REG - AT & T Inc. - 3Q16 10-Q <Origin Href="QuoteRef">T.N</Origin> - Part 6
17/11/2016 17:40
- Part 6: For the preceding part double click ID:nRSQ5061Pe
of Equity Securities and Use
of Proceeds
(c) A summary of our
repurchases of common stock
during the third quarter of
2016 is as follows:
Period (a) Total Number ofShares (or Units)Purchased 1, 2, 3 (b) Average Price PaidPer Share (or Unit) (c) Total Number ofShares (or Units)Purchased as Part ofPublicly Announced Plans or Programs1 (d) Maximum Number (orApproximate DollarValue) of Shares (orUnits) That May Yet BePurchased Under ThePlans or Programs
July 1, 2016 -July 31, 2016 3,143 $ - - 401,550,000
August 1, 2016 -August 31, 6,000,384 41.15 6,000,000 395,550,000
2016
September 1, 2016 -September 624,640 - - 395,550,000
30, 2016
Total 6,628,167 $ 41.15 6,000,000
1 In March 2014, our Board
of Directors approved an
additional authorization to
repurchase up to 300 million
shares of our common stock.
In March 2013, our Board of
Directors authorized the
repurchase of up to an
additional 300 million
shares of our common stock.
The authorizations have no
expiration date.
2 Of the shares repurchased,
3,721 shares were acquired
through the withholding of
taxes on the vesting of
restricted stock or on the
exercise price of options.
3 Of the shares repurchased,
624,446 shares were acquired
through reimbursements from
AT&T maintained Voluntary
Employee Benefit Association
(VEBA) trusts.
52
AT&T INC.
SEPTEMBER 30, 2016
Item 6. Exhibits
Exhibits identified in parentheses below, on file with the Securities and Exchange Commission, are incorporated by
reference as exhibits hereto. Unless otherwise indicated, all exhibits so incorporated are from File No. 1-8610.
10-a AT&T Health Plan
10-b Agreement between James Cicconi and AT&T Inc.
12 Computation of Ratios of Earnings to Fixed Charges
31 Rule 13a-14(a)/15d-14(a) Certifications31.1 Certification of Principal Executive Officer31.2 Certification of Principal Financial Officer
32 Section 1350 Certifications
101 XBRL Instance Document
53
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
November 3, 2016 AT&T Inc. /s/ John J. StephensJohn J. StephensSenior Executive Vice President and Chief Financial Officer
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AT&T HEALTH PLAN
Effective: January 1, 1987
Previously Amended and Restated: January 1, 2016
Amended and Restated Effective: January 1, 2017 (unless otherwise provided herein)
AT&T HEALTH PLAN
TABLE OF CONTENTS
ARTICLE 1ARTICLE 2ARTICLE 3 ARTICLE 4 ARTICLE 5 ARTICLE 6 ARTICLE 7 ARTICLE 8 ARTICLE 9 ARTICLE 10 ARTICLE 11 ARTICLE 12 PURPOSE......................................................................................................DEFINITIONS.................................................. 1 1 5 6 7 9101013151824
............................................ELIGIBILITY.................................................................................................BENEFITS..........
...........................................................................................TERMINATION OF
PARTICIPATION....................................................DISABILITY...............................................................................................
..COSTS...........................................................................................................LOYALTY
CONDITIONS..........................................................................MISCELLANEOUS.........................................................................
............COBRA.........................................................................................................PRIVACY OF MEDICAL
INFORMATION.............................................CLAIM AND APPEAL PROCESS ............................................................
AT&T HEALTH PLAN
ARTICLE 1 PURPOSE
The AT&T Health Plan ("Plan") provides Participants with supplemental medical, dental, and vision benefits. Effective
March 23, 2010, the Plan shall be frozen to new Participants, as further described in Section 2.16. The Company intends
this Plan to be a "grandfathered health plan" under the Patient Protection and Affordable Care Act (the "Affordable Care
Act"). Appendix C hereto contains the required Participant disclosure regarding the Plan's grandfathered status under the
Affordable Care Act.
ARTICLE 2 DEFINITIONS
For purposes of this Plan, the following words and phrases shall have the meanings indicated, unless the context clearly
indicates otherwise:
2.1 Active Participant. "Active Participant" shall mean an Active Employee Participant and his Dependents.
2.2 Active Employee Participant. "Active Employee Participant" shall mean an Eligible Employee electing to participate in the Plan while in active service, on a Leave of Absence or while receiving short term disability benefits under the Officer Disability Plan.
2.3 Annual Deductible. "Annual Deductible" shall mean the amount the Active Participant must pay for Covered Health Services in a Plan Year before the Plan will begin paying for Covered Benefits in that calendar year. The Annual Deductible applies to all
Covered Health Services. The Annual Deductible does not apply to Preventive Care, Dental Services and Vision Services. Solely for purposes of this Plan, the Annual Deductible will operate on a combined basis with the Annual Deductible (both the
"Network/ONA" and "Non-Network Benefit" annual deductibles) applicable in the AT&T Medical Plan. Once the Participant meets his applicable Annual Deductible, the Plan will begin to pay Covered Benefits, subject to any required Coinsurance, in accordance
with and as governed by Section 4.1. The applicable Annual Deductible is set forth in Appendix A to this Plan.
2.4 Annual Out-of-Pocket Maximum. "Annual Out-of-Pocket Maximum" shall mean the maximum amount of Covered Health Services an Active Participant must pay out-of-pocket every calendar year, including the Participant's Annual Deductible. Solely for purposes of
this Plan, the Annual Out-of-Pocket Maximum will operate on a combined basis with the Annual Out-of-Pocket Maximum (both the "Network/ONA" and "Non-Network Benefit annual out-of-pocket maximums) applicable in the AT&T Medical Plan (or the Annual Out-of
-Pocket Maximum in the AT&T International Health Plan for Officers serving in expatriate positions with the Company). Once the Participant reaches the applicable Annual Out-of-Pocket Maximum, Covered Benefits for those Covered Health Services that apply
to the Annual Out-of-Pocket Maximum are payable in accordance with and as governed by Section 4.1 during the rest of that Plan Year. The following costs shall never apply toward the Annual Out-of-Pocket Maximum: (a) any applicable Monthly Contributions
and (b) any charges for Non-Covered Health Services. Even when the Annual Out-of-Pocket Maximum has been reached, Covered Benefits will not be provided for the following: (a) any applicable Monthly Contributions and (b) any charges for Non-Covered Health
Services. The applicable Annual Out-of-Pocket Maximum is set forth in Appendix A to this Plan.
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2.5 AT&T. "AT&T" shall mean AT&T Inc. References to "Company" shall mean AT&T.
2.6 Basic Plan(s). "Basic Plan(s)" shall mean AT&T's group medical (known as the "Silver Option" in the "AT&T Medical Plan" (or the "AT&T International Health Plan" for Officers serving in expatriate positions with the Company)), dental (non-DHMO option), and
vision care plans (including the AT&T Retiree Vision Care Program). For a Participant who Retired on or before August 31, 1992, Basic Plans shall mean the AT&T Medical and Group Life Insurance Plan-CustomCare ("CustomCare") and dental (non-DHMO option)
plans. For this purpose, the Plan Administrator maintains governing records setting forth the names of those Participants who Retired on or before August 31, 1992.
2.7 CEO. "CEO" shall mean the Chief Executive Officer of AT&T Inc.
2.8 COBRA. "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
2.9 Coinsurance. "Coinsurance" shall mean the amount an Active Participant must pay each time he receives Covered Health Services, after he meets the applicable Annual Deductible. Coinsurance payments are calculated as a percentage of Covered Health Services, rather than a set dollar amount. Coinsurance does not apply to Preventive Care, Dental Services and Vision Services (or Medical Services for Retired Participants as provided in Section 4.1(c)). The applicable Coinsurance percentage is set forth in
Appendix A to this Plan.
2.10 Committee. "Committee" shall mean the Human Resources Committee of the Board of Directors of AT&T Inc.
2.11 Covered Benefits. "Covered Benefits" shall mean the benefits provided by the Plan, as provided for and governed by Section 4.1 of the Plan.
2.12 Covered Health Services. "Covered Health Services" means all Medical Services or Preventive Care that would qualify as deductible medical expenses for federal income tax purposes, whether deducted or not. Dental Services and Vision Services are not included in the definition of Covered Health Services.
2.13 Dental Services. "Dental Services" shall mean services for dental and orthodontic care. The Plan Administrator, in its sole discretion, shall determine whether a particular service is classified as Preventive Care or a Dental, Medical or Vision Service.
2.14 Dependent(s). "Dependent(s)" shall mean those individuals who would qualify as a Participant's dependent(s) under the terms of the group medical Basic Plan in which the Participant participates (or last previously participated with respect to Medicare Eligible Retired Participants (the "Prior Basic Plan"), or, if applicable, Substitute Basic Coverage.
2.15 Disability. "Disability" shall mean qualification for long term disability benefits under Section 3.1 of the Officer Disability Plan.
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2.16 Eligible Employee. "Eligible Employee" shall mean an Officer. Notwithstanding the foregoing, the CEO may, from time to time, exclude any Officer or group of Officers from being an "Eligible Employee" under this Plan. Employees of a company acquired by AT&T shall not be considered an Eligible Employee unless designated as such by the CEO. Notwithstanding the foregoing, only the Committee shall have the authority to exclude from participation or take any action with respect to Executive Officers.
Notwithstanding the foregoing provisions, individuals hired, rehired or promoted to an Officer level position on or after
March 23, 2010 shall be excluded from the term Eligible Employee, and such individuals (and their Dependents) shall not be
eligible to participate in this Plan.
2.17 Employer. "Employer" shall mean AT&T Inc. or any of its Subsidiaries.
2.18 Executive Officer. "Executive Officer" shall mean any executive officer of AT&T, as that term is used under the Securities Exchange Act of 1934.
2.19 Leave of Absence. "Leave of Absence" shall mean a Company-approved leave of absence.
2.20 Medical Services. "Medical Services" shall mean medical/surgical, mental health/substance abuse and prescription pharmacy services. The Plan Administrator, in its sole discretion, shall determine whether a particular service is classified as Preventive Care or a Medical, Dental or Vision Service. Medical Services do not include Dental Services and Vision Services.
2.21 Monthly Contributions. "Monthly Contributions" shall mean the monthly premiums or contributions required for participation in this Plan as further governed by Article 7 of the Plan. The applicable Monthly Contributions are set forth in Exhibit A to this Plan.
2.22 Non-Covered Health Services. "Non-Covered Health Services" shall mean any Medical Services or Preventive Care which do not meet the definition of Covered Health Services.
2.23 Officer. "Officer" shall mean an individual who is designated as an officer level employee for compensation purposes on the records of AT&T.
2.24 Participant. "Participant" shall mean an Active Participant or Retired Participant or both, as the context indicates.
2.25 Plan Administrator. "Plan Administrator" shall mean the SEVP-HR, or any other person or persons whom the Committee may appoint to administer the Plan; provided that the Committee may act as the Plan Administrator at any time.
2.26 Plan Year. "Plan Year" shall mean the calendar year.
2.27 Preventive Care. "Preventive Care" shall have the same meaning as such term has in the AT&T Medical Plan. The plan administrator for the AT&T Medical Plan shall determine whether a particular service constitutes Preventive Care and the Plan Administrator for this Plan shall rely upon such determination.
3
2.28 Qualified Dependent. "Qualified Dependent" shall mean a Dependent who loses coverage under a COBRA eligible program due to a Qualifying Event.
2.29 Qualifying Event. "Qualifying Event" shall mean any of the following events if, but for COBRA continuation coverage, they would result in a Participant's loss of coverage under this Plan:
(1)(2) death of a covered Eligible Employee;termination (other than by reason of such Eligible Employee's gross misconduct) of an Employee's employment;
(3) reduction in hours of an Eligible Employee;
(4) divorce or legal separation of an Eligible Employee or dissolution of an Eligible Employee's registered domestic partnership;
(5) an Eligible Employee's entitlement to Medicare benefits; or
(6) a Dependent child ceasing to qualify as a Dependent under the group medical Basic Plan,(or, if applicable, Substitute Basic Coverage) or with respect to a Dependent child who is a Medicare Eligible Retired Participant, the child's ceasing to otherwise qualify under the Prior Basic Plan.
2.30 Retire, Retired or Retirement. "Retire," "Retired" or "Retirement" shall mean the termination of an Active Employee Participant's employment with AT&T or any of its Subsidiaries, for reasons other than death, on or after the earlier of the following
dates: (1) the date such Active Employee Participant has attained age 55, and, for an Active Employee Participant on or after January 1, 2002, has five (5) years of service, or (2) the date the Active Employee Participant has attained one of the following
combinations of age and service at termination of employment on or after April 1, 1997:
Net Credited Service Age
25 years or more 50 or older
30 years or more Any age
2.31 Retired Participant. "Retired Participant" shall mean a Retired Employee Participant and his Dependents.
2.32 Retired Employee Participant. "Retired Employee Participant" shall mean a former Active Employee Participant who has Retired within the meaning of Section 2.30 and who meets the additional requirements of Section 3.2 to be eligible for coverage in Retirement.
2.33 SEVP-HR. "SEVP-HR" shall mean AT&T's highest ranking Officer, specifically responsible for human resources matters.
2.34 Subsidiary. "Subsidiary" shall mean any corporation, partnership, venture or other entity in which AT&T holds, directly or indirectly, a 50% or greater ownership interest. The Committee may, at its sole discretion, designate any other corporation,
partnership, venture or other entity a Subsidiary for the purpose of participating in this Plan. Notwithstanding anything herein to the contrary, unless designated a "Subsidiary" pursuant to the immediately preceding sentence, Cingular Wireless LLC,
Sterling Commerce, Inc., and their respective subsidiaries shall not be considered a Subsidiary under this Plan.
4
2.35 Vision Services. "Vision Services" shall mean services for vision care. The Plan Administrator, in its sole discretion, shall determine whether a particular service is classified as Preventive Care or a Vision, Medical or Dental Service.
2.36 Medicare Eligible Retired Participant. "Medicare Eligible Retired Participant" shall mean a Retired Participant who is eligible for Medicare due to reaching the eligible age for Medicare.
ARTICLE 3 ELIGIBILITY
3.1 Active Participants. Each Eligible Employee shall be eligible to participate in this Plan along with his/her Dependent(s) beginning on the effective date of the employee becoming an Eligible Employee.
Upon becoming an Eligible Employee, he/she shall have 90 days to elect to participate in this Plan. In order to continue
participation, the Active Participant must pay all applicable Monthly Contributions. If an Active Employee Participant
terminates participation in this Plan at any time for any reason, that Participant and his/her Dependent(s) shall be
ineligible to participate in the Plan at any time in the future.
3.2 Retired Participants. Provisions of this Plan will continue in effect during Retirement for each Retired Employee Participant and his/her Dependent(s) with respect to any Eligible Employee who became a Participant before January 1, 1999. Neither an
Eligible Employee who became a Participant after December 31, 1998 nor his/her Dependent(s) shall be eligible for participation hereunder on or after such Participant's Retirement. Coverage for Retired Participants shall be subject to the payment of all
applicable Monthly Contributions, as governed by Article 7. The provisions of this Plan related to Retired Participants, including the level of Covered Benefits and the applicable Monthly Premiums, shall begin to apply on the first day of the month
following the month in which the Active Employee Participant Retires. If a Retired Employee Participant terminates participation at any time for any reason, participation of that Retired Employee participant and his/her Dependent(s) may not be reinstated
for any reason.
3.3 Requirement to Enroll and Participate in Basic Plans and Medicare. Notwithstanding any provision in this plan to the contrary, as a condition to participation in the Plan, each Participant must be enrolled in, paying for, and participating in (i) the
Basic Plans if such Participant is eligible for coverage under the terms of the Basic Plans, or, if applicable, Substitute Basic Coverage, and (ii) all parts of Medicare for which such Participant is eligible and for which Medicare would be primary if
enrolled therein, except for Medicare Part D relating to prescription drug coverage.
Notwithstanding any other provision of the Plan to the contrary, an individual who first becomes an Eligible Employee in
the middle of a Plan Year and who is enrolled in AT&T sponsored group health plans other than the Basic Plans, will be
allowed to participate in the Plan for the remainder of the Plan Year along with his/her Dependent(s) who are enrolled in
such other AT&T sponsored health plans, as if they were participating in the Basic Plans. At the next group enrollment
opportunity for the Basic Plans, the Active Employee Participant and his/her Dependent(s) must enroll in the Basic Plans to
continue participation in this Plan.
5
ARTICLE 4 BENEFITS
4.1 Covered Benefits. Subject to the limitations in this Plan (including but not limited to the loyalty conditions set forth in Article 8 below), this Plan provides the benefits described below. Monthly Contributions for participation in this Plan, the Basic Plans, Medicare, or any other health plan are not considered "services", and are therefore are not Covered Benefits under this Plan.
(a) Active Participants (Medical Services and Preventive Care) -
Medical Services - After the Annual Deductible has been met, 100% payment of Covered Health Services not paid under the
AT&T Medical Plan (or AT&T International Health Plan with respect to Officers serving in expatriate positions with the
Company) or Medicare minus the amount of Coinsurance, until the Active Participant reaches the Annual Out-of-Pocket
Maximum, at which time coverage is 100% of Covered Health Services not paid under the AT&T Medical Plan (or AT&T
International Health Plan with respect to Officers serving in expatriate positions with the Company) .
Preventive Care - Preventive Care, whether received as a "Network/ONA" service or "Non-Network" service, as defined in the
AT&T Medical Plan, is covered at 100%, not subject to the Annual Deductible or Coinsurance.
(b) Active Participants (Dental Services and Vision Services) -
100% payment, through reimbursement or otherwise, of all Dental Services and Vision Services not paid under the Active
Participant's (i) Basic Plans or (ii) Medicare, provided expenses for such services would qualify as deductible medical
expenses for federal income tax purposes, whether deducted or not.
(c) Retired Participants -
100% payment, through reimbursement or otherwise, of all Medical, Dental, Vision and Preventive services not paid under the
Retired Participant's (i) Basic Plans or Substitute Basic Coverage, if either is applicable or (ii) Medicare, provided
expenses for such services would qualify as deductible medical expenses for federal income tax purposes, whether deducted
or not.
4.2 Covered Benefit Limits. RESERVED
4.3 Priority of Paying Covered Claims. Claims for benefits will be applied against the various health plans, as applicable, and coordinated with Medicare in the following order:
(1) Medicare, to the extent the Participant is eligible therefore and such claim is actually paid by Medicare,
(2) Basic Plans, if applicable,
(3) CarePlus, if elected,
(4) Long Term Care Plan, if elected,
(5) this Plan.
6
4.4 Substitute Basic Coverage. Notwithstanding any other provision of this Plan to the contrary, if a Retired Employee Participant, other than a Medicare Eligible Retired Participant, is eligible for participation under this Plan during Retirement, but not
eligible to participate under the Basic Plans, the Plan shall provide medical, dental, and vision benefits for the Retired Employee Participant and his/her Dependent(s) substantially equivalent to the benefits under the Basic Plans through an insured
product (hereinafter, "Substitute Basic Coverage"). Eligibility for Substitute Basic Coverage is conditioned upon the Retired Participant's payment of contributions in the same amount that a similarly situated retired Basic Plan participant is required to
pay under the Basic Plans. Such Substitute Basic Coverage shall constitute such Retired Participant's Basic Plans for all purposes under this Plan. The costs of Substitute Basic Coverage (except for the required monthly contributions referenced in this
paragraph) shall be borne by AT&T, and the costs of Substitute Basic Coverage shall not be included in the determination of any Retired Participant's annual Plan contribution amount as provided in Article 7. In addition, certain other Retired Employee
Participants participate in the "Separation Medical Plan" rather than the Basic Plans. References to Substitute Basic Coverage throughout this Plan shall be deemed to include the Separation Medical Plan. The Plan Administrator maintains records governing
the names of those Retired Employee Participants who have Substitute Basic Coverage or Separation Medical Plan coverage.
ARTICLE 5 TERMINATION OF PARTICIPATION
5.1 Termination of Participation. Participation will cease on the last day of the month in which one of the following conditions occurs:
(1) The Participant, other than a Medicare Eligible Retired Participant, is no longer a participant in the Basic Plans or Substitute Basic Coverage, in which case participation ceases for such Participant;
(2) A Participant ceases to meet the definition of a Dependent (as set forth in Section 2.14 of this Plan) for any reason, in which case participation ceases for such Participant;
(3) A Participant eligible to enroll in Medicare is no longer a participant in all parts of Medicare for which such Participant is eligible to enroll and for which Medicare would be primary if enrolled therein, except for Medicare Part D relating to prescription drug coverage, in which case participation ceases for such Participant;
(4) The Active Employee Participant's termination of employment for reasons other than Death, Disability, or Retirement by an individual who meets the applicable requirements of Section 3.2 in order to qualify for Plan benefits in Retirement, in which case participation ceases for the Participant and his/her Dependent(s);
(5) The demotion or designation of an Active Employee Participant so as to no longer be eligible to participate in the Plan, in which case participation ceases for the Participant and his/her Dependent(s);
(6) The Active Employee Participant (or Retired Employee Participant) participates in an activity that constitutes engaging in competitive activity with AT&T or engaging in conduct disloyal to AT&T under Article 8, in which case participation ceases for the Active Employee Participant (or Retired Employee Participant) and his/her Dependent(s); or
7
(7) Discontinuance of the Plan by AT&T, or, with respect to a Subsidiary's Active Employee Participants (or Retired Employee Participants), such Subsidiary's failure to make the benefits hereunder available to Active Employee Participants employed by it (or its Retired Employee Participants).
5.2 Dependents Failure to Participate in Basic Plans. If a Dependent, other than a Medicare Eligible Retired Participant, ceases participation under a Basic Plan or, if applicable, Substitute Basic Coverage, such Dependent's participation under this Plan will cease with the same effective date.
5.3 Death. In the event of the Active Employee Participant's (or Retired Employee's Participant's) death, his Dependents may continue participation in this Plan as follows:
(1) In the event of the death of a Retired Employee Participant such Retired Employee Participant's Dependents may continue participation in this Plan, eligible for the
Covered Benefits described in Section 4.1(c) of the Plan, for so long as such Dependents are participating in the Basic Plans (or, if applicable, Substitute Basic
Coverage) or with respect to a Dependent who is a Medicare Eligible Retired Participant, for so long as such Dependent would have otherwise been eligible for
participation under the terms of the Prior Basic Plan and are paying any applicable contributions for this Plan as provided in Article 7. If a surviving spouse of such
deceased Active Employee Participant otherwise eligible for participation in the Plan remarries, his/her participation and the participation of any otherwise eligible
Dependents will cease with the effective date of his/ her marriage.
(2) In the event of an in-service death of an Active Employee Participant eligible to participate in the Plan in Retirement as provided under Article 3.2, who was Retirement
eligible, within the meaning of Section 2.30, at the time of death, such Active Employee Participant's surviving Dependents may continue participation in this Plan,
eligible for the Covered Benefits described in Section 4.1(a) and (b), for so long as such Dependents are participating in the Basic Plans (or, if applicable Substitute
Basic Coverage) or with respect to a Dependent who is a Medicare Eligible Retired Participant, for so long as such Dependent would have otherwise been eligible for
participation under the terms of the Prior Basic Plan and are paying any applicable contributions for this Plan as provided in Article 7. If a surviving spouse of such
deceased Active Employee Participant otherwise eligible for participation in the Plan remarries, his/her participation and the participation of any otherwise eligible
Dependents will cease with the effective date of his/ her marriage.
(3) In the event of (i) an in-service death of an Active Employee Participant not eligible to participate in the Plan in Retirement as provided in Article 3.2 or (ii) an in-service death of an Active Employee Participant eligible to participate in the Plan in Retirement as provided in Article 3.2 but the
8
individual was not Retirement eligible, within the meaning of Section 2.30, at the time of death, such Active Employee Participant's Dependent(s) may continue
participation in this Plan, eligible for the Covered Benefits described in Sections 4.1(a) and (b), for a 36-month period commencing the month following the month in
which such Active Employee Participant dies as long as such Dependent(s) are participating in the Basic Plans (or with respect to a Dependent who is a Medicare Eligible
Retired Participant, for so long as such Dependent would have otherwise been eligible for participation under the terms of the Prior Basic Plan) and subject to the
payment of Active Participant Contributions for the first 12 months and payment of Active COBRA Contributions for the remaining 24 months, as provided by Articles 7 and
10.1. If the Active Employee Participant's Dependent(s) are eligible for COBRA, they will automatically be enrolled in COBRA so that there is no lapse in coverage, and
this 36-month coverage will be integrated and run concurrently with COBRA coverage.
ARTICLE 6 DISABILITY
6.1 Disability. With respect to any Active Employee Participant who commences receipt of short term or long term disability benefits under the Officer Disability Plan, participation under this Plan will be as follows:
(1) The Participant will continue to participate in this Plan, eligible for the Covered Benefits described in Section 4.1(a) and (b), for as long as he/she receives short term disability benefits under the Officer Disability Plan and pays the applicable contributions for this Plan as provided by Article 7.
(2) An Active Employee Participant not eligible to participate in the Plan in Retirement as provided in Article 3.2 who commences long term disability benefits under the
Officer Disability Plan or an Active Employee Participant eligible to participate in the Plan in Retirement as provided in Article 3.2 but who is not Retirement eligible,
within the meaning of Section 2.30, at the time long term disability benefits under the Officer Disability Plan commence, will cease participation in this Plan (along
with his/her Dependents) effective as of the last day of the calendar month in which such long term disability benefits commence, unless such benefits commence on the
first day of a calendar month, in which case participation in this Plan shall cease effective as of the last day of the prior month.
(3) An Active Employee Participant eligible to participate in the Plan in Retirement as provided in Article 3.2 ,who is Retirement eligible, within the meaning of Section
2.30, at the time long term disability benefits under the Officer Disability Plan commence, will be eligible to continue participation in this Plan on the same terms and
conditions that participation would be available to such Participant in Retirement, subject to the payment of applicable contributions for this Plan as provided by
Article 7, regardless of his/her continued receipt of long term disability benefits under the Officer Disability Plan.
9
ARTICLE 7 COSTS
7.1 Provision of Benefits under the Plan. Except as provided below in this Article 7 with respect to required Monthly Contributions or with respect to any required Coinsurance, the benefits available to Participants under this Plan shall be provided through an insurance policy maintained by AT&T.
7.2 Active Participant Contributions. An Active Participant electing to participate in the Plan will pay Monthly Contributions to participate in the Plan while in active service, while on Leave of Absence or while receiving short term disability benefits
under the Officer Disability Plan. The Monthly Contribution for participation may change annually, effective at the beginning of each Plan Year. Contributions to be made by Active Participants electing to participate in the Plan shall be set annually by
the SEVP-HR, determined in the SEVP-HR's sole and absolute discretion. The SEVP-HR may adopt tiered rates for similarly situated groups of Participants based on factors such as the number of Dependents covered or Medicare eligibility. Notwithstanding the
foregoing, required Monthly Contributions for Executive Officers shall be approved by the Committee.
7.3 Retired Participant Contributions. Retired Participants who elect to participate will pay Monthly Contributions to participate in the Plan. The Monthly Contribution for participation may change annually, effective at the beginning of each Plan Year. Contributions to be made by Retired Participants who elect to participate shall be set annually by the SEVP-HR (in his/her sole and absolute discretion), to the extent their contributions have not previously been provided for in a separate agreement.
7.4 Survivor Contributions. Upon the death of a Participant, the Participant's Dependents shall be required to pay Monthly Contributions to participate in the Plan. The Monthly Contributions shall be set annually by the SEVP-HR, in the SEVP-HR's sole and absolute discretion. Any changes to the Monthly Contributions shall be effective at the beginning of each Plan Year.
7.5 Contributions for Participants on Disability. Participants continuing benefits while on Disability shall be required to pay Monthly Contributions to participate in the Plan. The Monthly Contributions shall be set annually by the SEVP-HR, determined in the SEVP-HR's sole and absolute discretion. Any changes to the Monthly Contributions shall be effective at the beginning of each Plan Year.
ARTICLE 8 LOYALTY CONDITIONS
8.1 Participants acknowledge that no coverage and benefits would be provided under this Plan on and after January 1, 2010 but for the loyalty conditions and covenants set forth in this Article, and that the conditions and covenants herein are a material
inducement to AT&T's willingness to sponsor the Plan and to offer Plan coverage and benefits for the Participants on or after January 1, 2010. Accordingly, as a condition of receiving coverage and any Plan benefits on or after January 1, 2010, each
Participant is deemed to agree that he shall not, without obtaining the written consent of the Plan Administrator in advance, participate in activities that constitute engaging in competition with AT&T or engaging in conduct disloyal to AT&T, as those
terms are defined in this Section. Further and notwithstanding any other provision of this Plan, all coverage and
10
benefits under this Plan on and after January 1, 2010 with respect to a Participant and his or her Dependents shall be subject in their entirety to the enforcement provisions of this Section if the Participant, without the Plan Administrator's consent, participates in an activity that constitutes engaging in competition with AT&T or engaging in conduct disloyal to AT&T, as defined below. The provisions of this Article 8 as in effect immediately before such date shall be applicable to Participants who retire
before January 1, 2010.
8.2 Definitions. For purposes of this Article and of the Plan generally
(1) an "Employer Business" shall mean AT&T, any Subsidiary, or any business in which AT&T or a Subsidiary or an affiliated company of AT&T has a substantial ownership or joint venture interest;
(2) "engaging in competition with AT&T" shall mean, while employed by an Employer Business or within two (2) years after the Participant's termination of employment, engaging by the Participant in any business or activity in all or any portion of the same
geographical market where the same or substantially similar business or activity is being carried on by an Employer Business. "Engaging in competition with AT&T" shall not include owning a nonsubstantial publicly traded interest as a shareholder in a
business that competes with an Employer Business. "Engaging in competition with AT&T" shall include representing or providing consulting services to, or being an employee or director of, any person or entity that is engaged in competition with any
Employer Business or that takes a position adverse to any Employer Business.
(3) "engaging in conduct disloyal to AT&T" means, while employed by an Employer Business or within two (2) years after the Participant's termination of employment, (i) soliciting for employment or hire, whether as an employee or as an independent contractor,
for any business in competition with an Employer Business, any person employed by AT&T or its affiliates during the one (1) year prior to the termination of the Participant's employment, whether or not acceptance of such position would constitute a breach
of such person's contractual obligations to AT&T and its affiliates; (ii) soliciting, encouraging, or inducing any vendor or supplier with which Participant had business contact on behalf of any Employer Business during the two (2) years prior to the
termination of the Participant's employment, for any reason to terminate, discontinue, renegotiate, reduce, or otherwise cease or modify its relationship with AT&T or its affiliate; or (iii) soliciting, encouraging, or inducing any customer or active
prospective customer with whom Participant had business contact, whether in person or by other media, on behalf of any Employer Business during the two (2) years prior to the termination of Participant's employment for any reason ("Customer"), to
terminate, discontinue, renegotiate, reduce, or otherwise cease or modify its relationship with any Employer Business, or to purchase competing goods or services from a business competing with any Employer Business, or accepting or servicing business from
such Customer on behalf of himself or any other business. "Engaging in conduct disloyal to AT&T" also means, disclosing Confidential Information to any third party or using Confidential Information, other than for an Employer Business, or failing to
return any Confidential Information to the Employer Business following termination of employment.
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Confidential Information to the Employer Business following termination of employment.
(4) "Confidential Information" shall mean all information belonging to, or otherwise relating to, an Employer Business, which is not generally known, regardless of the manner in which it is stored or conveyed to the Participant, and which the Employer Business
has taken reasonable measures under the circumstances to protect from unauthorized use or disclosure. Confidential Information includes trade secrets as well as other proprietary knowledge, information, know-how, and non-public intellectual property
rights, including unpublished or pending patent applications and all related patent rights, formulae, processes, discoveries, improvements, ideas, conceptions, compilations of data, and data, whether or not patentable or copyrightable and whether or not it
has been conceived, originated, discovered, or developed in whole or in part by the Participant. For example, Confidential Information includes, but is not limited to, information concerning the Employer Business' business plans, budgets, operations,
products, strategies, marketing, sales, inventions, designs, costs, legal strategies, finances, employees, customers, prospective customers, licensees, or licensors; information received from third parties under confidential conditions; or other valuable
financial, commercial, business, technical or marketing information concerning the Employer Business, or any of the products or services made, developed or sold by the Employer Business. Confidential Information does not include information that (i) was
generally known to the public at the time of disclosure; (ii) was lawfully received by the Participant from a third party; (iii) was known to the Participant prior to receipt from the Employer Business; or (iv) was independently developed by the
Participant or independent third parties; in each of the foregoing circumstances, this exception applies only if such public knowledge or possession by an independent third party was without breach by the Participant or any third party of any obligation of
confidentiality or non-use, including but not limited to the obligations and restrictions set forth in this Plan.
8.3 Forfeiture of Benefits. Subject to the provisions of Section 1001(5) of the Affordable Care Act, coverage and benefits shall be forfeited and shall not be provided under this Plan for any period as to which the Plan Administrator determines that, within the time period and without the written consent specified, Participant has been either engaging in competition with AT&T or engaging in conduct disloyal to AT&T.
8.4 Equitable Relief. The parties recognize that any Participant's breach of any of the covenants in this Article 8 will cause irreparable injury to AT&T, will represent a failure of the consideration under which AT&T (in its capacity as creator and sponsor
of the Plan) agreed to provide the Participant with the opportunity to receive Plan coverage and benefits, and that monetary damages would not provide AT&T with an adequate or complete remedy that would warrant AT&T's continued sponsorship of the Plan and
payment of Plan benefits for all Participants. Accordingly, in the event of a Participant's actual or threatened breach of the covenants in this Article, the Plan Administrator, in addition to all other rights and acting as a fiduciary under ERISA on
behalf of all Participants, shall have a fiduciary duty (in order to assure that AT&T receives fair and promised consideration for its continued Plan sponsorship and funding) to seek an injunction restraining the Participant from breaching the covenants in
this Article 8. In addition, AT&T shall pay for any Plan expenses that the Plan Administrator incurs hereunder, and shall be entitled to recover from the Participant its reasonable attorneys' fees and costs incurred in obtaining such injunctive remedies.
To enforce its repayment rights with respect to a Participant, the Plan shall have a first priority, equitable lien on all Plan benefits provided to or for the Participant and his or her Dependents. In the event the Plan Administrator succeeds in
enforcing the terms of this Article through a written settlement with the Participant or a court order granting an injunction hereunder, the Participant shall be entitled to collect Plan benefits collect Plan benefits prospectively, if the Participant is
otherwise entitled to such benefits, net of any fees and costs assessed pursuant hereto (which fees and costs shall be paid to AT&T as a repayment on behalf of the Participant), provided that the Participant complies with said settlement or injunction.
12
8.5 Uniform Enforcement. In recognition of AT&T's need for nationally uniform standards for the Plan administration, it is an absolute condition in consideration of any Participant's accrual or receipt of benefits under the Plan after January 1, 2010 that each and all of the following conditions apply to all Participants and to any benefits that are paid or are payable under the Plan:
(1) ERISA shall control all issues and controversies hereunder, and the Committee shall serve for purposes hereof as a "fiduciary" of the Plan, and as its "named fiduciary" within the meaning of ERISA.
(2) All litigation between the parties relating to this Article shall occur in federal court, which shall have exclusive jurisdiction, any such litigation shall be held in the United States District Court for the Northern District of Texas, and the only remedies available with respect to the Plan shall be those provided under ERISA.
(3) If the Plan Administrator determines in its sole discretion either (I) that AT&T or its affiliate that employed the Participant terminated the Participant's employment for cause, or (II) that equitable relief enforcing the Participant's covenants under
this Article 8 is either not reasonably available, not ordered by a court of competent jurisdiction, or circumvented because the Participant has sued in state court, or has otherwise sought remedies not available under ERISA, then in any and all of such
instances the Participant shall not be entitled to collect any Plan benefits, and if any Plan benefits have been paid to the, the Participant shall immediately repay all Plan benefits to the Plan (with such repayments being used within such year for
increased benefits for other Participants in any manner determined in the Plan Administrator's discretion) upon written demand from the Plan Administrator. Furthermore, the Participant shall hold AT&T and its affiliates harmless from any loss, expense, or
damage that may arise from any of the conduct described in clauses (I) and (II) hereof.
ARTICLE 9 MISCELLANEOUS
9.1 Administration. The Plan Administrator is the named fiduciary of the Plan and has the power and duty to do all things necessary to carry out the terms of the Plan. The Plan Administrator has the sole and absolute discretion to interpret the provisions of
the Plan, to make findings of fact, to determine the rights and status of Participants and other under the Plan, to determine which expenses and benefits qualify as Covered Health Services or Covered Benefits, to make all benefit determinations under the
Plan, to decide disputes under the Plan and to delegate all or a part of this discretion to third parties and insurers. To the fullest extent permitted by law, such interpretations, findings, determinations and decisions shall be final, binding and
conclusive on all persons for all purposes of the Plan. The Plan Administrator may delegate any or all of its authority and responsibility under the Plan to other individuals, committees, third party administrators, claims administrators or insurers for
any purpose, including, but not limited to the processing of benefits and claims related thereto. In carrying out these functions, these individuals or entities have been delegated responsibility and discretion for interpreting the provisions of the Plan,
making findings of fact, determining the rights and status of Participants and others under the Plan, and deciding disputes under the Plan and such interpretations, findings, determinations and decisions shall be final, binding and conclusive on all
persons for all purposes of the Plan.
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9.2 Amendments and Termination. This Plan may be modified or terminated at any time in accordance with the provisions of AT&T's Schedule of Authorizations.
9.3 Newborns' and Mothers' Health Protection Act of 1996. To the extent this Plan provides benefits for hospital lengths of stay in connection with childbirth, the Plan will cover the minimum length of stay required for deliveries (i.e., a 48-hour hospital
stay after a vaginal delivery or a 96-hour stay following a delivery by Cesarean section.) The mother's or newborn's attending physician, after consulting with the mother, may discharge the mother or her newborn earlier than the
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