BELLSOUTH CORPORATION DIRECTORS'
                           COMPENSATION DEFERRAL PLAN





61854.02

                  BELLSOUTH CORPORATION DIRECTORS' COMPENSATION DEFERRAL PLAN
                                TABLE OF CONTENTS


BACKGROUND AND PURPOSE...................................................1
----------------------

A.      GOAL.............................................................1
--      ----
B.      PURPOSE..........................................................1
--      -------
C.      TYPE OF PLAN.....................................................1
--      ------------

ARTICLE I  DEFINITIONS...................................................2
----------------------

1.1     "ACCOUNT"........................................................2
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1.2     "AFFILIATE"......................................................2
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1.3     "BELLSOUTH"......................................................2
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1.4     "BENEFICIARY"....................................................2
---     -------------
1.5     "BOARD"..........................................................2
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1.6     "BUSINESS DAY"...................................................2
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1.7     "CODE"...........................................................2
---     ------
1.8     "COMPANY STOCK"..................................................2
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1.9     "COMPENSATION"...................................................2
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1.10    "CREDITED INTEREST RATE".........................................2
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1.11    "DEFERRAL CONTRIBUTIONS".........................................3
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1.12    "DEFERRAL ELECTION"..............................................3
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1.13    "EFFECTIVE DATE".................................................3
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1.14    "ELECTION DEADLINE"..............................................3
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1.15    "ELECTION PACKAGE"...............................................3
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1.16    "INTEREST INCOME OPTION".........................................3
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1.17    "INTEREST INCOME SUBACCOUNT".....................................3
----    ----------------------------
1.18    "INVESTMENT ELECTION"............................................3
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1.19    "INVESTMENT OPTIONS".............................................4
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1.19A   "MASTER ACCOUNT".................................................4
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1.20    "NONEMPLOYEE DIRECTOR "..........................................4
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1.21    "PARTICIPANT"....................................................4
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1.22    "PARTICIPATING COMPANY"..........................................4
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1.23    "PLAN"...........................................................4
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1.24    "PLAN ADMINISTRATOR".............................................4
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1.25    "PLAN YEAR"......................................................4
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1.26    "STOCK GRANT"....................................................4
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1.27    "STOCK UNIT".....................................................4
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1.28    "STOCK UNIT OPTION"..............................................4
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1.29    "STOCK UNIT SUBACCOUNT"..........................................5
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1.30    "VALUATION DATE".................................................5
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ARTICLE II  ELIGIBILITY AND PARTICIPATION................................6
-----------------------------------------

2.1     ANNUAL PARTICIPATION.............................................6
---     ---------------------
2.2     INTERIM PLAN YEAR PARTICIPATION..................................6
---     --------------------------------
2.2     ELECTION PROCEDURES..............................................6
---     --------------------
2.3     CESSATION OF ELIGIBILITY.........................................6
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ARTICLE III  PARTICIPANTS' ACCOUNTS; DEFERRAL CONTRIBUTIONS..............7
-----------------------------------------------------------

3.1     PARTICIPANTS' ACCOUNTS...........................................7
---     -----------------------
   (a)    Establishment of Accounts......................................7
   ---    --------------------------
   (b)    Nature of Contributions and Accounts...........................7
   ---    -------------------------------------
   (c)    Several Liabilities............................................7
   ---    --------------------
   (d)    General Creditors..............................................7
   ---    ------------------
3.2     DEFERRAL CONTRIBUTIONS...........................................7
---     -----------------------
   a)   Effective Date...................................................7
   --   --------------
   (b)    Term...........................................................8
   ---    -----
   (c)    Amount.........................................................8
   ---    -------
     (i)  Compensation Deferrals.........................................8
     ---------------------------
     (ii)    Stock Grant Deferrals.......................................8
     ----    ---------------------
   (d)    Revocation.....................................................8
   ---    -----------
   (e)    Crediting of Deferred Compensation.............................8
   ---    -----------------------------------
3.3     DEFERRAL ELECTIONS AND MULTIPLE PARTICIPATING COMPANIES..........8
---     --------------------------------------------------------
3.4     VESTING..........................................................9
---     -------

ARTICLE IV  DETERMINATION AND CREDITING OF INVESTMENT RETURN............10
------------------------------------------------------------

4.1     GENERAL INVESTMENT PARAMETERS...................................10
---     ------------------------------
4.2     DEEMED INVESTMENTS..............................................10
---     ------------------
   (a)    Nature of Deemed Investments..................................10
   ---    ----------------------------
   (b)    Investment of Contributions...................................10
   ---    ----------------------------
   (c)    Investment of Existing Account Balances.......................10
   ---    ----------------------------------------
   (d)    Investment Subaccounts........................................11
   ---    -----------------------
4.3     STOCK UNIT OPTION...............................................11
---     ------------------
   (a)    Stock Unit Subaccount.........................................11
   ---    ----------------------
   (b)    Cash Dividends................................................11
   ---    ---------------
   (c)    Adjustments...................................................11
   ---    ------------
4.4     INTEREST INCOME OPTION..........................................12
---     -----------------------
   (a)    Interest Income Subaccount....................................12
   ---    ---------------------------
   (b)    Crediting of Deemed Interest..................................12
   ---    -----------------------------
     (i)     Amount Invested............................................12
     ---     ----------------
     (ii)    Determination of Amount....................................12
     ----    ------------------------
4.5     GOOD FAITH VALUATION BINDING....................................12
---     -----------------------------
4.6     ERRORS AND OMISSIONS IN ACCOUNTS................................12
---     ---------------------------------

ARTICLE V  PAYMENT OF ACCOUNT BALANCES..................................14
--------------------------------------

5.1     BENEFIT AMOUNTS.................................................14
---     ----------------
   (a)    Benefit Entitlement...........................................14
   ---    --------------------
   (b)    Valuation of Benefit..........................................14
   ---    ---------------------
   (c)    Conversion of Stock Units into Dollars........................14
   ---    ---------------------------------------
5.2     ELECTIONS OF TIMING AND FORM....................................14
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   (a)    Timing........................................................14
   ---    -------
   (b)    Form of Distribution..........................................14
   ---    ---------------------
   (c)    Multiple Selections...........................................14
   ---    --------------------
5.3     BENEFIT PAYMENTS TO A PARTICIPANT...............................15
---     ----------------------------------
   (a)    Timing........................................................15
   ---    -------
   (b)    Form of Distribution..........................................15
   ---    ---------------------
   (c)    Valuation of Single Sum Payments..............................15
   ---    ---------------------------------
   (d)    Valuation of Installment Payments.............................15
   ---    ----------------------------------
5.4     DEATH BENEFITS..................................................15
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   (a)    General.......................................................15
   ---    -------
   (b)    Valuation.....................................................16
   ---    ---------
5.5     BENEFICIARY DESIGNATION.........................................16
---     ------------------------
   (a)    General.......................................................16
   ---    --------
   (b)    No Designation or Designee Dead or Missing....................16
   ---    -------------------------------------------
   (c)    Death of Beneficiary..........................................17
   ---    --------------------
5.6     TAXES...........................................................17
---     ------

ARTICLE VI SPECIAL ELECTION REGARDING RETIREMENT PLAN...................18
-----------------------------------------------------

6.1     DESCRIPTION OF ELECTION.........................................18
---     -----------------------
6.2     ELECTION DEADLINE...............................................18
---     -----------------
6.3     AMOUNT..........................................................18
---     ------
6.4     DEEMED INVESTMENT...............................................18
---     -----------------
6.5     PAYMENT OF BENEFITS.............................................18
---     -------------------
6.6     VESTING.........................................................18
---     -------

ARTICLE VI-A  SPECIAL ELECTION REGARDING MASTER ACCOUNT.................20
-------------------------------------------------------

6.1A      DESCRIPTION OF ELECTION.......................................20
----      -----------------------
6.2A      ELECTION DEADLINE.............................................20
----      -----------------
6.3A      EFFECT OF ELECTION............................................20
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6.4A      DEEMED INVESTMENT.............................................20
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6.5A      ELECTION OF TIMING AND FORM OF PAYMENT........................20
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   (a)    Timing........................................................20
   ---    ------
   (b)    Form of Distribution..........................................21
   ---    --------------------
   (c)    Benefit Payments..............................................21
   ---    ----------------

ARTICLE VII  CLAIMS.....................................................22
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7.1     INITIAL CLAIM...................................................22
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7.2     APPEAL..........................................................22
---     -------
7.3     SATISFACTION OF CLAIMS..........................................22
---     -----------------------

ARTICLE VIII  SOURCE OF FUNDS...........................................24
-----------------------------


ARTICLE IX  PLAN ADMINISTRATION.........................................25
-------------------------------

9.1     ACTION BY THE PLAN ADMINISTRATOR................................25
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   (a)    Individual Administrator......................................25
   ---    -------------------------
   (b)    Administrative Committee......................................25
   ---    -------------------------
9.2     RIGHTS AND DUTIES OF THE PLAN ADMINISTRATOR.....................25
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9.3     BOND; COMPENSATION..............................................26
---     -------------------

ARTICLE X  AMENDMENT AND TERMINATION....................................27
------------------------------------

10.1    AMENDMENTS......................................................27
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10.2    TERMINATION OF PLAN.............................................27
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10.3    LIMITATION ON AUTHORITY.........................................27
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   (a)    Plan Amendments...............................................27
   ---    ---------------
   (b)    Plan Termination..............................................27
   ---    ----------------
   (c)    Opinions of Counsel...........................................27
   ---    -------------------

ARTICLE XI  MISCELLANEOUS...............................................28
-------------------------

11.1    TAXATION........................................................28
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11.2    WITHHOLDING.....................................................28
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11.3    NO EMPLOYMENT CONTRACT..........................................28
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11.4    HEADINGS........................................................28
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11.5    GENDER AND NUMBER...............................................28
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11.6    ASSIGNMENT OF BENEFITS..........................................28
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11.7    LEGALLY INCOMPETENT.............................................28
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11.8    ENTIRE DOCUMENT.................................................28
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11.9    GOVERNING LAW...................................................28
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<PAGE>



61854.02
                                      -32-
                  BELLSOUTH CORPORATION DIRECTORS' COMPENSATION DEFERRAL PLAN
                  AS AMENDED AND RESTATED EFFECTIVE MAY 1, 2001


         Effective as of the 1st day of May, 2001, BellSouth Corporation
("BellSouth") hereby amends and restates the BellSouth Corporation Directors'
Compensation Deferral Plan (the "Plan").


                             BACKGROUND AND PURPOSE


     A. Goal.  BellSouth desires to provide  nonemployee members of its Board of
Directors,  and  nonemployee  members of the Board of Directors of those of
its affiliated  companies that  participate in the Plan, with an opportunity (i)
to defer  the  receipt  and  income  taxation  of a portion  of such  directors'
retainers,  fees, and other  compensation  as described in the Plan; and (ii) to
receive an investment  return on those deferred  amounts which  approximates the
return of BellSouth stock, and an indexed rate of interest.

     B.  Purpose.  The  purpose  of the  Plan  is to set  forth  the  terms  and
conditions   pursuant  to which these  deferrals  may be made and deemed
invested and to describe the nature and extent of the directors' rights to their
deferred amounts.

     C. Type of Plan. The Plan  constitutes an unfunded,  nonqualified  deferred
compensation plan.


<PAGE>



                                    ARTICLE I
                                   DEFINITIONS

         For purposes of the Plan, each of the following terms, when used with
an initial capital letter, shall have the meaning set forth below unless a
different meaning plainly is required by the context.


61854.02
                                      -36-
1.1  "Account" shall mean, with respect to a Participant or Beneficiary,
the total dollar amount or value evidenced by the last balance posted in
accordance with the terms of the Plan to the account record established for such
Participant or Beneficiary with respect to the Deferral Contributions of such
Participant for any Plan Year. "Account" shall also refer to a Master Account.

1.2  "Affiliate"  shall  mean at any  time any  corporation,  joint  venture  or
partnership in which BellSouth owns directly or indirectly,  (i) with respect to
a corporation, stock possessing at least ten percent (10%) of the total combined
voting power of all classes of stock in the corporation,  or (ii) in the case of
a joint venture or partnership,  a ten percent (10%) or greater  interest in the
capital or profits of such joint venture or partnership.

1.3 "BellSouth" shall mean BellSouth Corporation, a Georgia corporation.


1.4  "Beneficiary"  shall mean,  with respect to a  Participant,  the  person(s)
determined in accordance with Section 5.5 to receive any death benefits that may
be payable under the Plan upon the death of the Participant.

1.5 "Board" shall mean the Board of Directors of BellSouth.


1.6  "Business  Day" shall  mean each day on which the New York  Stock  Exchange
operates and is open to the public for trading.

1.7 "Code" shall mean the Internal Revenue Code of 1986, as amended.

1.8 "Company Stock" shall mean the $1.00 par value per share voting common stock
of BellSouth.

1.9  "Compensation"  shall mean the total of the  directors'  fees and retainers
which  actually  would be payable to a Nonemployee  Director  during a Plan Year
absent a Deferral Election under this Plan.

1.10 "Credited Interest Rate" shall mean, for each Plan Year, the rate of return
equal to Moody's Monthly Average of Yields of a Corporate Bonds, as published by
Moody's  Investors  Service,  Inc., for the month of July immediately  preceding
such  Plan  Year.  If such  rate  (or any  alternative  rate  described  in this
sentence)  is at any time no  longer  available,  the Plan  Administrator  shall
designate  an  alternative  rate  which in the Plan  Administrator's  reasonable
judgment  is  generally  comparable  to the  rate  described  in  the  preceding
sentence,  and such alternative  rate shall thereafter be the Credited  Interest
Rate.

1.11 "Deferral  Contributions" shall mean, for each Plan Year, that portion of a
Participant's  Compensation  and that  portion of a  Participant's  Stock  Grant
deferred under the Plan pursuant to Section 3.2.

1.12 "Deferral Election" shall mean a written election form provided by the Plan
Administrator on which a Nonemployee  Director may elect to defer under the Plan
all or a portion of such individual's Compensation and/or Stock Grant for a Plan
Year.

1.13 "Effective Date" shall mean May 1, 1997, the original effective date of the
Plan.

1.14 "Election Deadline" shall mean, with respect to a Plan Year:


     (a) For a  Nonemployee  Director  who is then a member  of the  Board,  the
November 30 (or if  November 30 is not a Business  Day,  the last  Business  Day
immediately  preceding November 30) immediately  preceding the first day of such
Plan Year.

     (b) For a Nonemployee Director who is first elected by shareholders to be a
member of the Board  after (or within  thirty  (30) days  before)  the  Election
Deadline  described in Section  1.14(a)  above with respect to a Plan Year,  the
date which is thirty  (30) days after the date the  Nonemployee  Director  first
becomes eligible to participate in the Plan.

1.15 "Election  Package" shall mean a package consisting of a Deferral Election,
an  Investment  Election  and such  other  forms and  documents  distributed  to
Nonemployee Directors by the Plan Administrator for the purpose of allowing them
to elect to actively participate in the Plan for a Plan Year.

1.16  "Interest  Income Option" shall mean the  Investment  Option  described in
Section 4.4, pursuant to which a Participant's  deemed  investment  earnings are
determined on the basis of the Credited Interest Rate.

1.17 "Interest Income Subaccount" shall mean a bookkeeping subaccount reflecting
that portion of a  Participant's  Accounts for each Plan Year which is deemed to
be invested in the Interest Income Option.

1.18  "Investment  Election" shall mean a written  election form provided by the
Plan  Administrator  on which a  Nonemployee  Director  may  elect to have  such
individual's Deferral Contributions for a Plan Year (and all investment earnings
attributable thereto) deemed invested in either the Stock Unit Option and/or the
Interest Income Option, to the extent permitted under the terms of the Plan.



<PAGE>



1.19  "Investment  Options"  shall mean the Stock Unit  Option and the  Interest
Income Option.

1.19A "Master  Account" shall have the meaning  ascribed to such term in Article
VI-A.

1.20 "Nonemployee Director" shall mean a member of the Board, or a member of the
Board of Directors of any other Participating Company, who is not concurrently a
common law employee of a Participating Company.

1.21 "Participant"  shall mean any person  participating in the Plan pursuant to
the provisions of Article II.

1.22  "Participating  Company" shall mean BellSouth and each Affiliate which, by
action of its Board of Directors (or equivalent governing body), adopts the Plan
as a Participating Company with the approval of the Plan Administrator.

1.23  "Plan"  shall  mean  the  BellSouth  Corporation  Directors'  Compensation
Deferral Plan, as contained herein and all amendments hereto.

1.24 "Plan  Administrator"  shall mean the Chief Executive  Officer of BellSouth
and any individual or committee the Chief Executive Officer designates to act on
his or her behalf with  respect to any or all of the Chief  Executive  Officer's
responsibilities  hereunder;  provided, the Board may designate any other person
or  committee  to  serve  in lieu of the  Chief  Executive  Officer  as the Plan
Administrator with respect to any or all of the administrative  responsibilities
hereunder.

1.25 "Plan  Year" shall mean each  fiscal  year  period  beginning  on May 1 and
ending on April 30 of the succeeding calendar year.

1.26 "Stock Grant" shall mean for each Plan Year the annual grant of two hundred
(200) shares of Company Stock awarded to Nonemployee  Directors beginning May 1,
1997, or such other amount as may be determined by the Board from time to time.

1.27 "Stock Unit" shall mean an  accounting  entry that  represents an unsecured
obligation of a Participating Company to pay to a Participant an amount which is
based on the fair  market  value of one  share  of  Company  Stock as set  forth
herein.  A Stock  Unit shall not carry any  voting,  dividend  or other  similar
rights and shall not  constitute  an option or any other  right to  acquire  any
equity securities of BellSouth.

1.28 "Stock Unit Option" shall mean the Investment  Option  described in Section
4.3, pursuant to which a Participant's deemed investment earnings are determined
by the rate of return  (determined as provided in the Plan)  applicable to Stock
Units.

1.29 "Stock Unit Subaccount" shall mean a bookkeeping subaccount reflecting that
portion  of a  Participant's  Account  for each Plan Year  which is deemed to be
invested in the Stock Unit Option.

1.30 "Valuation Date" shall mean (i) for purposes of Article V, each December 31
(or, if December 31 is not a Business  Day, the last  Business  Day  immediately
preceding December 31), and (ii) for all other purposes, each April 30, July 31,
October 31, and January 31 (or if any such date is not a Business  Day, the last
Business Day  immediately  preceding such date),  and each other day declared by
the Plan Administrator to be a Valuation Date.


<PAGE>



                                   ARTICLE II
                          ELIGIBILITY AND PARTICIPATION

         2.1 ______ Annual Participation. Each individual who is a Nonemployee
Director as of the first day of a Plan Year and is a member of the Board before
the beginning of such Plan Year shall be eligible to defer all or a portion of
such individual's Compensation and Stock Grant and thereby to actively
participate in the Plan for such Plan Year. Such individual's participation
shall become effective as of the first day of such Plan Year, assuming such
individual properly and timely completes the election procedures described
below."

         2.2  Interim Plan Year Participation. Each individual who becomes
a Nonemployee Director during a Plan Year shall be immediately eligible to make
a Deferral Election and thereby to participate actively in the Plan for the
remainder of such Plan Year.

         2.3  Election Procedures. Each Nonemployee Director shall elect
to defer all or a portion of such individual's Compensation, all or a portion of
such individual's Stock Grant, or both, and thereby become an active Participant
for a Plan Year by delivering a completed Deferral Election and an Investment
Election by the Election Deadline. The Plan Administrator also may require the
Nonemployee Director to complete other forms and provide other data, as a
condition of participation in the Plan.

     2.4 Cessation of Eligibility. A Nonemployee Director's active participation
in the Plan shall  terminate,  and such individual shall not be eligible to make
any additional  Deferral  Contributions for any portion of a Plan Year following
the date such individual's  service as a Nonemployee Director with BellSouth and
all  Participating  Companies  terminates  (unless  such  individual  once again
becomes  a  Nonemployee  Director  later in such Plan  Year).  In  addition,  an
individual who actively participated in the Plan during prior Plan Years but who
is not a Nonemployee Director or does not complete the election procedures,  for
a subsequent Plan Year,  shall cease active  participation  in the Plan for such
subsequent Plan Year. Even if an individual's  active  participation in the Plan
ends, such individual shall remain an inactive Participant in the Plan until the
earlier  of (i) the  date the  full  amount  of such  individual's  Accounts  is
distributed  from the Plan,  or (ii) the date such  individual  again  becomes a
Nonemployee  Director and recommences  active  participation in the Plan. During
the period of time that an  individual is an inactive  Participant  in the Plan,
such individual's Accounts shall continue to be credited with deemed earnings as
provided in the Plan.

<PAGE>



                                   ARTICLE III
                 PARTICIPANTS' ACCOUNTS; DEFERRAL CONTRIBUTIONS

         3.1      Participants' Accounts.
                  ----------------------

                  (a) Establishment of Accounts. The Plan Administrator
shall establish and maintain an Account on behalf of each Participant for each
Plan Year for which the Participant makes Deferral Contributions. The
Plan Administrator shall credit each Participant's Account with the
Participant's Deferral Contributions for such Plan Year and earnings
attributable thereto, and shall maintain such Account until the value thereof
has been distributed to or on behalf of the Participant or the Participant's
Beneficiary.

                  (b)  Nature of Contributions and Accounts. The amounts
credited to a Participant's Accounts shall be represented solely by bookkeeping
entries. Except as provided in Article VIII, no monies or other assets shall
actually be set aside for such Participant, and all payments to a Participant
under the Plan shall be made from the general assets of the Participating
Companies.

                  (c)  Several Liabilities. Each Participating Company
shall be severally (and not jointly) liable for the payment of benefits under
the Plan under Deferral Elections executed by Nonemployee Directors with, and
while serving as a Nonemployee Director of, such Participating Company.

                  (d)  General Creditors. Any assets which may
be acquired by a Participating Company in anticipation of its obligations under
the Plan shall be part of the general assets of such Participating Company. A
Participating Company's obligation to pay benefits under the Plan constitutes a
mere promise of such Participating Company to pay such benefits, and a
Participant or Beneficiary shall be and remain no more than an unsecured,
general creditor of such Participating Company.

         3.2 Deferral Contributions. Each Nonemployee Director may
irrevocably elect to have Deferral Contributions made for a Plan Year by
completing in a timely manner a Deferral Election and an Investment Election and
following other election procedures as provided in Section 2.3. Subject to
any modifications, additions or exceptions that the Plan
Administrator, in its sole discretion, deems necessary, appropriate or helpful,
the following terms shall apply to such Deferral Elections:

                  a) Effective Date. A Participant's Deferral Election
for all or a portion of a Plan Year shall be effective beginning with the first
Compensation or Stock Grant paid (i) in such Plan Year with respect to a
Participant participating for the entire Plan Year, and (ii) with respect to a
Participant participating for a portion of a Plan Year, in the calendar month
following the calendar month in which the Participant makes a Deferral Election.
To be effective, a Participant's Deferral Election must be made by the Election
Deadline. Any Nonemployee Director who fails to deliver a Deferral Election, or
to complete any of the other requisite election procedures, in a timely manner,
shall be deemed to have elected not to participate in the Plan for that Plan
Year.

                  (b) Term. Each Participant's Deferral Election
regarding Compensation for a Plan Year shall remain in effect with respect to a
portion of all Compensation paid or payable during such Plan Year, but shall not
apply to any subsequent Plan Year.

                  (c)      Amount.
                           ------

                         (i) Compensation  Deferrals.  To defer Compensation,  a
                    Nonemployee  Director's  Deferral  Election  shall specify a
                    whole  percentage,  in increments of ten percent  (10%),  of
                    Compensation  for a Plan Year to be deferred.  A Nonemployee
                    Director  may  defer  for any  Plan  Year up to one  hundred
                    percent (100%) of the  Nonemployee  Director's  Compensation
                    for  such  Plan  Year The  percentage  so  elected  shall be
                    withheld from each payment of Compensation otherwise payable
                    to  such   Nonemployee   Director   during  the  Plan  Year.
                    Notwithstanding  any  provision  of this Plan or a  Deferral
                    Election to the contrary,  however, the amount withheld from
                    any payment of Compensation shall be reduced  automatically,
                    if necessary,  so that it does not exceed the amount of such
                    payment net of all  withholding,  allotments and deductions,
                    other than any reduction pursuant to such Deferral Election.
                    No amounts shall be withheld during any period an individual
                    ceases to receive Compensation as a Nonemployee Director for
                    any reason during the Plan Year. No adjustment shall be made
                    in the amount to be withheld from any subsequent  payment of
                    Compensation for a Plan Year to compensate for any missed or
                    reduced withholding amounts above.

                         (ii)  Stock  Grant  Deferrals.  To  defer  from a Stock
                    Grant,  a Nonemployee  Director's  Deferral  Election  shall
                    specify the number of shares of Company Stock, in increments
                    of one hundred (100) shares,  to be deferred.  A Nonemployee
                    Director  may  defer  for any  Plan  Year up to one  hundred
                    percent (100%) of the Stock Grant awarded for such year.

     (d) Revocation. Once made for a Plan Year, a Participant may not
revoke a Deferral Election for such Plan Year.

     (e)  Crediting  of Deferral  Contributions.  The Plan  Administrator  shall
credit to each Participant's  Account for a Plan Year the amount of Compensation
or Stock Grant, or both, reflected on the Participant's  Deferral Election as of
the  date(s) on which such  Compensation  or Stock Grant would have been paid if
not subject to the Participant's Deferral Election.

         3.3 Deferral Elections and Multiple Participating Companies.
Any Deferral Election which is timely executed and delivered to the Plan
Administrator shall be effective to defer Compensation and Stock Grant earned by
the Participant from the Participating Company with respect to which such
Participant is a Nonemployee Director at the time of the election, or any other
Participating Company with respect to which such Participant is a Nonemployee
Director during the Plan Year for which the Deferral Election is effective. In
particular, a Participant (i) who timely executes and delivers a Deferral
Election while serving as a Nonemployee Director of one Participating Company
and subsequently becomes a Nonemployee Director of another Participating
Company, or (ii) who ceases service as a Nonemployee Director and subsequently
becomes a Nonemployee Director of another Participating Company, shall have the
Compensation and Stock Grant that is paid or payable to him by both
Participating Companies reduced under the terms of the Deferral Election and the
Plan as if the moves had not occurred; provided, that, as provided in Section
3.2(c), no amounts of Compensation shall be withheld attributable to any portion
of the Plan Year during which he is not receiving Compensation as a Nonemployee
Director of a Participating Company.

                 3.4 Vesting. A Participant shall at all times be fully vested
 in such Participant's Deferral Contributions and all deemed investment earnings
 attributable thereto.

<PAGE>



                                   ARTICLE IV
                       DETERMINATION AND CREDITING OF INVESTMENT RETURN


     4.1  General  Investment  Parameters.  The rate of return  credited to each
 Participant's  Accounts shall be determined on
the basis of the Investment Option(s) applicable to the Participant's  Accounts,
as set forth in this Article IV.

     4.2 Deemed  Investments  The manner in which  each  Participant's  Deferral
Contributions  for each Plan Year shall be deemed  invested  in and  between the
Stock Unit Option  and/or the Interest  Income  Option,  shall be  determined in
accordance with the following terms:

     (a) Nature of Deemed  Investments.  A deemed  investment  in the Stock Unit
Option  and/or  Interest  Income  Option  shall  be  for  the  sole  purpose  of
determining  the rate of return to be credited to a Participant's  Account,  and
shall not be treated or interpreted in any manner whatsoever as a requirement or
direction to actually  invest assets in Company Stock,  an interest income fund,
or any other investment media. The Plan, as an unfunded,  nonqualified  deferred
compensation  plan,  at no time  shall  have any  actual  investment  of  assets
relative to the benefits or Accounts hereunder.

     (b) Investment of  Contributions.  All deferrals of Compensation  otherwise
payable in the form of Company Stock,  and all deferrals of Stock Grants,  shall
be deemed  invested  in the Stock Unit  Option.  With  respect to  deferrals  of
Compensation otherwise payable in cash, a Nonemployee Director shall complete an
Investment  Election  prescribing the percentage of such Deferral  Contributions
for the Plan Year that will be deemed to be  invested  in the Stock Unit  Option
and/or the Interest  Income Option;  provided,  such  Investment  Election shall
specify one of the three alternatives, as follows:

               (i) 100% of such Deferral  Contributions  for the Plan Year shall
          be deemed invested in the Stock Unit Option;

               (ii) 100% of such Deferral  Contributions for the Plan Year shall
          be deemed invested in the Interest Income Option; or

                           (iii) 50% of such Deferral Contributions for the
         Plan Year shall be deemed invested in the Stock Unit Option, and 50% of
         such Deferral Contributions for the Plan Year shall be deemed invested
         in the Interest Income Option.

                  (c) Investment of Existing Account Balances. A
Participant may not make an Investment Election changing the percentage of an
existing Account balance that will be deemed to be invested in the Stock Unit
Option and/or the Interest Income Option. Once a deemed investment is made with
respect to an Account, it shall continue to apply with respect to such Account
until all amounts in such Account are distributed.

                  (d) Investment Subaccounts. For the sole
purpose of tracking a Participant's investment elections and calculating
investment earnings attributable to a Participant's Account for a Plan Year
pursuant to the terms of this Article IV, the Plan Administrator shall establish
and maintain for such Participant for such Plan Year a Stock Unit Subaccount and
an Interest Income Subaccount, as necessary, the total of which shall equal such
Participant's Account for such Plan Year.

         4.3      Stock Unit Option.
                  -----------------

                  (a) Stock Unit Subaccount. To the extent that a
Nonemployee Director's Deferral Contributions for a Plan Year are deemed to be
invested in the Stock Unit Option, the Participant's Stock Unit Subaccount for
such Plan Year shall be credited, as of the date(s) on which Compensation or
Stock Grants which comprise such Deferral Contributions would have been paid if
not subject to the Participant's Deferral Election, with a number of Stock Units
equal to (i) with respect to Stock Grants and Compensation that would be payable
in the form of Company Stock if not deferred, the number of shares of Company
Stock that would be so payable, and (ii) with respect to Compensation that would
be payable in the form of cash if not deferred, the number of full and
fractional shares of Company Stock that could have been purchased with such cash
at the average of the high and low sales prices of one share of Company Stock on
the New York Stock Exchange for the period of five Business Days ending on the
date such Compensation is so credited (or the period of five Business Days
ending on the immediately preceding Business Day if such date is not a Business
Day).

                  (b) Cash Dividends. As of each date on which BellSouth
has paid a cash dividend on Company Stock, the number of Stock Units credited to
a Participant's Stock Unit Subaccount for each Plan Year shall be increased by a
number of additional Stock Units equal to the quotient of (i) the amount of
dividends that would have been paid on the number of shares of Company Stock
equivalent to the number of Stock Units credited to such subaccount as of such
dividend payment date, divided by (ii) the average of the daily high and low
sales prices of one share of Company Stock on the New York Stock Exchange for
the period of five Business Days ending on such dividend payment date (or the
period of five Business Days ending on the immediately preceding Business Day if
such date was not a Business Day).

                  (c) Adjustments. In the event of any change in
outstanding shares of Company Stock, by reclassification, recapitalization,
merger, consolidation, spin-off, combination, exchange of shares, stock
split, reverse stock split or otherwise, or in the event of the payment of a
stock dividend on Company Stock, or in the event of any other increase or
decrease in the number of outstanding shares of Company Stock, other than the
issuance of shares for value received by BellSouth or the redemption of shares
for value, the Plan Administrator shall adjust the number and/or form of Stock
Units in the manner it deems appropriate in its reasonable judgment to reflect
such event, including substituting or adding publicly traded shares of companies
other than the Company as a basis for determining Stock Units. The Plan
Administrator similarly shall make such adjustments as it deems are appropriate
in its reasonable judgment in the form, including the basis of measurement, of
Stock Units in the event all shares of Company Stock cease for any reason to be
outstanding or to be actively traded on the New York Stock Exchange. In the
event the Plan Administrator determines in its reasonable judgment that it would
not be possible to appropriately reflect an event under this paragraph (c) by
adjusting the number and/or form of Stock Units, the Plan Administrator shall
establish a special Valuation Date appropriate to such event for all Stock Unit
Subaccounts and shall cause such subaccounts, as so valued, automatically to be
converted into Interest Income Subaccounts, which thereafter shall be subject to
Section 4.4.

         4.4      Interest Income Option.
                  ----------------------

                  (a) Interest Income Subaccount. To the extent that a
Nonemployee Director's Deferral Contributions for a Plan Year are deemed to be
invested in the Interest Income Option, the Participant's Interest Income
Subaccount for such Plan Year shall be credited, as of the date(s) on which
Compensation which comprises such Deferral Contributions would have been paid if
not subject to the Participant's Deferral Election, with such portion of the
Nonemployee Director's Deferral Contributions.

                  (b) Crediting of Deemed Interest. As of each Valuation
Date, the Plan Administrator shall credit a Participant's Interest Income
Subaccounts with the amount of earnings applicable thereto for the period since
the immediately preceding Valuation Date. Such crediting of earnings for each
Interest Income Subaccount shall be effected, as follows:

                           (i) Amount Invested. The Plan Administrator
         shall determine the amount of (A) in the case of an Interest Income
         Subaccount established in connection with a Deferral Election for the
         Plan Year in which such Valuation Date occurs, such Participant's
         Deferral Contributions credited to such Participant's Interest Income
         Subaccount since the immediately preceding Valuation Date plus the
         balance of such Participant's Interest Income Subaccount for such Plan
         Year as of the immediately preceding Valuation Date; and (B) in the
         case of an Interest Income Subaccount for a prior Plan Year, the
         balance of such Participant's Interest Income Subaccount as of the
         immediately preceding Valuation Date; minus the amount distributed
         from such Participant's Interest Income Subaccount since the
         immediately preceding Valuation Date; and

                           (ii) Determination of Amount. The Plan
         Administrator then shall apply the Credited Interest Rate for such Plan
         Year to such Participant's adjusted Interest Income Subaccount (as
         determined in subparagraph (i) hereof), and the total amount of
         investment earnings resulting therefrom shall be credited to such
         Participant's Interest Income Subaccount as of such Valuation Date.

         4.5 Good Faith Valuation Binding. In determining the value of
Accounts, the Plan Administrator shall exercise its best judgment, and all such
determinations of value (in the absence of bad faith) shall be binding upon all
Participants and their Beneficiaries.

         4.6 Errors and Omissions in Accounts. If an error or omission is
discovered in the Account of a Participant or in the amount of a Participant's
Deferral Contributions, the Plan Administrator, in its sole discretion, shall
cause appropriate, equitable adjustments to be made as soon as administratively
practicable following the discovery of such error or omission.


<PAGE>



                                    ARTICLE V
                           PAYMENT OF ACCOUNT BALANCES


         5.1      Benefit Amounts.
                  ---------------

                  (a) Benefit Entitlement. As the benefit
under the Plan, each Participant (or Beneficiary) shall be entitled
to receive the total amount of the Participant's (or Beneficiary's) Accounts,
determined as of the most recent Valuation Date, and payable at such times and
in such forms as described in this Article V.

                  (b) Valuation of Benefit. For purposes hereof, each
Account of a Participant as of any Valuation Date shall be equal to (i) the
total amount of all of such Participant's Deferral Contributions credited
thereto; plus (ii) all deemed investment earnings attributable thereto;
minus (iii) the total amount of all benefit payments previously made therefrom.

                  (c) Conversion of Stock Units into Dollars. For
purposes of converting some or all of a Participant's Stock Units into a dollar
amount in valuing the Participant's Accounts as of any Valuation Date, the value
of each Stock Unit shall be equal to the average of the high and low sales
prices of one share of Company Stock on the New York Stock Exchange for the last
Business Day of each of the three calendar months ending on or immediately
preceding such Valuation Date.

         5.2 Elections of Timing and Form. In conjunction with, and at
the time of, completing a Deferral Election for each Plan Year, a Nonemployee
Director shall select the timing and form of the distribution that will apply to
the Account of such Nonemployee Director for Deferral Contributions (and deemed
investment earnings attributable thereto) for such Plan Year. The terms
applicable to this selection process are as follows:

                  (a) Timing. For a Participant's Account for each Plan
Year, the Participant may elect that distribution will be made or commence as of
any January 1 following the Plan Year of deferral; provided, he may not select a
benefit payment or commencement date for such Account that is later than the
twentieth January 1 following the end of the Plan Year of deferral.

     (b)  Form of  Distribution.  For a  Participant's  Account  for  each  Plan
Year, the Participant may elect that the distribution will
be paid in one of the following forms:

                           (i)      a single lump-sum cash payment; or

                           (ii) substantially equal annual installments
         (adjusted for investment earnings between payments in the manner
         described in Article IV) over a period of one (1) to ten (10) years.

                  (c) Multiple Selections. A Nonemployee Director may
select a different benefit payment or commencement date and/or a different form
of distribution with respect to such Nonemployee Director's Account for each
Plan Year. For ease of administration, the Plan Administrator may combine
Accounts and subaccounts of a Participant to which the same benefit
payment/commencement date and the same form of distribution apply.

         5.3      Benefit Payments to a Participant.
                  ---------------------------------

                  (a) Timing. A Participant shall receive or
begin receiving a distribution of each of such Participant's Accounts as of
the earlier of (i) the January 1 selected by such Participant with respect to
each such Account pursuant to the terms of Section 5.2(a); or (ii) the January 1
immediately following the date that such Participant's service as a Nonemployee
Director with BellSouth and all Affiliates ends for any reason, unless he
returns to service as a Nonemployee Director with BellSouth or one of the
Affiliates before such January 1. An amount payable "as of" any January 1 shall
be made as soon as practicable after such January 1 and, unless extenuating
circumstances arise, no later than January 31.

                  (b)  Form of Distribution.  A Participant  shall
receive or begin receiving a distribution of each of such Participant's Accounts
in cash in the form selected by such Participant with respect to such Account
pursuant to the terms of Section 5.2(b).

                  (c)  Valuation  of  Single  Lump-Sum
Payments.  The  amount of a Participant's single lump-sum distribution of
any of such Participant's Accounts as of any applicable January 1 shall be equal
to the value of such Account as of the Valuation Date immediately preceding the
date on which such distribution is paid.

     (d) Valuation of  Installment  Payments.  For purposes of  determining  the
amount of any installment  payment to be paid as of a January 1 from an Account,
the following shall apply:

                           (i)  for any amount of such Account
         attributable to an Interest Income Subaccount as of the immediately
         preceding Valuation Date, such amount shall be divided by the number of
         remaining installments to be paid from such Account (including the
         current installment); and

                           (ii)  for any portion of such Account
         attributable to a Stock Unit Subaccount as of the immediately preceding
         Valuation Date, the total number of Stock Units constituting such
         portion shall be divided by the number of remaining installments to be
         paid from such Account (including the current installment), and the
         resulting number of Stock Units shall be converted into a dollar amount
         (pursuant to the terms of Section 5.1(c)) as of such Valuation Date.

         5.4      Death Benefits.
                  --------------

                  (a)  General. If a Participant dies before receiving the
 entire amount of the benefit under the Plan, such Participant's Beneficiary
 shall receive distribution of amounts remaining in the Participant's Accounts
 in the form, as elected by the Participant on a Beneficiary designation form
 described in Section 5.5, of either:

               (i) a single  lump-sum cash payment of the entire  balance in the
          Participant's  Accounts as of the January 1 immediately  following the
          date of the Participant's death; or

                           (ii)  (A) for Accounts with respect to which
         distribution has not commenced under Section 5.2 at the time of the
         Participant's death, substantially equal annual installments (adjusted
         for investment earnings between payments in the manner described in
         Article IV) over a period of one (1) to ten (10) years, commencing as
         of the January 1 immediately following the Participant's death; and (B)
         for Accounts with respect to which distribution has commenced in the
         form of installments described in Section 5.2(b)(ii) at the time of the
         Participant's death, continuation of such installment payment schedule.

 An amount payable "as of" any January 1 shall be made as soon as practicable
 after such January 1 and, unless extenuating circumstances arise, no later than
 January 31.

     (b) Valuation.  The valuation  rules  described in  subsections  5.3(c) and
 5.3(d) shall apply to payments described in this Section 5.4.

         5.5      Beneficiary Designation.
                  -----------------------

                  (a)  General.  A  Participant  shall
designate a  Beneficiary  or Beneficiaries for all of such Participant's
Accounts by completing the form prescribed for this purpose for the Plan by the
Plan Administrator and submitting such form as instructed by the Plan
Administrator. Once a Beneficiary designation is made, it shall continue to
apply until and unless such Participant makes and submits a new Beneficiary
designation form for this Plan.

     (b) No  Designation  or  Designee  Dead  or  Missing.  In the  event  that:
------------------------------------------

          (i) a Participant dies without  designating a Beneficiary;

          (ii)  the   Beneficiary  designated by a Participant is not
     surviving or in existence  when payments are to be made or commence to such
     designee  under the Plan,  and no contingent  Beneficiary,  surviving or in
     existence, has been designated; or

               (iii)  the Beneficiary  designated by a Participant cannot be
          located by the Plan Administrator  within 1 year from the date benefit
          payments are to be made or commence to such designee;

 then, in any of such events, the Beneficiary of such Participant shall be the
 Participant's surviving spouse, if any can then be located, and if not, the
 estate of the Participant, and the entire balance in the Participant's Accounts
 shall be paid to such Beneficiary in the form of a single lump-sum cash payment
 described in Section 5.4(a)(i).

                  (c)  Death of  Beneficiary.  If a Beneficiary
 who  survives the Participant, and to whom payment of Plan benefits
commences, dies before complete distribution of the Participant's Accounts,
the entire balance in such Accounts shall be paid to the estate of such
Beneficiary in the form of a single lump-sum cash payment as of the January 1
immediately following such Beneficiary's death. An amount payable "as of" any
January 1 shall be made as soon as practicable after such January 1 and, unless
extenuating circumstances arise, no later than  January 31.  The
valuation rules described in subsection 5.3(c) shall apply to any
payments described in this subsection 5.5(c).

     5.6 Taxes. If the whole or any part of any  Participant's  or Beneficiary's
benefit hereunder shall become subject to any estate, inheritance, income,
employment or other tax which a  Participating  Company shall be required to pay
or withhold,  the Participating  Company shall have the full power and authority
to withhold and pay such tax out of any monies or other property in its hand for
the account of the Participant or Beneficiary  whose interests  hereunder are so
affected.  Prior to making any payment,  the  Participating  Company may require
such releases or other  documents  from any lawful taxing  authority as it shall
deem necessary.

<PAGE>



                                   ARTICLE VI
                   SPECIAL ELECTION REGARDING RETIREMENT PLAN


         6.1  Description of Election.  In connection with the freezing
of benefit accruals under the BellSouth Corporation Directors Retirement Plan
(the "Retirement Plan") as of April 30, 1997, each active Nonemployee Director
shall be offered a special one-time election to convert the entire value of the
Retirement Plan benefit of such Nonemployee Director into a benefit described in
this Article VI, and thereby cease participation in the Retirement Plan. The
value of a Retirement Plan benefit with respect to which the election described
in this Section 6.1 is made shall, for all purposes of this Plan (other than
Sections 3.2(b), 3.2(c) and 4.2(b)) except as otherwise provided in this Article
VI, be deemed to be "Compensation" and "Deferral Contributions", and a separate
Account shall be maintained for such Deferral Contributions as if the election
was a Deferral Election for a separate Plan Year.

     6.2 Election Deadline.  The Election Deadline for the election described in
 Section 6.1 shall be April 28, 1997.

         6.3  Amount. Notwithstanding, any contrary provisions of Section
3.2(c), the election described in Section 6.1 must relate to one hundred percent
(100%) of the value of the Retirement Plan benefit of the Nonemployee Director.

         6.4  Deemed Investment. Notwithstanding any contrary provisions
of Section 4.2, Deferral Contributions described in Section 6.1 shall be deemed
invested in the Stock Unit Option. Notwithstanding any contrary provisions of
Section 4.3 (a), the Participant's Stock Unit Subaccount with respect to
Deferral Contributions described in Section 6.1 shall be credited as of May 1,
1997, with a number of Stock Units equal to the number of full and fractional
shares of Company Stock that could have been purchased with the value of the
Retirement Plan benefit (as determined by BellSouth and communicated to the
Participant in connection with the election described in Section 6.1) at the
average of the high and low sales prices of one share of Company Stock on the
New York Stock Exchange for the last Business Day of each of January, February
and March 1997.

         6.5  Payment  of  Benefits.  Notwithstanding  any
contrary  provisions  of Sections 5.2 and 5.3, amounts in each
Participant's  Account attributable to Deferral Contributions described in
Section 6.1 shall be payable commencing as of January 1 of the year during which
the Retirement Plan benefit of such Nonemployee Director would have commenced,
in substantially equal annual installments (adjusted for investment earnings
between payments in the manner described in Article IV) for the number of years
over which the Retirement Plan benefit of such Nonemployee Director would have
been distributed had the election described in Section 6.1 not been made. An
amount payable "as of" any January 1 shall be made as soon as practicable after
such January 1 and, unless  extenuating circumstances arise, no later than
January 31.

         6.6  Vesting. Notwithstanding anything to the contrary in this
Plan, including without limitation Section 3.4, a Participant shall not be
eligible for the benefits described in this Article VI unless the Participant
shall have attained the age of fifty-five (55) years, or more, at the time the
Participant terminates service as a Nonemployee Director.



<PAGE>



                                  ARTICLE VI-A
                    SPECIAL ELECTION REGARDING MASTER ACCOUNT


         6.1A  Description of Election. Each active Nonemployee Director
shall be offered a special one-time election to combine into a single Master
Account all of the Nonemployee Director's Accounts under the Plan. The election
shall be irrevocable upon the Election Deadline.

     6.2A Election Deadline. The Election Deadline for the Election described in
 Section 6.1A shall be April 30, 2001.

         6.3A  Effect of Election. For each Nonemployee Director making the
election described in Section 6.1A, all Accounts of such Nonemployee Director
for each Plan Year under the Plan, beginning with the first Plan Year under the
Plan which began on May 1, 1997, through and including the upcoming Plan Year
under the Plan which begins May 1, 2001, plus the special Account for any such
Nonemployee Director who made the election regarding the Retirement Plan
described in Section 6.1 of the Plan, shall be combined into a single Master
Account under the Plan, with payments from such Master Account to be made under
a single distribution schedule. As a result of the election described in Section
6.1A, Nonemployee Directors may delay one or more scheduled benefit payments
under an Account, but may not in any event accelerate the timing of payment of
any benefit under the Plan. Nonemployee Directors may not elect to combine some,
but not all, of such Accounts into the Master Account.

         6.4A  Deemed Investment. The special one-time election described
in Section 6.1A shall not affect the Investment Election made by a Nonemployee
Director with respect to Deferral Contributions for any Plan Year, or the deemed
investment of such Deferral Contributions in either of the Stock Unit Option
and/or the Interest Income Option, or the deemed investment of Deferral
Contributions described in Section 6.1 in the Stock Unit Option. Stock Unit
Subaccounts and/or Interest Income Subaccounts shall continue to be maintained
in accordance with Section 4.3 and 4.4 of this Plan, respectively, with respect
to the Master Accounts of Nonemployee Directors who make the election described
in Section 6.1A.

         6.5A  Election of Timing and Form of Payment. In conjunction with,
and at the time of, making the special one-time election described in Section
6.1A, a Nonemployee Director shall select the timing and form of the
distribution that will apply to the Master Account of such Nonemployee Director,
subject to the following:

                  (a)  Timing. The Participant may elect that distribution
will be made or commenced as of any January 1 after the date of such election
(but in no event sooner than January 1, 2003); provided, that the Participant
may not select a benefit payment or a commencement date for the Master Account
(i) that is later than the twentieth (20th) January 1 following such election;
or (ii) that is earlier than the latest date scheduled previously for
distribution to be made or commenced for any Account of such Participant.

                  (b)  Form of Distribution.  The Participant  shall
elect that the distribution from such Participant's Master Account will be made
in one of the following forms:

          (i) as single lump-sum cash payment; or

         (ii)  substantially equal annual installments (adjusted for
         investment earnings between payments in the manner described in Article
         IV) over a period of one (1) to ten (10) years;

provided, however, that such Participant may not elect to have such distribution
made over a period of years less than the number of years previously elected for
the Plan Year with respect to which such Participant elected the longest payment
schedule, or, if larger, the number of years over which the Participants Special
Account with respect to Retirement Plan benefits, if any, is to be paid.

     (c)  Benefit  Payments.  The  payment  of  benefits  from  a  Participant's
  Master Account shall be made in accordance with the provisions
of Section 5.3 of the Plan.

<PAGE>



                                   ARTICLE VII
                                     CLAIMS


         7.1  Initial Claim. Claims for benefits under the Plan may be
filed with the Plan Administrator on forms or in such other written documents,
as the Plan Administrator may prescribe. The Plan Administrator shall furnish to
the claimant written notice of the disposition of a claim within 90 days after
the application therefor is filed. In the event the claim is denied, the notice
of the disposition of the claim shall provide the specific reasons for the
denial, citations of the pertinent provisions of the Plan, and, where
appropriate, an explanation as to how the claimant can perfect the claim and/or
submit the claim for review.

         7.2  Appeal. Any Participant or Beneficiary who has been denied a
benefit shall be entitled, upon request to the Plan Administrator, to appeal the
denial of the claim. The claimant (or a duly authorized representative) may
review pertinent documents related to the Plan and in the Plan Administrator's
possession in order to prepare the appeal. The request for review, together with
written statement of the claimant's position, must be filed with the Plan
Administrator no later than 60 days after receipt of the written notification of
denial of a claim provided for in Section 7.1. The Plan Administrator's decision
shall be made within 60 days following the filing of the request for review. If
unfavorable, the notice of the decision shall explain the reasons for denial and
indicate the provisions of the Plan or other documents used to arrive at the
decision.

     7.3 Satisfaction of Claims.  The payment of the benefits due under the Plan
to a Participant  or Beneficiary  shall  discharge the  Participating  Company's
obligations  under the Plan,  and neither the  Participant  nor the  Beneficiary
shall have any further  rights  under the Plan upon  receipt by the  appropriate
person of all benefits. In addition, (i) if any payment is made to a Participant
or  Beneficiary  with respect to benefits  described in the Plan from any source
arranged by BellSouth or a Participating Company including,  without limitation,
any fund, trust,  insurance  arrangement,  bond, security device, or any similar
arrangement,   such  payment  shall  be  deemed  to  be  in  full  and  complete
satisfaction  of the obligation of the  Participating  Company under the Plan to
the extent of such  payment as if such  payment  had been made  directly by such
Participating Company; and (ii) if any payment from a source described in clause
(i) shall be made, in whole or in part,  prior to the time payment would be made
under the terms of the  Plan,  such  payment  shall be  deemed to  satisfy  such
Participating  Company's  obligation  to pay Plan  benefits  beginning  with the
benefit  which would next become  payable  under the Plan and  continuing in the
order in which benefits are so payable, until the payment from such other source
is fully recovered.  The Plan Administrator or such Participating  Company, as a
condition to making any

<PAGE>



payment,  may require such  Participant  or Beneficiary to execute a receipt and
release  therefor in such form as shall be determined by the Plan  Administrator
or the  Participating  Company.  If  receipt  and  release is  required  but the
Participant or  Beneficiary  (as  applicable)  does not provide such receipt and
release in a timely enough manner to permit a timely  distribution in accordance
with the general timing of  distribution  provisions in the Plan, the payment of
any affected  distribution  may be delayed until the Plan  Administrator  or the
Participating Company receives a proper receipt and release.

<PAGE>



                                  ARTICLE VIII
                                SOURCE OF FUNDS


         Each Participating Company shall provide the benefits described in the
Plan from its general assets. However, to the extent that funds in one or more
trusts, or other funding arrangement(s), allocable to the benefits payable under
the Plan are available, such assets may be used to pay benefits under the Plan.
If such assets are not sufficient or are not used to pay all benefits due under
the Plan, then the appropriate Participating Company shall have the obligation,
and the Participant or Beneficiary, who is due such benefits, shall look to such
Participating Company to provide such benefits. No Participant or Beneficiary
shall have any interest in the assets of any trust, or other funding
arrangement, or in the general assets of the Participating  Companies other
than as a general,  unsecured creditor. Accordingly, a Participating Company
shall not grant a security interest in the assets held by the trust in favor of
the Participants, Beneficiaries or any creditor.


<PAGE>



                                   ARTICLE IX
                               PLAN ADMINISTRATION


         9.1      Action by the Plan Administrator.
                  --------------------------------

     (a)   Individual   Administrator.   If  the   Plan   Administrator   is  an
 individual, he or she shall act and record his or her
actions in writing.  Any matter  concerning  specifically  such individual's own
benefit or rights hereunder shall be determined by the Board or its designee.

     (b)  Administrative  Committee.  If the Plan  Administrator is a committee,
action of the Plan  Administrator  may be taken  with or  without  a meeting  of
committee members;  provided,  action shall be taken only upon the vote or other
affirmative  expression of a majority of the committee members qualified to vote
with respect to such action.  If a member of the committee is a  Participant  or
Beneficiary,  he or she shall  not  participate  in any  decision  which  solely
affects his or her own benefit under the Plan. For purposes of administering the
Plan, the Plan Administrator  shall choose a secretary who shall keep minutes of
the  committee's  proceedings  and all records and  documents  pertaining to the
administration  of the Plan.  The secretary may execute any  certificate  or any
other written direction on behalf of the Plan Administrator.

         9.2  Rights and Duties of the Plan Administrator. The Plan
Administrator shall administer the Plan and shall have all powers necessary to
accomplish that purpose, including (but not limited to) the following:

     (a)      to construe, interpret and administer the Plan;

     (b) to make  determinations  required by the Plan, and to maintain  records
regarding Participants' and Beneficiaries' benefits hereunder;

     (c)  to compute and certify to Participating Companies
the amount and kinds of benefits payable to Participants and Beneficiaries, and
to determine the time and manner in which such benefits are to be paid;

     (d) to authorize all  disbursements by a Participating  Company pursuant to
the Plan;

     (e) to maintain  all the  necessary  records of the  administration  of the
Plan;

     (f) to make and publish such rules and procedures for the regulation of the
Plan as are not inconsistent with the terms hereof;

     (g) to delegate  to other  individuals  or  entities  from time to time the
performance of any of its duties or responsibilities hereunder; and

     (h) to hire agents, accountants,  actuaries,  consultants and legal counsel
to assist in operating and administering the Plan.

The Plan Administrator shall have the exclusive right to construe and interpret
the Plan, to decide all questions of eligibility for benefits and to determine
the amount of such benefits, and its decisions on such matters shall be final
and conclusive on all parties.

     9.3 Bond;  Compensation.  The Plan  Administrator  and (if  applicable) its
members  shall  serve  as such  without  bond  and  without
compensation  for services  hereunder.  All  expenses of the Plan  Administrator
shall be paid by the Participating Companies.


<PAGE>



                                    ARTICLE X
                            AMENDMENT AND TERMINATION


         10.1  Amendments. Subject to Section 10.3, the Board shall have
the right, in its sole discretion, to amend the Plan in whole or in part at any
time and from time to time. In addition, the Plan Administrator shall have the
right, in its sole discretion, to amend the Plan at any time and from time to
time so long as such amendment is not of a material nature.

         10.2  Termination of Plan. Subject to Section 10.3, BellSouth
reserves the right to discontinue and terminate the Plan at any time, for any
reason. Any action to terminate the Plan shall be taken by the Board and such
termination shall be binding on all Participating Companies, Participants and
Beneficiaries.
         10.3  Limitation on  Authority.  Except as
otherwise  provided  in  this Section 10.3, no contractual right
created by and under any Deferral Election made prior to the effective date of
any amendment or termination shall be abrogated by any amendment or termination
of the Plan, absent the express, written consent of the Participant who made the
Deferral Election.

                  (a)  Plan Amendments. The limitation on authority
 described in this Section 10.3 shall not apply to any amendment of the Plan
 which is reasonably necessary, in the opinion of counsel, (i) to preserve the
 intended income tax consequences of the Plan described in Section 11.1, or (ii)
 to guard against other material adverse impacts on Participants and
 Beneficiaries, and which, in the opinion of counsel, is drafted primarily to
 preserve such intended consequences, or status, or to guard against such
 adverse impacts.

                  (b)  Plan Termination. The limitation on authority
 described in this Section 10.3 shall not apply to any termination of the Plan
 as the result of a determination that, in the opinion of counsel, Participants
 and Beneficiaries generally are subject to federal income taxation on Deferral
 Contributions or other amounts in Participant Accounts prior to the time of
 distribution of amounts under the Plan but only if such termination is
 reasonably necessary, in the opinion of counsel, to guard against material
 adverse impacts on Participants and Beneficiaries,  or BellSouth or
 Participating  Companies.  Upon such termination, the entire amount in
 each Participant's Accounts shall be distributed in a single lump-sum
 distribution as soon as practicable after the date on which the Plan is
 terminated. In such event, the Plan Administrator shall declare that the date
 of termination (or, if such day is not a Business Day, the last Business Day
 immediately preceding such day) shall be a Valuation Date and all distributions
 shall be made based on the value of the Accounts as of such Valuation Date.

                  (c)  Opinions of Counsel. In each case in which an
 opinion of counsel is contemplated in this Section 10.3, such opinion shall be
 in writing and delivered to the Board, rendered by a nationally recognized law
 firm selected or approved by the Board.


<PAGE>



                                   ARTICLE XI
                                  MISCELLANEOUS

         11.1  Taxation. It is the intention of BellSouth that the benefits
payable hereunder shall not be deductible by the Participating Companies nor
taxable for federal income tax purposes to Participants or Beneficiaries until
such benefits are paid by the Participating Company to such Participants or
Beneficiaries. When such benefits are so paid, it is the intention of the
Participating Companies that they shall be deductible by the Participating
Companies under Code Section 162.

         11.2  Withholding. All payments made to a Participant or
Beneficiary hereunder shall be reduced by any applicable federal, state or local
withholding or other taxes or charges as may be required under applicable law.

         11.3  No Employment Contract. Nothing herein contained is intended
to be nor shall be construed as constituting a contract or other arrangement
between a Participating Company and any Participant to the effect that the
Participant will be employed by the Participating Company or continue to be a
Nonemployee Director for any specific period of time.

         11.4  Headings. The headings of the various articles and sections
in the Plan are solely for convenience and shall not be relied upon in
construing any provisions hereof. Any reference to a section shall refer to a
section of the Plan unless specified otherwise.

         11.5  Gender and Number. Use of any gender in the Plan will be
deemed to include all genders when appropriate, and use of the singular number
will be deemed to include the plural when appropriate, and vice versa in each
instance.

         11.6  Assignment of Benefits. The right of a Participant or
Beneficiary to receive payments under the Plan may not be anticipated,
alienated,  sold, assigned, transferred, pledged, encumbered, attached or
garnished by creditors of such Participant or Beneficiary, except by will or by
the laws of descent and distribution and then only to the extent permitted under
the terms of the Plan.

         11.7  Legally Incompetent. The Plan Administrator, in its sole
discretion, may direct that payment be made to an incompetent or disabled
person, for whatever reason, to the guardian of such person or to the person
having custody of such person, without further liability on the part of a
Participating Company for the amount of such payment to the person on whose
account such payment is made.

     11.8 Entire Document. This Plan document sets forth the entire Plan and all
  rights and limits.  Except for a formal amendment  hereto,  no
document shall modify the Plan or create any additional rights or benefits.

         11.9 Governing Law. The Plan shall be construed, administered and
governed in all respects in accordance with applicable federal law and, to the
extent not preempted by federal law, in accordance with the laws of the State of
Georgia. If any provisions of this instrument shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.