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                                                          EXHIBIT 10(ab)
                                                          Form 10-k for 1995
                                                          File 1-11237


                             FIRST AMENDMENT TO THE
                            AT&T CAPITAL CORPORATION
                         COMPENSATION LIMIT EXCESS PLAN

               WHEREAS, AT&T Capital Corporation (the "Company") adopted the
AT&T Capital Corporation Compensation Limit Excess Plan (the "Plan"), effective
as of January 1, 1995;

               WHEREAS, Section 11 of the Plan provides that the Compensation
Committee of the Board (the "Committee") may amend the Plan at any time and from
time to time; and

               WHEREAS, the Committee has approved this amendment to the Plan;

               NOW, THEREFORE, the Plan is hereby amended in the following
               respects, effective as of October 2, 1995;

               1.   Section 5 of the Plan is amended by adding the following new
paragraph (e):

               "(e) Notwithstanding anything to the contrary in this Section 5,
upon a Change in Control (as defined below) a Participant shall have a fully
vested interest in the Matching Contributions (and related Interest) and Excess
UPAs credited to his or her Account. For purposes of this paragraph (e), the
following terms shall be defined as follows:

        "AT&T Capital" means AT&T Capital Corporation and its successors and
assigns.

        "Change in Control" means any of the following events:

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        (1) An acquisition (other than in a "non-control transaction", as
defined in clause (3) below) of any Voting Securities by any "person" or "group"
of persons (as such terms are used in Sections 13 and 14 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), other than AT&T Capital,
any Subsidiary or any employee benefit plan (or a trust forming a part thereof)
maintained by AT&T Capital or any Subsidiary, as a result of which such person
or group becomes, directly or indirectly, the "beneficial owner" (as such term
is used in Section 13 of the Exchange Act) of Voting Securities representing
fifteen percent (15%) or more of the combined voting power of all Voting
Securities then outstanding; provided that no such acquisition shall be deemed
to give rise to a Change in Control so long as, after giving effect to such
acquisition, AT&T Corp. remains the beneficial owner of Voting Securities
representing a greater percentage of the combined voting power of all Voting
Securities then outstanding than is represented by the Voting Securities
beneficially owned by such person or group; provided, however, that an
acquisition of Voting Securities directly from AT&T Capital or any Subsidiary
shall not be deemed to give rise to a Change in Control if, immediately prior to
such acquisition, no person or group is directly or indirectly in "control" of
AT&T Capital (as such term is defined in Rule 405 under the Securities Act of
1933, as amended);

        (2) The individuals who, as of January 1, 1995, are members of the Board
of Directors of AT&T Capital (the "Incumbent Board"), cease for any reason to
constitute at least two-thirds of the Board of the Directors of AT&T Capital;
provided, however, that if the election or nomination for election by AT&T
Capital's stockholders, of any new director was approved by a vote of at least
two-thirds of the Incumbent Board, such new director shall, for the purposes of
this definition, be considered a member of the Incumbent Board; provided,
further, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "election contest" (as described in Rule 14a-11
under the Exchange Act) or other actual or threatened solicitation of proxies or

                                      -2-

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consents by or on behalf of any person or group other than the Board of the
Directors of AT&T Capital (a "proxy contest"), including by reason of any
agreement intended to avoid or settle any election contest or proxy contest;

        (3)    The consummation of:

               (i) a merger, consolidation or reorganization involving AT&T
        Capital, unless (A) the stockholders of AT&T Capital, immediately before
        such merger, consolidation or reorganization, own, directly or
        indirectly, immediately following such merger, consolidation or
        reorganization, at least sixty percent (60%) of the combined voting
        power of the outstanding voting securities of the corporation surviving
        such merger, consolidation or reorganization (the "surviving
        corporation") in substantially the same proportion as their ownership of
        the Voting Securities of AT&T Capital immediately prior to such merger,
        consolidation or reorganization, (B) the individuals who were members of
        the Incumbent Board immediately prior to the execution of the agreement
        providing for such merger, consolidation or reorganization constitute at
        least two-thirds of the members of the board of directors of the
        surviving corporation and (C) no person (other than AT&T Capital, any
        Subsidiary, any employee benefit plan (or any trust forming a part
        thereof) maintained by AT&T Capital, the surviving corporation or any
        Subsidiary, or any person who, immediately prior to such merger,
        consolidation or reorganization had beneficial ownership of fifteen
        percent (15%) or more of the then outstanding Voting Securities of AT&T
        Capital) has beneficial ownership of fifteen percent (15%) or more of
        the combined voting power of the surviving corporation's then
        outstanding voting securities (a transaction meeting the criteria set
        forth in the foregoing clauses (A) through (C) being sometimes referred
        to herein as a "non-control transaction");

               (ii)  a complete liquidation or dissolution of AT&T Capital; or

                                      -3-

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            (iii) an agreement for the sale or other disposition of all or
        substantially all of the assets of AT&T Capital to any person (other
        than a transfer to a Subsidiary).

Notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred solely because any person or group becomes the beneficial owner of more
than the permitted amount of the outstanding Voting Securities of AT&T Capital
as a result of an acquisition of Voting Securities by AT&T Capital which, by
reducing the number of Voting Securities outstanding, increases the proportional
number of Voting Securities owned by such person or group; provided, that if (i)
a Change in Control would have been deemed to have occurred but for the
operation of this sentence as a result of such acquisition of Voting Securities
by AT&T Capital and (ii) such person or group thereupon or thereafter becomes
the beneficial owner of any additional Voting Securities resulting in an
increase in the percentage of the then outstanding Voting Securities
beneficially owned by such person or group (and which percentage is in excess of
fifteen percent (15%)), then a Change in Control shall be deemed to have
occurred at the time of such acquisition of beneficial ownership of such
additional Voting Securities by such person or group.

"Subsidiary" means (i) any person that is directly or indirectly controlled by
AT&T Capital or (ii) any other person in which AT&T Capital has a significant
equity interest, as determined by the Committee.

"Voting Securities" means any shares of the capital stock or other securities of
AT&T Capital that are generally entitled to vote in elections for directors."

                                      -4-

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                    SEPARATION AGREEMENT AND GENERAL RELEASE


For purposes of this Separation Agreement and General Release, the "Company"
shall mean AT&T Capital Corporation, and its respective subsidiaries and
affiliated companies.

In consideration of the fact that I, __________________ (the "Member") have
voluntarily and of my own free will, elected to accept an enhanced payment (the
"Enhanced Payment") and the Company has agreed to pay me an Enhanced Payment, I
acknowledge and agree to the following:

1.      I understand that as of ___________ (the "Date of Termination") my
        employment with the Company will terminate.

2.      I have been advised by the Company that I am being terminated from the
        payroll pursuant to the terms of the AT&T Capital Corporation Leadership
        Severance Plan and that I am entitled to a severance payment, in
        addition to other post-employment benefits.

        I have also been told by the Company, and I understand, that I may
        elect, at my option, to receive an Enhanced Payment, but that my
        election to receive the Enhanced Payment is expressly conditioned upon
        my signing this Separation Agreement and General Release.

        The amount of the Enhanced Payment to be paid will be calculated by
        multiplying my Severance Payment by twenty percent (20%).

        I have elected to receive the Enhanced Payment in return for signing
        this Separation Agreement and General Release. I understand that the
        Enhanced Payment is being paid as consideration for my signing this
        Separation Agreement and General Release.

3.      I also understand that [, PURSUANT TO THE OLDER WORKERS BENEFIT
        PROTECTION ACT OF 1990,] I have the right and am encouraged to consult
        with an attorney before signing this Separation Agreement and General
        Release, I have [45] [21] days to consider the General Release before
        signing it, and I may revoke the General Release within seven calendar
        days after signing it. I acknowledge that the Company has informed me of
        my rights set forth in the immediately preceding sentence. For
        revocation to be effective, written notice must be received by the
        Company no later than the close of business on the seventh day after I
        sign this Separation Agreement and General Release. I understand that
        this revocation can be made by delivering the written notice 



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        of revocation to the AT&T Capital Corporation, Director of Human
        Resources, 44 Whippany Road, Morristown, New Jersey 07960.

4.      Subject to paragraph 5 below and in consideration of the Enhanced
        Payment provided for in this Separation Agreement and General Release,
        on behalf of myself, my heirs, executors, administrators, successors and
        assigns, I release and discharge the Company, its successors, assigns,
        subsidiaries, affiliates, directors, officers, representatives, agents
        and employees ("Releasees") from any and all debts, obligations, claims,
        including claims for attorney's fees and costs, charges, demands,
        judgments, actions and causes of action with respect to, or arising out
        of, my employment or termination of employment with the Company
        (collectively "Claims"). This includes, but is not limited to, Claims
        arising under federal, state, or local laws prohibiting age, color,
        race, gender, sexual preference/orientation, marital status, national
        origin, mental or physical disability, religious affiliation or veteran
        status or any other forms of discrimination including but not limited to
        Title VII of the Civil Rights Act of 1964, and the Age Discrimination in
        Employment Act, as amended, or Claims growing out of the Company's
        termination of its members. The Claims released also include all claims
        arising under the United States or any state constitutions; all claims
        arising under any Executive Order or derived from or based upon any
        federal regulations; all common law claims including claims for wrongful
        discharge, public policy claims, claims for breach of an express or
        implied contract, claims for breach of an implied covenant of good faith
        and fair dealing, whistleblower claims, claims for intentional
        infliction of emotional distress, negligent and/or intentional
        misrepresentation, defamation, and tortious interference with contract
        or prospective economic advantage; all claims for any compensation
        including back wages, front pay, fringe benefits, liquidated damages, or
        any other form of economic loss; and all claims for damages due to
        personal injury, including damages for mental anguish, emotional
        distress, pain and suffering, humiliation, and punitive damages. With
        respect to any charges that have been or may be filed concerning events
        or actions relating to my employment or the termination of my employment
        and which occurred on or before the date of this Agreement, I
        additionally waive and release any right I may have to recover in any
        lawsuit or proceeding brought by me, any administrative agency, or any
        other person on my behalf or which includes me in any class. I
        acknowledge that this Separation Agreement and General Release includes
        Claims that are both known and unknown,


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        anticipated and unanticipated. If I breach this paragraph, I understand
        that I will be liable for all expenses, including costs and reasonable
        attorney's fees, incurred by any Releasee in defending the lawsuit or
        charge of discrimination, regardless of the outcome. I agree to pay such
        expenses within thirty (30) calendar days of written demand. This
        paragraph is not intended to limit me from instituting legal action for
        the sole purpose of enforcing this Agreement.

        [I FURTHER AGREE THAT AS PART OF THE CONSIDERATION AND INDUCEMENT FOR
        THE EXECUTION OF THIS AGREEMENT, I SPECIFICALLY WAIVE THE PROVISIONS OF
        SECTION 1542 OF THE CALIFORNIA CIVIL CODE WHICH READS AS FOLLOWS:

                THE GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
                DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
                EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
                MATERIALLY AFFECTED SETTLEMENT WITH THE DEBTOR.

        NOTWITHSTANDING THE PROVISIONS OF SECTION 1542, AND FOR THE PURPOSE OF
        IMPLEMENTING A FULL AND COMPLETE RELEASE AND DISCHARGE OF THE COMPANY, I
        ACKNOWLEDGE THAT THIS SEPARATION AGREEMENT AND GENERAL RELEASE IS
        INTENDED TO INCLUDE, WITHOUT LIMITATION, MY CLAIMS WHICH ARE KNOWN,
        ANTICIPATED OR DISCLOSED AS WELL AS MY CLAIMS THAT ARE UNKNOWN,
        UNANTICIPATED AND UNDISCLOSED.]

5.      I understand that this Separation Agreement and General Release in no
        way affects any rights I may have for benefits under any applicable
        Company benefit plan.

6.      In accordance with my existing and continuing obligations to the
        Company, I have returned or will immediately return to the Company, on
        or before the Date of Termination, all Company property, including, but
        not limited to, notes, keys, card keys or security passes, Company
        identification cards, credit or phone cards, files, records, computer
        access codes, computer programs, instruction manuals, business plans,
        and other property relating to the business of the Company. I understand
        and agree that after the Date of Termination, I will no longer be
        authorized to incur any expenses, obligations or liabilities on behalf
        of the Company. I will submit any claims or vouchers for reimbursement
        of business expenses on or before the Date of Termination.

7.      I affirm my obligation to keep all proprietary or confidential Company
        information or work product

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        confidential and not to disclose it to any third party in the
        future. I understand that the term "proprietary Company information"
        includes, but is not necessarily limited to, information which is
        technical, marketing (including customer lists), business, financial
        pricing or other information which constitutes trade secret information
        or information not available to competitors of the Company, the use or
        disclosure of which might reasonably be construed to be contrary to the
        interest of the Company.

8.      I understand that the Company will pay to an outplacement services
        provider reasonable and documented fees for outplacement services
        rendered to me.

9.      The construction, interpretation and performance of this Separation
        Agreement and General Release shall be governed by the laws of the state
        in which I am working on the Date of Termination.

10.     I understand and agree that money damages are not a sufficient remedy
        for any actual or threatened breach of this Separation Agreement and
        General Release by me, and that, in addition to all other remedies, the
        Company will be entitled to specific performance and injunctive or other
        equitable relief as a remedy for any such breach.

11.     In the event that any one or more of the provisions contained in this
        Separation Agreement and General Release shall for any reason be held to
        be unenforceable in any respect under the law of any state or of the
        United States of America, such unenforceability shall not affect any
        other provision but, with respect only to that jurisdiction holding the
        provision to be unenforceable, this Separation Agreement and General
        Release shall then be construed as if such unenforceable provision or
        provisions had never been contained herein.

12.     This Separation Agreement and General Release contains the entire
        agreement between the Company and me and fully supersedes any and all
        prior agreements or understandings pertaining to the subject matter
        hereof. I represent and acknowledge that in executing this Separation
        Agreement and General Release I have not relied upon any representation
        or statement not set forth herein made by any of the Releasees or by any
        of the Releasee's agents, representatives or attorneys with regard to
        the subject matter hereof.


BY SIGNING THIS SEPARATION AGREEMENT AND GENERAL RELEASE, I STATE THAT; I HAVE
READ IT; I UNDERSTAND IT AND KNOW THAT I AM GIVING


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UP IMPORTANT RIGHTS; I AGREE WITH EVERYTHING IN IT; I AM AWARE OF MY RIGHT TO
CONSULT AN ATTORNEY BEFORE SIGNING IT; AND I HAVE SIGNED IT KNOWINGLY AND
VOLUNTARILY.


---------                                   --------------------------
Date:                                       Member Signature


                                            --------------------------
                                            Member Name Printed





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       SEPARATION AGREEMENT AND GENERAL RELEASE-OTHER ELIGIBLE TERMINATION


For purposes of this Separation Agreement and General Release, the "Company"
shall mean AT&T Capital Corporation, and its respective subsidiaries and
affiliated companies.

In consideration of the fact that I, __________________ (the "Member") have
voluntarily and of my own free will, elected to accept an enhanced payment (the
"Enhanced Payment") and the Company has agreed to pay me an Enhanced Payment, I
acknowledge and agree to the following:

1.      I understand that as of ___________ (the "Date of Termination") my
        employment with the Company will terminate.

2.      I have been advised by the Company that I am being terminated from the
        payroll pursuant to an "other eligible termination" under the terms of
        the AT&T Capital Corporation Leadership Severance Plan and that I am
        entitled to a severance payment (the "Severance Payment"), in addition
        to other post-employment benefits.

        I have also been told by the Company, and I understand, that I may
        elect, at my option, to receive an Enhanced Payment, but that my
        election to receive the Enhanced Payment is expressly conditioned upon
        my signing this Separation Agreement and General Release.

        The amount of the Enhanced Payment to be paid will be calculated by
        multiplying my Severance Payment by forty percent (40%).

        I have elected to receive the Enhanced Payment in return for signing
        this Separation Agreement and General Release. I understand that the
        Enhanced Payment is being paid as consideration for my signing this
        Separation Agreement and General Release.

3.      I also understand that [, PURSUANT TO THE OLDER WORKERS BENEFIT
        PROTECTION ACT OF 1990,] I have the right and am encouraged to consult
        with an attorney before signing this Separation Agreement and General
        Release, I have 21 days to consider the General Release before signing
        it, and I may revoke the General Release within seven calendar days
        after signing it. I acknowledge that the Company has informed me


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        of my rights set forth in the immediately preceding sentence. For
        revocation to be effective, written notice must be received by the
        Company no later than the close of business on the seventh day after I
        sign this Separation Agreement and General Release. I understand that
        this revocation can be made by delivering the written notice of
        revocation to the AT&T Capital Corporation, Director of Human Resources,
        44 Whippany Road, Morristown, New Jersey 07960.

4.      Subject to paragraph 5 below and in consideration of the Enhanced
        Payment provided for in this Separation Agreement and General Release,
        on behalf of myself, my heirs, executors, administrators, successors and
        assigns, I release and discharge the Company, its successors, assigns,
        subsidiaries, affiliates, directors, officers, representatives, agents
        and employees ("Releasees") from any and all debts, obligations, claims,
        including claims for attorney's fees and costs, charges, demands,
        judgments, actions and causes of action with respect to, or arising out
        of, my employment or termination of employment with the Company
        (collectively "Claims"). This includes, but is not limited to, Claims
        arising under federal, state, or local laws prohibiting age, color,
        race, gender, sexual preference/orientation, marital status, national
        origin, mental or physical disability, religious affiliation or veteran
        status or any other forms of discrimination including but not limited to
        Title VII of the Civil Rights Act of 1964, and the Age Discrimination in
        Employment Act, as amended, or Claims growing out of the Company's
        termination of its members. The Claims released also include all claims
        arising under the United States or any state constitutions; all claims
        arising under any Executive Order or derived from or based upon any
        federal regulations; all common law claims including claims for wrongful
        discharge, public policy claims, claims for breach of an express or
        implied contract, claims for breach of an implied covenant of good faith
        and fair dealing, whistleblower claims, claims for intentional
        infliction of emotional distress, negligent and/or intentional
        misrepresentation, defamation, and tortious interference with contract
        or prospective economic advantage; all claims for any compensation
        including back wages, front pay, fringe benefits, liquidated damages, or
        any other form of economic loss; and all claims for damages due to
        personal injury, including damages for mental anguish, emotional
        distress, 
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<PAGE>

        pain and suffering, humiliation, and punitive damages. With respect to
        any charges that have been or may be filed concerning events or actions
        relating to my employment or the termination of my employment and which
        occurred on or before the date of this Agreement, I additionally waive
        and release any right I may have to recover in any lawsuit or proceeding
        brought by me, any administrative agency, or any other person on my
        behalf or which includes me in any class. I acknowledge that this
        Separation Agreement and General Release includes Claims that are both
        known and unknown, anticipated and unanticipated. If I breach this
        paragraph, I understand that I will be liable for all expenses,
        including costs and reasonable attorney's fees, incurred by any Releasee
        in defending the lawsuit or charge of discrimination, regardless of the
        outcome. I agree to pay such expenses within thirty (30) calendar days
        of written demand. This paragraph is not intended to limit me from
        instituting legal action for the sole purpose of enforcing this
        Agreement.

        [I FURTHER AGREE THAT AS PART OF THE CONSIDERATION AND INDUCEMENT FOR
        THE EXECUTION OF THIS AGREEMENT, I SPECIFICALLY WAIVE THE PROVISIONS OF
        SECTION 1542 OF THE CALIFORNIA CIVIL CODE WHICH READS AS FOLLOWS:

                THE GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
                DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
                EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
                MATERIALLY AFFECTED SETTLEMENT WITH THE DEBTOR.

        NOTWITHSTANDING THE PROVISIONS OF SECTION 1542, AND FOR THE PURPOSE OF
        IMPLEMENTING A FULL AND COMPLETE RELEASE AND DISCHARGE OF THE COMPANY, I
        ACKNOWLEDGE THAT THIS SEPARATION AGREEMENT AND GENERAL RELEASE IS
        INTENDED TO INCLUDE, WITHOUT LIMITATION, MY CLAIMS WHICH ARE KNOWN,
        ANTICIPATED OR DISCLOSED AS WELL AS MY CLAIMS THAT ARE UNKNOWN,
        UNANTICIPATED AND UNDISCLOSED.]

5.      I understand that this Separation Agreement and General Release in no
        way affects any rights I may have for benefits under any applicable
        Company benefit plan.

6.      In accordance with my existing and continuing obligations to the
        Company, I have returned or will immediately return to the Company, on
        or before the Date of Termination, all


<PAGE>
<PAGE>

        Company property, including, but not limited to, notes, keys, card keys
        or security passes, Company identification cards, credit or phone cards,
        files, records, computer access codes, computer programs, instruction
        manuals, business plans, and other property relating to the business of
        the Company. I understand and agree that after the Date of Termination,
        I will no longer be authorized to incur any expenses, obligations or
        liabilities on behalf of the Company. I will submit any claims or
        vouchers for reimbursement of business expenses on or before the Date of
        Termination.

7.      I affirm my obligation to keep all proprietary or confidential Company
        information or work product confidential and not to disclose it to any
        third party in the future. I understand that the term "proprietary
        Company information" includes, but is not necessarily limited to,
        information which is technical, marketing (including customer lists),
        business, financial pricing or other information which constitutes trade
        secret information or information not available to competitors of the
        Company, the use or disclosure of which might reasonably be construed to
        be contrary to the interest of the Company.

8.      I understand that the Company will pay to an outplacement services
        provider reasonable and documented fees for outplacement services
        rendered to me.

9.      The construction, interpretation and performance of this Separation
        Agreement and General Release shall be governed by the laws of the state
        in which I am working on the Date of Termination.

10.     I understand and agree that money damages are not a sufficient remedy
        for any actual or threatened breach of this Separation Agreement and
        General Release by me, and that, in addition to all other remedies, the
        Company will be entitled to specific performance and injunctive or other
        equitable relief as a remedy for any such breach.

11.     In the event that any one or more of the provisions contained in this
        Separation Agreement and General Release shall for any reason be held to
        be unenforceable in any respect under the law of any state or of the
        United States of America, such unenforceability shall not affect any
        other provision but, with respect only to that jurisdiction 


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<PAGE>

        holding the provision to be unenforceable, this Separation Agreement and
        General Release shall then be construed as if such unenforceable
        provision or provisions had never been contained herein.

12.     This Separation Agreement and General Release contains the entire
        agreement between the Company and me and fully supersedes any and all
        prior agreements or understandings pertaining to the subject matter
        hereof. I represent and acknowledge that in executing this Separation
        Agreement and General Release I have not relied upon any representation
        or statement not set forth herein made by any of the Releasees or by any
        of the Releasee's agents, representatives or attorneys with regard to
        the subject matter hereof.


BY SIGNING THIS SEPARATION AGREEMENT AND GENERAL RELEASE, I STATE THAT; I HAVE
READ IT; I UNDERSTAND IT AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS; I AGREE
WITH EVERYTHING IN IT; I AM AWARE OF MY RIGHT TO CONSULT AN ATTORNEY BEFORE
SIGNING IT; AND I HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY.


---------                                   --------------------------
Date:                                       Member Signature



                                            --------------------------
                                            Member Name Printed