Exhibit 10-ll

 

BELLSOUTH NONQUALIFIED DEFERRED

 COMPENSATION PLAN

 

(As amended and restated effective as of January 1, 2005)

 

 

 

BellSouth Corporation (“BellSouth”) established on the first (1st) day of
January, 1985, the BellSouth Nonqualified Deferred Compensation Plan (“Plan”)
for certain executive employees and all Nonemployee Directors of BellSouth and
its adopting subsidiaries, and the Plan was subsequently amended from time to
time. The Plan is now hereby amended and restated, effective as of January 1,
2005, and as so amended and restated is intended to comply with the requirements
of Section 409A of the Internal Revenue Code of 1986, as amended, with respect
to all benefits under the Plan that are subject to Section 409A. Subject to the
limitations contained in Article 2 of the Plan, and except as expressly provided
herein, the Plan as so amended and restated shall hereafter apply to all
Deferral Agreements, including those executed before this effective date, under
the Plan.

 

ARTICLE 1

 

DEFINITIONS

 

1.1          “Base Salary” means the gross salary paid to executive employees,
not including Nonemployee Directors, plus the amount of any before-tax basic and
supplemental contributions to the BellSouth Retirement Savings Plan and the
amount of any other deferrals from gross salary under any nonqualified deferred
compensation plans which may be maintained by an Employer from time to time.

 

1.2         “Board” means the Board of Directors of BellSouth.

 

1.2A      “Change in Control Severance Plan” means a severance plan (or plans)
adopted under the terms of the Company Disclosure Letter to the Merger Agreement
(as defined in Section 1.14A below).

 

1.3         “Code” means the Internal Revenue Code of 1986, as amended.

 

1.4         “Compensation” means Net Monthly Salary or Net Directors Fees and
Retainers.

 

1.5         “Compensation Rate” means the cash compensation of an Employee
Participant, including (i) annual Base Salary rate in effect on the date the
Deferral Agreement is executed and (ii) the standard short-term award amount in
effect on the date the Deferral Agreement is executed for an Employee
Participant who is an officer in the executive compensation group or lump sum
payments under incentive compensation programs received for performance rendered
during the calendar year preceding the year in which the Deferral Agreement is
executed for an Employee Participant other than an officer in the executive
compensation group.

 

1.6         “Deferral Agreement” means an agreement pursuant to which deferral
elections under this Plan are made and includes a standard Fixed Benefit
Agreement for Nonemployee Directors, substantially in the form of Exhibit A
hereto, a standard Fixed Benefit Agreement for Employee Participants,
substantially in the form of Exhibit B hereto, a standard Deferral Agreement
which allows Nonemployee Directors to select between a Fixed Benefit Agreement
and a Stock Unit Agreement, substantially in the form of Exhibit C hereto; a
Deferral Agreement for deferral of certain lump sum payments by Employee
Participants, substantially in the form of Exhibit D hereto; and includes any
modifications to such agreements or such other agreements as are approved from
time to time for use in connection with this Plan as described in Article 2.

 

1.7        “Designated Beneficiary” means the beneficiary designated by a
Participant as provided in Section 6.1.

 

1.8        “Disabled” or “Disability” means, with respect to a Non-Grandfathered
Participant, any of the following:

 

(a)         the inability of the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months; or

 

(b)        the Participant is, by reason of any medically determinable physical
or mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months under an accident
and health plan covering employees of the Employer.

 

1.8A    “Effective Date” means January 1, 2005, the date as of which the Plan is
amended and restated.

 

1.9        “Eligible Person” means an executive employee of an Employer or
Nonemployee Director who is authorized by the Board to participate in this Plan
and is presented a Deferral Agreement for execution.

 

1.10      “Employee Participant” means an Eligible Person other than a
Nonemployee Director.

 

1.11     “Employer” means (i) BellSouth and (ii) any subsidiary of BellSouth, at
least eighty percent (80%) of the capital stock of which is owned by BellSouth
or by one or more subsidiaries of BellSouth if the Board of Directors of that
subsidiary adopts the Plan and if that subsidiary’s adoption of the Plan is
approved by the Board or its designee.

 

1.12      “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

 

1.12A   “Executive Severance Agreement” means a BellSouth executive change in
control agreement entered into by and between an executive who is a Participant
in this Plan and BellSouth, as amended and/or superseded from time to time,
providing certain benefits in the event of a change in corporate control of
BellSouth.

 

1.13     “Fixed Benefit Agreement” means a Deferral Agreement which provides for
a fixed benefit at Retirement under Section 5.1.

 

1.13A  “Grandfathered Participant” means any Participant other than a
Non-Grandfathered Participant.

 

1.14     “Interim Distribution” means a distribution specified as an Interim
Distribution in a Deferral Agreement.

 

1.14A    “Merger” means the planned merger, pursuant to the Agreement and Plan
of Merger dated as of March 4, 2006 (the “Merger Agreement”), by and among
BellSouth, AT&T Inc. (“AT&T”), and ABC Consolidation Corp., a Georgia
corporation and wholly-owned subsidiary of AT&T (“Merger Sub”), pursuant to
which, at the “Effective Time” (as defined in the Merger Agreement), BellSouth
will be merged with and into the Merger Sub.

 

1.15     “Net Credited Service” means an Employee Participant’s net credited
service as defined in the BellSouth Corporation Personal Retirement Account
Pension Plan under the terms of such plan in effect on the Effective Date,
except that it shall include only the portion of an Employee Participant’s net
credited service as is attributable to service with BellSouth, an Employer or
any other corporation which is a member of the same controlled group of
corporations, within the meaning of Code Section 414(b), as BellSouth and any
trade or business (whether or not incorporated) which is under common control
with BellSouth, within the meaning of Code Section 414(c).

 

1.16     “Net Monthly Salary” or “Net Directors Fees and Retainers” means the
amount of a Participant’s Base Salary or Directors Fees and Retainers which
actually is paid to him or her in any month net of all withholding, allotments,
and deductions other than any reduction as a result of participation in this
Plan.

 

1.17     “Nonemployee Director” means a member of the Board, or a member of the
Board of Directors of any other Employer, who is not concurrently a common law
employee of an Employer.

 

1.17A   “Non-Grandfathered Participant” means any Employee Participant who (a)
is described in Section 5.5A or Section 5.5B, or (b) otherwise first becomes
eligible for a Retirement benefit, or dies or becomes Disabled, on or after
January 1, 2005.

 

1.18     “Participant” means an Eligible Person who has executed a Deferral
Agreement which is accepted by an Employer under Article 4.

 

1.19     “Plan Administrator” means the Chief Executive Officer of BellSouth and
any individual or committee he designates to act on his behalf with respect to
any or all of his responsibilities hereunder; provided, the Board may designate
any other person or committee to serve in lieu of the Chief Executive Officer as
the Plan Administrator with respect to any or all of the administrative
responsibilities hereunder.

 

1.20     “Plan Year” means (i) February 1, 1985, through December 31, 1985, and
(ii) each calendar year thereafter through 1996. For certain Employee
Participants designated by the Board, “Plan Year” also means calendar year 1997.
For Nonemployee Directors, “Plan Year” also means the period from January 1,
1997 through April 30, 1997, and for certain Nonemployee Directors designated by
the Board, “Plan Year” also means (A) May 1, 1997, through April 30, 1998,
(B) May 1, 1998, through April 30, 1999, and (C) May 1, 1999, through April 30,
2000, to the extent the Board shall designate.

 

1.20A    “Rabbi Trust Agreements” means each and all of the: (i) BellSouth
Corporation Trust Under Executive Benefit Plan(s); (ii) BellSouth
Telecommunications, Inc. Trust Under Executive Benefit Plan(s); (iii) BellSouth
Enterprises, Inc. Trust Under Executive Benefit Plan(s); (iv) BellSouth
Corporation Trust Under Executive Benefit Plan(s) for Mobile Systems Executives;
(v) BellSouth Corporation Trust Under Executive Benefit Plan(s) for Advertising
and Publishing Executives; (vi) Trust Under Executive Benefit Plan(s) for
Certain BellSouth Companies; (vii) BellSouth Corporation Trust Under Board of
Directors Benefit Plan(s); and (viii) BellSouth Telecommunications, Inc. Trust
Under Board of Directors Benefit Plan(s); in each case, as amended from time to
time.

 

1.21     “Retirement” means (1) any termination of employment by a Nonemployee
Director and (2) any termination of employment by an Employee Participant who is
(or would be) eligible for a pension, other than a deferred vested pension,
under the terms and conditions of the BellSouth Personal Retirement Account
Pension Plan, or comparable plan maintained by the Employer employing such
Participant, under the terms of such plans in effect on the Effective Date.
Additionally, “Retirement” means any termination of employment by an Employee
Participant who has attained age 62 or older and whose Net Credited Service is
ten years or more at the time of employment termination.

 

Notwithstanding anything to the contrary herein, after the Merger, with respect
to any Non-Grandfathered Participant who otherwise satisfies none of the
alternative definitions of Retirement described above, “Retirement” also means
the termination of employment by the Non-Grandfathered Participant if at such
time (A) the sum of (i) plus (ii) equals or exceeds seventy-five (75) years
where (i) is the Non-Grandfathered Participant’s whole years and whole months of
age and (ii) is the Non-Grandfathered Participant’s whole years and whole months
of Net Credited Service, and (B) the Non-Grandfathered Participant’s Net
Credited Service is at least ten (10) years (the “Rule of 75”).

 

1.22     “Retirement Benefit” means a benefit specified as a Retirement Benefit
in a Deferral Agreement.

 

1.22A    “Section 409A” means Code section 409A and the Treasury regulations or
other authoritative guidance issued thereunder. Whenever the terms “subject to
Section 409A” or “to the extent permitted by Section 409A” (or any such similar
reference so as to indicate that a Plan provision is subject to Section 409A)
are used, such terms shall be interpreted to mean that the applicable Plan
provision shall be effective only if and to the extent such provision would not
trigger penalty taxes or interest under Section 409A.

 

1.23    “Share” means a share of $1.00 par value common stock of BellSouth.

 

1.24     “Stock Unit” means a bookkeeping entry representing the equivalent of
one Share credited to a Participant as described in Section 4.5.

 

1.25     “Stock Unit Agreement” means a Deferral Agreement which provides a
benefit at Retirement under Section 5.1 based upon Stock Units.

 

ARTICLE 2

 

TERM; AMENDMENT

 

This Plan may at any time or from time to time be amended and modified and shall
be effective until terminated by the Board; provided that no such action shall
accelerate or postpone the time or schedule of payment of any Plan benefits
except as may be permitted under Code Section 409A and regulations thereunder.
This Plan originally provided for Plan Years 1985 through 1998 with Plan
specifications and applicable interest rates being approved by the Board for
each separate Plan Year. Notwithstanding the foregoing, effective November 25,
1996, no deferrals will be permitted under the Plan except with respect to the
Plan Years described in Section 1.20 and then only to the extent provided in
resolutions adopted by the Board.

 

Notwithstanding the foregoing, no contractual right created by and under any
Deferral Agreement on the date of termination or amendment shall be abrogated by
the termination or amendment of this Plan unless the Participant who executed
such Deferral Agreement consents. Participants have no other right or interest
in the continuance of this Plan in any form.

 

ARTICLE 3

 

ADMINISTRATION; INTERPRETATION

 

3.1    Claim Procedure.

 

(a)         Initial Claim. Claims for benefits under the Plan may be filed with
the Plan Administrator on forms or in such other written documents as the Plan
Administrator may prescribe. The Plan Administrator shall furnish to the
claimant written notice of the disposition of a claim within 90 days after the
application therefor is filed. In the event the claim is denied, the notice of
the disposition of the claim shall provide the specific reasons for the denial,
citations of the pertinent provisions of the Plan, and where appropriate, an
explanation as to how the claimant can perfect the claim and/or submit the claim
for review.

 

(b)        Appeal. Any Participant or Designated Beneficiary who has been denied
a benefit shall be entitled, upon request to the Plan Administrator, to appeal
the denial of the claim. The claimant (or his duly authorized representative)
may review pertinent documents related to the Plan and in the Plan
Administrator’s possession in order to prepare the appeal. The request for
review, together with written statement of the claimant’s position, must be
filed with the Plan Administrator no later than 60 days after receipt of the
written notification of denial of a claim provided for in Section 3.1. The Plan
Administrator’s decision shall be made within 60 days following the filing of
the request for review. If unfavorable, the notice of the decision shall explain
the reasons for denial and indicate the provisions of the Plan or other
documents used to arrive at the decision.

 

3.2        Interpretation. The Plan Administrator shall have the exclusive
responsibility and complete discretionary authority to control the operation and
administration of the Plan, with all powers necessary to properly carry out such
responsibility, including without limitation, the full and exclusive power to
(i) interpret the terms and conditions of this Plan and any Deferral Agreement,
including the power to construe ambiguous or uncertain terms, (ii) to establish
reasonable procedures with which Participants must comply to exercise any right
established hereunder or any contractual right established under the Deferral
Agreement, (iii) to determine status, coverage, eligibility for and the amount
of benefits, and all questions arising in correction therewith, and (iv) to
resolve all questions that arise in the operation and administration of this
Plan. The rights and duties of Participants and other persons and entities are
subject to, and governed by, such acts of administration, interpretations and
procedures. All actions or determinations of the Plan Administrator (or its
delegates) under this Article 3 shall be final, conclusive and binding on all
persons.

 

3.3        Post-Merger Plan Administration. Notwithstanding anything to the
contrary in this Plan, following the Merger, responsibility for administration
of the Plan shall be determined under the terms of the Rabbi Trust Agreements.
As provided in the Rabbi Trust Agreements, claims for benefits, appeals of
benefit denials and Plan interpretations shall be made by a “Trust Contractor”
or “Independent Fiduciary” (as such terms are defined in the Rabbi Trust
Agreements), as the case may be. At any time during which a Trust Contractor or
Independent Fiduciary shall, under the terms of the Rabbi Trust Agreements, have
such Plan administrative responsibilities, the term “Plan Administrator” as used
in this Plan shall refer to such Trust Contractor or Independent Fiduciary.

 

 

ARTICLE 4

 

DEFERRAL AGREEMENT

 

4.1        Election to Defer.

 

(a)         As hereinafter provided and subject to acceptance by an Employer,
(i) an Eligible Person may elect to reduce the amount of Compensation which will
be paid to him or her during any Plan Year by executing and delivering to his or
her Employer in a timely fashion a standard Deferral Agreement substantially in
the form of Exhibit A, Exhibit B or Exhibit C hereto, as presented to such
Eligible Person, and (ii) an Employee Participant may elect to reduce the amount
of a lump-sum payment to which he or she may become entitled in connection with
separation under a severance arrangement approved by the Board as applicable to
this Plan by executing and delivering to his or her Employer in a timely fashion
a Deferral Agreement substantially in the form of Exhibit D hereto, as presented
to such Employee Participant.

 

(b)        The Board shall determine who is an Eligible Person under the Plan
for each Plan Year and the terms and conditions of Deferral Agreements to be
presented to such Eligible Persons, including the maximum amount of Compensation
subject to deferral under Section 4.4, the interest rate approved for
calculating Retirement Benefits for Fixed Benefit Agreements under Section 4.2,
the timing and number of Retirement Benefit payments under Section 5.1 and of
any Interim Distributions under Section 5.2. The Board may limit the number of
deferrals by any Eligible Person and may vary the terms and conditions of
Deferral Agreements applicable to Eligible Persons based upon the number of an
Eligible Person’s previous deferrals, the classification and/or Employer of an
Eligible Person or for any other reasons. Only Nonemployee Directors of
BellSouth shall be offered Stock Unit Agreements under the Plan.

 

4.2        Creation of Contractual Obligation. An Employer which accepts a
properly executed and timely delivered Deferral Agreement for a Plan Year, as
evidenced by the execution of such Deferral Agreement (including by facsimile
signature) by an officer of such Employer or by an officer of BellSouth on
behalf of such Employer, agrees to pay to the Participant or to his or her
Designated Beneficiary the benefits described in Article 5, which shall be
calculated based upon (i) the amount deferred by each Participant, (ii) either
(A) interest rates established for such Deferral Agreement by the Board or its
delegate and applied to that amount quarterly for the time which elapses between
the Plan Year and the date of benefit payments, or (B) in the case of Stock Unit
Agreements, share price and dividend performance as described in Section 4.5,
and (iii) other factors established in this Plan and by the Board or its
delegate.

 

4.3        Timing of Election. An Eligible Person may execute and deliver to his
or her Employer a standard Deferral Agreement, substantially in the form of
Exhibit A, B or C hereto, on or before November 30 of any calendar year (or on
or before December 16, 1994 in the case of BellSouth Nonemployee Director
elections for Plan Year 1995), to reduce the Eligible Person’s Compensation only
for the next subsequent Plan Year. In addition, an Employee Participant may
execute and deliver to his or her Employer a Deferral Agreement, substantially
in the form of Exhibit D hereto, in connection with a lump-sum payment described
in Section 4.1(b) of this Plan within the time period prescribed by his or her
Employer, but in no event later than the day preceding the day on which he or
she enters into a separation agreement with the Employer. Notwithstanding any
other provisions of this Plan or any Deferral Agreement, no deferral Agreement
shall be effective to defer Compensation (or other amount) which is earned by
any Eligible Person on or before the date upon which the Deferral Agreement is
properly executed and timely delivered to the Participant’s Employer.

 

4.4        Amount of Deferral.

 

(a)         An Employee Participant may elect to defer during any Plan Year a
dollar amount which is less than or equal to a specified percentage of his or
her Compensation Rate applicable to the Plan Year rounded to the next highest
one thousand dollars. The Board shall establish the specified percentage of the
Compensation Rate applicable to each Plan Year. A Nonemployee Director may elect
to defer any dollar amount which is less than or equal to one hundred percent
(100%) of his or her Compensation during the Plan Year to which the Deferral
Agreement applies. Notwithstanding any provision of any Deferral Agreement or
this Plan to the contrary, the Deferral Agreement of a Participant shall be
modified automatically if necessary such that all actual reductions pursuant to
his or her Deferral Agreement are made from his or her Net Monthly Salary or his
or her Net Directors Fees and Retainers.

 

(b)        An Employee Participant may elect to defer a portion of a lump-sum
payment to which he or she may become entitled as described in Section 4.1(b) in
an amount not to exceed the dollar amount by which any election of deferrals
under paragraph (a) of this Section 4.4 for the Plan Year in which the Employee
Participant terminates employment have not been satisfied at the time of
termination of employment, except as may be otherwise approved by the Board.

 

4.5        Stock Units.

 

(a)         Benefits paid to or on behalf of a Participant with respect to a
Stock Unit Agreement for a Plan Year will be based upon the value of the Stock
Units in such Participant’s Stock Unit account for such Plan Year except as
otherwise specifically provided in this Plan. An Employer shall credit Stock
Units to such Participant’s account during the Plan Year for which a Stock Unit
Agreement is in effect for each date that Compensation otherwise would be paid
to such Participant equal to the amount of such Compensation elected to be
deferred under the Stock Unit Agreement divided by the average of the high and
low sales price of a Share on the New York Stock Exchange (“NYSE”) on such date
(or the immediately preceding trading day if the NYSE is closed on such date.)
An Employer shall further credit to such Participant’s Stock Unit account with
respect to such Stock Unit Agreement for each dividend payment date an amount of
additional Stock Units equal to the dividends that would have been paid on the
number of Shares equivalent to the Stock Units in such account as of such
dividend payment date divided by the average of the daily high and low sales
prices of a Share on the New York Stock Exchange (“NYSE”) for the period of five
trading days ending on such dividend payment date (or the period of five trading
days immediately preceding such date if the NYSE is closed on such date).

 

(b)        Payments from a Participant’s Stock Unit account for a Stock Unit
Agreement shall be based upon the value of the Stock Units in such account as of
the January 1st, first day of a quarter, or other date as of which payment is
scheduled to be made. In the case of a Stock Unit Agreement that provides for
the payment of a Retirement benefit in installments, the payment for any such
installment shall be based on the value of the number of Stock Units equal to
the total number of Stock Units in the Participant’s Stock Unit account for such
Agreement as of the close of the day for which such installment payment is
scheduled to be made divided by the number of remaining installments on such day
(including the installment scheduled to be paid on such day.) The value of each
Stock Unit for payment purposes shall equal the average of the high and low
sales price of a Share on the NYSE on the date for which the payment is
scheduled to be made (or the next succeeding trading day if the NYSE is closed
on such scheduled payment date.) The number of Stock Units corresponding to any
Retirement Benefit payment will be cancelled upon such payment as of the
scheduled payment date. Furthermore, the Stock Unit account of a Participant
shall be immediately cancelled upon the scheduled payment date for a lump sum

payment under Section 5.3A, 5.4, 5.5 or 6.1 or upon the scheduled payment date
for the first installment of a payment, if applicable, under Section 5.5.

 

(c)         In the event of any change in outstanding Shares by reason of any
stock dividend or split, recapitalization, merger, consolidation, spin-off,
combination or exchange of shares or other similar corporate change, the Board
shall make such adjustment, if any, that it deems appropriate in the Stock Units
credited to Participant’s accounts. Any and all adjustments shall be conclusive
and binding upon all parties concerned.

 

4.6        No Deferrals Since 2000. No deferrals have been permitted under the
Plan since Plan Year 2000. No current or future deferrals shall be permitted
under the Plan.

 

ARTICLE 5

 

PAYMENT OF BENEFITS

 

5.1        Retirement Benefit.

 

(a)         If a Participant terminates employment with his or her Employer and
is not immediately reemployed by another Employer (or, in the case of a
Non-Grandfathered Participant, by any other entity with which his or her
Employer would be considered a single employer under Code Section 414(b) or
414(c)), and such termination constitutes a Retirement, or upon any subsequent
termination from such an entity that constitutes a Retirement, then the Employer
shall pay to the Participant the Retirement Benefits stated in each of his or
her Deferral Agreements as soon as administratively practicable after those
dates specified for this purpose in each Deferral Agreement. In the case of a
Fixed Benefit Agreement, the Employer also shall make any such Retirement
Benefit payment to a Participant who has remained employed through the date
specified for such payment in his or her Deferral Agreement. The number of
Retirement Benefit payments and the date upon which Retirement Benefit payments
begin shall be established for each Plan Year by the Board or its delegate and
stated in the Deferral Agreement executed by the Participant for each Plan Year.

 

(b)        If a Grandfathered Participant is or becomes a proprietor, officer,
partner, or employee of, or otherwise is or becomes affiliated with (i) any
business that is in competition with any Employer or (ii) any government agency
having regulatory jurisdiction over the business activities of any Employer,
then, upon that date, no further benefit payments shall be made to the
Participant, or any other person with respect to the Participant’s participation
in this Plan, under any provision or Section of this Plan, except that, the
Participant shall be paid in a lump sum as soon as administratively practicable
after the first (1st) day of January following that date an amount with respect
to each of the Participant’s Deferral Agreements equal to (i) the amount
deferred pursuant to such Deferral Agreement, (ii) plus interest on such amount
(adjusted to be take into account all payments described in (iii) immediately
below) credited separately at a rate equal to the rate paid on ten (10) year
United States Treasury obligations on each date for which interest is credited,
compounded quarterly, for each Plan Year between the Plan Year to which the
Deferral Agreement applies and the Plan Year in which the act occurs or status
is first attained, inclusive, (iii) minus the amount of all Interim
Distributions and Retirement Benefits, if any, paid to the Participant or to
which the Participant is entitled on or before the date the act occurs or status
is first attained with respect to such Deferral Agreement; provided that (x), if
the above calculation results in a negative amount, the result shall be deemed
to be zero and such negative amount shall not be collected from, or enforced
against, the Participant as a claim by his or her Employer, and (y) the amount
paid with respect to a Deferral Agreement that is a Stock Unit Agreement will be
the value of such Participant’s Stock Unit account for such Deferral Agreement
as determined under Section 4.5(b) for such January 1st scheduled payment date
if such value is less than the amount otherwise determined by applying (i), (ii)

and (iii) immediately above to such Deferral Agreement. This Section 5.1(b)
shall be inapplicable with respect to any Non-Grandfathered Participant.

 

5.2        Interim Distributions. A Participant shall be paid the Interim
Distributions stated in each of his or her Deferral Agreements as soon as
administratively practicable after those dates stated in that Deferral
Agreement. However, no Interim Distribution shall be stated in a Deferral
Agreement or paid to any Participant as a result of the Deferral Agreement if
the Participant is age fifty-five (55) or older on any day during the Plan Year
to which the Deferral Agreement applies. No Interim Distribution shall be paid
to a Participant on or after the date upon which the Participant or his or her
Designated Beneficiary receives any benefit or payment under any other Section
of this Plan or any paragraph of his or her Deferral Agreement providing
benefits other than Interim Distributions. Notwithstanding the foregoing, with
respect to any Plan Year or selected deferrals in any Plan Year, the Board may
specify alternative Interim Distribution schedules. No Interim Distribution
shall be paid in connection with any Stock Unit Agreement or any Fixed Benefit
Agreement which does not specifically provide for such benefits.

 

5.3        Pre-retirement, Pre-Disability Eligibility Death Benefit for Plan
Year 1985. Regarding deferrals for Plan Year 1985, if a Participant dies on or
before the date upon which he or she is first entitled to receive a benefit
under Section 5.1 or Section 5.4, then his or her Designated Beneficiary shall
be paid in a lump sum as soon as administratively practicable after the first
(1st) day of January following his or her date of death an amount equal to: (i)
the amount of Compensation deferred pursuant to his or her Deferral Agreement
for Plan Year 1985, (ii) plus interest on such amount (adjusted to take into
account all payments described in (iii) immediately below) credited separately
at the rate approved for and applicable to his or her participation for Plan
Year 1985, such rate to be compounded quarterly for each Plan Year between Plan
Year 1985 and the Plan Year in which his or her death occurs, inclusive, (iii)
minus the amount of all Interim Distributions with respect to such Deferral
Agreement, if any, paid to the Participant or to which the Participant is
entitled on or before the date of his or her death. If the above calculation
results in a negative amount, the result shall be deemed to be zero and such
negative amount shall not be collected from, or enforced against the Participant
as a claim by his or Participant’s Employer.

 

If the Participant’s Designated Beneficiary receives or is entitled to receive a
benefit hereunder, then no person or persons shall receive or be entitled to
receive any benefit or payment with respect to such Participant’s deferral for
Plan Year 1985 under any other Section of this Plan or under any Deferral
Agreement, notwithstanding any other provision of this Plan or any Deferral
Agreement.

 

5.3A     Pre-Retirement Eligibility Death Benefit for Plan Years After 1985.
Regarding deferrals for any Plan Year after 1985, if an Employee Participant
dies before the date upon which he or she would have been eligible for
Retirement (assuming a termination of employment), then his or her Designated
Beneficiary shall be paid in a lump sum as soon as administratively practicable
after the first (1st) day of January following his or her date of death an
amount with respect to each of the Participant’s Deferral Agreements for Plan
Years after 1985 equal to (i) the amount deferred pursuant to such Deferral
Agreement, (ii) plus interest on such amount (adjusted to take into account all
payments described in (iii) immediately below) credited separately at the rate
approved for and applicable to his or her participation for the Plan Year for
such Deferral Agreement, such rate to be compounded quarterly for each Plan Year
between the Plan Year to which the Deferral Agreement applies and the Plan Year
in which his or her death occurs, inclusive, (iii) minus the amount of all
Interim Distributions and Retirement Benefits, if any, paid to the Participant
or to which the Participant is entitled on or before the date of his or her
death with respect to such Deferral Agreement; provided, that if the above
calculation results in a negative amount, such result shall be deemed to be zero
and such negative amount shall not be collected from, or enforced against, the
Participant as a claim by his or her Employer.

 

If a Nonemployee Director dies, or if an Employee Participant dies on or after
the date upon which he or she is eligible for Retirement, whether or not he or
she has in fact terminated employment, and in either case if such death occurs
prior to the Participant having commenced receipt of benefits or prior to having
received all benefits, as the case may be, payable in accordance with a Deferral
Agreement under this Plan for Plan Years after 1985, except as provided under
Section 5.4, then his or her Designated Beneficiary shall receive all benefits,
or continue to receive the remaining benefits, as the case may be, in accordance
with that Deferral Agreement; provided, however, that each Grandfathered
Participant shall have the right to elect, or to revoke any such election or
make a new election, at any time prior to his or her death, to have the death
benefit described in this sentence paid to his or her Designated Beneficiary in
a lump sum as soon as administratively practicable after the first day of
January following the year in which the Grandfathered Participant died. A lump
sum payment made pursuant to an election by a Grandfathered Participant in
accordance with the preceding sentence shall be in an amount with respect to
each of the Grandfathered Participant’s Deferral Agreements for Plan Years after
1985 equal to: (i) the amount deferred pursuant to such Deferral Agreement, (ii)
plus interest on such amount (adjusted to take into account all payments
described in (iii) immediately below) credited separately at the rate approved
for and applicable to his or her participation for the Plan Year for such
Deferral Agreement, such rate to be compounded quarterly for each Plan Year
between the Plan Year to which the Deferral Agreement applies and the Plan Year
in which his or her death occurs, inclusive, (iii) minus the amount of all
Interim Distributions and Retirement Benefits, if any, paid to the Grandfathered
Participant or to which the Grandfathered Participant is entitled on or before
the date of his or her death with respect to such Deferral Agreement; provided
that (x), if the above calculation results in a negative amount, such result
shall be deemed to be zero and such negative amount shall not be collected from,
or enforced against, the estate of the Grandfathered Participant as a claim by
the Grandfathered Participant’s Employer, and (y) the amount paid with respect
to a Deferral Agreement that is a Stock Unit Agreement will be the value of the
Grandfathered Participant’s Stock Unit account for such Deferral Agreement as
determined under Section 4.5(b) for such January 1st scheduled payment date
instead of the amount determined by applying (i), (ii) and (iii) immediately
above to such Deferral Agreement.

 

If the Participant’s Designated Beneficiary receives or is entitled to receive a
benefit hereunder, then no person or persons shall receive or be entitled to
receive any benefit or payment with respect to such Participant’s deferral for
Plan Years after 1985 under any other Section of this Plan or under any Deferral
Agreement, notwithstanding any other provision of this Plan or any Deferral
Agreement.

 

5.4        Pre-Retirement Eligibility Disability Benefit. If an Employee
Participant suffers a Disability or becomes Disabled (with respect to
Grandfathered Participants, as those terms are defined in the BellSouth
Executive Long Term Disability and Survivor Protection Plan and the BellSouth
Long Term Disability Plan for Salaried Employees, as amended from time to time)
before the date upon which he or she would have been eligible for Retirement
(assuming a termination of employment), then he or she shall be paid by the
Employer in a lump sum as soon as administratively practicable after the first
(1st) day of January following the Plan Year in which the Disability occurs an
amount with respect to each of the Participant’s Deferral Agreements equal to
(i) the amount deferred pursuant to such Deferral Agreement, (ii) plus interest
on each amount (adjusted to take into account all payments described in (iii)
immediately below) credited separately at the rate approved for and applicable
to his or her participation for the Plan Year for such Deferral Agreement, such
rate to be compounded quarterly for each Plan Year between the Plan Year to
which the Deferral Agreement applies and the Plan Year in which his or her
Disability occurs, inclusive, (iii) minus the amount of all Interim
Distributions and Retirement Benefits, if any, paid to the Participant or to
which the Participant is entitled on or before the date of onset of Disability
with respect to such Deferral Agreement; provided that if the above calculation
results in a negative amount, such result shall be deemed to be zero and such
negative amount shall not be collected from, or enforced against, the
Participant as a claim by his or her Employer. If the Participant receives or is
entitled to receive a benefit hereunder, then no person or persons shall receive
or be entitled to receive any benefit or payment under any other Section of this
Plan or under any Deferral Agreement, notwithstanding any other provisions of
this Plan or any Deferral Agreement.

 

5.5        Termination of Employment Prior to Retirement or Disability. If an
Employee Participant terminates employment with his or her Employer, and is not
immediately reemployed by another Employer (or, in the case of a
Non-Grandfathered Participant, by any other entity with which his or her
Employer would be considered a single employer under Code Section 414(b) or
414(c)), prior to death, Disability or Retirement, then a benefit amount shall
be paid to the Participant, in a lump sum (or, in the case of a Grandfathered
Participant, either in lump sum or in five (5) annual installments, at the
election of the Board), as soon as administratively practicable after the first
(1st) day of January following his or her date of termination (and anniversaries
thereof in case of installments), which amount with respect to each of the
Participant’s Deferral Agreements shall be equal to (i) the amount deferred
pursuant to such Deferral Agreement, (ii) plus interest on such amount (adjusted
to take into account all payments described in (iii) immediately below) credited
separately at a rate equal to the rate on ten (10) year United States Treasury
obligations on each date for which interest is to be credited, compounded
quarterly, for each Plan Year between the Plan Year to which the Deferral
Agreement applies and the Plan Year in which the termination occurs, inclusive,
(iii) minus the amount of all Interim Distributions and Retirement Benefits, if
any, paid to the Participant or to which the Participant is entitled on or
before the date of his or her termination with respect to such Deferral
Agreement; provided that if the above calculation results in a negative amount,
such result shall be deemed to be zero and such negative amount shall not be
collected from, nor enforced against, the Participant as a claim by his or her
Employer. If the Participant receives or is entitled to receive a benefit
hereunder, then no person or persons shall then or thereafter receive any
benefit or payment under any other Section of this Plan or any Deferral
Agreement, notwithstanding any other provision of this Plan or any Deferral
Agreement.

 

5.5A    Termination of Employment Under Change in Control Severance Plan. A
Participant (i) who as of his or her termination of employment has not satisfied
the age and service requirements for Retirement, (ii) who will be treated under
the Change in Control Severance Plan as having satisfied such requirements upon
terminating employment under the circumstances specified therein, and (iii) who
elects on or before December 31, 2006, to be covered under these terms, shall be
deemed to have made a new payment election to have his or her entire Plan
benefit paid as if the Participant’s termination of employment constituted a
Retirement for all purposes of the Plan. Notwithstanding anything to the
contrary in this Plan, no such election made after December 31, 2006, shall be
valid and the new payment election described above shall in no event change the
terms of payment with respect to benefits that otherwise would have been paid in
2006, or to cause payments to be made in 2006.

 

5.5B     Termination of Employment Under Executive Severance Agreement. A
Participant who has an Executive Severance Agreement with BellSouth and (i) who
as of his or her “Termination Date,” as defined in the Executive Severance
Agreement, has not satisfied the age and service requirements for Retirement,
(ii) who will be treated under the Executive Severance Agreement as having
satisfied such requirements upon terminating employment under the circumstances
specified therein, and (iii) who elects on or before December 31, 2006, to be
covered under these terms, shall be deemed to have made a new payment election
to have his or her entire Plan benefit paid as if the Participant’s termination
of employment constituted a Retirement for all purposes of the Plan.
Notwithstanding anything to the contrary in this Plan, no such election made
after December 31, 2006, shall be valid, and the new payment election described
above shall in no event change the terms of payment with respect to benefits
that otherwise would have been paid in 2006, or to cause payments to be made in
2006.

 

5.6         Distributions to Code Section 409A Specified Employees.
Notwithstanding any provision of this Plan to the contrary, with respect to any
Non-Grandfathered Participant who is a “specified employee” for purposes of Code
Section 409A, no payment of any portion of the Non-Grandfathered Participant’s
benefit amount which is occasioned by the Non-Grandfathered Participant’s
separation from service shall be made before the date that is six (6) months
after the date of such Participant’s separation from service.

 

ARTICLE 6

 

MISCELLANEOUS

 

6.1        Beneficiary Designation. If a Participant dies and, on the date of
his or her death, any benefit or benefits remain to be paid to the Participant
under the terms and conditions of this Plan, the remaining benefit or benefits
shall be paid to that person or persons designated by the Participant
(“Designated Beneficiary”) on the form provided from time to time to the
Participant by his or her Employer in accordance with the Deferral Agreement. If
the Designated Beneficiary dies prior to completion of all payments under the
Deferral Agreement, the estate of the Designated Beneficiary shall be paid by
the Employer a lump sum with respect to each of the Participant’s Deferral
Agreements for Plan Years after 1985 as soon as administratively practicable
after the first (1st) day of January following the year in which the Designated
Beneficiary died. The amount of the lump sum with respect to each such Deferral
Agreement will be equal to (i) the amount deferred pursuant such Deferral
Agreement, (ii) plus interest on each amount (adjusted to take into account all
payments described in (iii) immediately below) credited separately at the rate
approved for and applicable to the Participant’s participation for the Plan Year
for which he or she executed such Deferral Agreement, such rate to be compounded
quarterly for each Plan Year between the Plan Year to which the Deferral
Agreement applies and the Plan Year in which the Designated Beneficiary’s death
occurs, inclusive, (iii) minus the amount of all Interim Distributions and
Retirement Benefits, if any, paid to the Participant or Designated Beneficiary
with respect to such Deferral Agreement; provided that (x), if the above
calculation results in a negative amount, such result shall be deemed to be zero
and such negative amount shall not be collected from, or enforced against, the
estate of the Designated Beneficiary, and (y) the amount paid with respect to a
Deferral Agreement that is a Stock Unit Agreement will be the value of the
Participant’s Stock Unit account for such Deferral Agreement as determined under
Section 4.5(b) for such January 1st scheduled payment date instead of the amount
otherwise determined by applying (i), (ii) and (iii) immediately above to such
Deferral Agreement. If no Designated Beneficiary has been chosen by the
Participant or if the Designated Beneficiary is not living on the date of the
Participant’s death, the estate of the Participant shall be paid by the Employer
in a lump sum with respect to each of the Participant’s Deferral Agreements for
Plan Years after 1985 as soon as administratively practicable after the first
(1st) day of January following the year in which the Participant died. The
amount of the lump sum shall be determined in the manner described in the
immediately preceding sentence of this Section 6.1. In the case of a Deferral
Agreement for Plan Year 1985, any Plan benefit payable following the death of
the Participant will be paid to the estate of the Participant if no Designated
Beneficiary is in existence on the scheduled payment date.

 

6.2        Obligations of Employers not the Obligations of BellSouth. The duties
and obligations of each Employer hereunder are several but not joint, each
Employer is only liable to its own employees and Nonemployee Directors who are
Participants hereunder, and BellSouth is not liable for the actions, omissions,
duties or obligations of any other Employer hereunder.

 

6.3         Recalculation Events; Treatment of this Plan under Applicable
Federal Income Tax Laws. With respect to Grandfathered Participants, the
adoption and maintenance of the Plan is strictly conditioned upon (i) the
applicability of Code Section 451(a) to the Participant’s recognition of gross
income as a result of his or her participation, (ii) the fact that Participants
will not recognize gross income as a result of participation in this Plan until
and to the extent that benefits are received, (iii) the applicability of Code
Section 404(a)(5) to the deductibility of the amounts paid to Participants
hereunder, (iv) the fact that an Employer will not receive a deduction for
amounts credited to any accounting reserve created as a result of this Plan
until and only to the extent that benefits are paid, and (v) the inapplicability
of Parts 2, 3, and 4 of Title I of ERISA to this Plan by reason of the
exemptions set forth in ERISA Sections 201(a), 301(a) and 401(a) and Part 1 of
ERISA by reason of the exemption set forth in Section 2520.104-23 of applicable
United States Department of Labor regulations. If the Internal Revenue Service,
the Department of Labor or any court determines or finds as a fact or legal
conclusion that any of the above conditions is untrue and issues or intends to
issue an assessment, determination, opinion or report stating such, or if the
opinion of the legal counsel of BellSouth based upon legal authorities then
existing is that any of the above assumptions is incorrect, then, if the Board
so elects within one year of such finding, determination, or opinion, a
Recalculation Event shall be deemed to have occurred.

 

If a Recalculation Event occurs under this Section 6.3, Section 6.4, or any
other Section of this Plan, then each Grandfathered Participant who has not
attained the age of fifty-five (55) years on the date on which the Board takes
official action to elect the occurrence of a Recalculation Event shall
thereafter be paid benefits in accordance with the election made irrevocably in
connection therewith in the Deferral Agreement. For each such Grandfathered
Participant the amount of Retirement benefit stated in the Deferral Agreement
shall be recalculated and restated using a rate of interest equal to the rate of
interest on ten (10) year United States Treasury obligations on each date upon
which interest should have been or will be calculated, compounded quarterly,
instead of the interest rate assumed in originally calculating the benefit, as
referenced in Section 4.2.

 

Notwithstanding anything to the contrary contained in this Plan or a Deferral
Agreement, the benefits payable with respect to any Participant who shall have
either (i) attained the age of fifty-five (55) years or (ii) died, on or prior
to the date on which the Board takes official action to elect the occurrence of
a Recalculation Event under either Sections 6.3 or 6.4 of this Plan, shall not
be recalculated and restated in the manner described in such Sections or in any
other way affected by such action. If such Participant or Designated Beneficiary
receives or is entitled to receive a benefit as result of the occurrence of a
Recalculation Event, then no person or persons shall receive or be entitled to
receive any benefit or payment under any other Section of this Plan or under any
Deferral Agreement, notwithstanding any other provision of this Plan or the
Deferral Agreement.

 

This Section 6.3 shall be inapplicable with respect to any Non-Grandfathered
Participant.

 

6.4        Changes in the Internal Revenue Code of 1954. With respect to
Grandfathered Participants, the adoption and maintenance of this Plan also is
strictly conditioned upon the existence and continuation of the percentage tax
rates for corporations stated in Section 11(b) of the Internal Revenue Code of
1954, as amended through August 13, 1981 but not thereafter (the “1954 Code”).
In particular, the adoption and maintenance of this Plan is strictly conditioned
upon the rate of tax stated in Section 11(b)(5) of the 1954 Code, that is, “46
percent of so much of the taxable income as exceeds $100,000.” If (1) 1954 Code
Section 11(b) is deleted or amended or a surtax or other addition to tax is
imposed and, as a result thereof, the rate of federal income tax imposed on
taxable income of corporations in excess of One Hundred Thousand Dollars
($100,000) is reduced below such rate in effect immediately before reduction and
is less than forty percent (40%), (2) a tax is imposed by the federal government
on income, sales, consumption, or the value of goods and services which is not
currently contained in the Code, or (3) the Code is amended or restated so
extensively that in the opinion of the legal counsel of BellSouth the tax
treatment of this Plan to the Employer has materially changed to the detriment
of the Employer, then, if the Board so elects within one year after the
enactment of the legislation causing such event, a Recalculation Event shall be
deemed to have occurred and a benefit will be payable only as described in
Section 6.3.

 

This Section 6.4 shall be inapplicable with respect to any Non-Grandfathered
Participant.

 

 

6.5          Governing Law. This Plan and the Deferral Agreements shall be
construed in accordance with the laws of the State of Georgia to the extent such
laws are not preempted by ERISA.

 

6.6        Successors, Mergers, Consolidations. The terms and conditions of this
Plan and each Deferral Agreement shall inure to the benefit of and bind
BellSouth, the other Employers, the Participants, their successors, assigns, and
personal representatives. If substantially all of the assets of any Employer are
acquired by another corporation or entity or if an Employer is merged into, or
consolidated with, another corporation or entity, then the obligations created
hereunder and as a result of the Employer’s acceptance of Deferral Agreements
shall be obligations of the successor corporations or entity.

 

6.7        Discharge of Employer’s Obligation. The payment by the Employer of
the benefits due under each and every Deferral Agreement to the Participant or
to the person or persons specified in Section 6.1 or Section 6.1A discharges the
Employer’s obligations hereunder, and the Participant has no further rights
under this Plan or the Deferral Agreements upon receipt by the appropriate
person of all benefits.

 

In addition, (i) if any payment is made to a Participant or his or her
Designated Beneficiary with respect to benefits described in this Plan from any
source arranged by the Employer including, without limitation, any fund, trust,
insurance arrangement, bond, security device, or any similar arrangement, such
payment shall be deemed to be in full and complete satisfaction of the
obligation of the Employer under this Plan and the Deferral Agreements to the
extent of such payment as if such payment had been made directly by the
Employer; and (ii) if any payment from a source described in clause (i) above
shall be made, in whole or in part, prior to the time payment would be made
under the terms of this Plan and the Deferral Agreement, such payment shall be
deemed to satisfy the Employer’s obligation to pay Plan benefits beginning with
the benefit which would next become payable under the Plan and the Deferral
Agreement and continuing in the order in which benefits are so payable, until
the payment from such other source is fully recovered. In determining the
benefits satisfied by a payment described in clause (ii), Plan benefits, as they
become payable, shall be discounted to their value as of the date such actual
payment was made using an interest rate equal to the valuation interest rate for
deferred annuities as last published by the Pension Benefit Guaranty Corporation
prior to the date of such actual payment. If the benefits which actually become
payable under this Plan, after applying the discount described in the preceding
sentence, are less than the amount of the payment(s) described in clause (ii),
any such shortfall shall not be collected from or enforced against the
Participant as a claim by the Employer.

 

6.8        Social Security and Income Tax Withholding. Each Participant agrees
as a condition of participation hereunder that his or her Employer may withhold
federal, state, and local income taxes and Social Security taxes from any
distribution or benefit paid hereunder.

 

6.9        Notice; Delivery of Deferral Agreement. Any notice required to be
delivered hereunder and any Deferral Agreement is properly delivered to Employer
when personally delivered to, or actually received from the United States mail,
postage prepaid, by Executive Compensation Matters Group, Room 13K06, BellSouth
Corporation, 1155 Peachtree Street, N.E., Atlanta, Georgia 30309-3610, or at
such other address as the Plan Administrator shall prescribe from time to time.

 

6.10      Nature of Obligations Created Hereunder. The Participants agree as a
condition of participation hereunder that:

 

(a)         Participants have the status of general, unsecured creditors of the
Employer and the Plan, and the Deferral Agreements constitute the mere promise
by the Employer to make benefit payments in the future;

 

(b)        Nothing contained in this Plan or any Deferral Agreement shall create
or be construed to create a trust of any kind between BellSouth, any Employer,
and any Participant.

 

(c)         Benefits payable, and rights to benefits under, this Plan and
Deferral Agreements may not be anticipated, sold, assigned (either at law or in
equity), transferred, pledged, encumbered or subject to attachment, garnishment,
levy, execution or other legal or equitable process.

 

The Plan is intended to be unfunded for purposes of ERISA and the Code.

 

6.11      No Modification of Employment Agreement. Neither this Plan nor any
Deferral Agreement constitutes a modification of the employment agreement of any
Participant, and no right to continued employment is created by this Plan or the
Deferral Agreement.

 

6.12     Liability of Employers for Individual Participants Employed by More
than One Employer; Applicability of Deferral Agreement Filed with One Employer
to Subsequent Employers. Any Deferral Agreement which is timely executed and
delivered to an Employer shall be effective to defer Compensation earned by the
Participant from that Employer or any other Employer during the period in which
the Deferral Agreement is effective. The execution and delivery of a Deferral
Agreement by a Participant constitutes an election by the Participant to defer
Compensation earned from any Employer under the terms of this Plan. A
Participant who timely executes and delivers a Deferral Agreement to one
Employer and who subsequently transfers to another Employer or otherwise
terminates employment and becomes employed by another Employer shall have the
Compensation which is paid to him or her by both Employers reduced under the
terms of the Deferral Agreement and this Plan as if the transfer or termination
and reemployment had not occurred. The Employer which accepts an executed,
timely delivered Deferral Agreement is liable to the Participant for all
benefits which may be payable under, and as a result of, that Deferral Agreement
notwithstanding the transfer of a Participant to or from another Employer, or
the termination and reemployment of a Participant by another Employer. If a
Participant timely executes and delivers Deferral Agreements to more than one
Employer, each Employer is singly and not jointly liable for the Deferral
Agreement or Deferral Agreements which it accepted. Any provision of this Plan
which refers to a benefit or payment which is payable as a result of more than
one (1) Deferral Agreement shall be construed to apply only to the Deferral
Agreements delivered by that Participant and accepted by each separate Employer
of that Participant, and not to all Deferral Agreements executed and timely
delivered by one Participant or all Participants to all Employers, each Deferral
Agreement which incorporates the terms of this constituting a separate
contractual obligation of a single Employer.

 

6.13      Savings Clause. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

 

6.14      Plan to Comply with Code Section 409A. Notwithstanding any provision
to the contrary in this Plan, each provision of this Plan shall be interpreted
to permit the deferral of compensation and the payment of deferred amounts in
accordance with Code Section 409A and any provision that would conflict with
such requirements shall not be valid or enforceable.

 

EXHIBIT A

 

 

DEFERRAL AGREEMENT

FOR THE BELLSOUTH NONQUALIFIED DEFERRED COMPENSATION PLAN

(for Nonemployee Directors)

 

 

1.          Amount of Deferral. I, ____________________________________________
(___-__-___), hereby agree to participate in the BellSouth Nonqualified Deferred
Compensation Plan (“Plan”). I have read the Plan in its entirety and agree to
its terms and conditions, which are incorporated herein by reference. Pursuant
to the terms of the Plan, I elect to defer from my compensation to be paid to me
in Plan Year 19__ ___% of my compensation. (Choose amount less than or equal to
100% of Compensation.) I understand that the Compensation which ordinarily would
be paid to me in that Plan Year will be reduced by the amount of my deferral and
that such reduction will be made only from my retainer and fees as a director. I
further understand that the amount of directors’ fees which will be paid to me
depends on the full performance of my obligations as a director for the entire
year and that the total amount of directors’ fees paid to me during the year
will be decreased from the amount normally paid to directors if I fail to attend
any scheduled meetings of the Board of Directors or the committees upon which I
serve.

 

2.          Retirement Benefits. In consideration for my deferral, the Employer
shall pay to me the following benefits determined in accordance with the terms
and conditions of the Plan:

 

3.          Interim Distributions. In consideration for my deferral, the
Employer shall pay to me the following benefits on the dates specified, if I am
entitled to these benefits under the terms and conditions of the Plan:

 

4.          Recalculation Event. If a Recalculation Event applicable to me
occurs, the Employer shall pay to me benefits in an amount determined in
accordance with the terms and conditions of paragraph 6.3 of the Plan paid in
accordance with the terms elected below. The undistributed balance of the
recalculated amount will continue to accumulate at the reduced rate specified in
paragraph 6.3 of the Plan.

 

 

•

Recalculated amount paid in a lump sum as soon as administratively practicable
after the first day of the year following the date of the Recalculation Event.

 

 

•

Recalculated amount paid in four annual payments beginning as soon as
administratively practicable after the first day of the year following the date
of the Recalculation Event.

 

 

•

Recalculated amount paid in same number of payments beginning on the same date
as specified in paragraph 2 of this Agreement.

 

5.          Irrevocable Election. This election is irrevocable after November 30
immediately preceding the Plan Year to which this Agreement pertains.

 

6.          Primacy of Plan. I recognize that I am entitled to benefits
hereunder and that this Agreement is subject to the terms and conditions of the
Plan.

 

 

___

I decline to participate in Plan Year 19__.

 

 

__________________________________

____________________________________

 

Director Signature

Employer Signature

 

__________________________________

____________________________________

 

Date

Date

 

 

EXHIBIT B

 

 

DEFERRAL AGREEMENT

FOR THE BELLSOUTH NONQUALIFIED DEFERRED COMPENSATION PLAN

(for officers and selected executive employees)

 

 

1.          Amount of Deferral. I, ________________________________, hereby
agree to participate in the BellSouth Nonqualified Deferred Compensation Plan
(“Plan”). I have read the Plan in its entirety and agree to its terms and
conditions, which are incorporated herein by reference. Pursuant to the terms of
the Plan, I elect to defer from my compensation to be paid to me in Plan Year
19__ the sum of ________Dollars. (Choose amount less than or equal to 35% of
Compensation Rate rounded to the next higher thousand dollars). I understand
that my Compensation which ordinarily would be paid to me in that Plan Year will
be reduced by the amount of my deferral, and that such reduction will be made
only from my gross monthly salary, not from my bonus or incentive award which
may be payable to me.

 

2.          Retirement Benefits. In consideration for my deferral, the Employer
shall pay to me the following benefits on the dates specified, if I am entitled
to these benefits under the terms and conditions of the Plan:

 

3.          Interim Distributions. In consideration for my deferral, the
Employer shall pay to me the following benefits on the dates specified, if I am
entitled to these benefits under the terms and conditions of the Plan:

 

4.          Recalculation Event. If a Recalculation Event applicable to me
occurs, the Employer shall pay to me benefits in an amount determined in
accordance with the terms and conditions of paragraph 6.3 of the Plan paid in
accordance with the terms elected below. The undistributed balance of the
recalculated amount will continue to accumulate at the reduced rate specified in
paragraph 6.3 of the Plan

 

 

•

Recalculated amount paid in a lump sum as soon as administratively practicable
after the first day of the year following the date of the Recalculation Event.

 

 

•

Recalculated amount paid in four annual payments beginning as soon as
administratively practicable after the first day of the year following the date
of the Recalculation Event.

 

 

•

Recalculated amount in same number of payments beginning on the same date as
specified in paragraph 2 of this Agreement.

 

5.            Irrevocable Election. This election is irrevocable after November
30 immediately preceding the Plan Year to which this Agreement pertains.

 

6.          Primacy of Plan. I recognize that I am entitled to benefits
hereunder and that this Agreement is subject to the terms and conditions of the
Plan.

 

 

 

___

I decline to participate in Plan Year 19__.

 

 

__________________________________

____________________________________

 

Director Signature

Employer Signature

 

__________________________________

____________________________________

 

Date

Date

 

 

EXHIBIT C

 

DEFERRAL AGREEMENT

FOR THE BELLSOUTH NONQUALIFIED DEFERRED COMPENSATION PLAN - SCHEDULE B

(for Nonemployee Directors)

 

1.          Amount of Deferral. I, ______________________________ (___-__-____),
hereby agree to participate in the BellSouth Nonqualified Deferred Compensation
Plan (“Plan”). I have read the Plan in its entirety and agree to its terms and
conditions, which are incorporated herein by reference. Pursuant to the terms of
the Plan, I elect to defer from my Compensation to be paid to me in Plan Year
19__ __% of my Compensation. (Choose amount less than or equal to 100% of
Compensation.) I understand that the Compensation which ordinarily would be paid
to me in that Plan Year will be reduced by the amount of my deferral and that
such reduction will be made only from my retainer and fees as a director. I also
understand that the amount of directors’ fees which will be paid to me depends
on the full performance of my obligations as a director for the entire year and
that the total amount of directors’ fees paid to me during the year will be
decreased from the amount normally paid to directors if I fail to attend any
scheduled meetings of the Board of Directors or the committees upon which I
serve. I further understand that my election below will be irrevocable after the
November 30th immediately preceding the above Plan Year and recognize that my
benefits under this Agreement are subject to the terms and conditions of the
Plan.

 

[CHECK AND COMPLETE WHICHEVER ONE APPLIES OF A, B OR C BELOW]

 

___

A.

FIXED BENEFIT AGREEMENT ELECTION

 

2.          Retirement Benefits. In consideration for my deferral, the Employer
shall pay to me the following benefits determined in accordance with the terms
and conditions of the Plan:

 

 

Beginning on January 1, ____ the Employer will pay me $___________

 

 

annually for ____ years.

 

 

3.

Interim Distributions. Not applicable.

 

 

4.

Recalculation Event. If a Recalculation Event applicable to me occurs, the
Employer shall pay to me benefits in an amount determined in accordance with the
terms and conditions of paragraph 6.3 of the Plan paid in accordance with the
terms elected below. The undistributed balance of the recalculated amount will
continue to accumulate at the reduced rate specified in paragraph 6.3 of the
Plan.

 

 

•

Recalculated amount paid in a lump sum as soon as administratively practicable
after the first day of the year following the date of the Recalculation Event.

 

 

•

Recalculated amount paid in four annual payments beginning as soon as
administratively practicable after the first day of the year following the date
of the Recalculation Event.

 

 

•

Recalculated amount paid in same number of payments beginning on the same date
as specified in paragraph 2 of this Agreement.

 

 

___

B.

STOCK UNIT AGREEMENT ELECTION

 

2.          Retirement Benefits. In consideration for my deferral, I will be
credited with Stock Units based upon Compensation deferred and dividend
equivalents and the Employer shall pay to me the value of those Stock Units in
________ (specify number not to exceed 10) annual installments, the first of
which shall be paid as of the first day of the calendar quarter following my
Retirement and the remainder of which shall be paid as of each succeeding
anniversary of such date.

 

 

3.

Interim Distributions. Not applicable.

 

 

4.

Recalculation Event. Not applicable.

 

___

C.

DECLINE PARTICIPATION

 

 

I decline to participate for Plan Year 19__.

 

 

__________________________________

____________________________________

 

Director Signature

Employer Signature

 

__________________________________

____________________________________

 

Date

Date

 

 

 

EXHIBIT D

 

 

DEFERRAL AGREEMENT

FOR THE BELLSOUTH NONQUALIFIED DEFERRED COMPENSATION PLAN

(For officers and selected executive employees)

 

THIS AGREEMENT is made this _____ day of ____________, 19 __ , by and between
_______________________ (the “Company”) and _________________ (the “Executive”);

 

W I T N E S S E T H:

 

WHEREAS, the Executive may retire from the service of the Company under the
terms of a separation arrangement to be mutually agreed upon (the “Separation
Agreement”); and

 

WHEREAS, the Company desires to permit the Executive to elect irrevocably to
defer, under the BellSouth Nonqualified Deferred Compensation Plan (the “Plan”),
a portion of the lump-sum separation allowance to which he may become entitled
under the Separation Agreement, and the Executive desires to make such deferral;

 

 

NOW, THEREFORE, it is mutually agreed as follows:

 

1.

 

PLAN PROVISIONS CONTROL

 

The Plan, including all terms, conditions, restrictions and limitations
contained therein, is hereby incorporated by reference and made a part of this
Agreement for all purposes. The terms and conditions applicable to the plan year
of the Plan in which the Executive separates from service shall apply to
deferrals hereunder. In interpreting the Plan for purposes of this Agreement,
the lump-sum separation allowance payable under the Separation Agreement shall
not be included in the Executive’s “Compensation Rate” as that term is used in
the Plan.

 

2.

 

CONDITIONAL DEFERRAL

 

The deferral election contained herein shall be irrevocable by the Executive
upon its submission to the Company but shall be expressly conditioned upon the
Executive’s separation from service under the Separation Agreement. If the
Executive does not separate from service under the Separation Agreement, this
Agreement shall be null and void. Neither the Company’s offering of this
deferral opportunity to the Executive, the Company’s acceptance of the
Executive’s deferral election contained in this Agreement, nor any other
provision hereof shall in any way be construed as conferring upon the Executive
any right or entitlement to any payment under the Separation Agreement.

 

3.

 

DEFERRAL ELECTION(S)

 

The Executive hereby irrevocably elects to defer from the lump-sum separation
allowance payable under the Separation Agreement the dollar amount by which any
election of deferrals from base salary under the Plan for the plan year of the
Plan in which the Executive separates from service has not been satisfied by the
time the Executive separates.

 

YES _______   NO _______

 

 

Such amounts shall be subject to the terms of the

 

 

original Deferral Agreement to which they relate.

 

I understand that the lump-sum separation allowance payable under the Separation
Agreement which would otherwise have been paid to me will be reduced by the
amount of my deferral(s).

 

4.

 

RETIREMENT BENEFITS

 

In consideration of my deferral described in section 3(a) above, if any, the
Company shall pay to me the following benefits on the dates specified, if I am
entitled to these benefits under the terms and conditions of the Plan:

 

5.

 

INTERIM DISTRIBUTIONS

 

In consideration for my deferral described in section 3(a) above, if any, the
Company shall pay to me the following benefits on the dates specified, if I am
entitled to these benefits under the terms and conditions of the Plan:

 

6.

 

RECALCULATION EVENT

 

If a Recalculation Event occurs, the Company shall pay to me benefits
attributable to my deferral described in section 3(a) above in an amount
determined in accordance with the terms elected below. The undistributed balance
of the recalculated amount will continue to accumulate at the reduced rate
specified in paragraph 6.3 of the Plan.

 

 

•

Recalculated amount paid in a lump sum as soon as administratively practicable
after the first day of the year following the date of the Recalculation Event.

 

 

•

Recalculated amount paid in four annual payments beginning as soon as
administratively practicable after the first day of the year following the date
of the Recalculation Event.

 

 

 

•

Recalculated amount paid in same number of payments beginning on the same date
as specified in paragraph 2 of this Agreement.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in its
corporate name by a duly authorized officer, and the Executive has hereunto set
his hand, as of the date set forth above.

 

Executive:

THE COMPANY:

 

__________________________________

By: ________________________________

 

Signature

Signature

 

__________________________________

___________________________________

 

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