EX-2.1.1 Second Amendment to Contribution Agreemen

EX-2.1.1 3 g80893exv2w1w1.txt EX-2.1.1 SECOND AMENDMENT TO CONTRIBUTION AGREEMEN EXHIBIT 2.1.1 SECOND AMENDMENT TO AMENDED AND RESTATED CONTRIBUTION AND FORMATION AGREEMENT SECOND AMENDMENT TO AMENDED AND RESTATED CONTRIBUTION AND FORMATION AGREEMENT, dated and effective as of March __, 2002 (the "Second Amendment"), by and among BellSouth Corporation, a Georgia corporation ("BellSouth"), SBC Communications Inc., a Delaware corporation ("SBC"), and Cingular Wireless LLC, a Delaware limited liability company ("Cingular"). W I T N E S S E T H: WHEREAS, BellSouth and SBC entered into that certain Contribution and Formation Agreement dated as of April 4, 2000, which was amended and restated in its entirety as of October 2, 2000, and further amended by a First Amendment (as so amended, the "Contribution Agreement"); WHEREAS, pursuant to the terms of the Contribution Agreement, BellSouth and SBC transferred employees primarily related to the BellSouth Business and the SBC Business, respectively, to Leasing Companies and caused the Leasing Companies to assume employment-related obligations and liabilities of such employees plus employment-related obligations and liabilities in respect of former employees whose employment was primarily related to the BellSouth Business and the SBC Business, respectively; WHEREAS, the Contribution Agreement contemplates that each of BellSouth and SBC shall contribute to Newco their respective interests in the Leasing Companies, and that Newco shall assume the obligations and liabilities of the Leasing Companies; and WHEREAS, BellSouth, SBC and Cingular now desire to amend certain provisions of the Contribution Agreement with respect to such matters; NOW, THEREFORE, in consideration of the premises and the mutual covenants and undertakings contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Defined Terms. Capitalized terms used in this Second Amendment and not otherwise defined are used herein as defined in the Contribution Agreement. Exhibit 2.1.1 2. Amendment to Section 4.4(c). Section 4.4(c) is amended and restated to read in its entirety as follows: "(c) The SBC Leasing Companies shall, as of the Transfer Date, assume (i) all employment-related obligations and liabilities (without regard to when such obligations and liabilities arise or are incurred whether before or after the Transfer Date), including obligations and liabilities under the SBC Compensation and Benefit Plans for which representations and warranties have been made in Section 3.1(i) herein, in respect of the SBC Wireless Employees as of the date each such employee becomes employed by a SBC Leasing Company and (ii) all employment-related obligations and liabilities (without regard to when such obligations and liabilities arose or were incurred whether before or after the Transfer Date) in respect of former employees whose employment was primarily related to the SBC Business prior to the Closing Date (but excluding obligations and liabilities relating to former employees under tax-qualified defined contribution and defined benefit plans). Notwithstanding the foregoing, the SBC Leasing Companies shall not assume the obligations and liabilities, whether in respect of current or former employees or identified groups of current or former employees,(A) for benefits payable pursuant to SBC Pension Plans to SBC Wireless Employees who terminate employment prior to the Leasing Company Contribution Date to the extent SBC Pension Plan assets for such SBC Wireless Employees are not transferred to Newco, or (B) relating to those SBC Compensation and Benefit Plans set forth in Appendix 4.4(c)." 3. Amendment to Section 4.4(d). Section 4.4(d) is amended and restated to read in its entirety as follows: "(d) The BellSouth Leasing Companies shall, as of the Transfer Date, assume (i) all employment-related obligations and liabilities (without regard to when such obligations and liabilities arise or are incurred whether before or after the Transfer Date), including obligations and liabilities under the BellSouth Compensation and Benefit Plans for which representations and warranties have been made in Section 3.2(i) herein, in respect of the BellSouth Wireless Employees as of the date each such employee becomes employed by a BellSouth Leasing Company and (ii) all employment-related obligations and liabilities (without regard to when such obligations and liabilities arose or were incurred whether before or after the Transfer Date) in respect of former employees whose employment was primarily related to the BellSouth Business prior to the Closing Date (but excluding obligations and liabilities relating to -2- Exhibit 2.1.1 former employees under tax-qualified defined contribution and defined benefit plans). Notwithstanding the foregoing, the BellSouth Leasing Companies shall not assume (A) benefits payable pursuant to BellSouth Pension Plans to BellSouth Wireless Employees who terminate employment prior to the Leasing Company Contribution Date to the extent BellSouth Pension Plan assets for such BellSouth Wireless Employees are not transferred to Newco, (B) obligations and liabilities, whether in respect of current or former employees or identified groups of current or former employees, relating to those BellSouth Compensation and Benefit Plans all as set forth in Appendix 4.4(d), or (C) obligations and liabilities relating to any nonqualified deferred compensation plans to the extent any deferrals under such plans are the obligation of an entity other than one of the BellSouth Leasing Companies." 4. Amendment to Section 4.4(g). Section 4.4(g) is amended and restated to read in its entirety as follows: "(g) On or prior to December 31, 2001, or such other dates as the Parties and Newco agree (collectively referred to as the "Leasing Company Contribution Date"), each of SBC and BellSouth shall cause to be contributed to Newco all of the outstanding stock of or other equity interests in their respective Leasing Companies in consideration of the acceptance by Newco of the obligations and liabilities of the Leasing Companies; it being understood that the contributions of each of the various Leasing Companies may be made at different times. Each Leasing Company shall cease participating in (or otherwise providing benefits under) the SBC Compensation and Benefit Plans and BellSouth Compensation and Benefit Plans, as applicable, as of the Leasing Company Contribution Date applicable to such Leasing Company and shall commence to participate in (or otherwise provide benefits under) the Newco Plans established pursuant to Section 4.4(k) hereof." 5. Amendment to Section 4.4(i). Section 4.4(i) is amended and restated to read in its entirety as follows: "(i) The assets and liabilities of the SBC Wireless Employees held under its Pension Plans with Code Section 401(k) features ("401(k) Plans") shall be transferred to the Newco 401(k) Plan in a trust-to-trust transfer as soon as practicable following the later of (i) the Leasing Company Contribution Date for each such Leasing Company, and (ii) the date that Newco has demonstrated, to the reasonable satisfaction of SBC that Newco 401(k) Plan satisfies the qualification requirements of Section 401 of the Code. The assets and liabilities of the BellSouth Wireless Employees held -3- Exhibit 2.1.1 under its Pension Plans with Code Section 401(k) features ("401(k) Plans") shall be transferred to the Newco 401(k) Plan in a trust-to-trust transfer as soon as practicable following the later of (i) February 4, 2002, and (ii) the date that Newco has demonstrated, to the reasonable satisfaction of BellSouth that Newco 401(k) Plan satisfies the qualification requirements of Section 401 of the Code." 6. Amendment to Section 4.4(j). Section 4.4(j) is amended and restated to read in its entirety as follows: "(j) As further provided herein, the assets and liabilities corresponding to the SBC Wireless Employees held under any defined benefit Pension Plans that are intended to be qualified under Code Section 401(a), other than the Ameritech Pension Plan, the Ameritech Management Pension Plan and the Employees' Pension Plan of Ameritech Publishing Ventures, Inc., ("SBC Qualified Pension Plans") and the BellSouth Wireless Employees held under any defined benefit Pension Plans intended to be qualified under Code Section 401(a) ("BellSouth Qualified Pension Plans") shall be transferred to a Newco Pension Plan with respect to which Newco has demonstrated to the satisfaction of BellSouth and SBC, as applicable, that such plan satisfies the qualification requirements of Code Section 401(a). Such transfers of assets shall be of an amount equal to the Economic Liability, as defined in Section 4.4(m)(i)(w), for each of the SBC Qualified Pension Plans (with respect to the SBC Wireless Employees) and the BellSouth Qualified Pension Plans (with respect to the BellSouth Wireless Employees) plus (A) one hundred and twenty million dollars ($120,000,000) from the SBC Qualified Pension Plans, and (B) eighty million dollars ($80,000,000) from the BellSouth Qualified Pension Plans; provided, the transfer of any assets in excess of the projected benefit obligation will be subject to appropriate corporate approval by both Parent Companies. Such asset transfers from the SBC Qualified Pension Plans and the BellSouth Qualified Pension Plans may occur in multiple transfers with the final transfer from all applicable Pension Plans to be made no later than September 30, 2002. Notwithstanding the preceding, the total amount transferred from the SBC Qualified Pension Plans and the BellSouth Qualified Pension Plans shall be no less than the minimum required transfer amount under Code Section 414(l), which shall be determined and certified by Chicago Consulting Actuaries." -4- Exhibit 2.1.1 7. Amendment to Section 4.4(K). Section 4.4(k) is amended and restated to read in its entirety as follows: "(k) Newco shall establish and sponsor, or cause to be established and sponsored, Compensation and Benefit Plans (the "Newco Plans") which are separate from the BellSouth Compensation and Benefit Plans and the SBC Compensation and Benefit Plans. The Newco Plans shall provide that the SBC Wireless Employees and the BellSouth Wireless Employees shall be credited with such employees' period of service with SBC, a Subsidiary of SBC, BellSouth, or a Subsidiary of BellSouth for purposes of eligibility, participation, and determining the level of benefits under the Newco Plans. In addition to the Newco Plans contemplated under Sections 4.4(i) and 4.4(j), the Newco Plans shall include, but shall not necessarily be limited to, plans for the benefit of certain SBC Wireless Employees that are substantially equivalent to the SBC Supplemental Retirement Income Plan, the supplemental pension benefit make up plans sponsored by SBC and its Affiliates, the SBC Executive Health Plan, and the SBC Salary and Incentive Award Deferral Plan." Should Newco adopt a supplemental retirement income plan for the benefit of a select group of its management employees, the benefit formula under such plan shall provide that benefits payable under such plan shall be reduced by any benefits that a participant in such Newco supplemental retirement income plan is entitled to receive under the Bell South SERP or the plan adopted by Newco for the benefit of certain SBC Wireless Employees that is substantially equivalent to the SBC Supplemental Retirement Income Plan. 8. Amendment to Section 4.4(m). Section 4.4(m) is amended and restated to read in its entirety as follows: "(m) Benefits True-Up Payment. i. Definitions. For purposes of Section 4.4(m): (v) "Total Benefits Liabilities" shall mean the sum of the SBC Benefits Liabilities and the BellSouth Benefits Liabilities. (w) "Economic Liability" shall mean the present value of all projected future benefit payments ("PVFB") less the PVFB earned after the applicable Leasing Company Contribution Date under the ongoing Newco plans (excluding the transition benefits identified on Appendix 4.4(m)(i)(w) -5- Exhibit 2.1.1 attached hereto). Present value calculations will utilize an annual discount rate of 8.50%, unless otherwise agreed to by the Parties. The calculation of Economic Liability shall be performed by Chicago Consulting Actuaries and shall utilize such other actuarial assumptions as may be mutually agreed upon by the Parties. (x) "SBC Benefits Liabilities" shall mean the aggregate employment-related liabilities, calculated on an Economic Liability basis, of the SBC Leasing Companies determined as of the applicable Leasing Company Contribution Date (or such other date or dates as shall be mutually agreed to by the Parties), including, without limitation, all such liabilities described in Section 4.4(c) reduced to take into account funding with respect to liabilities that have been funded by SBC and its Affiliates (including assets transferred in accordance with Section 4.4(j)) or are subject to payment for the benefit of the SBC Leasing Company under contracts of insurance. SBC Benefits Liabilities shall also include the "transition benefits" set forth on Appendix 4.4(m)(i)(x)(A), calculated on an Economic Liability basis and reduced to take into account funding to Newco by SBC and its Affiliates. Notwithstanding anything to the contrary in this subsection, "SBC Benefits Liabilities" shall not include obligations and liabilities under those SBC Compensation and Benefit Plans set forth in Appendix 4.4(m)(i)(x)(B), and to the extent that any such obligations and liabilities shall have been previously assumed by a SBC Leasing Company, SBC shall cause such Leasing Company to be relieved of such obligations and liabilities prior to the Leasing Company Contribution Date applicable to such Leasing Company, or as soon as practicable thereafter for any Leasing Company with respect to which the Leasing Company Contribution Date preceded the date of this Second Amendment. (y) "BellSouth Benefits Liabilities" shall mean the aggregate employment-related liabilities, calculated on an Economic Liability basis, assumed by the BellSouth Leasing Company, determined as of the Leasing Company Contribution Date (or such other date or dates as shall be mutually agreed to by the Parties), including, without limitation, all such liabilities described in Section 4.4(d) reduced to take into account funding to Newco by BellSouth and its Affiliates with respect to liabilities that have been funded by BellSouth and its Affiliates (including -6- Exhibit 2.1.1 assets transferred in accordance with Section 4.4(j) or are subject to payment for the benefit of the BellSouth Leasing Company under contracts of insurance. BellSouth Benefits Liabilities shall also include the "transitions benefits" set forth on Appendix 4.4(m)(i)(y)(A), calculated on an Economic Liability basis and reduced to take into account funding of such amounts to Newco by BellSouth and its Affiliates. Notwithstanding anything to the contrary in this subsection, "BellSouth Benefits Liabilities" shall not include obligations and liabilities under those BellSouth Compensation and Benefit Plans set forth in Appendix 4.4(m)(i)(y)(B), and to the extent that any such obligations and liabilities shall have been previously assumed by a BellSouth Leasing Company, BellSouth shall cause such Leasing Company to be relieved of such obligations and liabilities prior to the Leasing Company Contribution Date applicable to such Leasing Company, or as soon as practicable thereafter for any Leasing Company with respect to which the Leasing Company Contribution Date preceded the date of this Second Amendment. (y) [unamended] (z) [unamended] ii. Procedures. (x) As soon as practicable, but in no event later than December 31, 2002, Newco shall, on a basis consistent with GAAP and generally accepted actuarial principles, prepare and deliver to each of SBC and BellSouth a statement showing the calculation of the SBC Benefits Liabilities and the BellSouth Benefits Liabilities (the "Statement"). (y) [unamended]. (z) [unamended]. iii. [unamended]. iv. [unamended]." -7- EXHIBIT 2.1.1 9. Addition of Section 4.4(n). Section 4.4(n) is added to the Agreement as follows: "(n) Cooperation. To the extent necessary to fulfill their respective obligations under the SBC Compensation and Benefit Plans, the BellSouth Compensation and Benefit Plans and the Newco Plans, each Party agrees to (and agrees to cause its Affiliates to) timely provide and deliver such information as is reasonably necessary in order to administer such plans for the benefit of the plans' participants." 10. No Other Amendment or Waiver. Except as set forth in Sections 2 through 8 hereof, the Contribution Agreement remains in full force and effect with no amendments or waivers thereof. 11. Counterparts. This Second Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original by the parties executing such counterpart, but all of which shall be considered one and the same instrument. IN WITNESS WHEREOF, this Second Amendment has been signed on behalf of each of the parties hereto as of the date first written above. BELLSOUTH CORPORATION By: /s/ RONALD M. DYKES ------------------------------------- Name: Ronald M. Dykes -------------------------------- Title: Chief Financial Officer ------------------------------- SBC COMMUNICATIONS INC. By: /s/ RANDALL STEPHENSON ------------------------------------- Name: Randall Stephenson -------------------------------- Title: Sr. Exec. VP & CFO ------------------------------- CINGULAR WIRELESS LLC By: Cingular Wireless Corp., its Manager By: /s/ RICHARD G. LINDNER ------------------------------------- Name: Richard G. Lindner -------------------------------- Title: Chief Financial Officer ------------------------------- -8- EXHIBIT 2.1.1 APPENDIX 4.4(c) LIABILITIES NOT ASSUMED BY THE SBC LEASING COMPANIES AS OF THE TRANSFER DATE DonTech Profit Participation Plan referenced in 11-K filing in 10-K Ameritech Stock Retirement Plan for Non-Employee Directors, as amended Ameritech Deferred Compensation Plan for Non-Employee Directors, as amended Travel Accident Insurance through Hartford Life Insurance Company, for Non-Employee Directors Separation and General Release Agreements entered into between Ameritech (or subsidiary/business unit) and employee being exited from business. Individually negotiated arrangements, typically entered into with employees at the Corporate Resource level but have also used at lower levels for employees who do not qualify under the Management Separation Benefit Plan. Retirement and General Release Agreements entered into between Ameritech (or subsidiary/business unit) and employee being exited from business. Individually negotiated arrangements, typically entered into with employees at the Corporate Resource level but have also used at lower levels for employees who do not qualify under the Management Separation Benefit Plan. Employment Agreement, Agreement Not to Compete, Confidential Information, and Invention Assignment Agreement entered into between Ameritech (or subsidiary/business unit) and new employees as a condition of hire. Employment Agreement, Agreement Not To Compete, and Confidential Information Agreement entered into between Ameritech (or subsidiary/business unit) and new employees as a condition of hire. IP Assignment Agreement entered into between Ameritech (or subsidiary/business unit) and new employees as a condition of hire, or existing employees as condition of participation in Management Incentive Plan. Consulting Agreement entered into between Ameritech (or subsidiary/business unit) with prior employee. Employee loan agreement between business units. Employee loan agreement to Pioneers, NECA (and possibly other locations(s)) SBC Retirement Plan for Non-Employee Directors SBC Non-Employee Directors Restricted Stock Plan SBC Director Travel Accident Insurance SBC Director Group Life Insurance SBC Deferred Compensation Plan for Non-Employee Directors SBC Director and Officer Indemnity Agreement -9- EXHIBIT 2.1.1 APPENDIX 4.4(d) LIABILITIES NOT ASSUMED BY THE BELLSOUTH LEASING COMPANIES AS OF THE TRANSFER DATE Executive Severance Agreement (Change in Control Agreement) between BellSouth Corporation and M.L. Feidler Transition Agreement dated December 30, 1996, between BellSouth Cellular Corp. and M.T. Walsh Transition Agreement, dated December 31, 1999, between BellSouth Cellular Corp. and C.S. Hamm Transition Agreement between BellSouth Cellular Corp. and Hank Bunde -10- EXHIBIT 2.1.1 APPENDIX 4.4(m)(i)(x)(A) SBC TRANSITION BENEFITS Pension Transition Benefits - SBC Wireless Employees (other than former Ameritech employees) pension benefits equal to six months of transition credits that they would have been entitled to under the SBC Pension Plan and the greater of the Newco Pension Benefit Plan and the SBC Pension Benefit Plan as such benefit was grandfathered under the SBC Cash Balance Plan and which included a scheduled freeze date of June 1, 2002. SBC Wireless Employees who were former Ameritech employees will receive a transition benefit under the Newco Pension Plan that is equal to their projected shortfall between the Ameritech Plan benefit and the Newco Pension Plan benefit over a five-year period. Retiree Health Transition Benefits - Retiree Health benefits for SBC Wireless Employees who are within five years of retirement eligibility under the various SBC rules (Modified Rule of 75, Rule of 75 or Rule of 65) as of the Contribution Date Deferred Compensation Benefits - SBC Wireless Employees who participated in the SBC Salary and Incentive Award Deferral Plan ("SIAD") shall be eligible to participate in a Newco deferred compensation plan that is substantially identical to the SBC SIAD Plan; however, SBC will fund the historic liability as of the Contribution Date for this Plan. - SBC Wireless Employees who had accrued a benefit under nonqualified pension make up plan sponsored by SBC or any of its Affiliates shall participate in substantially identical plans adopted by Newco; however, SBC will fund the historic liability as of the Contribution Date for this Plan and SBC shall fund, on an annual basis, the annual liability associated with these Newco Plans until such time that Newco adopts a nonqualified pension make up plan for the benefit of its employees generally. - SBC Wireless Employees who participated in the SBC Supplemental Retirement Income Plan sponsored by SBC shall participate in a substantially identical plan adopted by Newco; however, SBC will fund the Economic Liability for this Newco Plan for a period of five years. Life Insurance Plans - SBC Wireless Employees who are participating in supplemental executive life insurance plans prior to the Contribution Date will be eligible for the greater of the life insurance benefit under the SBC life insurance plans or the Newco supplemental life insurance plan, and, in either case, such coverage shall be provided by Newco; provided, however, there are two SBC Wireless Employees who are retirement eligible as of the Contribution Date and their supplemental executive life insurance coverage shall be provided by SBC (and not by Newco). Executive Health Plan - SBC Wireless Employees who are not retirement eligible as of the Contribution Date and who are participating in the SBC Executive Health Plan as of the Contribution Date shall be entitled to substantially similar coverage provided by -11- EXHIBIT 2.1.1 Newco. SBC shall, on an annual, ongoing basis, fund the year-to-year liability under Newco's Executive Health Plan for these SBC Wireless Employees until such date that Newco adopts an Executive Health Plan as an ongoing benefit. -12- EXHIBIT 2.1.1 APPENDIX 4.4(m)(i)(x)(B) LIABILITIES RETAINED BY SBC AS OF THE CONTRIBUTION DATE Ameritech Supplemental Pension Plan (for non-management employees), effective as of January 1, 1995 Ameritech Management Supplemental Pension Plan, effective as of January 1, 1984, as amended through Thirteenth Amendment thereto Ameritech Mid-Career Pension Plan, as amended and restated effective as of January 1, 1989 as further amended by the First through the Ninth Amendments thereto, inclusive Ameritech Corporate Resource Supplemental Pension Plan as amended and restated effective as of February 4, 1998 Ameritech Pension Plan (for non-management employees), as amended and restated effective as of January 1, 1994 and as thereafter amended by the First through the Fourth Amendments thereto, inclusive Ameritech Management Pension Plan, as amended and restated effective as of May 1, 1995 and as thereafter amended by the First through the Fifth Amendments thereto, inclusive Ameritech Corporate Resource Deferral Plan as amended and restated effective as of February 1, 1998 Ameritech Long Term Disability Plan, as amended and restated effective as of June 1, 1996 Ameritech Corporate Resource Long Term Disability Plan, as amended and restated effective as of February 1, 1998 SecurityLink Long Term Disability Plan Ameritech Corporation Long-Term Stock Incentive Plan, as amended and restated effective as of February 1, 1998 Ameritech Long Term Incentive Plan, as amended and restated effective as of January 1, 1992 and as thereafter amended by First Amendment adopted on January 17, 1995 Ameritech 1989 Long Term Incentive Plan, as amended and restated effective as of January 1, 1992 and as thereafter amended by First Amendment thereto and a resolution approved on January 17, 1995 Ameritech Group Long Term Disability Insurance SBC 1992 Stock Option Plan SBC 1995 Management Stock Option Plan SBC 1996 Stock and Incentive Plan (to be voted on at April 26, 1996 Annual Meeting of Stockholders) SBC Stock Savings Program SBC Senior Management Long Term Disability Plan SBC Senior Management Deferred Compensation Program of 1998 (i.e., Regular and Early Payment Option) SBC Senior Management Deferred Compensation Plan (Prior to January 1, 1988) SBC Supplementary Life Insurance Plan (but only with respect to SBC Wireless Employees who are 'retirement eligible' as of the Contribution Date -13- EXHIBIT 2.1.1 ADS Long-Term Disability Plan UNUM Long Term Disability Plan CCPR Services, Inc. Long-term Disability Plan SNET Disability Benefits Plan (but only with respect to Long Term Disability benefits) Ameritech Non-Management Umbrella Welfare Benefit Plan, restated effective as of January 1, 1996 and comprising the Comprehensive Health Care Plan, the Dental Expense Plan and the Medical Expense Plan Ameritech Management Umbrella Welfare Benefit Plan, restated effective as of January 1, 1996 and comprising the Comprehensive Health Care Plan, the Dental Expense Plan, the Medical Expense Plan and the Medical Benefits Plan Ameritech Flexible Spending Account (FSA) Plan (including Health Care FSA, Dependent Care FSA and Premium Payment Program) Ameritech Vision Care Plan, originally effective January 1, 1984 Ameritech Educational Assistance Program Ameritech Sickness and Accident Disability Benefit Plan, as amended and restated effective as of June 1, 1996 Ameritech Life Insurance Program, originally effective January 1, 1984 (including Basic Life Insurance, Accidental Death & Dismemberment, Special Accident, Supplementary Life Insurance and Dependent Life Insurance benefits) Ameritech Accidental Death Insurance Program (Company-paid travel and accident insurance from Hartford Life Insurance Company for Management Committee members, selected Corporate Resource managers and pilots and flight attendants) Ameritech Long Term Care Plan (employee-paid long term care insurance from CNA) Supplemental Income Protection Programs (SIPP) for IBEW and CWA employees SecurityLink Vision Care Plan Medical, Dental, Vision, Disability, Life Insurance, Savings, Educational Assistance and Flexible Spending Plans of Liberty Services Division (except short term disability) Ameritech Management Separation Benefit Plan, commencing on January 1, 1995, as amended through the second amendment thereto Ameritech Success Sharing Plan for Union (CWA) Represented Employees, effective August 6, 1995, Ameritech Success Sharing Plan for Union (IBEW) Represented Employees, effective June 25, 1995, and CPE Success Sharing Plan, as amended, pursuant to Memorandum of Agreement between Ameritech Custom Business Services, Ameritech Enhanced Business Services and the CWA Ameritech Connections Long Distance Referral Program, approved June 18, 1997 Management Incentive Plan Policy Sales Incentive Plans/Policies, in effect for and maintained by Company business units Ameritech Senior Management Short Term Incentive Plan, as amended and restated effective as of February 1, 1998 Ameritech Management Committee Short Term Incentive Plan, as amended and restated effective February 1, 1998 Project completion/retention bonuses for certain employees participating in the Year 2000 Team and selected other IS projects Project completion/retention bonuses for certain ESP/Payroll Team participants and other selected employees -14- EXHIBIT 2.1.1 Paid Vacation and Related Policies Paid Personal Days and Related Policies Paid Holidays and Related Policies Leave of absence, Company paid time-off, flex-time and similar policies Arrangements in respect of employees afforded "red circled pay" or "incumbent grade treatment" relating to compensation and benefits International Human Resources Policies (e.g., relating to expatriate compensation and benefit arrangements for short and long term assignments and extended business trips and repatriation) Ameritech Corporate Resource Transfer Program, as amended and restated effective as of December 1, 1995 Ameritech Relocation Benefits Plan Ameritech Perquisites Program (including financial services, health evaluations, retiree office space, mobile phone/pager, lunch club and country club memberships and parking programs) Directors' and Officers' Liability Insurance Ameritech Telephone Concession Plan Employee Assistance Program (Life Works) Ameritech Adoption Assistance Program Ameritech Matching Gift Program Ameritech Pioneers Employee Program for Volunteerism and Community Service Pathways to Development Service Anniversary Award Program Educational Assistance Program Outplacement Counseling Program Financial counseling assistance related to employee separation Uniform allowances Annual Chairman's Award, Above and Beyond Recognition Programs, Pinnacle Awards, Day-to-Day Award Program and other performance/service award programs sponsored by the Company or its business units Ameritech Corporate Aircraft Policy, resolutions adopted by the Board of Director on March 21, 1984 regarding use of corporate aircraft, and Company policies and practices regarding company cars/drivers and other ground transportation Employee discounts on cellular, security monitoring and other goods and services SBC Senior Management Long Term Incentive Plan (expiring) SBC Officer Retirement Savings Plan SBC Senior Management Financial Counseling Program SBC Senior Management Survivor Benefit Plan SBC Mid-Career Pension Plan SBC Custom Care SBC Care Plus SBC Medical Expense Plan SBC Dental Expense Plan SBC Vision Plan SBC Vision Plus SBC Group Life Insurance Program -15- EXHIBIT 2.1.1 SBC Supplementary Group Life Insurance Program SBC Dependent Group Life Insurance Program SBC Sickness and Accident Disability Benefits Plan SBC Disability Benefits Plan (long term disability only) SBC Long-Term Care Insurance Plan SBC Employee Assistance Program SBC Employee/Family Assistance Plan SBC Employee Stock Ownership (PAYSOP) SBC Comprehensive Medical Plan SBC Managed Care Medical Plan ADS Group Dental Plan Dental Coverage Plan ADS Vision Plan Vision Coverage Plan Disability Benefits Plan (long term disability only) ADS Retirement Plan Pension Plan for Employees of Times-Journal Publishing Company ADS Group life AD&D Insurance Group Life Insurance Plan (Basic and Supplemental) Term Life Insurance Plan Times-Journal Publishing Company AD&D Disability Plan Dependent Group Life Insurance Plan ADS Section 125 Plan Capital Care, Inc. Group Enrollment Agreement Capital Choice Consumer Dental Care Prudential Organ and Tissue Expense Coverage UNUM Group Life Insurance Plan UNUM Group Life and Group Accidental Death and Dismemberment Insurance Policy Direct Elect Plan Medical Care Reimbursement Account Dependent Care Reimbursement Account Retirement Funding Account (SBC Group Life Insurance Program) Vail Program Phone service and equipment Management Compensation System for the holding company staff, which includes Team and Individual Discretion Incentive Awards, and comparable systems for employees below Senior Manager in subsidiaries SBC Adoption Reimbursement Program SBC CarePlus - A Supplemental Medical Plan SBC Dental Plan SBC Disability Income Plan (long term disability only) SBC Flexible Spending Account Plan SBC Medical Care Reimbursement Account Plan SBC Dependent Care Reimbursement Account Plan -16- EXHIBIT 2.1.1 SBC Leave of Absence Policy SBC Medical and Group Life Insurance Plan - CustomCare SBC Medical and Group Life Insurance Plan - Active Employees Group Life Insurance SBC Medical and Group Life Insurance Plan - Retired Employees Group Life Insurance CCPR Services, Inc. Health Plan CCPR Services, Inc. Life Insurance CCPR Services, Inc. Short-term Disability Plan SNET Active Bargaining Unit Health Plan (includes Medical, Dental, Vision, and Prescription Drug Card Coverage) Tax Reduction Act Stock Ownership Plan SNET Employee Life Insurance Plan SNET Health Payment Plan SNET Health Care Reimbursement Plan SNET Dependent Reimbursement Plan SNET Long Term Care Plan SNET Family Care Leave Program -17- EXHIBIT 2.1.1 APPENDIX 4.4(m)(i)(y)(A) BELLSOUTH TRANSITION BENEFITS Pension Transition Benefits - BellSouth Wireless Employees pension benefits equal to the greater of the benefit provided under the BellSouth Personal Retirement Account Pension Plan ("BellSouth PRA") as of the Contribution Date or the Newco Pension Benefit Plan for five years, including the graduated service credit under the BellSouth PRA, the additional service credit equal to 3% of base pay in excess of the social security wage base, the additional service credit of 1% that is discretionary under the BellSouth PRA, but has been approved for the past few years, and the BSMPP benefit as provided under the BellSouth PRA, which has a scheduled freeze date of December 31, 2005. Retiree Health Transition Benefits - Retiree Health benefits for BellSouth Wireless Employees who are within five years of retirement eligibility under BellSouth rules (Rule of 75) as of the Contribution Date Savings Plan Transition Benefits - BellSouth Wireless Employees (other than BellSouth Wireless Data LLC employees in New Jersey) will receive a 100% match in the Newco 401(k) Plan through calendar year 2003, which coincides with the year in which the BellSouth 401(k) Plan's LESOP expires. Life Insurance Benefits - BellSouth Wireless Employees who are participating in supplemental executive life insurance plans prior to the Contribution Date will be eligible for the greater of the life insurance benefit under the BellSouth executive life insurance plans or the Newco supplemental life insurance plan, and, in either case, such coverage shall be provided by Newco. -18- Exhibit 2.1.1 APPENDIX 4.4(m)(i)(y)(B) LIABILITIES RETAINED BY BELLSOUTH AS OF THE CONTRIBUTION DATE BellSouth Stock Ownership Plan BellSouth Flexible Benefits Medical Plan BellSouth Flexible Benefits Dental Plan BellSouth Medical Assistance Plan BellSouth Long Term Disability Plan BellSouth Corporation Group Life Plan BellSouth Universal Plus Insurance Plan BellSouth HealthCare Account BellSouth Family Care Account BellSouth Dependent Life Plan BellSouth Long-Term Care Insurance BellSouth Supplemental Transplant Assistance Plan BellSouth Supplemental Transplant Assistance Plan Trust BellSouth Corporation Health Care Trust - Retirees BellSouth Corporation Health Care Trust - Employees BellSouth RFA - VEBA Trust Mail Order Drug Program Prescription Drug Program BellSouth Cellular Certain Pension and Death Benefits from Operating Expenses BellSouth Dental Assistance Plan BellSouth Corporation Health Care Plan BellSouth Supplemental Executive Retirement Plan BellSouth Corporation Compensation Deferral Plan BellSouth Nonqualified Deferred Compensation Plan BellSouth Nonqualified Deferred Income Plan BellSouth Corporation Stock Plan BellSouth Stock Option Plan BellSouth Corporation Trust Under Executive Benefit Plan(s) for Mobile Systems Executives BellSouth Senior Manager Shareholder Return Cash Plan BellSouth Corporation Key Manager Financial Counseling Plan BellSouth Corporation Personal Vehicle Reimbursement Plan BellSouth Physical Examination Program BellSouth Corporation Executive Transfer Plan BellSouth Executive Long Term Disability Plan Adoption Assistance Program Employee Assistance Program Tuition Aid Program Life Care Connection Child Care Discounts Mortgage Program Financial Education -19- Exhibit 2.1.1 Holidays Optional Holidays BellSouth Stock Investment Plan Vacation Buy Plan Personal Days Qualified Transportation Expense Plan Telephone Concession Cellular/Digital Discount Employee Met Pay (Auto/home) Internet Pricing Policy Australian Body Works/LA Fitness Charitable Contributions Matching Gifts Program Education Loans BellSouth Scholarships Volunteer Grant Program Service Awards Theodore N. Vail Award Program BellSouth Transition Payment Plan for Management: Voluntary BellSouth Transition Payment Plan for Management: Involuntary BellSouth Transition Payment Plan for Senior Management: Voluntary BellSouth Transition Payment Plan for Senior Management: Involuntary BellSouth Transitional Leave of Absence for SERP Participants BellSouth Discretionary Transition Assistance Plan BellSouth Gold Chip Incentive Plan -20-