Exhibit 10zz
Performance Share Agreement -
162(m) Officers/Internal Metric
BELLSOUTH CORPORATION STOCK AND INCENTIVE COMPENSATION PLAN
FORM OF PERFORMANCE SHARES AWARD AGREEMENT
BellSouth Corporation, a Georgia corporation ("BellSouth"),
acting pursuant to action of its Board of Directors and in accordance with the
BellSouth Corporation Stock and Incentive Compensation Plan (the "Plan"), hereby
grants to _____________ ("Employee") Performance Shares under the terms set
forth in this Performance Shares Award Agreement ("Agreement"), effective as of
___________, 2005:
1. Award Grant. BellSouth grants to Employee _________ effective as of
the date above (the "Award"). The Award is subject to the terms and conditions
of this Agreement, and to the further terms and conditions applicable to
Performance Shares as set forth in the Plan.
2. Performance Cycle. The Performance Cycle with respect to the Award
shall be the three consecutive calendar year period commencing January 1, 2005
and ending December 31, 2007.
3. Performance Pool. The Performance Pool is equal to the greater of:
(A) nine-tenths of one percent (0.9%) of BellSouth's average Operating Cash
Flow, or (B) one and one-half percent (1.5%) of BellSouth's average Net Income,
in each case, for fiscal years 2005, 2006 and 2007.
4. Performance Objectives. The Award shall be payable only if average
Operating Cash Flow or average Net Income, in each case, for fiscal years 2005,
2006 and 2007, is positive.
5. Determination of Performance Shares Payable.
(a) Committee Certification. As soon as practicable following the
receipt by the Compensation Committee of a report from BellSouth's independent
auditor of BellSouth's Operating Cash Flow and Net Income for the fiscal year
ending December 31, 2007, the Compensation Committee shall certify in writing
whether one or more of the Performance Objectives have been satisfied and, if
so, the amount of the Performance Pool.
(b) Determination of Performance Shares Payable. If one or more of
the Performance Objectives have been satisfied, the Compensation Committee
shall, as soon as practicable following its certification, calculate the number
of Performance Shares payable under this Agreement based on the lesser of (i)
____________ and (ii) a number of Performance Shares equal to the product of (A)
the Performance Pool divided by the End of Period Share Price (as defined below)
times (B) ___%; provided, however, the Compensation Committee may, in its
sole discretion, reduce the number of Performance Shares payable to Employee
with respect to the Award, but not below zero (the "Performance Shares
Payable").
(c) Payment. Employee shall be paid an amount in cash determined
by multiplying the number of Performance Shares Payable by the End of Period
Share Price. The amount so determined shall be paid as soon as administratively
practicable after the certification by the Compensation Committee in accordance
with Paragraph 5(a) above, but in no event later than 2 1/2 months following the
end of the Performance Cycle. Except as otherwise provided in this Agreement,
the "End of Period Share Price" shall mean the average of the closing prices
quoted on the New York Stock Exchange (NYSE) for all trading days during the
period beginning on October 1, 2007 and ending on December 31, 2007.
(d) Dividends. If the Compensation Committee certifies that one or
more of the Performance Objectives have been satisfied pursuant to Paragraph
5(a) above, Employee shall be paid an amount equal to the number of Performance
Shares Payable determined pursuant to Paragraph 5(b) above, if any, multiplied
by the amount of cash dividends that were paid on one Share (acquired on the
first day of the Performance Cycle) during the Performance Cycle. Any amount
payable pursuant to this Paragraph 5(d) shall be paid in cash as soon as
administratively practicable after the certification by the Compensation
Committee, but in no event later than 2 1/2 months following the end of the
Performance Cycle.
6. Death, Disability or Retirement. In the event of a termination of
Employee's employment with BellSouth or any Subsidiary, or any employer
described in Paragraph 12 (also referred to herein as a "Subsidiary"), during
the Performance Cycle by reason of: (i) death of Employee; (ii) "Disability" (as
defined in the Plan); or (iii) retirement which entitles Employee to a "Service
Pension" under the terms of the BellSouth Personal Retirement Account Pension
Plan or the BellSouth Supplemental Executive Retirement Plan, or a retirement
pension under any alternative plan maintained by Employee's employer which
BellSouth determines to be comparable to such a Service Pension, and not for
"Cause" (as defined in the Plan), Employee or his or her Beneficiary, as the
case may be, shall, if the Compensation Committee certifies that one or more of
the Performance Objectives have been satisfied with respect to the Award
pursuant to Paragraph 5(a) above, be entitled to a prorated payment under this
Agreement. Such payment, if any, shall equal the sum of (a) and (b) below and
be paid as soon as administratively practicable after the certification by the
Compensation Committee, but in no event later than 2 1/2 months following the
end of the Performance Cycle:
(a) the product of (x) the amount described in Paragraph 5(c) above
(taking into account the Compensation Committee's discretion to
reduce the number of Performance Shares payable pursuant to
Paragraph 5(b) above), multiplied by (y) a fraction, the
numerator of which is the number of whole or partial calendar
months elapsed between January 1, 2005 and the date of
Employee's termination of employment, and the denominator of
which is thirty-six (36); and
(b) the amount determined by multiplying the number of Performance
Shares Payable (taking into account the Compensation
Committee's discretion to
reduce the number of such Shares pursuant to Paragraph 5(b)
above) by the amount of cash dividends that were paid on one
Share (acquired on the first day of the Performance Cycle)
through the date of Employee's termination of employment.
7. Change in Control. Notwithstanding anything to the contrary in this
Agreement, in the event of a "Change in Control" (as defined in the Plan),
(i) the Performance Cycle described in Paragraph 2 above shall end on the last
day of the calendar quarter most recently preceding (or coincident with) the
occurrence of the Change in Control (referred to hereinafter as the "Modified
Performance Cycle"); (ii) the Compensation Committee shall as soon as
practicable thereafter certify whether one or more of the Performance Objectives
have been satisfied with respect to the Modified Performance Cycle; and
(iii) Employee shall, if the Compensation Committee certifies that one or more
of the Performance Objectives have been satisfied with respect to the Modified
Performance Cycle, be entitled to a payment equal to the sum of (a) and
(b) below, to be paid as soon as administratively practicable following the
occurrence of Change in Control, but in no event more than six (6) months
thereafter:
(a) the amount determined with respect to the Modified Performance
Cycle pursuant to Paragraph 5(c) above (taking into account the
Compensation Committee's discretion to reduce the number of
Performance Shares payable pursuant to Paragraph 5(b) above),
multiplied by a fraction, the numerator of which is the number
of whole or partial calendar months elapsed during the Modified
Performance Cycle, and the denominator of which is thirty-six
(36); and
(b) the amount determined by multiplying the number of Performance
Shares Payable with respect to the Modified Performance Cycle
(taking into account the Compensation Committee's discretion to
reduce the number of such Shares pursuant to Paragraph 5(b)
above) by the amount of cash dividends that were paid on one
Share (acquired on the first day of the Performance Cycle)
during the Modified Performance Cycle.
For purposes of this Paragraph 7, the End of Period Share Price shall
mean the average of the closing prices quoted on the NYSE for all trading days
during the 90-day period immediately preceding the date of the Change in
Control.
8. Forfeiture. In the event Employee terminates employment with
BellSouth and its Subsidiaries, under circumstances other than those described
in Paragraph 6 above, prior to the date on which an amount is payable hereunder,
Employee shall forfeit all of his or her interest in the Award except to the
extent previously paid.
9. Employment and Termination. Neither the Plan, this Agreement nor
any related documents, communications or other material shall give Employee the
right to continued employment by BellSouth or by any Subsidiary or shall
adversely affect the right of any such company to terminate Employee's
employment with or without cause at any time.
10. Tax Withholding. BellSouth or any Subsidiary shall have the right
to withhold from any payment to Employee, require payment from Employee, or take
such other action which such company deems necessary to satisfy any income or
other tax withholding or reporting requirements arising from this Award of
Performance Shares, and Employee shall provide to any such company such
information, and pay to it upon request such amounts, as it determines are
required to comply with such requirements.
11. Jurisdiction and Venue. Acceptance of this Agreement shall be
deemed to constitute Employee's consent to the jurisdiction and venue of the
Superior Court of Xxxxxx County, Georgia, and the United States District Court
for the Northern District of Georgia for all purposes in connection with any
suit, action, or other proceeding relating to this Agreement, including the
enforcement of any rights under this Agreement and any process or notice of
motion in connection with such situation or other proceeding may be serviced by
certified or registered mail or personal service within or without the State of
Georgia, provided a reasonable time for appearance is allowed.
12. Certain Employment Transfers. In the event Employee is transferred
to any company or business in which BellSouth directly or indirectly owns an
interest but which is not a "Subsidiary" as defined in the Plan, then Employee
shall not be deemed to have terminated his employment under this Agreement until
such time, if any, as Employee terminates employment with such organization and,
if applicable, fails to return to BellSouth or a Subsidiary in accordance with
the terms of Employee's assignment, or Employee otherwise fails to meet the
terms of Employee's assignment, at which time Employee's deemed termination of
employment shall be treated in the same manner as a termination of employment
from BellSouth or a Subsidiary under this Agreement.
13. Non-Transferability. Performance Shares may not be sold,
transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated.
14. Miscellaneous.
(a) Employee's rights under this Agreement can be modified,
suspended or canceled only in accordance with the terms of the Plan.
(b) This Agreement shall be subject to the applicable provisions,
definitions, terms and conditions set forth in the Plan, all of which are
incorporated by this reference in this Agreement and, unless defined in this
Agreement, any capitalized terms in this Agreement shall have the same meaning
assigned to those terms under the Plan. If there is any inconsistency between
the terms of this Agreement and the terms of the Plan, the Plan's terms shall
supercede and replace the conflicting terms of this Agreement.
(c) Nothing in this Agreement or the Plan shall be deemed or
construed to create an obligation for the Compensation Committee, BellSouth or
any Subsidiary to make any payment with respect to the Award.
(d) The Plan and this Agreement shall be governed by the laws of
the State of Georgia.
IN WITNESS WHEREOF, XxxxXxxxx has executed this Agreement as of the date
first written above.
BELLSOUTH CORPORATION
By: _________________________________
Title: Vice President-Human Resources
