ex10cc.htm


    Exhibit
10-cc

    


    


    


    AT&T
INC.

    


    CASH
DEFERRAL PLAN

    


    Adopted
November 19, 2004

    As
amended through November 20, 2008

    


    Article
1 - Statement of Purpose

    


    The
purpose of the Cash Deferral Plan (“Plan”) is to provide savings opportunities
to a select group of management employees of AT&T Inc. (“AT&T”) and its
Subsidiaries.

    


    


    Article
2 - Definitions

    


    For the
purpose of this Plan, the following words and phrases shall have the meanings
indicated, unless the context indicates otherwise:

    


    Annual Bonus.  The
award designated the “Annual Bonus” by AT&T (including but not limited to an
award that may be paid in more frequent installments than annually), together
with any individual discretionary award made in connection therewith, or
comparable awards, if any, determined by AT&T to be used in lieu of these
awards.

    


                  
Base
Compensation.  The following types of cash-based compensation
paid by an Employer (but not including payments made by a non-Employer, such as
state disability payments), before reduction due to any contribution pursuant to
this Plan or reduction pursuant to any deferral plan of an Employer, including
but not limited to a plan that includes a qualified cash or deferral arrangement
under Section 401(k) of the Code:

    


    
      	
              (a)  

            	
              base
      salary;

            


    

    


    (b)  lump sum payments in
lieu of a base salary increase;  and

    


    (c)
Annual Bonus.

    


    Payments
by an Employer under a disability plan made in lieu of any compensation
described  above, shall be deemed to be a part of the respective form
of compensation it replaces for purposes of this definition.  Base
Compensation does not include zone allowances or any other geographical
differential and shall not include payments made in lieu of unused vacation or
other paid days off, and such payments shall not be contributed to this
Plan.

    


    Determinations
by AT&T (the Committee with respect to Officer Level Employees) of the items
that make up Base Compensation shall be final.  The Committee may,
from time to time, add or subtract types of compensation to or from the
definition of  “Base Compensation” provided, however, any such
addition or subtraction shall  be effective only with respect to the
next period in which a Participant may make an election to establish a Cash
Deferral Account.  Base Compensation that was payable in a prior Plan
Year but paid in a later Plan Year shall not be used to determine Employee
Contributions in the later Plan Year.

    


    Business Day.  Any
day during regular business hours that AT&T is open for
business.

    


    Cash Deferral Account or Account The Account or
Accounts established annually by an election by a Participant to make Employee
Contributions to the Plan with each account relating to a Plan
Year.  For each Plan Year after 2008, there shall be a separate Cash
Deferral Account for Base Compensation (excluding Annual Bonus) and a separate
Cash Deferral Account for the Short Term Incentive Award and/or Annual
Bonus.  Earnings on each of Employee Contributions shall accrue to the
respective Cash Deferral Accounts where they are earned

    


    Change in
Control.  With respect to AT&T’s direct and indirect
ownership of an Employer, a “Change in the effective control of a Corporation,”
as defined in Treasury Regulation Section 1.409A-3(i)(5)(vi)(A)(1), regardless
of whether the Employer is a corporation or non corporate entity as permitted by
the regulation, and using “50 percent” in lieu of “30 percent” in such
regulation.  A Change in Control will not apply to AT&T
itself.

    


    Chief Executive
Officer.  The Chief Executive Officer of AT&T
Inc.

    


    Code.  References to
the Code shall be to provisions of the Internal Revenue Code of 1986, as
amended, including regulations promulgated thereunder and successor
provisions.  Similarly, references to regulations shall include
amendments and successor provisions.

    


    Committee.  The
Human Resources Committee of the Board of Directors of AT&T
Inc.

    


    Disability. Absence of an
Employee from work with an Employer under the relevant Employer's disability
plan.

    


    Eligible
Employee.  An Employee who:

    (a) is a
full or part time, salaried Employee of AT&T or an Employer in which
AT&T has a direct or indirect 100% ownership interest and who is on active
duty or Leave of Absence (but only while such Employee is deemed by the Employer
to be an Employee of such Employer);

    


    (b) is,
as determined by AT&T, a member of Employer's “select group of management or
highly compensated employees” within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, and regulations thereunder (“ERISA”),
which is deemed to include each Officer Level Employee; and

    


    (c) has
an employment status which has been approved by AT&T to be eligible to
participate in this Plan or is an Officer Level Employee.

    


    Notwithstanding
the foregoing, AT&T (the Committee with respect to Officer Level Employees)
may, from time to time, exclude any Employee or group of Employees from being
deemed an “Eligible Employee” under this Plan.

    


    In the
event a court or other governmental authority determines that an individual was
improperly excluded from the class of persons who would be permitted to make
Employee Contributions during a particular time for any reason, that individual
shall not be permitted to make such contributions for purposes of the Plan for
the period of time prior to such determination.

    


                  
Employee.  Any
person employed by an Employer and paid on an Employer’s payroll system,
excluding persons hired for a fixed maximum term and excluding persons who are
neither citizens nor permanent residents of the United States, all as determined
by AT&T. For
purposes of this Plan, a person on Leave of Absence who otherwise would be an
Employee shall be deemed to be an Employee.

    


    Employee
Contributions.  Amounts credited to a Cash Deferral Account
pursuant to Section 4.1 (Election to Make Contributions) of the
Plan

    


    Employer.  AT&T
Inc. or any of its Subsidiaries.

    


    Incentive Award.  A
cash award paid by an Employer (and not by a non-Employer, such as state
disability payments) under the Short Term Incentive Plan or any successor plan,
the 2006 Incentive Plan or any successor plan, or any other award that the
Committee specifically permits to be contributed to a Cash Deferral Account
under this Plan (regardless of the purpose of the award).

    


    Leave of
Absence.  Where a person is absent from employment with an
Employer on a leave of absence, military leave, sick leave, or Disability, where
the leave is given in order to prevent a break in the continuity of term of
employment, and permission for such leave is granted (and not revoked) in
conformity with the rules of the Employer that employs the individual, as
adopted from time to time, and the Employee is reasonably expected to return to
service.  Except as set forth below, the leave shall not exceed six
(6) months for purposes of this Plan, and the Employee shall Terminate
Employment upon termination of such leave if the Employee does not return to
work prior to or upon expiration  of such six (6) month period, unless
the individual retains a right to reemployment under law or by
contract.  A twenty-nine (29) month limitation shall apply in lieu of
such six (6) month limitation if the leave is due to the Employee being
"disabled" (within the meaning of Treasury Regulation
§1.409A-3(i)(4)).  A Leave of Absence shall not commence or shall be
deemed to cease under the Plan where the Employee has incurred a Termination of
Employment..

    


    Officer Level
Employee.  Any executive officer of AT&T, as that term is
used under the Securities Exchange Act of 1934, as amended, and any Employee
that is an “officer level” Employee for compensation purposes as shown on the
records of AT&T.

    


    Participant.  An
Employee or former Employee who participates in this Plan.

    


    Plan Interest
Rate.  An annual rate of interest equal to Moody’s
Long-Term

    Corporate
Bond Yield Average for the September preceding the calendar year during which
the interest rate will apply.   The Committee may choose another
method of calculating the Plan Interest Rate, but such other method may only
apply to Cash Deferral Units that Participants have not yet elected to
establish.

    


    Plan Year.  Each of
the following shall be a Plan year:  the period from January 1, 2005
through January 15, 2006; the period January 16, 2006 through December 31, 2006;
and, for all later Plan Years, it is defined as the period from January 1
through December 31.

    


        Retirement or
Retire.  Termination of Employment on or after the date the
Participant has attained one of the following combinations of age and Net
Credited Service:

    
      


      
        	
                 
      

              	
                Net Credited
      Service

              	
                     
      Age

              


      

      
        	
                 
      

              	
                10
      Years of more

              	
                65
      or older

              


      

      
        	
                 
      

              	
                20
      years or more

              	
                55
      or older

              


      

      
        	
                 
      

              	
                25
      years or more

              	
                50
      or older

              


      

      
        	
                 
      

              	
                30
      years or more

              	
                Any
      age

              


      

      
For
purposes of this Plan only, Net Credited Service shall be calculated in the same
manner as “Pension Eligibility Service” under the AT&T Pension Benefit Plan
– Nonbargained Program (“Pension Plan”), as the same existed on October1, 2008,
except that service with an Employer shall be counted as though the Employer
were a “Participating Company” under the Pension Plan and the Employee was a
participant in the Pension Plan.

    

    


    Short Term Incentive
Award.  A cash award paid by an Employer (and not by a
non-Employer, such as state disability payments) under the Short Term Incentive
Plan or any successor plan, together with any individual discretionary award
made in connection therewith; an award under a similar  plan intended
by the Committee to be in lieu of an award under such Short Term Incentive Plan,
including, but not limited to, Performance Units granted under the 2006
Incentive Plan or any successor plan   It shall also include any
other award that the Committee designates as a Short Term Incentive Award
specifically for purposes of this Plan (regardless of the purpose of the award)
provided the deferral election is made in accordance with Section
409A.

    


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

    


    Subsidiary.  Any
corporation, partnership, venture or other entity or business with which
AT&T would be considered a single employer under Sections 414(a) and (c) of
the Code, using 50% as the ownership threshold as provided under Section 409A of
the Code.

    


    Termination of Employment.
References herein to “Termination of Employment," “Terminate Employment” or a
similar reference, shall mean the event where the Employee has a “separation
from service,” as defined under Section 409A, with all Employers. For purposes
of this Plan, a Termination of Employment with respect to an Employer shall be
deemed to occur when such Employer incurs a Change in Control.

    


    


    Article
3 - Administration of the Plan

    


    3.1          The Committee.

    Except as
delegated by this Plan or by the Committee, the Committee shall be the
administrator of the Plan and will administer the Plan, interpret, construe and
apply its provisions and all questions of administration, interpretation and
application of the Plan, including, without limitation, questions and
determinations of eligibility  entitlement to benefits and payment of
benefits, all in its sole and absolute discretion.  The Committee may
further establish, adopt or revise such rules and regulations and such
additional terms and conditions regarding participation in the Plan as it may
deem necessary or advisable for the administration of the
Plan.  References in this Plan to determinations or other actions by
AT&T, herein, shall mean actions authorized by the Committee, the Chief
Executive Officer, the Senior Executive Vice President of AT&T in charge of
Human Resources, or their respective successors or duly authorized delegates, in
each case in the discretion of such person.  All decisions by the
Committee, its delegate or AT&T, as applicable, shall be final and
binding.

     

    3.2          Claims
Procedure.

    Subject to the authority of the
Committee over the Plan, AT&T shall appoint a Claims Board to adjudicate
claims brought by or in respect to Participants and their beneficiaries relating
to benefits under the Plan.  A Participant may apply in writing to the
Claims Board to make a claim under this Plan.  The Claims Board shall
provide written notice within 90 days to a Participant whose claim hereunder has
been denied, setting forth reasons for such denial or explaining that an
extension of the time for processing the claim is necessary, written in a manner
calculated to be understood by such person.  After receipt of such
notice, or expiration of 90 days without any response from the Claims Board, the
Participant may appeal the decision in writing to the Senior Executive Vice
President of AT&T in charge of Human Resources, or to the person’s
successor, within 90 days, except that if the Participant is an Insider, as that
term is used in the 2006 Incentive Plan, then the Participant's appeal shall be
to the Committee.  The Participant shall receive written notice within
60 days of the resolution of the appeal, and if denied, setting forth reasons
for the denial or explaining that an extension of time for processing the appeal
is necessary, written in a manner calculated to be understood by such
person.  If no notice of the decision on the Participant’s appeal is
furnished within the required time frame, the appeal will be deemed
denied.  The Participant shall receive a full and fair review of the
decision denying the claim in accordance with the requirements of
ERISA.

    


    All
interpretations, determinations and decisions of the Claims Board with respect
to any claim, including without limitation the appeal of any claim, shall be
made by the Claims Board, in its sole discretion, based on the Plan and
comments, documents, records, and other information presented to it, and shall
be final, conclusive and binding.

    


    The
claims procedures set forth in this section are intended to comply with United
States Department of Labor Regulation § 2560.503-1 and should be construed
in accordance with such regulation.  In no event shall it be
interpreted as expanding the rights of claimants beyond what is required by
United States Department of Labor Regulation § 2560.503-1.

    


    


    Article
4 - Contributions

    


    4.1           Election to Make
Contributions.

    (a) The
Committee shall establish dates and other conditions for participation in the
Plan and making contributions as it deems appropriate.  Except as
otherwise provided by the Committee, each year an Employee who is an Eligible
Employee as of September 30 may thereafter make an election on or prior to the
last Business Day of the immediately following November (such election shall be
cancelled if the Employee is not an Eligible Employee on the last day such an
election may be made) to contribute on a pre-tax basis, through payroll
deductions, any combination of the following:

    


    (1)  From
1% to 50% (in whole percentage increments) of the Participant’s monthly Base
Compensation, other than Annual Bonus, during the calendar year (the Plan Year
for such contributions) following the calendar year of such
election.  Employees who are below the level of Senior Manager, as
shown on the records of AT&T at the time of the election, may contribute no
more than 25% or such other amount as determined by AT&T.

    


    (2)  Up
to 95% (in whole percentage increments) of a Short Term Incentive Award, or up
to 50% (in whole percentage increments) of Annual Bonus (25% for Employees who
are below the level of Senior Manager), in each case such contributions shall be
made during the second calendar year (which is the Plan Year for such
contributions) following the year of such election, except that in 2008 a
separate election may be made with respect to contributions to be made in
2009.  An Employee may make such an election with respect to the type
of Award (Short Term Incentive Award or Annual Bonus) that the Employee is under
as of the time the Employee’s eligibility to make such election is
determined.  If because of a promotion or otherwise, the Employee
receives a different type of Award instead of or in partial or full replacement
for the type of Award subject to the Employee’s election for the relevant Plan
Year, the election will apply to the other Award as well, including but not
limited to any individual discretionary award related thereto.

    


    (b)  The
Committee may permit an Eligible Employee to make an election to make other
contributions under this Plan with compensation other than Base Compensation or
Short Term Incentive Awards on such terms and conditions as such Committee may
permit from time to time provided that any such election is made in accordance
with Section 409A of the Code.)

    


    (c)
Notwithstanding anything to the contrary in this Plan, no election shall be
effective to the extent it would permit an Employee Contribution or distribution
to be made that is not in compliance with Section 409A of the
Code.  To the extent such election related to Employee Contributions
that complied with such statute and regulations, thereunder, that portion of the
election shall remain valid, except as otherwise provided under this
Plan.

    


    (d)  To
the extent permitted by Section 409A of the Code, AT&T may refuse or
terminate, in whole or in part, any election to make contributions to the Plan
at any time; provided, however, only the Committee may take such action with
respect to persons who are Officer Level Employees.

    


    (e)  In
the event the Participant takes a hardship withdrawal pursuant to Treasury
Regulation §1.401(k)-1 from a benefit plan qualified under the Code and
sponsored by an Employer, any election to make Employee Contributions by such
Participant shall be cancelled on a prospective basis, and the Participant shall
not be permitted to make a new election with respect to Employee Contributions
that would be contributed during the then current and immediately following
calendar year.

    


    (f)  To
the extent a Participant makes contributions to the Plan where the payment of
which would be deductible by AT&T under Section 162(m) of the Code without
regard to the size of the distribution, such contributions and earnings thereon
shall be distributed first.

    


    (g) With
respect to a Plan Year, an Employee may elect to (1) make Employee Contributions
of Base Compensation other than Annual Bonus to this Plan but only if the
Employee elects to contribute at least 15% of Base Compensation other than
Annual Bonus for the same Plan Year to the Stock Purchase and Deferral Plan
and/or (2) make Employee Contributions of Annual Bonus to this Plan but only if
the Employee elects to contribute at least 15% of Annual Bonus for the same Plan
Year to the Stock Purchase and Deferral Plan.

    


    


    4.2           Contributions
to a Cash Deferral Account.

    (a)
Employee Contributions shall be made pursuant to a proper election, only during
the Participant’s lifetime; provided, however, with respect to Employee
Contribution elections made prior to 2007, the Employee must remain an Eligible
Employee while making any such contributions.   In the event of a
Change in Control of an Employer, subsequent compensation from the Employer may
not be contributed to the Plan.  The Employer may continue the then
current elections of the participants under a subsequent plan in order to comply
with applicable tax laws.

    


    (b)  A
Participant’s contributions shall be credited to the Participant’s Cash Deferral
Account on the day the compensation – from which the contribution is to be
deducted – is to be paid (“paid,” as used in this Plan, includes amounts
contributed to the Plan that would have been paid were it not for an election
under this Plan), as determined by the relevant
Employer.   Earnings on each Cash Deferral Account shall be
recorded on Participant’s statements quarterly.  The Committee may
modify or change this paragraph (b) from time to time.

    


    
      	
              4.3

            	
              Earnings
      on Cash Deferral Accounts.

            


    

    During a
calendar year, the Participant’s Cash Deferral Account shall accrue interest on
amounts held by such Account at the Plan Interest Rate for such year, compounded
quarterly on the last day of each quarter.  Interest will accrue on
unpaid amounts in the Cash Deferral Account from the date credited to such
Account.

    


    


    Article
5 - Distributions

    


    
      	
              5.1

            	
              Distributions of Cash Deferral
      Accounts.

            


    

    (a)  Initial
Election with Respect to a Cash Deferred Account.  At the time the
Participant makes an election to make Employee Contributions with respect to a
Cash Deferral Account, the Participant shall also elect the calendar year of the
distribution of the Cash Deferral Account and the number of
installments.   The Participant may elect either of the
following:

    


    (1)
Specified Date Distribution.  That the distribution of the Cash
Deferral Account commence in the calendar year specified by the Participant, but
no later than the 5th
calendar year after the Plan Year the Cash Deferral Account commenced, in up to
Ten (10) installments.  However, for purposes of Initial Elections
with respect to Plan Years prior to 2009 only, in the event the Participant
Terminates Employment prior to the calendar year of the distribution, the Cash
Deferral Account must commence distribution the calendar year following the
calendar year of the Termination of Employment, with the same number of
installments, unless the Employee has made an irrevocable election under (b),
below.  For example, if the Participant elected a 2010 distribution
with five (5) installments, but Terminated Employment in 2007, the Cash Deferral
Account would commence distribution in 2008.

    


    (2)  Retirement
Distribution.  That the distribution of the Cash Deferral Account
commence the calendar year following the calendar year of Retirement in up to
(10) installments.  If the Participant Terminates Employment while not
Retirement eligible, the distribution shall commence the calendar year following
the calendar year of Termination of Employment, but shall be limited to five (5)
installments.  This distribution alternative will not be available for
Initial Elections made after 2007.

    


    If no
timely distribution election is made by the Participant, then the Participant
will be deemed to have made an election to have the Cash Deferral Account
distributed in a single installment in the first calendar year after the
calendar year Employee Contributions were first made.

    


    (b)  If
an Employee elected a Specified Date Distribution for a Cash Deferral Account,
the Employee may elect a new Specified Date Distribution commencement date but
not a new number of installments; provided, however, Termination of Employment
will not accelerate the distribution, unlike the initial deferral
election.  Unless otherwise provided by the Committee, the election of
a new commencement date must be made on or after October 1, and on or before the
last Business Day of the next following December, of the calendar year that is
the second calendar year preceding the calendar year of the relevant
commencement date.   To make this election, the Participant must
be an Eligible Employee both on the September 30 immediately preceding such
election and on the last day such an election may be made.   For
example, an election to defer a scheduled distribution that would otherwise
commence in 2010 must be made during the period from October 1, 2008, through
the last business day of December 2008, and the Participant must be an Eligible
Employee both on September 30, 2008, and the last business day of December
2008.  The new distribution election must delay commencement of the
distribution by five (5) years.  An election to create a new Specified
Date Distribution and defer the commencement of the distribution of a Cash
Deferral Account may not be made in the same calendar year the election to
establish the Cash Deferral Account is made.  Notwithstanding anything
to the contrary in this Plan, (1) such election to create a new Specified Date
Distribution must be made at least 12 months prior to the date of the first
scheduled payment under the prior distribution election and (2) the election
shall not take effect until at least 12 months after the date on which the
election is made.

    


    (c)  A
Participant’s Cash Deferral Account shall be distributed to the Participant on
March 10 (or as soon thereafter as administratively practicable, as determined
by AT&T) of the calendar year elected by the Participant for the
Account.  In the event the distribution is to be made to a “Specified
Employee” as a result of the Participant’s Termination of Employment (other than
as a result of a Change in Control), the distribution shall not occur until the
later of such March 10 or six (6) months after the Termination of Employment,
except it shall be distributed upon the Participant’s earlier death in
accordance with this Plan.  The distributions shall continue annually
on each successive March 10 (or such other date as determined by AT&T) until
the number of installments elected by the Participant is reached.  In
each installment, AT&T shall distribute to the Participant that portion of
the Participant's Cash Deferral Account that is equal to the total dollar amount
of the Participant's Account divided by the number of remaining
installments.

    


    (d)  The
Committee may establish other distribution alternatives from time to time, but
such alternatives may be offered no earlier than the next period in which a
Participant may make an election to establish a Cash Deferral
Account.

    


    5.2          Death
of the Participant.

    In the
event of the death of a Participant, notwithstanding anything to the contrary in
this Plan, all undistributed Cash Deferral Accounts shall be distributed to the
Participant's beneficiary in accordance with the AT&T Rules for Employee
Beneficiary Designations, as the same may be amended from time to time, within
the later of 90 days following such determination or the end of the calendar
year in which determination was made.

    


    5.3           Unforeseeable Emergency
Distribution.

    If a
Participant experiences an “Unforeseeable Emergency,” the Participant may submit
a written petition to AT&T (the Committee in the case of Officer Level
Employees), to receive a partial or full distribution of his Cash Deferral
Account(s).  In the event that AT&T (the Committee in the case of
Officer Level Employees), upon review of the written petition of the
Participant, determines in its sole discretion that the Participant has suffered
an “Unforeseeable Emergency,” AT&T shall make a distribution to the
Participant from the Participant’s Cash Deferral Accounts , on a pro-rata basis,
within the later of 90 days following such determination or the end of the
calendar year in which determination was made, subject to the
following:

    


    (a)           “Unforeseeable
Emergency” shall mean a severe financial hardship to the Participant resulting
from an illness or accident of the Participant, the Participant’s legal spouse,
the Participant’s beneficiary, or the Participant’s dependent (as defined in
Code Section 152, without regard to Code Section 152(b)(1), (b)(2), and
(d)(1)(B)); loss of the Participant’s property due to casualty; or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant, all as determined in the sole discretion
of the Committee.  Whether a Participant is faced with an
Unforeseeable Emergency permitting a distribution is to be determined based on
the relevant facts and circumstances of each case, but, in any case, a
distribution on account of Unforeseeable Emergency shall not be made to the
extent that such emergency is or may be relieved through reimbursement or
compensation from insurance or otherwise, by liquidation of the Participant’s
assets, to the extent the liquidation of such assets would not cause severe
financial hardship, or by cessation of deferrals under the Plan.

    


    (b)           The
amount of a distribution to be made because of an Unforeseeable Emergency shall
not exceed the amount reasonably necessary, as determined by AT&T (the
Committee in the case of Officer Level Employees) in its sole discretion, to
satisfy the emergency need (which may include amounts necessary to pay any
Federal, state, local, or foreign income taxes or penalties reasonably
anticipated to result from the distribution).  Determinations of the
amount reasonably necessary to satisfy the emergency need shall take into
account any additional compensation that is available if the plan provides for
cancellation of a deferral election upon a payment due to an Unforeseeable
Emergency.  The determination of amounts reasonably necessary to
satisfy the Unforeseeable Emergency need is not required to, but may, take into
account any additional compensation that, due to the Unforeseeable Emergency, is
available under another nonqualified deferred compensation plan but has not
actually been paid, or that is available due to the Unforeseeable Emergency
under another plan that would provide for deferred compensation except due to
the application of the effective date provisions under Treasury Regulation §
1.409A-6.

    


    (c)           Upon
such distribution on account of an Unforeseeable Emergency under this Plan, any
election to make Employee Contributions by such Participant shall be immediately
cancelled, and the Participant shall not be permitted to make a new election
with respect to Employee Contributions that would be contributed during the then
current and immediately following calendar year.

    


    


    5.4           Ineligible
Participant.

    Notwithstanding
any other provisions of this Plan to the contrary, if AT&T receives an
opinion from counsel selected by AT&T, or a final determination is made by a
Federal, state or local government or agency, acting within its scope of
authority, to the effect that an individual's continued participation in the
Plan would violate applicable law, then such person shall not make further
contributions to the Plan to the extent permitted by Section 409A of the
Code.

    


    


    Article
6 - Transition Provisions

    


    6.1           2005 Cash Deferral
Accounts.

    Notwithstanding
Article 4 to the contrary, if an Employee is an Eligible Employee on September
30, 2004, the Employee may make an election under Article 4 on or prior to
December 15, 2004, with respect to the establishment of a Cash Deferral Account
for the contribution of Base Compensation and/or Incentive Awards that would
otherwise be paid during the period from January 1, 2005, through January 15,
2006, which shall be the Plan Year for such Cash Deferral Account.

    


    6.2           2007
Amendments.

    Amendments
made to the Plan on November 15, 2007, shall be effective January 1, 2008,
except for amendments to this Article 7, which shall be effective upon
adoption.    Any Participants electing prior to November 15,
2007, to make Employee Contributions in 2008 shall have their elections canceled
if they do not consent by December 14, 2007, to all prior amendments to this
Plan and to the Stock Purchase and Deferral Plan.  Subject to the
foregoing consent requirements, all Employee Contribution elections made prior
to 2008, including but not limited to elections to contribute cash with respect
to Performance Shares granted that would be distributed under the 2001 Incentive
Plan or a successor plan, shall remain in force, subject to all other terms of
the amended Plan.

    


    6.3           2008
Amendments.  For the 2008 Plan Year, only Salary and Short Term
Incentive Awards paid after Termination of Employment may be contributed to the
Plan.

     

    


    Article 7 - Discontinuation,
Termination, Amendment.

    


    7.1           AT&T's Right to Discontinue
Offering Cash Deferral Accounts.

    The
Committee may at any time discontinue offerings of Cash Deferral Accounts or
contributions under the Plan.  Any such discontinuance shall have no
effect upon existing Cash Deferral Accounts or the terms or provisions of this
Plan as applicable to such Accounts.

    


    7.2           AT&T's Right to Terminate
Plan.

    The
Committee may terminate the Plan at any time.  Upon termination of the
Plan, contributions shall no longer be made under the Plan.

    


    After
termination of the Plan, Participants shall continue to earn interest on
undistributed amounts and shall continue to receive all distributions under this
Plan at such time as provided in and pursuant to the terms and conditions of
Participant's elections and this Plan.  Notwithstanding the foregoing,
the termination of the Plan shall be made solely in accordance with Section 409A
of the Code and in no event shall cause the accelerated distribution of any
Account unless such termination is effected in accordance with Section 409A of
the Code.

    


    
      	
              7.3

            	
              Amendment.

            


    

    The
Committee may at any time amend the Plan in whole or in part; provided, however,
that no amendment, including but not limited to an amendment to this section,
shall be effective, without the consent of a Participant, to alter, to the
material detriment of such Participant, any of the Cash Deferral Accounts of the
Participant, other than as provided elsewhere in this section.  For
purposes of this section, an alteration to the material detriment of a
Participant shall include, but not be limited to, a material reduction in the
period of time over which the Participant’s Cash Deferral Account may be
distributed to a Participant, any reduction in the amounts credited to the
Participant's Cash Deferral Accounts, or any reduction in the Plan Interest Rate
(other than as it may fluctuate in accordance with its terms) for Cash Deferral
Accounts previously elected by the Participant.  Any such consent may
be in a writing, telecopy, or e-mail or in another electronic format. An
election to make Employee Contributions shall be conclusively deemed to be the
consent of the Participant to any and all amendments to the Plan prior to such
election, and such consent shall be a condition to making any election with
respect to Employee Contributions.

    


    The Plan
is established in order to provide deferred compensation to a select group of
management and highly compensated employees with in the meaning of Sections
201(2) and 301(a)(3) of ERISA. To the extent legally required, the Code and
ERISA shall govern the Plan, and if any provision hereof is in violation of an
applicable requirement thereof, the Company reserves the right to retroactively
amend the Plan to comply therewith to the extent permitted under the Code and
ERISA.  The Company also reserves the right to make such other changes
as may facilitate implementation of Section 409A of the
Code.  Provided, however, that in no event shall any such amendments
be made in violation of the requirements of Section 409A of the
Code.

    


    


    Article
8 - Miscellaneous

    


    8.1           Tax Withholding.

    Upon a
distribution from a Participant’s Cash Deferral Account, AT&T shall withhold
sufficient amounts to satisfy the minimum amount of Federal, state, and local
taxes required by law to be withheld as a result of such
distribution.

    


    8.2           Elections and
Notices.

    Notwithstanding
anything to the contrary contained in this Plan, all elections and notices of
every kind under this Plan shall be made on forms prepared by AT&T or the
General Counsel, Secretary or Assistant Secretary, or their respective delegates
or shall be made in such other manner as permitted or required by AT&T or
the General Counsel, Secretary or Assistant Secretary, or their respective
delegates, including through electronic means, over the Internet or
otherwise.  An election shall be deemed made when received by AT&T
(or its designated agent, but only in cases where the designated agent has been
appointed for the purpose of receiving such election), which may waive any
defects in form.  Unless made irrevocable by the electing person, each
election with regard to making Employee Contributions or distributions of Cash
Deferral Accounts shall become irrevocable at the close of business on the last
day to make such election. AT&T may limit the time an election may be made
in advance of any deadline.

    


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

    


    Notice to
the Participant shall be deemed given when mailed (or sent by telecopy) to the
Participant's work or home address as shown on the records of AT&T or, at
the option of AT&T, to the Participant's e-mail address as shown on the
records of AT&T.  It is the Participant's responsibility to ensure
that the Participant's addresses are kept up to date on the records of
AT&T.  In the case of notices affecting multiple Participants, the
notices may be given by general distribution at the Participants' work
locations.

    


    By
participating in the Plan, each Participant agrees that AT&T may provide any
documents required or permitted under the Federal or state securities laws,
including but not limited to the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, by e-mail, by e-mail attachment, or
by notice by e-mail of electronic delivery through AT&T's Internet Web site
or by other electronic means.

    


    8.3           Unsecured General
Creditor.

    Participants
and their beneficiaries, heirs, successors, and assigns shall have no legal or
equitable rights, interest, or claims in any property or assets of any
Employer.  No assets of any Employer shall be held under any trust for
the benefit of Participants, their beneficiaries, heirs, successors, or assigns,
or held in any way as collateral security for the fulfilling of the obligations
of any Employer under this Plan.  Any and all of each Employer's
assets shall be, and remain, the general, unpledged, unrestricted assets of such
Employer.  The only obligation of an Employer under the Plan shall be
merely that of an unfunded and unsecured promise of AT&T to make
distributions under and in accordance with the terms of the Plan.

    


    8.4           Non-Assignability.

    Neither a
Participant nor any other person shall have any right to commute, sell, assign,
transfer, pledge, anticipate, mortgage, or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt, any Cash Deferral Account
under the Plan, if any, or any part thereof, which are, and all rights to which
are, expressly declared to be unassignable and non-transferable.  No
part of  a distributable Cash Deferral Account shall, prior to actual
distribution, be subject to seizure or sequestration for the payment of any
debts, judgments, alimony or separate maintenance owed by a Participant or any
other person, nor be transferable by operation of law in the event of a
Participant's or any other person's bankruptcy or insolvency.

    


    8.5           Employment Not
Guaranteed.

    Nothing
contained in this Plan nor any action taken hereunder shall be construed as a
contract of employment or as giving any employee any right to be retained in the
employ of an Employer or to serve as a director.

    


    8.6           Errors.

    At any
time AT&T or an Employer may correct any error made under the Plan without
prejudice to AT&T or any Employer.  Neither AT&T nor any
Employer shall be liable for any damages resulting from failure to timely allow
any contribution to be made to the Plan or for any damages resulting from the
correction of, or a delay in correcting, any error made under the
Plan.  In no event shall AT&T or any Employer be liable for
consequential or incidental damages arising out of a failure to comply with the
terms of the Plan.

    


    
      	
              8.7

            	
              Captions.

            


    

    The
captions of the articles, sections, and paragraphs of this Plan are for
convenience only and shall not control nor affect the meaning or construction of
any of its provisions.

    


    8.8           Governing Law.

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

    


    Because
benefits under the Plan are granted in Texas, records relating to the Plan and
benefits thereunder are located in Texas, and the Plan and benefits thereunder
are administered in Texas, AT&T and the Participant under this Plan, for
themselves and their successors and assigns, irrevocably submit to the exclusive
and sole jurisdiction and venue of the state or Federal courts of Texas with
respect to any and all disputes arising out of or relating to this Plan, the
subject matter of this Plan or any benefits under this Plan, including but not
limited to any disputes arising out of or relating to the interpretation and
enforceability of any benefits or the terms and conditions of this
Plan.  To achieve certainty regarding the appropriate forum in which
to prosecute and defend actions arising out of or relating to this Plan, and to
ensure consistency in application and interpretation of the Governing Law to the
Plan, the parties agree that (a) sole and exclusive appropriate venue for any
such action shall be an appropriate Federal or state court in Dallas County,
Texas, and no other, (b) all claims with respect to any such action shall be
heard and determined exclusively in such Texas court, and no other, (c) such
Texas court shall have sole and exclusive jurisdiction over the person of such
parties and over the subject matter of any dispute relating hereto and (d) that
the parties waive any and all objections and defenses to bringing any such
action before such Texas court, including but not limited to those relating to
lack of personal jurisdiction, improper venue or forum non
conveniens.

    


    8.9           Plan to Comply with Section
409A.

    In the
event any provision of this Plan is held invalid, void, or unenforceable, the
same shall not affect, in any respect whatsoever, the validity of any other
provision of this Plan.  Notwithstanding any provision to the contrary
in this Plan, each provision in this Plan shall be interpreted to permit the
deferral of compensation in accordance with Section 409A of the Code and any
provision that would conflict with such requirements shall not be valid or
enforceable.

    


    8.10        Successors and
Assigns.

    This Plan
shall be binding upon AT&T and its successors and
assigns.