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AT&T SENIOR OFFICER SEVERANCE PLAN

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AT&T SENIOR OFFICER SEVERANCE PLAN







PLAN DOCUMENT





SUMMARY PLAN DESCRIPTION



(Effective October 9, 1997)

(As Amended October 30, 1997)











THIS DOCUMENT, LIKE ALL COMPANY PLANS, PERSONNEL POLICIES OR PRACTICES, IS NOT A CONTRACT OF EMPLOYMENT. IT IS NOT INTENDED TO CREATE, AND IT SHOULD NOT BE CONSTRUED TO CREATE, ANY CONTRACTUAL RIGHTS, EITHER EXPRESS OR IMPLIED, BETWEEN THE COMPANY AND ITS EMPLOYEES.



AT AT&T, THE EMPLOYMENT RELATIONSHIP WITH EMPLOYEES COVERED BY THIS PLAN IS "AT-WILL". THIS MEANS THAT EMPLOYEES HAVE THE RIGHT TO QUIT THEIR EMPLOYMENT AT ANY TIME AND FOR ANY REASON, AND THE COMPANY RESERVES THE RIGHT TO TERMINATE ANY EMPLOYEE'S EMPLOYMENT, WITH OR WITHOUT CAUSE, AT ANY TIME FOR ANY REASON.



IN THE EVENT THERE IS A CONFLICT BETWEEN STATEMENTS IN THIS PLAN REGARDING BENEFITS PROVIDED BY ANOTHER PLAN AND THE TERMS OF THAT OTHER BENEFIT PLAN, POLICY, OR PRACTICE, THE APPLICABLE BENEFIT PLAN, POLICY OR PRACTICE PROVIDING THE BENEFITS IN QUESTION WILL CONTROL. AT&T RESERVES THE RIGHT, AT ANY TIME, TO MODIFY, SUSPEND, CHANGE, OR TERMINATE ITS EMPLOYEE BENEFIT PLANS OR SENIOR MANAGER INCENTIVE, BENEFIT AND/OR PERQUISITE PLANS, PROGRAMS, POLICIES OR PRACTICES.









AT&T SENIOR OFFICER SEVERANCE PLAN



PLAN DOCUMENT





SUMMARY PLAN DESCRIPTION







A. OVERVIEW



The AT&T Senior Officer Severance Plan ("the Plan" or "this Plan"), effective October 9, 1997 ("Effective Date"), is designed to provide certain supplemental payments and benefit enhancements to eligible Senior Management employees (each, a "Participant" or collectively "Participants") of AT&T Corp. ("the Company" and/or "AT&T") whose employment is terminated under certain circumstances set forth in this Plan.



Benefits under this Plan shall be in place of any other current or future plan, program, policy, or arrangement providing severance payments or post-retirement ancillary benefits, except as provided in Section N. The other benefits provided by this Plan, to the extent they differ from benefits provided by current AT&T benefit plans and programs, will be in addition to the benefits provided by the regular AT&T benefit plans and programs. See "About Your Benefits" for descriptions of those plans and programs.



For purposes of this Plan, "Service Pension eligibility" or "Service Pension eligible" shall have the meaning set forth in the AT&T Management Pension Plan (AT&TMPP) prior to the amendments effective August 1, 1997.



B. TYPE OF PLAN



Under Section 3 (1) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), this Plan is classified and is to be interpreted as an employee welfare benefit plan.



C. PLAN PARTICIPATION



Participants in this Plan are certain current members of the AT&T Senior Management Team, including all members of the AT&T Operations Team, as identified on Exhibit A.



D. ELIGIBILITY TO RECEIVE BENEFITS



1. You will become entitled to receive the benefits described in Section F. in the event you cease to be a Company employee:



a) by reason of Company-initiated termination for other than Cause

(as defined in Section E. below); or



b) by reason of your election to terminate your Company employment

for Good Reason (in accordance with the Notification provisions

set forth below); and



c) you execute a valid Separation Agreement and Release ("Release"),

and the time during which you may revoke the Release has expired.

Any Participant who receives any payments or benefits under this Plan shall not be entitled to receive any severance payments or severance benefits under any other plan, program, policy, agreement or practice of the Company, except as provided in Section N; provided, however, that agreement to participate in this AT&T Senior Officer Severance Plan will not preclude future participation in any similar arrangement that provides a greater level of benefits.



2. Notification of Termination for Good Reason. In the event you determine that Good Reason exists for you to elect to terminate your employment with the Company, you must notify the Executive Vice President - Human Resources in writing of the specific event which you believe constitutes Good Reason within thirty (30) days of the occurrence of such event. Upon receipt of such notice, the Company shall have thirty (30) days in which to remedy the event specified in your notice as constituting Good Reason, as defined below.



In the event the Company disagrees with your determination that the event specified in your notice constitutes Good Reason, you shall be so notified within ten (10) days of the Company's receipt of your written notice. In such event, or in the event you determine that the actions taken by the Company fail to adequately address your claimed event of Good Reason specified in your notice, the procedures set forth in Sections K. and L. of this Plan shall apply.



E. DEFINITIONS



For purposes of this Plan:



a) "Cause" termination shall mean:



(i) your conviction (including a plea of guilty or nolo contendere)

of a crime involving theft, fraud, dishonesty or moral turpitude;



(ii) violation by you of the Company's Code of Conduct or

Non-Competition Guideline;



(iii) gross omission or gross dereliction of any statutory, common law

or other duty of loyalty to the Company or any of its affiliates;



(iv) repeated failure to carry out the duties of your position despite

specific instruction to do so.



b) "Good Reason" shall mean the occurrence without your express written

consent of any of the following events:



(i) Your demotion to a position which is not of a rank and

responsibility comparable to members of the current Senior

Management Team or those of a similar/replacing governance

body; provided, however, that the Company's decision not to

continue a Senior Management Team shall not be Good Reason, and

provided, further, that (1) changes in reporting relationships

shall not, alone, constitute Good Reason and/or (2) a reduction

in your business unit's budget or a reduction your business

unit's head count, by themselves, do not constitute Good

Reason; or







(ii) a reduction in your "Total Annual Compensation" (defined as the

sum of your Annual Base Salary Rate, Target Annual Incentive

and "Target Annual Long Term Incentive Grants") for any

calendar or fiscal year, as applicable, to an amount that is

less than the Total Annual Compensation that existed in the

prior calendar or fiscal year, as applicable. For purposes of

this Paragraph E.b)(ii) the dollar value of the "Target Annual

Long Term Incentive Grants" shall exclude the value of any

special one-time or periodic long-term incentive grants, and

shall be determined by valuing Performance Shares, Stock Units,

Restricted Stock, Restricted Stock Units, etc., at the market

share price utilized in valuing the annual Senior Management

compensation structures in the materials presented to the

Compensation and Employee Benefits Committee of the Company's

Board of Directors ("the Committee") when authorizing such

grants, and assuming 100% performance achievement if such

grants include performance criteria. Stock Options and Stock

Appreciation Rights will be valued by the Black-Scholes

methodology (and related share price) as utilized in the

materials presented to the Committee when authorizing such



c) "Termination Date" shall mean the date the Participant ceases to be an

employee of the Company.



F. PLAN PAYMENTS AND BENEFITS



As a Participant who becomes eligible to receive benefits under this Plan, you shall be entitled to the following:



1. Severance Payment



A Severance Payment under this Section F.1. that will be the greater of 1) two hundred percent (200%) of the sum of your final annual base salary plus the target annual incentive in effect for you at your Termination Date, or 2) two hundred percent (200%) of the sum of your annual base salary plus the target annual incentive in effect for you at the Effective Date.



2. Deferral Option



At your election prior to termination of employment you may defer receipt of all or a portion of the Severance Payment under Section F.1. for up to five (5) years from your Termination Date. Payout of the Severance Payment may be in the form of a lump sum or up to a maximum of five approximately equal annual installments. In the event of your death prior to either the commencement or completion of payout of the deferred amount, the unpaid balance shall be paid to your named beneficiary (or to your estate if no beneficiary has been named) in a lump sum within thirty (30) business days of such death.



The interest rate on such deferred amounts will be the interest rate formula applicable under the AT&T Senior Management Incentive Award Deferral Plan for deferred cash amounts which otherwise would have been payable in the calendar year which includes the Effective Date.



Your initial election to defer must be made within thirty (30) days after you first become eligible to participate in this Plan. Thereafter, you may change your election, provided, however, that any such change must be made prior to your Termination Date in the event of a Company-initiated termination for other than Cause, or at the time of or prior to your notification of termination for Good Reason.

If you elect to defer, the obligation to pay the deferred amounts will be evidenced by th
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