Document:

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                                                          EXHIBIT (10)(iii)(A)41

                                                                   July 29, 2003

Mr. John Polumbo

Dear John:

      This letter agreement ("the Agreement") is an amendment to your transfer
letter dated September 7, 2001 detailing your special individual pension
arrangement (as amended by Board resolutions in October 2002), and supercedes
all other oral and written communication on the subject.

      This Agreement will establish an individual non-qualified pension
arrangement ("Individual Pension"), which, subject to the terms and conditions
below, will provide you a benefit payable from AT&T Corp. (the "Company")
operating assets upon your retirement from the Company. This Individual Pension
will be immediately vested and only for termination for "Cause" (as defined)
will this Individual Pension be null and void in its entirety. In addition, this
Individual Pension is subject to the provisions of the AT&T Non-Competition
Guideline.

      With respect to the amount payable under this Individual Pension at your
retirement/termination, the single life annual annuity amount payable will be
determined as (a) minus (b) as set forth in the charts below:

      (a)   the single life annual pension annuity benefits calculated in
            accordance with the table set forth below:

<TABLE>
<CAPTION>
                                  Percentage of Final 3 Year Average
                                  Total Cash Compensation (Base Pay
Year of Retirement/Termination     plus Actual Bonus Paid in Year)
------------------------------     -------------------------------
<S>                               <C>
           2003                                17.25%
           2004                                19.30%
           2005                                21.35%
           2006                                23.40%
           2007                                25.45%
           2008                                27.50%
           2009                                29.55%
           2010                                31.60%
           2011                                33.65%
           2012                                36.40%
           2013                                39.15%
           2014                                41.90%
           2015                                44.65%
           2016                                47.40%
           2017                                50.00%
</TABLE>

      (b)   any single life annual annuity benefits payable from AT&T, i.e.
            pension benefits under the AT&T Management Pension Plan (AT&TMPP),
            AT&T Non Qualified Pension Plan (AT&TNQPP), AT&T Excess Benefit and
<PAGE>
            Compensation Plan (AT&TEBCPP), minimum retirement benefits under the
            AT&T Senior Management Long Term Disability and Survivor Protection
            Plan (AT&TSMLTD&SPP) if applicable, as well as by any qualified and
            nonqualified pension benefits from prior employers.

Joint and survivor benefits on your death, whether your death occurs as an
active employee or following your termination, will be governed by the
administrative guidelines applicable to this Agreement.

      In the event of your termination within two years following a Change in
Control ("CIC"), as defined in the AT&T 1997 Long Term Incentive Program, for
reasons other than for Cause or if you terminate employment for Good Reason (as
defined) within two years following a CIC, your benefit under this Individual
Pension will be calculated by accelerating the Individual Pension schedule above
by adding three years to the schedule, i.e. the applicable percentage will be
that associated with the "Year of Retirement/Termination" three years from your
actual termination year. In addition, the cash compensation used in calculating
the final three year average cash compensation will not use cash compensation
for years in which you did not hold the position of CEO- Consumer.

      For purposes of this Agreement:

      a) "Cause" shall mean:

            i.    your conviction (including a plea of guilty or nolo
                  contendere) of a crime including theft, fraud, dishonesty or
                  moral turpitude;

            ii.   violation by you of the Company's Code of Conduct or
                  Non-Competition Guideline;

            iii.  gross omission or gross dereliction of any statutory, common
                  law or other duty of loyalty to the Company or any of its
                  affiliates; or

            iv.   repeated failure to carry out the duties of your position
                  despite specific instruction to do so.

      b)    "Good Reason" prior to a CIC shall mean the occurrence without your
            express written consent of any of the following events:

            i.    Your demotion to a position which is not of a rank and
                  responsibility comparable to members of the current Operations
                  Group or those of a similar/replacing governance body;
                  provided, however, that the Company's decision not to continue
                  the Operations Group shall not be Good Reason, and provided,
                  further, that (1) changes in reporting relationships shall
                  not, alone, constitute Good Reason and/or (2) a reduction in
                  your business unit's budget or a reduction of your business
                  unit's head count, by themselves, do not constitute Good
                  Reason; or

            ii.   A reduction in your "Total Annual Compensation" (defined as
                  the sum of your Annual Base Salary Rate, Target Annual
                  Incentive and "Target
<PAGE>
                  Annual Long Term Incentive Grants") for any calendar or fiscal
                  year, as applicable, to an amount that is less than the Total
                  Annual Compensation that existed in the prior calendar or
                  fiscal year, as applicable. For purposes of this Paragraph
                  (b)(ii) the dollar value of the "Target Annual Long Term
                  Incentive Grants" shall exclude the value of any special
                  one-time or periodic long-term incentive grants, and shall be
                  determined by valuing Performance Shares, Stock Units,
                  Restricted Stock, Restricted Stock Units, etc., at the market
                  share price utilized in valuing the annual Senior Management
                  compensation structures in the materials presented to the
                  Compensation and Employee Benefits Committee of the Company's
                  Board of Directors ("the Committee") when authorizing such
                  grants, and assuming 100% performance achievement if such
                  grants include performance criteria. Stock Options and Stock
                  Appreciation Rights will be valued by the Black-Scholes
                  methodology (and related share price) as utilized in the
                  materials presented to the Committee when authorizing such
                  grants.

      c)    "Good Reason" within two years following a CIC shall be in
            accordance with the October 23, 2000 CIC Board Resolutions, which
            include reduction in authority or responsibility, reduction in
            compensation, and business relocation beyond a reasonable commuting
            distance.

      Notwithstanding the foregoing, the Company may require you to change to an
      equivalent executive position within the Company with substantially
      similar levels of duties or responsibilities without causing Good Reason
      to occur.

      You must notify the Company within 60 days following knowledge of an event
      you believe constitutes Good Reason, or such event shall not constitute
      Good Reason hereunder.

      This agreement may not be amended or waived, unless the amendment or
waiver is in a writing signed by you and the Company'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 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 FOR ANY REASON. LIKEWISE, THE COMPANY RESERVES THE
RIGHT TO DISCONTINUE YOUR EMPLOYMENT WITH OR WITHOUT CAUSE AT ANY TIME AND FOR
ANY REASON.
<PAGE>
      You understand that the terms of this Agreement shall apply to the Company
and its successors. The Company specifically reserves the right to assign the
terms of this Agreement to any successor, whether the successor is the result of
a sale, purchase, merger, consolidation, asset sale, divestiture or spin-off or
any combination or form thereof. No sale, purchase, merger, consolidation, asset
sale, divestiture or spin-off or any combination or form thereof by the Company
shall be construed as a termination of your employment and will not be
considered a termination for purposes of this Agreement.

      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.

      In addition, all of the benefits provided under this Agreement are subject
to forfeiture if you violate the AT&T Non-Competition Guideline, a copy of which
has been previously provided to you.

      John, I am happy to present this special pension arrangement to you. It
recognizes the extraordinary contributions that we expect you to continue to
make to our business. If you agree with the terms and conditions detailed above,
sign and date this Agreement in the spaces provided below and return the
original executed copy to me.

<TABLE>
<S>                                       <C>
                                          Sincerely,

                                          /s/  Mirian M. Graddick-Weir

Acknowledged and Agreed to:

/s/  John Polumbo                              7/30/2003
-------------------------                 -------------------
John Polumbo                                     Date
</TABLE><PAGE>
                                                          Exhibit (10)(iii)(A)42

              SPECIAL INDIVIDUAL PENSION ARRANGEMENT FOR J. POLUMBO
        AS AMENDED BY TRANSFER LETTER OF 9/7/01 AND BOARD APPROVAL 10/02

GENERAL TERMS AND CONDITIONS

-     AT&T (the Company) has established an individual non-qualified pension
      arrangement (hereinafter Individual Pension) which, subject to the terms
      and conditions below, will provide you with a benefit payable from AT&T
      operating assets upon your retirement

-     Individual Pension was applicable during your employment by AT&T and the
      joint venture know as Concert

-     This pension became vested as per the transfer letter of 9/7/01 on the
      last day of the month which contained the six month anniversary of the
      date of transfer from Concert to AT&T or on 3/31/02. Only for termination
      for "cause" (as defined) will this Individual Pension will be null and
      void in its entirety. IN ADDITION, THIS PENSION IS SUBJECT TO THE
      PROVISIONS OF THE AT&T NON-COMPETITION GUIDELINE.

-     In the event of a termination for "disability" (as defined) the Individual
      Pension accrued to the date of such Termination will be payable in
      accordance with the terms and conditions set forth below in the
      "Individual Pension Formula."

-     In the event of your death as an active employee AFTER THIS AGREEMENT IS
      SIGNED BY BOTH YOU AND THE COMPANY, your surviving spouse or other
      designated beneficiary will be eligible for a pension under this
      Individual Pension calculated as provided below.

INDIVIDUAL PENSION FORMULA

-     With respect to the amount payable under this Individual Pension at your
      retirement/Termination, the amount payable will be determined as (a) minus
      (b) below.

            (a)   the pension benefits calculated in accordance with the table
                  set forth below:

<TABLE>
<CAPTION>
                                            Percentage of Final 5 Year Average Total Cash
                                           Compensation (Base Pay Plus Actual annual bonus
Date of Retirement/Termination                             Paid in Year)*
------------------------------                             --------------
<S>                                        <C>
Prior to 7/1/2002                                             10.25
7/1/2002-09/30/2002                                           12.30
10/1/2002-6/30/2003                                           15.20
7/1/2003-6/30/2004                                            17.25
7/1/2004-6/30/2005                                            19.30
7/1/2005-6/30/2006                                            21.35
7/1/2006-6/30/2007                                            23.40
7/1/2007-6/30/2008                                            25.45
7/1/2008-6/30/2009                                            27.50
7/1/2009-6/30/2010                                            29.55
</TABLE>
<PAGE>

<TABLE>
<S>                                                           <C>
7/1/2010-6/30/2011                                            31.60
7/1/2011-6/30/2012                                            33.65
7/1/2012-6/30/2013                                            35.00
7/1/2013-6/30/2014                                            35.00
7/1/2014-6/30/2015                                            35.00
7/1/2015 or later                                             35.00
</TABLE>

            * For purposes of this Individual Pension Formula, Total Cash
            Compensation for years prior to actual Company service and for the
            first year of employment is assumed to be $520,000 annually, e.g.
            calculation of this formula at 7/1/99 will be determined as .1025
            multiplied by $520,000 or a single life annuity of $53,300 per year

            (b)   any pension benefits payable from AT&T, i.e., pension benefits
                  under the AT&T Management Pension Plan (AT&TMPP), AT&T Non
                  Qualified Pension Plan (AT&TNQPP), AT&T Excess Benefit and
                  Compensation Pension Plan (AT&TEBCPP), AT&T Senior Management
                  Long Term Disability and Survivor Protection Plan
                  (AT&TSMLTD&SPP)

      -     The payment form for you under this Individual Pension will be the
            same as the payment form (e.g., single life annuity, joint and 50%
            annuity, etc.) under the AT&TEBCP based on your actual NCS. Upon
            your death following your termination, your spouse's or other
            designated beneficiary's entitlement to a survivor annuity benefit
            under the Individual Pension will be in accordance with your
            election under the AT&TMPP and the reduction factor applicable to
            your Individual Pension amount for the survivor annuity under this
            Individual Pension will be in accordance with the election you made
            for your AT&T MPP benefit

DEATH AS ACTIVE EMPLOYEE

-     In the event of your death as an active employee, your surviving spouse
      will be entitled to a survivor benefit under this Individual Pension. The
      terms and conditions of such benefit shall be in accordance with the terms
      and conditions set forth in the AT&TNQPP assuming you were eligible to
      voluntarily terminate under this Individual Pension; such benefit will be
      offset by any pension payments payable from AT&T under the AT&TMPP,
      AT&TEBCPP, AT&TNQPP, AT&TMCPP, and AT&TSMLTD&SPP

DEFINITIONS

-     For purposes of this Agreement,

-     "Cause" shall be defined as follows: (1) conviction (including a plea of
      guilty or nolo contendere) of a felony or any crime or theft, dishonesty
      or moral turpitude; or (2) gross omission or gross dereliction of any
      statutory or common-law duty of loyalty to the Company or (3) violation of
      AT&T's Code of Conduct.

-     "Disability" shall mean termination of your employment with the Company
      with eligibility to receive a disability benefit/allowance under any
      long-term disability plan of the Company.

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