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                                                            EXHIBIT 10(iii)(a)35

January 31, 2001

Mr. Hossein Eslambolchi

Dear Hossein,

         In recognition of the role AT&T Corp. (the "Company") anticipates that
you will play as a Senior Manager, the Company agrees to make the equity grants
and awards ("Grants") described in Attachment A of this letter. These Grants are
in addition to the Special Stock Option Grant and the Special Restricted Stock
Unit Grant described in the Executive Term Sheet that you signed upon your
re-employment with AT&T effective January 8, 2001. The "Grants" described in
Attachment A shall be subject to the terms and conditions set forth in the
applicable Stock Option, Restricted Stock Unit and Performance Share Agreements
and the additional terms and conditions set forth below in this letter
("Agreement").

         Any payments resulting from such Grants shall be subject to applicable
payroll tax withholding and reporting. Such Grants are in addition to and not in
lieu of any qualified or non-qualified pension, savings, or other retirement
plan, program or compensation. Neither the Grants nor any payments resulting
from such Grants shall be included in the base for calculating benefits under
the employee benefit plans, programs or practices of the Company or its
affiliates.

         These Grants shall be contingent upon you signing this Agreement,
Attachment A to this Agreement and the appropriate Stock Option, Restricted
Stock Unit and Performance Share Agreements.

         This Agreement may not be amended or waived, unless the amendment or
waiver is in writing, signed by you and by AT&T's Executive Vice President -
Human Resources.

         It is understood and agreed that you will not talk about, write about
or otherwise publicize the terms or existence of this Agreement or any fact
concerning its execution or implementation unless required by law or to enforce
the terms of this Agreement. You may, however, discuss its contents with your
spouse, legal and/or financial counselor, provided that you advise them of your
obligations of confidentiality and that any disclosures made by any of them may
be treated by the Company as disclosures made by you for purposes of this
provision.

         THIS AGREEMENT IS NOT AN EMPLOYMENT CONTRACT AND SHOULD NOT BE
CONSTRUED OR INTERPRETED AS CONTAINING ANY GUARANTEE OF

                          AT&T Proprietary (Restricted)

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CONTINUED EMPLOYMENT. THE EMPLOYMENT RELATIONSHIP WITH THE COMPANY IS BY MUTUAL
CONSENT ("EMPLOYMENT-AT-WILL"). THIS MEANS THAT EMPLOYEES HAVE THE RIGHT TO
TERMINATE THEIR EMPLOYMENT AT ANY TIME AND FOR ANY REASON. LIKEWISE, THE COMPANY
RESERVES THE RIGHT TO DISCONTINUE YOUR EMPLOYMENT WITH OR WITHOUT CAUSE AT ANY
TIME AND FOR ANY REASON.

         The construction, interpretation and performance of this Agreement
shall be governed by the laws of the State of New Jersey, without regard to its
conflict of laws rule.

         Hossein, I am happy to present this Agreement to you. If you agree with
the terms and conditions detailed above, please sign both this Agreement and
Attachment A and return the executed originals to me.

                                                 Sincerely,

                                                 /s/ Mirian Graddick-Weir
                                                 -------------------------
                                                 Mirian Graddick-Weir
                                                 Executive Vice President

Attachment

/s/ Hossein Eslambolchi                          3/19/01
-------------------------------                  ----------------------------
Acknowledged and agreed to                       Date
Hossein Eslambolchi

                          AT&T Proprietary (Restricted)

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Hossein Eslambolchi - Special Equity Grant Term Sheet

-    AT&T Stock Option Grants
-    Three AT&T grants totaling 87,200 stock options:
-    16,500 @ $29.02
-    30,000 @ $38.27
-    40,700 @ $50.76
-    Grant date: 1/31/01
-    Vest 25% /Yr. over 4 years
-    Expire 1/31/2011

-    Wireless Stock Option Grant
-    Wireless grant
-    26,400 stock options @ current market price
-    Grant date:  1/31/01
-    25% vest after 6mos., 6.25%  / qtr. thereafter
-    Expire 1/31/2011

-    Retention Grants
-    Retention Grant based on approximately 1.33 X Base Salary;
-    17,300 AT&T stock options @ current price
     -    Grant date:  1/31/01
     -    Vest in 3 years
     -    Expire 1/31/2011
-    14,700 AT&T Restricted Stock Units
     -  Grant date:  1/31/01
     -  Vest in 3 years
-    Retention Grant consisting of 75,000 Wireless stock options @ current price
     -  Grant date:  1/31/01
     -  Vest 33.33%/Yr. over 3 years

-    Performance Shares
-    1998 - 2000 cycle - Make special cash payment equal to performance share
     payment.
-    1999 - 2001 and 2000 - 2002 cycles - grant seasoned Performance Shares
     equal to shares that were cancelled upon 12/3/00 termination of employment.

 /s/ Hossein Eslambolchi                         ___________________
-------------------------                               Date
Hossein Eslambolchi

                          AT&T Proprietary (Restricted)

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