, plus Interest to the Pension
Effective Date;
(iv) Amount of all withdrawals and distributions made from
the Basic, Variable and Transition Accounts under the PacTel Retirement
Plan prior to the Separation Date, plus Interest from the date of
withdrawal to the Pension Effective Date; and
(v) Value of the Participant's accounts attributable to
Company contributions under the PacTel Corporation Excess Benefit Plan
and the PacTel Corporation Deferred Compensation Plan as of the
Separation Date, other than Company "matching" contributions, plus
Interest to the Pension Effective Date. (As of the Separation Date,
assets and liabilities attributable to these plans were transferred to
the AirTouch Communications Excess Benefit Plan.)
"PacTel Employee" means a Participant who was employed by PacTel
Corporation or any of its subsidiaries (if such subsidiary was a
participating company in the PacTel Corporation Employees Pension Plan)
before the Separation Date.
"PacTel Pension Benefit," which is used to reduce the Officer Minimum
Benefit and the Special Minimum Benefit in Sections 3.3(b) and 3.4(b) of the
Plan, means the sum of the pensions payable at age 65 that were accrued as
of the Separation Date under the AirTouch Communications Employees Pension
Plan (other than any pension payable under Supplements A, B and C of that
plan) and the AirTouch Communications Supplemental Executive Pension Plan,
except that each pension shall be adjusted for early payment, under the
terms of its plan in effect at the Separation Date, as if the Participant's
annuity under the plan commenced on the Participant's pension effective date
under those plans, if received as a service pension, or on the Pension
Effective Date under this Plan, if received as a vested pension.
18
"PacTel Retirement Plan" means the defined contribution plan maintained
by the Company before the Separation Date for the benefit of employees of
PacTel Corporation and its subsidiaries. Its formal name was the PacTel
Corporation Retirement Plan. (As of the Separation Date, assets and
liabilities attributable to this plan were transferred to the AirTouch
Communications Retirement Plan).
"Participant" means an Executive or former Executive who meets the
eligibility requirements of Section 2 of the Plan.
"Participating Companies" mean the Company and each other corporation
or partnership that both (a) participates in the Qualified Pension Plan and
(b) has determined, with the concurrence of the Company's Board of
Directors, to participate in this Plan.
"Pension Effective Date" means the date as of which the Participant's
Executive Pension is calculated, as follows:
(i) For service pensions, the Pension Effective Date is the
day after the Participant's Termination of Employment.
(ii) For vested pensions, the Pension Effective Date is the
date as of which the Pension is paid under Section 4.
(iii) For disability pensions, the Pension Effective Date is
the day after the Participant's Termination of Employment due to
disability.
"Plan" means this Pacific Telesis Group Executive Supplemental Pension
Plan.
"Plan Administrator" means the Executive Vice President-Human Resources
of the Company, as set forth in Section 10.2 of the Plan.
"Predecessor Plans" mean the Pacific Telesis Group Executive Non-
Qualified Pension Plan, the Pacific Telesis Group Supplemental Executive
Retirement Plan, and the minimum pension and related welfare and surviving
spouse benefit provisions of the Pacific Telesis Group Executive Disability
and Survivor Protection Plan (formerly called the Pacific Telesis Group
Senior Management Long Term Disability and Survivor Protection Plan). It
also means the predecessor plan to those plans, i.e., the Bell System Senior
Management Non-Qualified Pension Plan.
"Present Value" means a single sum amount which is actuarially
equivalent to a monthly annuity payable for life, based on actuarial factors
set forth in the Qualified Pension Plan for the purposes of determining
cashout payments.
19
"Qualified Pension Benefit" means the amount of the monthly pension
that would be payable to a Participant under the Qualified Pension Plan as
of the Participant's Pension Effective Date, adjusted for early payment if
applicable and further adjusted for any additional pension actually payable
after the Pension Effective Date due to increased limits under section 415
of the Internal Revenue Code. However, if a Participant is not an Executive
at his or her Termination of Employment and if nonqualified pension benefits
are payable under the Qualified Pension Plan due to limits under sections
401(a)(17) and 415 of the Internal Revenue Code, then the Participant's
Qualified Pension Benefit shall include the nonqualified pension benefits
payable under the Qualified Pension Plan. Any ad hoc or other increases
payable under the Qualified Pension Plan after the Pension Effective Date
(other than increases due to section 415 limits) shall not be included in
the amount of the Participant's Qualified Pension Benefit.
"Qualified Pension Plan" means the Pacific Telesis Group Pension Plan
for Salaried Employees.
"Separation Date" means April 1, 1994, the date as of which occurred
the total and complete separation of the ownership of PacTel Corporation
from the Company.
"Short Term Incentive Plan" means the Pacific Telesis Group Short Term
Incentive Plan and its predecessor plan.
"Special Minimum Benefit" is a benefit that is used to determine the
amount of the Executive Pension, as set forth in Section 3.4.
"Standard Award" shall have the meaning set forth in the Short Term
Incentive Plan, which includes adjustments for changes in position rate.
"Term of Employment" means the number of years credited to the
Participant for purposes of determining eligibility for a service pension
and the early payment discount under the Qualified Pension Plan. As
provided under the Qualified Pension Plan, a Participant's Term of
Employment (a) includes all periods that the Participant was employed by the
Company, other companies participating in the Qualified Pension Plan,
certain joint venture employers, and certain predecessor employers; (b) does
not include service before a break in service until such service is
"bridged" as provided in the Qualified Pension Plan; and (c) excludes any
period of employment which was transferred from the Qualified Pension Plan
to the PacTel Corporation Employees Pension Plan effective before the
Separation Date and was included in the Participant's service recognized by
that plan as of the Separation Date.
"Termination of Employment" means the date on which a Participant
terminates employment with all Participating Companies and members of the
Employer Group.
20
"Years of Credited Service" means the number of whole and partial years
credited to the Participant for purposes of calculating the monthly pension
benefit under the Qualified Pension Plan except that, as provided in Section
3.1(b) above, if a Participant is not an Executive upon his or her
Termination of Employment, the years so credited under the Qualified Pension
Plan after the Participant ceased serving as an Executive shall be
disregarded. As provided under the Qualified Pension Plan, a Participant's
Years of Credited Service (a) reflect an adjustment for part-time
employment; (b) do not include periods of service with a non-Participating
Company without a transfer of assets and corresponding Disabilities; (c) do
not include periods that the Participant was employed by PacTel Corporation
(and its subsidiaries) between January 1, 1987, and the Separation Date
unless the Participant was an Employee on the Separation Date and had been a
full accrual participant under the PacTel Corporation Employees Pension Plan
before the Separation Date; (d) do not include periods of service before a
break in service until such service is "bridged" as provided in the
Qualified Pension Plan; and (e) are limited to the greater of 30 years or
the actual years accrued as of December 31, 1994.
"Years of Officer Service" means the number of whole and partial 365-
day periods during which the Participant was continuously employed as an
Officer of a Participating Company. In addition, Years of Officer Service
include periods of service with other members of the Employer Group or Joint
Venture Employers (non-Participating Companies) if such service is included
in the Participant's Term of Employment and if the position in which the
Participant served at the non-Participating Company is designated by the
Committee to be the equivalent of an Officer position for purposes of this
Plan. Such service with non-Participating Companies shall not be considered
a break in the continuity of Years of Officer Service for purposes of
Sections 3.3(a) and (b). If a Participant has a break in the continuity of
Years of Officer Service which does not exceed six months, service before
and after the break shall be included in the Participant's Years of Officer
Service. However, if a Participant is reemployed after a break of more than
six (6) months in the continuity of Years of Officer Service, the
Participant's service before the break shall not be included in his or her
Years of Officer Service until the Participant completes five (5) Years of
Officer Service after reemployment. Subject to these break-in-service
rules, service as an Officer with a company that participated in a
Predecessor Plan before the Separation Date (including PacTel Corporation)
shall be included in the Participant's Years of Officer Service, regardless
of whether or not such service is included in the Participant's Term of
Employment after the Separation Date.
21
Dates Referenced Herein and Documents Incorporated by Reference
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