Document:

ex10ee.htm

    

      
        Exhibit
10-ee

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        2005

      

      
        SUPPLEMENTAL
EMPLOYEE

      

      
        RETIREMENT
PLAN

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        

      

      
        Adopted:  November
19, 2004

      

      
                     Effective:  November
18, 2005

      

      
        Amended:  December
31, 2008

      

      
        

      

      
 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        2005
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN

      

      

       

      
        	
                1  

              	
                Purpose.

              

      

       

      
        The
purpose of the 2005 Supplemental Employee Retirement Plan (the “SERP” or the
"Plan") is to provide Participants with retirement benefits to supplement
benefits payable pursuant to qualified group pension plans sponsored by AT&T
or an affiliate of AT&T.  The Plan is a successor to the AT&T
Supplemental Retirement Income Plan (“SRIP”) that was effective January 1, 1984
and which was amended, effective December 31, 2004, to cease accruals so that
the benefits payable under the SRIP shall be grandfathered and administered in
accordance with the provisions of the SRIP in a manner that does not invoke
Section 409A of the Code.

         

        

      

      
        	
                2  

              	
                Definitions.

              

      

       

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

         

        

      

      
        Administrative
Committee. "Administrative Committee" means a Committee, consisting of
the SEVP-HR and two or more other members designated by the SEVP-HR, which shall
administer the Plan.

         

        

      

      
        Agreement.  "Agreement"
means the written agreement entered into between AT&T by its SEVP-HR and a
Participant prior to January 1, 2009 to carry out the Plan with respect to such
Participant.  No Agreements are necessary for Participants who become
eligible to participate in the Plan on or after January 1, 2009.

         

        

      

      
        AT&T.  "AT&T"
means AT&T Inc.

         

        

      

      
        Beneficiary.  "Beneficiary"
shall mean any beneficiary or beneficiaries designated by the Participant
pursuant to the AT&T Rules for Employee Beneficiary Designations as may
hereafter be amended from time-to-time ("Rules").  If a Participant
fails to execute a Beneficiary designation form with respect to Plan benefits,
his or her Beneficiary designation form with respect to his SRIP benefits shall
apply with respect to his Plan benefits.  If a Participant fails to
execute a Beneficiary designation form with respect to Plan benefits and with
respect to SRIP benefits, the default provisions in the Rules shall
apply.

         

        

      

      
        CEO or
Chief Executive Officer.  “CEO” or
“Chief Executive Officer” shall mean the Chief Executive Officer of
AT&T.

         

        

      

      
        Disabled
or Disability.  “Disabled” or "Disability" means the
Participant’s (i) inability to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, or (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
(12) months, receiving income replacement benefits for a period of not less than
three (3) months under an accident or health plan covering employees of the
Participant’s employer.  The Administrative Committee, in its complete
and sole discretion, determines whether a Participant is
Disabled.  The Administrative Committee may require that the
Participant submit to an examination by a competent physician or medical clinic
selected by the Administrative Committee.  On the basis of such
medical evidence, the determination of the Administrative Committee as to
whether or not a Participant is Disabled shall be conclusive.

         

        

      

      
        Earnings.  "Earnings"
means for a given calendar year the Participant's: (1) bonus earned as a short
term award during the calendar year but not exceeding 200% of the target amount
of such bonus (or such other portion of the bonus or target bonus as may be
determined by the Human Resources Committee of the Board of AT&T), plus (2)
base salary before reduction due to any contribution pursuant to any deferred
compensation plan or agreement sponsored by AT&T or an AT&T affiliate,
including but not limited to compensation deferred in accordance with Sections
401(k), 125, or 132(f) of the Internal Revenue Code.

         

        

      

      
        Final
Average Earnings.  "Final Average Earnings" means the average
of the Participant's Monthly Earnings for the thirty-six (36) consecutive months
out of the one hundred twenty (120) months next preceding the Participant's
Termination of Employment which yields the highest average
earnings.  If the Participant has fewer than thirty-six (36) months of
employment, the average shall be taken over his or her period of
employment.

         

        

      

      
        GAAP
Rate.  For a referenced calendar year, "GAAP Rate" means the
interest rate used for valuing Plan liabilities on December 31 of the
immediately preceding calendar year and for calculating periodic pension expense
for the referenced calendar year, both for purposes of AT&T's financial
statement reporting requirements.

         

        

      

      
        Immediate
Annuity Value of any AT&T or affiliate Qualified
Pensions.  “Immediate Annuity Value of any AT&T or
affiliate Qualified Pensions” shall have the meaning as provided in Attachment
B.

         

        

      

      
        Immediate
Annuity Value of SRIP. "Immediate Annuity Value of SRIP" shall have the
meaning as provided in Attachment C.

         

        

      

      
        Immediate
Annuity Value of any other AT&T or affiliate Non-Qualified Pensions other
than SERP. "Immediate Annuity Value of any AT&T or affiliate
Non-Qualified Pensions other than SERP" shall have the meaning as provided in
Attachment D.

         

        

      

      
        Mid-Career
Hire.  “Mid-Career Hire”
means an individual whose Service Commencement Date is on or after the
individual’s thirty-fifth (35th)
birthday.

         

        

      

      
        Monthly
Earnings.  "Monthly Earnings" means one-twelfth (1/12) of
Earnings.

         

        

      

      
        Mortality
Tables.  "Mortality Tables" means the mortality tables as
defined by Code Section 417(e) for valuing minimum lump sum benefits payable
from qualified pension plans for the referenced period.

         

        

      

      
        Officer.
"Officer" shall mean an individual who is designated as an officer level
employee for compensation purposes on the records of
AT&T.

      

      
        

      

      
        Participant.
"Participant" means:

         

        

      

      
        
          	
                  (a)  

                	
                  Any
      person who, as of close of business on December 31, 2004, was employed by
      an AT&T affiliate and was a participant in the SRIP;
  or

                

        

         

        

      

      
        
          	
                  (b)  

                	
                  Any
      person who was a participant in the SRIP, terminated employment in 2004
      and receives Earnings in 2005; or

                

        

         

        

      

      
        
          	
                  (c)  

                	
                  An
      Officer of AT&T or an AT&T affiliate who is designated by the CEO
      as eligible to participate in the
Plan.

                

        

         

        

      

      
        Notwithstanding
the foregoing definition of Participant, the CEO, may, at any time and from time
to time, exclude any person or group of persons from being deemed a
“Participant” under this plan.

         

        

      

      
        An
individual’s participation in SERP shall commence as of his or her SERP
Effective Date.

         

        

      

      
        Retire or
Retirement.  "Retire" or "Retirement" shall mean the
Termination of Employment of a Participant for reasons other than death, on or
after the earlier of the following dates:  (1) the date the
Participant is Retirement Eligible or (2) the date the Participant has attained
one of the following combinations of age and service at Termination of
Employment:

         

        

         

        
          	 Years of Service	
                  Age

                   

                
	25 years or
      more 	50 or
      older 
	30 years or
      more 	Any
    age 

        

         

      

      
         

      

      
        Retirement
Eligible.  "Retirement Eligible" or "Retirement Eligibility"
means that a Participant has attained age 55 and has at least five (5) Years of
Service.

         

        

      

      
        Retirement
Percent.  "Retirement Percent" means the percent specified in
the Agreement with the Participant (if any) which establishes a Target
Retirement Benefit (see Section 3.1) as a percentage of Final Average Earnings.
For an individual who becomes a Participant on or after January 1, 2006,
"Retirement Percent" means 50 percent unless otherwise provided by the Human
Resources Committee of the Board of Directors of AT&T.

         

        

      

      
        SERP
Effective Date.  “SERP Effective Date” means the date of the
written designation of the Participant’s eligibility to participate in SERP,
signed by the CEO.

         

        

      

      
        SEVP-HR.  “SEVP-HR”
means AT&T’s Senior Executive Vice President responsible for Human Resources
matters.

         

        

      

      
        Supplemental
Retirement Income Plan or SRIP.  "Supplemental Retirement
Income Plan” or “SRIP" means the AT&T Inc. Supplemental Retirement Income
Plan effective January 1, 1984.

         

        

      

      
        Service
Commencement Date.  “Service Commencement Date” means the
Participant’s employment commencement date with AT&T or any AT&T
affiliate, as such date may be adjusted from time-to-time in accordance with
rules, policies and procedures generally applied by AT&T to adjust for
breaks in service or other periods of time, as reflected in AT&T’s or an
AT&T affiliate’s records, all as determined in the discretion of the
SEVP-HR.

         

        

      

      
        Service
Factor.  "Service Factor" means, unless otherwise agreed in
writing by the Participant and AT&T, either (a) a deduction of 1.43 percent,
or .715 percent for Mid-Career Hires, multiplied by the number by which (i)
thirty-five (or thirty in the case of a Participant who is an Officer) exceeds
(ii) the number of Years of Service of the Participant, or (b) a credit of 0.715
percent multiplied by the number by which (i) the number of Years of Service of
the Participant exceeds (ii) thirty-five (or thirty in the case of a Participant
who is an Officer).  For purposes of the above computation, a
deduction shall result in the Service Factor being subtracted from the
Retirement Percent whereas a credit shall result in the Service Factor being
added to the Retirement Percent.

         

        

      

      
        Termination
of Employment.  "Termination of Employment" means the ceasing
of the Participant's employment from the AT&T controlled group of companies
for any reason whatsoever, whether voluntarily or involuntarily.  A
Participant will be deemed to have realized a Termination of Employment at any
time that a Participant and the Administrative Committee reasonably anticipate
that the bona fide level of services the Participant will perform (whether as an
employee or an independent contractor) will be permanently reduced to a level
that is less than fifty percent (50%) of the average level of bona fide services
the Participant performed during the immediately preceding thirty-six (36)
months (or the entire period the Participant has provided services if the
Participant has been providing services to the AT&T controlled group of
companies less than thirty-six (36) months).

         

        

      

      
        Year.  A "Year" is a
period of twelve (12) consecutive calendar months.

         

        

      

      
        Years of
Participation.  "Years of Participation" means the number of
each complete Years beginning with the Participant’s SERP Effective Date through
each annual anniversary of such date.

         

        

      

      
        Years of
Service.  "Years of Service" means the number of each complete
Years of full-time service as an employee of AT&T or an AT&T affiliate
beginning with the Participant’s Service Commencement Date through each annual
anniversary of such date, including service prior to the adoption of this Plan.
“Years of Service” shall also include a Participant’s Years of service that are
recognized for purposes of the BellSouth Corporation Supplemental Employee
Retirement Plan, but that are not otherwise included pursuant to the immediately
preceding sentence.

         

        

      

      
        	
                3  

              	
                Plan ("SERP")
      Benefits.

              

      

       

      
        
          	
                  3.1 
        

                	
                  SERP Benefit
      Formula.

                

        

         

        

      

      
        With
respect to (1) a Participant who was a participant in the SRIP prior to January
1, 1998, or (2) a Participant who, prior to January 1, 1998, was an officer of a
Pacific Telesis Group ("PTG") company and became a participant in the SRIP after
January 1, 1998, the amount of such Participant’s SERP Benefit is calculated as
follows:

         

        Final
Average Earnings

      

      
        x Revised Retirement
Percentage                                                                                                                     

      

      
        = Target
Retirement Benefit

      

      
        
          	
                   -

                	
                  Immediate
      Annuity Value of any AT&T or affiliate Qualified
    Pensions

                

        

      

      
        
          	
                   -

                	
                  Immediate
      Annuity Value of any other AT&T or affiliate Non-Qualified Pensions
      other than the SERP

                

        

      

      
        = Target
Benefit

      

      
        -  Age
Discount                                                                                                                    

      

      
        
          	
                  =

                	
                  Annual
      Value of Life with 10 Year Certain SERP Benefit payable as a result of
      Termination of Employment Before SRIP
Reduction

                

        

      

      
        - Immediate Annuity Value of
SRIP                                                                                                                    

      

      
        
          	
                  = 
      

                	
                  Annual
      Value of Life with 10 Year Certain SERP Benefit payable as a result of
      Termination of Employment

                

        

         

         

      

      
        With
respect to all other Participants, subject to the provisions of Attachment E,
the amount of such Participant’s SERP Benefit is calculated as
follows:

         

      

      
        Final
Average Earnings

        
          x Revised Retirement
Percentage                                                                                                                     

        

        
          = Target
Retirement Benefit

          -  Age
Discount

          =
Discounted Target Benefit

        

        
          -  Immediate Annuity Value of any AT&T or
affiliate Qualified Pensions

          -  Immediate Annuity Value of SRIP

          -  Immediate Annuity
Value of any other AT&T or affiliate Non-Qualified Pensions other that
SERP

        

        
          
            	
                    =

                  	
                    Annual
      Value of Life with 10 Year Certain SERP Benefit payable as a result of
      Termination of Employment

                  

          

        

        
          
 

        

      

      
        Where in
both of the above cases the following apply:

         

        

      

      
        
          	
                  (a)     
      

                	
                  Revised
      Retirement Percentage = Retirement Percent + Service
  Factor

                

        

         

        

      

      
        
          	
                  (b)     
      

                	
                  For
      purposes of determining the Service Factor, the Participant's actual Years
      of Service as of the date of Termination of Employment, to the day, shall
      be used.

                

        

         

        

      

      
        
          	
                  (c)     
      

                	
                  For
      purposes of determining the Final Average Earnings, the Participant's
      Earnings history as of the date of Termination of Employment shall be
      used.

                

        

         

        

      

      
        
          	
                  (d)     
      

                	
                  Age
      Discount means the Participant's SERP Benefit shall be decreased by
      five-tenths of one percent (.5%) for each month that the date of the
      Participant’s Termination of Employment precedes the date on which the
      Participant will attain age 60.

                

        

         

        

      

      
        Notwithstanding
the foregoing, if at the time of Termination of Employment the Participant is,
or has been within the one year period immediately preceding the Participant's
Termination of Employment, an Officer with 30 or more Years of Service such
Participant's Age Discount shall be zero.

         

        

      

      
        Except to
true up for an actual short term award paid following Termination of Employment,
there shall be no recalculation of the value of a Participant's SERP Benefit
hereunder following a Participant's Termination of Employment.

         

        

      

      
         3.2.  
Vesting.

         

        

      

      
        Notwithstanding
any other provision of this Plan, upon any Termination of Employment of the
Participant for a reason other than death or Disability, AT&T shall have no
obligation to the Participant under this Plan if the Participant has less than
five (5) Years of Service or, for Participants who are informed, in writing, of
their SERP eligibility on or after September 28, 2006, less than four (4) Years
of Participation, at the time of Termination of Employment.

         

        

      

      
        	
                4  

              	
                Election and Form of
      Distribution of SERP
Benefits.

              

      

       

      
        
          	
                  4.1  
        

                	
                  Normal
      Form.

                

        

         

        

      

      
        The
normal form of a Participant's benefits hereunder shall be a Life with 10-Year
Certain Benefit as described in Section 4.2(a).

         

        

      

      
        
          	
                  4.2  
        

                	
                  Election
      Alternatives.

                

        

         

        

      

      
        Notwithstanding
the normal form for distribution of a Participant’s SERP Benefits, a Participant
may elect one of the following Benefit Payout Alternatives:

         

        

      

      
        
          	
                  (a)  
        

                	
                  Life with a 10-Year
      Certain Benefit.  An annuity payable during the longer of
      (i) the life of the Participant or (ii) the 10-year period commencing on
      the Participant’s Termination of Employment and ending on the day next
      preceding the tenth anniversary of such date (the "Life With 10-Year
      Certain Benefit").  If a Participant who is receiving a Life
      with 10-Year Certain Benefit dies prior to the expiration of the 10-year
      period described in this Section 4.2(a), the Participant's Beneficiary
      shall be entitled to receive the remaining Life With 10-Year Certain
      Benefit installments which would have been paid to the Participant had the
      Participant survived for the entire such 10-year
  period.

                

        

         

        

      

      
        
          	
                  (b)  
        

                	
                  Joint and 100%
      Survivor Benefit.  A joint and one hundred percent (100%)
      survivor annuity payable for life to the Participant and at his or her
      death to his or her Beneficiary, in an amount equal to one hundred percent
      (100%) of the amount payable during the Participant's life, for life (the
      "Joint and 100% Survivor Benefit").

                

        

         

        

      

      
        
          	
                  (c)  
        

                	
                  Joint and 50% Survivor
      Benefit.  A joint and fifty percent (50%) survivor
      annuity payable for life to the Participant and at his or her death to his
      or her Beneficiary, in an amount equal to fifty percent (50%) of the
      amount payable during the Participant's life, for life (the "Joint and 50%
      Survivor Benefit").

                

        

         

        

      

      
        
          	
                  (d)  
        

                	
                  Lump Sum
      Benefit.  A lump sum benefit, which shall apply only if
      the Participant has attained the age of fifty-five (55) years as of his or
      her Termination of Employment.  If a Participant elects a lump
      sum benefit but realizes a Termination of Employment prior to attaining
      age fifty-five (55), the Participant’s SERP Benefit shall be paid as
      provided in Section 4.2(a), 4.2(b) or 4.2(c), as elected or deemed elected
      by the Participant.

                

        

         

        

      

      
        The
Benefit Payout Alternatives described in Section 4.2(b), 4.2(c) and 4.2(d) shall be the actuarially determined
equivalent (using the same reasonable actuarial assumptions and methods for
valuing each Benefit Payout Alternative as determined by the SEVP-HR in his or
her complete and sole discretion) of the Life With 10-Year Certain Benefit that
is converted by such election.  The amount of a Participant's lump sum
benefit shall be calculated as of the Participant's Termination of Employment by
applying the Mortality Tables and the GAAP Rate, both as in effect for the
calendar year immediately preceding the calendar year of the Participant’s
Termination of Employment, but using the Participant’s age, Years of Service and
other factors as of the Participant’s Termination of Employment.

         

        

      

      
        
          	
                  4.3 
        

                	
                  Distribution
      Election.

                

        

         

        

      

      
        
          	
                  (a)  
        

                	
                  Individual Who Is A
      Participant On or Before December 31, 2008.  An
      individual who was a Participant on or before December 31, 2008 may make
      an irrevocable election of a Benefit Payout Alternative before the earlier
      of December 31 of the year immediately preceding his or her Termination of
      Employment or December 31, 2008 by delivery of such election, in writing,
      telecopy, email or in another electronic format, pursuant to or as
      instructed by the SEVP-HR (as determined by the SEVP-HR in his or her sole
      and absolute discretion).

                

        

         

        

      

      
        
          	
                  (b)  
        

                	
                  Individual Who Becomes
      A Participant After December 31, 2008.  An individual who
      becomes a Participant after December 31, 2008 may make an irrevocable
      election of a Benefit Payout Alternative no later than the thirtieth
      (30th)
      day immediately following the Participant’s SERP Effective Date by
      delivery of such election in writing, telecopy, email or in another
      electronic format, pursuant to or as instructed by the SEVP-HR (as
      determined by the SEVP-HR in his or her sole and absolute
      discretion).

                

        

         

        

      

      
        
          	
                  (c)  
        

                	
                  Failure to Timely Make
      a Distribution Election.  If a Participant fails to make
      a timely election of a Benefit Payout Alternative as provided in Section
      4.3(a) or 4.3(b), such Participant shall be deemed to have elected and
      such Participant's form of benefit shall be the Life With 10-Year Certain
      Benefit described in Section 4.2(a).

                

        

         

        

      

      
        
          	
                  (d)  
        

                	
                  Death of or Divorce
      from Annuitant During Participant’s
      Lifetime.  Notwithstanding any other provision of this
      Plan to the contrary, in the event of the death of a designated annuitant
      during the life of the Participant, the Participant's election to have a
      Benefit Payout Alternative described in Section 4.2(b) or 4.2(c) shall, without any action by
      the Participant, be revoked, and the Participant’s benefit, or remaining
      benefit, under the Plan, as the case may be, shall be paid as provided in
      Section 4.2(a).  Any
      conversion of benefit from one form to another pursuant to the provisions
      of this paragraph shall use the same reasonable actuarial assumptions and
      methods for valuing each annuity form of benefit before and after the
      death of the designated annuitant and shall be subject to actuarial
      adjustment (as determined by the SEVP-HR in his or her complete and sole
      discretion) such that the Participant's new benefit is the actuarial
      equivalent of the Participant's remaining prior form of
      benefit.  Payments pursuant to Participant's new form of benefit
      shall be effective commencing with the first monthly payment for the month
      following the death of the
annuitant.

                

        

         

        

      

      
        Notwithstanding
any other provision of this Plan to the contrary, in the event of the divorce or
legal separation of the Participant, the Participant’s election to have a
Benefit Payout Alternative described in Section 4.2(b) or 4.2(c), with a
survivor annuity for the benefit of the Participant's former spouse as
Beneficiary, shall, without any action by the Participant, be revoked, and the
Participant's benefit, or remaining benefit, under the Plan, as the case may be,
shall be paid as provided in Section 4.2(a) (using the same reasonable actuarial
assumptions and methods for valuing each annuity form of benefit before and
after the divorce or legal separation  and shall be subject to
actuarial adjustment (as determined by the SEVP-HR in his or her complete and
sole discretion).  In such event, the 10-Year period as described in
Section 4.2(a) shall be the same 10-year period as if such form of benefit was
the form of benefit originally selected and the expiration date of such period
shall not be extended beyond its original expiration date.  Payments
pursuant to Participant’s new form of benefit shall be effective commencing with
the first monthly payment following notice from the Participant to the SEVP-HR
after the divorce (or legal separation) becomes final.

         

        

      

      
        
          	
                  (e)  
        

                	
                  Special Provisions for
      Lump Sum Benefit Election.  A Participant who elects a
      lump sum benefit under Section 4.2(d) must, contemporaneous with such
      Lump Sum Benefit election, elect a specific number of year(s), not to
      exceed twenty (20) years, following his or her Termination of Employment
      upon which the lump sum benefit (including any interest accrued thereon)
      shall be distributed; provided, however,

                

        

         

        

      

      
        
          	
                  (i)    
      

                	
                  the Participant may
      not receive more than thirty percent (30%) of his or her lump sum benefit
      (excluding any interest thereon) until the third (3rd) anniversary of his
      or her Termination of Employment; provided, however, if the
      Participant is age sixty (60) or older as of his or her Termination of
      Employment, the Participant, if elected in his or her timely filed
      election of a Benefit Payout Alternative, may receive one hundred percent
      (100%) of his or her lump sum benefit upon the day that is six (6) months
      following his or her Termination of Employment if he or she agrees, in
      writing, substantially in the form provided in Attachment A, not to
      compete with an Employer Business within the meaning of Section 8.2 for a
      period of three (3) years from such Participant’s Termination of
      Employment and further agrees that if he or she fails to abide by such
      agreement, the non-compete agreement is challenged, or the non-compete
      agreement is unenforceable, he or she shall forfeit all benefits hereunder
      and repay the lump sum benefit to AT&T;
      and

                

        

         

        

      

      
        
          	
                  (ii)   
      

                	
                  prior
      to distribution of the Participant’s lump sum benefit, interest on such
      lump sum benefit shall accrue and shall be added to the Participant’s lump
      sum benefit or distributed monthly, as elected by the Participant in his
      or her election of a
      Benefit Payout Alternative.

                

        

         

        

      

      
        A
Participant’s lump sum benefit payment schedule must comply with the rules for
payment schedules as adopted by the SEVP-HR (as determined by the SEVP-HR in his
or her sole and absolute discretion), which, for example, may require payment of
principal to be made no more frequently than once per calendar
year.

         

        

      

      
        If the
payment schedule elected by a Participant does not comply with the rules for
payment schedules, (i) thirty percent (30%) of such Participant’s lump sum
benefit shall be paid to the Participant upon the date that is six (6) months
following the Participant’s Termination of Employment, and (ii) the
remaining seventy percent (70%) shall be paid to the Participant on the third
(3rd)
anniversary of such Participant’s Termination of Employment.

         

        

      

      
        
          	
                  (f)  
        

                	
                  Lump Sum Benefit
      Account Balance.  From and after a Participant’s
      Termination of Employment, the SEVP-HR shall maintain records of a lump
      sum benefit account balance for each Participant who elected a lump sum
      benefit.  During such period of time that all or any portion of
      a Participant’s lump sum benefit is not paid, interest shall be credited
      using the same methodology used by AT&T for financial accounting
      purposes using the GAAP Rate that was used to calculate such Participant’s
      lump sum benefit.  Payments of principal and interest shall be
      deducted from the lump sum benefit account
  balance.

                

        

         

        

      

      
        A
Participant whose employment has not terminated may change a prior distribution
election at any time on or before December 31, 2008, provided, however, if the
Participant’s employment terminates for any reason in the calendar year in which
the new distribution election is filed, such new election shall be null and
void.  In the event the Participant’s new election is null and void,
the Participant’s prior election, if any, shall apply.  If there is no
prior election, the Plan’s default distribution provisions shall
apply.

         

        

      

      
        	
                5  

              	
                Death or Disability
      Benefits.                                                                                                

              

      

       

      
        
          	
                  5.1  
        

                	
                  Death Following
      Termination of Employment.

                

        

         

        

      

      
        If a
Participant who has commenced payment of his or her SERP benefit hereunder dies,
his or her Beneficiary shall be entitled to receive the remaining SERP benefit
in accordance with the Benefit Payout Alternative elected or deemed elected by
the Participant.

         

        

      

      
        
          	
                  5.2  
        

                	
                  Death Prior to
      Termination of Employment.

                

        

         

        

      

      
        If a
Participant dies prior to his or her Termination of Employment, a pre-retirement
death benefit will be calculated and paid as though the Participant had
Retired  (determined without regard to the 5 Years of Service or the 4
Years of Participation requirements) on the day prior to the date of
death.  The pre-retirement death benefit shall be paid at such time
and in such form as timely elected or deemed elected by the Participant;
provided, if the Participant elected or is deemed to have elected any form of an
annuity, such pre-retirement death benefit shall be paid as a Beneficiary Life
Annuity (as such term is hereinafter described) based on the life expectancy of
the Beneficiary, and, if the Participant elected or is deemed to have elected a
Life with a 10-Year Certain Benefit, such Beneficiary Life Annuity shall
continue for the longer of (i) the Beneficiary’s life, or (ii) the 10 year
period commencing on the Participant’s death.  If paid as a
Beneficiary Life Annuity, such benefit shall be the actuarially determined
equivalent using the same reasonable actuarial assumptions and methods (as
determined by the SEVP-HR in his or her complete and sole discretion) of the
Life With 10-Year Certain Benefit that would have been paid to the Participant
had he or she Retired on the day immediately prior to his or her
death.  If the Participant had timely elected and qualified to receive
a Lump Sum Benefit, it shall be calculated in the same manner as provided in
Section 4.2 as if the Participant were alive; e.g., calculated as of the
Participant's death applying the Mortality Tables and the GAAP Rate, both as in
effect for the calendar year immediately preceding the calendar year of the
Participant’s death, but using the Participant’s age, Years of Service and other
factors as of the Participant’s date of death.

         

        

      

      
        
          	
                  5.3 
        

                	
                  Disability.

                

        

         

        

      

      
        Upon a
Participant's Termination of Employment and contemporaneous qualification for
receipt of long term disability benefits under an AT&T or AT&T affiliate
sponsored long term disability benefit plan in which the Participant
participates prior to being Retirement Eligible (without regard to the 5 Years
of Service or 4 Years of Participation requirements), the Participant will
continue to accrue Years of Service during such disability until the earliest of
his or her:

         

        

      

      
        
          	
                  (a)  
        

                	
                  Recovery
      from Disability,

                

        

         

        

      

      
        
          	
                  (b)  
        

                	
                  Retirement
      (determined without regard to the 5 Years of Service or 4 Years of
      Participation requirements), or

                

        

         

        

      

      
        
          	
                  (c)  
        

                	
                  Death.

                

        

         

        

      

      
        Upon the
occurrence of either (a) Participant's recovery from Disability prior to his or
her Retirement Eligibility if Participant does not return to employment, or (b)
Participant's Retirement (determined without regard to the 5 Years of Service or
4 Years of Participation requirements), the Participant shall be entitled to
receive a SERP Benefit as if he or she realized a Termination of Employment as
of the date of such occurrence.

         

        

      

      
        For
purposes of calculating the foregoing benefit, the Participant's Final Average
Earnings shall be determined using his or her Earnings history as of the date of
his or her Disability.

         

        

      

      
        If a
Participant who continues to have a Disability dies prior to his or her
Retirement Eligibility (without regard to the 5 Years of Service or 4 Years of
Participation requirements), the Participant will be treated in the same manner
as if he or she had died while in employment (See Section 5.2).

         

        

      

      6.                  
Payment of
Benefits.

       

      
        
          	
                  6.1  
       

                	
                  Commencement of
      Payments.

                

        

         

        

      

      
        
          	
                  (a) 
        

                	
                  Except
      as provided in Section 5.3, benefit payments shall commence pursuant to
      the Benefit Payout Alternative elected by the Participant in his or her
      Agreement on the date that is six (6) months following his or her
      Termination of Employment; provided, however, if the Participant dies
      after Termination of Employment and prior to the lapse of such six (6)
      month period, benefit payments shall commence upon the Participant’s
      death.  If a Participant elected (or is deemed to have elected)
      an annuity form of benefit under Section 4.2(a), 4.2(b) or 4.2(c), the
      aggregate monthly amount that would be paid between the Participant’s
      Termination of Employment through the date that benefit payments actually
      commence, shall be paid in a lump sum on the date that benefit payments
      actually commence hereunder.  In addition, during the period of
      time between a Participant’s Termination of Employment and the date that
      annuity payments hereunder actually commence, interest shall be credited
      on the withheld annuity amounts for such period of time that each annuity
      payment is withheld.  The credited interest shall be paid in a
      lump sum on the date that payments hereunder actually
      commence.  Interest shall be credited using the GAAP Rate in
      effect for the calendar year immediately preceding the calendar year of
      the Participant’s Termination of
Employment.

                

        

         

        

      

      
        
          	
                  (b) 
        

                	
                  Notwithstanding
      the designation of a specific date for commencement of payment of a
      distribution hereunder, commencement of payments under this Plan may be
      delayed for administrative reasons in the discretion of the SEVP-HR, but
      shall begin not later than sixty (60) days following the date upon which
      payment(s) would otherwise commence under this Plan. A Participant shall
      not have the right to designate or participate in the decision as to the
      taxable year of benefit
commencement.

                

        

         

        

      

      
        
          	
                  6.2  
       

                	
                  Withholding;
      Unemployment Taxes.

                

        

         

        

      

      
        
          	
                  (a) 
        

                	
                  A
      payment may be made from the Plan to reflect the payment of state, local,
      or foreign tax obligations arising from participation in the Plan that
      apply to an amount deferred under the Plan before the amount is paid or
      made available to a Participant (the “State, Local, or Foreign Tax
      Amount”).  Such payment may not exceed the amount of such taxes
      due as a result of participation in the Plan.  Such payment may
      be made by distributions to the Participant in the form of withholding
      pursuant to provisions of applicable state, local, or foreign law or by
      distribution directly to the Participant.  Additionally, a
      payment may be made from the Plan to pay the income tax at source on wages
      imposed under Code Section 3401 as a result of the payment of the State,
      Local, or Foreign Tax Amount and to pay the additional income tax at
      source on wages attributable to such additional Code Section 3401 wages
      and taxes.  However, the total payment under this Section 6.2(a) shall not exceed the aggregate
      of the State, Local, or Foreign Tax Amount and the income tax withholding
      related to such State, Local, or Foreign Tax
  Amount.

                

        

         

        

      

      
        
          	
                  (b) 
        

                	
                  A
      payment may be made from the Plan to pay the Federal Insurance
      Contributions Act tax imposed by Code Sections 3101, 3121(a), and
      3121(v)(2) on compensation deferred under the Plan (the “FICA
      Amount”).  Additionally, a payment may be made from the Plan to
      pay the income tax at source on wages imposed under Code Section 3401 or
      the corresponding withholding provisions of applicable state, local or
      foreign tax laws as a result of the payment of the FICA Amount and to pay
      the additional income tax at source on wages attributable to the
      pyramiding section 3401 wages and taxes.  However, the total
      payment under this Section 6.2(b)
      shall not exceed the aggregate of the FICA Amount and the income tax
      withholding related to such FICA
Amount.

                

        

         

        

      

      
        
          	
                  6.3 
        

                	
                  Recipients of
      Payments; Designation of
Beneficiary.

                

        

         

        

      

      
        All
payments to be made under the Plan shall be made to the Participant during his
or her lifetime, provided that if the Participant dies prior to the completion
of such payments, then all subsequent payments under the Plan shall be made to
the Participant's Beneficiary or Beneficiaries.

         

        

      

      
        In the
event of the death of a Participant, distributions/benefits under this Plan
shall pass to the Beneficiary (ies) designated by the Participant in accordance
with this Plan and the Rules.

         

        

      

      
        
          	
                  6.4  
       

                	
                  No Other
      Benefits.

                

        

         

        

      

      
        No
benefits shall be paid hereunder to the Participant or his or her Beneficiary
except as specifically provided herein.

         

        

      

      
        
          	
                  6.5 
        

                	
                  Small
      Benefit.

                

        

         

        

      

      
        Notwithstanding
any election made by the Participant, the SEVP-HR in his or her sole discretion
may pay any benefit in the form of a lump sum payment if (A) the lump sum
equivalent amount is or would be less than the applicable dollar amount under
Code Section 402(g)(1)(B) when payment of such benefit would otherwise commence,
and (B) the payment of the lump sum equivalent amount results in the termination
and liquidation of the entirety of the Participant’s interest under the Plan and
under any other plan that is considered a single nonqualified deferred
compensation plan under Treasury Regulations Section
1.409A-1(c)(2).

         

        

      

      7.                  
Conditions Related to
Benefits.

       

      
        
          	
                  7.1 
        

                	
                  Administration of
      Plan.

                

        

         

        

      

      
        The
Administrative Committee and the SEVP-HR with respect to specific functions
identified in the Plan, shall be the sole administrators of the Plan and will,
in their discretion, administer, interpret, construe and apply the Plan in
accordance with its terms.  The Administrative Committee or the
SEVP-HR shall further establish, adopt or revise such rules and regulations as
each may deem necessary or advisable for the administration of the
Plan.  All decisions of the Administrative Committee or the SEVP-HR
shall be final and binding unless the Board of Directors should determine
otherwise.

         

        

      

      
        
          	
                  7.2  

                	
                  No Right to AT&T
      Assets.

                

        

         

        

      

      
        Neither a
Participant nor any other person shall acquire by reason of the Plan any right
in or title to any assets, funds or property of any AT&T company whatsoever
including, without limiting the generality of the foregoing, any specific funds
or assets which AT&T, in its sole discretion, may set aside in anticipation
of a liability hereunder, nor in or to any policy or policies of insurance on
the life of a Participant owned by AT&T.  No trust shall be
created in connection with or by the execution or adoption of this Plan or any
Agreement, and any benefits which become payable hereunder shall be paid from
the general assets of AT&T.  A Participant shall have only a
contractual right to the amounts, if any, payable hereunder unsecured by any
asset of AT&T.

         

        

      

      
        
          	
                  7.3 
        

                	
                  Trust
      Fund.

                

        

         

        

      

      
        AT&T
shall be responsible for the payment of all benefits provided under the
Plan.  At its discretion, AT&T may establish one or more trusts,
for the purpose of providing for the payment of such benefits.  Such
trust or trusts may be irrevocable, but the assets thereof shall be subject to
the claims of AT&T's creditors.  To the extent any benefits
provided under the Plan are actually paid from any such trust, AT&T shall
have no further obligation with respect thereto, but to the extent not so paid,
such benefits shall remain the obligation of, and shall be paid by
AT&T.

         

        

      

      
        
          	
                  7.4 
        

                	
                  No Employment
      Rights.

                

        

         

        

      

      
        Nothing
herein shall constitute a contract of continuing employment or in any manner
obligate any AT&T company to continue the service of a Participant, or
obligate a Participant to continue in the service of any AT&T company and
nothing herein shall be construed as fixing or regulating the compensation paid
to a Participant.

         

        

      

      
        
          	
                  7.5    

                	
                  Modification or
      Termination of Plan.

                

        

         

        

      

      
        This Plan
may be modified or terminated at any time in accordance with the provisions of
AT&T's Schedule of Authorizations.  A modification may affect
present and future Participants.   AT&T also reserves the
sole right to terminate at any time any or all Agreements.  In the
event of termination of the Plan or of a Participant's Agreement, a Participant
shall be entitled to benefits hereunder, if prior to the date of termination of
the Plan or of his or her Agreement, such Participant has attained 5 Years of
Service and, if applicable, 4 Years of Participation, in which case, regardless
of the termination of the Plan/Participant's Agreement, such Participant shall
be entitled to benefits at such time as provided in and as otherwise in
accordance with the Plan and his or her Agreement, provided, however, a
Participant's benefit shall be computed as if the Participant had realized a
Termination of Employment as of the date of termination of the Plan or of his or
her Agreement; provided further, however, a Participant's service subsequent to
Plan/Agreement termination shall be recognized for purposes of reducing or
eliminating the Age discount provided for by Section 3.1(d).  No amendment, including
an amendment to this Section 7.5, shall
be effective, without the written consent of a Participant, to alter, to the
detriment of such Participant, the benefits described in this Plan as applicable
to such Participant as of the effective date of such amendment.  For
purposes of this Section 7.5, an
alteration to the detriment of a Participant shall mean a reduction in the
amount payable hereunder to a Participant to which such Participant would be
entitled if such Participant realized a Termination of Employment at such time,
or any change in the form of benefit payable hereunder to a Participant to which
such Participant would be entitled if such Participant realized a Termination of
Employment at such time.  Any amendment which reduces a Participant's
benefit hereunder to adjust for a change in his or her pension benefit resulting
from an amendment to any company-sponsored defined benefit pension plan which
changes the pension benefits payable to all employees, shall not require the
Participant's consent.  Written notice of any amendment shall be given
to each Participant.

         

        

      

      
        
          	
                  7.6  
       

                	
                  Offset.

                

        

         

        

      

      
        If at the
time payments or installments of payments are to be made hereunder, a
Participant or his or her Beneficiary or both are indebted to AT&T or any
AT&T affiliate as a result of debt incurred in the ordinary course of the
employment relationship between the Participant and the AT&T company, then,
annually, up to $5,000 of the payments remaining to be made to the Participant
or his or her Beneficiary or both, may, at the discretion of the SEVP-HR, be
reduced by the amount of such indebtedness; provided, however, that the
reduction must be made at the same time and in the same amount as the debt
otherwise would have been due and collected from the Participant or his or her
Beneficiary; provided, further, however, that an election by the Board of
Directors not to reduce any such payment or payments shall not constitute a
waiver of such AT&T company's claim for such indebtedness.

         

        

      

      
        
          	
                  7.7 
        

                	
                  Change in
      Status.

                

        

         

        

      

      
        In the
event of a change in the employment status of a Participant to a status in which
he is no longer an Participant, the Participant shall immediately cease to be
eligible for any benefits under this Plan except such benefits as had previously
vested.  Only Participant's Years of Service and Earnings history
prior to the change in his employment status shall be taken into account for
purposes of determining Participant's vested benefits hereunder.

         

        

      

      8.                  
Miscellaneous.

       

      
        
          	
                  8.1 
        

                	
                  Nonassignability.

                

        

         

        

      

      
        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 of the amounts, if any,
payable hereunder, or any part thereof, which are, and all rights to which are,
expressly declared to be unassignable and non-transferable.  No part
of the amounts payable shall, prior to actual payment, 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.

         

        

      

      
        
          	
                  8.2 
        

                	
                  Non-Competition.

                

        

         

        

      

      
        Notwithstanding
any other provision of this Plan, all benefits provided under the Plan with
respect to a Participant shall be forfeited and canceled in their entirety if
the Participant, without the consent of AT&T and while employed by AT&T
or any subsidiary thereof or within three (3) years after termination of such
employment, engages in competition with AT&T or any subsidiary thereof or
with any business with which AT&T or a subsidiary or affiliated company has
a substantial interest (collectively referred to herein as "Employer business")
and fails to cease and desist from engaging in said competitive activity within
120 days following receipt of written notice from AT&T to Participant
demanding that Participant cease and desist from engaging in said competitive
activity.  For purposes of this Plan, engaging in competition with any
Employer business shall mean engaging by the Participant in any business or
activity in the same geographical market where the same or substantially similar
business or activity is being carried on as an Employer
business.  Such term shall not include owning a nonsubstantial
publicly traded interest as a shareholder in a business that competes with an
Employer business. However, engaging in competition with an Employer business
shall include representing or providing consulting services to, or being an
employee of, any person or entity that is engaged in competition with any
Employer business or that takes a position adverse to any Employer
business.  Accordingly, benefits shall not be provided under this Plan
if, within the time period and without the written consent specified,
Participant either engages directly in competitive activity or in any capacity
in any location becomes employed by, associated with, or renders service to any
company, or parent or affiliate thereof, or any subsidiary of any of them, if
any of them is engaged in competition with an Employer business, regardless of
the position or duties the Participant takes and regardless of whether or not
the employing company, or the company that Participant becomes associated with
or renders service to, is itself engaged in direct competition with an Employer
business.

         

        

      

      
        
          	
                  8.3 
        

                	
                  Notice.

                

        

         

        

      

      
        Any
notice required or permitted to be given to the Administrative Committee or the
SEVP-HR under the Plan shall be sufficient if in writing and hand delivered, or
sent by certified mail, to the principal office of AT&T, directed to the
attention of the SEVP-HR.  Any notice required or permitted to be
given to a Participant shall be sufficient if in writing and hand delivered, or
sent by certified mail, to Participant at Participant's last known mailing
address as reflected on the records of his or her employing company or the
company from which the Participant incurred a Termination of Employment, as
applicable.  Notice shall be deemed given as of the date of delivery
or, if delivery is made by mail, as of the date shown on the postmark or on the
receipt for certification.

         

        

      

      
        
          	
                  8.4  
        

                	
                  Validity.

                

        

         

        

      

      
        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.

         

        

      

      
        
          	
                  8.5 
        

                	
                  Applicable
      Law.

                

        

         

        This Plan
shall be governed and construed in accordance with the laws of the State of
Texas to the extent not preempted by the Employee Retirement Income Security Act
of 1974, as amended, and regulations thereunder ("ERISA").

      

       

      

      
        
           

        

        
           

          
            

          

        

        
           

          
            Attachment A

          

        

      

      LUMP SUM DISTRIBUTION
AGREEMENT

      

      This Lump
Sum Distribution Agreement is made as of the ____ day of ______________, ____ by
and between AT&T Inc.
(“AT&T” or the
“Company”) and _______________(“Participant”).  Unless otherwise
indicated herein, capitalized words used herein shall have the same meaning
ascribed to such words in the 2005 Supplemental Employee Retirement Plan (the
“Plan” or “SERP”).

      

      WHEREAS,
Participant is a Participant in the Plan, which is sponsored by the
Company;

       

      WHEREAS,
pursuant to the Plan, Participant executed an Agreement, governing Participant’s
benefits in the Plan;

       

      WHEREAS,
Participant’s Agreement provides for the distribution of his benefits in the
form of a lump sum, payable one hundred percent (100%) upon the six (6) month
anniversary of his Termination of Employment provided that Participant is age
sixty (60) or older as of the date of his Termination of Employment and
Participant agrees not to compete with an Employer Business;

       

      NOW,
THEREFORE, the parties hereto, for good and valuable consideration, the
sufficiency of which is hereby acknowledged, hereby agree as
follows:

       

      
        	
                1.  

              	
                If
      Participant is age sixty (60) or over as of the date of his Termination of
      Employment, Company shall pay to

              

      

      Participant his benefits under the Plan
in the form of a lump sum distribution, one hundred percent (100%) of which
shall be paid upon the six (6) month anniversary of Participant’s Termination of
Employment.

       

      
        	
                2.  

              	
                In
      exchange for the right to receive the payment described in Paragraph 1,
      above, Participant acknowledges and agrees that he shall not, without the
      written consent of Company, within three (3) years after Termination of
      Employment, engage in competition with AT&T or with any business with
      which AT&T or a subsidiary of AT&T or an affiliated company has a
      substantial interest (collectively referred to herein as "Employer
      business").  For purposes of this Lump Sum Distribution
      Agreement, engaging in competition with any Employer business shall mean
      Participant’s engaging in any business or activity in the same
      geographical market where the same or substantially similar business or
      activity is being carried on as an Employer business. Such term shall not
      include owning a nonsubstantial publicly traded interest as a shareholder
      in a business that competes with an Employer business.  However,
      it is hereby specifically agreed that engaging in competition with an
      Employer business shall include representing or providing consulting
      services to, or being an employee of, any person or entity that is engaged
      in competition with any Employer business or that takes a position adverse
      to any Employer business.  Participant hereby specifically
      agrees not to engage in any such conduct.  Participant also
      specifically agrees that a breach of this provision would result if,
      within the time period and without the written consent specified,
      Participant either engages directly in competitive activity or in any
      capacity in any location becomes employed by, associated with, or renders
      service to any company, or parent or affiliate thereof, or any subsidiary
      of any of them, if any of them is engaged in competition with an Employer
      business, regardless of the position or duties Participant takes and
      regardless of whether or not the employing company, or the company
      that

              

      

      Participant
becomes associated with or renders service to, is itself engaged in direct
competition with an Employer business.

       

      
        	
                3.  

              	
                Participant
      acknowledges and agrees that he shall promptly return to the Company and
      forfeit all consideration previously received pursuant to this Lump Sum
      Distribution Agreement, specifically the payment referred to in Paragraph
      1, if he engages in competition with an Employer business in
      violation of the provisions of Paragraph
2.

              

      

       

      
        	
                4.  

              	
                Participant
      may submit a description of any proposed activity in writing to AT&T and AT&T shall
      advise

              

      

      Participant in writing within
fifteen (15) business days whether such proposed activity would constitute
engaging in competition with an Employer business, within the meaning of this
Lump Sum Distribution Agreement.

       

      
        	
                5.  

              	
                It
      is hereby specifically agreed that the terms of this Lump Sum Distribution
      Agreement shall be kept strictly confidential and that neither party
      shall, except as necessary for performance of the terms hereof or as
      specifically required by law, disclose the existence of this Lump Sum
      Distribution Agreement or any of its terms to third persons without the
      express consent of the other party.

              

      

       

      
        	
                6.  

              	
                Participant agrees that for any
      breach or threatened breach of any of the provisions of this Lump Sum
      Distribution Agreement by Participant, the Company shall have no adequate
      legal remedy, and in addition to any other remedies available, including
      the repayment and forfeiture remedies described in Paragraph 3, a
      restraining order and/or an injunction may be issued against
      Participant to prevent or
      restrain any such breach.

              

      

       

      
        	
                7.  

              	
                Any
      notice required hereunder to be given by either party will be in writing
      and will be deemed effectively given upon personal delivery to the party
      to be notified, or five (5) days after deposit with the United States Post
      Office by certified mail, postage prepaid, to the other party at the
      address set forth below, or to such other address as either party may from
      time to time designate by ten (10) days advance written notice pursuant to
      this Paragraph.

              

      

       

      
        	
                8.  

              	
                In
      the event any provision of this Lump Sum Distribution Agreement is held
      invalid, void, or unenforceable, the same shall not affect in any respect
      whatsoever the validity of any other provision of this Lump Sum
      Distribution Agreement, except that should any part of the non-compete
      provisions of Paragraph 2 of this Agreement be held invalid, void, or
      unenforceable as applicable to and as asserted by Participant, this Lump
      Sum Distribution Agreement, at the Company's option, may be declared by
      the Company null and void.  If this Lump Sum Distribution
      Agreement is declared null and void by Company pursuant to the provisions
      of this Paragraph, Participant shall return to Company all consideration
      previously received pursuant to this Lump Sum Distribution
      Agreement.

              

      

       

      

       

       

      AT&T
Inc.

       

      

      

      

      
                                                                                                                                                                         

      By:
Senior Executive Vice

      President-Human Resources

      175 E. Houston Street

      San Antonio,
Texas 78205

      

      

                                                                                                                                                                             

      Date                                                                           Date

      
        
           

        

        
           

          
            

          

        

        
           

          
            Attachment B

          

        

      

      “Immediate
Annuity Value of any AT&T or affiliate Qualified Pensions” shall
mean:

      

      
        The
annual amount of annuity payments that would be paid out of the qualified
defined benefit pension plan sponsored by AT&T or an AT&T affiliate in
which the Participant participates on a single life, level payment annuity basis
assuming payment of such qualified defined benefit pension plan benefit
commenced immediately upon the Participant’s Termination of Employment,
notwithstanding the form of payment of such qualified defined benefit pension
plan’s benefit actually made to the Participant (i.e., joint and survivor
annuity, lump sum, etc.) and notwithstanding the actual commencement date of the
payment of such qualified defined benefit pension plan benefit.

         

        

      

      
        

         

        

      

      

      
        
           

        

        
           

          
            

          

        

        
           

          
            Attachment C

          

        

      

      
        Immediate
Annuity Value of SRIP. "Immediate Annuity Value of SRIP" shall
mean

         

        

      

      
        An
objectively determined amount as of December 31, 2008 equal to the annual amount
of a level payment, single life with 10 year certain annuity benefit that would
be paid to the Participant pursuant to the SRIP as it exists on December 31,
2008 assuming the Participant became eligible to receive a distribution of
benefit payments under the SRIP on December 31, 2008, applying the Participant’s
Final Average Earnings and Years of Service (both as defined in the SRIP) as of
December 31, 2004 and the Participant’s age as of December 31, 2008,
notwithstanding the form of payment of the SRIP benefit that would actually be
made to the Participant (i.e., joint and survivor annuity, lump sum, etc.) and
notwithstanding the actual commencement date of the payment of such SRIP
benefit.

         

        

      

      
        

         

        

      

      
        

         

        

      

      
        

         

        

      

      
        
           

        

        
           

          
            

          

        

        
           

          
            Attachment D

          

        

      

      
        Attachment D to the AT&T
2005 Supplemental Employee Retirement Plan

         

        

      

      
        Immediate
Annuity Value of any AT&T or AT&T affiliate Non-Qualified Pensions other
than SERP.  "Immediate Annuity Value of any AT&T or
AT&T affiliate Non-Qualified Pensions other than SERP" shall mean with
respect to a Participant, any one or more of the following, as
applicable:

         

        

      

      
        1.           For
a Participant who is a participant in (or otherwise has a benefit in) the
AT&T Pension Benefit Make Up Plan No. 1  (“PBMU No. 1”), the
AT&T Pension Benefit Make Up Plan No. 2 (“PBMU No. 2”), the AT&T Inc.
Management Mid-Career Hire Plan (the “Mid-Career Plan”), the Cingular Wireless
SBC Executive Transition Pension Make Up Plan (the “Cingular Plan”) and/or the
Pacific Telesis Group Executive Supplemental Cash Balance Pension Plan (“PTG
Plan”) and is a Participant in the Plan on December 31, 2008:

         

        

      

      An
objectively determined amount as of December 31, 2008 equal to the annual amount
of a level payment, single life annuity benefit that would be paid to the
Participant pursuant to the PBMU No. 1, the PBMU No. 2, the Mid-Career Plan, the
Cingular Plan, and/or the PTG Plan, as applicable, as they exist on December 31,
2008 assuming the Participant became eligible to receive a distribution of
benefit payments under the PBMU No. 1, the PBMU No. 2, the Mid-Career Plan, the
Cingular Plan, and/or the PTG Plan, as applicable, on December 31, 2008,
notwithstanding the form of payment of the benefit that would actually be made
to the Participant pursuant to the PBMU No. 1, the PBMU No. 2, the Mid-Career
Plan, the Cingular Plan, and/or the PTG Plan, (i.e., 10-year certain annuity,
lump sum, etc.) and notwithstanding the actual commencement date of the payment
of such PBMU No. 1, PBMU No. 2, the Mid-Career Plan, the Cingular Plan, and/or
PTG Plan benefit.

       

      
        2.           For
a Participant who is a participant in (or otherwise has a benefit in) the PBMU
No. 1, the PBMU No. 2, the Mid-Career Plan, the Cingular Plan, and/or the PTG
Plan and has a SERP Effective Date after December 31, 2008:

         

        

      

      An
objectively determined amount as of the Participant’s SERP Effective Date equal
to the annual amount of a level payment, single life annuity benefit that would
be paid to the Participant pursuant to the PBMU No. 1, the PBMU No. 2, the
Mid-Career Plan, the Cingular Plan, and/or the PTG Plan, as applicable, as they
exist on the Participant’s SERP Effective Date assuming the Participant became
eligible to receive a distribution of benefit payments under the PBMU No. 1, the
PBMU No. 2, the Mid-Career Plan, the Cingular Plan, and/or the PTG Plan, on his
or her SERP Effective Date, notwithstanding the form of payment of the benefit
that would actually be made to the Participant pursuant to the PBMU No. 1, the
PBMU No. 2, the Mid-Career Plan, the Cingular Plan, and/or the PTG Plan (i.e.,
10-year certain annuity, lump sum, etc.) and notwithstanding the actual
commencement date of the payment of such PBMU No. 1, PBMU No. 2, the Mid-Career
Plan, the Cingular Plan, and/or PTG Plan benefit.

       

      
        3.           For
a Participant who is a participant in (or otherwise has a benefit in) the
BellSouth Corporation Supplemental Executive Retirement Plan (the “BellSouth
Plan”) and is a Participant in the Plan on December 31, 2008:

         

        

      

      
        An
objectively determined amount as of December 31, 2008 equal to the annual amount
of a level payment, single life annuity benefit that would be paid to the
Participant pursuant to the BellSouth Plan as it exists on December 31, 2008
assuming the Participant became eligible to receive a distribution of benefit
payments under the BellSouth Plan on December 31, 2008, but applying the
Participant’s age and years of service as if the Participant remained employed
through the fourth anniversary of his or her SERP Effective Date and the
Participant’s Included Earnings (as defined in the BellSouth Plan) as of
December 31, 2008, notwithstanding the form of payment of the BellSouth Plan’s
benefit that would actually be made to the Participant (i.e., joint and survivor
annuity, lump sum, etc.) and notwithstanding the actual commencement date of the
payment of such BellSouth Plan benefit.

         

        

      

      
        4.           For
a Participant who is a participant in (or otherwise has a benefit in) the
BellSouth Plan and has a SERP Effective Date after December 31,
2008:

         

        

      

      An
objectively determined amount as of the Participant’s SERP Effective Date equal
to the annual amount of a level payment, single life annuity benefit that would
be paid to the Participant pursuant to the BellSouth Plan as it exists on the
Participant’s SERP Effective Date assuming the Participant became eligible to
receive a distribution of benefit payments under the BellSouth Plan on his or
her SERP Effective Date (applying the Participant’s age, years of service and
Included Earnings (as defined in the BellSouth Plan) as of the Participant’s
SERP Effective Date), notwithstanding the form of payment of the BellSouth
Plan’s benefit that would actually be made to the Participant (i.e., joint and
survivor annuity, lump sum, etc.) and notwithstanding the actual commencement
date of the payment of such BellSouth Plan benefit.

       

      
        5.           For
a Participant who is a participant in (or otherwise has a benefit in) the
AT&T Corp. Long Term Disability and Survivor Protection Plan (“LTDSPP”) and
is entitled to a nonqualified defined benefit from the LTDSPP, the AT&T
Corp. Excess Benefit and Compensation Plan, (“Excess Plan”), and/or the AT&T
Corp. Non-Qualified Pension Plan (“NQPP”) and is a Participant in the Plan on
December 31, 2008 (the Participant’s election as to the time and form of
benefits under these plans is identical to such election under this
Plan):

         

        

      

      
        The
benefit payments paid pursuant to the LTDSPP (nonqualified defined benefit
only), Excess Plan, and/or the NQPP, as applicable, commencing at the actual
time and pursuant to the actual form such benefit payments are made from the
LTDSPP, Excess Plan, and/or the NQPP, as applicable.

         

        

      

      
        6.           For
a Participant who is a participant in (or otherwise has a benefit in) the LTDSPP
and is entitled to a nonqualified defined benefit from the LTDSPP, the Excess
Plan, and/or the NQPP and has a SERP Effective Date after December 31,
2008:

         

        

      

      An
objectively determined amount as of the Participant’s SERP Effective Date equal
to the annual amount of a level payment, single life annuity benefit that would
be paid to the Participant pursuant to the LTDSPP (nonqualified defined benefit
only), the Excess Plan, and/or the NQPP, as applicable, as they exist on the
Participant’s SERP Effective Date assuming the Participant became eligible to
receive a distribution of benefit payments under the AT&T Corp. LTDSPP
(nonqualified defined benefit only), the Excess Plan, and/or the NQPP, on his or
her SERP Effective Date, notwithstanding the form of payment of the benefit that
would actually be made to the Participant pursuant to the LTDSPP (nonqualified
defined benefit only), the Excess Plan, and/or the NQPP (i.e., 10-year certain
annuity, lump sum, etc.) and notwithstanding the actual commencement date of the
payment of such the AT&T Corp. LTDSPP (nonqualified defined benefit only),
the Excess Plan, and/or the NQPP benefit.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
            Attachment E

            

            

            

            

          

        

      

      Attachment
E applies with respect to any Participant who:

      

      
        	
                ·  

              	
                Became
      a Participant in the 2005 AT&T Supplemental Executive Retirement Plan
      on or before December 31, 2008;

              

      

      
        	
                ·  

              	
                Is
      a participant in the BellSouth Corporation Supplemental Executive
      Retirement Plan; and

              

      

      
        	
                ·  

              	
                Attained
      the age of fifty-four (54) on or before March 1, 2007;
  and

              

      

      
        	
                ·  

              	
                Realizes
      a Termination of Employment on or after January 1,
  2009.

              

      

      

      Upon
Termination of Employment, such Participant’s Plan benefit shall equal the
greater of his or her benefit determined in accordance with Section 3 of the
Plan or this Attachment E.

      

      A.           Definitions.  Solely
for purposes of this Attachment E, the following words shall have the meanings
as provided in this Attachment E.  Any other capitalized word, not
otherwise defined in this Attachment E, shall have the meaning as provided in
Section 2 of the Plan.

      

      
        	
                1.

              	
                The
      term "Annual
      Bonus Award" shall mean the bonus amount paid annually to an
      Attachment E Participant that is included in the calculation of pension
      benefits under the Pension Plan.

              

      

      

      
        	
                2.

              	
                The
      term “Attachment
      E Participant” shall mean any Participant to whom Attachment E
      applies as described in the first paragraph of this Attachment
      E.

              

      

      

      
        	
                3.

              	
                The
      terms "BellSouth
      Corporation" and "Company" shall
      mean BellSouth Corporation, a Georgia corporation, or its
      successors.

              

      

      

      
        	
                4.

              	
                The
      term "Included
      Earnings" shall mean the 12 month average of the sum of (1) the
      last sixty (60) months of base pay, plus (2) the Annual Bonus Awards
      payable during or after that sixty (60) month period; provided, however,
      Included Earnings shall not include base pay or Annual Bonus Awards earned
      after March 1, 2011.  The amounts of base pay and other payments
      used to determine Included Earnings as described above include all amounts
      during the specified period including those amounts previously deferred
      pursuant to other plans.  If an Attachment E Participant
      terminates employment while eligible for a benefit under this Attachment E
      and thereafter receives Included Earnings, these additional Included
      Earnings shall be deemed to have been paid as of the date of the
      Attachment E Participant’s Termination of Employment, and the amount of
      benefit payable under this Attachment E shall be corrected
      accordingly.

              

      

      

      
        	
                5.

              	
                The
      term “Merger” shall
      mean the merger, pursuant to the Agreement and Plan of Merger dated as of
      March 4, 2006 (the “Merger Agreement”), by and among BellSouth, AT&T
      Inc. (“AT&T”), and ABC Consolidation Corp., a Georgia corporation and
      wholly-owned subsidiary of AT&T (“Merger Sub”), pursuant to which, at
      the “Effective Time” (as defined in the Merger Agreement), BellSouth was
      merged with and into the Merger
Sub.

              

      

      

      

      
        	
                6.

              	
                The
      term "Pension
      Plan" shall mean the BellSouth Personal Retirement Account Pension
      Plan as in effect on the date of the
Merger.

              

      

      

      
        	
                7.

              	
                The
      term "Standard
      Annual Bonus" shall mean the Attachment E Participant’s Target
      Award under the AT&T 2006 Incentive Plan or the AT&T Short Term
      Incentive Plan and for periods of time prior to the Attachment E
      Participant’s participation in the AT&T 2006 Incentive Plan or the
      AT&T Short Term Incentive Plan, Standard Annual Bonus shall mean an
      amount determined by applying a target percentage of an Attachment E
      Participant’s base pay rate as determined by the annual compensation plan
      and the Attachment E Participant’s job or pay
  grade.

              

      

      

      
        	
                8.

              	
                The
      term "Vesting
      Service Credit", except as expressly limited or otherwise provided
      in this Attachment E or under an individual Attachment E Participant’s
      employment-related agreement with the Company, shall have the same meaning
      as is attributed to such term under the Pension Plan and shall be
      interpreted in the same manner as that term is interpreted for purposes of
      the Pension Plan; provided, however, Vesting Service Credit shall not
      include any period of time on or after March 1,
  2011.

              

      

      

      B.           Benefit
Amount.  An Attachment E Participant’s benefit under this
Attachment E shall be determined as follows:

      

      The
aggregate annualized benefit of each Attachment E Participant shall be
determined by adding the sum of two percent (2%) of Included Earnings for each
year of the Attachment E Participant's Vesting Service Credit for the first
twenty years, plus one and one-half percent (1.5%) of Included Earnings for each
year of the Attachment E Participant's Vesting Service Credit for the next ten
years, plus one percent (1%) of Included Earnings for each year of the
Attachment E Participant's Vesting Service Credit for each additional year up to
the month in which the Attachment E Participant retires less (1) 100% of the
Primary Social Security benefit payable at age 65, (2) 100% of the retirement
benefit (unreduced for survivor annuity) payable from the Pension Plan (as
defined below), and (3) 100% of the benefit payable from the BellSouth
Corporation Supplemental Executive Retirement Plan (as defined
below).

      

      a.           The
benefit reduction to be applied for the benefit payable from the Pension Plan
shall be the amount of such benefit that would be payable on the date that
benefits are eligible to be paid (or become payable) under the Plan, or, if
earlier, March 1, 2011 (regardless of the Attachment E Participant’s actual
pension commencement date under the Pension Plan) and determined assuming that
the Attachment E Participant elected a single life annuity (regardless of the
actual form of benefit elected under the Pension Plan).

      

      The
benefit reduction to be applied for the benefit payable from the BellSouth
Corporation Supplemental Executive Retirement Plan shall be an objectively
determined amount as of December 31, 2008 equal to the annual amount of a level
payment, single life annuity benefit that would be paid to the Attachment E
Participant pursuant to the BellSouth Supplemental Executive Retirement Plan as
it exists on December 31, 2008 assuming the Attachment E Participant became
eligible to receive a distribution of benefit payments under the BellSouth
Supplemental Executive Retirement Plan on December 31, 2008, but applying the
Attachment E Participant’s age and years of service as of March 1, 2011 and the
Attachment E Participant’s Included Earnings as of December 31, 2008,
notwithstanding the form of payment of the BellSouth Supplemental Executive
Retirement Plan’s benefit that would actually be made to the Attachment E
Participant (i.e., joint and survivor annuity, lump sum, etc.) and
notwithstanding the actual commencement date of the payment of such BellSouth
Supplemental Executive Retirement Plan benefit.

      

      

      b.           The
benefit amount determined in accordance with this Attachment E (expressed as an
annuity) at the time of the Attachment E Participant’s Termination of Employment
shall not be less than the benefit that would have been payable to the
Attachment E Participant if the Attachment E Participant had a Termination of
Employment on any prior December 31 (using pay, service, offsets and all factors
applicable on the previous dates and assuming an immediate benefit
commencement).

      

      c.           The
benefit amount determined in accordance with this Attachment E shall be reduced
(before the offset for benefits under the Pension Plan) by one-quarter percent
(0.25%) for each calendar month or part thereof by which the Attachment E
Participant’s Termination of Employment precedes his or her 62nd
birthday.ex10hh.htm

    Exhibit
10-hh

    

    

    

    

    

    

    

    

    

    AT&T

    EXECUTIVE
DEFERRED COMPENSATION PLAN

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    Amended
and Restated Effective January 1, 2008

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    AT&T

    EXECUTIVE
DEFERRED COMPENSATION PLAN

    

    Background and
Purpose

    

    The
AT&T Executive Deferred Compensation Plan was previously established to
provide a plan of deferred compensation for certain executives of the Company
who are classified as Officers and who contribute to the continued growth,
development, and future business of the Company.  From the time of its
adoption through December 31, 1984, the Plan was named the “Bell System
Senior Management Incentive Award Deferral Plan”.  During the period
from January 1, 1984 through December 31, 2004, the Plan was known as the
“AT&T Senior Management Incentive Award Deferral Plan”.  The name
of the Plan was changed to “AT&T Executive Deferred Compensation Plan”,
effective as of January 1, 2005, to reflect the broader classification of
executive-level employees who became eligible to participate in the Plan as of
that date.

    

    The
AT&T Executive Deferred Compensation Plan is a “nonqualified deferred
compensation plan” as that term is defined in Code
Section 409A(d)(1).  The AT&T Deferred Compensation Plan is
intended to constitute an “employee pension benefit plan” as defined in
Section 3(2)(A) of ERISA that covers a select group of management or highly
compensated employees.

    

    The
AT&T Executive Deferred Compensation Plan is amended and restated, as set
forth herein, to (i) effective as of January 1, 2008, to incorporate a
series of amendments that were previously adopted by the AT&T Corp. Board of
Directors; and (ii) effective as of January 1, 2005, to make additional
amendments, necessary for the AT&T Executive Deferred Compensation Plan to
comply with the applicable provisions of Code Section 409A.

    

    The
AT&T Executive Deferred Compensation Plan, as amended and restated, provides
for two distinct programs:  (i) the “Grandfathered Deferral Program”;
and (ii) the “Executive Deferral Program”.  The Grandfathered Deferral
Program incorporates all provisions, rights, and obligations, in effect as of
December 31, 2004, and governs the deferral accounts (and any earnings thereon)
associated with compensation deferred under the AT&T Executive Deferred
Compensation Plan that was earned and vested by the respective Participants
prior to January 1, 2005.  The Grandfathered Deferral Program,
and all accounts thereunder, is deemed to be a “grandfathered” nonqualified
deferred compensation plan that is not subject to the requirements of Code
Section 409A.  The Executive Deferral Program applies to all deferred
compensation under the Plan that was not earned and vested prior to January 1,
2005 (and any earnings thereon), and is subject the applicable provisions of
Code Section 409A.

    

    During
the period from January 1, 2005 to December 31, 2008, the AT&T Executive
Deferred Compensation Plan has been operated in good faith compliance with the
provisions of Code Section 409A, Internal Revenue Service Notice 2005-1, the
proposed Treasury Regulations for Code Section 409A, and the final Treasury
Regulations for Code Section 409A, and any other generally applicable guidance
published in the Internal Revenue Service Bulletin with an effective date prior
to January 1, 2009.

    

    Effective
November 18, 2005, AT&T Corp. became a wholly-owned subsidiary of SBC
Communications Inc. (now known as “AT&T Inc.”) pursuant to the Agreement and
Plan of Merger dated as of January 30, 2005.

    

    

    Section

    1.

    Definitions

    

    The
following words and phrases, as used in this plan document, shall have the
meanings set forth below unless a clearly different meaning is required by the
context in which the word or phrase is used.

    

    
      	
              1.0

            	
              Administrator.  Prior to
      August 22, 2006, “Administrator” means the Executive Vice President –
      Human Resources of AT&T Corp. (or his or her delegate).  On
      and after August 22, 2006, “Administrator” means the most senior vice
      president of AT&T Inc. responsible for human resource matters (or his
      or her designee).  The Administrator shall have absolute
      discretion to interpret, manage and administer the Plan in accordance with
      its terms and conditions.

            

    

    

    
      	
              1.1

            	
              Affiliate.  “Affiliate”
      means (i) any individual, corporation, partnership, association,
      joint-stock company, trust, unincorporated organization, or governmental
      or political subdivision thereof that directly, or through one or more
      intermediates, controls, or is controlled by, or is under common control
      with, the Company; or (ii) any entity in which the Company has a
      significant equity interest, as determined by the Committee, provided,
      however, that effective immediately after the Closing, the term
      “Affiliate” shall not include any individual, corporation, partnership,
      association, joint-stock company, trust, unincorporated organization, or
      governmental or political subdivision that was not an Affiliate
      immediately prior to the Closing other than AT&T Enterprise Services,
      Inc.

            

    

    

    
      	
              1.2

            	
              Annual
      Base Salary.  “Annual
      Base Salary” means the amount of annual cash compensation for an active
      Officer or E-Band that is identified and treated as “salary” in accordance
      with the compensation and pay procedures of the Company, as in effect from
      time to time.  For clarification, “Annual Base Salary” does not
      include Annual Bonus.

            

    

    

    
      	
              1.3

            	
              Annual
      Bonus.  “Annual
      Bonus” means a cash payment of incentive compensation to an Officer or
      E-Band pursuant to the provisions of the AT&T Short Term Incentive
      Plan, as amended from time to time.

            

    

    

    
      	
              1.4

            	
              AT&T
      Common Stock.  For periods
      prior to the Closing, “AT&T Common Stock” means the common shares, par
      value of $1.00 per share, of AT&T Corp.  After the Closing,
      “AT&T Common Stock” means the common shares, par value $1.00 per
      share, of AT&T Inc. (known as SBC Communications Inc. prior to
      November 18, 2005).

            

    

    

    
      	
              1.5

            	
              AT&T
      Share Price.  “AT&T
      Share Price” means the average of the daily high and low sale prices of
      shares of AT&T Common Stock on the New York Stock Exchange (“NYSE”)
      during each of the five (5) trading days ending on the applicable
      Determination Date, or during each of the five trading days immediately
      preceding the applicable Determination Date, if the NYSE is closed on the
      Determination Date.

            

    

    

    
      	
              1.6

            	
              Basic
      Deferral Distribution Option.  “Basic
      Deferral Distribution Option” means the distribution option under the
      Grandfathered Deferral Program that is provided for in
      Section 2.6.

            

    

     

    
      	
              1.7

            	
              Broadband
      Spin-Off.  “Broadband
      Spin-Off” means the spin-off of the Company’s broadband unit that
      conducted business as “AT&T Broadband” (or the spin-off of a
      newly-formed holding company for such broadband business) to the Company’s
      shareholders pursuant to the definitive merger agreement for the
      AT&T-Comcast transaction, as approved by the Board and announced by
      the Company on December 19,
2001.

            

    

    

    
      	
              1.8

            	
              Beneficiary.  “Beneficiary”
      means the person, trust, entity, organization or estate of a Participant
      designated pursuant to Section 2.5(f) or Section 3.10 that is entitled to
      receive benefits under the Grandfathered Deferral Program or the Executive
      Deferral Program, as applicable, upon the death of a
      Participant.

            

    

    

    
      	
              1.9

            	
              Board.  “Board”
      means the Board of Directors of the
Company.

            

    

    

    
      	
              1.10

            	
              Change
      in Control.  “Change in
      Control” has the same meaning assigned to that term in the AT&T 2004
      Long Term Incentive Program as in effect on May 19,
  2004.

            

    

    

    
      	
              1.11

            	
              CIC
      Eligible Employee.
      “CIC Eligible Employee” means a “Senior Officer” (as defined in the
      AT&T Senior Officer Separation Plan), a “Senior Manager” (as defined
      in the AT&T Senior Manager Separation Plan), or an “Executive” (as
      defined in the AT&T Executive Separation Plan) or an “Employee” (as
      defined in the AT&T Separation Plan), as the case may be who, within
      two (2) years following a Change in Control (a) is terminated for reasons
      other than (i) “cause”, or (ii) by reason of becoming eligible for
      benefits under any Company-sponsored long-term disability plan; or
      (b) terminates employment for “good reason” occurring after a Change
      in Control.

            

    

    

    
      	
              1.12

            	
              Closing.  “Closing”
      means the closing of SBC Communications Inc.’s acquisition of AT&T
      Corp. as defined in the definitive Agreement and Plan of Merger dated
      January 30, 2005, between AT&T Corp. and SBC Communications
      Inc.  The Closing occurred on November 18,
      2005.

            

    

    
      	
              1.13

            	
              Code.  “Code”
      means the Internal Revenue Code of 1986, as
  amended.

            

    

    

    
      	
              1.14

            	
              Committee.  For periods
      prior to the Closing, “Committee” means
      the Compensation and Employee Benefits Committee of the Board (or the
      successor to such committee).  For period on or after the
      Closing, “Committee” means the
Administrator.

            

    

    

    
      	
              1.15

            	
              Company.  “Company”
      means AT&T Corp., a New York corporation, and any successors to such
      entity.

            

    

    

    
      	
              1.16

            	
              Company
      Matching Contribution.  “Company
      Matching Contribution” means the matching contribution made by the Company
      to a Participant’s deferral account under the Executive Deferral Program
      in accordance with the provisions of
  Section 3.5.

            

    

    

    
      	
              1.17

            	
              Determination
      Date.  “Determination
      Date” means the date on which a completed election form for the Basic
      Deferral Distribution Option from a Participant is received by the
      Administrator.

            

    

     

    
      	
              1.18

            	
              E-Band.  “E-Band”
      means a management employee of a Participating Company holding a position
      classified as a “Manager 5” or “Manager E”, or its equivalent, in a
      non-banded environment, or at the salary grade level of “E-Band”, or its
      equivalent, in a banded environment (also referred to as an “Executive” or
      “Director” from time to time), as determined in the discretion of the
      Administrator.

            

    

    

    
      	
              1.19

            	
              Eligible
      Executive.  “Eligible
      Executive” means (i) in the context of the Grandfathered Deferral Program,
      an active management employee of a Participating Company who satisfies the
      eligibility requirements set forth in Section 2.1; and (ii) in the context
      of the Executive Deferral Program, an active management employee of a
      Participating Company who satisfies the eligibility requirements set forth
      in Section 3.1.

            

    

    

    
      	
              1.20

            	
              Employer.  “Employer”
      means the Company and certain of its subsidiaries and affiliates, as
      determined by the Company in its sole discretion.  Effective
      immediately after the Closing, the term “Employer” shall, in addition,
      include AT&T Enterprise Services, Inc. (known as “SBC Enterprise
      Services, Inc.” prior to January 19, 2006), which following the Closing
      became an affiliate of the Company.

            

    

    

    
      	
              1.21

            	
              ERISA.  “ERISA”
      means the Employee Retirement Income Security Act of 1974, as
      amended.

            

    

    

    
      	
              1.22

            	
              Executive
      Deferral Program.  “Executive
      Deferral Program” means the nonqualified deferred compensation program
      described in Section 3 that is applicable to amounts of compensation
      deferred by Officers and E-Bands that was not earned and vested prior to
      January 1, 2005.

            

    

    

    
      	
              1.23

            	
              Grandfathered
      Deferral Program.  “Grandfathered
      Deferral Program” means the nonqualified deferred compensation program
      described in Section 2 that is applicable to amounts of compensation
      deferred by Officers that was earned and vested prior to January 1,
      2005.   The substantive terms and conditions of the
      Grandfathered Deferral Program, including all benefits and rights
      thereunder, are those that existed under the AT&T Senior Management
      Incentive Award Deferral Plan on October 3, 2004, without any
      subsequent “material modifications” (as referred to in the federal income
      tax regulations underlying Code Section
409A).

            

    

    

    
      	
              1.24

            	
              Long
      Term Award.  “Long Term
      Award” means an Eligible Executive’s annual grant from a Participating
      Company of “performance shares” (as defined in the 2004 Incentive Program)
      and/or restricted stock units.

            

    

    

    
      	
              1.25

            	
              Officer.  “Officer”
      means a management employee of a Participating Company holding a position
      classified as a “Manager 6”, “Manager O” or higher level in a non-banded
      environment, or at a salary grade level above “E-Band”, or its equivalent,
      in a banded environment (formerly referred to as a “Senior Manager” from
      time to time), as determined in the discretion of the
      Administrator.

            

    

    

    
      	
              1.26

            	
              Participant.  “Participant”
      means (i) in the context of the Grandfathered Deferral Program, an active
      or former Officer or E-Band who has satisfied the requirements in Section
      2.1 to be an Eligible Executive, has made one or more elections to defer
      compensation under the Grandfathered Deferral Program, and has an account
      balance under the Grandfathered Deferral Program; and (ii) in the
      context of the Executive Deferral Program, an active or former Officer or
      E-Band who has satisfied the requirements in Section 3.1 to be an
      Eligible Executive, has made one or more elections to defer compensation
      under the Executive Deferral Program, and has an account balance under the
      Executive Deferral Program.

            

    

    

    
      	
              1.27

            	
              Participating
      Company.  “Participating
      Company” means AT&T Corp. and any
Affiliate.

            

    

    

    
      	
              1.28

            	
              Plan.  “Plan”
      means the AT&T Executive Deferred Compensation Plan, which shall be
      evidenced by this plan document, as amended from time to
      time.  During the period beginning on January 1, 1984, and
      ending on December 31, 2004, the Plan was known as the “AT&T Senior
      Management Incentive Award Deferral Plan”.  Prior to January 1,
      1984, the Plan was known as the “Bell System Senior Management Incentive
      Award Deferral Plan”.  A reference in this document to the
      “Plan” shall generally be construed as a reference to the Grandfathered
      Deferral Program and the Executive Deferral Program, collectively, unless
      another meaning is clearly required by the context in which the term
      “Plan” is used.

            

    

    

    
      	
              1.29

            	
              Savings
      Plan.  “Savings
      Plan” means the AT&T Long Term Savings Plan for Management Employees
      (or any successor to such plan).

            

    

    

    
      	
              1.30

            	
              Separation
      From Service.  “Separation
      From Service” means, for purposes of the Executive Deferral Program, a
      Participant’s termination of the employment with the Employer for any
      reason which constitutes a "separation from service" under Code Section
      409A(a)(2).  Notwithstanding the foregoing, the employment
      relationship of a Participant with the Employer is considered to remain
      intact while the Participant is on military leave, sick leave or other
      bona fide leave of absence if there is a reasonable expectation that the
      Participant will return to perform services for the Employer and the
      period of such leave does not exceed six (6) months, or if longer, so long
      as the Participant retains a right to reemployment with the Employer under
      applicable law or contract.  Whether an Participant has
      terminated employment with the Employer will be determined by the Employer
      based on whether (i) it is reasonably anticipated by the Employer and the
      Participant that the Participant will permanently cease providing services
      to the Employer (as either an employee or independent contractor); or (ii)
      the level of bona fide services to be performed by the Participant (as
      either an employee or independent contractor) will permanently decrease to
      no more than twenty percent (20%) of the average level of bona fide
      services performed (as either an employee or independent contractor) over
      the immediately preceding thirty-six (36) month period or such shorter
      period during which the Participant was performing services for the
      Employer.  If a leave of absence occurs during such thirty-six
      (36) month or shorter period which is not considered a separation from
      service, unpaid leaves of absence shall be disregarded and the level of
      services provided during any paid leave of absence shall be presumed to be
      the level of services required to receive the compensation paid with
      respect to such leave of absence.

            

    

    

    
      	
              1.31

            	
              Service
      Period.  “Service
      Period” means the calendar year during which an Eligible Executive’s right
      to compensation from a Participating Company in the form of Annual Base
      Salary, Annual Bonus, and/or Long Term Award
  arises.

            

    

    

    
      	
              1.32

            	
              Service
      Recipient.  “Service
      Recipient” means the Employer and all other corporations, entities, and
      businesses (including, but not limited to, AT&T Inc., a Delaware
      corporation) that together with the Employer are considered a single
      employer under Code Sections 414(b) and
414(c).

            

    

    

    
      	
              1.33

            	
              Specified
      Employee.  “Specified
      Employee” means any Participant who is a “Key Employee” (as defined in
      Code Section 416(i) without regard to paragraph (5) thereof), as
      determined by the Company 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.

            

    

    

    
      	
              1.34

            	
              2004
      Incentive Program.  “2004
      Incentive Program” means the AT&T 2004 Long Term Incentive
      Program.

            

    

    

    
      	
              1.35

            	
              Year
      of Service.  “Year of
      Service” shall have the same meaning as that assigned to such term under
      the Savings Plan from time to time.

            

    

    

    

    Section

    2.

    Grandfathered Deferral
Program

    

    
      	
              2.0

            	
              Continuation
      of Prior Deferred Compensation Plan.  The
      Grandfathered Deferral Program, as set forth in Section 2, represents
      a restatement of the substantive terms and conditions of the AT&T
      Senior Management Incentive Award Deferral Plan, including all benefits
      and rights thereunder, as they existed on October 3, 2004.  The
      text set forth in Section 2 substantially tracks that in the AT&T
      Senior Management Incentive Award Deferral Plan document, as amended,
      through October 3, 2004.  Certain headings and introductory
      phrases have been introduced to the text for reference and transitional
      purposes; however, it is the Company’s intent that the Grandfathered
      Deferral Program, as set forth herein, reflect no “material modification”
      (as referred to in the federal income tax regulations underlying Code
      Section 409A) to those terms and conditions in existence under the
      AT&T Senior Management Incentive Award Deferral Plan on October 3,
      2004.  It is further the Company’s intent that the deferral
      accounts previously established under the AT&T Senior Management
      Incentive Award Deferral Plan that was earned and vested prior to January
      1, 2005 (including all earning thereon) and all deferral and distribution
      elections made with respect to such deferral accounts, be treated as
      exempt from the application of the provisions of Code Section
      409A.

            

    

    

    
      	
              2.1

            	
              Eligibility
      to Participate.  An active
      Officer of a Participating Company who is eligible for an award under the
      AT&T Short Term Incentive Award Plan and/or who has been granted a
      “performance award” or “stock unit award” under the AT&T Senior
      Management Long Term Incentive Plan, the 1987 Long Term Incentive Plan,
      the AT&T 1997 Long Term Incentive Program or the 2004 Incentive
      Program shall be eligible to commence participation in the Grandfathered
      Deferral Program, provided, however, that no active Officer or other
      individual may be or become eligible to participate under the
      Grandfathered Deferral Program with respect to the deferral of any form of
      compensation with respect to which the Officer or other individual did
      not, prior to January 1, 2005, have a legally binding right to such
      compensation, and that right was earned and
  vested.

            

    

    

    
      	
              2.2

            	
              Participation
      Elections.  An Officer
      who satisfies the eligibility requirements in Section 2.1 may elect to
      participate in the Grandfathered Deferral Program by making an election to
      defer compensation in accordance with the following
      provisions:

            

    

    

    
      	
               
      

            	
              (a)

            	
              Elections
      to Defer Awards and Dividend Equivalent Payments.  Prior
      to the beginning of any calendar year, any Officer may elect to
      participate in the Grandfathered Deferral Program by directing that (i)
      all or part of an annual short term incentive award or a “performance
      award” or “stock unit award” under the 1987 Long Term Incentive Plan, the
      AT&T 1997 Long Term Incentive Program  or the 2004 Incentive
      Program, and/or (ii) all or part of the dividend equivalent payments under
      the 1987 Long Term Incentive Plan, the AT&T 1997 Long Term Incentive
      Program or the 2004 Incentive Program, that such employee’s Participating
      Company would otherwise pay currently to such employee in such calendar
      year, shall be credited to a deferred account subject to the terms of the
      Grandfathered Deferral Program.  However, in no event shall the
      part of an award under any plan credited during any calendar year be less
      than $1,000 (based on a valuation at the time the award would otherwise be
      paid).  There shall be no such minimum limitation on amounts
      credited during any calendar year that are related to dividend equivalent
      payments.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Elections
      by Designated Officers to Defer Salary.  Prior
      to the beginning of any calendar year, the Chairman of the Board and any
      other Officer designated by the Chairman of the Board may elect to
      participate in the Grandfathered Deferral Program by directing that all or
      part of such Officer’s salary that such employee’s Participating Company
      would otherwise pay currently to such employee in such calendar year shall
      be credited to a deferred account subject to the terms of the
      Grandfathered Deferral Program.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Elections
      to Defer Other Compensation.  Subject
      to approval by the Committee, prior to the beginning of any calendar year,
      any Officer may elect to participate in the Grandfathered Deferral Program
      as to other awards under the 1987 Long Term Incentive Plan, AT&T 1997
      Long Term Incentive Program or 2004 Incentive Program, or other amounts of
      compensation of such Officer, by directing that all or part of such awards
      or compensation that such Officer’s Participating Company would otherwise
      pay currently to such Officer in such calendar year be credited to a
      deferred account subject to the terms of the Grandfathered Deferral
      Program.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Form
      of Deferral Elections.  An
      election to participate in the Grandfathered Deferral Program described in
      Section 2.2(a), Section 2.2(b) or Section 2.2(c) shall be in the form of a
      document executed by the Officer and filed with the Executive Vice
      President – Human Resources of AT&T Corp. (or his or her
      designee).

            

    

    

    
      	
               
      

            	
              (e)

            	
              Irrevocability
      of Deferral Elections.  Except
      as provided in Section 2.5(k) or Section 2.6, an election related to
      awards, dividend equivalent payments, salary and/or other compensation
      otherwise payable currently in any calendar year shall become irrevocable
      on the last day prior to the beginning of such calendar
    year.

            

    

    

    
      	
               
      

            	
              (f)

            	
              Elections
      to Defer Made by Newly-Eligible Officers.  Notwithstanding
      anything to the contrary contained in this Section 2.2, in the case of an
      Officer who is newly eligible to participate in the Grandfathered Deferral
      Program, or in the case of any Officer with respect to awards or
      compensation newly eligible to be deferred under the Grandfathered
      Deferral Program, a deferral election may be made with respect to
      compensation earned and otherwise receivable in the same calendar year in
      which the election is made and subsequent to such election, provided such
      election is made within ninety (90) days of such
    eligibility.

            

    

    

    
      	
              2.3

            	
              Deferred
      Amounts – Amounts Otherwise Payable in Cash.  Amounts of
      compensation deferred under the Grandfathered Deferral Program pursuant to
      elections made under the provisions of Section 2.2 that otherwise would be
      payable in cash shall be credited to the Officer’s account and
      administered in accordance with the following
  provisions:

            

    

    

    
      	
               
      

            	
              (a)

            	
              General
      Rule.  Deferred
      amounts related to awards, dividend equivalent payments which would
      otherwise have been distributed in cash by a Participating Company and
      deferred amounts related to salary and/or other cash compensation shall be
      credited to the employee’s account and shall bear interest from the date
      the awards, dividend equivalent payments, salary and/or other cash
      compensation would otherwise have been
paid.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Interest
      Crediting Rate and Methodology.  The
      interest credited to the account will be compounded at the end of each
      calendar quarter, and the annual rate of interest applied at the end of
      any calendar quarter shall be determined by the Committee from time to
      time; provided, however, that:

            

    

    

    
      	
               
      

            	
              (i)

            	
              The
      annual interest rate to be applied with respect to the cash portion of an
      employee’s (or former employee’s) deferred account balance as of December
      31, 1998, plus any additions to such account after December 31, 1998, but
      prior to January 1, 2000, that result from deferral elections made by the
      employee prior to December 31, 1998 (reduced by any distributions
      attributable to such portion of the employee’s deferred account balance),
      shall not be less than the applicable ten (10) year U.S. Treasury Note
      rate for the prior calendar quarter, plus five percent
    (5%).

            

    

    

    
      	
               
      

            	
              (ii)

            	
              The
      annual interest rate to be applied with respect to any additions to the
      cash portion of an employee’s (or former employee’s) deferred account
      after December 31, 1999, but prior to January 1, 2001, that result from
      deferral elections made by the employee prior to December 31, 1999, shall
      be the applicable ten (10) year U.S. Treasury Note rate for the prior
      calendar quarter, plus five percent
(5%).

            

    

    

    
      	
               
      

            	
              (iii)

            	
              The
      annual interest rate to be applied with respect to any additions to the
      cash portion of an employee’s (or former employee’s) deferred account
      after December 31, 2000, shall be the applicable ten (10)
    year

            

    

    U.S.
Treasury Note rate for the prior calendar quarter, plus two percent
(2%).

    

    
      	
               
      

            	
              (c)

            	
              Special
      Transition Rule.  If
      an employee made an election described in Section 2.2, which election was
      effective on December 31, 1983, then such employee’s account shall also be
      credited during 1984 with an amount equal to the deferred amounts which
      would have been credited to the employee’s account during 1984 had the
      company which employed the employee on December 31, 1983, continued to be
      a Participating Company during 1984, and such amount shall bear interest
      in accordance with Section 2.3(b) from the date such amount would have
      been credited had such company continued to be a Participating Company
      during 1984.

            

    

    

    
      	
              2.4

            	
              Deferred
      Amounts – Amounts Otherwise Payable in AT&T Common Stock.  Amounts of
      compensation deferred under the Grandfathered Deferral Program pursuant to
      elections made under the provisions of Section 2.2 that otherwise
      would  be payable in AT&T Common Stock shall be credited to
      the Officer’s account and administered in accordance with the following
      provisions:

            

    

    

    
      	
               
      

            	
              (a)

            	
              General
      Rule.  Deferred
      amounts related to awards that would otherwise have been distributed in
      AT&T Common Stock by a Participating Company shall be credited to the
      employee’s account as deferred AT&T Common
  Stock.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Special
      Transition Rule.  If
      an employee made an election described in Section 2.2, which election was
      effective on December 31, 1983, then such employee’s account shall also be
      credited during 1984 with the deferred AT&T shares which would have
      been credited to the employee’s account had the company which employed the
      employee on December 31, 1983, continued to be a Participating Company in
      the Plan and in the AT&T Senior Management Long Term Incentive Plan
      during 1984.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Deferred
      Amounts Related to Dividend Equivalent Payments.  Prior
      to the beginning of any calendar year, the Chairman of the Board and any
      other Officer designated by the Chairman of the Board may elect that
      deferred amounts related to dividend equivalent payments, which would
      otherwise have been distributed in cash by a Participating Company during
      such calendar year, shall be credited to the employee’s account as
      deferred AT&T Common Stock.  The number of deferred AT&T
      Common Stock credited, with respect to each dividend equivalent, shall be
      determined in accordance with the conversion formula set forth in Section
      2.4(d), as if such dividend equivalent were the amount to be converted to
      a number of additional deferred AT&T Common
  Stock.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Dividend
      Payment Conversions to AT&T Common Stock.  The
      employee’s account shall also be credited on each dividend payment date
      for deferred AT&T Common Stock with an amount equivalent to the
      dividend payable on the number of deferred AT&T shares of Common Stock
      equal to the number of deferred AT&T shares of Common Stock in the
      employee’s account on the record date for such dividend.  Such
      amount shall then be converted to a number of additional deferred AT&T
      shares of Common Stock determined by dividing such amount by the price of
      AT&T Common Stock, as determined in the following
      sentence.  The price of AT&T Common Stock related to any
      dividend payment date shall be the average of the daily high and low sale
      prices of AT&T Common Stock on the New York Stock Exchange (“NYSE”)
      for the period of five (5) trading days ending on such dividend payment
      date, or the period of five (5) trading days immediately preceding such
      dividend payment date if the NYSE is closed on the dividend payment
      date.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Adjustments
      in Number of Deferred AT&T Common Stock.  In
      the event of any change in outstanding shares of AT&T Common Stock by
      reason of any stock dividend or split, recapitalization, merger,
      consolidation, combination or exchange of shares or other similar
      corporate change, the Committee shall make such adjustments, if any, that
      it deems appropriate in the number of deferred AT&T shares of Common
      Stock then credited to employees’ accounts.  Any and all such
      adjustments shall be conclusive and binding upon all parties
      concerned.

            

    

    

    
      	
               
      

            	
              (f)

            	
              Special
      Deferred Share Conversion Election.  An
      employee with deferred shares of AT&T Common Stock credited to his
      account may make an irrevocable, one-time election to convert all or a
      portion of the deferred shares of AT&T Common Stock credited to his
      deferred account to their cash value amount and have such amount credited
      to the employee’s account.  If an employee makes this conversion
      election, the value of the deferred shares of AT&T Common Stock
      subject to the employee’s conversion election shall be determined by
      multiplying (i) the number of deferred shares of AT&T Common Stock
      credited to the employee’s account that are subject to the employee’s
      conversion election, by (ii) the average of the daily high and low sale
      prices of AT&T Common Stock on the NYSE during each of the five (5)
      trading days immediately preceding the date applicable to the AT&T
      Wireless Group split-off transaction, as determined by the Executive Vice
      President - Human Resources of AT&T Corp., in consultation with the
      AT&T Law Department.  After such cash value amount has been
      credited to the employee’s account, it shall thereafter be credited with
      interest from time to time at the applicable rate determined under Section
      2.3(b) for amounts of salary and/or other cash compensation deferred
      during the year in which the split-off of the AT&T Wireless Group is
      consummated.  An employee’s conversion election must be made
      within the time period established by the Executive Vice President - Human
      Resources of AT&T Corp., in consultation with the AT&T Law
      Department.  Notwithstanding the foregoing provisions of this
      Section 2.4(f), no conversion of deferred shares of AT&T Common Stock
      to their cash value amount shall have been effective unless (i) the Board
      (or its delegate) approves the Separation and Distribution Agreement By
      and Between AT&T Corp. and AT&T Wireless Services, Inc. (“Wireless
      Separation and Distribution Agreement”); (ii) the Board (or its
      delegate) approves the Employee Benefits Agreement By and Between AT&T
      Corp. and AT&T Wireless Services, Inc. (“Wireless Employee Benefits
      Agreement”); and (iii) the AT&T Wireless Group split-off transaction
      contemplated by the Wireless Separation and Distribution Agreement and the
      Wireless Employee Benefits Agreement is consummated.  The period
      during which an employee may submit a Special Deferred Share Conversion
      Election has closed, and no such further elections shall be permitted
      under the Plan.

            

    

    

    
      	
              2.5

            	
              Distributions.  The amounts
      credited to an employee’s deferred account shall be distributed in
      accordance with the following
provisions:

            

    

    

    
      	
               
      

            	
              (a)

            	
              Distribution
      Elections.  At
      the time an eligible employee makes an election to participate in the
      Grandfathered Deferral Program, the employee shall also make an election
      with respect to the distribution (during the employee’s lifetime or in the
      event of the employee’s death) of the amounts credited to the employee’s
      deferred account.  Except as provided in Section 2.5(k) or
      Section 2.6, such an election related to the distribution during the
      employee’s lifetime, of amounts otherwise payable currently in any
      calendar year, shall become irrevocable on the last day prior to the
      beginning of such calendar year.  The election related to the
      distribution in the event of the employee’s death, including the
      designation of a Beneficiary or Beneficiaries, may be changed by the
      employee at any time by filing the appropriate document with the Executive
      Vice President – Human Resources of AT&T Corp. (or his or her
      designee).

            

    

    

    
      	
               
      

            	
              (b)

            	
              Form
      of Distributions.  Amounts
      credited as cash plus accumulated interest shall be distributed in cash;
      amounts credited as deferred shares of AT&T Common Stock shall be
      distributed in the form of an equal number of AT&T shares of Common
      Stock.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Number
      of Installment Payments.  With
      respect to amounts related to deferred cash credited to the employee’s
      account under Section 2.3(a), and to deferred shares of AT&T Common
      Stock credited to the employee’s account under Section 2.4(a), Section
      2.4(b) or Section 2.4(c), an employee may elect to receive such amounts in
      one payment or in some other number of approximately equal annual
      installments (not exceeding twenty (20)), provided however, that the
      number of annual installments may not extend beyond the life expectancy of
      the employee, determined as of the date the first installment is
      paid.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Time
      of Commencement of Payments.  The
      employee’s election made pursuant to the provisions of Section 2.5(a)
      shall also specify that the first installment (or the single payment if
      the employee has so elected) shall be paid either (i) as soon as
      practicable after the first day of the calendar quarter next following the
      end of the month in which the employee attains the age specified in such
      election, which age shall not be earlier than age fifty-five (55) or later
      than age seventy and one-half (701⁄2), or (ii) as soon as practicable after
      the first day of the calendar quarter next following the end of the month
      in which the employee retires from a Participating Company or otherwise
      terminates employment with a Participating Company (except for a transfer
      to another Participating Company); provided, however, that the Committee
      may, in its sole discretion, direct that the first installment (or the
      single payment) shall be paid as soon as practicable after the first day
      of the first calendar quarter in the calendar year next following the year
      of retirement or other termination of employment.  In addition,
      any Officer eligible to defer salary may specify that the first
      installment (or the single payment if the employee has so elected) shall
      be paid as soon as practicable after the first day of the first calendar
      quarter in the calendar year next following the calendar year in which the
      employee retires from a Participating Company or otherwise terminates
      employment with a Participating Company (except for a transfer to another
      Participating Company).

            

    

    

    
      	
               
      

            	
              (e)

            	
              Acceleration
      of Distributions.  Notwithstanding
      an election pursuant to Section 2.5(c) and Section 2.5(d), the entire
      amount then credited to an employee’s account shall be paid immediately in
      a single payment (i) if the employee is discharged for cause by his
      Participating Company; (ii) if the such Participating Company determines
      that the employee engaged in misconduct in connection with the employee’s
      employment with the Participating Company; (iii) if the employee, without
      the consent of his Participating Company and while employed by such
      Participating Company or after the termination of such employment,
      establishes a relationship with a competitor of the Participating Company
      or engages in activity which is in conflict with or adverse to the
      interest of the Participating Company as determined under the AT&T
      Non-Competition Guideline; or (iv) the employee becomes employed by a
      governmental agency having jurisdiction over the activities of a
      Participating Company or any of its
  subsidiaries.

            

    

    

    
      	
               
      

            	
              (f)

            	
              Distributions
      to Beneficiaries.  An
      employee may elect that, in the event the employee should die before full
      payment of all amounts credited to the employee’s deferred account, the
      balance of the deferred account shall be distributed in one payment or in
      some other number of approximately equal annual installments (not
      exceeding ten (10)) to the Beneficiary or Beneficiaries designated in
      writing by the employee, or if no designation has been made, to the estate
      of the employee.  The first installment (or the single payment
      if the employee has so elected) shall be paid on the first day of the
      calendar quarter next following the month of death; provided, however,
      that the Committee may, in its sole discretion, direct that the first
      installment (or the single payment) shall be paid as soon as practicable
      after the first day of the first calendar quarter in the calendar year
      next following the year of death.

            

    

    

    
      	
               
      

            	
              (g)

            	
              Installment
      Payment Methodology.  Installments
      subsequent to the first installment to the employee, or to a Beneficiary
      or to the employee’s estate, shall be paid on the first day of the
      applicable calendar quarter in each succeeding calendar year until the
      entire amount credited to the employee’s deferred account shall have been
      paid.  Deferred amounts held pending distribution shall continue
      to be credited with interest or additional deferred shares of AT&T
      Common Stock, as applicable, determined in accordance with Section 2.3,
      Section 2.4(a), Section 2.4(b), Section 2.4(c), and
      Section 2.4(d).

            

    

    

    
      	
               
      

            	
              (h)

            	
              Severe
      Financial Hardship.  In
      the event an employee, or the employee’s beneficiary after the employee’s
      death, incurs a severe financial hardship, the Committee, in its sole
      discretion, may accelerate or otherwise revise the distribution schedules
      from the employee’s account to the extent reasonably necessary to
      eliminate the severe financial hardship.  For the purpose of
      this Section 2.5(h), a severe financial hardship will be considered to
      have occurred only if (i) the hardship has been caused by an accident,
      illness, or other event beyond the control of the employee or, if
      applicable, the beneficiary; and (ii) the hardship cannot be satisfied by
      other reasonably available financial resources of the employee, or if
      applicable, the beneficiary.

            

    

    

    
      	
               
      

            	
              (i)

            	
              Obligation
      to Make Distributions of Deferred Amounts.  The
      obligation to make a distribution of deferred amounts credited to an
      employee’s account during any calendar year, plus the additional amounts
      credited on such deferred amounts pursuant to Section 2.3, Section 2.4(a),
      Section 2.4(b), Section 2.4(c), and Section 2.4(d), shall be borne by the
      Participating Company which otherwise would have paid the related award or
      salary currently.  However, the obligation to make distribution
      with respect to deferred amounts which are related to amounts credited to
      an employee’s account under Section 2.3(c) and under Section 2.4(b), and
      with respect to which no Participating Company would otherwise have paid
      the related award currently, shall be borne by the Participating Company
      which employed the employee on January 1,
1984.

            

    

    

    
      	
               
      

            	
              (j)

            	
              Elections
      to Forego Deferred Compensation.  Notwithstanding
      any provision of the Plan to the contrary, the amount credited to a former
      Officer’s account shall be reduced by the amount specified in an Election
      to Forego Compensation Form executed by the former Officer under the
      AT&T Corp. Estate Enhancement Program, and the reduction shall be
      effective as of the effective date of such
  election.

            

    

    

    
      	
               
      

            	
              (k)

            	
              Modified
      Distribution Elections.  Notwithstanding
      the provisions of Section 2.5(a), Section 2.5(d), and any election made
      thereunder, an employee may modify a prior distribution election to
      preclude payment of his deferred account balance upon termination of
      employment and to provide for payment of the amount credited to his
      deferred account to commence as soon as practicable after attainment of a
      specific age (not greater than age sixty-five (65)) and to be distributed
      in one payment or in some other number of approximately equal annual
      installments (not exceeding ten (10)), provided that such modified
      distribution election (the “Modified Deferral Election”) shall be
      effective with respect to the employee only if (i) the Board (or its
      delegate) approves the Wireless Separation and Distribution Agreement and
      the Wireless Employee Benefits Agreement; (ii) the Modified Deferral
      Election is made on or before December 31, 2000, or such later date as
      approved by the AT&T Corp. Tax Department; (iii) the AT&T Wireless
      Group split-off transaction contemplated by the Wireless Separation and
      Distribution Agreement and the Wireless Employee Benefits Agreement is
      consummated; and (iv) the employee becomes a “Transferred Individual” as
      defined in the Wireless Employee Benefits Agreement.  A Modified
      Deferral Election must be made within the time period established by the
      Executive Vice President - Human Resources of AT&T Corp., in
      consultation with the AT&T Corp. Law Department.  Once made,
      a Modified Deferral Election shall be irrevocable.  If an
      employee makes more than one Modified Deferral Election, all such Modified
      Deferral Elections made by the employee shall provide for payments to
      commence at the same specific age and in the same number of annual
      installments.  The period during which an employee may submit a
      Modified Deferral Election has closed, and no such further elections shall
      be permitted under the Plan.

            

    

    

    
      	
              2.6

            	
              Basic Deferral
      Distribution Option.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Notwithstanding
      the provisions of Section 2.5(a), Section 2.5(b), Section 2.5(c), and
      Section 2.5(d) to the contrary, effective thirty (30) days after the date
      on which the Broadband Spin-Off occurs, a Participant shall have an option
      to relinquish all of his rights under all prior deferral and distribution
      elections made under the Grandfathered Deferral Program.  The
      rights to be relinquished shall include, but not be limited to, the right
      to continued deferral of the balance of his deferred account in the
      Grandfathered Deferral Program (until full payment is made in accordance
      with the Participant’s previous distribution elections made pursuant to
      Section 2.5), the right (to the extent applicable) to future interest
      credits on the cash portion of his deferred account as provided for in
      Section 2.3(a) and Section 2.3(b), and ten (10) percent of his or her
      deferred account balance as of the Determination Date.  In
      exchange for relinquishing all of his or her rights under the
      Grandfathered Deferral Program, the Participant shall receive a single
      payment of an amount equal to ninety percent (90%) of the Participant’s
      deferred account balance as of the Determination Date (as determined under
      Section 2.6(a)(ii) and Section 2.6(a)(iii)), payable in the form of
      AT&T Common Stock, provided, however, that, effective as of November
      20, 2008, accounts distributed under the Basic Deferral Distribution
      Option shall be made pursuant to Section 2.6(a)(iv).  The
      distribution shall be made as soon as administratively practicable after
      the applicable Determination Date, in a manner determined by the
      Administrator, subject to the following terms and
    conditions:

            

    

     

    
      	
               
      

            	
              (i)

            	
              The
      Basic Deferral Distribution Option may be exercised only by an irrevocable
      written election made by a Participant on a form approved by the
      Administrator and filed with the Administrator on a date not earlier than
      thirty (30) days after the date on which the Broadband Spin-Off
      occurs;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              For
      purposes of the Basic Deferral Distribution Option, the value of a
      Participant’s deferred account as of the Determination Date shall equal
      the sum of (1) the value of the deferred cash portion, and (2) the value
      of the portion represented by the deferred shares of AT&T Common
      Stock, determined as follows:

            

    

    

    
      	
               
      

            	
              (A)

            	
              The
      value of the deferred cash portion of a Participant’s deferred account
      shall be the Participant’s deferred account balance (excluding any
      deferred shares of AT&T Common Stock credited to such account) as of
      the Determination Date (including all interest credited to such deferred
      account through that date); and

            

    

     

    
      	
               
      

            	
              (B)

            	
              The
      value of the portion represented by the deferred shares of AT&T Common
      Stock (if any) of the Participant’s deferred account shall be determined
      by (1) multiplying the number of deferred shares of AT&T Common Stock
      credited to the Participant’s deferred account on the Determination Date,
      by (2) the AT&T Share Price;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              For
      periods prior to November 20, 2008, the number of shares of AT&T
      Common Stock to be distributed to a Participant who elects the Basic
      Deferral Distribution Option shall be determined by dividing (1) ninety
      percent (90%) of the value of the Participant’s deferred account (as
      determined in Section 2.6(a)(ii)), by (2) the AT&T Share
      Price.

            

    

    

    
      	
               
      

            	
              (iv)  On
      or after November 20, 2008, the distribution shall consist of
      (1) ninety percent (90%) of the deferred shares of AT&T Common
      Stock (if any) credited to the Participant’s deferred account, and
      (2) ninety percent (90%) of the value of the deferred cash portion of
      a Participant’s deferred account balance (excluding any deferred shares of
      AT&T Common Stock credited to such account) as of the Determination
      Date (including all interest credited to such deferred account through
      that date).

            

    

    

    
      	
               
      

            	
              (v)

            	
              If
      a Participant is deceased, the Participant did not file an election for
      the Basic Deferral Distribution Option with the Administrator prior to the
      Participant’s death, and amounts are payable to one or more Beneficiaries
      from a deceased Participant’s deferred account, each of the Participant’s
      Beneficiaries shall have the independent right to elect the Basic Deferral
      Distribution Option with respect to the portion of the deceased
      Participant’s deferred account to which the respective Beneficiary is then
      entitled, subject to substantially the same terms and conditions that
      would be applicable under this Section 2.6 if the Beneficiary were a
      Participant; and

            

    

    

    
      	
               
      

            	
              (vi)

            	
              The
      Administrator may, in his or her sole discretion, require the Participant
      to execute a written receipt or such other documentation determined to be
      appropriate, on a form approved by the Administrator, as a condition for
      receipt of the shares of AT&T Common
Stock.

            

    

     

    
      	
               
      

            	
              (b)

            	
              No
      Participant’s election of the Basic Deferral Distribution Option pursuant
      to Section 2.6(a) shall be effective (and no distribution shall be made
      pursuant to a Participant’s election of the Basic Deferral Distribution
      Option) until the later of (i) thirty (30) days after the date on which
      the Broadband Spin-Off occurs; or (ii) the satisfaction of all federal and
      state securities law requirements relative to the distribution of AT&T
      Common Stock to Participants who elect the Basic Deferral Distribution
      Option.

            

    

    

    
      	
              2.7

            	
              Termination
      of Participation.  A
      Participant’s participation in the Grandfathered Deferral Program shall
      terminate when the first of any of the following events
      occurs:

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      death of the Participant;

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      Participant ceases to have an account balance under the Grandfathered
      Deferral Program;

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      Board (or its delegate) terminates the Grandfathered Deferral Program
      pursuant to the provisions of Section 5.1;
or

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Board (or its delegate) terminates the Plan pursuant to the provisions of
      Section 5.1.

            

    

    

    Section

    3.

    Executive Deferral
Program

    

    
      	
              3.0

            	
              Establishment
      of Executive Deferral Program.  The
      Executive Deferral Program was established as part of the Plan, effective
      January 1, 2005, and applies to payments of Annual Base Salary and Annual
      Bonus, and grants of Long Term Awards, to Eligible Executives by a
      Participating Company that were not earned and vested prior to January 1,
      2005.

            

    

    

    
      	
              3.1

            	
              Eligibility.  An
      individual shall be an Eligible Executive who is eligible to participate
      in the Executive Deferral Program if he or she is an active employee of a
      Participating Company who is classified as either an Officer or an
      E-Band.

            

    

    

    
      	
              3.2

            	
              Commencement
      of Participation.  An Eligible
      Executive may elect to participate in the Executive Deferral Program
      initially, and for any Service Period thereafter, by making a deferral
      election in accordance with the provisions of Section
  3.3.

            

    

    

    3.3           Deferral
Elections.

    

    
      	
               
      

            	
              (a)

            	
              Form
      of Deferral Elections.  Any deferral
      election under the Executive Deferral Program shall be made in writing on
      such form, or in such other manner, as the Administrator (or his or her
      designee) shall prescribe from time to time.  Each deferral
      election shall apply to a specified Service Period, and with respect to
      such Service Period shall (i) designate the type of compensation
      identified in Section 3.3(b) the Eligible Executive elects to defer; (ii)
      specify the amount (subject to the percentage limitations in Section
      3.3(b)) of each type of compensation attributable to the Service Period
      which the Eligible Executive elects to defer; and (iii) indicate the
      Eligible Executive’s election to receive distribution of the deferred
      amounts upon his or her Separation From Service in a manner that conforms
      with the provisions of Section 3.8 and/or in the form of an in-service
      distribution that conforms with the provisions of Section
    3.9.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Allowable
      Amounts of Compensation for Deferral.  Under
      the Executive Deferral Program, an Eligible Executive may elect to defer
      the following amounts of compensation with respect to any Service
      Period:

            

    

    

    
      	
              (i)  

            	
              Up
      to fifty percent (50%) of the Eligible Executive’s Annual Base
      Salary;

            

    

    

    
      	
              (ii)  

            	
              Up
      to one hundred percent (100%) of the Eligible Executive’s Annual Bonus;
      and

            

    

    

    
      	
              (iii)  

            	
              Up
      to one hundred percent (100%) of the Eligible Executive’s annual grant of
      Long-Term Awards.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Time
      of Deferral Elections.  Except
      as provided in Section 3.3(d), a deferral election under the Executive
      Deferral Program must be made no later than the time specified by the
      Administrator; provided, however,
that:

            

    

    

    
      	
               
      

            	
              (i)

            	
              A
      deferral election with respect to the deferral of an Eligible Executive’s
      Annual Base Salary shall be made no later than the last day of the
      calendar year immediately preceding the Service Period to which such
      deferral election applies; and

            

    

    

    
      	
               
      

            	
              (ii)

            	
              A
      deferral election with respect to the deferral of an Eligible Executive’s
      Annual Bonus and/or Long Term Awards that constitute “performance-based
      compensation” (as defined in the federal income tax regulations for Code
      Section 409A) shall be made no later than six (6) months before the end of
      the applicable Service Period.

            

    

    

    Notwithstanding
the preceding provisions of this Section 3.3(c), the Administrator (or his or
her designee) may, in his or her sole discretion, require that a deferral
election with respect to an Eligible Executive’s Annual Base Salary, Annual
Bonus, and Long Term Awards (if any) for a particular Service Period all be made
prior to the last day of the calendar year immediately preceding the Service
Period to which such deferral election applies.

    

    
      	
               
      

            	
              (d)

            	
              Newly
      Eligible Executives.  If
      an Eligible Executive first becomes eligible to participate in the
      Executive Deferral Program during a Service Period, the Eligible Executive
      may make an initial deferral election within thirty (30) days after the
      Eligible Executive first becomes eligible to participate in the Executive
      Deferral Program.  Such deferral election shall be made only
      with respect to Annual Base Salary, Annual Bonus, and Long Term Award
      compensation earned, payable or granted for services performed by the
      Eligible Executive after the deferral election is
  made.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Irrevocability
      of Deferral Elections.  A
      deferral election (including the distribution elections comprising part of
      a deferral election) under the Executive Deferral Program shall be deemed
      made when it is received by the Administrator (or his or her designee) but
      in any event such election must be received before the commencement of the
      Service Period.  Once a deferral election under the Executive
      Deferral Program has been made, it shall be irrevocable, and except as
      provided in Section 3.14 and Section 3.15, shall not be subject to any
      subsequent modification as to the amount of compensation to be deferred
      for the particular Service Period and/or the time and form of payment of
      the deferred compensation to which such election
  applies.

            

    

    

    
      	
               
      

            	
              (f)

            	
              Cessation
      of Deferrals.  Notwithstanding
      any provision of the Plan to the contrary, no Eligible Executive may make
      an election to defer compensation under the Executive Deferral Program
      that provides for the crediting of any amount of deferred compensation to
      a deferral account under the Plan after December 31,
  2006.

            

    

    

    
      	
               
      

            	
              (g)

            	
              Independent
      Annual Deferral Elections.  An
      Eligible Executive may annually make a deferral election covering his or
      her Annual Base Salary, Annual Bonus, and Long Term Awards attributable to
      a particular Service Period.  The Eligible Executive’s deferral
      election made for each Service Period shall be independent of his or her
      deferral elections made for other Service Periods.  All deferral
      elections made under the Executive Deferral Program shall be independent
      of the Eligible Executive’s deferral elections, if any, made under the
      Grandfathered Deferral Program.

            

    

    

    
      	
              3.4

            	
              Crediting
      Accounts.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Types
      of Deferred Compensation Credited to Accounts.  The
      deferred compensation credited to the cash portion of a Participant’s
      deferral account under the Executive Deferral Program shall be amounts of
      deferred Annual Base Salary and Annual Bonus that, but for the
      Participant’s deferral election, would have been payable to the
      Participant as cash, plus the Company Matching Contributions associated
      with such deferred compensation.  The deferred compensation
      credited to the deferred AT&T share unit portion of a Participant’s
      deferral account under the Executive Deferral Program shall be deferred
      Long Term Awards that, but for the Participant’s deferral election, would
      have been payable to the Participant as shares of AT&T Common
      Stock.

            

    

    

    
      	
                      
      (b)  

            	
              Amounts
      of Deferred Compensation Credited to Accounts.  The
      amounts of deferred compensation credited to a Participant’s account under
      the Executive Deferral Program with respect to any deferral election shall
      be determined in accordance with the following
  provisions:

            

    

    

    
      	
               
      

            	
              (i)

            	
              Annual
      Base Salary.  The
      amount of Annual Base Salary to which a Participant’s deferral election
      shall be applied shall first be reduced by any pre-tax benefit deductions
      (including medical benefit premiums payable under a Code Section 125 plan
      and/or any contributions to a healthcare reimbursement account plan), but
      shall not be reduced for contributions made to the Savings
      Plan.  The amount of Annual Base Salary credited to a
      Participant’s deferral account shall be the percentage of his or her
      Annual Base Salary in any paycheck to be deferred under the Executive
      Deferral Program, net of withholding deductions for FICA and Medicare
      taxes due on the deferred amount of Annual Salary and federal and state
      income tax withholding based on the FICA and Medicare tax
      deductions.

            

    

    
      	
               
      

            	
              (ii)

            	
              Annual
      Bonus.  The
      amount of Annual Bonus credited to a Participant’s deferral account shall
      be the percentage of Annual Bonus to be deferred under the Executive
      Deferral Program, net of withholding deductions for FICA and Medicare
      taxes due on the deferred amount of the Annual Bonus and federal and state
      income tax withholding based on the FICA and Medicare tax
      deductions.

            

    

    

    
      	
              (iii)     
       

            	
              Long
      Term Awards.  The
      amount of Long Term Awards credited to a Participant’s deferral account
      shall be the percentage of Long Term Awards to be deferred under the
      Executive Deferral Program, net of withholding deductions for FICA and
      Medicare taxes due on the deferred amount of the Long Term Awards and
      federal and state income tax withholding based on the FICA and Medicare
      tax deductions.

            

    

    

    
      	
              3.5  

            	
              Company
      Matching Contributions.  Amounts of
      Annual Base Salary and Annual Bonus deferred under the Executive Deferral
      Program are eligible for Matching Company Contributions as provided in
      this Section 3.5.

            

    

    

    
      	
              (a)        

            	
              Matching
      Contribution Rate Formula.  Subject
      to the limitations set forth in Section 3.5(b), the Company shall match a
      Participant’s contributions of deferred Annual Base Salary and deferred
      Annual Bonus under the Executive Deferral Program for a payroll period
      with periodic cash contributions to the Participant’s deferral account at
      the rate of two-thirds of the sum of the Participant’s deferred Annual
      Base Salary and Annual Bonus under the Executive Deferral Program for such
      payroll period.

            

    

    

    
      	
              (b)     
        

            	
              Maximum
      Company Matching Contribution.  Notwithstanding
      the provisions of Section 3.5(a), the Company Matching Contribution to the
      Executive Deferral Program with respect to a Participant for any payroll
      period shall not exceed four percent (4%) of the sum of a Participant’s
      Annual Base Salary and Annual Bonus for the payroll period (before
      reduction by the amount of Participant’s deferrals under the Executive
      Deferral Program, the amount of the Participant’s elective deferrals under
      the Savings Plan, and the amount of any pre-tax salary reductions for the
      Participant under a Company-sponsored Code Section 125 cafeteria plan),
      less the amount of “company matching contributions” allocated to the
      Participant’s account under the Savings Plan for the corresponding payroll
      period.  For purposes of applying this limitation, the Company
      shall first match a Participant’s contributions, if any, to the Savings
      Plan until the allowable annual compensation and/or contribution
      limitations under the Savings Plan are attained; provided, however, that
      the Company Matching Contribution on the deferred portion of an Officer’s
      Annual Bonus shall be credited entirely to his or her deferral account
      under the Executive Deferral
Program.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Annual
      Limitation on Company Matching Contribution.  In
      no event shall the amount of the Company Matching Contribution made
      pursuant to Section 3.5(a) and Section 3.5(b) with respect to any
      Participant for any Plan Year exceed one hundred percent (100%) of the
      “matching company contribution” that could have been credited to the
      Participant’s account under the Savings Plan in the absence of any
      plan-based restrictions that reflect the limits on qualified plan
      contributions under the Code.

            

    

    

    3.6           Vesting.

    

    
      	
              (a)      
        

            	
              Participant
      Contributions.  A
      Participant shall be one hundred percent (100%) vested at all times in his
      or her contributions of deferred Annual Base Salary, Annual Bonus, and
      Long Term Awards (and all earnings thereon) to his or her deferral account
      under the Executive Deferral
Program.

            

    

    

    
      	
              (b)      
        

            	
              Company
      Matching Contributions.  The
      Company Matching Contributions credited to a Participant’s deferral
      account under the Executive Deferral Program (and any earning thereon)
      shall be one hundred percent (100%) vested after the Participant completes
      three (3) Years of Service.  If not then vested, the Company
      Matching Contributions credited to a Participant’s account under the
      Executive Deferral Program (and any earning thereon) shall also become one
      hundred percent (100%) vested, regardless of his or her number of Years of
      Service, upon the occurrence of any of the following events prior to (or
      concurrent with) his or her Separation From
  Service:

            

    

    

    
      	
               
      

            	
              (i)

            	
              The
      Participant terminates employment the Company with eligibility for
      AT&T Corp. Postretirement Welfare Benefits under the AT&T Pension
      Plan or the AT&T Management Pension
Plan;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              The
      Participant separates from service due to permanent
      disability;

            

    

    

    
      	
               
      

            	
              (iii)

            	
              The
      Participant attains the first day of the month in which his or her
      sixty-fifth (65th)
      birthday occurs;

            

    

    

    
      	
               
      

            	
              (iv)

            	
              The
      Participant separates from service pursuant to a Company-initiated force
      reduction program or in accordance with the Company’s practices with
      respect to technological
displacement;

            

    

    

    
      	
               
      

            	
              (v)

            	
              The
      Participant is laid off (Participant’s position is eliminated or relocated
      and redeployment is not possible);

            

    

    

    
      	
               
      

            	
              (vi)

            	
              The
      Participant dies;

            

    

    

    
      	
               
      

            	
              (vii)

            	
              The
      Participant is assigned to an entity, other than a Participating Company
      or another Affiliate., and terminates employment with a Participating
      Company solely for this purpose;

            

    

    
      	
               
      

            	
              (viii)

            	
              The
      Participant’s employment with a Participating Company is terminated on
      account of a disposition of assets or disposition of a
      subsidiary;

            

    

    

    
      	
               
      

            	
              (ix)

            	
              The
      Participant’s employment with a Participating Company is terminated as
      part of an outsourcing transaction;

            

    

    

    
      	
               
      

            	
              (x)

            	
              This
      Plan is terminated or partially terminated, or there is a complete
      discontinuance of contributions by a Participating Company, other than by
      reason of being merged into, or consolidated with, another Participating
      Company; or

            

    

    

    
      	
               
      

            	
              (xi)

            	
              Upon
      the date a “Change in Control” (as such term is defined in the 2004
      Incentive Program as of May 19, 2004) occurs, provided he or she is a CIC
      Eligible Employee.

            

    

    

    
      	
              (c)    
        

            	
              Forfeitures.  If
      a Participant terminates employment with the Employer before the Company
      Matching Contributions credited to his or her deferral account are one
      hundred percent (100%) vested, the Participant’s Company Matching
      Contributions and the associated earnings credited to the Participant’s
      deferral account under the Executive Deferral Program shall be
      forfeited.  The Company Matching Contributions and any earnings
      thereon credited to a Participant’s deferral account under the Executive
      Deferral Program shall also be forfeited if the Participant violates the
      AT&T Non-Competition Guidelines or the AT&T Code of
      Conduct.

            

    

    

    3.7           Deferral
Account Earnings.

    

    
      	
              (a)     
       

            	
              Earnings
      on Cash Portion of Deferral Account.  The
      annual rate of interest crediting on amounts allocated to the cash portion
      of a Participant’s deferral account under the Executive Deferral Program
      shall be equal to the yield on the ten (10) year U.S. Treasury Note, plus
      a premium amount, denominated as a percentage rate, determined by the
      Board (or its designee) from time to time.  For 2005 and all
      subsequent years until modified by the Board (or its designee), the
      applicable premium amount shall be equal to two percent
      (2%).  Interest on amounts held in the cash portion of a
      Participant’s deferral account under the Executive Deferral Program shall
      be credited quarterly, at the end of each calendar quarter, based on the
      actual average ten (10) year U.S. Treasury Note rate (and if applicable,
      any premium adjustment) for the prior calendar
  quarter.

            

    

    

    
      	
              (b)     
       

            	
              Earnings
      on Share Unit Portion of Deferral Account.  The
      deferred AT&T share unit portion of each Participant’s deferral
      account under the Executive Deferral Program shall be credited on each
      dividend payment date for AT&T Common Stock with an amount equal to
      the dividend payment on the number of shares of AT&T Common Stock that
      is equal to the number of AT&T share units credited to the respective
      Participant’s deferral account.  That amount is then converted
      to an additional number of deferred AT&T share units and credited to
      the respective Participant’s deferral account under the Executive Deferral
      Program.  For valuation purposes, the deferred AT&T share
      unit portion of a Participant’s deferral account under the Executive
      Deferral Program will be indexed to the AT&T Share
    Price.

            

    

    

    
      	
              3.8

            	
              Distributions
      of Deferred Compensation Upon Separation From Service.

            

    

    

    
      	
               
      

            	
              (a)

            	
              General
      Rule.  Subject
      to Section 3.8(d), distributions of amounts of Annual Base Salary, Annual
      Bonus, and Long Term Awards deferred under the Executive Deferral Program
      pursuant to a specific deferral election (and any associated Company
      Matching Contributions and earnings) shall be made upon the Participant’s
      Separation From Service at a time and in a form elected pursuant to
      Section 3.3 which conforms with the provisions of this Section 3.8, except
      to the extent that the Participant elects to have permissible amounts of
      such deferred compensation paid in the form of an in-service distribution
      pursuant to Section 3.9.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Form
      of Payments.  An
      Eligible Executive’s deferral election that includes an election to
      receive payment of deferred compensation upon the Eligible Executive’s
      Separation From Service shall specify whether the deferred compensation to
      which the deferral election applies shall be paid in the form of either
      (i) a single payment; or (ii) annual installments.  If the
      Eligible Executive elects the annual installment payment option, he or she
      shall also specify the number of annual installments to be made, ranging
      between a minimum of two (2) annual installments and a maximum of ten (10)
      annual installments.  If a Participant elects the single payment
      option, the Plan shall make a single payment to the Participant of all
      amounts of compensation (and any associated Company Matching Contributions
      and earnings) credited to the Participant’s deferral account for the
      particular Service Period.  If a Participant elects the
      installment payment option, the Plan shall pay to the Participant all
      amounts of compensation (and any associated Company Matching Contributions
      and earnings) credited to the Participant’s deferral account for the
      particular Service Period in the specified number of annual installment
      payments.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Medium
      of Payment.  Under
      either the single payment or the annual installment payment options
      described in Section 3.8(b), (i) the distributable amount credited to the
      cash portion of a Participant’s deferral account under the Executive
      Deferral Program attributable to the particular Service Period shall be
      paid in the form of cash; and (ii) the distributable amount credited to
      the AT&T share unit portion of a Participant’s deferral account under
      the Executive Deferral Program attributable to the particular Service
      Period shall be paid in the form of shares of AT&T Common Stock equal
      to the number of AT&T share units credited to the AT&T share unit
      portion of a Participant’s deferral account under the Executive Deferral
      Program.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Timing
      of Payments.

            

    

    

    
      	
               
      

            	
              (i)

            	
              Single
      Payment Option.  As
      part of each deferral election that provides for payment of deferred
      compensation upon the Participant’s Separation From Service in the form of
      a single payment, the Participant shall specify whether such payment is to
      be made either:

            

    

    

    
      	
               
      

            	
              (A)

            	
              On
      the first day of the calendar quarter that begins six (6) months after the
      calendar quarter during which the Participant incurs a Separation From
      Service with the Employer; or

            

    

    

    
      	
               
      

            	
              (B)

            	
              On
      the first day of the calendar quarter that immediately follows the first
      one-year anniversary of the Participant’s Separation From Service with the
      Employer.

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Installment
      Payments.  As
      part of each deferral election that provides for payment of deferred
      compensation upon the Participant’s Separation From Service in the form of
      installment payments, the Participant shall specify whether such payments
      shall commence either:

            

    

    

    
      	
               
      

            	
              (A)

            	
              On
      the first day of the calendar quarter that begins six (6) months after the
      calendar quarter during which the Participant incurs a Separation From
      Service with the Company, with any subsequent annual installment payments
      being made on the first day of the same calendar quarter of each
      subsequent calendar year; or

            

    

    

    
      	
               
      

            	
              (B)

            	
              On
      the first day of the calendar quarter that immediately follows the first
      one-year anniversary of the Participant’s Separation From Service with the
      Company, with any subsequent annual installment payments being made on the
      first day of the same calendar quarter of each subsequent calendar
      year.

            

    

    

    3.9           In-Service
Distributions.

    

    
      	
              (a)     
        

            	
              Election
      of In-Service Distributions.  In
      lieu of making an election for a distribution of deferred compensation
      upon Separation From Service pursuant to Section 3.8, a Participant may,
      as part of his or her deferral election for a particular Service Period,
      elect to receive an in-service distribution.  An in-service
      distribution election must specify (i) a source of the in-service
      distribution; and (ii) an in-service payment
      date.  Pursuant to Section 3.3(e), an in-service distribution
      election which comprises part of a deferral election shall be irrevocable
      once it is received by the
Administrator.

            

    

    

    
      	
              (b)    
        

            	
              Source
      of In-Service Distribution.  The
      source of an in-service distribution is limited to either the Annual Base
      Salary (plus any earnings thereon) or the Annual Bonus (plus any earnings
      thereon) which a Participant elects pursuant to Section 3.3 to defer for
      the particular Service Period.  An in-service distribution
      election shall apply to the entire amount of the specified source of
      compensation that is deferred by the Participant for the particular
      Service Period.  Company Matching Contributions made with
      respect to a Participant’s deferral of Annual Base Salary or Annual Bonus
      for a Service Period shall not be distributed as part of an in-service
      distribution.

            

    

    

    
      	
              (c)     
        

            	
              In-Service
      Payment Date.  An
      election to receive an in-service distribution shall specify a future date
      (referred to as the “in-service payment date”) as of which the in-service
      distribution shall be made.  Such in-service payment shall be at
      least four (4) years but no more than ten (10) years after the date on
      which the deferral election that includes the in-service distribution
      election is made.

            

    

    

    
      	
              (d)     
        

            	
              Timing
      of In-Service Distribution.  An
      in-service distribution shall be made to a Participant as soon as
      practicable during the third calendar quarter (July 1 to September 30) of
      the year during which the in-service payment date specified by the
      Participant occurs.

            

    

    

    
      	
              (e)        

            	
              Form
      of Payment.  All
      in-service distributions shall be made in the form of a lump sum cash
      payment.

            

    

    

    
      	
              (f)     
        

            	
              Limitation
      on Number of In-Service Distribution Elections.  A
      Participant may have no more than three (3) in-service distribution
      elections in force under the Executive Deferral Program at
      anytime.

            

    

    

    
      	
              (g)    
        

            	
              Priority
      of Payment.  In the event that an Eligible Executive has
      a Separation From Service prior to the date indicated in his or her
      in-service distribution election, the Eligible Executive’s entire deferred
      compensation under the Plan shall be payable at the time and form as if
      the eligible executive had made a deferral election that provides for
      distribution pursuant to Section 3.8(d)(i)(A) upon a Separation From
      Service.

            

    

    

    3.10           Payments
After Death of Participant.

    

    
      	
              (a)       

            	
              Beneficiary
      Election.  At
      the time an Eligible Executive first enrolls to participate in the
      Executive Deferral Program, the Eligible Executive shall be required to
      make and file a Beneficiary Election with the Administrator (or his or her
      designee).  The Beneficiary Election shall be made in writing on
      such form or forms as the Administrator (or his or her designee) shall
      prescribe.  As part of the Beneficiary Election, the Participant
      shall (i) designate a Beneficiary to receive the distribution of the
      balance of the Participant’s deferral account under the Executive Deferral
      Program in the event of the Participant’s death; and (ii) specify the
      number of annual installment payments (up to a maximum of five (5)
      payments) through which such account balance is to be made to the
      Participant’s Beneficiary.  Such Beneficiary Election shall be
      effective upon the Participant’s death.  Prior to death, a
      Participant may change his or her designated Beneficiary (but not the
      specified number of annual installment payments) from time to time
      following the procedures established by the Administrator (or his or her
      designee).  Once a Participant’s Beneficiary Election is made,
      the Participant’s specification of the number of annual installment
      payments shall be irrevocable.  The designation of a
      Participant’s Beneficiary on his or her Beneficiary Election shall be
      irrevocable upon the death of the Participant.  If, for any
      reason, the Administrator (or his or her designee) determines that it does
      not have a valid Beneficiary Election on file at the time of the
      Participant’s death, the Participant shall be deemed to have made a
      Beneficiary Election in which the Participant (i) designated his or her
      estate as the Beneficiary; and (ii) specified that his or her deferral
      account under the Executive Deferral Program be paid to the Beneficiary in
      a single payment.

            

    

    

    
      	
              (b)   
        

            	
              Payments
      to Beneficiary.  Upon
      the death of a Participant, the first payment of all of the Participant’s
      deferral account balance under the Executive Deferral Program shall be
      made to the Participant’s Beneficiary during the calendar quarter that
      begins immediately after the calendar quarter during which the
      Participant’s death occurs.  If the Participant dies after the
      commencement of payment of his or her deferral account under the Executive
      Deferral Program, the Plan shall pay the remainder of the balance of the
      Participant’s account under the Executive Deferral Program to the
      Participant’s Beneficiary in the number of payments specified in the
      Participant’s Beneficiary Election at such time as when the payments would
      have been paid to the Participant had his or her death not
      occurred.  Any in-service distribution that a Participant may
      have elected pursuant to Section 3.9 but not received prior to the date of
      his or her death shall be paid to the Participant’s Beneficiary during the
      calendar quarter that begins immediately after the calendar quarter during
      which the Participant’s death occurs.  If, for any reason, the
      AT&T Executive Compensation Department is not notified of the
      Participant’s death until after the end of the calendar quarter that
      begins immediately after the calendar quarter during which the
      Participant’s death occurs, the first payment of all of the Participant’s
      deferral account balance under the Executive Deferral Program and the
      payment of any in-service distribution the Participant had elected but not
      received prior to his or her death shall be made to the Participant’s
      Beneficiary within such period of time as may be provided for under the
      provisions of Code Section 409A.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Medium
      of Payment to Beneficiary.  Amounts
      credited to the cash portion of a Participant’s deferral account under the
      Executive Deferral Program shall be paid to the Participant’s Beneficiary
      in the form of cash.  Amounts credited to the AT&T share
      unit portion of a Participant’s deferral account under the Executive
      Deferral Program shall be paid to the Participant’s Beneficiary in the
      form of shares of AT&T Common Stock equal to the number of AT&T
      share units credited to the AT&T share unit portion of a Participant’s
      deferral account under the Executive Deferral
  Program.

            

    

    

    
      	
              3.11

            	
              Periodic
      Statements to Participants.  The
      Administrator (or his or her designee) shall deliver a statement to each
      Participant in the Executive Deferral Program each calendar quarter that
      reports with respect to the immediately preceding calendar quarter (i) the
      amount of contributions of the Participant’s deferred compensation
      received by the Plan during such calendar quarter; (ii) the amount of
      Company Matching Contributions credited to the Participant’s deferral
      account during such calendar quarter; (iii) the amount of interest
      credited to the cash portion of a Participant’s deferral account under the
      Executive Deferral Program during such calendar quarter; and (iv) the
      amount of dividends (if any) reinvested in the AT&T share unit portion
      of the Participant’s’ deferral account during such calendar
      quarter.

            

    

    

    
      	
              3.12

            	
              Impact
      of Participation in Executive Deferral Program.  The rules
      and procedures for the Executive Deferral Program set forth in this
      Section 3 shall only apply to the Executive Deferral
      Program.  Neither the establishment of the Executive Deferral
      Program nor the rules and procedures for the Executive Deferral Program
      set forth in this Section 3 shall have any bearing or impact on the
      Grandfathered Deferral Program or any Participant’s deferral account or
      deferral and distribution elections made thereunder.  An
      Eligible Executive’s decision to participate in the Executive Deferral
      Program, and any deferral election made under the Executive Deferral
      Program as a result of such decision to participate, shall not, in any
      way, impact the Eligible Executive’s deferral account or deferral and
      distribution elections made under the Grandfathered Deferral
      Program.  A Participant’s Beneficiary Election made pursuant to
      Section 3.10 (including his or her designation of a Beneficiary)
      shall be independent of any election as to the
  form

            

    

    or number
of payments upon death or any designation of a Beneficiary made by a Participant
for purposes of the Grandfathered Deferral Program.

    

    
      	
              3.13

            	
              Delay
      in Deferred Compensation Payments to Specified Employees.  Notwithstanding
      any other provision of the Plan or the Executive Deferral Program to the
      contrary, if a Participant in the Executive Deferral Program incurs a
      Separation From Service on or after January 1, 2005, and at the time of
      such Separation From Service the Participant is a Specified Employee, no
      payment of deferred compensation from the Participant’s deferral account
      under the Executive Deferral Program shall be made to, or with respect to,
      such Participant before the date that is six (6) months after the
      Participant’s Separation From Service (or if earlier, the date of the
      Participant’s death).  Any payment from a deferral account under
      the Executive Deferral Program that, but for the application of the
      preceding provisions of this Section 3.13, would have been paid to a
      Participant at any time during the first six (6) months after the
      Participant’s Separation From Service (or if earlier, the date of the
      Participant’s death) shall be accumulated (including any earnings thereon
      credited in accordance with Section 3.7 during the period that payment is
      delayed pursuant to this Section 3.13) and paid to the Participant on the
      first day of the seventh (7th)
      month following the Participant’s Separation From Service.  Any
      payment under the Executive Deferral Program to a Specified Employee not
      scheduled to be made during the first six (6) months after the
      Participant’s Separation From Service shall be made at the time or times
      provided for in the Participant’s Deferral Election and Section 3.8 or
      Section 3.9, as applicable.  Notwithstanding the foregoing, in
      the event that an Eligible Executive’s in-service distribution date occurs
      within six (6) months following his or her Separation From Service, such
      in-service distribution date shall be disregarded and shall be of no force
      or effect.

            

    

    

    
      	
              3.14

            	
              Prohibition
      on Acceleration of Payments of Deferred Compensation.  Notwithstanding
      any provision of the Executive Deferral Program as set for the herein to
      the contrary except the provisions of Section 3.15, any acceleration of
      the time or schedule of any payment of deferred compensation under the
      terms of the Executive Deferral Program or the amount of such deferred
      compensation scheduled to be paid under the terms of the Executive
      Deferral Program, shall be prohibited on or after January 1, 2005, unless
      such change to the time, schedule or amount of the deferred compensation
      payment qualifies for an exception established in the federal income tax
      regulations underlying the prohibition on acceleration of deferred
      compensation payments set forth in Code
      Section 409A(a)(3).

            

    

    

    
      	
              3.15

            	
              Special
      Distribution Provision.  Notwithstanding
      any provision of the Executive Deferral Program as set forth herein to the
      contrary, in the event that (i) the Internal Revenue Service prevails in a
      claim that all or any portion of a Participant’s deferral account under
      the Executive Deferral Program is required to be included in the
      Participant’s taxable income for any taxable year of such Participant
      prior to the taxable year during which such amount is otherwise to be
      distributed to him or her due to the Plan’s failure to satisfy the
      requirements of Code Section 409A; or (ii) legal counsel satisfactory
      to the Company and the applicable Participant renders an opinion that the
      Internal Revenue Service would likely prevail in such a claim, the
      affected portion of the Participant’s deferral account that is required to
      be included in the Participant’s taxable income shall be immediately
      distributed to the Participant (or his or her Beneficiary).  For
      purposes of this Section 3.15, the Internal Revenue Service shall be
      deemed to have prevailed in a claim if such claim is upheld by a court of
      final jurisdiction, or if the Company or Participant, based on an opinion
      of legal counsel satisfactory to the Company and the Participant fails to
      appeal a decision of the Internal Revenue Service, or a court of
      applicable jurisdiction, with respect to such claim, to an appropriate
      Internal Revenue Service appeals authority or to a court of higher
      jurisdiction within the appropriate time
period.

            

    

    

    
      	
              3.16

            	
              Termination
      of Participation in Executive Deferral Program.  A
      Participant’s participation in the Executive Deferral Program shall
      terminate upon the occurrence of the first of any of the following
      events:

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      death of the Participant;

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      Participant ceases to have a deferral account balance under the Executive
      Deferral Program;

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      Board (or its delegate) terminates the Executive Deferral Program pursuant
      to the provisions of Section 5.1;
or

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Board (or its delegate) terminates the Plan pursuant to the provisions of
      Section 5.1.

            

    

    

    Notwithstanding
the provisions of Section 3.16(b) or Section 3.16(c), an individual who has a
deferral account balance under the Grandfathered Deferral Program shall continue
to be a Participant in the Grandfathered Deferral Program and the Plan until his
or her participation in the Grandfathered Deferral Program also terminates in
accordance with the provisions of Section 2.8.

    

    

    Section

    4.

    Claims and
Appeals

    

    
      	
              4.0

            	
              Claims.  A person
      who believes that he or she is being denied a benefit to which he or she
      is entitled under this Plan (hereinafter referred to as a “Claimant”) may
      file a written request for such benefit with the Executive Compensation
      Administration Department, setting forth his or her claim.  The
      request must be addressed to the AT&T Executive Compensation
      Administration Department at its then principal place of
      business.

            

    

    

    
      	
              4.1

            	
              Claim
      Decision.  Upon
      receipt of a claim, the AT&T Executive Compensation Administration
      Department shall review the claim and provide the Claimant with a written
      notice of its decision within a reasonable period of time, not to exceed
      ninety (90) days, after the claim is received.  If the AT&T
      Executive Compensation Administration Department determines that special
      circumstances require an extension of time beyond the initial ninety (90)
      day claim review period, the AT&T Executive Compensation
      Administration Department shall notify the Claimant in writing within the
      initial ninety (90) day period and explain the special circumstances that
      require the extension and state the date by which the AT&T Executive
      Compensation Administration Department expects to render its decision on
      the claim.  If this notice is provided, the AT&T Executive
      Compensation Administration Department may  take up to an
      additional ninety (90) days (for a total of one hundred eighty (180) days
      after receipt of the claim) to render its decision on the
      claim.

            

    

    

    If the
claim is denied by the AT&T Executive Compensation Administration
Department, in whole or in part, the AT&T Executive Compensation
Administration Department shall provide a written decision using language
calculated to be understood by the Claimant and setting forth:  (i)
the specific reason or reasons for such denial; (ii) specific references to
pertinent provisions of this Plan on which such denial is based; (iii) a
description of any additional material or information necessary for the Claimant
to perfect his or her claim and an explanation of why such material or such
information is necessary; (iv) a description of the Plan’s procedures for review
of denied claims and the steps to be taken if the Claimant wishes to submit the
claim for review; (v)  the time limits for requesting a review of a
denied claim under Section 4.2 and for conducting the review under Section 4.3;
and (vi) a statement of the Claimant’s right to bring a civil action under
Section 502(a) of ERISA if the claim is denied following review under Section
4.3.

     

    
      	
              4.2

            	
              Request
      for Review.  Within
      sixty (60) days after the receipt by the Claimant of the written decision
      on the claim provided for in Section 4.1, the Claimant may request in
      writing that the Administrator review the determination of the AT&T
      Executive Compensation Administration Department.  Such request
      must be addressed to the Administrator at the address for giving notice to
      the Administrator designated in Section 7.5.  To assist the
      Claimant in deciding whether to request a review of a denied claim or in
      preparing a request for review of a denied claim, a Claimant shall be
      provided, upon written request to the Administrator and free of charge,
      reasonable access to, and copies of, all documents, records and other
      information relevant to the claim.  The Claimant or his or her
      duly authorized representative may, but need not, submit a statement of
      the issues and comments in writing, as well as other documents, records or
      other information relating to the claim for consideration by the
      Administrator.  If the Claimant does not request a review of the
      AT&T Executive Compensation Administration Department’s decision by
      the Administrator within such sixty (60) day period, the Claimant shall be
      barred and estopped from challenging the determination of the AT&T
      Executive Compensation Administration
  Department.

            

    

    

    
      	
              4.3

            	
              Review
      of Decision.  Within
      sixty (60) days after the Administrator’s receipt of a request for review,
      the Administrator will review the decision of the AT&T Executive
      Compensation Administration Department.  If the Administrator
      determines that special circumstances require an extension of time beyond
      the initial sixty (60) day review period, the Administrator shall notify
      the Claimant in writing within the initial sixty (60) day period and
      explain the special circumstances that require the extension and state the
      date by which the Administrator expects to render its decision on the
      review of the claim.  If this notice is provided, the
      Administrator may take up to an additional sixty (60) days (for a total of
      one hundred twenty (120) days after receipt of the request for review) to
      render its decision on the review of the
claim.

            

    

    

    During
its review of the claim, the Administrator shall:

    

    
      	
                  
      (a)  

            	
              Take
      into account all comments, documents, records, and other information
      submitted by the Claimant relating to the claim, without regard to whether
      such information was submitted or considered in the initial review of the
      claim conducted pursuant to Section
4.1;

            

    

    

    
      	
                 
      (b)  

            	
              Follow
      reasonable procedures to verify that its benefit determination is made in
      accordance with the applicable Plan documents;
  and

            

    

    

    
      	
                
      (c)  

            	
              Follow
      reasonable procedures to ensure that the applicable Plan provisions are
      applied to the Participant to whom the claim relates in a manner
      consistent with how such provisions have been applied to other
      similarly-situated Participants.

            

    

    

    After
considering all materials presented by the Claimant, the Administrator will
render a decision, written in a manner designed to be understood by the
Claimant.  If the Administrator denies the claim on review, the
written decision will include (i) the specific reasons for the decision;
(ii) specific references to the pertinent provisions of this Plan on which
the decision is based; (iii) a statement that the Claimant is entitled to
receive, upon request to the Administrator and free of charge, reasonable access
to, and copies of, all documents, records, and other information relevant to the
claim; and (iv) a statement of the Claimant’s right to bring a civil action
under Section 502(a) of ERISA.

    

    The
Administrator shall serve as the final review committee under the Plan and shall
have sole and complete discretionary authority to administer, interpret,
construe and apply the Plan provisions, and determine all questions of
administration, interpretation, construction, and application of the Plan,
including questions and determinations of eligibility, entitlement to benefits
and the type, form and amount of any payment of benefits, all in its sole and
absolute discretion. The Committee shall further have the authority to determine
all relevant facts and related issues, and all documents, records and other
information relevant to a claim conclusively for all parties, and in accordance
with the terms of the documents or instruments governing the
Plan.  Decisions by the Administrator shall be conclusive and binding
on all parties and not subject to further review.

    

    In any
case, a Participant or Beneficiary may have further rights under
ERISA.  The Plan provisions require that Participants or Beneficiary
pursue all claim and appeal rights described in this Section 4 before they seek
any other legal recourse regarding claims for benefits.

    

    

    Section

    5.

    Amendment and
Termination

    

    
      	
              5.0

            	
              Continuation
      of Program.  The Company
      does not guarantee the continuation of the Plan or any benefits during
      employment or after termination of employment, nor does the Company
      guarantee any specific level of benefits.  Benefits are provided
      under the Plan at the Company’s discretion and do not create a contract of
      employment.  Neither the establishment nor the continuance of
      the Plan shall be construed as conferring any legal rights upon any
      Eligible Executive, Participant or other person for continuation of
      employment, nor shall such establishment or continuance interfere with the
      right of the Company to discharge any Eligible Executive, Participant or
      other person without regard to the existence of the Plan.  The
      Company intends to continue the Plan indefinitely; however, the Committee
      (for periods ending prior to the Closing) and the Board or its delegate
      (for periods beginning on or after the Closing) reserve the right to amend
      or terminate the Plan at any time pursuant to Section
  5.1.

            

    

    

    
      	
              5.1

            	
              Amendment
      or Termination.  The
      Committee (for periods ending prior to the Closing) and the Board or its
      delegate (for periods beginning on or after the Closing) may, at any time,
      amend or terminate the Plan or any underlying program, but such amendment
      or termination shall not adversely affect the rights of any Participant
      without his or her consent, to any benefit under the Plan to which such
      Participant may have previously become entitled prior to the effective
      date of such amendment or termination.  The Executive Vice
      President – Human Resources of AT&T Corp. (or his or her successor),
      with the concurrence of the General Counsel of AT&T Corp. (or his or
      her successor), shall be authorized to make minor or administrative
      changes to the Plan, as well as amendments required by applicable federal
      or state law (or authorized or made desirable by such
      statutes).

            

    

    

    

    

    Section

    6.

    Change In
Control

    

    
      	
              6.0

            	
              Coverage
      of Individual Deferral Agreements.  Upon the
      occurrence of a “Change in Control” or a “Potential Change in Control” (as
      those terms are defined in the AT&T Corp. Benefits Protection Trust as
      in effect on October 23, 2000), each individual deferral agreement
      (including any individual nonqualified pension arrangement) made between
      an Officer (active or former) and a Participating Company for the deferral
      of compensation, retirement and/or severance benefits (and the deferred
      account balance, if any, under each such agreement) identified by the
      Executive Vice President – Human Resources of AT&T Corp. (or his or
      her successor), in his or her discretion, shall be deemed to be a deferred
      compensation obligation under the Plan.  Notwithstanding any
      other provision of the Plan to the contrary, (i) each of the individual
      deferral agreements (including each of the individual nonqualified pension
      arrangements) deemed to be a deferred compensation obligation of the Plan
      pursuant to the provisions of this Section 6.0 shall be treated under
      the Plan in a manner that is consistent with the express terms and
      conditions of the respective individual deferral agreement; and (ii) the
      deferred compensation (including nonqualified pension benefit) entitlement
      of an Officer under the Plan with respect to any such individual deferral
      agreement (including individual nonqualified pension arrangements) shall
      be limited solely to the benefit provided under the express terms and
      conditions of the respective individual deferral
      agreement.  Nothing contained in this Section 6.0 shall entitle
      an Officer to any other deferred compensation benefits under the Plan
      except as expressly provided in the individual deferral agreement
      (including any individual nonqualified pension
    arrangement).

            

    

    

    
      	
              6.1

            	
              Vesting
      Upon Change in Control.  Upon the
      occurrence of a “Change in Control” (as defined in the 2004 Incentive
      Program as in effect on May 19, 2004), the portion, if any, of each
      deferred account balance under the Plan (including the deferred account
      balance of any former Officer, the deferred account balance under any
      individual deferral agreement, and the benefits under any individual
      nonqualified pension arrangement deemed pursuant to the provisions of
      Section 6.0 to be an obligation of the Plan), that was not vested
      immediately prior to such “Change in Control”, shall become fully
      vested.

            

    

    

    
      	
              6.2

            	
              Interest
      Crediting After Change in Control.  After the
      occurrence of a “Change in Control” (as defined in the 2004 Incentive
      Program as in effect on May 19, 2004), the interest credited to a
      deferred account (including the deferred account of any former Officer and
      the deferred account under any individual deferral agreement deemed
      pursuant to the provisions of Section 6.0 to be an obligation of the
      Plan) for any period, to the extent applicable, shall not be less than the
      interest derived under the interest rate formula applicable to such
      deferred account (and used to calculate the interest credited to such
      deferred account) for the interest crediting period immediately prior to
      the occurrence of such “Change in Control” (unless the provisions of any
      individual deferral agreement provide
  otherwise).

            

    

    

    
      	
              6.3

            	
              Prohibition
      on Deferral of Short-Term Incentive Awards.  Notwithstanding
      any provision of any Officer’s deferral election to the contrary, after
      the occurrence of a “Change in Control” (as defined in the 2004 Incentive
      Program as in effect on May 19, 2004), no payment of any Officer’s
      short term incentive award, if any, under the AT&T Short Term
      Incentive Plan for the performance year during which such “Change in
      Control” occurs shall be deferred under the
  Plan.

            

    

    

    

    Section

    7.

    General
Provisions

    

    
      	
              7.0

            	
              Named
      Fiduciary.  The
      Administrator is hereby designated as the “named fiduciary” under this
      Plan.  The named fiduciary shall have authority to control and
      manage the operation and administration of this
  Program.

            

    

    

    
      	
              7.1

            	
              Plan
      Administration.  The
      Administrator (or his or her designee) shall have authority to establish,
      from time to time, and implement reasonable and necessary procedures for
      the administration of the Plan.

            

    

    

    
      	
              7.2

            	
              Cooperation
      With Administrator.  All
      Participants and Beneficiaries shall be required to reasonably cooperate
      with the direction of the Administrator (or his or her designee) with
      respect to the administration of the Plan.  Such cooperation
      shall include (i) timely completion, execution, and return of all
      enrollment forms, deferral election forms, and other administrative forms
      and documents in the manner prescribed by the Administrator; and (ii)
      compliance with such further administrative requirements and conditions as
      may be reasonably established by the Administrator from time to
      time.

            

    

    

    
      	
              7.3

            	
              Effective
      Date.  The
      effective date of this amended and restated Plan document is January 1,
      2008, unless otherwise stated
herein.

            

    

    

    
      	
              7.4

            	
              Calendar
      Year Plan.  All Plan
      records shall be maintained on a calendar year basis, beginning January 1
      and ending December 31.

            

    

    

    
      	
              7.5

            	
              Notice
      Under Plan.  Any notice
      to be given under this Plan shall be in writing and shall be either
      delivered in person or mailed by United States Mail, first-class postage
      pre-paid.  If notice is to be given to the Administrator by
      mail, such notice shall be addressed as indicated below and mailed to the
      Administrator at the following
address:

            

    

    

    AT&T
Inc.

    208 South Akard, Room
2350.06

    Dallas,
Texas  75202

    Attention:  AT&T
Executive Compensation

                       
Administration
Department

    

    If notice
is to be given to a Participant by United States Mail, such notice shall be
addressed using such Participant’s address then on file with the AT&T
Executive Compensation Department.  Any party may change the address
to which notices shall be mailed by giving written notice of such change of
address.

    

    
      	
              7.6

            	
              Binding
      Effect.  This Plan
      shall be binding upon the Company’s successors and assigns, and upon the
      Participants and their Beneficiaries, heirs, executors, and
      administrators.

            

    

    

    
      	
              7.7

            	
              Pension
      Benefit Plan Under ERISA.  The Plan is
      intended to constitute an “employee pension benefit plan” within the
      meaning of Section 3(2)(A) of ERISA, covering a select group of management
      or highly compensated employees.

            

    

    

    
      	
              7.8

            	
              Plan
      Document.  This Plan
      document is the plan document required by ERISA. The information contained
      herein provides the final and exclusive statement of the terms of the
      Plan.  Unless otherwise authorized by the Board or its delegate,
      no amendment or modification to this Plan shall be effective until reduced
      to writing and adopted pursuant to Section 5.1.  This document
      legally governs the operation of the Plan, and any claim of right or
      entitlement under the Plan shall be determined solely in accordance with
      the provisions of Section 4.  No other evidence, whether written
      or oral, shall be taken into account in determining the right of an
      Eligible Executive, a Participant or a Beneficiary, as applicable, to any
      benefit of any type provided under the
Plan.

            

    

    

    
      	
              7.9

            	
              Source
      of Funds.  The amounts
      of compensation deferred under this Plan (and any earnings thereon) shall
      be held in the general funds of the Participating
      Companies.  The Participating Companies shall not be required to
      reserve, or otherwise set aside, funds for the payment of such amounts of
      compensation deferred (or the earnings
thereon).

            

    

    

    
      	
              7.10

            	
              Prohibition
      on Assignments.  The rights
      of a Participant or Beneficiary to any deferred amounts of compensation
      deferred under this Plan, plus the additional amounts credited thereon
      pursuant to Section 2.3, Section 2.4(a), Section 2.4(b), Section
      2.4(c), Section 2.4(d), and Section 3.7, shall not be subject to
      assignment by the Participant or any
  Beneficiary.

            

    

    

    
      	
              7.11

            	
              Governing
      Law. To the
      extent not preempted by applicable federal law, the Plan shall be governed
      by, and construed and interpreted in accordance with, the laws of the
      State of Texas (irrespective of the choice of laws principles of the State
      of Texas).

            

    

    

    
      	
              7.12

            	
              Severability.  If any
      provision of this Plan or the application thereof to any person or
      circumstance shall be held by a court of competent jurisdiction to be
      invalid or unenforceable under any applicable law, such event shall not
      affect or render invalid or unenforceable the remainder of the Plan and
      shall not affect the application of any provision of the Plan to any other
      person or circumstance.

            

    

    

    
      	
              7.13

            	
              Headings.  The
      headings and subheadings preceding the Sections of this Plan have been
      inserted solely as a matter of convenience of reference, and shall have no
      force or effect in the construction or interpretation of the Plan or any
      of its provisions.

            

    

     

    
      	
              7.14

            	
              Construction.  Whenever
      any words used herein are in the singular form, they shall be construed as
      though they were also used in the plural form in all cases where the
      plural form would apply (and vice
      versa).  Pronouns and other words of one gender used
      herein shall be construed to include the other gender as the context
      requires.  The word “or” shall not be exclusive; “may not” is
      prohibitive and not permissive.  The term “earnings” shall refer
      to the amounts of interest and/or dividend equivalents credited to a
      deferral account hereunder pursuant to the provisions of Section 2.3(b),
      Section 2.4(d), and Section 3.7.  The words, “hereof”, “herein”,
      “hereunder” and words of similar import shall refer to the entire Plan
      document, and not to any particular Section or paragraph of the Plan
      document, unless the context clearly indicates otherwise.  All
      Section references made in this Plan document are to the applicable
      Sections of this Plan document unless otherwise
  specified.

            

    

    

    
      	
              7.15

            	
              Plan
      to Comply with Section 409A. The Plan (other than
      with respect to the Grandfathered Deferral Program) is at all times
      intended to comply with and operate in a manner that is consistent with
      the requirements of Section 409A of the Code.  Notwithstanding
      any other provision to the contrary in this Plan, each provision in this
      Plan (other than with respect to the Grandfathered Deferral Program) 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.

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