Exhibit (10)(iii)(A)12 - Mid-Career Pension Plan

                                      Executive Vice President - Human Resources
                                 Approval Under Delegation of Board of Directors



                          AT&T MID-CAREER PENSION PLAN

   Approval of Plan Language for Certain Amendments Adopted on April 16, 1997
                and December 17, 1997 by the Board of Directors

     On  April  16,  1997,  the  Board  of  Directors  of  the  Company  adopted
resolutions amending the AT&T Mid-Career Pension Plan (the "Plan"),  among other
things, to:

o     Freeze benefit accruals as of December 31, 1996;

o     Provide for payment of a single  life  annuity  if  the  executive  elects
      the cash payment option under the AT&T Management Pension  Plan;

o     Provide  that  benefits  under the Plan may be  forfeited if the Executive
      Vice  President - Human  Resources  determines   that   the  Employee  has
      violated the AT&T Non-Competition Guideline;

o     Provide for a transfer of the  liability for the benefit  under this  Plan
      for Executives above E-band effective January 1, 1998.

     Pursuant to the delegations  from the Board of Directors and the Committee,
the Executive  Vice  President - Human  Resources  approves the  following  Plan
language reflecting these amendments: *

1.    Amendment to  freeze  Term of  Employment  as of  December 31, 1996 in the
calculation of Mid-Career Pension Credits.  Effective August 1, 1997, add to end
of Section 2.15(a) as follows:

Mid-Career  Pension  Credits  for  Eligible  Executives  hired or  rehired  by a
Participating Company at E-band or above, and all of whose Term of Employment is
at E-band or above,  is  determined  as if the Eligible  Executive  had actually
terminated employment as of December 31, 1996.

2.    Amendment  to freeze Term  of Employment as of  December 31, 1996  in  the
calculation of Mid-Career Pension Credits.  Effective August 1, 1997, add to end
of Section 2.15(b) as follows:

The  numerator  and  denominator  set  forth in this  Section  2.15(b)  above is
determined as if the Eligible Executive had actually terminated employment as of
December 31, 1996. Further,  for any Eligible Executive on the active roll as of
August 29, 1991, he shall be deemed to have terminated employment as of December
31, 1996.

3.    Amendment  to  establish   eligibility  for Participant status.  Effective
August 1, 1997, add to end of Section 4.1 as follows:

<PAGE>

An  individual  is an  Eligible  Executive  in this  Plan if the  individual  is
eligible for the Special  Update,  within the meaning of the Pension  Plan,  and
satisfies the requirements set forth in this Section 4.1(a) through (d) above if
he had terminated  employment as of December 31, 1996, provided,  however,  that
any individual  hired in 1996 shall be deemed to have satisfied the  requirement
set forth in Section 4.1(c) above if he satisfies such requirement no later than
December 31, 1997.

4.    Amendment  to establish  eligibility for the benefit under  the Plan as an
Employee. Effective January 1, 1998, add to end of Section 4.2(a) as follows:

Only Eligible Executives, as defined in Section 4.1 above, who are E-bands, will
be considered Employees,  provided, however, that for purposes of satisfying the
requirement  in this Section  4.2(a) of  completing a Term of  Employment  of at
least five years at E-band or above at termination  of employment,  all Eligible
Executives  will be considered  Employees,  if otherwise  considered an Employee
pursuant to this Section 4.2(a).

5.    Amendment to eliminate concept of service, disability  pension or deferred
pension benefits.  Effective August 1, 1997,  replace Sections 4.2(b) and (c) in
their entirety as follows:

(b)  Service and Disability Benefit

Any  Employee  shall be eligible  for a service  benefit or  disability  benefit
pursuant  to this Plan if he or she has  retired  with a service  or  disability
pension before January 1, 1997 under the Pension Plan, including an Employee who
was eligible for a service pension as a result of a Transition  Leave of Absence
or a Transition to Retirement as set forth in the Pension Plan.

(c)  Mid-Career Pension Benefit

Any Employee is eligible for a Mid-Career  Pension Benefit pursuant to this Plan
if the Employee in not eligible for a service or  disability  benefit under this
Plan as set forth in Section 4.2(b).

6.    Amendment  to  the Plan's Formula  to  eliminate  references to  Post-Base
Period and  explicitly  provide the base formula  multiplier  amount.  Effective
August 1, 1997, replace Section 4.3(a)(i) with the following:

     The annual benefit amount will equal:

           A * [(B * C) + (D * E)]

     Where:

           A = Mid-Career Pension Credits;

           B = .008

           C = Average Base Period  Compensation x Term of Employment to the end
               of the Base Period divided by Total Term of Employment;

           D = .008

           E = NQPP Average Base Period Compensation x Term of Employment to the
               end of the Base Period divided by Total Term of Employment.

<PAGE>

7.    Amendment to the definition of "Base Period" to correspond to the new Base
Period in the Pension Plan.  Effective  August 1, 1997,  Section  4.3(a)(iii) is
amended in its entirety as follows:

For purposes of determining C in Section  4.3(a)(i),  "Base Period" shall be the
pay base averaging  period as is set forth in the Pension Plan effective  August
1, 1997. For purposes of determining E in Section 4.3(a)(i), "Base Period" shall
be the Base  Period as is set forth in the Basic  Formula of the NQPP  effective
August 1, 1997.

8.    Effective   August 1, 1997,  delete   Section 4.3(a)(iv),  4.3(a)(vii) and
4.3(a)(viii) in their entirety and renumber Section 4.3(a) accordingly.

9.    Amendment to the  definition  of "Total Term of Employment" to freeze Term
of Employment as of December 31, 1996. Effective August 1, 1997, replace Section
4.3(a)(vi) in its entirety as follows:

For  purposes  of  determining  C and E in  Section  4.3(a)(i),  "Total  Term of
Employment" shall be the Employee's Term of Employment as of December 31, 1996.

10.   Amendment to  the calculation  of the  monthly benefit  under the  Plan to
change the definition of Term of Employment. Effective August 1, 1997, add a new
Section 4.3(a)(ix) as follows:

(ix) Term of Employment

Effective  August 1,  1997,  for  purposes  of  determining  C and E in  Section
4.3(a)(i),  "Term  of  Employment"  shall  equal  the  lesser  of  (1)  Term  of
Employment,  as defined in Section 2.22, as of December 31, 1996,  plus 1 or (2)
105% of Term of Employment, as defined in Section 2.22, as of December 31, 1996.

11.   Amendment   to  clarify  that, for  purposes   of  determining  the  early
retirement  discount,  if any, the discount is  calculated in the same manner as
the  discount  applicable  to the Special  Update  Benefit in the Pension  Plan.
Effective August 1, 1997, replace Section 4.3(b) in its entirety as follows:

Effective August 1, 1997, where an Employee terminates  employment under the age
of 55 years and commences a pension  under the Pension Plan,  his or her monthly
benefit shall be reduced in the same manner as set forth in the Pension Plan for
the Special Update Benefit, within the meaning of the Pension Plan.

12.   Amendment  relating  to  the  elimination  of  the concept  of a  deferred
benefit.  Effective  August 1,  1997,  any  references  in  Section  4.3(c) to a
"deferred benefit amount" or "deferred  benefit" shall be replaced with the term
"Mid-Career Pension Benefit."

13.   Amendment to  provide  for  special increases  in  service and  disability
payments only for those  Employees  eligible for service and disability  pension
benefits.

Section 4.3(e) shall be replaced in its entirety as follows:

Section 4.3(e)   Special Increases

<PAGE>

Monthly service and disability benefit payments for retired Employees,  eligible
as set forth in Section  4.2(b),  shall be increased by the same  percentage and
pursuant to the same terms and conditions as are set forth in the Pension Plan.

14.   Amendment  relating  to commencement and  duration of benefits.  Effective
for monthly  benefits  commencing on or after August 1, 1997,  replace  Sections
4.5(a) and (b)(i) in their entirety as follows:

(a)      Service or Disability Benefit

Payment of a service or disability  benefit under this Plan shall commence to an
Employee  at the same  time as the  Employee's  service  or  disability  pension
benefits  commence  under the Pension Plan and shall continue to the last day of
the  month in which  the  death of the  Employee  occurs,  or,  in the case of a
disability  benefit,  until termination of disability pension payments under the
Pension  Plan,  if  earlier,  subject  to Section  4.4 of this  Plan,  provided,
however,  that if the Employee  elects the cash payment  option  pursuant to the
Pension Plan,  payment of a service or disability  benefit under this Plan shall
be paid in the form of a single life annuity.

(b)      Mid-Career Pension Benefit

         (i) Payment  of a  Mid-Career  Pension  benefit  under  this Plan shall
commence  to an  Employee at the same time as the  Employee's  pension  benefits
commence  under the Pension Plan and shall continue to the last day of the month
in which the death of the Employee occurs,  subject to Section 4.4 of this Plan,
provided,  however, that if the Employee elects the cash payment option pursuant
to the Pension  Plan,  payment of a Mid-Career  Pension  benefit under this Plan
shall be paid in the form of a single life annuity.

15.   Amendment to Section 4.6(a)(iii) to  be consistent with  amendment to AT&T
Non-Competition  Guideline.  Effective December 17, 1997, Section 4.6(a)(iii) is
amended in its entirety as follows:

         (iii)  If the Executive Vice President - Human Resources of the Company
determines,  pursuant to the AT&T Non-Competition Guideline, determines that the
Employee has violated the AT&T Non-Competition Guideline.

16.   Amendment to provide for a  transfer of liability for certain Employees to
the AT&T  Non-Qualified  Pension  Plan.  Effective  January 1,  1998,  add a new
Section 4.7 as follows:

Section 4.7      Transfer of Liability

Effective January 1, 1998, the liability for the monthly benefit under this Plan
of Eligible  Executives,  as defined in Section  4.1, who are above the level of
E-band,  shall be transferred to the AT&T Non-Qualified  Pension Plan, effective
January 1, 1998. Solely for purposes of determining  eligibility for the monthly
benefit under this Plan to be  transferred,  an Eligible  Executive who is above
the level of E-band shall be  considered an Employee who has completed a Term of
Employment of at least 5 years at E-band or above as of December 31, 1997.


Signature:     /s/   Hal W. Burlingame
               --------------------------------
               By:   Hal W. Burlingame
                     Executive Vice President - Human Resources

---------------------
*  Each   amendment  is  preceded  by  a  brief explanation.

<PAGE>

                                         Exhibit (10)(iii)(A)13 - AT&T 1997 LTIP

                      AT&T 1997 LONG TERM INCENTIVE PROGRAM

                  (as amended May 19, 1999 and March 14, 2000)

    SECTION  1.  PURPOSE.  The  purposes  of the AT&T 1997  Long Term  Incentive
Program  (the  "Plan") are to  encourage  selected  employees  and  Non-Employee
Directors  of AT&T  Corp.  (the  "Company")  and its  Affiliates  to  acquire  a
proprietary and vested interest in the growth and performance of the Company, to
generate an increased  incentive to contribute to the Company's  future  success
and  prosperity,  thus  enhancing  the value of the  Company  for the benefit of
shareholders,  and to enhance the ability of the Company and its  Affiliates  to
attract and retain  individuals of exceptional  managerial  talent upon whom, in
large measure,  the sustained progress,  growth and profitability of the Company
depends.

    SECTION 2.  DEFINITIONS.   As used  in the Plan, the  following terms  shall
have the meanings set forth below:

    (a)  "Affiliate" shall mean (i) any Person that directly,  or through one or
more intermediaries,  controls,  or is controlled by, or is under common control
with,  the  Company or (ii) any entity in which the  Company  has a  significant
equity interest, as determined by the Committee.

    (b)  "Award" shall mean any Option,  Stock  Appreciation  Right,  Restricted
Stock Award,  Performance Share,  Performance Unit, Dividend  Equivalent,  Other
Stock Unit Award, or any other right,  interest, or option relating to Shares or
other property granted pursuant to the provisions of the Plan.

    (c)  "Award Agreement" shall mean any written agreement,  contract, or other
instrument or document evidencing any Award granted by the Committee  hereunder,
which may, but need not, be executed or acknowledged by both the Company and the
Participant.

    (d)  "Board" shall mean the Board of Directors of the Company.

    (e)  "Change in Control" shall  mean the happening of  any of the  following
events:

         (i) An  acquisition  by any  individual,  entity or group  (within  the
meaning of Section 13 (d) (3) or 14 (d) (2) of the Exchange  Act) (an  "Entity")
of beneficial  ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (A) the then outstanding AT&T Shares (the
"Outstanding Company Common Stock") or (B) the combined voting power of the then
outstanding  voting  securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities");  excluding,
however,  the following:  (1) any acquisition  directly from the Company,  other
than an acquisition by virtue of the exercise of a conversion  privilege  unless
the security being so converted was itself  acquired  directly from the Company,
(2) any acquisition by the Company,  (3) any acquisition by any employee benefit
plan  (or  related  trust)  sponsored  or  maintained  by  the  Company  or  any
corporation controlled by the Company, or (4) any acquisition by any corporation
pursuant to a  transaction  which  complies  with  clauses  (A),  (B) and (C) of
subsection (iii) of this Section 2(e);

<PAGE>

         (ii) A change in the composition of the Board such that the individuals
who,  as of the  effective  date of the Plan,  constitute  the Board (such Board
shall be hereinafter  referred to as the "Incumbent Board") cease for any reason
to  constitute  at least a majority of the Board;  provided,  however,  that for
purposes of this  definition,  any  individual who becomes a member of the Board
subsequent to the effective date of the Plan, whose election,  or nomination for
election,  by the  Company's  stockholders  was approved by a vote of at least a
majority  of those  individuals  who are  members of the Board and who were also
members of the  Incumbent  Board (or deemed to be such pursuant to this proviso)
shall be  considered  as though such  individual  were a member of the Incumbent
Board;  and provided,  further  however,  that any such individual whose initial
assumption  of  office  occurs as a result of or in  connection  with  either an
actual or threatened  election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or threatened
solicitation  of proxies or consents by or on behalf of an Entity other than the
Board shall not be so considered as a member of the Incumbent Board;

         (iii) The  approval  by the  stockholders  of the  Company of a merger,
reorganization  or  consolidation  or  sale  or  other  disposition  of  all  or
substantially all of the assets of the Company (each, a "Corporate Transaction")
or, if  consummation  of such Corporate  Transaction is subject,  at the time of
such approval by stockholders,  to the consent of any government or governmental
agency,  the  obtaining of such consent  (either  explicitly  or  implicitly  by
consummation); excluding however, such a Corporate Transaction pursuant to which
(A)  all or  substantially  all of the  individuals  and  entities  who  are the
beneficial  owners,  respectively,  of the Outstanding  Company Common Stock and
Outstanding  Company  Voting  Securities  immediately  prior  to such  Corporate
Transaction will  beneficially  own,  directly or indirectly,  more than 60% of,
respectively,  the outstanding  shares of common stock,  and the combined voting
power of the then outstanding  voting  securities  entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Corporate  Transaction  (including,  without  limitation,  a corporation or
other  Person which as a result of such  transaction  owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries  (a "Parent  Company")) in  substantially  the same  proportions as
their  ownership,  immediately  prior  to  such  Corporate  Transaction,  of the
Outstanding Company Common Stock and Outstanding  Company Voting Securities,  as
the case may be, (B) no Entity  (other than the Company,  any  employee  benefit
plan (or related  trust) of the Company,  such  corporation  resulting from such
Corporate  Transaction  or, if  reference  was made to equity  ownership  of any
Parent Company for purposes of determining whether clause (A) above is satisfied
in connection with the applicable  Corporate  Transaction,  such Parent Company)
will beneficially own, directly or indirectly, 20% or more of, respectively, the
outstanding  shares  of  common  stock of the  corporation  resulting  from such
Corporate  Transaction or the combined  voting power of the  outstanding  voting
securities  of such  corporation  entitled to vote  generally in the election of
directors unless such ownership  resulted solely from ownership of securities of
the Company prior to the Corporate  Transaction,  and (C)  individuals  who were
members of the Incumbent Board will  immediately  after the  consummation of the
Corporate Transaction constitute at least a majority of the members of the board
of directors of the corporation  resulting from such Corporate  Transaction (or,
if reference was made to equity  ownership of any Parent Company for purposes of
determining  whether  clause  (A)  above is  satisfied  in  connection  with the
applicable Corporate Transaction, of the Parent Company); or

         (iv)  The  approval by the  stockholders of the Company  of a  complete
liquidation or dissolution of the Company.

<PAGE>

    (f)  "Change in Control  Price"  means,  with  respect to an AT&T Share or a
Wireless Group Share, as the case may be, the higher of (A) the highest reported
sales price,  regular way, of such Share in any transaction  reported on the New
York Stock  Exchange  Composite  Tape or other  national  exchange on which such
Shares are listed or on NASDAQ  during the 60-day  period prior to and including
the date of a Change in Control or (B) if the Change in Control is the result of
a tender or exchange  offer or a Corporate  Transaction,  the highest  price per
such Share  paid in such  tender or  exchange  offer or  Corporate  Transaction;
provided  however,  that in the  case  of  Incentive  Stock  Options  and  Stock
Appreciation  Rights relating to Incentive Stock Options,  the Change in Control
Price  shall be the Fair Market  Value of such Share on the date such  Incentive
Stock  Option or Stock  Appreciation  Right is  exercised  or  deemed  exercised
pursuant to Section 11(b). To the extent that the consideration paid in any such
transaction  described  above  consists  all or in part of  securities  or other
noncash   consideration,   the  value  of  such   securities  or  other  noncash
consideration shall be determined in the sole discretion of the Board.

    (g)  "Code"  shall mean the Internal  Revenue  Code of 1986, as amended from
time to time, and any successor thereto.

    (h)  "Committee" shall mean the Compensation and Employee Benefits Committee
of the Board, or any successor to such committee,  composed of no fewer than two
directors  each of whom is a  Non-Employee  Director  and an "outside  director"
within the meaning of Section  162(m) of the Code,  or any  successor  provision
thereto.

    (i)  "Company" shall mean AT&T Corp., a New York corporation.

    (j)  "Covered  Employee" shall mean a "covered  employee" within the meaning
of Section 162(m)(3) of the Code, or any successor provision thereto.

    (k)  "Employee"  shall mean any employee of the Company or of any Affiliate.
Unless  otherwise  determined  by the  Committee  in its  sole  discretion,  for
purposes  of the  Plan,  an  employee  shall be  considered  to have  terminated
employment and to have ceased to be an Employee if his or her employer ceases to
be an Affiliate, even if he or she continues to be employed by such employer.

    (l)  "Exchange  Act" shall mean  the  Securities  Exchange  Act of  1934, as
amended.

    (m)  "Fair  Market Value"  shall  mean, with  respect to  any  property, the
market  value of such  property  determined  by such  methods or  procedures  as
shall be established from time to time by the Committee.

    (n)  "Incentive  Stock Option" shall mean an Option  granted under Section 6
hereof that is intended to meet the  requirements  of Section 422 of the Code or
any successor provision thereto.

    (o)  "Non-Employee  Director"  shall  have  the  meaning  set  forth in Rule
16b-3(b)(3)  promulgated  by the Securities  and Exchange  Commission  under the
Exchange Act, or any successor definition adopted by the Securities and Exchange
Commission.

    (p)  "Nonstatutory  Stock  Option"  shall  mean  an  Option  granted   under
Section 6 hereof that is not intended to be an Incentive Stock Option.

<PAGE>

    (q)  "Option"  shall mean any right granted to a  Participant under the Plan
allowing such  Participant to purchase Shares at such price or prices and during
such period or periods as the Committee shall determine.

    (r)  "Other Stock Unit Award" shall mean any right granted to a  Participant
by the Committee pursuant to Section 10 hereof.

    (s)  "Participant"  shall mean an Employee or  Non-Employee  Director who is
selected by the Committee to receive an Award under the Plan.

    (t)  "Performance  Award"  shall  mean any  Award of  Performance  Shares or
Performance Units pursuant to Section 9 hereof.

    (u)  "Performance  Period"   shall  mean  that  period  established  by  the
Committee  at  the  time  any  Performance  Award is  granted  or  at  any  time
thereafter  during  which any  performance  goals  specified  by  the  Committee
with respect to such Award are to be measured.

    (v)  "Performance  Share"  shall  mean  any  grant  pursuant  to  Section  9
hereof of  a unit valued by reference to a  designated  number of Shares,  which
value  may be  paid to the  Participant  by  delivery  of such  property  as the
Committee  shall determine,  including,  without  limitation,  cash,  Shares, or
any  combination thereof,  upon  achievement  of such  performance  goals during
the  Performance  Period as the  Committee shall establish  at the time  of such
grant or thereafter.

    (w)  "Performance  Unit" shall mean any grant  pursuant to  Section 9 hereof
of a unit valued by  reference  to a  designated  amount of property  other than
Shares,  which value may be paid to the Participant by delivery of such property
as the Committee shall determine,  including,  without limitation, cash, Shares,
or any combination  thereof,  upon achievement of such performance  goals during
the  Performance  Period as the  Committee  shall  establish at the time of such
grant or thereafter.

    (x)  "Person"   shall  mean  any   individual,   corporation,   partnership,
association,   joint-stock  company,  trust,  unincorporated  organization,   or
government or political subdivision thereof.

    (y)  "Restricted Stock" shall  mean any  Share issued  with the  restriction
that the holder may not sell,  transfer,  pledge,  or assign such Share and with
such other  restrictions as the Committee,  in its sole  discretion,  may impose
(including, without limitation, any restriction on the right to vote such Share,
and the right to  receive  any cash  dividends),  which  restrictions  may lapse
separately  or in  combination  at  such  time  or  times,  in  installments  or
otherwise, as the Committee may deem appropriate.

    (z)  "Restricted Stock Award" shall mean an award of Restricted  Stock under
Section 8 hereof.

    (Aa)  "Senior  Manager"  shall  mean  any  Employee  of the  Company  or any
Affiliate  holding a position above E band or any future salary band that is the
equivalent thereof.

    (Bb)  "Shares" shall mean, collectively or as the case may be, (i)the shares
of AT&T Common Stock of the Company,  $1.00 par value ("AT&T Shares"),  and (ii)
the  shares of  Wireless  Group  Common  Stock of the  Company,  $1.00 par value

<PAGE>

("Wireless Group Shares"). "Outstanding Wireless Group Shares" shall mean, as at
any date of  determination,  the sum of (i) the  total  issued  and  outstanding
Wireless Group Shares, plus (ii) the number of Wireless Group Shares represented
by the inter-group  interest held by the "AT&T Common Stock Group" (as described
the Company's  Proxy  Statement  dated  January 26,  2000).  The numbers of AT&T
Shares referred to in the Plan have been adjusted to reflect the Company's 3 for
2 stock split effective April 15, 1999.

    (Cc)  "Stock   Appreciation  Right"  shall  mean  any  right  granted  to  a
Participant  pursuant  to  Section 7 hereof to  receive,  upon  exercise  by the
Participant, the excess of (i) the Fair Market Value of one Share on the date of
exercise or, if the  Committee  shall so determine in the case of any such right
other than one  related to any  Incentive  Stock  Option,  at any time  during a
specified  period  before the date of exercise  over (ii) the grant price of the
right on the date of grant,  or if granted  in  connection  with an  outstanding
Option on the date of grant of the related Option, as specified by the Committee
in its sole  discretion,  which,  except in the case of Substitute  Awards or in
connection with an adjustment  provided in Section 4(e),  shall not be less than
the Fair  Market  Value of one  Share on such  date of grant of the right or the
related  Option,  as the case may be. Any  payment by the  Company in respect of
such  right may be made in cash,  Shares,  other  property,  or any  combination
thereof, as the Committee, in its sole discretion, shall determine.

    (Dd)  "Subsidiary" shall mean any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
granting of the Award, each of the corporations  other than the last corporation
in the  unbroken  chain  owns stock  possessing  50 percent or more of the total
combined  voting power of all classes of stock in one of the other  corporations
in the chain.

    (Ee)  "Substitute  Awards" shall mean Awards granted or Shares issued by the
Company in assumption of, or in substitution or exchange for, awards  previously
granted, or the right or obligation to make future awards, by a company acquired
by the Company or with which the Company combines.

    SECTION 3. ADMINISTRATION.  The Plan shall be administered by the Committee.
The  Committee  shall have full power and  authority,  subject to such orders or
resolutions not inconsistent with the provisions of the Plan as may from time to
time be adopted by the Board,  to: (i) select the  Employees  of the Company and
its Affiliates and Non-Employee Directors of the Company to whom Awards may from
time to time be granted hereunder;  (ii) determine the type or types of Award to
be granted to each Participant  hereunder;  (iii) determine the number of Shares
to be covered by each Award  granted  hereunder;  (iv)  determine  the terms and
conditions,  not  inconsistent  with the  provisions  of the Plan,  of any Award
granted  hereunder;  (v)  determine  whether,  to what  extent  and  under  what
circumstances  Awards  may be  settled  in cash,  Shares  or other  property  or
canceled or suspended;  (vi)  determine  whether,  to what extent and under what
circumstances  cash,  Shares and other  property and other amounts  payable with
respect to an Award under this Plan shall be deferred either automatically or at
the election of the Participant; (vii) interpret and administer the Plan and any
instrument or agreement entered into under the Plan; (viii) establish such rules
and  regulations  and appoint such agents as it shall deem  appropriate  for the
proper  administration  of the Plan; and (ix) make any other  determination  and
take any other  action that the  Committee  deems  necessary  or  desirable  for
administration  of  the  Plan.  Decisions  of  the  Committee  shall  be  final,
conclusive and binding upon all persons, including the Company, any Participant,
any shareholder, and any employee of the Company or of any Affiliate. A majority

<PAGE>

of the members of the  Committee  may determine its actions and fix the time and
place of its  meetings.  Notwithstanding  the  foregoing or anything else to the
contrary in the Plan, any action or determination by the Committee  specifically
affecting or relating to an Award to a  Non-Employee  Director shall be approved
and ratified by the Board.

    SECTION 4.  SHARES SUBJECT TO THE PLAN.

    (a)  Subject  to  adjustment  as  provided  in  Section  4(e),  a  total  of
twenty-two  and one half (22.5) million AT&T Shares shall be available for a one
time  grant of  Options to  substantially  all  Employees  during  1997.  Shares
available  for such one time grant of  Options,  but not used for such  Options,
shall be available for other Awards under the Plan, in 1997 or later years.

    (b)  In addition to the number of AT&T Shares  available under Section 4(a),
and  subject to  adjustment  as  provided  in Section  4(e),  a total of (i) one
hundred twenty-seven and one half (127.5) million AT&T Shares, and (ii) a number
of Wireless  Group Shares equal to 5.00% of the number of  Outstanding  Wireless
Group Shares  shall be available  for Awards  granted  under the Plan;  provided
that,  commencing on January 1, 2000 and on each subsequent January 1 throughout
the term of the Plan, an additional  number of AT&T Shares shall be added to the
number of AT&T  Shares  available  for  Awards  granted  under  the Plan,  which
additional  number of AT&T Shares shall be  calculated  by  multiplying  (x) the
number of AT&T Shares  outstanding  on such  January 1, by (y) 1.75%;  provided,
further,  that the number of AT&T Shares available for Awards other than Options
and/or  Stock  Appreciation  Rights shall not exceed  thirty-seven  and one half
(37.5) million; and provided further that,  commencing on January 1, 2001 and on
each subsequent  January 1 throughout the term of the Plan, an additional number
of Wireless  Group Shares shall be added to the number of Wireless  Group Shares
available for Awards granted under the Plan, which additional number of Wireless
Group Shares shall be calculated by  multiplying  (x) the number of  Outstanding
Wireless Group Shares on such January 1, by (y) 2.00%;  provided,  further, that
the number of Wireless  Group  Shares  available  for Awards  other than Options
and/or  Stock  Appreciation  Rights  shall  not  exceed  1.25% of the  number of
Outstanding  Wireless Group Shares;  and provided,  further,  that if any Shares
subject to an Award or to an award under the Company's  1987 Long Term Incentive
Program or 1984 Stock  Option Plan (the "Prior  Plans") are  forfeited or if any
Award or award under the Prior  Plans  based on Shares is settled  for cash,  or
expires or otherwise is terminated  without issuance of such Shares,  the Shares
subject to such Award shall to the extent of such cash settlement, forfeiture or
termination  again be available for Awards under the Plan. In the event that any
Option or other Award  granted  hereunder is  exercised  through the delivery of
Shares or in the event that withholding tax liabilities arising from such Option
or other Award are satisfied by the  withholding  of Shares by the Company,  the
number of Shares  available  for Awards under the Plan shall be increased by the
number of Shares so  surrendered  or withheld.  In addition,  Substitute  Awards
shall  not  reduce  the  Shares  available  for  grants  under  the Plan or to a
Participant in any calendar year.

    (c)  In addition  to the  number of Wireless  Group  Shares  available under
Section  4(b),  and subject to  adjustment  as provided  in Section  4(e),  such
additional  number of Wireless  Group  Shares as are  required  for Awards as an
adjustment  to  existing  Awards  under the Plan based  upon AT&T  Shares as the
result of any distribution of Wireless Group Shares to holders of AT&T Shares as
more fully described in the Company's Proxy Statement dated January 26, 2000.

<PAGE>

    (d)  Any  Shares  issued  hereunder  may  consist,  in whole  or in part, of
authorized and unissued shares, treasury shares, or shares purchased in the open
market or otherwise.

    (e)  In  the   event   of   any   merger,   reorganization,   consolidation,
recapitalization,  stock dividend, stock split, reverse stock split, spin-off or
similar transaction or other change in corporate structure affecting the Shares,
such adjustments and other substitutions shall be made to the Plan and to Awards
as  the  Committee  in its  sole  discretion  deems  equitable  or  appropriate,
including without limitation such adjustments in the aggregate number, class and
kind of securities which may be delivered under the Plan, in the aggregate or to
any one Participant,  in the number, class, kind and option or exercise price of
securities subject to outstanding  Options,  Stock Appreciation  Rights or other
Awards granted under the Plan,  and in the number,  class and kind of securities
subject to Awards  granted under the Plan  (including,  if the  Committee  deems
appropriate,  the  substitution of similar options to purchase the shares of, or
other awards denominated in the shares of, another company) as the Committee may
determine to be appropriate in its sole discretion,  provided that the number of
Shares subject to any Award shall always be a whole number.

    SECTION 5.  ELIGIBILITY.  Any  Employee or  Non-Employee  Director  shall be
eligible to be selected as a  Participant,  provided,  however,  that  Incentive
Stock Options shall only be awarded to Employees of the Company.

    SECTION 6.  STOCK OPTIONS.  Options may be granted hereunder to Participants
either alone or in addition to other Awards  granted under the Plan.  Any Option
granted under the Plan shall be evidenced by an Award  Agreement in such form as
the Committee may from time to time approve. Any such Option shall be subject to
the following terms and conditions and to such additional  terms and conditions,
not  inconsistent  with the provisions of the Plan, as the Committee  shall deem
desirable:

    (a) OPTION PRICE.   The purchase price per Share purchasable under an Option
shall be  determined  by the Committee in its sole  discretion;  provided  that,
except in the case of  Substitute  Awards or in  connection  with an  adjustment
provided for in Section  4(e),  such  purchase  price shall not be less than the
Fair Market Value of the Share on the date of the grant of the Option.

    (b) OPTION PERIOD.   The term of each Option shall be fixed by the Committee
in its sole discretion;  provided that no Option shall be exercisable  after the
expiration of ten years from the date the Option is granted.

    (c) EXERCISABILITY.   Options shall be exercisable at  such time or times as
determined by the Committee at or subsequent to grant.

    (d) METHOD OF EXERCISE.   Subject to the other  provisions  of the Plan, any
Option may be exercised by the  Participant  in whole or in part at such time or
times,  and the Participant may make payment of the option price in such form or
forms,  including,  without  limitation,  payment by delivery of cash, Shares or
other  consideration  (including,  where  permitted  by law and  the  Committee,
Awards)  having a Fair  Market  Value on the  exercise  date  equal to the total
option price, or by any combination of cash,  Shares and other  consideration as
the Committee may specify in the applicable Award Agreement.

<PAGE>

    (e) INCENTIVE STOCK OPTIONS.   In  accordance  with  rules   and  procedures
established  by the Committee,  and except as otherwise  provided in Section 11,
the  aggregate  Fair Market  Value  (determined  as of the time of grant) of the
Shares with respect to which  Incentive  Stock  Options held by any  Participant
which are exercisable for the first time by such Participant during any calendar
year under the Plan (and  under any other  benefit  plans of the  Company or any
Subsidiary) shall not exceed $100,000 or, if different,  the maximum  limitation
in effect at the time of grant under  Section 422 of the Code,  or any successor
provision,  and any regulations promulgated thereunder.  Incentive Stock Options
shall be granted  only to  participants  who are  employees  of the Company or a
Subsidiary  of the Company.  The terms of any  Incentive  Stock  Option  granted
hereunder shall comply in all respects with the provisions of Section 422 of the
Code, or any successor provision,  and any regulations  promulgated  thereunder.
The aggregate number of Shares with respect to which Incentive Stock Options may
be granted under the Plan shall not exceed (i) seventy-five  (75) million in the
case of AT&T  Shares,  and (ii) 50.00% of the  aggregate  number of all Wireless
Group Shares  available for Awards under the Plan in the case of Wireless  Group
Shares.

    (f) FORM OF SETTLEMENT.   In its sole discretion, the Committee may provide,
at the time of grant,  that the Shares to be issued  upon an  Option's  exercise
shall be in the form of  Restricted  Stock or other similar  securities,  or may
reserve the right so to provide after the time of grant.

    SECTION 7.  STOCK  APPRECIATION  RIGHTS.  Stock  Appreciation  Rights may be
granted  hereunder to  Participants  either alone or in addition to other Awards
granted  under the Plan and may,  but need  not,  relate  to a  specific  Option
granted under Section 6. The provisions of Stock Appreciation Rights need not be
the same with respect to each recipient. Any Stock Appreciation Right related to
a  Nonstatutory  Stock  Option may be  granted  at the same time such  Option is
granted or at any time thereafter  before exercise or expiration of such Option.
Any Stock  Appreciation  Right  related to an  Incentive  Stock  Option  must be
granted  at the same  time  such  Option  is  granted.  In the case of any Stock
Appreciation  Right  related  to any  Option,  the Stock  Appreciation  Right or
applicable portion thereof shall terminate and no longer be exercisable upon the
termination or exercise of the related Option,  except that a Stock Appreciation
Right  granted with respect to less than the full number of Shares  covered by a
related  Option shall not be reduced  until the exercise or  termination  of the
related   Option  exceeds  the  number  of  Shares  not  covered  by  the  Stock
Appreciation  Right. Any Option related to any Stock Appreciation Right shall no
longer be  exercisable  to the extent the related Stock  Appreciation  Right has
been exercised.  The Committee may impose such conditions or restrictions on the
exercise of any Stock Appreciation Right as it shall deem appropriate,  provided
that no Stock  Appreciation Right shall have a term that is longer than ten (10)
years.

    SECTION 8.  RESTRICTED STOCK.

    (a) ISSUANCE.    A Restricted  Stock Award shall be subject to  restrictions
imposed by the Committee during a period of time specified by the Committee (the
"Restriction  Period").  Restricted  Stock  Awards  may be issued  hereunder  to
Participants, for no cash consideration or for such minimum consideration as may
be required  by  applicable  law,  either  alone or in addition to other  Awards
granted under the Plan.  The  provisions of Restricted  Stock Awards need not be
the same with respect to each recipient.

<PAGE>

    (b) REGISTRATION.  Any Restricted Stock issued hereunder may be evidenced in
such manner as the  Committee  in its sole  discretion  shall deem  appropriate,
including,  without limitation,  book-entry  registration or issuance of a stock
certificate  or  certificates.  In the event any stock  certificate is issued in
respect of shares of Restricted  Stock awarded under the Plan, such  certificate
shall  be  registered  in the  name  of  the  Participant,  and  shall  bear  an
appropriate  legend  referring  to  the  terms,  conditions,   and  restrictions
applicable to such Award.

    (c) FORFEITURE.  Except as otherwise determined by the Committee at the time
of grant or thereafter, upon termination of employment for any reason during the
restriction  period, all Shares of Restricted Stock still subject to restriction
shall  be  forfeited  by  the   Participant   and  reacquired  by  the  Company.
Unrestricted  Shares,  evidenced  in such  manner as the  Committee  shall  deem
appropriate,  shall be  issued  to the  grantee  promptly  after  the  period of
forfeiture, as determined or modified by the Committee, shall expire.

    (d) MINIMUM VESTING CONDITION.  The minimum Restriction Period applicable to
any  Restricted  Stock  Award  that is not  subject  to  performance  conditions
restricting transfer shall be three (3) years from the date of grant;  provided,
however,  that a Restriction Period of less than three (3) years may be approved
under the Plan for such  Awards with  respect to (i) up to twelve  (12)  million
AT&T Shares, and (ii) up to 0.50% of the Outstanding Wireless Group Shares.

    SECTION 9. PERFORMANCE AWARDS. Performance Awards may be issued hereunder to
Participants, for no cash consideration or for such minimum consideration as may
be required  by  applicable  law,  either  alone or in addition to other  Awards
granted  under the Plan.  The  performance  criteria to be  achieved  during any
Performance  Period and the length of the Performance Period shall be determined
by the Committee upon the grant of each Performance Award. Except as provided in
Section 11,  Performance  Awards will be  distributed  only after the end of the
relevant  Performance  Period.  Performance  Awards may be paid in cash, Shares,
other  property  or any  combination  thereof,  in the  sole  discretion  of the
Committee at the time of payment. The performance levels to be achieved for each
Performance  Period  and the  amount  of the  Award to be  distributed  shall be
conclusively  determined by the Committee.  Performance  Awards may be paid in a
lump sum or in installments following the close of the Performance Period or, in
accordance with procedures established by the Committee, on a deferred basis.

    SECTION 10.  OTHER STOCK UNIT AWARDS.

    (a) STOCK AND  ADMINISTRATION.  Other Awards of Shares and other Awards that
are  valued  in whole or in part by  reference  to, or are  otherwise  based on,
Shares or other property ("Other Stock Unit Awards") may be granted hereunder to
Participants,  either  alone or in addition to other  Awards  granted  under the
Plan.  Other Stock Unit Awards may be paid in Shares,  cash or any other form of
property as the  Committee  shall  determine.  Subject to the  provisions of the
Plan,  the  Committee  shall have sole and complete  authority to determine  the
Employees of the Company and its Affiliates and  Non-Employee  Directors to whom
and the time or times at which such Awards  shall be made,  the number of Shares
to be granted  pursuant to such Awards,  and all other conditions of the Awards.
The  provisions  of Other Stock Unit Awards need not be the same with respect to
each recipient.

<PAGE>

    (b) TERMS AND  CONDITIONS.  Subject to the  provisions  of this Plan and any
applicable Award Agreement,  Awards and Shares subject to Awards made under this
Section  10,  may not be  sold,  assigned,  transferred,  pledged  or  otherwise
encumbered  prior to the date on which the Shares are issued,  or, if later, the
date on which any applicable restriction, performance or deferral period lapses.
For any Award or Shares  subject to any Award  made  under  this  Section 10 the
transferability  of which  is  conditioned  only on the  passage  of time,  such
restriction  period  shall be a minimum  of three (3) years.  Shares  (including
securities convertible into Shares) subject to Awards granted under this Section
10 may be issued for no cash consideration or for such minimum  consideration as
may be required by applicable law. Shares (including securities convertible into
Shares)  purchased  pursuant to a purchase  right  awarded under this Section 10
shall be purchased for such  consideration  as the  Committee  shall in its sole
discretion determine,  which, except in the case of Substitute Awards, shall not
be less than the Fair Market Value of such Shares or other  securities as of the
date such purchase right is awarded.

    SECTION 11.  CHANGE IN CONTROL PROVISIONS.

    (a) IMPACT OF EVENT.  Notwithstanding any other provision of the Plan to the
contrary,  unless the Committee shall  determine  otherwise at the time of grant
with respect to a particular Award, in the event of a Change in Control:

        (i)  any Options and Stock  Appreciation  Rights  outstanding  as of the
date such Change in Control is  determined to have  occurred,  and which are not
then  exercisable and vested,  shall become fully  exercisable and vested to the
full extent of the original grant;

        (ii)   the  restrictions  and  deferral  limitations  applicable  to any
Restricted Stock shall lapse, and such Restricted Stock shall become free of all
restrictions  and  limitations  and become fully vested and  transferable to the
full extent of the original grant;

        (iii)  all  Performance  Awards  shall be  considered  to be earned  and
payable in full,  and any  deferral  or other  restriction  shall lapse and such
Performance Awards shall be immediately settled or distributed; and

        (iv)  The  restrictions  and deferral  limitations and other  conditions
applicable  to any Other Stock Unit Awards or any other Awards shall lapse,  and
such  Other  Stock Unit  Awards or such other  Awards  hall  become  free of all
restrictions, limitations or conditions and become fully vested and transferable
to the full extent of the original grant.

    (b) CHANGE IN CONTROL CASH-OUT.  Notwithstanding  any other provision of the
Plan, during the 60-day period from and after a Change in Control (the "Exercise
Period"), if the Committee shall determine at, or at any time after, the time of
grant, a Participant  holding an Option or Stock  Appreciation  Right shall have
the  right,  whether  or not the  Option  or Stock  Appreciation  Right is fully
exercisable  and in lieu of the  payment  of the  purchase  price for the Shares
being  purchased  under  the  Option or Stock  Appreciation  Right and by giving
notice to the Company, to elect (within the Exercise Period) to surrender all or
part of the Option or Stock  Appreciation  Right to the  Company  and to receive
cash,  within 30 days of such notice,  in an amount equal to the amount by which
the Change in Control Price per Share on the date of such election  shall exceed
the purchase price per Share under the Option or Stock  Appreciation  Right (the

<PAGE>

"Spread")  multiplied by the number of Shares  granted under the Option or Stock
Appreciation  right as to which the right granted under this Section 11(b) shall
have been exercised.

    (c) Notwithstanding  any other provision  of this Plan, if any right granted
pursuant to this Plan would make a Change in Control transaction  ineligible for
pooling-of-interests  accounting  under APB No. 16, that (after giving effect to
any other  actions  taken to cause  such  transaction  to be  eligible  for such
pooling-of-interests  accounting  treatment)  but for the  nature of such  right
would otherwise be eligible for such accounting  treatment,  the Committee shall
have the  ability to  substitute  for the cash  payable  pursuant  to such right
Shares  with a Fair  Market  Value  equal to the cash that  would  otherwise  be
payable pursuant thereto.

    SECTION 12.  CODE SECTION 162(m) PROVISIONS.

    (a) Notwithstanding  any  other  provision  of this Plan,  if the  Committee
determines at the time Restricted  Stock, a Performance  Award or an Other Stock
Unit Award is granted to a Participant who is then a Senior Manager or an E band
employee that such  Participant  is, or is likely to be as of the end of the tax
year in which the Company would claim a tax  deduction in  connection  with such
Award, a Covered  Employee,  then the Committee may provide that this Section 12
is applicable to such Award.

    (b) If an  Award  is  subject  to this  Section  12,  then  the  lapsing  of
restrictions  thereon and the  distribution  of cash,  Shares or other  property
pursuant thereto,  as applicable,  shall be subject to the achievement of one or
more objective  performance goals  established by the Committee,  which shall be
based on the  attainment of specified  levels of one or any  combination  of the
following:  net cash provided by operating  activities,  earnings per share from
continuing  operations,  operating  income,  revenues,  gross margin,  return on
operating  assets,   return  on  equity,   economic  value  added,  stock  price
appreciation,  total stockholder  return, or cost control, of the Company or the
Affiliate  or division of the Company  for or within  which the  Participant  is
primarily  employed.   Such  performance  goals  also  may  be  based  upon  the
achievement  of  specified  levels of Company  performance  (or  performance  of
applicable  Affiliate  or  division  of the  Company)  under  one or more of the
measures described above relative to the performance of other corporations. Such
performance  goals  shall  be  set by  the  Committee  within  the  time  period
prescribed  by, and shall  otherwise  comply with the  requirements  of, Section
162(m) of the Code,  or any successor  provision  thereto,  and the  regulations
thereunder.

    (c) Notwithstanding  any provision of this Plan other than  Section 11, with
respect  to any Award  that is subject to this  Section  12, the  Committee  may
adjust  downwards,  but not upwards,  the amount payable pursuant to such Award,
and the Committee may not waive the  achievement of the  applicable  performance
goals except in the case of the death or disability of the Participant.

    (d) The Committee shall have the power to impose such other  restrictions on
Awards  subject to this Section 12 as it may deem  necessary or  appropriate  to
ensure  that  such  Awards  satisfy  all  requirements  for   "performance-based
compensation"  within the meaning of Section  162(m) (4) (C) of the Code, or any
successor provision thereto.

    (e) Notwithstanding  any  provision of  this Plan other than  Section  4(e),
commencing with calendar year 1999, no Participant may be granted Options and/or

<PAGE>

SARs in any  calendar  year  period  with  respect  to more than  three  million
(3,000,000) AT&T Shares, or more than three million  (3,000,000)  Wireless Group
Shares and the maximum  dollar value payable with respect to  Performance  Units
and/or Other Stock Unit Awards that are valued with  reference to property other
than  Shares  and  granted  to any  Participant  in any  one  calendar  year  is
$10,000,000.

    SECTION 13. AMENDMENTS AND TERMINATION. The Board may amend, alter, suspend,
discontinue or terminate the Plan or any portion  thereof at any time;  provided
that no such amendment, alteration,  suspension,  discontinuation or termination
shall be made without (i) shareholder  approval if such approval is necessary to
qualify for or comply with any tax or regulatory  requirement  for which or with
which the Board deems it necessary or desirable to qualify or comply or (ii) the
consent of the affected  Participant,  if such action would impair the rights of
such Participant under any outstanding  Award.  Notwithstanding  anything to the
contrary  herein,  the  Committee  may amend  the Plan in such  manner as may be
necessary so as to have the Plan conform to local rules and  regulations  in any
jurisdiction outside the United States.

    The  Committee  may  amend  the  terms  of any  Award  theretofore  granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any  Participant  without his or her consent.  Notwithstanding  any provision of
this  plan,  the  Committee  may not amend the terms of any Option to reduce the
option price nor may the Committee,  without prior shareholder approval,  cancel
any  outstanding  Option and  replace it with a new Option  with a lower  option
price,  where the economic effect would be the same as reducing the option price
of the canceled Option.

    SECTION 14.  GENERAL PROVISIONS.

    (a) Unless  the  Committee  determines  otherwise  at the time  the Award is
granted or thereafter:  (i) no Award,  and no Shares subject to Awards described
in  Section  10 which  have  not  been  issued  or as to  which  any  applicable
restriction,  performance  or  deferral  period  has not  lapsed,  may be  sold,
assigned, transferred, pledged or otherwise encumbered, except by will or by the
laws of  descent  and  distribution;  provided  that,  if so  determined  by the
Committee,  a  Participant  may,  in the manner  established  by the  Committee,
designate a beneficiary to exercise the rights of the  Participant  with respect
to any Award upon the death of the  Participant;  and (ii) each  Award  shall be
exercisable,  during the Participant's  lifetime, only by the Participant or, if
permissible  under  applicable  law,  by the  Participant's  guardian  or  legal
representative.

    (b) The term of each Award  shall be for such period of months or years from
the date of its grant as may be determined by the Committee; provided that in no
event shall the term of any Stock Option or any Stock  Appreciation Right exceed
a period of ten (10) years from the date of its grant.

    (c) No Employee or Participant  shall have any claim to be granted any Award
under  the Plan and  there is no  obligation  for  uniformity  of  treatment  of
Employees or Participants under the Plan.

    (d) The  prospective  recipient of any Award under the Plan shall not,  with
respect to such Award,  be deemed to have become a  Participant,  or to have any
rights with respect to such Award,  until and unless such  recipient  shall have
executed an agreement or other  instrument  evidencing the Award and delivered a

<PAGE>

copy thereof to the Company,  and otherwise  complied  with the then  applicable
terms and conditions.

    (e) Except as provided in Section 12, the  Committee  shall be authorized to
make adjustments in performance award criteria or in the terms and conditions of
other Awards in  recognition  of unusual or  nonrecurring  events  affecting the
Company or its financial  statements or changes in applicable laws,  regulations
or  accounting  principles.  The  Committee  may correct any defect,  supply any
omission or reconcile any  inconsistency  in the Plan or any Award in the manner
and to the extent it shall deem desirable to carry it into effect.  In the event
the Company shall assume  outstanding  employee  benefit  awards or the right or
obligation to make future such awards in connection  with the  acquisition of or
combination with another  corporation or business entity,  the Committee may, in
its discretion,  make such  adjustments in the terms of Awards under the Plan as
it shall deem appropriate.

    (f) The Committee shall have full power and authority to determine  whether,
to what  extent and under what  circumstances  any Award  shall be  canceled  or
suspended.  In addition,  all  outstanding  Awards to any  Participant  shall be
canceled if the Participant,  without the consent of the Company, while employed
by  the  Company  or  after  termination  of  such  employment,   establishes  a
relationship with a competitor of the Company or engages in activity which is in
conflict with or adverse to the interest of the Company, as determined under the
AT&T Non-Competition Guideline.

    (g) All  certificates  for Shares  delivered  under the Plan pursuant to any
Award shall be subject to such  stock-transfer  orders and other restrictions as
the  Committee  may deem  advisable  under  the  rules,  regulations,  and other
requirements of the Securities and Exchange Commission,  any stock exchange upon
which the Shares are then listed, and any applicable Federal or state securities
law,  and the  Committee  may  cause a legend or  legends  to be put on any such
certificates to make appropriate reference to such restrictions.

    (h) No  Award  granted  hereunder  shall  be  construed  as an offer to sell
securities of the Company,  and no such offer shall be  outstanding,  unless and
until the Committee in its sole  discretion has determined  that any such offer,
if made,  would be in compliance  with all applicable  requirements  of the U.S.
federal  securities laws and any other laws to which such offer, if made,  would
be subject.

     (i) The Committee shall be authorized to establish  procedures  pursuant to
which the payment of any Award may be deferred. Subject to the provisions of the
Plan and any Award  Agreement,  the  recipient of an Award  (including,  without
limitation,  any deferred  Award) may, if so  determined  by the  Committee,  be
entitled to receive,  currently or on a deferred basis, cash dividends,  or cash
payments  in  amounts   equivalent  to  cash  dividends  on  Shares   ("dividend
equivalents"),  with  respect to the number of Shares  covered by the Award,  as
determined  by the  Committee,  in its sole  discretion,  and the  Committee may
provide  that such amounts (if any) shall be deemed to have been  reinvested  in
additional Shares or otherwise reinvested.

    (j) Except as otherwise required in any applicable Award Agreement or by the
terms of the Plan,  recipients of Awards under the Plan shall not be required to
make any payment or provide consideration other than the rendering of services.

<PAGE>

    (k) The Committee may delegate to one or more Senior Managers or a committee
of Senior  Managers the right to grant Awards to Employees  who are not officers
or directors of the Company and to cancel or suspend Awards to Employees who are
not officers or directors of the Company.

    (l) The Company  shall be  authorized  to withhold from any Award granted or
payment due under the Plan the amount of withholding  taxes due in respect of an
Award or payment  hereunder and to take such other action as may be necessary in
the opinion of the Company to satisfy  all  obligations  for the payment of such
taxes. The Committee shall be authorized to establish procedures for election by
Participants  to  satisfy  such  obligations  for the  payment  of such taxes by
delivery of or transfer of Shares to the Company, or by directing the Company to
retain Shares otherwise deliverable in connection with the Award.

    (m) Nothing  contained  in this Plan shall  prevent the Board from  adopting
other or additional compensation  arrangements,  subject to shareholder approval
if such  approval is required;  and such  arrangements  may be either  generally
applicable or applicable only in specific cases.

    (n) The  validity,  construction,  and  effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the laws
of the State of New York and applicable Federal law.

    (o) If any  provision  of this  Plan is or  becomes  or is  deemed  invalid,
illegal or  unenforceable in any  jurisdiction,  or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision shall
be construed or deemed amended to conform to applicable  laws or if it cannot be
construed or deemed  amended  without,  in the  determination  of the Committee,
materially  altering  the  intent  of the  Plan,  it shall be  stricken  and the
remainder of the Plan shall remain in full force and effect.

    (p) Awards  may be granted to  Participants  who are  foreign  nationals  or
employed  outside  the United  States,  or both,  on such  terms and  conditions
different  from those  applicable to Awards to Employees  employed in the United
States as may, in the  judgment of the  Committee,  be necessary or desirable in
order to recognize  differences  in local law or tax policy.  The Committee also
may impose  conditions on the exercise or vesting of Awards in order to minimize
the  Company's  obligation  with respect to tax  equalization  for  Employees on
assignments outside their home country.

    SECTION 15.  EFFECTIVE DATE OF PLAN.  The  Plan  shall  be effective  as  of
June 1, 1997.

    SECTION 16.  TERM OF PLAN.    No  Award  shall  be granted pursuant  to  the
Plan  after May 31, 2004,  but any Award  theretofore granted  may extend beyond
that date.