FORM
BELLSOUTH CORPORATION STOCK PLAN
PERFORMANCE SHARES AWARD AGREEMENT
BellSouth Corporation ("BellSouth") and [
_____________________________ ] ("Employee"), in consideration of the mutual
covenants set forth herein, and for other good and valuable consideration,
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, hereby agree to the terms of this Performance Shares Award
Agreement ("Agreement"), effective as of February 1, 2001:
1. _______ Award Grant. XxxxXxxxx, acting pursuant to action
of its Board of Directors and in accordance with the BellSouth Corporation Stock
Plan (the "Plan"), hereby grants to Employee, and Employee hereby accepts, [
_______________________________________ ( _______ )] Performance Shares as
described in Section 9.2 of the Plan effective as of the date above (the
"Award"). This 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 Period. The Performance Period with respect to the
Award shall be the three consecutive calendar year period
commencing January 1, 2001 and ending December 31, 2003.
3. Performance Objectives. The Performance Objectives applicable to
the Award shall be those financial performance criteria,
and the targeted level or levels of performance with respect to such criteria,
as set forth on Exhibit "A" attached hereto and incorporated herein by this
reference.
4. Payments.
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(a) Administrator's Determination. At the end of
the Performance Period, the Administrator shall determine the number of
Performance Shares earned under this Agreement, between zero (0) and
1.5 times the number of Performance Shares in the Award, based upon the
levels of achievement of the Performance Objectives during the
Performance Period (the "Performance Shares Earned"). The Compensation
Committee, in its discretion, shall make this determination, which
shall be final, conclusive and binding upon the Company and the
Employee.
(b) Payment for Performance Shares Earned. The Employee
shall be paid in cash an amount determined by multiplying the number of
Performance Shares Earned by the Fair Market Value of a Share as of the
last day of the Performance Period. The amount so determined shall be
paid in two (2) equal installments, with fifty (50%) percent to be paid
as soon as administratively practicable after the end of the
Performance Period, but in no event later than June 30, 2004; and the
remaining fifty (50%) percent to be paid six (6) months after payment
of the first installment.
(c) Dividends. In addition, the Employee shall be paid
an amount determined by multiplying the number of Performance Shares
Earned by the amount of cash dividends that were paid on one Share
(acquired on February 1, 2001) during the Performance Period. This
amount shall be paid as soon as administratively practicable after
the end of the Performance Period.
5. Death, Disability or Retirement. In the event of a termination of
the Employee's employment with BellSouth or
any Subsidiary, or any employer described in Paragraph 11 (also referred to
herein as a "Subsidiary"), during the Performance Period by reason of:
(i) death of the Employee;
(ii) disability, provided as a result of such disability
Employee is eligible for disability benefits under the BellSouth
Corporation Long Term Disability Plan or disability benefits under an
alternative plan maintained by Employee's employer which BellSouth
determines to be comparable to such disability benefits; or
(iii) retirement which entitles Employee to a "Service
Pension" under the terms of the applicable BellSouth Personal
Retirement Account Pension Plan or a 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 or as a result
of misconduct in connection with his or her employment,
the Employee or his or her Beneficiary, as the case may be, shall be entitled to
prorated payments under this Agreement. Such payments shall equal:
(A) the product of (x) the amount described in
Paragraph 4(b) above, multiplied by (y) a fraction, the numerator of
which is the number of whole or partial calendar months elapsed between
January 1, 2001 and the date of Employee's termination of employment,
and the denominator of which is thirty-six (36); such amount to be paid
at the times described in Paragraph 4(b) above; and
(B) the amount determined by multiplying the number of
Performance Shares Earned by the amount of cash dividends that were
paid on one Share (acquired on February 1, 2001) through the date of
Employee's termination of employment; such amount to be paid at the
time described in Paragraph 4(c) above.
6. Change in Control. Notwithstanding anything to the
contrary in this Agreement, in the event of a Change in Control, (i) the
Performance Period 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
Period"), (ii) the Employee shall be entitled to a payment equal to the amount
determined for the Modified Performance Period pursuant to Paragraph 4(b) above
multiplied by a fraction, the numerator of which is the number of whole or
partial calendar months elapsed during the Modified Performance Period, and the
denominator of which is thirty-six (36), and (iii) the Employee shall be
entitled to an amount determined by multiplying the number of Performance Shares
Earned by the amount of cash dividends that were paid on one Share (acquired on
February 1, 2001) during the Modified Performance Period. Such amounts shall be
paid as soon as administratively practicable after the end of the Modified
Performance Period, but in no event later than six (6) months after such date.
7. Forfeiture. In the event Employee terminates
employment with BellSouth and its Subsidiaries, under circumstances other than
those described in Paragraph 5 above, prior to the date on which an amount is
payable hereunder, Employee shall forfeit all of his interest in the Award
except to the extent previously paid.
8. 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.
9. 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.
10. Jurisdiction and Venue. Employee consents 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.
11. 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.
12. Pooling of Interests Accounting
Treatment. Notwithstanding anything to the contrary in this Agreement, if
the application of any provision(s) of this Agreement, or of the Agreement in
its entirety, would preclude the use of pooling of interests accounting
treatment with respect to a transaction for which such treatment otherwise is
available and to be adopted by BellSouth, this Agreement shall be modified as it
applies to such transaction, to the minimum extent necessary to prevent such
impact, including if necessary the invalidation of such provisions (or the
entire Agreement, as the case may be) to the extent they otherwise would have
been triggered by such transaction. If the pooling of interests accounting rules
require modification or invalidation of one or more provisions of this Agreement
as it applies to such transaction, the adverse impact on the Employee shall, to
the extent reasonably possible, be proportionate to the adverse impact on other
similarly situated employees of BellSouth. The Board of Directors of BellSouth
shall, in its sole and absolute discretion, make all determinations necessary
under this subsection; provided, that determinations regarding the
application of the pooling of interests accounting rules for these purposes
shall be made by BellSouth with the concurrence of BellSouth's independent
auditors at the time such determination is to be made.
13. Non-Transferability. Performance Shares may not be sold, transferred,
pledged, assigned or otherwise alienated, other than by will or by the laws of
decent and distribution.
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) The Plan and this Agreement shall be governed by the laws of the State
of Georgia.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
BELLSOUTH CORPORATION:
By: _____________________________________
EMPLOYEE:
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EXHIBIT "A"
PERFORMANCE OBJECTIVES
