Document:

ex10q.htm

Exhibit 10-q

AT&T HEALTH PLAN

Effective:  January 1, 1987

                                                        Previously Amended and Restated:  January 1, 2011

Amended and Restated Effective:  January 1, 2012 (unless otherwise provided herein)

  

  

  

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.

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 “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, 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.

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.

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)

	
death of a covered Eligible Employee;

	
(2)

	
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.

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.

2.32Retired 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.

2.33SEVP-HR.  “SEVP-HR” shall mean AT&T’s highest ranking Officer, specifically responsible for human resources matters.

2.34Subsidiary.  "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.

 

 

2.35Vision 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.

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, 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.

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, if applicable, Substitute Basic Coverage, 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 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,

	
(3)

	
CarePlus, if elected,

	
(4)

	
Long Term Care Plan, if elected,

	
(5)

	
this Plan.

4.4 Substitute Basic Coverage.  Notwithstanding any other provision of this Plan to the contrary, if a Retired Employee 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 is no longer a participant in the Basic Plans or Substitute Basic Coverage, in which case participation ceases for such Participant;

	 	
(2)  

	
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;

	 	
(3)  

	
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);

	 	
(4)  

	
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);

	 	
(5)  

	
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

	 	
(6)  

	
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 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) 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) 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 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 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.

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 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.

 

(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.

 

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.

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 minimum length of stay otherwise required by law.  Such coverage shall be subject to all other provisions of this Plan.

9.4 Women's Health and Cancer Rights Act of 1998.  To the extent this Plan provides benefits for mastectomies, it will provide, for an individual who is receiving benefits in connection with a mastectomy and who elects breast reconstruction in connection with such mastectomy, coverage for reconstruction on the breast on which the mastectomy was performed, surgery and reconstruction on the other breast to give a symmetrical appearance, and prosthesis and coverage for physical complications of all stages of the mastectomy, including lymphedemas.  Such coverage shall be subject to all other provisions of this Plan.

9.5 Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008.   To the extent this Plan provides mental health benefits or substance use disorder benefits it will not place annual or lifetime maximums for such benefits that are lower than the annual and lifetime maximums for physical health benefits.  In addition, the financial requirements (e.g., deductibles and co-payments) and treatment limitations (e.g., number of visits or days of coverage) that apply to mental health benefits or substance use disorder benefits will not be more restrictive than the predominant financial requirements or treatment limitations that apply to substantially all medical/surgical benefits; mental health benefits and substance use disorder benefits will not be subject to any separate cost sharing requirements or treatment limitations that only apply to such benefits; if the Plan provides for out of network medical/surgical or substance use disorder benefits, it will provide for out of network mental health and substance use disorder benefits and standards for medical necessity determinations and reasons for any denial of benefits relating to mental health benefits and substance use disorder benefits will be made available upon request to plan participants.  Such coverage shall be subject to all other provisions of this Plan.

9.6 Continuation of Coverage During Family or Medical Leave.  During any period which an Active Employee Participant is on a family or medical leave as defined in the Family or Medical Leave Act, any benefit elections in force for such Participant shall remain in effect.  While the Participant is on paid leave, contributions shall continue.  If the Participant is on an unpaid leave, the Participant may elect to prepay required contributions on a pre-tax basis before the commencement of such unpaid leave.  Alternatively, the Participant may elect to make such payments on an after-tax basis monthly in accordance with an arrangement that the Plan Administrator shall provide.  If coverage is not continued during the entire period of the family or medical leave because the Participant declines to pay the premium, the coverage must be reinstated upon reemployment with no exclusions or waiting periods, notwithstanding any other provision of this Plan to the contrary. If the Participant does not return to work upon completion of the leave, the Participant must pay the full cost of any health care coverage that was continued on his/her behalf during the leave.  These rules apply to the COBRA eligible programs.

 

9.7 Rights While on Military Leave.  Pursuant to the provisions of the Uniformed Services Employment and Reemployment Rights Act of 1994, an Active Employee Participant on military leave will be considered to be on a Leave of Absence and will be entitled during the leave to the health and welfare benefits that would be made available to other similarly situated employees if they were on a Leave of Absence.  This entitlement will end if the individual provides written notice of intent not to return to work following the completion of the military leave.  The individual shall have the right to continue his/her coverage, including any Dependent coverage, for the lesser of the length of the leave or 18 months.  If the military leave is for a period of 31 days or more, the individual may be required to pay 102 percent of the total premium (determined in the same manner as a COBRA continuation coverage premium).  If coverage is not continued during the entire period of the military leave because the individual declines to pay the premium or the leave extends beyond 18 months, the coverage must be reinstated upon reemployment with no pre-existing condition exclusions (other than for service-related illnesses or injuries) or waiting periods (other than those applicable to all Eligible Employees).

9.8 Qualified Medical Child Support Orders.  The Plan will comply with any Qualified Medical Child Support Order issued by a court of competent jurisdiction or administrative body that requires the Plan to provide medical coverage to a Dependent child of an Active Employee or Retired Employee Participant.  The Plan Administrator will establish reasonable procedures for determining whether a court order or administrative decree requiring medical coverage for a Dependent child meets the requirements for a Qualified Medical Child Support Order.  The cost of coverage or any additional cost of such coverage, if any, shall be borne by the Participant.

9.9 Right of Recovery.  If the Plan has made an erroneous or excess payment to any Participant, the Plan Administrator shall be entitled to recover such excess from the individual or entity to whom such payments were made.  The recovery of such overpayment may be made by offsetting the amount of any other benefit or amount payable by the amount of the overpayment under the Plan.

ARTICLE 10   COBRA

10.1 Continuation of Coverage Under COBRA.  Participants shall have all COBRA continuation rights required by federal law and all conversion rights.  COBRA continuation coverage shall be continued as provided in this Article 10.

10.2 COBRA Continuation Coverage for Terminated Participants.  A covered Active Employee Participant may elect COBRA continuation coverage, at his/her own expense, if his participation under this Plan would terminate as a result of one of the following Qualifying Events: an Employee’s termination of employment or reduction of hours with an Employer.

10.3 COBRA Continuation Coverage for Dependents.  A Qualified Dependent may elect COBRA continuation coverage, at his/her own expense, if his/her participation under this Plan would terminate as a result of a Qualifying Event.

10.4 Period of Continuation Coverage for Covered Participants.  A covered Active Employee Participant who qualifies for COBRA continuation coverage as a result of a Participant’s termination of employment or reduction in hours of employment described in Subsection 10.2 may elect COBRA continuation coverage for up to 18 months measured from the date of the Qualifying Event.

Coverage under this Subsection 10.4 may not continue beyond the:

	 	
(1)  

	
date on which the Active Employee Participant’s Employer ceases to maintain this Plan;

	 	
(2)  

	
last day of the month for which premium payments have been made with respect to this Plan, if the individual fails to make premium payments on time, in accordance with Subsection 10.6;

	 	
(3)  

	
date the covered Active Employee Participant becomes entitled to Medicare; or

	 	
(4)  

	
date the covered Participant is no longer subject to a pre-existing condition exclusion under the Participant's other coverage or new employer plan for the type of coverage available under the COBRA eligible program for which the COBRA election was made.

10.5 Period of COBRA Continuation Coverage for Dependents.  If a Qualified Dependent elects COBRA continuation coverage under a COBRA eligible program as a result of the an Active Employee Participant’s termination of employment as described in Subsection 10.2, continuation coverage may be continued for up to 18 months measured from the date of the Qualifying Event.  COBRA continuation coverage for all other Qualifying Events may continue for up to 36 months.

Continuation coverage under this Subsection 10.5 with respect to a COBRA eligible program may not continue beyond the date:

	 	
(1)  

	
on which premium payments have not been made, in accordance with Subsection 10.6 below;

	 	
(2)  

	
the Qualified Dependent  becomes entitled to Medicare;

	 	
(3)  

	
on which the Employer ceases to maintain this Plan; or

	 	
(4)  

	
the Qualified Dependent is no longer subject to a pre-existing condition exclusion under the Participant’s other coverage or new employer plan for the type of coverage available under this Plan.

10.6 Contribution Requirements for COBRA Continuation Coverage.  Covered Participants and Qualified Dependents who elect COBRA continuation coverage as a result of a Qualifying Event will be required to pay continuation coverage payments.  Continuation coverage payments are the payments required for COBRA continuation coverage that is an amount equal to a reasonable estimate of the cost to this Plan of providing coverage for all covered Participants at the time of the Qualifying Event plus a 2% administrative expense.  In the case of a disabled individual who receives an additional 11-month extended coverage under COBRA, the Employer may assess up to 150% of the cost for this extended coverage period.  Such cost shall be determined on an actuarial basis and take into account such factors as the Secretary of the Treasury may prescribe in regulations.

Covered Participants and Qualified Dependents must make the continuation coverage payment prior to the first day of the month in which such coverage will take effect.  However, a covered Participant or Qualified Dependent has 45 days from the date of an affirmative election to pay the continuation coverage payment for the first month's payment and the cost for the period between the date medical coverage would otherwise have terminated due to the Qualifying Event and the date the covered Participant and/or Qualified Dependent actually elects COBRA continuation coverage.

The covered Participant and/or Qualified Dependent shall have a 30-day grace period to make the continuation coverage payments due thereafter.  Continuation coverage payments must be postmarked on or before the completion of the 30-day grace period.  If continuation coverage payments are not made on a timely basis, COBRA continuation coverage will terminate as of the last day of the month for which timely premiums were made.  The 30-day grace period shall not apply to the 45-day period for the first month’s payment of COBRA premiums as set out in the section above.

If payment is received that is significantly less than the required continuation coverage payment, then continuation coverage will terminate as of the last day of the month for which premiums were paid.  A payment is considered significantly less than the amount due if it is greater than the lesser of $50 or 10% of the required continuation coverage payment.  Upon receipt of a continuation coverage payment that is insignificantly less than the required amount, the Plan Administrator must notify the covered Participant or Qualified Dependent of the amount of the shortfall and provide them with an additional 30-day grace period from the date of the notice for this payment only.

10.7 Limitation on Participant's Rights to COBRA Continuation Coverage.

	 	
(1)  

	
If a Qualified Dependent loses, or will lose medical coverage under this Plan as a result of divorce, legal separation, entitlement to Medicare, or ceasing to be a Dependent, such Qualified Dependent is responsible for notifying the Plan Administrator in writing within 60 days of the Qualifying Event.  Failure to make timely notification will terminate the Qualified Dependent's rights to COBRA continuation coverage under this Article.

	 	
(2)  

	
A Participant must complete and return the required enrollment materials within 60 days from the later of (a) the date of loss of coverage, or (b) the date the Plan Administrator sends notice of eligibility for COBRA continuation coverage.  Failure to enroll for COBRA continuation coverage during this 60-day period will terminate all rights to COBRA continuation coverage under this Article.  An affirmative election of COBRA continuation coverage by a Participant or his/her spouse shall be deemed to be an election for that Participant's Dependent(s) who would otherwise lose coverage under the Plan.

10.8 Subsequent Qualifying Event.  If a second Qualifying Event occurs during an 18-month extension explained above, coverage may be continued for a maximum of 36 months from the date of the first Qualifying Event.  In the event the Dependent loses coverage due to a Qualifying Event and after such date the Participant becomes entitled to Medicare, the Dependent shall have available up to 36 months of coverage measured from the date of the Qualifying Event that causes the loss of coverage.  If the Participant was entitled to Medicare prior to the Qualifying Event, the Dependent shall have up to 36 months of coverage measured from the date of entitlement to Medicare.

10.9 Extension of COBRA Continuation Period for Disabled Individuals.  The period of continuation shall be extended to 29 months in total (measured from the date of the Qualifying Event) in the event the individual is disabled as determined by the Social Security laws within 60 days of the Qualifying Event.  The individual must provide evidence to the Plan Administrator of such Social Security determination prior to the earlier of 60 days after the date of the Social Security determination, or the expiration of the initial 18 months of COBRA continuation coverage.  In such event, the Employer may charge the individual up to 150% of the COBRA cost of the coverage.

ARTICLE 11   PRIVACY OF MEDICAL INFORMATION

11.1 Definitions.  For purposes of this Article 11, the following defined terms shall have the meaning assigned to such terms in this subsection:

(1)    “Business Associate” shall have the meaning assigned to such phrase at 45 C.F.R. § 160.103;

(2)           “Health Care Operations” shall have the meaning assigned to such phrase at 45 C.F.R. § 164.501;

(3)           “HIPAA” shall mean Parts 160 (“General Administrative Requirements”) and 164 (“Security and Privacy”) of Title 45 of the Code of Federal Regulations as such parts are amended from time to time;

(4)           “Payment” shall have the meaning assigned to such phrase at 45 C.F.R § 160.103;

(5)           “Protected Health Information” or “PHI” shall have the meaning assigned to such phrase at 45 C.F.R. § 160.103; and

(6)           “Treatment” shall have the meaning assigned to such phrase at 45 C.F.R. § 164.501.

11.2 Privacy Provisions Relating to Protected Health Information (“PHI”).  The Plan and its Business Associates shall use and disclose PHI to the extent permitted by, and in accordance with, HIPAA, for purposes of providing benefits under the Plan and for purposes of administering the plan, including, by way of illustration and not by way of limitation, for purposes of Treatment, Payment, and Health Care Operations.

11.3 Disclosure of De-Identified or Summary Health Information.  The HIPAA Plan, or, with respect to the HIPAA Plan, a health insurance issuer, may disclose summary health information (as that phrase is defined at 45 C.F.R. § 160.5049a))  to the Plan Sponsor of the HIPAA Plan (and its affiliates) if such entity requests such information for the purpose of:

(1)           Obtaining premium bids from health plans for providing health insurance coverage under the HIPAA Plan;

(2)           Modifying, amending or terminating the group health benefits under the HIPAA Plan.

In addition, the HIPAA Plan or a health insurance insurer with respect to the HIPAA Plan may disclose to the Plan Sponsor of the HIPAA Plan (or its affiliates) information on whether an individual is participating in the group health benefits provided by the HIPAA Plan or is enrolled in, or has ceased enrollment with health insurance offered by the HIPAA Plan.

11.4 The HIPAA Plan Will Use and Disclose PHI as Required by Law or as Permitted by the Authorization of the Participant or Beneficiary.

Upon submission of an authorization signed by a Participant, beneficiary, subscriber or personal representative that meets HIPAA requirements, the HIPAA Plan will disclose PHI.

In addition, PHI will be disclosed to the extent permitted or required by law, without the submission of an authorization form.

11.5 Disclosure of PHI to the Plan Sponsor.  The HIPAA Plan will disclose information to the Plan Sponsor only upon certification from the Plan Sponsor that the HIPAA Plan documents have been amended to incorporate the assurances provided below.

The Plan Sponsor agrees to:

	 	
(1)

	
not use or further disclose PHI other than as permitted or required by the HIPAA Plan document or as required by law;

	 	
(2)

	
ensure that any affiliates or agents, including a subcontractor, to whom the Plan Sponsor provides PHI received from the HIPAA Plan, agrees to the same restrictions and conditions that apply to the Plan Sponsor with respect to such PHI;

	 	
(3)

	
not use or disclose PHI for employment-related actions and decisions unless authorized by the individual to whom the PHI relates;

	 	
(4)

	
not use or disclose PHI in connection with any other benefits or employee benefit plan of the Plan Sponsor or its affiliates unless permitted by the Plan or authorized by an individual to whom the PHI relates;

	 	
(5)

	
report to the Plan any PHI use or disclosure that is inconsistent with the uses or disclosures provided for of which it becomes aware;

	 	
(6)

	
make PHI available to an individual in accordance with HIPAA’s access rules;

	 	
(7)

	
make PHI available for amendment and incorporate any amendments to PHI in accordance with HIPAA;

 (8)           make available the information required to provide an accounting of disclosures;

	 	
(9)

	
make internal practices, books and records relating to the use and disclosure of PHI received from the HIPAA Plan available to the Secretary of the United States Department of Health and Human Resources for purposes of determining the Plan’s compliance with HIPAA; and

	 	
(10)

	
if feasible, return or destroy all PHI received from the HIPAA Plan that the Plan Sponsor still maintains in any form, and retain no copies of such PHI when no longer needed for the purpose for which disclosure was made (or if return or destruction is not feasible, limit further uses and disclosures to those purposes that make the return or destruction infeasible).

11.6 Separation Between the Plan Sponsor and the HIPAA Plan.  In accordance with HIPAA, only the following employees and Business Associate personnel shall be given access to PHI:

	 	
(1)

	
employees of the AT&T Benefits and/or AT&T Executive Compensation organizations responsible for administering group health plan benefits under the HIPAA Plan, including those employees whose functions in the regular course of business include Payment, Health Care Operations or other matters pertaining to the health care programs under a HIPAA Plan;

	 	
(2)

	
employees who supervise the work of the employees described in (1), above;

	 	
(3)

	
support personnel, including other employees outside of the AT&T Benefits or AT&T Executive Compensation organizations whose duties require them to rule on health plan-related appeals or perform functions concerning the HIPAA Plan;

	 	
(4)

	
investigatory personnel to the limited extent that such PHI is necessary to conduct investigations of possible fraud;

	 	
(5)

	
outside and in-house legal counsel providing counsel to the HIPAA Plan;

	 	
(6)

	
consultants providing advice concerning the administration of the HIPAA Plan; and

	 	
(7)

	
the employees of Business Associates charged with providing services to the HIPAA Plan.

The persons identified above shall have access to and use PHI to the extent that such access and use is necessary for the administration of group health benefits under a HIPAA Plan.  If these persons do not comply with this Plan document, the Plan Sponsor shall provide a mechanism for resolving issues of noncompliance, including disciplinary sanctions.

11.7 Enforcement.

 

Enforcement of this Article 11 shall be as provided for by HIPAA. In particular, participants and beneficiaries are not authorized to sue with regard to purported breaches of this Article 11 except as explicitly permitted by HIPAA.

 

 

ARTICLE 12         CLAIM AND APPEAL PROCESS

12.1         Claims for Benefits under the Plan. – See Appendix B.

12.2         Claims Related to Basic Eligibility for Coverage under the Plan and Claims Related to the Article 8 Loyalty Conditions.

(a)            Claims.  A person who believes that he or she is being denied a benefit to which he or she is entitled under this Plan (hereinafter referred to as a “Claimant”) based on a claim for basic eligibility for coverage under the Plan or a claim related to the Article 8 Loyalty Conditions may file a written request for such benefit with the Executive Compensation Administration Department, setting forth his or her claim. The request must be addressed to the AT&T Executive Compensation Administration Department at its then principal place of business.

 

(b)            Claim Decision.  Upon receipt of a claim, the AT&T Executive Compensation Administration Department shall review the claim and provide the Claimant with a written notice of its decision within a reasonable period of time, not to exceed ninety (90) days, after the claim is received. If the AT&T Executive Compensation Administration Department determines that special circumstances require an extension of time beyond the initial ninety (90)- day claim review period, the AT&T Executive Compensation Administration Department shall notify the Claimant in writing within the initial ninety (90)-day period and explain the special circumstances that require the extension and state the date by which the AT&T Executive Compensation Administration Department expects to render its decision on the claim. If this notice is provided, the AT&T Executive Compensation Administration Department may take up to an additional ninety (90) days (for a total of one hundred eighty (180) days after receipt of the claim) to render its decision on the claim.

 

If the claim is denied by the AT&T Executive Compensation Administration Department, in whole or in part, the AT&T Executive Compensation Administration Department shall provide a written decision using language calculated to be understood by the Claimant and setting forth:  (i) the specific reason or reasons for such denial; (ii) specific references to pertinent provisions of this Plan on which such denial is based; (iii) a description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation of why such material or such information is necessary; (iv) a description of the Plan’s procedures for review of denied claims and the steps to be taken if the Claimant wishes to submit the claim for review; (v) the time limits for requesting a review of a denied claim under this section and for conducting the review under this section ; and (vi)  a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA if the claim is denied following review under this section.

 

(c)            Request for Review. Within sixty (60) days after the receipt by the Claimant of the written decision on the claim provided for in this section, the Claimant may request in writing that the Plan Administrator review the determination of the AT&T Executive Compensation Administration Department.  Such request must be addressed to the Plan Administrator at the address provided in the written decision regarding the claim.  To assist the Claimant in deciding whether to request a review of a denied claim or in preparing a request for review of a denied claim, a Claimant shall be provided, upon written request to the Plan Administrator and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim.  The Claimant or his or her duly authorized representative may, but need not, submit a statement of the issues and comments in writing, as well as other documents, records or other information relating to the claim for consideration by the Committee.  If the Claimant does not request a review by the Plan Administrator of the AT&T Executive Compensation Administration Department’s decision within such sixty (60)-day period, the Claimant shall be barred and estopped from challenging the determination of the AT&T Executive Compensation Administration Department.

 

(d)           Review of Decision.  Within sixty (60) days after the Plan Administrator’s receipt of a request for review, the Plan Administrator will review the decision of the AT&T Executive Compensation Administration Department.  If the Plan Administrator determines that special circumstances require an extension of time beyond the initial sixty (60)-day review period, the Plan Administrator shall notify the Claimant in writing within the initial sixty (60)-day period and explain the special circumstances that require the extension and state the date by which the Plan Administrator expects to render its decision on the review of the claim.  If this notice is provided, the Plan Administrator may take up to an additional sixty (60) days (for a total of one hundred twenty (120) days after receipt of the request for review) to render its decision on the review of the claim.

 

During its review of the claim, the Plan Administrator shall:

 

(1)            Take into account all comments, documents, records, and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial review of the claim conducted pursuant to this section;

 

(2)            Follow reasonable procedures to verify that its benefit determination is made in accordance with the applicable Plan documents; and

 

(3)            Follow reasonable procedures to ensure that the applicable Plan provisions are applied to the Participant to whom the claim relates in a manner consistent with how such provisions have been applied to other similarly-situated Participants.

 

After considering all materials presented by the Claimant, the Plan Administrator will render a decision, written in a manner designed to be understood by the Claimant.  If the Plan Administrator denies the claim on review, the written decision will include (i) the specific reasons for the decision; (ii) specific references to the pertinent provisions of this Plan on which the decision is based; (iii) a statement that the Claimant is entitled to receive, upon request to the Plan Administrator and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim; and (iv) a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA.

 

In any case, a Participant or Beneficiary may have further rights under ERISA. The Plan provisions require that Participants or Beneficiary pursue all claim and appeal rights described in this section before they seek any other legal recourse regarding claims for benefits.

 

  

  

  

 

Appendix A

AT&T Health Plan

Monthly Contributions, Annual Deductible, Coinsurance Percentages and

Annual Out-of-Pocket Maximum

	
Participant/Coverage

	
Categories

	
2012 Plan Year

	  	  	  
	
Active Participants

	
Monthly Contributions

	
Individual - $51

Individual +1 - $51

Individual +2 or more - $104

	  	
Annual Deductible

	
Individual - $1,200

Individual + 1 - $2,400

Individual +2 or more - $2,400

	  	
Coinsurance Percentage

	
10% (After Annual Deductible is met, Coinsurance applies until Annual Out-of-Pocket Maximum is reached.)*

	  	
Annual Out-of-Pocket Maximum

	
Individual - $4,125

Individual +1 - $6,188

Individual +2 or more - $8,250

	  	  	  
	
Retired Participants

	
Monthly Contributions

	
Plan Year 2012

	  	
Retired Prior to August 31, 1992 and Surviving Spouses

	
$102

	  	
Retired on or after September 1, 1992 and Surviving Spouses**

	
Class A Individual: $437

Class A Individual +1: $449

Class A Individual +2 or more: $449

Class B Individual: $530

Class B Individual +1: $550

Class B Individual +2 or more: $550

Class C Individual: $542

Class C Individual +1: $687

Class C Individual +2 or more: $693

Class D Individual: $542

Class D Individual +1: $1,058

Class D Individual +2 or more: $1,102

Monthly Contributions for COBRA Continuation Coverage

	
Participant/Coverage

	
Monthly Contribution

	  	  
	
Active COBRA

	
Individual - $505

Individual + 1 - $986

Individual +2 or more - $1,416

	
Retiree COBRA

	
Individual - $553

Individual +1 - $1,079

Individual +2 or more - $1,549

*For prescription pharmacy services, the Coinsurance shall equal the lesser of (i) the Coinsurance Percentage multiplied by the amount of the Covered Health Services or (ii) the amount payable by the Participant for such services under the Basic Plan.

**The Plan Administrator shall maintain records governing whether a Retired Participant is in Class A, B, C or D.

  

  

  

Appendix B

Claims Procedure Applicable to Claims for Benefits under the Plan

 

Claim for Benefits Procedures

 

You, your covered dependents or a duly authorized person has the right under ERISA and the Plan to file a written claim for benefits under the Plan. The following describes the procedures used by the Plan to process claims for benefits, along with your rights and responsibilities. These procedures were designed to comply with the rules of the Department of Labor (DOL) concerning claims for Benefits. It is important that you follow these procedures to make sure that you receive full benefits under the Plan.

 

The Plan is an ERISA plan, and you may file suit in federal court if you are denied benefits you believe are due you under the Plan. However, you must complete the full claims and appeal process offered under the Plan before filing a lawsuit.

 

 

Filing a Claim for Benefits

When filing a claim for benefits, you should file the claim with the Claims Administrator.  The Claims Administrator is the third party to whom claims and appeal responsibility has been delegated as permitted under Section 9.1 of the Plan.

 

The following are not considered claims for benefits under the Plan:

 

	
·  

	
A claim related to basic eligibility for coverage under the Plan (See Section 12.2 of the Plan).

 

	
·  

	
A claim related to the Loyalty Conditions contained in Article 8 of the Plan (See Section 12.2 of the Plan).

 

 

Claim Filing Limits

A request for payment of benefits must be submitted within one year after the date of service or the date the prescription was provided.

 

Required Information

When you request payment of benefits from the Plan, you must provide certain information as requested by the Claims Administrator.

 

 

Benefit Determinations

Post-Service Claims

Post-service claims are those claims that are filed for payment of benefits after medical care has been received. If your post-service claim is denied, you will receive a written notice from the Claims Administrator within 30 days of receipt of the claim, as long as all needed information identified above and any other information that the Claims Administrator may request in connection with services rendered to you was provided with the claim. The Claims Administrator will notify you within this 30-day period if additional information is needed to process the Claim and may request a one-time extension not longer than 15 days and pend your Claim until all information is received.

 

Once notified of the extension, you then have 45 days to provide this information. If all of the needed information is received within the 45-day time frame and the claim is denied, the claims Administrator will notify you of the denial within 15 days after the information is received. If you don't provide the needed information within the 45-day period, your claim will be denied.

 

A denial notice will explain the reason for denial, refer to the part of the Plan on which the denial is based, and provide the claim appeal procedures.

 

Pre-Service Claims

Pre-service claims are those claims that require notification or approval prior to receiving medical care or require notification within a specified time period after service begins as required under the Plan provisions. If your claim is a pre-service claim and is submitted properly with all needed information, you will receive written notice of the claim decision from the Claims Administrator within 15 days of receipt of the claim. If you file a pre-service claim improperly, the Claims Administrator will notify you of the improper filing and how to correct it within five days after the pre-service claim is received. If additional information is needed to process the pre-service claim, the Claims Administrator will notify you of the information needed within 15 days after the claim was received and may request a one-time extension not longer than 15 days and pend your claim until all information is received. Once notified of the extension, you then have 45 days to provide this information. If all of the needed information is received within the 45-day time frame, the Claims Administrator will notify you of the determination within 15 days after the information is received. If you don't provide the needed information within the 45-day period, your claim will be denied. A denial notice will explain the reason for denial, refer to the part of the Plan on which the denial is based, and provide the claim appeal procedures.

 

 

Urgent Care Claims That Require Immediate Action

Urgent care claims are those claims that require notification or approval prior to receiving medical care in which a delay in treatment could seriously jeopardize your life or health or the ability to regain maximum function or, in the opinion of a physician with knowledge of your medical condition, could cause severe pain. In these situations:

 

	
·  

	
You will receive notice of the benefit determination in writing or electronically within 72 hours after the Claims Administrator receives all necessary information, taking into account the seriousness of your condition.

 

	
·  

	
Notice of denial may be oral with a written or electronic confirmation to follow within three days.

 

If you filed an urgent claim improperly, the Claims Administrator will notify you of the improper filing and how to correct it within 24 hours after the urgent claim was received. If additional information is needed to process the claim, the Claims Administrator will notify you of the information needed within 24 hours after the claim was received. You then have 48 hours to provide the requested information.

 

You will be notified of a determination no later than 48 hours after either:

 

	
·  

	
The Claims Administrator's receipt of the requested information.

 

	
·  

	
The end of the 48-hour period within which you were to provide the additional information, if the information is not received within that time.

 

A denial notice will explain the reason for denial, refer to the part of the Plan on which the denial is based, and provide the claim appeal procedures.

 

Concurrent Care Claims

If an ongoing course of treatment was previously approved for a specific period of time or number of treatments, and your request to extend the treatment is an urgent care claim as defined above, your request will be decided within 24 hours, provided your request is made at least 24 hours prior to the end of the approved treatment. The Claims Administrator will make a determination on your request for the extended treatment within 24 hours from receipt of your request.

 

If your request for extended treatment is not made at least 24 hours prior to the end of the approved treatment, the request will be treated as an urgent care claim and decided according to the time frames described above. If an ongoing course of treatment was previously approved for a specific period of time or number of treatments, and you request to extend treatment in a non-urgent circumstance, your request will be considered a new claim and decided according to post-service or pre-service timeframes, whichever applies.

 

 

How to Appeal a Claim Decision

 

If you disagree with a pre-service or post-service claim determination after following the above steps, you can contact the applicable Claims Administrator in writing to formally request an appeal. Your first appeal request must be submitted to the Claims Administrator within 180 days after you receive the Claim denial.

 

 

Appeal Process

 

A qualified individual who was not involved in the decision being appealed will be appointed to decide the appeal. The Claims Administrator may consult with, or seek the participation of, medical experts as part of the appeal resolution process. You must consent to this referral and the sharing of pertinent medical claim information. Upon written request and free of charge you have the right to reasonable access to and copies of all documents, records and other information relevant to your claim for benefits.

 

 

Appeals Determinations

 

 

Pre-Service and Post-Service Claim Appeals

You will be provided written or electronic notification of the decision on your appeal as follows:

 

	
·  

	
For appeals of pre-service claims, the first-level appeal will be conducted and you will be notified by the Claims Administrator of the decision within 15 days from receipt of a request for appeal of a denied Claim. The second-level appeal will be conducted and you will be notified by the Claims Administrator of the decision within 15 days from receipt of a request for review of the first-level appeal decision.

 

	
·  

	
For appeals of post-service claims, the first-level appeal will be conducted and you will be notified by the Claims Administrator of the decision within 30 days from receipt of a request for appeal of a denied claim. The second-level appeal will be conducted and you will be notified by the Claims Administrator of the decision within 30 days from receipt of a request for review of the first-level appeal decision.

 

	
·  

	
For procedures associated with urgent Claims, refer to the following "Urgent Claim Appeals That Require Immediate Action" section.

 

	
·  

	
If you are not satisfied with the first-level appeal decision of the Claims Administrator, you have the right to request a second-level appeal from the Claims Administrator. Your second level appeal request must be submitted to the Claims Administrator in writing within 60 days from receipt of the first-level appeal decision.

 

	
·  

	
For pre-service and post-service claim appeals, the Plan Administrator has delegated to the Claims Administrator the exclusive right to interpret and administer the provisions of the Plan. The Claims Administrator's decisions are conclusive and binding.

 

Please note that the Claims Administrator's decision is based only on whether or not benefits are available under the Plan for the proposed treatment or procedure. The determination as to whether the pending health service is necessary or appropriate is between you and your physician.

 

 

Urgent Claim Appeals That Require Immediate Action

 

Your appeal may require immediate action if a delay in treatment could significantly increase the risk to your health or the ability to regain maximum function or cause severe pain.

 

In these urgent situations, the appeal does not need to be submitted in writing. You or your physician should call the Claims Administrator as soon as possible. The Claims Administrator will provide you with a written or electronic determination within 72 hours following receipt by the Claims Administrator of your request for review of the determination taking into account the seriousness of your condition.

 

For urgent claim appeals, the Plan Administrator has delegated to the applicable Claims Administrator the exclusive right to interpret and administer the provisions of the Plan. The Claims Administrator's decisions are conclusive and binding.

 

In any case, a Participant or Beneficiary may have further rights under ERISA. The Plan provisions require that Participants or Beneficiary pursue and exhaust all claim and appeal rights described in this section before they seek any other legal recourse regarding claims for benefits.

 

  

  

  

APPENDIX C

 

DISCLOSURE OF GRANDFATHERED STATUS

 

MODEL NOTICE

 

 

AT&T, as plan sponsor, believes this Plan is a “grandfathered health plan” under the Patient Protection and Affordable Care Act (the “Affordable Care Act”).  As permitted by the Affordable Care Act, a grandfathered health plan can preserve certain basic health coverage that was already in effect when that law was enacted.  Being a grandfathered health plan means that the plan may not include certain consumer protections of the Affordable Care Act that apply to other plans, for example, the requirement for the provision of preventive health services without any cost sharing.  However, grandfathered health plans must comply with certain other consumer protections of the Affordable Care Act, for example, the elimination of lifetime limits on benefits.

 

Questions regarding which protections apply and which protections do not apply to a grandfathered health plan and what might cause a plan to change from grandfathered health plan status can be directed to the plan administrator at P.O. Box 30558, Salt Lake City, Utah  84130-0558.  You may also contact the Employee Benefits Security Administration, U.S. Department of labor at 1-866-444-3272 or www.dol.gov/ebsa/healthreform.  This website has a table summarizing which protections do and do not apply to grandfathered health plans.ex10r.htm

Exhibit 10-r

 

 

 

AT&T

Management Relocation

Plan A

November 18, 2005

Presented by

Altair Global Relocation

  

  

  

November 18, 2005

 

 

Dear Relocating Employee:

 

Altair Global Relocation, contracted by AT&T, is ready to assist you at every stage of the move to your new location.  Experienced relocation professionals look forward to helping you and your family accomplish the change smoothly, and we encourage you to contact them at your earliest opportunity.

 

This plan document outlines the various relocation benefits available and the way in which Altair Global Relocation can assist you. Please read it carefully. Keep in mind, however, that this document is designed as a supplement, not a substitute, to consultation with Altair Global Relocation.

 

Please feel free to call upon your Relocation Consultant and the other staff members for assistance whenever questions or problems arise in connection with your move.

 

Sincerely,

Gail Plummer

 

President and Chief Executive Officer

 

PROPRIETARY

Not for use or disclosure outside AT&T except under written agreement

  

  

  

Section 1

Introduction

Statement of Philosophy

 

AT&T and its Participating Subsidiaries recognize that the relocation of managers to meet organizational requirements is a part of doing business. This Plan is intended to provide fair and equitable treatment to minimize the impact of the move on employees and their families.

 

We believe that maintaining a program of high quality, communicating relocation benefits clearly and consistently, and encouraging and providing counseling, benefits the AT&T companies by allowing employees to regain maximum productivity in the shortest possible time. This plan contains very specific plan components. No substitutions or alterations of the benefits will be allowed.

 

We further believe that as employees of AT&T or its Participating Subsidiaries, relocating managers have a responsibility to utilize company funds in a manner consistent with the Code ofBusiness Conduct, which clearly states:

 

“When spending company money or personal money that will be reimbursed, the employee involved should make sure his or her company receives proper value in return.”

 

Employees found in violation of the Code of Business Conduct will be subject to disciplinary action up to and including termination of employment.

 

The cost and structure of this plan have been developed with specific components which are not intended to be substituted, altered or modified in any way.

 

 

General

 

Provisions of the Management Relocation Plan for AT&T and participating subsidiaries/affiliates are provided herein. Questions about this material should be directed to a consultant at Altair Global Relocation who can provide further explanation and clarification.

 

This is a reference only and is not a contract. AT&T reserves the right to change, alter, modify, or delete any provisions of the Plan at any time, with or without prior notice. Such changes will be authorized by the Senior Vice President - Human Resources.

 

 

Plan Objectives

 

	
§  

	
To provide fair and equitable treatment for employees relocated within and between Subsidiaries.

	
§  

	
To facilitate acceptance of company initiated relocations.

	
§  

	
To be supportive of the employee and his/her family by providing guidanceand counseling through experienced relocation professionals.

 

 

Eligibility Requirements

 

	
§ 

	
Transferee must be a full-time management employee.

	
 §

	
Transfer is company initiated (this plan does not apply to employees transferring at their own request).

 

NOTE:  Employees who accept a job through the Career Path process will not be eligible for the provisions of the Relocation Plan if the hiring manager has indicated that no relocation benefits are associated with the job.

 

	
§  

	
The commute from the old residence to the new place of work must be at least 50 miles farther than the commute from the old residence to the old place of work.

	
§  

	
Property must be marketed with a real estate broker, approved by Altair Global Relocation, for at least sixty (60) of the one hundred twenty (120) days allowed under the Home Sale Options of this Plan (see Section 2, Page 5).

 

Once eligibility has been determined, the move must be completed within one year of the effective date of the transfer. All expenses related to the move must be incurred within that time period in order to receive reimbursement.

 

Please Note: Any costs incurred as a result of an employee’s decision to relocate are subject to repayment in the event he/she fails to report to work or terminates their employment within twelve (12) months from the report date in the new location. (See Section 12, Page 2).

 

 

Employee Responsibility

 

	
§  

	
Be familiar with this Management Relocation Plan, participate in counseling and/or other programs designed to help manage the relocation efficiently.

 

	
§  

	
Contact Altair Global Relocation for referral to real estate agents in connection with the purchase and/or sale of a residence (unless purchasing a residence that is for sale by owner). It is required that these agents be utilized in order for the employee to be eligible for the home sale and home purchase features of this plan.

 

 

Department Responsibility

 

To initiate a relocation, it is the responsibility of the employee’s receiving department to contact Altair Global Relocation to receive an AT&T Relocation Initiation Form. The form is completed and forwarded to Altair Global Relocation before any relocation expenses can be incurred on behalf of the employee. A copy of the Relocation Plan is available on the AT&T Intranet, or can be sent to you by your Altair Global Relocation Consultant.

 

Normally, the receiving organization or department bears all incurred costs associated with the relocation of an employee.

Authorization of Relocation Expenses

 

All relocation expenses will be paid by Altair Global Relocation with approval based on employee’s relocation policy and submission of appropriate transmittal form.

 

	
NOTE:

	
COMPANY SPONSORED PURCHASE CREDIT CARDS MAY NOT BE USED FOR RELOCATION EXPENSES.

 

If a personal car is used for transportation, the number of miles is reimbursed at the Company approved mileage rate.

 

Relocation Consultants will prepare Lump Sum Allowances for interim living, pre-move house hunting trips and day(s) of move. (See Section 7.)

 

The Miscellaneous Moving Allowance will also be paid by the Relocation Consultant. (See Section 8.)

 

Section 2

Home Sale Program

 

This Plan offers various options with regard to the marketing and sale of the residences of eligible employees. The AT&T companies have a contractual agreement with Altair Global Relocation to handle sales of eligible residences. Altair Global Relocation will assign a broker who will provide high quality real estate assistance at both the origin and destination. It is required that these agents be utilized in order for the employee to be eligible for the home sale and home purchase features of this Plan. The options available are explained in this section.

 

Home sale assistance has proven to increase the likelihood of the employee receiving and acting upon a bona fide private offer for his/her home. Altair Global Relocation provides comprehensive counseling and support in the following areas:

 

	
§  

	
Provide assistance in selecting a qualified broker to list the home. The employee will be offered at least two (2) brokers from which to choose in a large metropolitan area. Employee preferences for brokerage companies will be considered.

 

	
§  

	
Provide objective criteria to be used in establishing “asking price.”

 

	
§  

	
Provide tips to maximize the value of the employee’s home.

 

	
§  

	
Establish a marketing strategy best suited for the particular area and type of property, in coordination with the employee and the employee’s agent.

 

 

Eligible Employees

 

An eligible employee is a regular full-time management or acting management employee who is in either a management or non-management position in one city and relocated to a management position in another city at company request. Employee initiated transfers are not covered under thisPlan.

 

 

Eligible Properties

 

Eligibility is limited to homes which meet all of the following criteria:

 

	
§  

	
The residence is a one- or two-family home, townhouse or condominium.

	
§  

	
The employee is the sole owner, owns the property jointly.

	
§  

	
The home is the employee’s primary residence on the effective date of the transfer and the employee is currently living there.

	
 §  

	
The employee holds good and marketable title to the property, free from liens and encumbrances (any expense incurred to eliminate or establish trusts, grants, or other title situations or to clear liens or encumbrances, will be the responsibility of the employee).

	
§  

	
The residence is in good and marketable condition.

	
 §  

	
The employee knows of no hidden or latent defects for which he/she might later be held responsible.

Ineligible Properties

 

Certain properties are not eligible for home sale assistance under the Plan.  They are:

 

	
§  

	
Properties housing more than two (2) families.

	
§  

	
Cooperative apartments.

	
§  

	
Residences which require an association’s approval of purchaser.

	
§  

	
Any residence which is involved in current and/or pending litigation.

	
§  

	
Property with material defects (i.e., composite-type siding, etc.).

	
§  

	
Homes with Synthetic Stucco

	
§  

	
Income-producing properties.

	
 §  

	
Homes with hazardous substances (i.e., toxic and/or pathogenic mold, radon, asbestos, etc.).

	
§  

	
Mobile homes (the company will move mobile homes to the new location in lieu of purchase or will reimburse closing costs under Option 3 of the Plan).

 

NOTE: Lots are covered only if mobile home and lot are sold together.

 

	
§  

	
Properties not conforming to local regulations and/or which do not qualify for a certificate of occupancy.

	
 §  

	
Seasonal Residences.

	
 §  

	
Properties or parts of properties used or acquired for speculative purposes.

	
 §  

	
Farms, ranches, or homes located, on properties in excess of five (5) acres.

	
 §  

	
Undeveloped lots and/or homes under construction or renovation.

 

 

Appraisal / Valuation Process

 

It is important that you understand that AT&T is not in the real estate business. We have no interest in purchasing the homes of our employees or re-selling them. Our goal is to provide an alternative for employees who cannot sell their homes in a reasonable period of time. Therefore, the appraisers are asked to objectively evaluate your home in order to estimate the most-probable selling price after reasonable market exposure (see Section 2, Pg. 3). This definition of value differs from a bank or mortgage appraisal, and may also differ from what a specific buyer might be willing to pay for your home when it is first exposed to the market. The primary intent of the home sale program is to help you locate a buyer. If that is not possible, AT&T provides the Guaranteed Value Offer to purchase your home at a price that should enable us to resell it within a reasonable amount of time.

 

Altair Global Relocation shall arrange for establishment of a Guaranteed Value based on the “most probable selling price,” in “as is” condition, which is the base value guaranteed to the employee should he/she fail to obtain a buyer for the property.

 

The most probable selling price is defined as:

 

The price at which a property would most probably sell if exposed to the market for a reasonable period of time in “as is” condition, where payment is made in cash or its equivalent.  For purposes of establishing value, “as is” condition is defined as the cosmetic condition of the property at the time of appraisal.

 

NOTE: Exposure to the market for a reasonable period of time is defined as up to one hundred twenty (120) days.

 

The Guaranteed Value will be determined as follows:

 

	
§  

	
The average of two (2) independent appraisals will be the Guaranteed Value, provided the difference between the two (2) appraisal values does not exceed five (5) percent of the highest value.

 

	
§  

	
In cases where the difference between the two appraisal values exceeds five (5) percent, a third (3rd) appraisal will be ordered.  In this case, the Guaranteed Value will be the average of the two (2) highest appraisals.

 

	
§  

	
The Guaranteed Value is contingent upon the results of any customary and required inspections. Please Note: Altair Global Relocation has a legal responsibility to disclose any defects or subsequent bids for repair discovered as a result of all inspections. Repairs identified by subsequent buyer inspections must also be disclosed.

 

	
§  

	
Repairs identified through any inspections are the responsibility of the employee. Repairs must be completed before equity is released or the cost of repairs may be deducted from the employee’s final equity.  Repairs are subject to reinspection.

 

	
§  

	
Should problems be identified through subsequent inspections by potential buyers, the employee will be required to perform additional repairs.

 

In the process of appraising the employee’s home the appraisers will review comparable sales selected from the multiple listing or similar directory. Employees are encouraged to provide appraisers with a list of recent comparable sales.

 

	  	
NOTE:

	
For comparison purposes only, two Broker Market Analyses (BMAs) are routinely ordered by Altair Global Relocation.

 

 

Homeowner Disclosure Statement

 

This Plan requires the use of a Homeowner Disclosure Statement as part of the marketing process.  Most states currently make the seller liable for not disclosing any material defect known to the seller but not obvious to the buyer. It is essential for the employee, as seller, to disclose all such defects in or on the property, whether the buyer is Altair Global Relocation or a private individual. Employees will be held responsible for such defects whether or not they are disclosed.

 

Your Relocation Consultant will provide you with the appropriate Altair Global Relocation disclosure form.  Any disclosure forms required by state of locality will be supplied by your real estate agent.

 

The Homeowner’s Disclosure Statement is designed to:

 

	
§  

	
Assure that the appraisers do not overlook a defective condition or system.

	
 §  

	
Provide justification to conduct further investigation or order a detailed inspection.

	
 §  

	
Serve as a medium for ordering repairs or disclosing defects to potential buyers.

	
 §  

	
Comply with all known and pending legal requirements for disclosure by the seller to the buyer.

 

	
NOTE:

	
Release of a check for advance distribution of equity will be contingent upon the receipt of a signed Homeowner’s Disclosure Statement.

 

ANY EMPLOYEE WHO MAKES FRAUDULENT REPRESENTATIONS AND/OR ACTIONS WILL BE SUBJECT TO DISCIPLINARY ACTION UP TO AND INCLUDING TERMINATION OF EMPLOYMENT.

 

 Listing Agreement Exclusion Clause

 

When an employee lists with a broker, a “Listing Exclusion Clause” must be signed to avoid payment of a broker’s commission and allow cancellation of a listing agreement should the employee accept the Guaranteed Value.

 

The listing agreement must include the following provisions:

 

“This listing agreement is subject to the following provisions. It is understood and agreed regardless of whether or not an offer is presented by a ready, willing and able Buyer(s):

 

No commission or compensation shall be earned, or be due and payable to Broker until the sale of the property has been consummated between Seller(s) and Buyer(s), the Deed delivered to the Buyer(s) and the purchase price delivered to the Seller(s); and

 

The Seller(s) reserve the right to sell the Property to Altair Global Relocation, or any other person(s) designated by Altair Global Relocation, (individually and collectively a “Named Prospective Purchaser”) at any time.  Upon the execution by a Named Prospective Purchaser and me/us of an Agreement of Sale with respect to the Property, this listing shall immediately terminate without obligation on my/our part or on the part of any Named Prospective Purchaser to either pay a commission or to continue this listing agreement.”

 

 

Home Sale Options

 

There are three (3) home sale options available to employees. They are:

  

 

	
Option 1:

	
Amended Value Sale (Please refer to the Contract of Sale for terms and conditions of Amended Value Sale).

 

An Amended Value Sale occurs when the employee works with the Relocation Consultant and real estate agent to sell the residence to a qualified buyer under the Amended Value Sale provision of this Plan.

 

Offer Period: The employee will have a period of one hundred twenty (120) days from the date of the Guaranteed Value Offer letter to market the property. The first sixty (60) days is mandatory.  The employee is responsible for all taxes, utilities, insurance, maintenance, principle and interest on the mortgage during the marketing period until amended value close or vacate date, whichever is later.

 

If a bona fide offer is secured on the home from a buyer, Altair Global Relocation will process the contract under the Amended Value Sale process.

 

The employee is required to notify the Relocation Consultant of all offers received on his/her home.

 

IRS rulings are very strict about benefits received under this process. Therefore, in order to receive the tax advantages an Amended Value process provides, and receive the bonus, certain procedures MUST be followed. They are:

 

	
§  

	
Should the real estate agent present an offer to you, DO NOT VERBALLY ACCEPT. DO NOT TAKE ANY MONEY FROM THE BROKER OR PROSPECTIVE PURCHASER, OR SIGN ANY DOCUMENT WHICH WOULD CONSTITUTE ACCEPTANCE.

 

	
§  

	
Call your Relocation Consultant as soon as possible and provide him/her with the details of the offer. The Relocation Consultant will promptly negotiate with the real estate agent and verify if the offer made is bona fide.

 

	
§  

	
The Relocation Consultant will request the employee to execute the Altair Global Relocation Contract of Sale and return it to Altair Global Relocation.

 

	
§  

	
Upon receipt of the Sale Contract, Altair Global Relocation will review the Contract to verify all terms and conditions are in the employee’s best interest. Altair Global Relocation will sign the Sale Contract and return it to the buyers.

 

	
§  

	
Altair Global Relocation will process the Sale Contract, work through the inspection contingency, and verify the buyers are financially qualified to purchase the property. Altair Global Relocation will then execute the Contract of Sale with the employee at the net sale price of the Sale Contract (purchase price less all concessions which are the employee’s responsibility). This process takes approximately 2 - 3 weeks.

 

	
§  

	
Altair Global Relocation will enter into a listing agreement with the broker and prepare to accept possession upon employee vacating the premises.

 

	
§  

	
 Altair Global Relocation will close the sale with the buyer.

 

Employee Responsibility: The employee will be responsible for payment of any negotiated closing costs typically paid by the Buyer, e.g., concessions made to the buyer for repairs, financing points, etc. Reimbursable Expenses are listed in Section 2, Page 8.

  

The employee has one hundred twenty (120) days from the date of the Guaranteed Value Letter to present a bona fide contract.

 

Proration Date/Equity Calculation: The employee will be responsible for insurance, taxes, utilities, maintenance, principle and interest on the mortgage, through the date Altair Global Relocation accepts the contract or the date the employee vacates the property, whichever is later.  Your final equity will be calculated based on whichever value is higher, your guaranteed value or your amended value.  It is the employee’s responsibility to collect any escrow balance from the mortgage company.

 

Home Sale Bonus: A bonus will be awarded to an employee who, within the one hundred twenty (120) day offer period, obtains a private contract equal to or greater than 96% of the Guaranteed Value Offer. The bonus will be stated as 2 (two)percent of the sale price, and the maximum bonus paid will be $25,000.

 

If the contract is ninety-five (95) percent up to but not including ninety-six (96) percent of the Guaranteed Value, the employee will not receive a bonus but will receive the Guaranteed Value.

 The bonus is paid when the sale is amended.

 

The cash bonus is considered fully taxable income, and is not grossed-up for tax purposes. Taxes will be withheld at the applicable Federal and State supplemental tax rates, and the applicable local tax rate. Social Security and Medicare tax rates will also be withheld at the applicable rates before issuing the bonus check.

 

Advance of Equity: It is the intent of this Plan to allow for advance distribution of home equity to the employee prior to electing Option 1 or 2 when the equity is required to guarantee a contract on a home in the new location. Prior to any advancement of equity, you must forward a copy of your destination purchase agreement to your Relocation Consultant.

 

The following guidelines are applicable:

 

	
§  

	
The advance is up to ninety-five (95) percent of the equity as determined by the Guaranteed Value. Additionally, charges for interest, taxes and insurance will be pro-rated from the date of your last mortgage payment through your anticipated acceptance date. It is the employee’s responsibility to collect any escrow balance from the mortgage company.

 

	
§  

	
Only the amount needed to qualify for the new residence will be advanced.

 

	
§  

	
The employee will sign a promissory note agreeing that within the one-hundred-twenty-(120) day Offer Period he/she will:

 

	
-­  

	
Accept the Guaranteed Value offer, or

	
 -­  

	
Provide a bona fide contract for the Amended Value Sale, or

	
 -­  

	
Pay back the equity advance in full

 

The employee is required to leave the property in clean and livable condition.  Any charges for hauling or excessive clean up will be charged to the employee.

 

Equity advances will be provided under the Home Sale Assistance Program Options 1 or 2 ONLY.

 

 The employee must notify his/her Relocation Consultant at Altair Global Relocation of any potential buyers before accepting Option 2.

 

	
NOTE:

	
If the transferred employee is considered an Executive Officer under the Sarbanes-Oxley Act, he/she will not be eligible for any equity prior to the final contract with Altair Global Relocation.

 

	
NOTE:

	
All expenses associated with the Amended Value are the company’s responsibility. None of these expenses are required to be reported as earnings on your W-2. Altair Global Relocation is unable to provide personal tax advice. Please contact your tax advisor or obtain IRS Form 2119, Sale of Your Home and IRS Publication 523, Selling Your Home.

 

	
Option 2:

	
Guaranteed Value Sale (Please refer to the Contract of Sale for terms and conditions of the Guaranteed Value Sale).

 

A Guaranteed Value Sale occurs when the employee works with the Relocation Consultant and real estate agent to sell the residence but is unable to secure a contract and accepts the Guaranteed Value Offer.

 

Offer Period: The employee will have a period of one hundred twenty (120) days from the date of the Guaranteed Value Offer Letter to market their property. Sixty (60) days of that time period is mandatory. During that time the employee is responsible for all taxes, utilities, insurance, maintenance, principle and interest on the mortgage until sale of the property to Altair Global Relocation or vacate date, whichever is later.

 

The employee is required to notify the Relocation Consultant of all offers received on his/her home.

 

Acceptance of Guaranteed Offer: After the employee has satisfied the mandatory sixty (60) day marketing eligibility requirement, or is at the end of the one hundred twenty (120) day marketing period, he/she may accept the Guaranteed Value Offer. Failure to act (i.e., forward the appropriate documents contained in the Offer Package, as directed) by the end of this one hundred twenty (120) day period will result in an automatic expiration of the Guaranteed Value.

 

Proration Date: The employee will be responsible for insurance, taxes, utilities, maintenance, principle and interest on the mortgage through the date of acceptance of the Guaranteed Value or the date the property is vacated, whichever is later. These items will be deducted from the equity and the employee will be credited for any escrow balance.

 

Possession Period: The employee will be given thirty (30) days from acceptance to vacate the property.

 

Items Included in the Purchase Price: Altair Global Relocation’s purchase price includes, but is not limited to, all fixtures, appurtenances, and built-in items usually considered to be part of residential properties such as blinds, window shades, awnings, window screens, storm and sash screens, storm or combination doors, curtain and drapery fixtures, electric and lighting fixtures, yard lights, fixed gas barbecue grills, T. V. antennas, electric garage door openers, and installed wall-to-wall carpeting.

 

 

	
Option 3:

	
Unassisted Sale

 

The employee chooses to sell the property without benefit of company assistance and is reimbursed for customary closing costs.

 

This option provides for the reimbursement of certain expenses involved in the sale of a residence when an employee lists, sells and closes a contract independent of Altair Global Relocation. The employee may choose this option for personal reasons or as a result of owning property which does not qualify for other options outlined in this Plan (e.g., a mobile home with land, a cooperative or a house with hazardous substances). The employee will be reimbursed for most normal and customary closing costs associated with this sale. The home, however, must be sold and reimbursable expenses incurred within one (1) year following the effective date of the relocation.

 

The amount of reimbursement of customary closing costs is fully taxable income and is not grossed up for tax purposes. Taxes will be withheld at the applicable Federal and State supplemental tax rates and the applicable local tax rate. Social Security and Medicare will also be withheld at the applicable rates before issuing the check.

 

	
Reimbursable Closing Expenses (applies to options 1 & 3)

 

	
§  

	
Documentary Stamps.

	
 §  

	
Legal Fees

	
 §  

	
Licensed Broker’s Selling Commission not to exceed 6% (anything higher must be approved in advance by the Altair Global Relocation Consultant).

	
 §  

	
Survey Charges.

	
 §  

	
Termite Inspection Fees (where applicable).

	
 §  

	
Title Fees (where applicable).

	
 §  

	
Transfer Taxes.

 

	
NOTE:

	
In certain areas it is customary for the seller to provide title insurance on the property being sold. If this is required, the employee is eligible for reimbursement.

 

	
Non Reimbursable Expenses (applies to options 1 & 3)

 

	
§  

	
Closing costs normally charged to the buyer.

	
 §  

	
Discount points used to obtain financing for the buyer.

	
 §  

	
Expenses related to selling seasonal residences, income producing property or undeveloped lots.

	
 §  

	
Service Fees charged by Real Estate brokers.

	
 §  

	
Mortgage Pre-Payment Penalties.

	
 §  

	
Any cost to obtain clear title.

 

Section 3

Capital Loss Program

 

Under the provisions of this Program, reimbursement is available for documented capital loss of original purchase price of employee’s home. The Plan does not provide for reimbursement of any special financing or other concessions (see Section 3, Page 2). The Plan does not cover all losses incurred, but provides assistance should it become necessary.

 

To be eligible for reimbursement under the Capital Loss Program, the property:

 

	
§  

	
Must meet the eligibility requirements of the Home Sale Provision of this Plan.

	
 §  

	
Must have sold through one of the Home Sale Assistance Programs. (Options 1 and 2 only).

  

Reimbursement under this program is according to the following guidelines:

 

	
§  

	
Original Purchase Price must be verified on the two-page settlement statement. (HUD-1).

	
§  

	
Deductions will be made for special financing or other concessions, (i.e., seller paid discount points).

	
 §  

	
Capital improvements are not eligible for reimbursement.

 

 

If You Have a Capital Loss

 

If you incur a capital loss due to your relocation, contact your Relocation Consultant who will review the documents required to support your request for reimbursement.  Those required documents are:

 

	
§  

	
Real estate contract indicating the original sales price when the home was purchased

	
 §  

	
Settlement statement on the home (HUD-1)

 

	
NOTE:

	
Unless proper documentation is available, Capital Loss will not be eligible   for reimbursement.

 

  

  

  

REQUEST FOR CAPITAL LOSS

REIMBURSEMENT

	
Name:

 

___________________________________

	
Title:

 

________________________________

	
Department: 

 

___________________________________

	
New Location (City/State):

 

________________________________

	
Contact Phone No:

 

___________________________________

	
 

 

________________________________

 

 

	
Effective Date: 

___________________________________

	  	  
	
Property Address:

 

______________________________________________

	  
	
Date of Purchase:

 

__________ ____________  

	
Date of Sale:

 

_______________________

	
Date Vacated: 

 

________________

Capital Loss Computation

	
1.

	
Contract Purchase Price

	
$

_______________

	  	  	  
	
2.

	
Deductions - (Concessions, Special Financing,

	
$

	  	
etc., i.e., Seller paid discount points)

	_______________
	  	  	  
	
3.

	
Purchase Price

	$
	  	
(Line 1 minus Line 2)

	
_______________

	  	  	  
	
4.

	
Total Purchase Price

	
$

_______________

	  	  	  
	
5.

	
Sale Price (Guaranteed Value or Private Offer,

	$
	  	
whichever is higher)

	
_______________

	  	  	  
	
6.

	
Capital Loss

(Line 5 minus Line 6)

	
$

_______________

	
Correct

	  	
Reviewed

	
Employee:

	  	
Relocation Consultant:

	
Date:

	  	
Date:

	  	  	  
	
Title

	  	
Title

 

Section 4

Home Purchase/Rental Program Overview

 

Home Buyers

 

In order to qualify for reimbursement of allowable home purchase costs, employee must be under contract within six (6) months following the effective payroll change date of his/her move.  Assistance is provided in finding a home in the new location as quickly and economically as possible. Employees must utilize a Real Estate Broker qualified by Altair Global Relocation to be eligible for the Home Purchase Benefits of this Plan.  The Real Estate Broker will provide a qualified, experienced sales agent who will:

 

	
§  

	
Familiarize the employee with the new location.

	
 §  

	
Review the types of housing available in the area.

	
 §  

	
Discuss special needs and interests of the employee and family.

	
 § 

	
Discuss commute times to and from the office.

	
 §  

	
Assist in determining price range of homes.

	
 §  

	
Pre-screen homes in the employee’s price range.

 

It is recommended that the Guaranteed Value Offer be established prior to contracting topurchase a new home. The employee should contact the broker as soon as possible to schedule the house hunting trip(s). Discussing the above information before house hunting will enhance productivity of the trips.

 

	
NOTE:

	
This Plan does not provide for reimbursement of fees for Buyer’s Agents. Such commissions/fees should be paid by the seller.

 

 

Discounted Inventory Homes

 

Discounted inventory homes may be available in “as is” condition for ninety-four (94) percent of the appraisal value.  To qualify, the employee must contact his/her Relocation Consultant.

 

Renters

 

In order to assist employees who intend to rent or lease a home or apartment in the new location, this Plan provides for the payment of a finder’s fee to locate a suitable home in the new area.  This provision is limited to a maximum of $250 (receipts required), and does not apply to interim living rentals. It is applicable only in areas where this charge is typical, i.e., New York City; Washington, D.C.

 

Section 5

Mortgage Financing Program/Closing Costs

 

Altair Global Relocation has arrangements with a number of national lenders to provide mortgage financing for the purchase of a residence at the new location, where such a purchase is made within six (6) months following the effective date of your payroll change.

 

Altair Global Relocation will wire the funds for covered buyer’s closing expenses directly to the title company handling the closing. Therefore, the employee only has to provide funds at closing for expenses that are not covered under the provisions of the Plan.

 

 

Covered Closing Expenses

 

Reasonable, customary and non-recurring buyer’s closing costs may include the following:

 

	
§  

	
Credit Report.

	
 §  

	
Document Preparation Fee.

	
 §  

	
Escrow Fee/Settlement Closing Fee.

	
 §  

	
Homeowner’s Association Transfer Fee.

	
 §  

	
Lender’s Appraisal Fee.

	
 §  

	
Loan Origination Fee, Points, or Mortgage Broker Fee not to exceed one (1) percent.  (Gross-up for federal and state income tax not provided).

	
 §  

	
Typical Inspections including termite, structural, mechanical and radon.

	
 §  

	
Real Estate Transfer Tax.

	
 §  

	
Recording Fee.

	
 §  

	
Title Fees (except in states where it is customary for sellers to pay).

	
 §  

	
Lender Required Survey.

 

Altair Global Relocation will coordinate with the title company to expedite the wiring of covered closing costs.  However, should it be necessary to seek direct reimbursement from Altair Global Relocation, the following must be submitted:

 

	
§  

	
Original Settlement Statement, usually the HUD-1.

	
 §  

	
Receipts for any closing-related service or inspections not itemized on the closing statement.

 

Non Reimbursable Expenses

 

The following expenses, and any other expenses not standard for the area, are not reimbursable under the provisions of this program:

 

	
§  

	
Assessments.

	
 §  

	
Buyer’s Agency Fees (Use of Buyer’s Agents is encouraged, but all commissions must be paid by the seller).

	
 §  

	
Commitment Fee (if separate from Loan Origination Fee).

	
 §  

	
Duplicate Construction Loan Costs.

	
 §  

	
Interest.

	
 §  

	
Mortgage Discount Points (in excess of 1% Loan Origination Fee, Points or Mortgage Broker Fee).

	
 §  

	
Mortgage Insurance.

	
 §  

	
Taxes.

	
 §  

	
Utility Adjustments.

	
 §  

	
Mortgage Pre-Payment Penalties.

	
 §  

	
Costs typically paid by the seller.

 

  

  

  

Section 6

Lease Settlement

Lease Settlement

 

Renters who are moving due to a change in work location must notify landlords in writing that they will be vacating. Timetables should be set according to the terms set forth in lease agreements.

 

Reasonable costs associated with breaking a lease will be reimbursed.  They include:

 

	
§  

	
Lease cancellation fees.

	
§  

	
Untenanted rent upon vacate.

	
 §  

	
Forfeited security deposits.

 

Landlord charges for cleaning or damages to the premises, beyond normal wear and tear, are not reimbursable.

 

The following supporting documentation must be provided to the Relocation Consultant:

 

	
§  

	
Copy of the lease.

	
§  

	
Letter from landlord documenting expenses owed.

	
§  

	
Copy of check or receipt.

 

NOTE:  The maximum reimbursement for lease settlement is equivalent to two (2) months’ rent.

 

 

Section 7

Interim Living/Day(s) of Move

and Transportation Expenses

 

 

Lump Sum Allowance

 

This Plan provides a lump sum allowance to cover expenses for pre-move house hunting trips, interim living and day(s) of move. The Lump Sum Allowance is prepared by your Relocation Consultant and is based on whether you rent or own at your old location and the total number of relocating dependents.

 

Included in the lump sum are allowances for:

 

	
§  

	
House hunting trips which are based on whether you are a renter or homeowner.  House hunting provides for lodging, meals, and transportation for the employee and one other relocating dependent.

	
§  

	
Interim living which provides for lodging, meals, and transportation for trips home for employee only.

	
§  

	
Meals and lodging expenses during day(s)-of-move for employee and all relocating dependents.

 

	
NOTE:

	
If the employee already owns a home in the destination city, and that home will be the employee’s primary place of residence, the lump sum will not include pre-move house hunting. Interim living, provisions will be adjusted accordingly.

 

 

Tax Implications

 

The lump sum allowance is fully taxable and subject to gross-up tax assistance.  See Section 11.

 

Documentation of actual expenses incurred and covered by the lump sum allowance is not a requirement; however, it is recommended that the employee keep accurate records throughout the relocation for income tax purposes.

 

 

Day(s) of Move

 

This Plan provides for reimbursement of actual expenses for transportation cost only to destination location for employee and relocating dependents during day(s)-of-move (receipts required).

 

AT&T will pay for transporting a total of two (2) automobiles per household, if they are operational and have a current registration.  Employee may drive one (1) or both vehicles to the new residence and be reimbursed mileage at the current authorized rate. (See Transporting Your Automobiles, Section 10, Page 2.)

 

	
NOTE:

	
AT&T will not reimburse employee for frequent flyer miles, other travel coupons and/or incentives used for day-of-move travel.

 

Tax Implications

 

A portion of reimbursed mileage is excluded from compensation, and a portion is considered taxable compensation under current IRS guidelines. The amount included in compensation is subject to gross-up tax assistance. (See Section 11.)

Trailing Spouse

 

If an employee has a spouse who is also a company employee, that “trailing spouse” is eligible for meals for the number of days actually spent in temporary quarters at the new location within the corresponding interim living period of the primary relocating employee. This does not include weekends. These expenses will be reimbursed at the end of the move (receipts required).

 

NOTE:  Unless otherwise specified, it is assumed that the organization of the primary relocating employee will bear the expenses of the trailing spouse.

 

Tax Implications

 

Interim living expenses reimbursed to the trailing spouse are fully taxable and subject to gross-up tax assistance. (See Section 11.)

 

Section 8

Miscellaneous Moving Allowance

 

The Miscellaneous Moving Allowance will be calculated by your Relocation Consultant. It is provided to cover certain moving expenses not included under the other provisions of the Plan. These expenses include, but are not limited to:

 

	
§  

	
Utility service connection charge, including any applicable telephone connection charge.

	
 §  

	
Removal or installation of articles secured to the premises or plumbing, electrical, or carpentry services necessary.

	
 §  

	
Installation cost of telephone service, connection charge, move or change charge.

	
 §  

	
Piano tuning.

	
 §  

	
Driver’s and car license reissues, registration, and applicable sales tax.

	
 §  

	
Deposits, dues, etc. for clubs, private schools, health clubs, safe deposit boxes, etc.

	
 §  

	
Transportation of live plants.

	
 §  

	
Disassembly and reassembly of recreational or custom accessories (e.g., swing set, wall units, pool tables, etc.).

	
 §  

	
Child care.

	
 §  

	
Cleaning of former and new residence, yard maintenance, trash removal, etc.

	
 §  

	
Notary Fees.

	
 §  

	
Cab/limousine fares and tolls.

	
 §  

	
Fees charged by airlines to change previously ticketed flights.

	
 §  

	
Unrefunded or unexpired deposits, dues, etc.

	
 §  

	
Local transportation to and from work and parking.

	
 §  

	
Local transportation for house hunting.

	
 §  

	
Alteration, replacement, and installation cost of floor covering, drapes, and window accessories.

	
 §  

	
Expenses incurred in connection with animals such as shipment of pets and horses, charges for license fees for pets, kennel fees, and other associated expenses.

	
 §  

	
Exterminating and fumigating.

	
 §  

	
Loss on unused frozen foods, fuel, fireplace wood, animal feed and unused building materials such as lumber, bricks, and flagstone. The cost of moving these items is prohibitive relative to value.

	
 §  

	
Outside services for excessive or unusual moving needs (hiring a forklift or crane, etc.).

	
 §  

	
Unexpired insurance (residence, automobile, or household appliances).

	
 §  

	
Tips to movers.

	
 §  

	
Appraisals of art or antiques for insurance claims.

 

In the event that the transferred employee and the trailing spouse are both employed by AT&T or a subsidiary thereof, and both the employees are transferred simultaneously, the allowance will be calculated on the higher base salary.

 

	
NOTE:

	
The employee should keep a record of all money spent for expenses in the above since some of these expenses may be deductible on the employee’s tax return together with other expenses defined as deductible. Employee should consult IRS Publication 521, Moving Expenses.

 

Tax Implications

 

The miscellaneous moving allowance is considered taxable compensation, and is not eligible for gross-up tax assistance. Taxes will be withheld at the applicable Federal and State supplemental rates and the applicable local tax rate. Social Security and Medicare taxes will also be withheld at the applicable rates before issuing the check.

Section 9

Spousal/Partner Career Assistance

AT&T provides Spousal/Partner Career Assistance for job-seeking spouses/partners of employees who accept relocation assignments. Services may be initiated for the spouse/partner after relocation has been approved and initiated for the transferring employee.

 

 

Program Components

 

This benefit is designed to help spouses/partners with successful career/job transitions in a new community. Following a personal needs assessment telephone call, a customized program is designed and delivered which may include: assessment and profiling, resume development, targeting of potential job sources/employers/recruiters and/or networking contacts, job search communications guidance/training, assistance in interviewing, follow-up and salary negotiation.

 

Program components may also include exploration and assessment for those considering career changes, help for the spouse/partner pursing an executive career track or entrepreneurial ventures, and specific program tracks for teachers, health care professionals, administrative personnel and other professions.

 

The spouse/partner career consulting services provided through this benefit do not guarantee employment. However, services provided do help spouses/partners seek employment and enable them to understand the responsibilities and actions needed to obtain re-employment in a new location.

 

 

Eligibility

 

The spouse/partner is eligible to initiate services for up to six (6) months from the effective date of your payroll change. Any employee/spouse/partner interested in this provision must contact his/her Relocation Consultant during this time period.

 

 

Tax Implications

 

Fees for services provided by Vandover are paid by AT&T and are considered taxable compensation to the relocating employee.  Spousal/Partner Career Assistance is subject to gross-up tax assistance. (See Section 11.)

 

Section 10

Movement and Insurance of Household Goods

 

Movement of Household Goods

 

AT&T has contracts with van lines offering substantial discounts to handle the movement of household goods.

 

This provision covers payment for the transportation of household goods and personal belongings located in the employee’s primary residence in the departure city as of the date of initiation into the relocation program to the primary residence in the destination city. Coverage includes:

 

	
§  

	
Packing

	
 §  

	
Loading

	
 §  

	
Unloading

	
 §  

	
Transportation

	
 §  

	
Storage (maximum of sixty (60) days)

	
 §  

	
Insurance

	
 §  

	
Crating (only if authorized by AT&T)

 

Upon selection of a carrier, the Relocation Consultant will prepare a Purchase Order and forward a copy to the carrier.

 

Packing and loading dates should be arranged between the employee and the mover with every attempt made to provide these services on the dates requested. However, keep in mind that Altair Global Relocation cannot authorize the additional cost of weekend or holiday service.

 

Employees must be at the old residence when the movers arrive to pack and at the new home when goods are delivered. Insurance will be provided on a replacement value basis, subject to limitations (see Insurance on Shipment of Household Goods in this section).

 

Should goods be lost or damaged, documents of ownership and the value of the specific items claimed will be required (please refer to Insurance on Shipment of Household Goods for details regarding insurance and claims).

 

Moving costs are paid directly to the mover.

 

 

Storage

 

This Plan allows payment for a maximum of sixty (60) days of storage in a warehouse facility provided by the mover (climate control storage is not included).  No exceptions will be made for employees who choose to build in the new location.  Temporary storage of household goods to accommodate plans for vacation or side trips en route to employee’s new home, initial fix-up of the new home, or to delay mortgage payments will NOT be authorized. However, if employee elects to store longer than sixty (60) days, at his/her expense, insurance coverage will continue until household goods are delivered out.

 

NOTE:                     Motorized vehicles and boats are not authorized for storage.

 

 

Delivery of Household Goods

 

Upon delivery of goods to the new residence, all items should be closely inspected for damage and loss. The number and condition of items should coincide with the inventory sheet prepared at origin. Note all discrepancies on the driver’s and employee’s inventory sheets, such as “missing”, “broken”, “scratched”, etc., and have the van line representative sign employee’s copy.

 

If loss or damage does occur, please refer to Insurance on Shipment of Household Goods in this section for claim handling procedures.

 

When unloading and unpacking is completed, the driver will ask the employee to sign the bill of lading and inventory sheets to certify receipt of services, including any unpacking.  At this time, any damage or loss to goods should be noted. If certain services were not performed by the carrier, make a specific notation in the appropriate column on the bill of lading and request the driver to verify by signing.

 

It is recommended that all containers which the carrier did not unpack be inspected within forty eight (48) hours and checked for concealed damage.

 

Tax Implications

 

In accordance with current IRS regulations, the amount paid by the Company to or on behalf of the employee associated with the movement of household goods and storage of household goods up to 30 days is excludable from income and not reportable on Form W-2.  Therefore, no gross-up is necessary for these expenses.  Storage of household goods in excess of 30 days up to 60 days is taxable compensation to the employee and is eligible for gross-up tax assistance.  See Section 11.

 

 

Transporting Your Automobiles

 

AT&T will pay for transporting a total of two (2) automobiles per household, if they are operational and have a current registration.  Employee may drive one (1) or both vehicles to the new residence and be reimbursed mileage at the current Company authorized rate. (See Day(s) of Move, Section 7, Page 1.)

 

	
NOTE:

	
One (1) car may be pre-shipped, on an overflow basis, separate from your household goods.

 

 

Services NOT Authorized

 

The following services are not paid for separately but are provided for in the miscellaneous moving allowance (see Section 8). These services may include, but are not limited to:

	
§  

	
Disassembly/Assembly - play gyms, sheds, T.V./radio antennas, swing sets, exercise equipment, computer desks, entertainment centers, pool tables, chandeliers, above ground swimming pools, flagpoles, etc. Such items may be transported if they are disassembled prior to packing. If movers assemble or disassemble any unusual items, employees will be required to pay the mover directly.

	
 §  

	
Servicing grandfather clocks.

	
 §  

	
Establishing Services - installing power, water/gas lines, etc.

	
 §  

	
Parts and/or labor required for appliance disconnect/reconnect will be at the employee’s expense.

	
 §  

	
Assembly or hook up of electronic equipment such as stereos, VCRs, TVs, computers, etc.

	
 §  

	
Excess Insurance Charges – beyond the “all risk” insurance coverage (i.e., flood, fire, and civil disturbance) provided by the Company while goods are in storage or transit.

	
 §  

	
Exclusive use of moving van or space reservation.

	
 §  

	
Unauthorized extra pickups or deliveries. (Any charges associated with an extra stop are the transferee’s responsibility.)

	
 §  

	
Unauthorized overtime packing and unpacking.

	
 §  

	
Unauthorized crating.

	
 §  

	
Packing and/or movement of household goods from attics and/or crawl spaces.

 

 

Items NOT Authorized for Transportation

 

The following is a list of items for which AT&T will not authorize transportation.  Movement of:

 

	
§  

	
Wine Collections.

	
 §  

	
Art Collections (in excess of $5,000).

	
 §  

	
More than two (2) automobiles.

	
 §  

	
More than two (2) motorcycles or small two (2)- or four (4)-wheel recreational vehicles.

	
 §  

	
Spas/Hot Tubs.

	
 §  

	
Live plants, shrubs or trees.

	
 §  

	
Firewood or construction material.

	
 §  

	
Animals.

	
 §  

	
Frozen/perishable foods.

	
 §  

	
Aircraft.

	
 §  

	
Liquids in unsafe containers/flammable liquids.

	
 §  

	
Valuable papers/jewelry, photographs, personal video tapes, etc.

	
 §  

	
Tractors/farm equipment larger than normally required for yard and garden maintenance.

	
 §  

	
Any goods/materials prohibited by law.

	
 §  

	
Campers and motor homes.

	
 §  

	
Satellite dishes.

	
 §  

	
Boats in excess of twenty-six (26) feet.

	
 §  

	
Collectibles, including but not limited to coins, stamps and trading cards.

	
 §  

	
Propane/Butane tanks.

 

 

Just Before the Movers Arrive

 

	
§  

	
Separate and mark items clearly (such as luggage and garage door openers) that will not be sent by the mover.

	
 §  

	
Leave in place any breakables to be packed by movers.

	
 §  

	
Move items to be packed and/or transferred from attic to main area of home.

	
 §  

	
Arrange for storage at destination if new home will not be ready when household goods arrive.

	
 §  

	
Check:

	
 ­  

	
Clothes at cleaners

	
 ­  

	
Shoes at repair shop

	
 ­  

	
Sports equipment in locker

	
 §  

	
Close and lock all windows and doors.

	
 §  

	
Defrost refrigerator or freezer at least thirty-six (36) hours in advance.  Clean and wipe them thoroughly dry.  Movers will not accept mold stains as transit damage.

	
§  

	
Disassemble items employee is responsible for, unless prior arrangements have been made with the movers.

 

 

Insurance for Shipment of Household Goods

 

Transported property is insured at replacement value against loss and/or damage from any external cause, including strikes, riots and civil commotions.

 

Only those items which are packed and/or stored by the moving company are covered by insurance.

 

Employees are automatically insured against all physical loss or damage for replacement value of up to $150,000.00 while the items are in transit or storage, subject to limitations. In the event the value of an employee’s personal effects exceeds $150,000, the employee should make their own arrangements for extra insurance coverage using their miscellaneous moving allowance.

 

If you have personal insurance, check with your insurance agent for additional insurance of your personal property while it is being moved. It is prudent to keep this coverage in force throughout your move, until you have obtained permanent insurance at your new location. Employees should consider purchasing insurance for their antiques, other collectibles and/or collections, as they are not covered under this Plan.

  

Covered items and limitations include:

 

	
§  

	
Automobiles and trailers are covered only while in the custody of the moving company or while being driven between the employee’s residence and the shipping point.

	
 §  

	
Boats up to twenty-six (26) feet in length.

	
 §  

	
Jewelry and furs up to $50 for each item, not to exceed $500 for a single claim.

	
 §  

	
Fine art and antiques up to $5,000 per shipment.

 

Items not covered under this Plan include, but are not limited to:

 

	
§  

	
Bills, credit cards, currency, deeds, evidence of debt, money, notes, securities, bullion, collectibles.

	
 §  

	
Any item not shipped under this Plan.

	
 §  

	
Live plants, animals, and perishable foodstuffs.

	
 §  

	
Automobiles and trailers, while being driven over the highway, except while being driven by the mover’s agent from the residence of the employee to the shipping point of the common carrier and vice versa.

 

Employees should determine that they have adequate insurance to cover the above items to the extent not covered by company-provided insurance, as well as coverage for items moved in the employee’s personal car. Such coverage may or may not be provided for in a homeowner’s-type policy. Employee should contact his/her insurance agent to be certain.

 

The employee is expected to be present during the loading of household goods to make sure possessions are fully inventoried.  Articles left in drawers cannot be counted in the inventory.

 

When goods arrive at the new home, inspect them and note any exceptions on the carrier’s copy of the bill of lading or inventory.

 

	
NOTE:

	
Be certain that important or valuable papers or documents of any kind, stamp collections, monies, jewelry or valuable furs are not included in the shipment by van. This is extremely important because neither the mover, the insurance company, nor AT&T will accept liability for these items.

 

AT&T contracts with an independent firm for the processing of insurance claims related to damage incurred to personal property during the movement of employee’s household goods and personal belongings.

 

Employees should contact the Relocation Consultant for assistance in initiating a claim. Claims for insurance must be filed with UNIRISC within six months of delivery to final residence. Claim forms are available on the AT&T intranet.

 

Should it become necessary to file a claim for loss or damage, inspect all items, noting the damage and/or loss on the carrier’s copy of the bill of lading and add to the notation, “Subject to Further Inspection.” Make sure the driver signs the bill of lading. Employees must keep a copy of the bill of lading and inventory sheets. Information from these documents is required to process the claim.

 

 

 

	
NOTE

	
It is the employee’s responsibility to establish proof of ownership and value to the carrier in case of loss or damage. The costs associated with this, such as obtaining appraisals of antiques or works of art, are covered by the Miscellaneous Moving Allowance. Appraisals obtained by the employee for insurance purposes may be sufficient.

 

Section 11

Tax Aspects of Relocation

 

Introduction

 

This section addresses the tax consequences of a company-initiated relocation and defines the tax “gross-up” method.

 

Tax Implications Overview

 

Most reimbursements for relocation expenses, whether paid to the employee as a direct reimbursement or paid to another on his/her behalf, are earned taxable income to the employee.  An exception to this rule is that certain reimbursements are excluded from income as follows:

 

	
§  

	
Reimbursements related to the shipment of household goods and the first thirty (30) days of storage.

 

	
§  

	
Reimbursements related to travel and lodging at the time of the move.

 

Tax Gross-Up Method

 

Under the gross-up method, an allowance is computed according to established guidelines to cover the anticipated tax on reimbursements (and the subsequent tax on tax reimbursement). Payment of this allowance will be made directly to the Federal, State, and local Governments (where applicable) on behalf of the employee. The Company has determined that the gross-up will be calculated using the applicable Federal and State supplemental tax rates, and the applicable local tax rate.  Social Security and Medicare tax rates will also be utilized.

 

The termination or resignation of a relocated employee in the same year that relocation benefits were allowed does not eliminate the tax obligation by the employee’s company. Gross-up payments will be made regardless.

 

Employee Responsibility

 

Gross-up tax assistance calculated on behalf of each employee is designed to meet the withholding obligation of the applicable taxing authority. The gross-up tax assistance calculated is not meant to meet all tax obligations of the employee.

 

In the event the gross-up tax assistance does not cover an employee’s tax liability, the employee is responsible for any additional tax. The gross-up tax assistance is not subject to appeal by the employee.

 

Altair Global Relocation Responsibility

 

When form W-2 Wage and Tax Statement is issued, the payroll office or Altair Global Relocation will provide the employee with a Summary of Relocation Expenses for the year.

 

	
NOTE:

	
Because of the complexities of income tax laws, Altair Global Relocation, AT&T, etc., will not assume responsibility or become involved with regard to the employee’s income tax reporting, filing or calculation. It is, therefore, recommended that employee(s) seek professional advice and assistance in this matter; however, charges for such assistance are not reimbursable.

 

 

Section 12

Relocation Repayment Agreement

 

The attached Repayment Agreement must be signed by the relocating employee and transmitted to Altair Global Relocation before any relocation payments can be disbursed.

 

 

RELOCATION REPAYMENT REIMBURSEMENT AGREEMENT

 

I, _________________________, have accepted a position with ___________________(name of company or subsidiary “Company”) which involves relocation, and may result in payment by Company of costs and tax allowances to me or to third parties on my behalf, under the terms of the AT&T Relocation Plan (the “Plan”). These costs may include, but are not limited to, service fees paid to the vendor for administration of the terms of the plan, household moving expenses, appraisal fees, etc., (“Relocation Expenses”). The Company or my relocation assistance vendor will provide me with a statement detailing all Relocation Expenses within a reasonable time after such expenses have been fully identified.

 

In consideration of Company incurring such Relocation Expenses, I agree to repay Company such Relocation Expenses in full in the event that I cancel my acceptance of the job cited above and do not report to work in the new location, or if I decide not to work for the Company or sever my employment with the Company for any reason within my control within twelve (12) months from the date such Relocation Expenses were last incurred.

 

To cover repayment of the Relocation Expenses, I authorize Company to deduct up to half of my final paycheck or any other monies Company owes to me, if any. If any such deduction is insufficient to cover repayment of the Relocation Expenses, I agree to repay the balance to Company within 30 days of the date I decide not to work for Company or terminate my employment with Company.

 

I understand that I will be solely responsible for any tax consequences arising from any reimbursement I may be required to make to the Company as a result of this Agreement.

 

This Agreement in no way constitutes or implies, nor shall it be construed as constituting or implying, any guarantee or contract of employment. I understand that my eligibility for relocation benefits is controlled by the terms of the Plan. This Agreement cannot be changed or modified except in writing, signed by me and an authorized representative of the Company. I understand that any oral or written representations about this subject which are not contained in this Agreement are no longer effective. I have entered into this Agreement freely, knowingly and voluntarily.

 

I UNDERSTAND AND ACKNOWLEDGE THAT MY EXECUTION OF THIS RELOCATION EXPENSE REIMBURSEMENT AGREEMENT IS A CONDITION OF MY ELIGIBILITY FOR BENEFITS UNDER THE AT&T RELOCATION PLAN.

 

______________________________                                __________________________

Signature                                                                                     Social Security Number

 

______________________________                                __________________________

Print Name                                                                                   Date

  

  

  

Section 13

Helpful Hints / Contacts / Telephone Numbers

Helpful Hints

 

During the rush and stress of moving, it is easy to forget small but important details. Following is a checklist for your use in keeping track of some of the more common items. This list is not meant to be all-inclusive.

 

	
CATEGORY

	
ACTION

	
DONE

	
Insurance

	
Check homeowner's policy to determine coverage if home is left vacant.

	  
	
Notify all agents (life, fire, car, health, etc.) of the impending move.

	
Be sure family medical/dental/life plans are in force in the new location.

	
Banking

	
Close out savings and checking accounts.

	  
	
Notify banks where to send final account statements.

	
Remove valuables from safe deposit boxes or have the bank forward them to the new location by registered or insured mail.

	
Notify finance companies, stores, or any other current lenders of the new address.

	
Arrange for sufficient cash or traveler's checks to cover expenses until new banking arrangements can be made.

	
Cancel automatic drafts on mortgage loan.

	
Change of Address Notification

	
File a change of address card with the post office one week before leaving.

	  
	
Send change of address cards to magazine or newspapers.

	
AT&T Benefits

	
Check with Supervisor or Benefit Office on change of medical, dental, etc. benefits

	  
	
Records

	
Arrange for transfer of the following records:

 §  Legal papers (check with attorney to see if current will is valid in new state)

 §  Bank/savings and loan

 §  Doctors and dentists (including prescriptions for glasses and/or medicines, records of inoculations and allergies, dates of last physical examination)

 §  Church

 §  Fraternal organizations

 §  Animal (pets)

 §  School transcripts

 §  Birth certificates

 §  Tax records

 

	  
	
Records

(continued)

	
Be sure to take copies of:

 §  Marriage license

 §  Real estate settlement statements

 

	  
	
Taxes

	
Be sure state and city taxes are current

	  
	
Keys

	
Surrender house keys and garage door opener to the new owner or agent

	  
	
Miscellaneous

	
Take along a copy of old phone directories (they may come in handy)

	  

	
 SERVICES TO BE DISCONTINUED

	
DATE

	
Telephone Company (deposit refund?)

	  
	
Electric Company (deposit refund?)

	  
	
Water Company (deposit refund?)

	  
	
Gas Company (deposit refund?)

	  
	
Fuel Oil Company (have them measure the remaining oil)

	  
	
Home Deliveries (milk, newspapers)

	  
	
Laundry and Dry Cleaning services

	  
	
Garbage Collection

	  
	
Diaper Services

	  
	
Lawn / Pool Services

	  
	
Pest Control Services

	  
	
Alarm Services

	  
	
Cable and / or Internet Services

	  
	
Leased Services (i.e. satellite dishes, furniture, water softeners, etc.)

	  

 

In choosing Options 1 or 2 of the Home Sale Assistance Program and requesting final readings on all utilities, instruct these companies to mail the final bill to the new address. Notify Altair Global Relocation of the date of your final utility readings so that they can arrange for continuation of services.

 

Important Contacts and Telephone Numbers

 

During relocation, numerous telephone numbers will become vital.  Following is a list of the numbers employees will use most often.  Also included are spaces for the names and numbers of relocation consultants, realtors, van lines, etc., after they are assigned.

 

	
Altair Global Relocation

	
877.290.8500

	
Vandover

	
314.576.0010

800.822.7345

	
Van Line Company:

Phone:

	
Relocation Consultant:

Phone:

	
Realtor (old location):

Phone:

	
Realtor (new location):

Phone:

	
Lender (new location):

Phone:

	
Insurance Company:

Phone:

 

  

  

  

Employee Assistance Counseling

 

 

A major career move can be overwhelming in many ways. AT&T offers an Employee Assistance Program (EAP) to assist the employee and his/her family in managing this transition.

 

The EAP counselors provide confidential, professional counseling to employees who may find themselves experiencing personal difficulties during or after the move.

 

EAP counseling services include:

 

	
§  

	
Marital or family counseling.

	
 §  

	
Work-related concerns.

	
 §  

	
Interpersonal difficulties.

	
 §  

	
Personal growth and development issues.

	
 §  

	
Alcohol or drug abuse.

 

All records and activities are maintained in strict confidence in accordance with medical ethics and state laws. If an employee needs assistance, he/she should contact an EAP counselor directly at 1.800.554.6701.

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