261635167
FIFTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
AT&T MOBILITY II LLC
This Fifth Amended and Restated Limited Liability Company Agreement (this “Agreement”) is entered into effective as of the date specified herein by and among AT&T Mobility LLC, a Delaware limited liability company (“Mobility”), AT&T Corp, a New York corporation (“AT&T Corp.”), SBC Master Pension Trust (“Trust”), BellSouth Mobile Data, Inc., a Georgia corporation (“BSMD”) and the entities listed on the signature page hereto under the heading “Investor Funds” (“Investor Funds”), as the members (the “Members”), and AT&T Mobility Corporation, a Delaware corporation, as the manager (the “Manager”) of AT&T Mobility II LLC (f/k/a Cingular Wireless II LLC) (the “Company”), which has been formed as a limited liability company pursuant to the Delaware Limited Liability Company Act (6 Del. C. § 18 101, et seq.) (the “Act”) upon the following terms and conditions.
WHEREAS, New Cingular Wireless Services, Inc., a Delaware corporation (“NCWS”), Mobility, BSMD and Manager were parties to an Amended and Restated Limited Liability Company Agreement of the Company with an effective date of January 16, 2008, and that certain First Amendment to the Amended and Restated Limited Liability Company Agreement of the Company dated August 25, 2009;
WHEREAS, on January 1, 2010, Centennial Cellular Operating Co LLC (“CCOC”) contributed certain assets to Mobility II in exchange for a 1.2721165% interest in Mobility II and at such time, and in connection with such contribution, the assets of Mobility II were revalued;
WHEREAS, on July 1, 2010, CCOC merged with Centennial Communications Corp., a Delaware corporation (“Centennial”) and as a result of such merger, the Mobility II interest held by CCOC was transferred to Centennial and Centennial was admitted as a member of the Company;
WHEREAS, on September 9, 2013, the then existing membership interests in the Company were recapitalized into Common Interests (defined below);
WHEREAS, on September 9, 2013, AT&T Inc. contributed a promissory note to the Company (the “Series A Contribution”) pursuant to a Contribution, Assignment and Assumption Agreement, dated as of August 30, 2013 (as amended and restated on October 15, 2018, the “Contribution Agreement”) in exchange for 320,000,000 Series A Preferred Interests (defined below) and the Amended and Restated Agreement was amended and restated and superseded by the Second Amended and Restated Limited Liability Company Agreement (the “Second Amended and Restated Agreement”) to provide, among other things, for the issuance of the Series A Preferred Interests to AT&T Inc.;
WHEREAS, on September 9, 2013, AT&T Inc. contributed 320,000,000 Series A Preferred Interests in the Company to the Trust and the Trust was admitted as a member of the
Company and the Second Amended and Restated Limited Liability Company Agreement was amended and restated and superseded by the Third Amended and Restated Limited Liability Company Agreement (the “Third Amended and Restated Agreement”);
WHEREAS, on January 1, 2016, Centennial merged with AT&T Corp. and as a result of such merger, the Company interest held by Centennial was transferred to AT&T Corp. by operation of law, and AT&T Corp. was admitted as a member of the Company;
WHEREAS, on May 31, 2017, the Company redeemed a portion of the Common Interests in the Company from NCWS and Mobility;
WHEREAS, on October 15, 2018, the Third Amended and Restated Limited Liability Company Agreement as amended, was amended and restated and superseded by the Fourth Amended and Restated Limited Liability Company Agreement (the “Fourth Amended and Restated Agreement”), to provide, among other things, additional rights with respect to any transferee of the Series A Preferred Interests;
WHEREAS, on October 23, 2018, the Fourth Amended and Restated Agreement was amended to correct a scrivener’s error with respect to Schedule A (the “First Amendment”);
WHEREAS, on January 1, 2019, NCWS made a capital contribution to Mobility consisting of all of its outstanding membership interests of the Company (the “NCWS Contribution”), and the Fourth Amended and Restated Agreement was amended to reflect the new Percentage Interest of the Members (the “Second Amendment”);
WHEREAS, on August 29, 2019, the Fourth Amended and Restated Agreement was amended to address and satisfy certain requirements, conditions and guidelines contained in the Bipartisan Budget Act of 2015 (the “Third Amendment”)
WHEREAS, effective January 1, 2019, the Fourth Amended and Restated Agreement was amended to update the final Percentage Interests of the Members resulting from the NCWS Contribution based on the final valuation of the contributed interests (the “Fourth Amendment”);
WHEREAS, the Members and the Manager desire to amend and restate the Fourth Amended and Restated Agreement as amended, to among other things, admit Investor Funds as members of the Company and otherwise replace the Fourth Amended and Restated Agreement and First through Fourth Amendments thereof with this Agreement.
NOW, THEREFORE, in consideration of the premises, and the representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:
1.Certain Definitions. For the purposes of this Agreement, the following terms shall have the following meanings:
“Act” has the meaning set forth in the Recitals.
“Adjusted Capital Account Balance” means, with respect to any Member as of the date of any determination, the balance in such Member's Capital Account at such time, after such balance is:
(a) Increased by any amounts that such Member is obligated to restore under the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (taking into account the extent to which the Member bears the economic risk of loss for Company liabilities (other than Member Nonrecourse Debt) as determined in accordance with Code Section 704(b) and the Treasury Regulations thereunder and Treasury Regulation Section 1.752-2) or is deemed obligated to restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5); and
(b) Decreased by the amount of the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account Balance is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
“Adjusted Capital Account Deficit” means, with respect to each Member, the deficit balance, if any, of such Member's Adjusted Capital Account Balance as of the end of the relevant Allocation Period.
“Adjusted K-1 Election” means an election made by the Company in accordance with Section 6226 of the Code.
“Agreement” has the meaning set forth in the Recitals.
“Allocation Period” means (a) any period commencing on January 1 and ending on the following December 31 or (b) any portion of the period described in clause (a) for which the Company is required to allocate Net Income, Net Loss and other items of Company income, gain, loss or deduction pursuant to Section 14.
“AT&T Common Stock” means the common stock, $1.00 par value per share, of AT&T Inc. and any successor equity securities issued in lieu thereof by any successor of AT&T Inc.
“AT&T Corp.” has the meaning set forth in the Recitals.
“AT&T Shares” means AT&T Inc. Common Stock that may become deliverable pursuant to Section 8(e)(iii) of this Agreement.
“AT&T Inc.’s Debt-to-Total-Capitalization Ratio” means AT&T Inc.’s Debt divided by the sum of AT&T Inc.’s Debt and total shareholders’ equity (as taken directly from AT&T Inc.’s most recently prepared US GAAP balance sheet).
“BBA” means the Bipartisan Budget Act of 2015, as amended from time to time. All references herein to sections of the BBA shall include any corresponding provision or provisions of succeeding law.
“BSMD” has the meaning set forth in the Recitals.
“Business Day” means any day other than a Saturday, Sunday, federal holiday or a day on which banks in The City of New York are authorized or obligated by law to close.
“Capital Account” means the account established and maintained for each Member on the books of the Company pursuant to Section 15, as said Capital Account may be increased or decreased from time to time. Any reference to Capital Account of a Member shall include the Capital Account of a predecessor holder of the interest of the Member, or a proportionate share of that Capital Account if the Member has succeeded to less than all of the predecessor’s interest.
“Capital Contribution” means, with respect to any Member, the amount by which (a) the aggregate amount of money and the initial Carrying Value of any property (other than money) contributed to the Company by such Member (or its predecessors in interest) with respect to the LLC Interest in the Company held by such Member exceeds (b) the initial Carrying Value of any liabilities to which such contributed property is subject or that are assumed from such Member in connection with such contribution.
“Carrying Value” means, with respect to any Company asset or liability (which shall include, for purposes of this Agreement, the Company’s interest in any asset or liability owned through one or more partnerships) as of the date of any determination, the value at which the asset or liability is properly reflected on the books and records of the Company as of such date in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv) as follows:
(a) The initial Carrying Value of any asset or liability contributed or transferred by a Member to the Company shall be the fair market value of such asset or liability as agreed to by the transferring Member and the Manager;
(b) The Carrying Values of all Company assets and liabilities shall, except as otherwise provided herein, be adjusted to equal their respective Fair Market Values immediately prior to the following events: (i) immediately prior to a contribution to the Company of more than a de minimis amount of cash or other property, or a Member’s assumption of more than a de minimis amount of Company liabilities, in exchange for an interest in the Company, the issuance of an interest (other than a de minimis interest) in the Company in consideration of the performance of services, or the issuance of a Noncompensatory Option (other than an option for a de minimis interest); (ii) the distribution by the Company to a Member of more than a de minimis amount of money or other property in retirement of all or any portion of its LLC Interest; (iii) the liquidation of the Company within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g); and (iv) any other event to the extent determined by the Manager to be permitted and necessary to properly reflect Carrying Values in accordance with the standards set forth
in Treasury Regulation Section 1.704-1(b)(2)(iv); provided, however, that in the event of the issuance of an interest in the Company pursuant to the exercise of a Noncompensatory Option where the right to share in Company capital represented by such LLC Interest differs from the consideration paid to acquire and exercise such option, the Carrying Value of each Company property immediately after the issuance of such LLC Interest shall be adjusted upward or downward in a manner consistent with Treasury Regulation Section 1.704-1(b)(2)(iv)(s);
(c) The Carrying Value of any Company asset distributed to any Member or any Company Liability assumed or taken subject to by any Member shall, except as otherwise provided herein, be the Fair Market Value of such asset (or, in the case of cash, shall be its face amount) or liability as of the date of such distribution or assumption;
(d) The Carrying Values of Company assets shall, except as otherwise provided herein, be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m) and subparagraph (f) of the definition of “Net Income” and “Net Loss” or Section 14(c)(vii); provided, however, that Carrying Values shall only be adjusted pursuant to this subparagraph (d) to the extent that the adjustment would be allowable under Treasury Regulation Section 1.704 1(b)(2)(iv)(m)(5) after taking into account any adjustment to Carrying Value required pursuant to subparagraph (b) as a result of the same transaction that would otherwise result in an adjustment pursuant to this subparagraph (d);
(e) If the Carrying Value of a Company asset has been determined or adjusted pursuant to subparagraph (a), (b), or (d) or Section 15, such Carrying Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of the allocations made pursuant to Section 14; and
(f) If the Carrying Value of a Company Liability has been determined or adjusted pursuant to subparagraph (a) or (b) or Section 15, such Carrying Value shall thereafter be adjusted based on the method adopted under subparagraph (e) of the definition of “Net Income” and “Net Loss” to determine the extent to which the Carrying Value of such liability is treated as satisfied or otherwise taken into account.
“Change of Control” means the occurrence of any merger, reorganization or other transaction that results in AT&T Inc., directly or indirectly, owning less than fifty percent of the capital or profits interests (where the Company remains taxable as a partnership), or equity (if the Company becomes taxable as a corporation), of the Company exclusive of the Series A Preferred Interests.
“Code” means the Internal Revenue Code of 1986 (as amended from time to time, or any successor statute).
“Common Interests” means the common membership interests of the Company, having the powers, preferences, rights, qualifications, limitations and restrictions set forth in Section 7(b) of this Agreement.
“Common Percentage Interest” of a Member holding Common Interests means such Member’s aggregate Common Interests’ economic percentage interest in the Company as determined by dividing the Common Interests of such Member by the total Common Interests of all Members, as set forth on Schedule A and as may be adjusted from time to time.
“Communications Laws” has the meaning set forth in Section 10(d).
“Company” has the meaning set forth in the Recitals.
“Company’s Debt-to-Total-Capitalization Ratio” means the Company’s Debt divided by the sum of the Company’s Debt and total members’ equity including outstanding Series A Preferred Interests (as taken directly from the Company’s most recently prepared US GAAP balance sheet).
“Company Liability” means any Obligation of the Company.
“Contingent Event” means an event described in Section 8(e)(i)(a), (b) or (c).
“Contribution Agreement” has the meaning set forth in the Recitals.
“Debt” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, and (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments.
“Depreciation” means, for each Allocation Period, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable for federal income tax purposes with respect to an asset for such Allocation Period, except that (a) with respect to any asset whose Carrying Value differs from its adjusted tax basis for United States federal income tax purposes and which difference is being eliminated by use of the “remedial method” defined by Treasury Regulation Section 1.704-3(d), Depreciation for such Allocation Period shall be the amount of book basis recovered for such Allocation Period under the rules prescribed by Treasury Regulation Section 1.704-3(d)(2) and (b) with respect to any other asset whose Carrying Value differs from its adjusted basis for federal income tax purposes at the beginning of such Allocation Period, Depreciation shall be an amount which bears the same ratio to such beginning Carrying Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Allocation Period bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Allocation Period is zero, Depreciation shall be determined with reference to such beginning Carrying Value using any reasonable method selected by the Manager.
“Designated Individual” has the meaning set forth in Section 20(h).
“Distribution Payment Date” has the meaning set forth in Section 16(a)(i).
“Distribution Period” has the meaning set forth in Section 16(a)(i).
“Effective Time” means the time specified in Section 3.
“Fair Market Value” means (a) as of the date of any revaluation of Company property in accordance with Section 15, the fair market value of each Company asset and liability and (b) as of the date of any distribution of Company property or a Member’s assumption or taking subject to a Company Liability, the fair market value of each Company asset or liability, in each case as determined reasonably and in good faith by the Manager using such reasonable methods of valuation as it may adopt; provided, however, that if at the time of any revaluation of Company property in accordance with Section 15, the Company has an outstanding Noncompensatory Option, the fair market value of Company property shall be adjusted as provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(h)(2).
“FCC” means the U.S. Federal Communications Commission.
“First Amendment” has the meaning set forth in the Recitals.
“Fourth Amended and Restated Agreement” has the meaning set forth in the Recitals.
“Fourth Amendment” has the meaning set forth in the Recitals.
“Guaranteed Payment Amount” of a particular Series A Preferred Return quarterly amount means an amount equal to (a) the Series A Preferred Return quarterly amount less (b) the Series A Preferred Interest Return of Capital Amount for such Series A Preferred Return quarterly amount, and such amount shall be treated as a guaranteed payment within the meaning of section 707(c) of the Code.
“IRS” has the meaning set forth in Section 20(a).
“Indemnified Party” has the meaning set forth in Section 24(b)(v).
“Liquidation Amount of the Series A Preferred Interests” means $25.00 per Series A Preferred Interest.
“Liquidation Preference” means the Liquidation Amount of the Series A Preferred Interests, plus the Unpaid Series A Preferred Interest Return of Capital Amount, plus any accrued but unpaid Series A Preferred Return.
“LLC Interest” means a Member’s entire limited liability company interest in the Company at any particular time, evidenced by Common Interests and Series A Preferred Interests.
“Manager” has the meaning set forth in the Recitals.
“Media Company” means any company subject to the FCC’s Media Ownership rules, 47 C.F.R. § 73.555.
“Members” means those Persons executing this Agreement as Members of the Company, including any substitute Members or additional Members, in each such person’s capacity as a Member of the Company.
“Member Nonrecourse Deductions” has the same meaning as the term “partner nonrecourse deductions” in Treasury Regulation Sections 1.704-2(i)(1) and 1.704-2(i)(2).
“Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” in Treasury Regulation Section 1.704-2(b)(4).
“Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulation Section 1.704-2(i)(3).
“Minimum Gain” has the meaning given the term “partnership minimum gain” in Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d).
“Mobility” has the meaning set forth in the Recitals.
“NCWS” has the meaning set forth in the Recitals.
“Net Income” and “Net Loss” mean, for each Allocation Period, an amount equal to the Company’s taxable income or loss for such Allocation Period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:
(a) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of “Net Income” and “Net Loss” shall be added to such taxable income or loss;
(b) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of “Net Income” and “Net Loss” shall be subtracted from such taxable income or loss;
(c) Gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Carrying Value of such property, notwithstanding that the adjusted tax basis of such property differs from its Carrying Value;
(d) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Allocation Period, computed in accordance with the definition of “Depreciation;”
(e) Income, gain, deduction or loss resulting from the satisfaction or accrual for federal income tax purposes of a Company Liability with a Carrying Value that differs from its adjusted issue price (if any) shall be computed by reference to the Carrying Value of such liability, with the extent to which the Carrying Value of such liability is treated as satisfied or otherwise taken into account being determined under any reasonable method adopted by the Manager; and
(f) Notwithstanding anything to the contrary in subparagraphs (a) through (e) above, any items which are specially allocated pursuant to Section 14(c) or (d) shall not be taken into account in computing Net Income or Net Loss.
The amounts of the items of Company income, gain, loss or deduction available to be specially allocated pursuant to Section 14 shall be determined by applying rules analogous to those set forth in subparagraphs (a) through (e) above.
“Noncompensatory Option” has the meaning set forth in Treasury Regulation Section 1.721-1(f).
“Nonrecourse Deductions” has the meaning set forth in Treasury Regulation Sections 1.704-2(b)(1) and 1.704-2(c).
“Nonrecourse Liability” has the meaning set forth in Treasury Regulation Section 1.704-2(b)(3).
“Obligation” has the meaning assigned to that term in Treasury Regulation Section 1.752-1(a)(4)(ii).
“Option Price” means, for each Series A Preferred Interest, the greater of.
(a) the fair market value of the Series A Preferred Interest as of the last date of the calendar quarter preceding the date of exercise of a Redemption Option or a Put Option, as the case may be or, for the portion of the Series A Preferred Interests that cannot be purchased due to the Put 12-Month Cap, the fair market value of the Series A Preferred Interest as of the last date of the calendar quarter immediately preceding the date such portion of the Series A Preferred Interest is actually redeemed by the Company, and
(b) the Liquidation Amount of the Series A Preferred Interests plus any accrued and unpaid distributions.
For purposes of the foregoing, “the fair market value of the Series A Preferred Interest” means:
(x) in cases of exercise of the Put Option on or after September 9, 2020 (other than an exercise prior to September 9, 2022 as the result of a Contingent Event) OR upon exercise of the Redemption Option on or after September 9, 2022, an amount determined based upon the Liquidation Amount of the Series A Preferred Interests plus any accrued and unpaid distributions and market conditions at the time, and
(y) in cases of exercise of the Put Option prior to September 9, 2022 as the result of a Contingent Event OR upon exercise of the Redemption Option prior to September 9, 2022, an amount determined based upon the sum of:
(i) the Liquidation Amount of the Series A Preferred Interests plus any accrued and unpaid distributions, and
(ii) the present value of future distributions (excluding accrued and unpaid distributions accounted for in (i) immediately above) through and ending on September 9, 2022.
The independent fiduciary with respect to Series A Preferred Interests held by the SBC Master Pension Trust shall determine “the fair market value of the Series A Preferred Interests” with respect to Series A Preferred Interests held by the SBC Master Pension Trust.
“Publicly Traded Partnership” means a “publicly traded partnership” within the meaning of Section 7704(b) of the Code.
“Partnership Audit Procedures” has the meaning set forth in Section 20(f).
“Partnership Representative” means the “tax matters partner” within the meaning of Section 6231(a)(7) of the Code (to the extent applicable for taxable years beginning before January 1, 2018) and the “partnership representative” as defined in Section 6223 of the Code, as amended by the BBA, for any tax period subject to the provisions of Section 6223 of the Code.
“Person” means any natural person, partnership (whether general or limited), trust, estate, association, corporation, custodian, nominee or any other individual or entity in its own or any representative capacity, in each case, whether domestic or foreign, or a limited liability company or foreign limited liability company.
“Plan” means the AT&T Pension Benefit Plan.
“Public Indebtedness” means the Cingular Wireless LLC 7.125% Senior Notes, due December 2031 in the principal amount of $510 million; and the AT&T Wireless Services, Inc. 8.75% Senior Notes, due March 2031 in the principal amount of $896 million.
“Put 12-Month Cap” has the meaning set forth in Section 8(e)(i).
“Put Option” has the meaning set forth in Section 8(e)(i).
“Put Option Period” means any period, from time to time, after the Put Option becomes exercisable hereunder, beginning on the 15th Business Day prior to the end of each fiscal quarter of AT&T Inc. and ending on the 15th Business Day of the subsequent fiscal quarter of AT&T Inc.
“Redemption Option” has the meaning set forth in Section 8(e)(ii).
“Redemption Period” means the period, from time to time, after the Redemption Option becomes exercisable hereunder, beginning on the 26th Business Day of each fiscal quarter of AT&T Inc. and ending on the 35th Business Day of each fiscal quarter of AT&T Inc.
“Registration Rights Agreement” means the Amended and Restated Registration Rights Agreement dated October 15, 2018 among AT&T Inc., Brock Fiduciary Services LLC and the Trust, as may be amended or modified from time to time.
“Second Amended and Restated Agreement” has the meaning set forth in the Recitals.
“Second Amendment” has the meaning set forth in the Recitals.
“Series A Contribution” has the meaning set forth in the Recitals.
“Series A Preferred Interest Return of Capital Amount” means, with respect to each Series A Preferred Interest, (a) for each quarter in the first five (5) years following the issuance of the Series A Preferred Interests an amount equal to the quotient where (i) the difference between (A) the Capital Contribution of the Series A Preferred Interest and (B) the Liquidation Amount of the Series A Preferred Interest is the numerator and (ii) twenty (20) is the denominator, and (b) in all other years zero.
“Series A Preferred Interests” means the series A cumulative perpetual preferred membership interests, having the powers, preferences, rights, qualifications, limitations and restrictions set forth in Section 7(c) of this Agreement.
“Series A Preferred Return” means, with respect to each Series A Preferred Interest, a distribution of $1.75 per annum, payable quarterly. A portion of the Series A Preferred Return shall be treated as the Guaranteed Payment Amount and a portion of the Series A Preferred Return shall be treated as the Series A Preferred Interest Return of Capital Amount.
“Small Partnership Election” means an election made by the Company in accordance with Section 6221(b) of the Code to have the Partnership Audit Procedures (as defined below) not apply to the Company.
“Special Rights” means, with respect to any Series A Preferred Interests, the rights set forth in Section 7(c), Section 8 and Section 23 of this Agreement as applicable to such interests.
“Third Amended and Restated Agreement” has the meaning set forth in the Recitals.
“Third Amendment” has the meaning set forth in the Recitals.
“Transfer” means (a) when used as a verb, to give, sell, exchange, assign, transfer, pledge, hypothecate, bequeath, devise or otherwise dispose of or encumber, and (b) when used as a noun, the nouns corresponding to such verbs, in either case voluntarily or involuntarily, by operation of law or otherwise.
“Transferred Interests” has the meaning set forth in Section 14(f)(v).
“Treasury Regulations” means the Income Tax Treasury Regulations, including Temporary Treasury Regulations, promulgated under the Code, as such regulations are amended, modified or supplemented from time to time.
“Trust” has the meaning set forth in the Recitals.
“Unpaid Series A Preferred Interest Return of Capital Amount” means, with respect to each Series A Preferred Interest, an amount equal to (a) the Capital Contribution of the Series A Preferred Interest, minus (b) the Liquidation Amount of the Series A Preferred Interest, minus (c) payments of the Series A Preferred Return treated as the Series A Preferred Interest Return of Capital Amount of the Series A Preferred Interest.
“Unrealized Gain” attributable to any item of Company property means, as of any date of determination, the excess, if any, of (a) the Fair Market Value of such property as of such date over (b) the Carrying Value of such property as of such date. With respect to any Company Liability, Unrealized Gain shall mean, as of any date of determination, the excess, if any, of (a) the Carrying Value of such liability as of such date, over (b) the Fair Market Value of such liability as of such date.
“Unrealized Loss” attributable to any item of Company property means, as of any date of determination, the excess, if any, of (a) the Carrying Value of such property as of such date, over (b) the Fair Market Value of such property as of such date. With respect to any Company Liability, Unrealized Loss shall mean, as of any date of determination, the excess, if any, of (a) the Fair Market Value of such liability as of such date over (b) the Carrying Value of such liability as of such date.
2.Name. The name of the limited liability company formed hereby is AT&T Mobility II LLC. The Company may do business under that name or any other name approved by the Manager.
3.Effectiveness. This Agreement shall, upon the execution by all parties hereto, be fully effective on September 28, 2020.
4.Termination of Limited Liability Company Agreement. All prior limited liability company agreements of the Company are hereby terminated and superseded in its or their entirety by this Agreement.
5.Registered Office. The address of the registered office of the Company in the State of Delaware is 1209 Orange Avenue, Wilmington, Delaware 19801.
6.Registered Agent. The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is CT Corporation, 1209 Orange Avenue, Wilmington, Delaware 19801.
7.Capital Structure.
(a)General. Subject to the terms of this Agreement, (i) the Company is authorized to issue equity interests in the Company designated as “LLC Interests,” which shall constitute limited liability company interests under the Act and shall include initially Common Interests and Series A Preferred Interests and (ii) the Manager is expressly authorized, by resolution or resolutions, to create and to issue, out of authorized but unissued LLC Interests, different classes, groups or series of LLC Interests and fix for each such class, group or series such voting powers, full or limited or no voting powers, and such distinctive designations, preferences and relative participating, optional or other special rights and qualifications, limitations or restrictions as determined by the Manager. The Manager shall have the authority to issue such number of LLC Interests of any class, series or tranche pursuant to clauses (i) and (ii) of the immediately preceding sentence as the Manager shall from time to time determine. Other than as set forth in this Agreement, or in the instruments governing the terms of the LLC Interests issued pursuant to clause (ii), each LLC Interest shall be identical in all respects with each other LLC Interest.
(b)Common Interests. The Common Interests shall have such rights to allocations and distributions as may be authorized and set forth under this Agreement. The relative rights, powers, preferences, duties, liabilities and obligations of holders of the Common Interests shall be as set forth herein. Each holder of Common Interests shall be entitled to vote, in person or by proxy, or to act by written consent, on the basis of its Common Percentage Interest on all matters upon which Members have the right to vote, give approval or take other actions as set forth in this Agreement and provided under the Act. All approvals to be given and other actions to be taken by the holders of Common Interests pursuant to this Agreement and the Act (whether by vote at a meeting or written consent) may be granted or taken by the holders of Common Interests representing a majority in Common Percentage Interest.
(c)Series A Preferred Interests. The Series A Preferred Interests shall have such rights to allocations and distributions as may be authorized and set forth in this Agreement. The Series A Preferred Interests shall rank senior to any other class or series of equity interests in the Company in respect of the right to receive distributions and the right to receive payments or distributions out of the assets of the Company, upon voluntary or involuntary liquidation, dissolution or winding up of the Company, all as provided in Section 16 hereof. The Series A Preferred Interests shall not have any voting power. Accordingly, but subject to Section 23, no
holder of Series A Preferred Interests shall have any voting rights (or other approval rights) with respect to their interest in the Company or as to any other matter (whether under this Agreement or the Act) as a result of holding the Series A Preferred Interests.
(d)Certificates; Legend. In the sole discretion of the Manager, the issued and outstanding LLC Interests may be represented by certificates. In addition to any other legend required with respect to a particular class, group or series of LLC Interests or pursuant to any other agreement between any one or more Members and the Company, each such certificate shall bear the following legend:
THE LLC INTERESTS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT AMONG THE COMPANY AND ITS MEMBERS, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE LLC INTERESTS REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT.
THE LLC INTERESTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER.
Any LLC Interests issued in uncertificated form may be subject to similar restrictive notations on the relevant books and records of the Company or its transfer agent.
(e)Opt-in to Article 8 of the Uniform Commercial Code. The Members agree that the LLC Interests may be evidenced by certificates executed by the Manager of the Company and that the LLC Interests shall be securities governed by Article 8 of the Uniform Commercial Code of the State of Delaware (and the Uniform Commercial Code of any other applicable jurisdiction).
8.Transfers of LLC Interests.
(a)General Restrictions.
(i)No Member may Transfer all or any part of such Member’s LLC Interest, except as provided in this Section 8. Any purported Transfer of an LLC Interest or a
portion thereof in violation of the terms of this Agreement shall be null and void and of no effect. A permitted Transfer shall be effective as of the date specified in the instruments relating thereto. Any transferee desiring to make a further Transfer shall become subject to all the provisions of this Section 8 to the same extent and in the same manner as any Member desiring to make any Transfer.
(ii)A person shall cease to be a Member upon transfer of ownership of all such Member’s LLC Interest.
(b)Permitted Transfers.
a.Except as otherwise provided in this Section 8(b), each Member holding Series A Preferred Interests shall have the right to Transfer (but not to substitute the transferee as a substitute Member in such Member’s place, except in accordance with Section 8(c)), by a written instrument, all or any part of such Member’s Series A Preferred Interests, if, and only if: (1) the Manager determines in advance that the Transfer will comply with the registration requirements of the Securities Act of 1933 and any applicable state or other securities laws (including any exemption therefrom); (2) the Manager determines in advance that the Transfer will not cause the Company to become a Publicly Traded Partnership; and (3) if such Transfer consists of the transfer of ownership of any Series A Preferred Interest (A) the transferee has executed an instrument accepting and adopting the terms and provisions of the Certificate and this Agreement; (B) the transferee has executed and become a party to the Registration Rights Agreement; and (C) the transferee has caused to be paid all reasonable expenses of the Company in connection with the admission of the transferee as a substitute Member. In making the determinations referenced in the prior sentence, the Manager may require the proposed transferor, the proposed transferee or others to provide such evidence of compliance with the registration requirements referenced above, including an opinion of counsel, certificates or other documentation, as it may reasonably request.
b.Except as otherwise provided in this Section 8(b), each Member holding Common Interests shall have the right to Transfer (but not to substitute the transferee as a substitute Member in such Member’s place, except in accordance with Section 8(c)), by a written instrument, all or any part of such Member’s Common Interests, if, and only if: (1) the Manager has given its prior approval, which may be withheld in its sole discretion for any reason or no reason, and (2) if such Transfer is a transfer of ownership of any Common Interest, (A) the transferee has executed an instrument accepting and adopting the terms and provisions of the Certificate and this Agreement; and (B) the transferee has caused to be paid all reasonable expenses of the Company in connection with the admission of the transferee as a substitute Member.
c.No Transfer of an LLC Interest shall be effective or reflected on the books and records of the Company or its transfer agent except in accordance with this Section 8.
i.Substitute Member. No transferee of ownership all or part of a Member’s LLC Interest shall become a substitute Member in place of the transferor unless and until the terms of Section 8(b) are satisfied. Upon satisfaction of all the foregoing conditions with respect to a particular transferee, the Manager shall cause the books and records of the Company to reflect the admission of the transferee as a substitute Member to the extent of the Transferred LLC Interest owned by the transferee.
ii.Effect of Admission as a Substitute Member. A transferee who has become a substitute Member has, to the extent of the transferred LLC Interest, all the rights, powers and benefits of and is subject to the restrictions and liabilities of a Member under the Certificate, this Agreement, the Act and, in the case of a transferee of Series A Preferred Interests, the Registration Rights Agreement. Upon admission of a transferee as a substitute Member, the transferor of the LLC Interest so acquired by the substitute Member shall cease to be a Member of the Company to the extent of such transferred LLC Interest.
iii.Put Option and Redemption Option.
d.The Company hereby grants to the holders of Series A Preferred Interests the right to require the Company to purchase the Series A Preferred Interests (the “Put Option”), at a price per Series A Preferred Interest equal to the Option Price, at any time and from time to time on or after the earliest of (a) the first date that the Company’s Debt-to-Total-Capitalization Ratio exceeds that of AT&T Inc., (b) the date on which AT&T Inc. is rated below investment grade for two consecutive calendar quarters by at least two of the following rating agencies: (x) Standard & Poor’s, (y) Moody’s, or (z) Fitch Group, (c) a Change of Control, or (d) September 9, 2020; provided, however, that except in the event of a Change of Control, the Company shall not be required to purchase more than 106,666,667 Series A Preferred Interests in any twelve-month period (the “Put 12-Month Cap”). Upon the request of a holder of Series A Preferred Interests, as of the end of any calendar quarter, the Company shall, within forty-five (45) calendar days after the end of such calendar quarter, certify as to whether the Company’s Debt-to-Total-Capitalization ratio exceeds that of AT&T Inc. A purchase of Series A Preferred Interests pursuant to Section 8 of the Contribution Agreement shall be treated as a purchase by the Company for purposes of determining whether or not the Put 12-Month Cap has been met for a given twelve-month period. In the event of an exercise pursuant to clause (d) above, the Put Option may only be exercised upon written notice to the Company during a Put Option Period, specifying the name of the holder of Series A Preferred Interests, number of Series A Preferred Interests to be purchased by the Company (subject to the limitation in the proviso in the previous sentence) and the time and place of the closing of the Put Option.
e.The Company has the right to purchase from the holders of the Series A Preferred Interests, all or any portion of the Series A Preferred Interests (the “Redemption Option”), at a price per Series A Preferred Interest equal to the Option Price, at any time and from time to time (1) upon a Change of Control or (2) on or after September 9, 2022. In the event of an exercise pursuant to clause (2) above, the
Redemption Option may only be exercised upon written notice to the holder(s) of Series A Preferred Interests during a Redemption Period, specifying the number of Series A Preferred Interests to be purchased by the Company and the time and place of the closing of the Redemption Option.
f.At the sole election of the Company, payment of the Option Price may be made in (a) fully paid and non-assessable AT&T Shares, (b) cash, or (c) any combination of AT&T Shares and cash as the Company shall determine. Any AT&T Shares delivered to satisfy all or a portion of the Option Price shall be valued at the average closing price of the 20 trading days preceding the date of the applicable notice of exercise (A) by the holder(s) of Series A Preferred interests (in the case of exercise of a Put Option) or (B) by the Company (in the case of exercise of a Redemption Option). In the event there are two or more holders Series A Preferred Interests, then (x) in the event less than all of the Series A Preferred Interests are to be purchased by the Company, the Company shall repurchase from each such holder its pro rata portion of Series A Preferred Interests (based on the total number of Series A Preferred Interests held by all such holders) and (y) in the event the Company elects to pay the Option Price in a combination of AT&T Shares (including in any election effected under subsection (iv) of this Section 8(e)), then the relative proportion of cash and AT&T Shares shall be the same for all such holders Series A Preferred Interests to the nearest extent practicable, unless otherwise agreed in writing by the Company and any holder(s) who agree to accept a different proportion.
g.Notwithstanding anything herein to the contrary, in no event shall the Company be required to deliver more than 250 million AT&T Shares (the “Capped Number”) to the holder(s) of Series A Preferred interests in settlement of the Option Price for the Series A Preferred Interests; provided, however, the Company may, in its sole and absolute discretion (subject to the last sentence of this Section 8(e)(iv)), deliver more than the Capped Number of AT&T Shares. In the event the Company, through delivery of the Capped Number of AT&T Shares and AT&T Shares in addition to the Capped Number of AT&T Shares, if any, shall not have delivered the full number of AT&T Shares otherwise deliverable in settlement of the Option Price for the Series A Preferred Interests, the Company will use its best efforts to acquire and deliver additional AT&T Shares. The Company may elect, solely at its option, to settle the Option Price, in whole or in part, by delivering cash. In the event of a merger, reorganization, consolidation, recapitalization, separation, split-up, liquidation, share combination, stock split, stock dividend, or other change in the corporate structure of AT&T Inc. affecting the AT&T Shares (including a conversion of the AT&T Shares into cash or other property), an adjustment may be made in the number and class of shares that may be delivered in settlement of the Option Price for the Series A Preferred Interests, as determined by the Company to prevent dilution or accretion with respect to the Capped Number and reflect such changes in corporate structure (e.g., substitution of successor shares). In the event the Company, through delivery of the Capped Number of AT&T Shares and AT&T Shares in addition to the Capped Number of AT&T Shares, if any, shall not have delivered the full number of AT&T Shares otherwise deliverable in settlement of the
Option Price for the Series A Preferred Interests (resulting in a shortfall), the Series A Preferred Interests for which neither AT&T Shares nor cash have been delivered shall remain outstanding, in accordance with their terms.
iv.Private Placement. In the event the holder of Series A Preferred Interests desires to Transfer some or all of the Series A Preferred Interests pursuant to a private placement offering, the Company shall use its reasonable best efforts to cooperate with such private placement. In the event of a private placement offering of the Series A Preferred Interests, the following shall apply:
h.The Company shall select the investment banking firm that will conduct each such private placement offering;
i.The Company shall provide the financial information, document preparation and other support required for such private placement offering of the Series A Preferred Interests to the holders of the Series A Preferred Interests and/or to the investment bank on a timely basis; and
j.The Company shall bear all usual and customary costs associated with such private placement offering, including reasonable fees and expenses of investment banking firms, legal counsel for the Company and holders of the Series A Preferred Interests and, if required, auditors in connection therewith.
v.Publicly Traded Partnership Status. No Member holding Series A Preferred Interests is or will become a partnership, grantor trust, or “S corporation” (within the meaning of Section 1361(a) of the Code) for U.S. federal income tax purposes, in each case, without the prior written consent of the Manager.
9.Members. The name of and LLC Interest held by each of the Members holding Common Interests and Series A Preferred Interests as of the Effective Time are set forth on Schedule A attached hereto. To the extent any additional or substitute Members are hereafter admitted to the Company or the respective relative Common Percentage Interests are adjusted as a result of the issuance of additional LLC Interests or the redemption of LLC Interests, the Manager shall revise Schedule A of this Agreement accordingly.
10.Powers.
vi.The business and affairs of the Company shall be managed by a manager, who may, but need not be, a Member. The Company shall initially have one manager. The number of managers shall be fixed from time to time by the Members, but in no instance shall there be less than one manager. The Members may, with or without cause, at any time and from time to time, remove the manager then acting and elect a new manager. Any person or entity dealing with the Company may rely on a certificate signed by the manager on any document purporting to bind the Company, which shall constitute exclusive evidence to third parties of the authority of such person to execute such document on behalf of the Company and so bind the Company. Subject to any restrictions set forth in manager’s organizational documents, as in effect from
time to time, the manager acting on behalf or in respect of the Company is empowered, subject to the specified terms of this Agreement, to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Company and its subsidiaries, including, without limitation, full power and authority, directly or through its subsidiaries or affiliates, to distribute cash to the Members, enter into, perform and carry out contracts of any kind, borrow money and issue evidences of indebtedness whether or not secured by mortgage, deed of trust, pledge or other lien, acquire, own, manage, improve and develop any property, and lease, sell, transfer and dispose of any property. The Company shall not be required to hold annual meetings of the Members.
vii.The Members, in their capacity as such (and except to the extent that a Member shall act in the capacity of Tax Matters Representative pursuant to Section 20 hereof) shall have no part in the management of the Company and shall have no authority or right to act on behalf of or bind the Company in connection with any matter.
viii.AT&T Mobility Corporation is hereby designated to serve as the manager but may resign upon 30 days’ written notice to the Members and any other manager.
ix.For so long as the Company has an investment in any regulated Media Company or Common Carrier (as defined by the Communications Act of 1933, as amended, and the Federal Communication’s Acts rules and decisions (the “Communications Laws”)), then the following provisions shall apply to the holders of Series A Preferred Interests to the minimum extent necessary to insulate the holders of Series A Preferred Interests from any deemed “attributable interest” in a Common Carrier or regulated Media Company under the attribution rules and policies of the Communications Laws. No holder of Series A Preferred Interests may:
k.act as an employee of the Company if such Person’s functions, directly or indirectly, relate to the Common Carrier or regulated Media Company business of the Company;
l.serve, in any material capacity, as an independent contractor or agent of the Common Carrier or regulated Media Company business of the Company;
m.communicate on matters pertaining to the day-to-day operations of the Common Carrier or regulated Media Company business of the Company, with an officer, director, partner, member, agent, representative or employee of any Common Carrier or regulated Media Company investment;
n.perform any services for, or relating to, the Common Carrier or regulated Media Company business of the Company, with the exception of making loans to, or acting as surety for, such Common Carrier or regulated Media Company to the extent consistent with “equity/debt plus” component of the FCC’s attribution rule;
o.become actively involved in the management or operation of the common carrier business of the Company; or
p.elect or vote for the appointment or removal of any Manager.
x.No holder of Series A Preferred Interests Holder shall take any action that such holder knows would cause a violation by the Company or any of its Affiliates of the Communications Laws.
11.Dissolution. The Company shall dissolve, and its affairs shall be wound up, upon the earlier to occur of the following: (a) the written consent of the Manager, subject to Section 10(a), or (b) the entry of a decree of judicial dissolution under Section 18-802 of the Act.
12.Admission.
xi.The Members (other than Investor Funds) set forth on Schedule A hereto are hereby confirmed to have been previously properly admitted as Members of the Company.
xii.Each Investor Fund is hereby admitted to the Company as a Member of the Company upon its execution of a counterpart signature page hereto.
13.Additional Contributions.
xiii.Except as provided in this Section 13, no Member is required to make any additional capital contribution to the Company. However, the Members may, in their sole discretion, make additional capital contributions to the Company.
xiv.In the event that the assets of the Company are insufficient upon liquidation and dissolution pursuant to Section 11 hereof to fully satisfy the Public Indebtedness, Mobility shall contribute to the Company solely to be used to satisfy such Public Indebtedness an amount necessary to fully satisfy such indebtedness. In the event that such contribution is made, Mobility shall not be entitled to any right of reimbursement, contribution or other payment from the Company or any of its Members, and Mobility hereby waives and relinquishes any and all rights of contribution, reimbursement or any other remedy afforded under applicable law or otherwise to a guarantor or assuror of debt, on which more than one person has joint, several or joint and several liability, in connection with a payment on such debt by the guarantor or assuror.
14.Allocations. Each Member’s distributive share of the Company’s Net Income, Net Loss and items thereof shall be determined in accordance with the rules of this Section 14.
xv.Net Income. Except as otherwise provided in this Section 14, Net Income shall be allocated among the Members as follows:
q.First, to the Members pro rata in proportion to the cumulative Net Losses previously allocated to each Member pursuant to Section 14(b)(ii), until the cumulative allocation of Net Income to each Member pursuant to this Section 14(a)(i)
equals the cumulative allocation of Net Loss to each Member pursuant to Section 14(b)(ii); and
r.Second, any remaining Net Income to the Members holding Common Interests pro rata in proportion to their respective Common Percentage Interests.
xvi.Net Loss. Except as otherwise provided in this Section 14, Net Loss shall be allocated among the Members as follows:
s.First, to the Members holding Common Interests pro rata in proportion to their positive Adjusted Capital Account balances until the Adjusted Capital Account balances of the Members holding Common Interests is reduced to zero; and
t.Second, any remaining Net Loss to the Members who bear the economic risk of loss in accordance with the Treasury Regulations.
xvii.Special Allocations. The following special allocations shall be made in the following order:
u.Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulation Section 1.704-2(f), notwithstanding any other provision of this Section 14, if there is a net decrease in Minimum Gain during any Allocation Period, each Member shall be specially allocated items of Company income and gain for such Allocation Period (and, if necessary, subsequent Allocation Periods) in an amount equal to such Member’s share of the net decrease in Minimum Gain, determined in accordance with Treasury Regulation Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulation Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 14(c)(i) is intended to comply with the minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
v.Member Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulation Section 1.704-2(i)(4), notwithstanding any other provision of this Section 14, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Allocation Period, each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulation Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such Allocation Period (and, if necessary, subsequent Allocation Periods) in an amount equal to such Member’s share of the net decrease in Member Nonrecourse Debt, determined in accordance with Treasury Regulation Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulation Sections
1.704-2(i)(4) and 1.704-2(j)(2). This Section 14(c)(ii) is intended to comply with the minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
w.Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704 1(b)(2)(ii)(d)(6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulation, the Adjusted Capital Account Deficit of such Member as quickly as possible; provided that an allocation pursuant to this Section 14(c)(iii) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 14 have been tentatively made as if this Section 14(c)(iii) were not in the Agreement.
x.Gross Income Allocation. In the event any Member has an Adjusted Capital Account Deficit at the end of any Allocation Period, such Member shall be specially allocated items of Company income and gain in the amount of such deficit as quickly as possible; provided that an allocation pursuant to this Section 14(c)(iv) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 14 have been made as if Section 14(c)(iii) and this Section 14(c)(iv) were not in the Agreement.
y.Nonrecourse Deductions. Nonrecourse Deductions for any Allocation Period shall be specially allocated to the Members in proportion to their Percentage Interests.
z.Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Allocation Period shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i)(1).
aa.Section 754 Adjustments. To the extent Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4) requires an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of its LLC Interest, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in accordance with Treasury Regulation Section 1.704 1(b)(2)(iv)(m)(2) or Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(4), as the case may be; provided, however, that for this purpose, the determination of the extent to which Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(2) or 1.70 1(b)(2)(iv)(m)(4) requires an adjustment pursuant to Code Section 734(b) or Code Section 743(b) to be taken into account in determining Capital Accounts shall be
made after taking into account any adjustment to the Carrying Value of the Company’s assets required in connection with the liquidating distribution pursuant to subparagraph (b) of the definition of “Carrying Value” in Section 1.
xviii.Curative Allocations. The allocations set forth in Section 14(c) and Section 14(e) (the “Regulatory Allocations”) are intended to comply with certain requirements of the Treasury Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Section 14(d). Therefore, notwithstanding any other provision of this Section 14 (other than the Regulatory Allocations), the Manager shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to this Section 14 without regard to the Regulatory Allocations. In exercising its discretion under this Section 14(d), the Manager shall take into account future Regulatory Allocations that, although not yet made, are likely to offset other previously made Regulatory Allocations.
xix.Loss Limitation. Net Loss allocated pursuant to Section 14(b) and the items of loss or deduction allocated pursuant to Section 14(c) and Section 14(d) shall not exceed the maximum amount of Net Loss and items of loss or deduction that can be so allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Allocation Period.
xx.Other Allocation Rules.
ab.Net Income, Net Loss and any other items of income, gain, loss or deduction shall be allocated to the Members pursuant to this Section 14 as of the last day of each Allocation Period.
ac.In any cases in which it is necessary to determine the Net Income, Net Loss or any other items allocable to any period within an Allocation Period, Net Income and Net Loss and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Manager using any permissible method under Code Section 706 and the Treasury Regulation thereunder.
ad.The Members hereby agree to be bound by the provisions of this Section 14 in reporting their shares of Company income and loss for income tax purposes, except to the extent otherwise required by law.
ae.Solely for purposes of determining each Member’s share of the “excess nonrecourse liabilities” of the Company within the meaning of Treasury Regulation Section 1.752-3(a)(3), the manner in which the Members share excess nonrecourse liabilities for any taxable year shall be determined by the Manager using any permissible method provided under Treasury Regulation Section 1.752-3(a)(3); provided
that unless otherwise determined by the Manager, excess nonrecourse liabilities (within the meaning of Treasury Regulation Section 1.752-3(a)(3)) shall be allocated under the allocation method that (1) will, to the maximum extent possible, result in no Member recognizing taxable gain (or will minimize the taxable gain recognized) under Code Section 731 or otherwise as a result of any actual or deemed distribution to a Member, while (2) maximizing any Code Section 734(b) positive basis adjustment (or minimizing any Code Section 734(b) negative basis adjustment) resulting from any such actual distribution of property (the “Preferred Excess Nonrecourse Liability Allocation Method”). For purposes hereof, the Preferred Excess Nonrecourse Liability Allocation Method may be any method or combination of methods permitted by Treasury Regulation Section 1.752-3(a)(3), including the “additional method” of Treasury Regulation Section 1.752-3(a)(3), which allows excess nonrecourse liabilities to be allocated to a partner based on the amount of built-in gain that is allocable to such partner on Code Section 704(c) property (as defined in Treasury Regulation Section 1.704-3(a)(3)(ii)) or property for which reverse Code Section 704(c) allocations are applicable (as described in Treasury Regulation Section 1.704-3(a)(6)(i)) that is subject to a nonrecourse liability to the extent such built-in gain exceeds the gain described in Treasury Regulation Section 1.752-3(a)(2).
af.If a Member transfers all or any part of its Series A Preferred Interests (the “Transferred Interests”), then (i) with respect to the Distribution Period in which such transfer occurs, when, as and if declared by the Manager, the Company shall allocate for U.S. federal income tax purposes the Series A Preferred Return with respect to such Transferred Interests for such Distribution Period pro rata to the transferor and transferee based on the number of days in the Distribution Period (x) prior to the date of the transfer and (y) on and after the date of the transfer (respectively), and (ii) with respect to each prior Distribution Period in the taxable year in which such transfer occurs, when, as and if declared by the Manager, the Company shall allocate for U.S. federal income tax purposes the Series A Preferred Return with respect to such Transferred Interests for such Distribution Periods to the transferor.
xxi.Tax Allocations: Code Section 704(c).
ag.In accordance with Code Section 704(c) and the applicable Treasury Regulation thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company before or after the Effective Time or any liability assumed by or taken subject to by the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property or the adjusted issue price (if any) of such liability to the Company, as the case may be, for federal income tax purposes and its initial Carrying Value.
ah.In the event the Carrying Value of any Company asset or liability is adjusted pursuant to subparagraph (b) of the definition of “Carrying Value” in Section 1 and Section 14(b) or (c), subsequent allocations of income, gain, loss, and deduction
with respect to such asset or liability shall take account of any variation between the adjusted basis of such asset or the adjusted issue price (if any) of such liability, as the case may be, for federal income tax purposes and its Carrying Value in the same manner as under Code Section 704(c) and the applicable Treasury Regulation thereunder.
ai.For purposes of applying Section 704(c) to a contributed or revalued property or liability, the Manager may, except as otherwise provided herein, elect any permissible method under Section 704(c) of the Code and the Treasury Regulations thereunder; provided, however, that with respect to the adjustment to the Carrying Value of Company property and liabilities made in connection with the Additional Contributions, the Manager shall, unless otherwise agreed by the Members, elect “the traditional method with curative allocations” under Treasury Regulation Section 1.704-3(c).
aj.Except as otherwise provided in this Agreement, all items of Company income, gain, loss, deduction, and any other allocations not otherwise provided for shall be divided among the Members in the same proportions as they share Net Income or Net Loss, as the case may be, for the Allocations Period.
ak.Allocations pursuant to this Section 14(g) are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Income, Net Loss other items, or distributions pursuant to any provision of this Agreement.
15.Capital Accounts.
xxii.The Company shall maintain for each Member a Capital Account in accordance with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be (i) increased by (A) the Capital Contributions made by such Member to the Company pursuant to this Agreement, (B) the Net Income and items of Company income and gain (including income and gain exempt from tax) allocated to such Member pursuant to Section 14 and (C) the Fair Market Value of any Company Liability assumed or taken subject to by such Member, and (ii) decreased by (A) the amount of cash and the Fair Market Value of any property distributed to such Member pursuant to this Agreement (other than the Guaranteed Payment Amount) and (B) the Net Loss and items of Company deduction and loss (including expenditures of the Company that are neither deductible nor capitalized for federal income tax purposes) allocated to such Member pursuant to Section 14. In the event a Member transfers an LLC Interest in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred LLC Interest.
xxiii.In accordance with the provisions of Treasury Regulation Sections 1.704-1(b)(2)(iv)(f) and 1.704-l(b)(2)(iv)(h)(2), immediately prior to a Member’s contribution to the Company of more than a de minimis amount of cash or other property, or a Member’s assumption of more than a de minimis amount of Company liabilities, in exchange for an interest in the Company, the issuance of an interest (other than a de minimis interest) in the Company in consideration of the performance of services, or the issuance of a Noncompensatory Option
(other than an option for a de minimis interest), the Carrying Value of all Company property and liabilities shall be adjusted in accordance with subparagraph (b) of the definition of “Carrying Value” in Section 1 and the Capital Accounts of all Members shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to Company property and liabilities, as if (i) the Unrealized Gain or Unrealized Loss with respect to such property and liabilities immediately prior to the contribution or assumption had been recognized on the sale of each such property and the satisfaction of each such liability at that time and (ii) the resulting items of Unrealized Gain or Unrealized Loss had been allocated among the Members pursuant to Section 14 as if such items were the only items of income, gain, loss, or deduction of the Company for an Allocation Period ending on the date of the contribution or assumption; provided, however, that in the event of the issuance of an interest in the Company pursuant to the exercise of a Noncompensatory Option where the right to share in Company capital represented by such interest differs from the consideration paid to acquire and exercise such option, the Carrying Value of each Company property immediately after the issuance of such interest shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Company property and the Capital Accounts of the Members shall be adjusted in a manner consistent with Treasury Regulation Section 1.704-1(b)(2)(iv)(s).
xxiv.In accordance with the provisions of Treasury Regulation Sections 1.704-l(b)(2)(iv)(f) and 1.704-l(b)(2)(iv)(h)(2), immediately prior to any distribution to a Member by the Company of more than a de minimis amount of money or other property, or the Company’s assumption of more than a de minimis amount of a Member’s individual liabilities, in exchange for an interest in the Company (including the liquidation of the Company within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g)), the Manager may cause the Carrying Value of all Company property and liabilities to be adjusted in accordance with subparagraph (b) of the definition of “Carrying Value” in Section 1 and the Capital Accounts of all Members to be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to Company property and liabilities, as if (i) the Unrealized Gain or Unrealized Loss with respect to such property and liabilities immediately prior to the distribution or assumption had been recognized on the sale of each such property and the satisfaction of each such liability at that time and (ii) the resulting items of Unrealized Gain or Unrealized Loss had been allocated among the Members pursuant to Section 14 as if such items were the only items of income, gain, loss, or deduction of the Company for an Allocation Period ending on the date of the distribution or assumption.
xxv.In accordance with the provisions of Treasury Regulation Section 1.704 l(b)(2)(iv)(e), immediately prior to any distribution to a Member of any Company property as part of a pro rata distribution to the Members, the Manager may cause the Carrying Value of the distributed Company property to be adjusted in accordance with subparagraph (c) of the definition of “Carrying Value” in Section 1 and the Capital Accounts of all Members to be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to the distributed Company property, as if (i) the Unrealized Gain or Unrealized Loss with respect to such property immediately prior to the distribution had been recognized on the sale of such property at that time and (ii) such Unrealized Gain or Unrealized Loss had been allocated among
the Members pursuant to Section 14 as if such items were the only items of income, gain, loss, or deduction of the Company for an Allocation Period ending on the date of the distribution.
xxvi.For purposes of computing the amount of any items of income, gain, loss or deduction to be reflected in the Members’ Capital Accounts, rules analogous to those set forth in subparagraphs (a) through (e) of the definition of “Net Income” and “Net Loss” shall be applied.
16.Distributions.
xxvii.Non-Liquidating Distributions. Subject to the Manager’s powers set forth in Section 10 hereof to determine the amount and timing of any distribution, any non-liquidating distributions shall be made to the Members in the following order of priority:
al.First, Members holding Series A Preferred Interests shall be entitled to receive, when, as and if declared by the Manager, only out of funds legally available for the making of such distributions, cumulative cash distributions in an amount equal to the Series A Preferred Return with respect to each Series A Preferred Interest, and no more, payable quarterly on the 1st day of February, May, August and November in each year (each, a “Distribution Payment Date”), beginning on November 1, 2013. Notwithstanding any provision hereof, any distribution otherwise payable on a Distribution Payment Date that is not a Business Day may be paid on the next succeeding Business Day with the same force and effect as if paid on such Distribution Payment Date and, if so paid, shall be deemed for all purposes to have been paid on such Distribution Payment Date. Any amount so payable on a Distribution Payment Date shall be payable in arrears with respect to the calendar quarter (or portion thereof) ending on the last day of such calendar quarter preceding such Distribution Payment Date (each such period, a “Distribution Period”), to the Members holding the Series A Preferred Interests on such Distribution Payment Date. Distributions on Series A Preferred Interests shall accrue and be cumulative from September 9, 2013. Any distribution or portion thereof payable on the Series A Preferred Interests in respect of any partial Distribution Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Any distribution that accrues in respect of a Distribution Period but is not declared and paid on the relevant Distribution Payment Date as aforesaid shall cumulate and shall not be payable until such time, if any, as it is declared by the Manager out of legally available funds as aforesaid. No interest or distributions, or sum of money in lieu thereof, shall accrue or be payable in respect of any distribution payments on Series A Preferred Interests that may be in arrears. Holders of Series A Preferred Interests shall not be entitled to any distributions, whether payable in cash, securities or other property, other than distributions (if any) declared and payable on Series A Preferred Interests as specified in this Section 16(a)(1) (subject to the other provisions of the LLC Agreement) unless declared by the Manager. No distribution amount that accrues in respect of any Distribution Period shall be “in arrears” at any time on or prior to the corresponding Distribution Payment Date (or, if such day is not a Business Day, the next succeeding Business Day). Any distribution amount in arrears may be paid on any Business Day,
whether or not a Distribution Payment Date, at any time at the election of the Manager, whereupon such amount shall no longer be “in arrears.”
am.Second, to the Members holding Common Interests in accordance with their relative Common Percentage Interests.
xxviii.Liquidating Distributions. Upon dissolution of the Company pursuant to Section 11, or any other voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the proceeds of such dissolution shall be used:
an.First, to satisfy the debts and liabilities of the Company;
ao.Second, to pay each Member holding Series A Preferred Interests an amount equal to the greater of (A) the Series A Preferred Interests Member’s Capital Account balance or (B) the aggregate Liquidation Preference for the Series A Preferred Interests held by such Member;
ap.Third, any remaining proceeds shall be distributed to the Members in accordance with the positive balances in their Capital Account.
xxix.Priority of Distributions.
No distributions on the Series A Preferred Interests will be declared or paid or set apart for payment if such authorization, payment or setting apart for payment is restricted or prohibited by law or contract. Notwithstanding the foregoing, distributions with respect to the Series A Preferred Interests will accrue during (but only during) the relevant respective Distribution Period and, if not paid on the corresponding Distribution Payment Date, will thereupon cumulate, whether or not any of the foregoing restrictions exist, whether or not there are funds legally available for the payment thereof and whether or not they are declared (but no amount shall accrue on any cumulated distribution in arrears).
aq.Unless accrued distributions on the Series A Preferred Interests have been, or contemporaneously are, declared and paid in full, or declared and a sum sufficient for the payment thereof in full is or has been set apart for such payment, for all past, completed Distribution Periods: (A) no distributions will be declared or paid, and no sums set apart for payment, upon any Common Interests (other than distributions payable in Common Interests); and (B) the Company shall not be permitted to make any transfer of cash or other property to any Member or affiliate of such Member, whether pursuant to a loan, equity distribution, sale, exchange or any other arrangement.
xxx.Advance or Draw. Except as otherwise provided in any written agreement prepared in connection with a distribution by the Company, any non-liquidating distribution of money or other property made during a taxable year by the Company to a Member with respect to Common Interests held by such Member constitutes an advance or draw against the Member’s distributive share of Company taxable income for such year; provided, however, that any such
distribution that is made by the Company to a Member during a taxable year shall constitute a loan by the Company to such Member that must be repaid as soon as practicable to the extent that the amount of such distribution exceeds the Member’s adjusted tax basis in its LLC Interest after taking into account its distributive share of the Company’s taxable income for the current year. For purposes of the foregoing sentence, the amount of any distribution equals the sum of the amount of any distributed money and the fair market value of any distributed property.
17.Admission of Additional Members. Subject to Section 7(a), additional members of the Company may be admitted to the Company with the consent of the Manager.
18.Issuance of Additional LLC Interests. Subject to Section 7(a) and Section 8, Manager is hereby authorized to cause the Company from time to time to issue to Members or other persons additional LLC Interests in accordance with the terms hereof.
19.Personal Property. The LLC Interests shall for all purposes be personal property. No Member shall have any interest in specific property of the Company.
20.Partnership Representative.
xxxi.The Partnership Representative, for purposes of Code Section 6223 shall be the Manager or such other person the Manager designates. Each Member hereby consents to such designation and agrees that, upon the request of the Manager, it will execute, certify, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents as may reasonably be necessary or appropriate to evidence such consent. The Company shall notify the Internal Revenue Service (the “IRS”) of the change in Partnership Representative in the manner and at the time that the IRS requires; the former Partnership Representative shall cooperate with the Manager in making any necessary filings with the IRS regarding such change. As a condition of appointment as the Partnership Representative, the Partnership Representative agrees or shall agree that, in the event such person ceases to be the Partnership Representative, all correspondence or notifications from or by the IRS received by such person in such person’s capacity (or former capacity) as the Partnership Representative for the Company shall be promptly forwarded to the Manager and shall, if contacted by the IRS, inform the IRS that such person no longer is authorized by the Company to act as the Partnership Representative of the Company. Without the consent of all the Members, the Partnership Representative may not elect to apply the Partnership Audit Procedures to any taxable year beginning before January 1, 2018.
(b) The Partnership Representative may not (i) commence a judicial action with respect to a federal income tax matter or appeal an adverse determination of a judicial tribunal, or (ii) enter into any settlement agreement which affects the amount, deductibility or credit of any Company item, in each case, without the prior consent of the Manager. In the event of any pending tax action, investigation, claim or controversy involving the Company which proposes an adjustment with respect to any item reported on a federal income tax return of a Member, the Partnership Representative shall provide to the Members copies of all notices and other written communications received by the Partnership Representative from the IRS or sent by the Partnership Representative to the IRS, relating to the Company. The Partnership Representative is entitled to reimbursement by the Company for all expenses reasonably incurred by it in
representing the Company in any administrative or judicial proceeding relating to the tax treatment of Company items. The terms and conditions of Section 24 (Indemnification) applicable to the Manager shall apply to the Partnership Representative, mutatis mutandis.
(c) At the sole discretion of the Partnership Representative, acting through the Designated Individual (as defined below), the Company shall make a Small Partnership Election (to the extent permitted to be made under applicable law) for each taxable year. By execution of this Agreement, the Members hereby consent to Small Partnership Elections (to the extent permitted to be made under applicable law).
(d) If a Small Partnership Election cannot be made under applicable law, the Members agree that, if the Company receives a notice of final partnership administrative adjustment that would, with the passing of time, result in an “imputed underpayment” imposed on the Company as that term is defined in Section 6225 of the Code, then, (i) the Partnership Representative may request any applicable modifications to such imputed underpayment pursuant to Section 6225(c) of the Code, (ii) each Member shall take all actions requested by the Partnership Representative to facilitate any applicable modification to such imputed underpayment pursuant to Section 6225(c) of the Code (other than the filing of amended returns) and (iii) if the Partnership Representative determines to do so, the Company shall make an Adjusted K-1 Election and comply with all of the requirements and procedures required in connection with such election to make inapplicable to the Company the requirement in Section 6225 of the Code that the Company pay such “imputed underpayment” as that term is used in that section; provided, however, that the Members may determine by unanimous consent not to make such Adjusted K-1 Election.
(e) In all situations, without regard to the specific elections made, each Member agrees to reasonably cooperate with the Partnership Representative, the Company, and other Members by providing such information and taking such actions as may be reasonably necessary to mitigate, to the fullest extent possible, the potential tax exposure of the Company as well as the potential tax exposure of the other Member or Members relating to the Company.
(f) Any taxes, penalties, and interest payable by the Company or any entity disregarded for United States income tax purposes in which the Company owns an interest under Subchapter C of Chapter 63 of Subtitle F of the Code and the Treasury Regulations pursuant thereto (“Partnership Audit Procedures”) shall be treated as specifically attributable to the Members, and the Manager shall use reasonable best efforts to allocate the burden of (or any diminution in distributable proceeds resulting from) any such taxes, penalties or interest to those Members to whom such amounts are specifically attributable (whether as a result of their status, actions, inactions or otherwise), as determined by the Manager. Notwithstanding the foregoing, such apportionment of liability shall also take into account the extent to which the Company’s imputed underpayment was modified by adjustments under Code Section 6225(c) (to the extent approved by the IRS) and attributable to (x) a particular Member’s tax classification, tax rates, tax attributes, the character of tax items to which the adjustment relates, and similar factors, or (y) the Member’s filing of an amended return or complying with the “alternative procedure” to filing an amended tax return for the Member’s taxable year that includes the end of the
Company’s reviewed year and payment of required tax liability in a manner that complies with Code Section 6225(c)(2). In connection with the foregoing, to the extent that the Company is assessed amounts under the Partnership Audit Procedures, each current or former Member to which the assessment relates shall remit to the Company, within 30 days’ written notice by the Partnership Representative, an amount equal to such Member’s allocable share of the assessment, including such Member’s allocable share of any interest imposed on the Company. The foregoing sentence shall survive the dissolution of the Company, the withdrawal of any Member from the Company and the transfer of any Member’s interest in the Company.
(g) These procedures shall apply, mutatis mutandis, to any state, local or foreign tax audit regime that centralizes the conduct of a tax audit of the Company. The Partnership Representative shall serve in a similar capacity for any such audit.
(h) If the Partnership Representative is an entity, the Partnership Representative shall, at its sole discretion, appoint the “designated individual” of the Partnership Representative within the meaning of Treas. Reg. Section 301.6223-1(b)(3)(ii) (the “Designated Individual”), provided that any such appointee shall agree to be bound by the terms, conditions and other provisions of this Agreement to the extent that such terms, conditions and other provisions are expressly imposed upon the Partnership Representative as provided herein. The Company shall enter into a Designated Individual Agreement with the Designated Individual, and with any person subsequently qualified and appointed as the Designated Individual, in substantially the form attached hereto as Exhibit A.
i.This Section 20 shall survive the dissolution of the Company, the withdrawal of any Member from the Company and the transfer of any Member’s interest in the Company.
21.Limited Liability. Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Members and the Manager, if any, shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member or manager of the Company.
22.Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE OF DELAWARE, ALL RIGHTS AND REMEDIES BEING GOVERNED BY SAID LAWS, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW.
23.Amendments. This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered either by the Members holding Common Interests representing, in the aggregate, a majority in Common Percentage Interest or by the Manager; provided that any such amendment that adversely affects the Special Rights associated with any Series A Preferred Interests held by a Member or Members shall also be executed and delivered by the Member or Members holding a majority (in number) of the Series A Preferred Interests whose Special Rights are so affected.
24.Indemnification.
ii.The Manager shall not be liable, responsible or accountable in damages or otherwise to the Company, to any third party or to any Member for (i) any act performed or omission within the scope of the authority conferred on the Manager by this Agreement or otherwise except for the gross negligence, fraud or willful misconduct (including any willful violation of the terms of the Manager Certificate or this Agreement) of the Manager, (ii) the Manager’s performance of, or failure to perform, any act on the reasonable reliance on advice of legal counsel to the Company, or (iii) the negligence, dishonesty or bad faith of any agent, consultant or broker of the Company selected, engaged or retained in good faith and with reasonable prudence. In any threatened, pending or completed action, suit or proceeding, the Manager shall, to the fullest extent permitted by law, be fully protected and indemnified and held harmless by the Company against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, proceedings, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, reasonable attorneys’ fees, costs of investigation, fines, judgments and amounts paid in settlement, actually incurred by the Manager in connection with such action, suit or proceeding) by virtue of its status as an indemnified party or with respect to any action or omission taken or suffered in good faith, other than liabilities and losses resulting from the gross negligence, fraud, breach of fiduciary duty or willful misconduct (including any willful violation of the terms of the Certificate of Incorporation (or other governing instrument) of Manager or this Agreement) of the Manager. Expenses, including reasonable attorneys’ fees, incurred by Manager in defending any such action, suit or proceeding shall be paid or reimbursed by the Company promptly upon demand and, if any such demand is made in advance of the final disposition of any such action, suit or proceeding, promptly upon receipt by the Company of an undertaking of Manager to repay such expenses if it shall ultimately be determined that Manager is not entitled to be indemnified by the Company. The indemnification provided by this Section 24 shall be recoverable only out of the assets of the Company, and no Member shall have any personal liability on account thereof. For purposes of this subsection (a), the term “Company” shall include any predecessor of the Company and any constituent entity (including any constituent of a constituent) absorbed by the Company in a consolidation or merger.
iii. The Company shall indemnify to the full extent permitted by law (A) any person made or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person or such person’s testator or intestate is or was an officer of the Company or was a director, officer, member, stockholder, partner, incorporator or liquidator of a subsidiary of the Company or serves or served at the request of the Company any other enterprise as a director, officer, employee, member, stockholder, partner, incorporator or liquidator or in any other capacity, (B) the Manager to the extent of its indemnification payments under its bylaws, and (C) NCWS with respect to any payment made by it with respect to the Public Indebtedness. Expenses, including reasonable attorneys’ fees, incurred by any such person in defending any such action, suit or proceeding shall be paid or reimbursed by the Company promptly upon demand by such person and, if any such demand is made in advance of the final disposition of any such action, suit or proceeding, promptly upon
receipt by the Company of an undertaking of such person to repay such expenses if it shall ultimately be determined that such person is not entitled to be indemnified by the Company. The rights provided to any person by this provision shall be enforceable against the Company by such person, who shall be presumed to have relied upon it in serving or continuing to serve as an officer or in such other capacity as provided above. In addition, the rights provided to any person by this provision shall survive the termination of such person as any such officer of the Company or director, officer, member, stockholder, partner, incorporator or liquidator of a subsidiary of the Company and, insofar as such person served at the request of the Company as a director, officer, member, stockholder, partner, incorporator or liquidator of or in any other capacity for any other enterprise, shall survive the termination of such request as to service prior to termination of such request.
ar.Notwithstanding anything contained in this subsection (b), except for proceedings to enforce rights provided in this subsection (b), the Company shall not be obligated under this subsection (b) to provide any indemnification or any payment or reimbursement of expenses to any officer or other person in connection with a proceeding (or part thereof) initiated by such person (which shall not include counterclaims or crossclaims initiated by others, or any claim to enforce rights to indemnification under this subsection (b) if it has been ultimately determined that the person making such indemnification claim is entitled to the claimed indemnification) unless the board of directors of the Manager has authorized or consented to such proceeding (or part thereof) in a resolution adopted by it.
as.For purposes of this subsection (b), the term “Company” shall include any predecessor of the Company and any constituent entity (including any constituent of a constituent) absorbed by the Company in a consolidation or merger; the term “other enterprise” shall include any corporation, partnership, limited liability company, joint venture, trust, association or other unincorporated organization or other entity and any employee benefit plan; the term “officer”, when used with respect to the Company, shall refer to any officer of the Company or the Manager elected by or appointed pursuant to authority granted by the board of directors (or similar body) of the Manager pursuant to the bylaws (or other governing instrument) of the Manager, when used with respect to a subsidiary or other enterprise that is a corporation, shall refer to any person elected or appointed pursuant to the bylaws of such subsidiary or other enterprise or chosen in such manner as is prescribed by the bylaws of such subsidiary or other enterprise or determined by the board of directors of such subsidiary or other enterprise, and when used with respect to a subsidiary or other enterprise that is not a corporation or is organized in a foreign jurisdiction, the term “officer” shall include in addition to any officer of such entity, any person serving in a similar capacity or as the manager of such entity; service “at the request of the Company” shall include service as an officer or employee of the Company which imposes duties on, or involves services by, such officer or employee with respect to an employee benefit plan, its participants or beneficiaries; any excise taxes assessed on a person with respect to an employee benefit plan shall be deemed to be indemnifiable expenses; and action by a person with respect to
an employee benefit plan which such person reasonably believes to be in the interest of the participants and beneficiaries of such plan shall be deemed to be action not opposed to the best interests of the Company.
at.Nothing in this subsection (b) shall limit the power of the Company or the Manager to provide rights of indemnification and to make payment and reimbursement of expenses, including attorneys’ fees, to officers, employees, agent or other persons otherwise than pursuant to this subsection (b).
au.Payments made by the Company directly to attorneys representing persons entitled to indemnification under subsection (a) or (b) of this Section 24 (each an “Indemnified Party”), and payments made by the Company directly to claimants or other persons to discharge obligations of such persons that would be indemnifiable under subsection (a) or (b) of this Section 24 if paid by such persons, shall also be deemed to be indemnification payments.
iv.To the extent that, at law or in equity, an Indemnified Party has duties (including fiduciary duties) and liabilities relating thereto to the Company, to any Member or to any other Indemnified Party, an Indemnified Party acting under this Agreement shall not be liable to the Company or to any Member or to any other Indemnified Party for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of an Indemnified Party otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Party.
v.No amendment of this Section 24 shall impair the rights of any person arising at any time with respect to events occurring prior to such amendment.
25.Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefore in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.
26.Counterparts. For the convenience of the Members, this Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall together constitute the same agreement.
27.Headings; Recitals. All section headings and the recitals herein are for convenience of reference only and are not part of this Agreement, and no construction or reference shall be derived therefrom.
28.Entire Agreement; Waiver. This Agreement (including any exhibits and schedules hereto) supersedes all prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof and thereof and contains the entire agreement among the parties with respect to the subject matter hereof and thereof. No waiver of any provisions hereof by any party hereto shall be deemed a waiver of any other provisions hereof by any such party, nor shall any such waiver be deemed a continuing waiver of any provision hereof by such party.
29.Third Party Beneficiaries. NOTHING IN THIS AGREEMENT, EXPRESS OR IMPLIED, IS INTENDED TO CONFER UPON ANY PERSON NOT A MEMBER ANY RIGHTS OR REMEDIES OF ANY NATURE WHATSOEVER UNDER OR BY REASON OF THIS AGREEMENT (EXCEPT TO THE EXTENT SPECIFICALLY PROVIDED IN SECTIONS 24 AND 30) AND THE MANAGER SHALL HAVE NO DUTY OR OBLIGATION TO ANY CREDITOR OF THE COMPANY TO REQUEST THE MEMBERS TO MAKE ADDITIONAL CONTRIBUTIONS TO THE CAPITAL OF THE COMPANY.
30.Exculpation. Notwithstanding any other terms of this Agreement, whether express or implied, or obligation or duty at law or in equity, no Indemnified Party shall be liable to the Company or any member or manager for any act or omission (in relation to the Company, this Agreement, any related document or any transaction contemplated hereby or thereby) taken or omitted by an Indemnified Person in the belief that such act or omission is in or is not contrary to the best interests of the Company and is within the scope of authority granted to such Indemnified Party by this Agreement, provided that such act or omission does not constitute willful misfeasance, gross negligence or bad faith of such Indemnified Party.
[The remainder of this page intentionally left blank. Signatures on following page.]
IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed this Agreement (which may be in counterparts) as of the date first above written.
AS MEMBERS: AS MANAGER:
AT&T Mobility LLC AT&T Mobility Corporation
By: AT&T Mobility Corporation, By:
its sole Manager Name: George B. Goeke
Title: Treasurer
By:
Name: George B. Goeke
Title: Treasurer
AT&T Corp.
By:
Name: Jeston B. Dumas
Title: Chief Financial Officer and Treasurer
BellSouth Mobile Data, Inc.
By:
Name: George B. Goeke
Title: Treasurer
JP Morgan Chase Bank, N.A., as trustee
of the SBC Master Pension Trust
By:
Name:
Title:
INVESTOR FUNDS:
[Investor Funds 1-28]
By:
Name:
Title:
Signature Page to
Fifth Amended and Restated Limited Liability Company Agreement of AT&T Mobility II LLC
SCHEDULE A
MEMBERS
Common Interest Members
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Member
|
|
Common Interests
|
|
Common Percentage Interest
|
|
Mobility
|
|
644,959,718
|
|
92.865222460%
|
|
BSMD
|
|
36,828,861
|
|
5.302843385%
|
|
AT&T Corp.
|
|
12,722,995
|
|
1.831934155%
|
|
|
|
694,511,574
|
|
100.0000000%
|
Series A Preferred Interest Member
Schedule A to
Fifth Amended and Restated Limited Liability Company Agreement of AT&T Mobility II LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Member
|
|
Series A Preferred Interests
|
|
|
|
SBC Master Pension Trust
|
|
213,333,334
|
|
|
|
PIMCO Funds: PIMCO Income Fund
|
|
41,201,923
|
|
|
|
PIMCO Funds: PIMCO Total Return Fund
|
|
22,978,604
|
|
|
|
PIMCO Funds: Private Account Portfolio Series PIMCO Long Duration Credit Bond Portfolio
|
|
9,048,456
|
|
|
|
PIMCO Funds: PIMCO Investment Grade Credit Bond Fund
|
|
6,388,322
|
|
|
|
PIMCO Funds: PIMCO International Bond Fund (U.S. Dollar-Hedged)
|
|
3,952,199
|
|
|
|
PIMCO Funds: PIMCO Real Return Fund
|
|
2,004,101
|
|
|
|
PIMCO Variable Insurance Trust: PIMCO Total Return Portfolio
|
|
2,136,108
|
|
|
|
PIMCO Funds: PIMCO Low Duration Income Fund
|
|
1,868,094
|
|
|
|
Brighthouse Funds Trust I - PIMCO Total Return Portfolio
|
|
1,644,083
|
|
|
|
PIMCO Funds: PIMCO Diversified Income Fund
|
|
1,576,079
|
|
|
|
PIMCO Funds: Private Account Portfolio Series PIMCO Investment Grade Credit Bond Portfolio
|
|
1,560,079
|
|
|
|
PIMCO ETF Trust: PIMCO Active Bond Exchange-Traded Fund
|
|
1,196,060
|
|
|
|
PIMCO Funds: PIMCO Long-Term Credit Bond Fund
|
|
1,148,058
|
|
|
|
Pacific Select Fund - Managed Bond Portfolio
|
|
1,148,058
|
|
|
|
PIMCO Funds: PIMCO Long Duration Total Return Fund
|
|
1,128,057
|
|
|
|
Bridge Builder Trust: Bridge Builder Core Plus Bond Fund
|
|
1,036,052
|
|
|
|
PIMCO Funds: PIMCO Dynamic Bond Fund
|
|
400,020
|
|
|
|
PIMCO Dynamic Credit and Mortgage Income Fund
|
|
876,044
|
|
|
|
Brighthouse Funds Trust I- PIMCO Inflation Protected Bond Portfolio
|
|
444,022
|
|
|
|
PIMCO Funds: PIMCO StocksPLUS® Absolute Return Fund
|
|
700,035
|
|
|
|
Transamerica PIMCO Total Return VP
|
|
696,035
|
|
|
|
Harbor Bond Fund
|
|
656,033
|
|
|
|
PIMCO Funds: PIMCO Preferred and Capital Securities Fund
|
|
588,030
|
|
|
|
PIMCO Variable Insurance Trust: PIMCO Real Return Portfolio
|
|
360,018
|
|
|
|
PIMCO Funds: PIMCO StocksPLUS® Small Fund
|
|
524,026
|
|
|
|
PIMCO Flexible Credit Income Fund
|
|
484,024
|
|
|
|
PIMCO Funds: PIMCO Moderate Duration Fund
|
|
464,023
|
|
|
|
PIMCO Dynamic Income Fund
|
|
460,023
|
|
|
Schedule A to
Fifth Amended and Restated Limited Liability Company Agreement of AT&T Mobility II LLC
EXHIBIT A
FORM OF DESIGNATED INDIVIDUAL AGREEMENT
DESIGNATED INDIVIDUAL AGREEMENT
This DESIGNATED INDIVIDUAL AGREEMENT (this “Agreement”), dated as of [___], 20[_], is entered into by and between [______________________] (the “Company”), and [______________________], an individual (the “Designated Individual”). Capitalized terms used but not defined herein are used as defined in [______________________] (the “LLC Agreement”).
RECITALS:
WHEREAS, the Bipartisan Budget Act of 2015 eliminates the concept of a “tax matters partner,” and replaces it with the concept of a “partnership representative” and makes certain changes to the manner in which limited liability companies and their members are audited and taxes may be assessed therefrom, each effective for tax years commencing after December 31, 2017;
WHEREAS, by that certain [______________________], [______________________] has been designated by the Company to serve as the partnership representative (the “Partnership Representative”); and
WHEREAS, where the Partnership Representative is an entity, the Partnership Representative shall, at its sole discretion, appoint the “designated individual” of the Partnership Representative within the meaning of Treas. Reg. Section 301.6223-1(b)(3)(ii).
NOW, THEREFORE, it is mutually agreed as follows:
1. The Designated Individual hereby acknowledges that he or she has received and reviewed a true and correct copy of the LLC Agreement, attached hereto as Exhibit A.
2. The Designated Individual hereby approves, consents to and agrees to be bound by the terms, conditions and other provisions of the LLC Agreement to the extent that such terms, conditions and other provisions are expressly imposed upon the Partnership Representative as provided therein.
[Signature Page Follows]
Exhibit A to
Fifth Amended and Restated Limited Liability Company Agreement of AT&T Mobility II LLC
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
COMPANY:
[_____________________]
By:______________________________
Title:_____________________________
DESIGNATED INDIVIDUAL:
________________________________
Name:
[Signature Page to Designated Individual Agreement]
Exhibit A to
Fifth Amended and Restated Limited Liability Company Agreement of AT&T Mobility II LLC
AT&T HEALTH PLAN
Effective January 1, 2021
ARTICLE 1 PURPOSE
The AT&T Health Plan ("Plan") provides Participants with certain medical, dental, and vision benefits, as specified herein. Effective March 23, 2010, the Plan shall be frozen to new Participants, except as described in Section 2.15. 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:
a.Active Participant. “Active Participant” shall mean an Active Employee Participant and his Dependents.
b.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.
c.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. 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.
d.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. 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.
e.AT&T. “AT&T” shall mean AT&T Inc. References to “Company” shall mean AT&T.
f.CEO. "CEO" shall mean the Chief Executive Officer of AT&T Inc.
g.COBRA. “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
h.Coinsurance. “Coinsurance” shall mean the amount an Active Participant must pay each time he/she receives Covered Health Services, after he/she 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.
i.Committee. "Committee" shall mean the Human Resources Committee of the Board of Directors of AT&T Inc.
j.Covered Benefits. “Covered Benefits” shall mean the benefits provided by the Plan, as provided for and governed by Section 4.1 of the Plan.
k.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.
l.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.
m.Dependent(s). “Dependent(s)” shall mean those individuals who would qualify as a Participant’s dependent(s) under the terms of the AT&T Medical Program.
n.Disability. "Disability" shall mean qualification for long term disability benefits under Section 3.1 of the Officer Disability Plan.
o.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, unless otherwise provided for in Appendix D to this Plan, 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.
p.Employer. "Employer" shall mean AT&T Inc. or any of its Subsidiaries.
q.Executive Officer. “Executive Officer” shall mean any executive officer of AT&T, as that term is used under the Securities Exchange Act of 1934.
r.International Plan. “International Plan” shall mean the “AT&T International Health Plan” for Officers serving in expatriate positions with the Company.
s.Leave of Absence. “Leave of Absence” shall mean a Company-approved leave of absence.
t.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.
u.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.
v.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.
w.Officer. "Officer" shall mean an individual who is designated as an officer level employee for compensation purposes on the records of AT&T.
x.Participant. “Participant” shall mean an Active Participant or Retired Participant or both, as the context indicates.
y.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.
z.Plan Year. ”Plan Year” shall mean the calendar year.
aa.Preventive Care. “Preventive Care” generally focuses on evaluating a Participant’s current health status when the Participant is symptom-free and taking the necessary steps to maintain the Participant’s health. The Plan Administrator, in its sole discretion, shall determine whether a particular service constitutes Preventive Care.
ab.Qualified Dependent. “Qualified Dependent” shall mean a Dependent who loses coverage under a COBRA eligible program due to a Qualifying Event.
ac.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
ad.Retire, Retired or Retirement. “Retire,” “Retired” or "Retirement" shall mean the termination of an Active Employee Participant's employment with AT&T or any of its Subsidiaries, for reasons other than death, on or after the earlier of the following dates: (1) the date such Active Employee Participant has attained age 55, and, for an Active Employee Participant on or after January 1, 2002, has five (5) years of service, or (2) the date the Active Employee Participant has attained one of the following combinations of age and service at termination of employment on or after April 1, 1997:
Net Credited Service Age
25 years or more 50 or older
30 years or more Any age
2.31 Retired Participant. “Retired Participant” shall mean a Retired Employee Participant and his Dependents.
2.32 Retired Employee Participant. “Retired Employee Participant” shall mean a former Active Employee Participant who has Retired within the meaning of Section 2.30 and who meets the additional requirements of Section 3.2 to be eligible for coverage in Retirement.
2.33 SEVP-HR. “SEVP-HR” shall mean AT&T’s highest ranking Officer, specifically responsible for human resources matters.
2.34 Subsidiary. "Subsidiary" shall mean any corporation, partnership, venture or other entity in which AT&T holds, directly or indirectly, a 50% or greater ownership interest. The Committee may, at its sole discretion, designate any other corporation, partnership, venture or other entity a Subsidiary for the purpose of participating in this Plan.
2.35 Vision Services. “Vision Services” shall mean services for vision care. The Plan Administrator, in its sole discretion, shall determine whether a particular service is classified as Preventive Care or a Vision, Medical or Dental Service.
2.36 Medicare Eligible Retired Participant. “Medicare Eligible Retired Participant” shall mean a Retired Participant who is eligible for Medicare due to reaching the eligible age for Medicare.
ARTICLE 3 ELIGIBILITY
a.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.
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.
b.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.
c.Requirement to Enroll and Participate in Medicare and the International Plan. 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) 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, and (ii) the International Plan (if eligible).
ARTICLE 4 BENEFITS
a.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 International Plan, 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 International Plan 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 (or 100% of Covered Health Services not paid under the International Plan).
Preventive Care - Preventive Care 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) Medicare, or (ii) International Plan, 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 Medicare, provided expenses for such services would qualify as deductible medical expenses for federal income tax purposes, whether deducted or not.
b.Priority of Paying Covered Claims. Claims for benefits will be applied against the various health plans, as applicable, and coordinated with Medicare in the following order:
(1)Medicare, to the extent the Participant is eligible therefore and such claim is actually paid by Medicare,
(2)International Plan, if applicable,
(2) CarePlus, if elected,
(3) Long Term Care Plan, if elected,
(4) this Plan.
ARTICLE 5 TERMINATION OF PARTICIPATION
a.Termination of Participation. Participation will cease on the last day of the month in which one of the following conditions occurs:
(1)A Participant ceases to meet the definition of a Dependent (as set forth in Section 2.13 of this Plan) for any reason, 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.a.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 would have otherwise been eligible to participate under the terms of the AT&T Medical Program, are paying any applicable contributions for this Plan as provided in Article 7, and are participating in Medicare if eligible. 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 would have otherwise been eligible for participation under the terms of the AT&T Medical Program, are paying any applicable contributions for this Plan as provided in Article 7, and are participating in Medicare if eligible. 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) would have otherwise been eligible for participation under the terms of the AT&T Medical Program 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
5.a.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
5.a.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.
5.b.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.
5.c.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.
5.d.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.
5.e.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
5.a.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/she 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.
5.b.Definitions. For purposes of this Article and of the Plan generally
i.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;
ii.“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.
iii.“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.
iv.“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.
5.c.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.
5.d.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.
5.e.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:
i.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.
ii.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.
iii.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
5.a.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.
5.b.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.
5.c.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.
5.d.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.
5.e.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.
5.f.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.
5.g.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).
5.h.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.
5.i.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
5.a.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.
5.b.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.
5.c.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.
5.d.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.a.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.a.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.b.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.a.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.b.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
10.a.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.
10.b.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.
10.c.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.
10.d.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.
10.e.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).
10.f.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.
10.g.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
2021 MONTHLY CONTRIBUTIONS, ANNUAL DEDUCTIBLE, COINSURANCE PERCENTAGES AND ANNUAL OUT-OF-POCKET MAXIMUM
Active Participants
|
|
|
|
|
|
|
|
Monthly Contributions
|
Individual - $216
Individual + Spouse - $354
Individual + 1 or More Children - $233
Individual + Spouse + 1 or More Children - $551
|
|
Annual Deductible
|
Individual - $1,750
All other tiers - $3,500
|
|
Coinsurance Percentage
|
10% after the Annual Deductible is met. Coinsurance applies until the Annual Out-of-Pocket Maximum is reached.
|
|
Annual Out-of-Pocket Maximum
|
Individual - $7,000
All other tiers- $14,000 (individual amount of $7,000)
|
Retired Participants – Monthly Contributions
|
|
|
|
|
|
|
|
|
|
|
Retired Prior to August 31, 1992 and Surviving Spouses
|
Individual - $230
Individual + Spouse - $230
Individual + 2 or More - $230
|
|
Retired on or after September 1, 1992 and Surviving Spouses
Note: The Plan Administrator shall maintain records governing whether a Retired Participant is in Class A, B, C or D.
|
Class A
|
Individual - $750
Individual + Spouse - $1,097
Individual + 1 or More Children - $750
Individual + Spouse + 1 or More Children - $1,135
|
|
Class B
|
Individual - $899
Individual + Spouse - $1,242
Individual + 1 or More Children - $899
Individual + Spouse + 1 or More Children - $1,390
|
|
Class C
|
Individual - $1,110
Individual + Spouse - $1,433
Individual + 1 or More Children - $1,110
Individual + Spouse + 1 or More Children - $1,678
|
|
Class D
|
Individual - $1,491
Individual + Spouse - $2,135
Individual + 1 or More Children - $1,491
Individual + Spouse + 1 or More Children - $2,292
|
COBRA Continuation Coverage – Monthly Contributions
|
|
|
|
|
|
|
|
Active COBRA
|
Individual $2,105
Individual + Spouse - $4,313
Individual + 1 or More Children - $3,420
Individual + Spouse + 1 or More Children - $6,169
|
|
Retired Prior to August 31, 1992 and Surviving Spouses COBRA
|
Individual - $1,690
Individual + 1 - $3,300
Individual + 2 or More - $4,738
|
|
Retired on or after September 1, 1992 and Surviving Spouses COBRA
|
Individual - $1,630
Individual + Spouse - $3,341
Individual + 1 or More Children - $2,649
Individual + Spouse + 1 or More Children - $4,779
|
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.
APPENDIX D
Notwithstanding the provisions and limitations of Section 2.15 of the Plan, the following Officers shall be included in the term “Eligible Employee” and shall be eligible to participate in the Plan (along with any Dependents) subject to all applicable provisions of the Plan:
|
|
|
|
|
|
|
|
|
|
|
Name
|
Title
|
Effective Date of Participation
|
|
David McAtee
|
Senior Executive Vice President & General Counsel
|
February 1, 2018
|