ex10v.htm


    Exhibit
10-v

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    CHANGE
IN CONTROL SEVERANCE PLAN

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    Effective
January 1, 2007

    Amended
through January 1, 2010

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AT&T
INC.

     

    CHANGE
IN CONTROL SEVERANCE PLAN

     

    Article
1- Purpose

     

    The
purpose of the AT&T Inc. Change in Control Severance Plan (the “Plan”) is to foster the
continuous employment of key management personnel of the Company and its
Subsidiaries and to reinforce and encourage their continued attention and
dedication to their duties in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control (as defined in Section 2) of
the Company, although no such change is now apparent or
contemplated.

     

    Article
2 - Definitions

     

    As used
in this Plan, the following terms shall have the respective meanings set forth
below, and, when the meaning is intended, the initial letter of the word is
capitalized:

     

    “Base
Salary” means the Participant’s annual rate of base salary in effect
immediately prior to the occurrence of the circumstance giving rise to the
Participant’s Termination of Employment,
or, if greater, the Participant’s annual rate of base salary in effect
immediately prior to the Change in Control.

     

    “Board”
means the Board of Directors of the Company and, after a Change in Control, the
“board of directors” of the Ultimate Parent (as defined below under Change in
Control).

     

    “Bonus
Amount” means a Participant’s target annual bonus for the fiscal year in
which the Change
in Control
occurs or in which Participant’s Date of Termination occurs, whichever is
greater; provided that, if a target annual bonus
has not been established for the applicable fiscal year, then the target annual
bonus established for the preceding fiscal year shall be substituted in lieu
thereof.

     

    “Cause”
means (i) the willful and continued failure by a Participant to substantially
perform his or her duties with the Company and its Subsidiaries (other than any
such failure resulting from his or her incapacity due to physical or mental
impairment, or any such actual or anticipated failure after the issuance of a
notice of termination by him or her for Good Reason) after a written demand for
substantial performance is delivered to the Participant by the Company which
demand specifically identifies the manner in which the Company believes that he
or she has not substantially performed his or her duties, or (ii) the willful
engaging by a Participant in conduct which is demonstrably and materially
injurious to the Company or any Subsidiary, monetarily or
otherwise.  For purposes of this definition, no act, or failure to
act, on a Participant’s part shall be deemed “willful” unless done, or omitted
to be done, by the Participant not in good faith and without reasonable belief
that his or her action or omission was in the best interest of the Company and
its Subsidiaries.  Notwithstanding the foregoing, a Participant shall
not be deemed to have been terminated for Cause unless and until there shall
have been delivered to him or her a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership
of the Board at a meeting of the Board called and held for such purpose (after
reasonable notice to the Participant and an opportunity for him or her, together
with counsel, to be heard before the Board), finding that in the good faith
opinion of the Board the Participant was guilty of the conduct set forth above
in clauses (i) or (ii) of the first sentence of this definition and specifying
the particulars thereof in detail.

     

    “Change in
Control” shall be deemed to have occurred if (i) any “person” (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned directly or indirectly by the shareowners of
the Company in substantially the same proportions as their ownership of stock of
the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the total voting power represented
by the Company’s then outstanding voting securities, or (ii) during any period
of two (2) consecutive years, individuals who at the beginning of such period
constitute the Board of Directors and any new Director whose election by the
Board of Directors or nomination for election by the Company’s shareowners was
approved by a vote of at least two-thirds (2/3) of the Directors then still in
office who either were Directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (iii) the consummation of a merger
or consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation (such post-merger
surviving entity the "Ultimate
Parent"), or the shareowners of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company’s assets.

     

    “Committee”
means the Human Resources Committee of the Board.

     

    “Company”
means AT&T Inc.

     

    “Date of
Termination” means the date of the Participant's Termination of Employment with the Company and
its Subsidiaries as determined under Section 4.1 of the Plan.

     

    “Disability”
has the meaning ascribed under the relevant Employer’s long-term disability
plan.

     

    “Employee”
means any person employed as an employee by an Employer and paid on an
Employer’s employee payroll system, excluding persons hired for a fixed maximum
term and excluding persons who are neither citizens nor permanent residents of
the United States, all as determined by the Employer.  For purposes of
this Plan, a person on a Leave of Absence who otherwise would be an Employee
shall be deemed to be an Employee.

     

    “Employer”
means the Company or any of its Subsidiaries provided that, if an entity ceases to be a Subsidiary
during the Termination Period, such entity shall continue to be an Employer and
the Employee shall continue to be a Participant until the second anniversary of
the Change in Control and, notwithstanding any other provision to the contrary,
any benefits under the Plan shall be paid or provided by the
Company.

     

    “Exchange
Act” means the Securities Exchange Act of 1934.

     

    “Executive
Officer” means a person who has been identified by the Company as an
executive officer under Rule 3b-7 of the Securities Exchange Act of 1934 prior
to a Change in Control.

     

    “Good
Reason” means, without the Participant’s express written consent, the
occurrence of any of the following events after a Change in
Control:  (i) the assignment to the Participant of any duties
inconsistent with his or her title(s) or status immediately prior to the Change
in Control, or a substantial adverse alteration in the nature or status of his
or her responsibilities from those in effect immediately prior to the Change in
Control; (ii) a reduction in the Participant’s annual base salary, target
short-term or long term incentive award opportunity (including any current
payments that may be made thereunder, such as the payment of dividend
equivalents) as in effect immediately prior to the Change in Control, except for
across-the-board salary reductions similarly affecting all officers of the
Company and its Subsidiaries and all managers in equivalent positions of any
person in control of the Company; (iii) the failure to pay to the Participant
any portion of his or her current compensation or deferred compensation under
any compensation or benefit program within seven (7) days of the date such
payment is due; (iv)  the failure to continue to provide the
Participant with benefits substantially similar to those enjoyed by him or her
under the pension, life insurance, medical, health, accident and disability
plans, or any fringe benefit  material to the Participant that he or
she was eligible for at the time of the Change in Control; the direct or
indirect material reduction in any of such benefits; or the failure to provide
the Participant with the number of paid vacation days to which he or she is
entitled on the basis of his or her duration of service with the Company and its
Subsidiaries, in accordance with the Employer's normal vacation policy in effect
immediately prior to the Change in Control; (v) the failure to obtain a
satisfactory agreement from any successor to assume and agree to perform this
Plan, as contemplated in Article 7; or (vi) any purported termination of the
Participant’s employment after a Change in Control which is not effected
pursuant to a notice of termination satisfying the requirements of Sections 4.1
and 8.1 (for purposes of this Plan, no such purported termination shall be
effective); provided, however, that a good faith determination within ninety
(90) days of the occurrence of a Change in Control by a Participant who is the
Chief Executive Officer of the Company (the “CEO”) or who was an Executive
Officer on January 1, 1990 that, as a result of such Change in Control, he or
she is not able to discharge his or her duties effectively shall constitute Good
Reason.

     

    An
isolated, insubstantial and inadvertent action taken in good faith implicating
clauses (i), (iv), (v) or (vi) of this definition which is fully corrected by
the Company prior to the Date of Termination specified in the notice of
termination shall not constitute Good Reason.  A Participant’s right
to terminate his or her employment for Good Reason shall not be affected by his
or her incapacity due to physical or mental impairment.  A
Participant’s continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason
hereunder.

     

    “Leave of
Absence” shall mean when a
Participant is absent from employment with an Employer on a leave of absence
military leave, or sick leave, where the
leave is given in order to prevent a break in the
continuity of term of employment, and
permission for such leave is granted (and
not revoked) in conformity with the rules of the Employer that employs the
individual, as adopted from time to time and the
Employee is reasonably expected to return to service.  Except as set
forth below, the leave shall not exceed six (6) months for purposes of this
Plan, and the Employee shall incur a Termination of Employment upon cessation of
such leave if the Employee does not return to work prior to that time, unless
the individual retains a right to reemployment under law or by
contract.  A twenty-nine (29) month limitation shall apply in lieu of
such six (6) month limitation if the leave is due to the Employee being
"disabled" (within the meaning of Treasury Regulation §1.409A-3(i)(4)), and the
Employee shall incur a Termination of Employment upon cessation of such
leave.  A Leave of Absence shall not commence or shall be deemed to
cease under the Plan where the Employee has incurred a Termination of
Employment.  For purposes of this Plan, a Leave of Absence
shall be deemed to also include a transfer by an Employer of a person to, and
continuous employment by, an entity for a rotational work
assignment.  To be a rotational work assignment, the Employer must
have indicated in writing to the person that the person was to be rehired by the
Employer upon the earlier of the
termination of the rotational work
assignment and the end of the six month period commencing on the first day of
such potential work assignment.

     

    “Officer
Level Employee” means any Executive Officer and any Employee who is an
“officer level” Employee for compensation purposes as shown on the records of
the Company and its Subsidiaries.

     

    “Participant”
means the CEO, each Officer Level Employee who had
in effect on September 28, 2006 a Severance Benefits – Change in Control
Agreement with the Company, and each other Officer Level Employee (i) who is
designated from time to time in writing by the CEO and (ii) whose designation is
evidenced in writing by a notification of participation to the Employee signed
by the CEO.  A person shall cease to be a Participant upon (a) the
Participant’s Termination of Employment prior to a Potential Change in Control
or (b) the Board, the Committee or the CEO determining, in their sole
discretion, that the person shall cease to qualify for benefits under this Plan
(but any such determination made in respect of a Participant shall be considered
an amendment of the Plan adverse to the interests of the affected Participant
and is subject to the provisions of Section 8.5).  Notwithstanding the
foregoing, only the Committee shall have the authority to exclude from
participation or take any other action with respect to Executive
Officers.

     

    “Potential
Change in Control” shall be deemed to have occurred if (i) the Company
enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control or (ii)  the Board adopts a
resolution to the effect that, for purposes of this Plan, a potential change in
control of the Company has occurred.

     

    “Qualifying
Termination” means a Participant’s Termination of Employment during the
Termination Period (i) by the Employer
other than for Cause or (ii) by the Participant for Good
Reason.  Termination of Employment on account of death, Disability or
Retirement shall not be treated as a Qualifying Termination.

     

    “Retirement”
means the Participant’s mandatory retirement in accordance with the Employer’s
mandatory retirement age policy, if any, for officers as in effect immediately prior to a Change
in Control or in accordance with any retirement arrangement established with the
Participant’s consent with respect to him or her; provided, however, that a
Participant's termination for Good Reason shall not constitute
Retirement.

     

    “Specified
Employee” means any Participant who is a
“Key Employee” (as defined in Code Section 416(i) without regard to paragraph
(5) thereof), as determined by the Company in accordance with its uniform policy
with respect to all arrangements subject to Code Section 409A, based upon the
twelve (12) month period ending on each December 31st (such twelve (12) month
period is referred to below as the “identification period”).  All
Participants who are determined to be key employees under Code Section 416(i)
(without regard to paragraph (5) thereof) during the identification period shall
be treated as Specified Employees for purposes of the Plan during the twelve
(12) month period that begins on the first day of the 4th month following the
close of such identification period.

     

    “Subsidiary”
means any corporation, partnership, venture or other entity in which the Company
holds, directly or indirectly, a fifty percent (50%) or greater ownership
interest.  The Committee may, at its sole discretion, designate, on
such terms and conditions as the Committee shall determine, any other
corporation, partnership, limited liability company, venture or other entity a
Subsidiary for purposes of this Plan.

     

    “Termination
of Employment” means the event where the Participant has a “separation from service,” as defined
under Section 409A, with the Employer.

     

    “Termination
Period” means the period of time beginning with a Change in Control and
ending on the second anniversary of such Change in Control.

     

    Article
3 - Effectiveness of the Plan

     

    This Plan
shall be effective as of January 1, 2007.  Nothing in this Plan shall
be deemed to entitle any Participant to continued employment with any Employer,
and if a Participant's employment with any Employer terminates prior to a Change
in Control, the Participant shall have no rights under this Plan (except in the
case of a Qualifying Termination).

     

    Article
4 - Payments Upon a Qualifying Termination

     

    4.1 Termination of
Employment.

     

    (a) Notice of
Termination.  Any purported termination of a Participant’s
employment during the Termination Period by an Employer or by a Participant
shall be communicated by written notice of termination to the other party in
accordance with this Section 4.1 and Section 8.1 (regarding
notices).  For purposes of this Plan, a “notice of termination” shall
mean a notice which shall indicate the specific termination provision in this
Plan relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for the Participant’s Termination of
Employment under the provision so indicated.  The failure by the
Participant or the Employer to set forth in such notice any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any right
of the Participant or the Employer hereunder or preclude the Participant or the
Employer from asserting such fact or circumstance in enforcing the Participant’s
or the Employer’s rights hereunder.

     

    (b) Date of
Termination.  If a Participant has a Qualifying Termination,
the Date of Termination shall be the date specified in the notice of termination
(which, in the case of a termination other than for Cause or a termination for
Good Reason shall not be less than fifteen (15) nor more than sixty (60) days
from the date such notice is given).  If a Participant's Termination
of Employment is for Cause, the Date of Termination shall not be less than
thirty (30) days from the date notice is given.  In the event of a
dispute arising out of the Participant’s Termination of Employment, the Date of
Termination will be determined in accordance with Section 4.1(c).

     

    (c) Disputes
Involving Termination.  If within fifteen (15) days after any
notice of termination is given, or, if later, prior to the Date of Termination
(as determined without regard to this provision), the party receiving such
notice of termination notifies the other party that a dispute exists concerning
whether the termination is a Qualifying Termination or for Cause, the Date of
Termination for purposes of Section 4.2
hereof shall be the date on which the dispute is finally resolved either
by mutual written agreement of the parties, or by a final judgment, order or
decree of a court of competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has expired and no appeal has
been perfected); provided, however, that if the dispute is not resolved prior to
the end of the Termination Period, the Termination Period shall be extended so
as not to deprive the Participant of the benefits under Section 4.2 in respect
of such termination;  provided
further, that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.  During the
pendency of any such dispute (the “Dispute
Period”), subject to Section 6.1, the Employer will (i) continue to pay the Participant his or her
full Base Salary in accordance with the Company’s
payroll practice in effect from time to time (provided that the amount paid in
any calendar year shall be equal to the Participant’s annual rate of Base Salary
or a proportionate fraction thereof with respect to portions of calendar years
during the Dispute Period (other than amounts that are required to be paid in a
subsequent calendar year pursuant to Section 6.1)), and (ii) continue the
Participant as a participant in all Health
Benefits as described in Section 4.2(c) of the Plan (subject to Section 6.2 of
the Plan) on the same basis as provided under Section 4.2(c). Amounts
paid under this provision are in addition to all other amounts due under this
Plan and shall not be offset against or reduce any other amounts due under this
Plan.

     

    4.2 Severance
Payments.

     

    If the
Participant has a Qualifying Termination, then the Company shall or
shall cause the Employer to provide to the Participant:

     

    (a) his or
her full base salary through the Date of Termination at the rate in effect at
the time notice of termination is given, plus all other amounts to which he or
she is entitled under any compensation plan in effect immediately prior to the
Change in Control, at the time such payments are due; provided that, subject to the Participant’s execution of (and not
revoking) a Release in the form attached to this Plan as Schedule A (the
“Release”) for purposes of determining the amount to
which a Participant is entitled under the Financial Counseling Program, he or
she shall be regarded as having retired under the terms of the program;
and

     

    (b) subject to the Participant’s execution of (and not revoking) a Release, a lump sum cash
payment equal to the result of multiplying (i) the sum of (A) the Participant’s
Base Salary, plus (B) the Participant’s Bonus Amount by (ii) 2.99; provided,
however, that if the amount of such payment cannot be finally determined on or
before such day, the Participant shall be paid an estimate, as determined in
good faith by the Company of the minimum amount of such payment and the
remainder of such payment (together with interest at the rate provided in
section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as amended (the
“Code”)) as soon as the
amount thereof can be determined; provided further that, in the event that the
amount of the estimated payment exceeds the amount subsequently determined to
have been due, such excess shall be reimbursed
by the Participant, payable on the fifth (5th) day
after demand by the Company (together with interest at the rate provided in
section 1274(b)(2)(B) of the Code); and

    (c) subject to the Participant’s execution of (and not
revoking) a Release, if the Participant is not otherwise entitled to such
benefits at no cost to him or her pursuant to the terms of such plans, subject to section 6.2 of the Plan, for a thirty
six (36) month period from the Date of Termination or until December 31 of the
year in which the Participant reaches age sixty-five (65), whichever is the
shorter period (the “Benefit
Period”), life, health and dental benefits (including spouse and dependent coverage) (“Health Benefits”) substantially similar to
those that he or she was  receiving
immediately prior to the Date of Termination and such benefits shall be provided
at no cost to the Participant (or spouse and
dependents).  Notwithstanding the foregoing, the Participant
shall not be provided any Health Benefit
pursuant to this Section 4(c) if an equivalent benefit is actually received by
the Participant during the Benefit Period from
another Employer following his or her Date of Termination and any such
Health Benefit actually received by the
Participant shall be reported by the Participant to the Company;
and

     

    (d) subject to the Participant’s execution of (and not
revoking) a Release, if the Participant is subject to any excise tax
imposed under Section 4999 of the Code (the “Excise
Tax”) by reason of the Change in Control and the prior deferral of income
(whether or not the Participant has a Qualifying Termination), then the Company
shall pay to the Participant an amount as specified in Schedule B.

     

    (e) Except as
otherwise expressly provided pursuant to this Plan, this Plan shall be construed
and administered in a manner which avoids duplication of compensation and
benefits which may be provided under any other plan, program, policy, or other
arrangement or individual contract.  In the event a Participant is
covered by any other plan, program, policy, individually negotiated agreement or
other arrangement, in effect as of his or her Date of Termination, that may
duplicate the payments and benefits provided for in this Article 4, the Company
may reduce or eliminate the duplicative benefits provided for under the Plan
but solely to the extent such reduction or
elimination  does not cause the Participant to be subject to penalty
taxes under Section 409A.

     

    (f) This Plan
does not abrogate any of the usual entitlements which a Participant has or will
have, first, while a regular employee, and subsequently, after termination, and
thus a Participant shall be entitled to receive all benefits payable to him or
her under each and every qualified plan, welfare plan and any other plan or
program relating to benefits and deriving from his or her employment with the
Company and it Subsidiaries, but solely in accordance with the terms and
provisions thereof.

     

    Article 5
- Withholding Taxes

     

    The
Company and its Subsidiaries may withhold from all payments due to the
Participant (or his beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local or other law, is required to be
withheld.

     

    Article
6 - Certain Additional Agreements under Section 409A

     

    6.1 Delay of
Payment.  In the event that a payment to be made pursuant to Sections 4.1(c), 4.2(b) or
Schedule B or any other amounts under this Plan that constitutes non-qualified deferred
compensation under Section 409A of the Code ("Section 409A") is to be made to a “Specified Employee,” such
payment will be delayed for six (6) months after the Date of Termination if
required in order to avoid additional tax under Section 409A and paid in a single lump sum on the first business day
of the month following the end of such six (6) month
period.  If a Participant who is
a Specified Employee dies within six (6) months following such Termination of Employment, any such delayed payments shall not
be further delayed, and shall be immediately payable within thirty (30) days to his or her estate in
accordance with the applicable provisions of this Plan.

     

    6.2 Health
Benefits.  Health Benefits shall
be provided in such a manner that such benefits (and the costs and premiums
thereof) are excluded from the Participant’s income for federal income tax
purposes and, if the Company reasonably determines that providing continued
coverage under one or more of its health care benefit plans contemplated herein
could be taxable to the Participant, the Company shall provide such benefits at
the level required hereby through the purchase of individual insurance
coverage.

    
      6.3 Cash Payments.  The Company shall use its best efforts to pay, or shall
use its best efforts to cause the Employer to pay, to the Participant the cash
lump sum described in  Section 4.2(b) within eight (8) days following
the execution by the Participant of the Release (subject to the Participant not
revoking such Release); provided, however, that in no event shall such payment
be made later than the later of (i) the date provided in Section 6.1, if
applicable, and (ii) the end of the ninety (90) day period commencing with the
Date of Termination.

       

      6.4 No
Adverse Action.  No Employer will
take any action that would expose any payment or benefit to a Participant under
this Plan to the additional tax imposed under Section 409A unless (i) the
Employer is obligated to take the action under an agreement, plan or
arrangement, (ii) a Participant requests the action, (iii) the Employer advises
such Participant in writing that the action may result in the imposition of the
additional tax and (iv) such Participant subsequently requests the action in a
writing that acknowledges that he or she will be responsible for any effect of
the action under Section 409A.

       

      Article
7 - Successors; Binding Agreement

       

      7.1 The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to unconditionally assume all of the obligations of
the Employer hereunder.  Failure
of the Company to obtain such assumption prior to the effectiveness of any such
succession shall constitute Good Reason hereunder and shall entitle the
Participants to compensation and other benefits in the same amount and on the
same terms as the Participants would be entitled hereunder if they had a
Qualifying Termination, except that for purposes of implementing the foregoing,
the date on which any succession becomes effective shall be deemed the Date of
Termination.

       

      7.2 The
benefits provided under this Plan shall inure to the benefit of and be
enforceable by the Participant’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees.  If the Participant shall die while any amounts would be
payable to the Participant hereunder had the Participant continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Plan to such person or persons appointed in writing by the
Participant to receive such amounts or, if no person is so appointed, to the
Participant’s estate.

       

      Article 8 -
Miscellaneous

       

      8.1 Elections and
Notices.

       

      Notwithstanding
anything to the contrary contained in this Plan, all elections and notices of
every kind under this Plan shall be made on forms prepared by the Company or its
General Counsel, Secretary or Assistant Secretary, or their respective delegates
or shall be made in such other manner as permitted or required by the Company or
its General Counsel, Secretary or Assistant Secretary, or their respective
delegates, including through electronic means, over the Internet or
otherwise.  An election shall be deemed made when received by the
Company (or its designated agent, but only in cases where the designated agent
has been appointed for the purpose of receiving such election), which may waive
any defects in form.

       

      If not
otherwise specified by this Plan or the Company, any notice or filing required
or permitted to be given to the Company under the Plan shall be delivered to the
principal office of the Company, directed to the attention of the Senior
Executive Vice President in charge of Human Resources for the Company or his or
her successor.  Such notice shall be deemed given on the date of
delivery.

       

      Notice to
the Participant shall be deemed given when mailed (or sent by telecopy) to the
Participant’s work or home address as shown on the records of the Employer or,
at the option of the Company, to the Participant’s e-mail address as shown on
the records of the Employer.  It is the Participant’s responsibility
to ensure that the Participant’s addresses are kept up to date on the records of
the Employer.  In the case of notices affecting multiple Participants,
the notices may be given by general distribution at the Participants’ work
locations.

       

      8.2 No Mitigation; Resolution of
Disputes and Costs.

       

      (a) In no
event shall the Participant be obligated to seek other employment or take other
action by way of mitigation of the amounts payable to the Participant under any
of the provisions of this Plan and, except as provided in Section 4.2(c), such
amounts shall not be reduced whether or not the Participant obtains other
employment.

       

      (b) Participants
may submit claims for benefits by giving notice to the Company pursuant to
Section 8.1.  If a Participant believes that he or she has not
received coverage or benefits to which he or she is entitled under the Plan, the
Participant may notify the Company in writing of a claim for coverage or
benefits.  If the claim for coverage or benefits is denied in whole or
in part, the Company shall notify the applicant in writing of such denial within
thirty (30) days (which may be extended to sixty (60) days under special
circumstances), with such notice setting forth: (i) the specific reasons for the
denial; (ii) the Plan provisions upon which the denial is based; (iii) any
additional material or information necessary for the applicant to perfect his or
her claim; and (iv) the procedures for requesting a review of the
denial.  Upon a denial of a claim by the Company, the Participant
may:  (i) request a review of the denial by the Board or, where review
authority has been so delegated, by such other person or entity as may be
designated by the Board for this purpose; (ii) review any Plan documents
relevant to his or her claim; and (iii) submit issues and comments to the Board
or its delegate that are relevant to the review.  Any request for
review must be made in writing and received by the Board or its delegate within
sixty (60) days of the date the applicant received notice of the initial denial,
unless special circumstances require an extension of time for
processing.  The Board or its delegate will make a written ruling on
the applicant’s request for review setting forth the reasons for the decision
and the Plan provisions upon which the denial, if appropriate, is
based.  This written ruling shall be made within thirty (30) days of
the date the Board or its delegate receives the applicant’s request for review
unless special circumstances require an extension of time for processing, in
which case a decision will be rendered as soon as possible, but not later than
sixty (60) days after receipt of the request for review.  All
extensions of time permitted by this Section 18 will be permitted at the sole
discretion of the Board or its delegate.  If the Board does not
provide the Participant with written notice of the denial of his or her appeal,
the Participant’s claim shall be deemed denied.

       

      (c) Notwithstanding
anything in this Plan to the contrary, any court, tribunal or arbitration panel
that adjudicates any dispute, controversy or claim arising between a Participant
and any Employer, or any of their delegates or successors, in respect of a
Participant’s Qualifying Termination, will apply a de novo standard of
review to any determinations made by such person. Such de novo standard shall
apply notwithstanding the grant of full discretion hereunder to any such person
or characterization of any such decision by such person as final, binding or
conclusive on any party.

       

      (d) If any
contest or dispute shall arise under this Plan involving a Participant’s
Termination of Employment or involving the failure or refusal of any Employer to
perform fully in accordance with the terms hereof, the Company shall or shall
cause the Employer to reimburse the Participant on a current basis for all
reasonable legal fees and related expenses, if any, incurred by the
Participant at any time from the Effective
Date of this Plan through the Participant’s remaining lifetime (or, if longer,
through the 20th anniversary of the Change in Control) in connection with such
contest or dispute (regardless of the result thereof), together with interest at
the rate provided in section 1274(b)(2)(B) of the Code, such interest to accrue
thirty (30) days from the date the Company receives the Participant’s statement
for such fees and expenses through the date of payment thereof, regardless of
whether or not the Participant’s claim is upheld by a court of competent
jurisdiction or an arbitration panel; provided, however, that the
Participant shall be required to repay immediately any such amounts to the Employer to the extent that a court or an
arbitration panel issues a final and non-appealable order setting forth the
determination that the position taken by the Participant was frivolous or
advanced by the Participant in bad faith. To comply with Section 409A, in no event shall the
payments by the Employer under this Section 8.2(d) be made later than the end of
the calendar year next following the calendar year in which such fees and
expenses were incurred, provided, that the Participant shall have submitted an
invoice for such fees and expenses at least ten (10) days before the end of the
calendar year next following the calendar year in which such fees and expenses
were incurred.  The amount of such legal fees and expenses that the
Employer is obligated to pay in any given calendar year shall not affect the
legal fees and expenses that the Employer is obligated to pay in any other
calendar year, and the Participant’s right to have the Employer pay such legal
fees and expenses may not be liquidated or exchanged for any other
benefit.

       

      8.3 Survival.  The respective
obligations and benefits afforded to the Company and the Participant as provided
in Articles 4 (to the extent that payments or benefits are owed as a result of a
Qualifying Termination that occurs during the term of this Plan), 5, 6, 7 and 8
shall survive the termination of this Plan.

       

      8.4 Governing Law;
Validity.

       

      To the
extent not preempted by Federal law, the Plan, and all benefits and agreements
hereunder, and any and all disputes in connection therewith, shall be governed
by and construed in accordance with the substantive laws of the State of
Delaware, without regard to conflict or choice of law principles which might
otherwise refer the construction, interpretation or enforceability of this Plan
to the substantive law of another jurisdiction.

       

      8.5 Amendment
and Termination.  The Board or the
Committee may amend (and, by amendment, terminate) this Plan at any time; provided, however, that (i) no amendment that reduces or
eliminates any benefit or other entitlement of any Participant or that is
otherwise adverse to the interests of a Participant (an “Adverse Amendment”) may take
effect prior to the beginning of any calendar year,
and any such amendment shall be void and of no effect,
unless the Participant was notified of such amendment by September 30 of the
prior year, (ii) no Adverse Amendment may be adopted during the period of time
beginning on a Potential Change in Control and ending on the earlier of (a) the
termination of the agreement that constituted the Potential Change in Control
and (b) the second anniversary of the
resulting Change in Control, without the Participant’s written consent, and
(iii) no Adverse Amendment may be adopted during the period commencing on a
Change in Control and ending on the second anniversary of the Change in Control
without the Participant’s written consent. The
restrictions on amendments set forth in the prior sentence shall not apply to
any amendment adopted within the period specified in clauses (ii) or (iii),
above, if the following three conditions are satisfied: (1) the amendments do
not take effect until the expiration of the periods, as applicable, set forth in
such clauses, (2) each adversely affected Participant receives written notice of
the adoption of such amendments within ten (10) days of such adoption and (3)
such written notice is provided at least ninety (90) days prior to such
amendments taking effect.

       

      8.6 Interpretation
and Administration.  The Plan shall be
administered by the Board.  The Board may delegate any of its powers
under the Plan to a committee thereof or prior to a Change in Control, to the
CEO.  Unless otherwise provided in this Plan, actions of the Board or
such committee shall be taken by a majority vote of its members.  All
references to the “Board” herein shall be deemed to be references to such
delegate, as appropriate.  The Board shall have the authority (i) to
exercise all of the powers granted to it under the Plan, (ii) to construe,
interpret and implement the Plan, (iii) to prescribe, amend and rescind rules
and regulations relating to the Plan, (iv) to make all determinations necessary
or advisable in administration of the Plan and (v) to correct any defect, supply
any omission and reconcile any inconsistency in the Plan.

       

      8.7 Type of
Plan.  This Plan is
intended to be, and shall be interpreted as an unfunded employee welfare plan
under Section 3(1) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”) and Section 2520.104-24 of the Department of Labor
Regulations, maintained primarily for the purpose of providing employee welfare
benefits, to the extent that it provides welfare benefits, and under Sections
201, 301 and 401 of ERISA, as a plan that is unfunded and maintained primarily
for the purpose of providing deferred compensation, to the extent that it
provides such compensation, in each case for a select group of management or
highly compensated employees.

       

      8.8 Nonassignability.  Benefits under
the Plan may not be sold, assigned, transferred, pledged, anticipated,
mortgaged, or otherwise encumbered, transferred, hypothecated, or conveyed in
advance of actual receipt of the amounts, if any, payable hereunder, or any part
thereof by the Participant.

       

      Schedule
A

       

      RELEASE
AND WAIVER

       

      I,
________________, hereby fully waive and forever release and discharge Company,
AT&T, any and all other subsidiaries of Company and of AT&T, their
officers, directors, agents, servants, employees, successors and assigns and any
and all employee benefit plans maintained by AT&T or any subsidiary thereof
and/or any and all fiduciaries of any such plan from any and all common law
and/or statutory claims, causes of action or suits of any kind whatsoever
arising from or in connection with my past employment by Company (and any
AT&T subsidiary to the extent applicable) and/or my separation therefrom,
including but not limited to claims, actions, causes of action or suits of any
kind allegedly arising under the Employee Retirement Income Security Act
(ERISA), as amended, 29 USC §§ 1001 et seq.; the Rehabilitation Act of 1973, as
amended, 29 USC §§ 701 et seq.; the Civil Rights Acts of 1866 and 1870, as
amended, 42 USC §§ 1981, 1982 and 1988; the Civil Rights Act of 1871, as
amended, 42 USC §§ 1983 and 1985; the Civil Rights Act of 1964, as amended, 42
USC § 2000d et seq.; the Americans With Disabilities Act, as amended, 42 USC §§
12101 et seq., and the Age Discrimination in Employment Act of 1967 (ADEA), as
amended, 29 USC §§ 621 et seq., known and unknown. In addition, I, ___________,
agree not to file any lawsuit or other claim seeking monetary damage or other
relief in any state or federal court or with any administrative agency against
any of the aforementioned parties in connection with or relating to any of the
aforementioned matters. Provided, however, by executing this Release and Waiver,
I, ________________, do not waive rights or claims that may arise after the date
of execution; provided further, however, this Release and Waiver shall not
affect my right to receive or enforce through litigation, any indemnification
rights to which I am entitled as a result of my past employment by the Company
or contract rights pursuant to the Agreement and Release and Waiver of Claims
entered into contemporaneously herewith and, if applicable, any subsidiary of
AT&T; and, provided further, this Release and Waiver shall not affect the
ordinary distribution of benefits/entitlements, if any, to which I am entitled
upon termination from Company; it being understood by me that said
benefits/entitlements, if any, will be subject to and provided in accordance
with the terms and conditions of their respective governing plan and this
Agreement.

       

      Schedule
B

       

      Additional Reimbursement
Payments by the Company

       

      (a)           Pursuant
to Section 4.2(d) of the Plan, in the event it shall be determined that any
payment, award, benefit or distribution (or any acceleration of any payment,
award, benefit or distribution) by the Company (or any of its affiliated
entities) or any entity which effectuates a Change in Control (or any of its
affiliated entities) to or for the benefit of the Participant (whether pursuant
to the terms of this Plan or otherwise, but determined without regard to any
additional payments required under this Schedule B) (the “Payments”)
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”),
or any interest or penalties are incurred by the Participant with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise
Tax”), then the Company shall remit to the
Internal Revenue Service or any other applicable taxing authority an
additional payment (a “Reimbursement
Payment”) in an amount such that after payment by the Participant of all
taxes (including any Excise Tax) imposed upon the Reimbursement Payment, the
Participant retains an amount of the Reimbursement Payment equal to the Excise
Tax imposed upon the Payments; provided, however, that the Company shall have
the obligation to make a Reimbursement Payment only to the extent the
Participant is subject to the Excise Tax by virtue of the reduction of his or
her “base amount” (as defined in Section 280G(b)(3) of the Code) by reason of
his or her election to defer a portion of his or her compensation payable during
the applicable period (such Excise Tax, a “Qualifying Excise
Tax”).  For purposes of determining the amount of the
Reimbursement Payment, the Participant shall be deemed to (i) pay federal income
taxes at the highest marginal rates of federal income taxation for the calendar
year in which the Reimbursement Payment is to be made and (ii) pay applicable
state and local income taxes at the highest marginal rate of taxation for the
calendar year in which the Reimbursement Payment is to be made, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes.

       

      (b)           Subject
to the provisions of Paragraph (a), all determinations required to be made under
this Schedule B, including whether and when a Reimbursement Payment is required,
the amount of such Reimbursement Payment, the amount of any Option
Redetermination (as defined below), and the assumptions to be utilized in
arriving at such determinations, shall be made by a public accounting firm that
is retained by the Company as of the date immediately prior to the Change in
Control (the “Accounting
Firm”) which shall provide detailed supporting calculations both to the
Company and the Participant within fifteen (15) business days of the receipt of
notice from the Company or the Participant that there has been a Payment, or
such earlier time as is requested by the Company (collectively, the “Determination”).  For
the avoidance of doubt, the Accounting Firm may use the Option Redetermination
amount in determining the reduction of the Payments to the Safe Harbor
Cap.  Notwithstanding the foregoing, in the event (i) the Board shall
determine prior to the Change in Control that the Accounting Firm is precluded
from performing such services under applicable auditor independence rules or
(ii) the Audit Committee of the Board determines that it does not want the
Accounting Firm to perform such services because of auditor independence
concerns or (iii) the Accounting Firm is serving as accountant or auditor for
the person(s) effecting the Change in Control, the Board shall appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder).  All fees and expenses of the Accounting Firm shall
be borne solely by the Company, and the Company shall enter into any agreement
reasonably requested by the Accounting Firm in connection with the performance
of the services hereunder.  The Reimbursement Payment under this
Schedule B with respect to any Payments shall be made no later than thirty (30)
days following such Payment.  If the Accounting Firm determines that
no Qualifying Excise Tax is payable by a Participant, it shall furnish the
Participant with a written opinion to such effect, and to the effect that
failure to report the Qualifying Excise Tax, if any, on the Participant’s
applicable federal income tax return will not result in the imposition of a
negligence or similar penalty.  The Determination by the Accounting
Firm shall be binding upon the Company and the Participant.

       

      As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the Determination, it is possible that Reimbursement Payments which will
not have been made by the Company should have been made (“Underpayment”)
or Reimbursement Payments are made by the Company which should not have been
made (“Overpayment”),
consistent with the calculations required to be made hereunder.  In
the event the amount of the Reimbursement Payment is less than the amount
necessary to reimburse the Participant for the Qualifying Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment (together with interest at the rate provided
in Section 1274(b)(2)(B) of the Code) shall be promptly remitted to the Internal Revenue Service or any other
applicable taxing authority an additional payment (to or for the benefit
of the Participant.  In the event the amount of the Reimbursement
Payment exceeds the amount necessary to reimburse the Participant for the Qualifying Excise Tax, the
Accounting Firm shall determine the amount of the Overpayment that has been made
and any such Overpayment (together with interest at the rate provided in Section
1274(b)(2) of the Code) shall be promptly paid by the Participant (to the extent
the Participant has received a refund if the applicable Qualifying Excise Tax
has been paid to the Internal Revenue Service) to or for the benefit of the
Company.  The Participant shall cooperate, to the extent his or
her expenses are
reimbursed by the Company, with any reasonable requests by the Company in
connection with any contests or disputes with the Internal Revenue Service in
connection with the Excise Tax.  In the event that the Company makes a
Reimbursement Payment to the Participant and subsequently the Company determines
that the value of any accelerated vesting of stock options held by the
Participant shall be redetermined within the context of Treasury Regulation
§1.280G-1 Q/A 33 (the “Option
Redetermination”), the Participant shall (i) file with the Internal
Revenue Service an amended federal income tax return that claims a refund of the
overpayment of the Qualifying Excise Tax attributable to such Option
Redetermination and (ii) promptly pay the refunded Qualifying Excise Tax to the
Company; provided that the
Company shall pay all reasonable professional fees incurred in the preparation
of the Participant’s amended federal income tax return.  If the Option
Redetermination occurs in the same year that the Reimbursement Payment is
included in the Participant’s taxable income, then in addition to returning the
refund to the Company, the Participant will also promptly return to the Company
any tax benefit realized by the return of such refund and the return of the
additional tax benefit payment (all determinations pursuant to this sentence
shall be made by the Accounting Firm).

       

      Notwithstanding any other provision to the contrary, a
Reimbursement Payment described in this Schedule B shall be made by the end of
the calendar year next following the calendar year in which the related taxes
are remitted to the taxing authority by the Participant.