Document:

ex10qq_ii.htm

    

    

    Exhibit
10-qq(ii)

    

    

    

    AT&T
INC.

    HUMAN
RESOURCES COMMITTEE

    June
26, 2008

    

    Second
Amendment to BellSouth Corporation

    Stock and
Incentive Compensation Plan

    

    

    RESOLVED,
that the Human Resources Committee of AT&T Inc. ("Corporation") hereby
authorizes and directs the Senior Executive Vice President-Human Resources to
provide that, notwithstanding anything to the contrary in the plan, payments of
Restricted Stock Units under the BellSouth Corporation Stock and Incentive
Compensation Plan must be delayed six months from when they would otherwise be
payable when such amounts are to be paid to a Specified Employee, as that term
is used in Treasury Regulation §1.409A; and

    

    RESOLVED FURTHER, that the appropriate
officers of the Corporation are authorized to do or cause to be done any and all
such acts and things, and to execute and deliver any and all documents and
papers that they may deem necessary, proper or advisable to carry out the
foregoing resolutions.ex10xx.htm

    

     

    Exhibit
10-xx

    

    

    

    

    

    

    

    

    AT&T

    

    SENIOR
MANAGEMENT LONG TERM

    

    DISABILITY
AND SURVIVOR PROTECTION PLAN

    

    

     

     

     

     

     

    
 

    

    

    As
Amended and Restated effective January 1, 1998

    With
Amendments through December 31, 2008

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    PURPOSE

     

    

    

    

    The Senior Management Long Term
Disability and Survivor Protection Plan (the “Plan”) has provided disability
benefits to Senior Managers of AT&T Corp. The Plan also has provided a
minimum retirement benefit (from all AT&T sources) to a Senior Manager who
satisfies certain age and service requirements at termination of employment. The
Surviving Spouse of a Senior Manager is also entitled to a minimum Surviving
Spouse benefit (from all AT&T sources) if the Senior Manager dies while
actively employed, or after termination of employment with eligibility for a
minimum retirement benefit.

    

    Effective December 31, 2007, the Plan
was amended to eliminate the disability benefit with respect to future
disabilities.  Also effective after December 31, 2007, new Senior
Managers do not become participants in this Plan.

    

    During
the period from January 1, 2005 to December 31, 2008, the Plan has been operated
in good faith compliance with the provisions of Code Section 409A, Internal
Revenue Notice 2005-1, 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.  On
or after January 1, 2009, this Plan shall be interpreted and construed
consistent with the requirements of Code Section 409A and all applicable
guidance issued thereunder with respect to all accrued benefits under this Plan,
including, except as indicated below, those benefits that may be otherwise
treated as existing prior to the statutory effective date of Code Section 409A
(“grandfathered benefits”) within the meaning of Treasury Regulation Section
1.409A-6(a)(3).  The preceding sentence notwithstanding, it is the
intention of the Company that the grandfathering provisions of Code Section 409A
be applied under this Plan with respect to any Participant (and any surviving
Spouse, Beneficiary or Estate of such Participant) who terminated employment
prior to January 1, 2005, with respect to all benefits earned under the Plan
with respect to such Participant prior to termination of
employment.  If any individual who terminated employment prior to
January 1, 2005 is rehired after December 31, 2004 and earns additional benefits
following reemployment the terms of the Plan shall be applied separately with
respect to benefits earned prior to January 1, 2005 and with respect to benefits
earned following rehire. The Company reserves the right to amend any provision
of the Plan or any election submitted by a Participant, or take any other action
that the Company deems appropriate to ensure compliance with Code Section 409A,
including altering the time and form of any distribution so as to accomplish the
intended purpose of this Plan.

     

    

     

    ARTICLE
1

    DEFINITIONS

     

    

    For the
purpose of the Plan, the following terms shall have the meanings set forth in
this Article
1.

    

    
      	
              1.01.  

            	
              “Administrator” shall
      mean the person identified as the Pension Plan Administrator under the
      Pension Plan or such other person or entity designated by the
      Company.

            

    

    

    
      	
              1.02.  

            	
              “Affiliated Corporation”
      shall mean any corporation or other entity of which 50 percent or
      more of the voting stock is owned directly or indirectly by
      AT&T.

            

    

    

    
      	
              1.03.  

            	
              “AT&T” or “Company”
      shall mean AT&T Corp. (formerly American Telephone and
      Telegraph Company), a New York Corporation, or its
    successors.

            

    

    

    
      	
              1.04.  

            	
              “AT&T Inc.” shall
      mean AT&T Inc. (formerly SBC Communications Inc.), a Delaware
      Corporation, which acquired AT&T Corp. effective November 18, 2005
      pursuant to that certain merger agreement dated January 30,
      2005.

            

    

    

    
      	
              1.05.  

            	
              “Annual Basic Pay” shall
      mean the Participant’s annual base salary rate on the last day the
      Participant was on the active payroll plus an amount determined with
      reference to the Short Term Plan, but excluding all differentials regarded
      as temporary or extra payments and all awards and distributions made under
      the Long Term Plan.  For purposes of determining the Disability
      Allowance under Article
      A-2, the amount determined with reference to the Short Term Plan
      shall be the last Short Term Award granted to the Participant prior to the
      last day the Participant was on the active payroll.  For
      purposes of determining the Minimum Retirement Benefit under Article 3 and Article A-3, and the
      Surviving Spouse Benefit under Article 4 and Article A-4, the amount
      determined with reference to the Short Term Plan shall be the greater of
      (a) the Short Term Award for the last full calendar year of service prior
      to the earlier of the Participant’s retirement, termination or death, or
      (b) the Short Term Award granted with respect to any later partial
      calendar year of service.

            

    

    

    
      	
              1.06.  

            	
              “Board” shall mean the
      Board of Directors of AT&T
Corp.

            

    

    

    
      	
              1.07.  

            	
              “Committee” shall mean
      the Employees’ Benefit Committee appointed by the Company to administer
      the Pension Plan, or any successor to such Employees’ Benefit
      Committee.

            

    

    

    
      	
              1.08.  

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

            

    

    

    
      	
              1.09.  

            	
              “Disability Benefit Plan”
      shall mean a Participating Company’s Sickness and Accident
      Disability Benefit Plan.

            

    

    

    
      	
              1.10.  

            	
              “Long Term Plan” shall
      mean the AT&T Senior Management Long Term Incentive Program or
      successor long term incentive
plans.

            

    

    

    
      	
              1.11.     
       (a)

            	
              “Participant” for
      purposes of the Disability Allowance under Article A-2, shall mean
      an employee of a Participating Company holding a position evaluated or
      classified as above “E-band” or equivalent, except that no employee who
      has been notified in writing that the assignment to such position will be
      temporary shall be considered as a Participant for any purpose under the
      Plan.  Effective January 1, 2004, for purposes of Section
      A-2.04, “Participant” shall mean an employee of a Participating Company
      holding a position as a Senior Manager. Notwithstanding the preceding,
      effective January 1, 2008, an individual shall be a Participant for
      purposes of the Disability Allowance only if such individual is considered
      “disabled” pursuant to Section A-2.01(a) prior to January 1, 2008, and
      only with respect to a continuous uninterrupted period of disability
      commencing prior to January 1,
2008.

            

    

    

    
      	
               
      

            	
              (b)

            	
              “Participant” for
      purposes of the Minimum Retirement Benefit under Article 3, shall mean
      (i) an employee of a Participating Company who holds a position evaluated
      or classified as above “E-band” or equivalent, except that no employee who
      has been notified in writing that the assignment to such position will be
      temporary shall be considered as a Participant for any purpose under the
      Plan, or (ii) effective January 1, 2004, an employee of a Participating
      Company holding a position as a Senior Manager. For purposes of the
      Minimum Retirement Benefit under Article 3, “Participant” shall also
      include a former employee who met the requirements of the preceding
      sentence on the last day of employment with AT&T Corp. and who (i)
      terminated employment with five or more years of service and on or after
      age 62, or (ii) retired on a service pension under the Pension Plan or,
      (iii) effective for a termination of employment on or after January 1,
      1998, was Service Pension Eligible as defined herein at the date of
      termination of employment.

            

    

    

    
      	
               
      

            	
              Notwithstanding
      the preceding, an individual who is not a Participant on December 31, 2007
      shall not become a Participant under this
Plan.

            

    

    

    
      	
               
      

            	
              (c)

            	
              “Participant” for
      purposes of the Surviving Spouse Benefit under Article 4, shall mean an
      employee described in Section 1.11(a) above, or a former
      employee of a Participating Company who was a Participant under Section
      1.11(a) on the last day of employment, if such former employee (1) is
      eligible to receive a Disability Allowance under Article 2, or (2) is
      eligible to receive a Minimum Retirement Benefit under Article
      3.

            

    

    

    
      	
               
      

            	
              (d)

            	
              “Participant” for
      purposes of the Death Benefit under Article 5, shall mean a
      former employee of a Participating Company who was a Participant under
      Section 1.11(b) above on the last day of employment, if such former
      employee is eligible to receive a Disability Allowance under Article 2, or
      is eligible to receive a Minimum Retirement Benefit under Article
      3.

            

    

    

    
      	
                   
      (e)  

            	
              For
      purposes of Sections
      1.11(b), 1.11(c), and 1.11(d) above, a former employee shall be
      considered to be eligible to receive a Disability Allowance under Article
      2 or a Minimum Retirement Benefit under Article 3 if he or she has met the
      conditions specified in Article 2 or in Article 3, even though the receipt
      of other benefits by such former employee precludes his or her receipt of
      any benefits under Article 2 or Article
3.

            

    

    

    
      	
                   
      (f)  

            	
              For
      purposes of Section
      1.11, Senior Manager shall mean a management employee of a
      Participating Company classified as “Manager 6” in a non-banded
      environment, or at salary grade level above “E-band” or its equivalent, in
      a banded environment.

            

    

    

    
      	
              1.12.  

            	
              “Participating Company”
      shall mean AT&T Corp. and any Affiliated Corporation that has
      elected, with the approval of the Committee as required by Section 8.01, to
      participate in the Plan.

            

    

    

    
      	
              1.13.  

            	
              “Pension Plan” shall
      mean the AT&T Management Pension Plan or successor pension
      plans.

            

    

    

    
      	
              1.14.  

            	
              “Plan” shall mean this
      AT&T Senior Management Long Term Disability and Survivor Protection
      Plan.

            

    

    

    
      	
              1.15.  

            	
              “SERP Participant” shall
      mean an officer who is designated as a participant in the AT&T Inc.
      2005 Supplemental Employee Retirement Plan (the “AT&T SERP”). The
      initial day of participation in such plan is the named officer’s “SERP
      Effective Date” as defined in the AT&T SERP. For purposes of this
      Plan, such individual is considered a SERP Participant whether or not he
      or she has satisfied the vesting requirements of the
  SERP.

            

    

    

    
      	
              1.16.  

            	
              “SERP Vesting Date”
      shall mean the date a SERP Participant becomes vested in his or her
      benefit under the 2005 Supplemental Employee Retirement Plan of AT&T
      Inc., or January 1, 2011 if later.

            

    

    

    
      	
              1.17.  

            	
              “Service Pension
      Eligible” means termination of employment with a combination of age
      and/or Term of Employment as
follows:

            

    

    

    (i)          the
Participant’s Term of Employment has been at least thirty years, regardless of
his or her age, or

    

    (ii)          the
Participant’s Term of Employment has been at least twenty-five years and he or
she has reached the age of fifty years, or

    

    (iii)          the
Participant’s Term of Employment has been at least twenty years and he or she
has reached the age of fifty-five years, or

    

    (iv)          the
Participant’s Term of Employment has been at least ten years and he or she has
reached the age of sixty-five years

    

    For
purposes of determining whether a Participant is Service Pension Eligible at his
or her termination of employment on or after January 1, 1998, “term of
employment” shall include the period of a transition leave of absence, as
defined in the Pension Plan, determined in accordance with the provisions of the
Pension Plan.

    

    
      	
              1.18.  

            	
              “Short Term Award” means
      the actual amount awarded (including any amounts deferred pursuant to the
      AT&T Senior Management Incentive Award Deferral Plan) annually to a
      Participant pursuant to the AT&T Short Term Incentive Plan or
      successor short term incentive plans.  Short Term Awards shall,
      for purposes of this Plan, be considered to be awarded on the last day of
      the performance period with respect to which they are
    earned.

            

    

    

    
      	
              1.19.  

            	
              “Short Term Plan” shall
      mean the AT&T Short Term Incentive Plan or predecessor short term
      incentive plans.

            

    

    

    
      	
              1.20.  

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

            

    

    

    
      	
              1.21.  

            	
              “Surviving Spouse” means
      a deceased Participant’s surviving spouse of the opposite sex who is such
      Participant’s “spouse” within the meaning of the Qualified Plan, as
      defined in the respective provisions of the Qualified
      Plan.  Notwithstanding the preceding, if an alternate payee (as
      that term is defined in Section 414(p) of the Code) is deemed the
      surviving spouse for purposes of all or a portion of the Participant’s
      benefit under the Qualified Plan, such alternate payee shall not be deemed
      to be the “spouse” for any purpose under this
  Plan

            

    

    

    
      	
              1.22.  

            	
              “Term of Employment”
      shall have the same meaning as the meaning assigned to such expression in
      the Pension Plan.

            

    

    

    
      	
              1.23.  

            	
              “Termination of
      Employment” shall mean the ceasing of the Participant’s employment
      from the AT&T controlled group of companies for any reason whatsoever,
      whether voluntarily or involuntarily. References herein to Termination of
      Employment, Terminate Employment, or a similar reference, shall mean the
      event where the employee has a separation from service, as defined under
      Code Section 409A, with all members of the AT&T controlled group.
      Notwithstanding the foregoing, the employment relationship of a
      Participant with the AT&T controlled group is considered to remain
      intact while the individual is on a Leave of Absence. With respect to
      periods on or after November 18, 2005, the controlled group shall be
      determined with respect to entities required to be aggregated recognizing
      the acquisition of AT&T Corp. by SBC Communications Inc. (now known as
      AT&T Inc.).

            

    

    

     

    ARTICLE
2

    DISABILITY
ALLOWANCE

     

    

    Disability
benefits under this Plan are provided only with respect to an eligible
Participant whose disability commenced prior to January 1, 2008.  Plan
provisions applicable to disability benefits are described in Article
A-2.

    

     

    ARTICLE
3

    MINIMUM
RETIREMENT BENEFIT

     

    

    This
Article 3 describes the Minimum Retirement Benefit payable with respect to a
Participant who terminates employment on or after December 1, 2008. The
provisions of Article A-3 describe the Minimum Retirement Benefit with respect
to a Participant who terminates employment prior to December 1,
2008.

    

    
      	
              3.01.

            	
              A
      Participant described in Section 1.11(a) whose
      Term of Employment has been five years or more who terminates employment
      on or after his or her sixty-second birthday, or a Participant described
      in Section 1.11(b)
      who is Service Pension Eligible at the time of his or her termination of
      employment, shall be eligible to receive a monthly minimum retirement
      benefit equal to one and one-quarter percent of Participant’s Annual Basic
      Pay, as defined in Section 1.05, on the
      last day the Participant was on the active payroll reduced by the sum of
      the Immediate Annuity Value of the Qualified Plan, and the Immediate
      Annuity Value of the AT&T Nonqualified Pension Plans.  For
      purposes of this Section 3.01,

            

    

    

    
      	
               
      

            	
              (a)
      the Immediate Annuity Value of the Qualified Plan means the monthly amount
      of annuity payments that would be paid under the Pension Plan on a single
      life, level payment annuity basis assuming payment of such plan benefit
      commenced immediately upon the Participant’s Termination of Employment,
      notwithstanding the form of payment of such Pension Plan benefit actually
      made to the Participant and notwithstanding the actual commencement date
      of such Pension Plan benefit; and

            

    

    

    
      	
               
      

            	
              (b)
      the Immediate Annuity Value of the AT&T Nonqualified Pension Plans
      shall mean the monthly amount of annuity benefits paid under the AT&T
      Excess Benefit and Compensation Plan and the AT&T Non-Qualified
      Pension Plan, as applicable, commencing at the actual time and pursuant to
      the actual form such benefit payments are made from such plans; provided,
      however, that if such payments are made in a form of payment other than a
      life annuity, the “Immediate Annuity Value” for purposes of this Section
      3.01(b) shall mean the amount payable as a single life annuity that is the
      actuarial equivalent of the payments made from such plans. Actuarial
      equivalence for this purpose shall be determined based on the actuarial
      assumptions and methodology in effect under the SERP as of the date
      payments commence.

            

    

    

    
      	
               
      

            	
              Notwithstanding
      the preceding, with respect to a Participant whose Termination of
      Employment occurs after the SERP Vesting Date, as defined herein, a
      benefit shall be calculated pursuant to the provisions of the preceding
      paragraph as of the Participant’s SERP Vesting Date, as if the Participant
      had a Termination of Employment and benefits under the Pension Plan and
      AT&T Nonqualified Pension Plans had commenced as of such
      date.  Thereafter, the Minimum Retirement Benefit shall be a
      frozen amount equal to the amount so determined as of such
      date.  If a Participant is not Service Pension Eligible or is
      not age 62 or older with five or more years of service as of the SERP
      Vesting Date, the Participant’s Minimum Retirement Benefit shall
      thereafter be zero.

            

    

    

    
      	
              3.02.

            	
              The
      minimum retirement benefit shall be paid as an annuity, lump sum, or in
      installments payments, pursuant to an election under the AT&T SERP
      made on or before December 31, 2008 with respect to benefits that may
      become payable to the Participant under the AT&T SERP. The amount of
      any payment made in the form of installments or a lump sum will be the
      actuarial equivalent of the single life annuity benefits determined
      pursuant to Section 3.01, based on the actuarial assumptions and
      methodology in effect under the SERP as of the date payments
      commence.

            

    

    

    
      	
              3.03.

            	
              Payment
      of the Minimum Retirement Benefit shall commence at the Participant’s
      Termination of Employment. Notwithstanding the preceding, effective on and
      after January 1, 2005 with respect to payments in the form of a commercial
      annuity pursuant to Section 6.01 and effective on and after January 1,
      2009 with respect to all other payments under the Plan, payment under the
      Plan to or with respect to a Participant who is eligible to participate in
      the SERP or who is determined to meet the definition of Specified Employee
      shall be payable as otherwise provided in this Plan, except that the
      initial payment shall be made no earlier than six (6) months following his
      or her Termination of Employment.  If, absent this Section 3.03,
      payment to a Specified Employee would have commenced before the expiration
      of such six-month period, the first payment with respect to such Specified
      Employee will include the sum of the annuity payments withheld, together
      with interest thereon.    For purposes of the
      immediately preceding sentence, interest shall be credited using the GAAP
      Rate in effect as of the end of the calendar year immediately preceding
      the Participant’s Termination of Employment, for distributions made after
      December 31, 2007.  “GAAP Rate” means such rate as defined under
      the SERP for the referenced period. Notwithstanding the preceding, for
      distributions made prior to January 1, 2008, interest credited for
      purposes of this Section 3.03 shall be at an effective annual rate equal
      to 120 percent of the Federal Mid-term rate in effect as of the date such
      annuity payments otherwise would have
  commenced..

            

    

    

    
      	
              3.04.

            	
              Payments
      made pursuant to this Article 3 shall terminate at the death of the
      Participant, but shall terminate earlier if the form of payment,
      determined pursuant to Section 3.02, is other than a life annuity form of
      payment.

            

    

    

    

    

     

    ARTICLE
4

    SURVIVING
SPOUSE BENEFIT

     

    This
Article 4 describes the Surviving Spouse Benefit payable with respect to a
Participant who is an employee on December 1, 2008 and whose death occurs on or
after December 1, 2008. The provisions of Article A-4 describe the Surviving
Spouse Benefit with respect to a Participant not described in the preceding
sentence.

    

    
      	
              4.01.

            	
              Subject
      to the provisions of Section 4.02, in the event of the death of a
      Participant, who is described in Section 1.11(c), the
      Surviving Spouse of such Participant shall be eligible to receive a
      monthly benefit equal to one and one-quarter percent of the Participant’s
      Annual Basic Pay, as defined in Section 1.04, on the
      last day the Participant was on the active payroll prior to his or her
      death reduced by the Spouse Immediate Annuity Value of the Qualified Plan,
      and the Spouse Immediate Annuity Value of the AT&T Nonqualified
      Pension Plans.  The Spouse Immediate Annuity Value of the
      Qualified Plan means the monthly annuity payment that would be paid to the
      Participant under the Pension Plan on a single life, level payment annuity
      basis assuming payment of such plan benefit commenced immediately upon the
      Participant’s Termination of Employment, whether by death or otherwise,
      notwithstanding the form of payment of such Pension Plan benefit actually
      made to the Participant and notwithstanding the actual commencement date
      of such Pension Plan benefit.  For purposes of this Section
      4.01, the Spouse Immediate Annuity Value of the AT&T Nonqualified
      Pension Plans shall mean the monthly annuity benefits paid to the
      Surviving Spouse under the AT&T Excess Benefit and Compensation Plan
      and the AT&T Non-Qualified Pension Plan, as applicable, commencing at
      the actual time and pursuant to the actual form such benefit payments are
      made to the Surviving Spouse from such plans following the death of the
      Participant.

            

    

    

    
      	 	
              Notwithstanding
      the preceding, with respect to a Participant whose Termination of
      Employment occurs after the SERP Vesting Date, a benefit shall be
      calculated pursuant to the provisions of the preceding paragraph as of the
      Participant’s SERP Vesting Date, as if the Participant died and benefits
      under the Pension Plan and the AT&T Nonqualified Pension Plans had
      commenced on such date.  The amount so determined shall be
      fixed, and shall not be subject to redetermination. With respect to a
      benefit payable upon the death of a Participant occurring after the SERP
      Vesting Date, the Surviving Spouse Benefit shall be determined as
      follows:

            

    

    

    
      	
               
      

            	
              (i)   If
      the Participant dies following Termination of Employment, the Surviving
      Spouse Benefit shall be equal to the amount determined as of the SERP
      Vesting Date; provided, however, if the Participant is not Service Pension
      Eligible or is not age 62 or older with five or more years of service as
      of the SERP Vesting Date, the Surviving Spouse Benefit shall be zero.
      

            

    

    

    
      	
               
      

            	
               

            	
              (ii) 
      If the Participant dies prior to Termination of Employment, the Surviving
      Spouse Benefit shall be equal to the amount determined as of the SERP
      Vesting Date.

            

    

    

    
      	
              4.02.

            	
              Notwithstanding
      any provision of Section
      4.01 to the contrary, the Surviving Spouse of a Participant shall
      not be eligible to receive benefits under this Article 4 if the form of
      payment designated by the Participant pursuant to an election under the
      AT&T SERP made on or before December 31, 2008 with respect to benefits
      that may become payable to the Participant under the AT&T SERP is
      other than a joint and survivor form of payment with the Surviving Spouse
      as the joint annuitant.

            

    

    

    
      	
              4.03.  

            	
              The
      benefit payable to the Surviving Spouse shall be paid in the form of a
      single life annuity, commencing upon the death of the
      Participant.

            

    

    

    
      	
              4.04.

            	
              Payments
      made pursuant to this Article 4 shall terminate at the death of the
      Surviving Spouse.

            

    

    

     

    ARTICLE
5

    DEATH
BENEFITS

     

    

    

    

    

    
      	
              5.01.  

            	
              Upon
      the death of a Participant described in Section 1.11(d) whose
      last day on the active payroll occurred on or after January 1, 1987, and
      who has not retired on a service pension or a disability pension under the
      Pension Plan, or who was not Service Pension Eligible at the time of
      termination, a death benefit in the amount of the Participant’s annual
      base salary rate in effect on the last day said Participant was on the
      active payroll shall be paid to one or more of the beneficiaries listed in
      Section 5.02 below
      as determined by the Committee, provided, however, that such death benefit
      shall be reduced by the sum of any death benefit paid under Section 5 of
      the Pension Plan, the AT&T Excess Benefits and Compensation Plan, and
      the AT&T Non-Qualified Pension Plan on account of the Participant’s
      death.

            

    

    

    
      	
              5.02.  

            	
              The
      persons who may be the beneficiaries of the death benefit described in
      Section 5.01 are
      the Participant’s legal spouse if living with him at the time of his or
      her death, his or her unmarried child or children under age 23 (or over
      that age if physically or mentally incapable of self-support) who were
      being supported in whole or in part by the deceased at his or her death,
      or a dependent parent or parents living with the deceased at the time of
      his or her death or in a separate household in the vicinity of the
      deceased and provided by him.

            

    

    

    
      	
              5.03.  

            	
              If
      the Participant is not survived by any person listed in Section 5.02, a death
      benefit up to the maximum amount shown in Section 5.01 above may
      be payable, at the discretion of the Committee, to any other dependent
      relative receiving or entitled to receive support from the deceased; if no
      such dependent relative survives the deceased, no death benefit will be
      payable under this Plan.

            

    

    

     

    ARTICLE
6

    SOURCE
OF PAYMENT

     

    

     

    6.01.       Source
of Payments.

     

    

    (a)           AT&T
may establish a trust to hold assets to be used to make benefit payments under
the terms of this Plan, provided such trust does not cause the Plan to be
“funded” within the meaning of ERISA.  Funds invested hereunder shall,
for purposes of this Plan, be considered to be part of the general assets of the
Participating Company which invested the funds, and no Participant, beneficiary
or lawful spouse shall have any interest or right in such funds.  To
the extent trust assets are available, they may be used to pay benefits arising
under this Plan and all costs, charges and expenses relating
thereto.  To the extent that the funds held in the trust are
insufficient to pay such benefits, costs, charges and expenses, AT&T or the
responsible Participating Company shall pay such benefits, costs, charges and
expenses from its general assets.

    

    (b)           In
addition, the Company may, in its sole discretion, purchase and distribute one
or more commercial annuity contracts, or cause the trustee of the trust to
purchase and distribute one or more commercial annuity contracts, to make
benefit payments required under this Plan, to any Officer, as defined herein, or
the Surviving Spouse of any Officer, provided, however, that with respect to an
annuity purchase occurring prior to January 1, 2005,  the purchase and
distribution of any such annuity contracts shall be no sooner than the
expiration of any forfeiture provisions applicable to the
Officer  under the AT&T Non-Competition Guidelines, or as
otherwise may be provided in accordance with procedures establish by the
Executive Vice President – Human Resources (or any successor to such position),
and provided further that, effective January 1, 2004, the Company’s right to
direct that payments under the Plan shall be made through one or more commercial
annuity contracts shall be applicable to only the benefits payable to any
Participant, or the Surviving Spouse of any such Participant, as applicable, who
(1) was  on the active payroll of the Company (or on an approved leave
of absence with guaranteed right of reinstatement) and classified as an Officer
on December 31, 2003, and (2) satisfies the age and service requirements, or is
within twelve months of satisfying the  requirements in effect at the
time the Participant terminates employment with the Company for the receipt of
retirement-related health benefits under the AT&T Corp. Postretirement
Welfare Benefits Plan (or any successor to such plan) (other than by virtue of
the “Rule of 65”or  through a Company-sponsored employee-paid health
benefits access program, or through the AT&T Corp. Separation Medical Plan),
without regard to whether or not the Officer has five years of service as of
December 31, 1999. Such annuity contracts may be purchased from a commercial
insurer acceptable to the Executive Vice President - Human Resources (or any
successor to such position). Further, the Executive Vice President - Human
Resources (or any successor to such position), may determine, in his or her sole
discretion, to pay additional sums to any Officer, from the Company’s general
assets or from the trust, if any, to reimburse the Officer for additional
federal and state income taxes estimated to be incurred by reason of the
distribution of any such annuity contracts. The Executive Vice President - Human
Resources (or any successor to such position) shall establish a methodology or
methodologies for determining the amount of such additional sums. The
methodology or methodologies selected shall be those that the Executive Vice
President - Human Resources (or any successor to such position) determines, in
his or her sole discretion, to be the most effective and administratively
feasible for the purpose of producing after-tax periodic benefit payments that
approximate the after-tax periodic benefit payments that would have been
received by Officers in the absence of the distribution of the annuity
contract.  Any such purchase and distribution of an annuity contract
shall be a full and complete discharge of the Plan’s, AT&T’s and the
Participating Companies’ liability for payments assumed by the issuer of the
annuity contract.

    

    (c)    Notwithstanding
the provisions of the preceding Section 6.01(b), effective January 1, 2005, a
Participant who is eligible to elect to receive his or her benefit under the
Plan in the form of a third-party commercial annuity contract pursuant to
Section 6.01(b) shall be required to submit an election, on a form provided by
the Company, with respect to the time and form of payment in which benefits
under this Plan shall be distributed for any reason other than the death of the
Participant.  Such election form shall be submitted to the Company no
later than one of the following dates, whichever is applicable:  (i)
such Participant’s separation from service, with respect to distribution of such
annuity contract during the 2005 calendar year, (ii) the earlier of (A) such
employee’s separation from service, or (B) December 31, 2005, with respect to
the distribution of such annuity contract during the 2006 calendar year, and
(iii) December 31, 2006, for distributions of such annuity contracts occurring
after the 2006 calendar year.  Notwithstanding the foregoing, the
Company may permit such a Participant to submit a distribution election form in
2006 with respect to his or her benefits under the Plan, provided that such
election in the 2006 calendar year may not result in a change in payment
elections with respect to payments that the Participant would otherwise receive
during the 2006 calendar year, or to cause payments to be made in 2006, to the
extent permitted under the proposed Treasury Regulations under Code Section
409A.

    

    (d)  Notwithstanding
the provisions of the preceding Section 6.01(b) and Section 6.01(c), the annuity
purchase program described in Section 6.01(b) shall be discontinued effective
September 6, 2007, and any election in effect on September 6, 2007 pursuant to
which a Participant has elected to receive distribution of his or her benefits
under this Plan through the purchase of a commercial annuity contract shall be
null and void, as such election relates to any distribution from this Plan to a
Participant or Surviving Spouse occurring after September 6, 2007.

     

    6.02.       Unfunded
Status.

     

    The Plan
at all times shall be entirely unfunded for purposes of the Internal Revenue
Code of 1986, and ERISA, and, except as provided in Section 6.01, no provision
shall at any time be made with respect to segregating any assets of a
Participating Company for payment of any benefits hereunder.  Funds
invested hereunder shall continue for all purposes to be part of the general
assets of the Participating Company which invested the funds.  The
Plan constitutes a mere promise by the Participating Company to make payments,
if any, in the future.  No Participant, spouse, beneficiary or any
other person shall have any interest in any particular assets of a Participating
Company by reason of the right to receive a benefit under the Plan and to the
extent the Participant, surviving lawful spouse, beneficiary or any other person
acquires a right to receive benefits under this Plan, such right shall be no
greater than the right of any unsecured general creditor of a Participating
Company.

     

    ARTICLE
7

    ADMINISTRATION
OF THE PLAN

     

    

     

    7.01.       Administration
and Authorities.

     

    The Plan
shall be administered by the Company and it shall have full discretionary
authority to manage and control the operation and administration of the Plan,
including the power to interpret provisions of the Plan, make determinations of
fact, promulgate rules and regulations, determine benefit eligibility of
individual and classes of Participants, delegate its powers and duties hereunder
to the Committee, the Administrator or others and take such other action as it
shall find necessary and appropriate to implement the provisions of the
Plan.  The Committee and the Administrator may retain attorneys,
consultants, accountants or other persons (who may be employees of the Company
or an Affiliated Corporation) to render advice and assistance and may delegate
any of the authorities conferred on it to such persons as it shall determine to
be appropriate to effect the discharge of its duties hereunder.  The
Company, the Affiliated Corporations and any of their officers and employees
shall be entitled to rely upon the advice, opinions, and determinations of any
such persons.  Any exercise of the authorities set forth in this
Section, whether by the Company, the Committee or its Delegate, or the
Administrator, shall be final and binding upon the Company, its Affiliated
Corporations, their officers, directors and affected Participants and
beneficiaries.

     

    7.02.      Committee.

     

    The
Company has delegated to the Committee authority to make the final determination
to grant or deny claims for benefits under the Plan with respect to Participants
and to authorize disbursements according to the terms of the Plan.

     

    7.03.      Indemnification.

     

    No member
of the Board or the Committee or the Administrator shall be personally liable by
reason of any contract or other instrument executed by such individual on his or
her behalf or in his or her capacity as a member of the Board, Committee or the
Administrator nor for any mistake of judgment made in good faith, and AT&T
shall indemnify and hold harmless each member of the Board, each member of the
Committee, the Administrator and each other employee, officer, or director of
AT&T or any Participating Company to whom any duty or power relating to the
administration or interpretation of the Plan may be allocated or delegated,
against any cost or expense (including attorneys’ fees) or liability (including
any sum paid in settlement of a claim) arising out of any act or omission to act
in connection with the Plan unless arising out of such person’s own fraud or bad
faith.

     

    
      	
              7.04.  

            	
              Benefit
      Claims and Appeals.

            

    

     

    

    
      	
                    
      (a)  

            	
              Benefit
      Claims.

            

    

    

    All
claims for benefit payments under the Plan shall be submitted in writing by a
Participant, a Surviving Spouse, beneficiary, or the estate of the Participant,
or the duly authorized representative of such person or estate (“Claimant” for
purposes of this Section 7.04) to the Administrator. The Administrator shall
notify the Claimant in writing within 90 days after receipt as to whether the
claim has been granted or denied. This period may be extended for up to an
additional 90 days, for a total of 180 days, in the case of special circmstances
provided that written notice of the extension is furnished to the Claimant prior
to the termination of the initial 90-day period. The extension notice shall
indicate the special circumstances requiring an extension of time and the date
by which the Administrator expects to render the benefit determination. In the
event the claim is denied, in whole or in part, the Claimant will receive notice
of the Administrator’s decision, including: (i) the specific reasons for the
adverse determination, (ii) reference to the pertinent Plan provisions on which
the adverse determination is based, (iii) a description of any additional
material or information necessary for the Claimant to perfect the claim and an
explanation of why such material or information is necessary, and (iv) a
description of the Plan’s procedures for appealing the adverse determination
(including applicable time limits) and the Claimant’s right to bring a civil
action under section 502(a) of ERISA following an adverse determination on
review.

    

    
      	
                   
      (b)  

            	
              Benefit
      Appeals.

            

    

    

    A
Claimant whose claim for benefits has been denied, in whole or in part, may,
within 60 days of receipt of any adverse benefit determination, appeal such
denial to the Committee. All appeals shall be in the form of a written statement
and shall (i) set forth all of the reasons in support of favorable action on the
appeal, (ii) identify those provisions of the Plan upon which the Claimant is
relying, and (iii) include copies of any other documents, records and other
materials which may support favorable consideration of the claim. If the
Claimant submits a written request for review of a denied claim, the Claimant is
entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to the claim
(as defined in DOL Reg. §2560.503-1(m)(8) for claims filed on or after January
1, 2002), and (iv) a statement of the right of the Claimant to bring a civil
action under section 502(a) of ERISA following an adverse benefit determination
on review.  The Claimant may raise issues even if such issues were not
raised in the initial benefit determination. The Committee shall decide the
issues presented within 60 days after receipt of such request, but this period
may be extended for up to an additional 60 days in the case of special
circumstances provided that written notice of the extension is furnished to the
Claimant prior to the termination of the initial 60-day period.  The
extension notice shall indicate the special circumstances requiring an extension
of time and the date by which the Committee expects to render the determination.
In the case of an adverse determination, the decision of the Committee shall be
set forth in writing and include (i) the specific reason or reasons for the
adverse determination, (ii) reference to the pertinent Plan provisions on which
the denial is based, (iii) a statement that the Claimant is entitled to receive,
upon request and free of charge, reasonable access to, and copies of, all
documents, records, and other information (as defined in DOL Reg.
§2560.503-1(m)(8) for claims filed on or after January 1, 2002) relevant to the
Claimant’s claim for benefits, and (iv) a statement of the right of the Claimant
to bring a civil action action section 502(a) of ERISA.

    

    Any
Claimant whose claim for benefits has been denied shall have such further rights
of review as are provided in ERISA § 503, and the Committee and
Administrator shall retain such right, authority, and discretion as is provided
in or not expressly limited by ERISA § 503.  The Plan provisions
require that the Claimant pursue all claim and appeal rights described in this
Section 7.04 before seeking any other legal recourse regarding claims for
benefits.

    

    
      	
                   
      (c)  

            	
              Final
      Review.

            

    

    

    The
Committee shall serve as the final review committee, under the Plan and ERISA,
for the review of all appeals by Claimants (as defined in Section 7.04) whose
initial claims for benefits have been denied, in whole or in part, by the
Administrator. The Committee shall have the authority, subject to Section
7.04(c), to determine conclusively for all parties any and all questions arising
from administration of the Plan, and shall have sole and complete discretionary
authority and control to manage the operation and administration of the Plan,
including, but not limited to, authorizing disbursements according to the Plan,
the determination of all questions relating to eligibility for participation and
benefits, interpretation of all Plan provisions, determination of the amount and
kind of benefits payable to any Participant, Surviving Spouse or estate, and the
construction of disputed and doubtful terms. Such decisions by the Committee
shall be conclusive and binding on all parties and not subject to further
review.

    

    

     

    ARTICLE
8

     

     

    ADOPTION,
AMENDMENT AND TERMINATION

     

    

     

    8.01.        Adoption
of Plan.

     

    Any
Affiliated Corporation that participates in the Pension Plan may, with the
consent of the Committee, elect to participate in the Plan.  Such
Affiliated Corporation shall become a Participating Company as of the date
specified by the Committee in its resolution approving the participation of the
Affiliated Corporation in the Plan.

     

    8.02.        Amendment
and Termination.

     

    AT&T
is the Sponsor of the Plan and the Board or its delegates, may from time to time
amend, modify or change the Plan as set forth in this document, and the Board or
its delegate (acting pursuant to the Board’s delegations of authority then in
effect) may terminate the Plan at any time.  Plan amendments may
include, but are not limited to, elimination or reduction in the level or type
of benefits provided to any class or classes or Participants, surviving lawful
spouses and beneficiaries).  Any and all Plan amendments may be made
without the consent of any employee, Participant, spouse or
beneficiary.  Notwithstanding the foregoing, the exercise of the power
to amend, modify or terminate the Plan shall be subject to the limitations
described in paragraphs (a) and (b) below.

    

    
      	
                   
      (a)  

            	
              Such
      amendment, modification or termination shall not affect the rights of any
      Participant or surviving lawful spouse, without his or her consent, to any
      benefit under the Plan to which such Participant or surviving lawful
      spouse may have previously become entitled as a result of disability,
      death or termination of employment which occurred prior to the later of
      the adoption date or the effective date of such amendment or
      termination.

            

    

    

    
      	
                   
      (b)  

            	
              Such
      amendment, modification or termination shall not affect the rights of any
      Participant or his or her surviving lawful spouse, without his or her
      consent, to any future benefits payable under Article 3 or Article 4, provided
      that, prior to the later of the adoption date or the effective date of
      such amendments or termination, such Participant either (i) had satisfied
      the requirements for eligibility for the benefits described in Article 3, other than
      the termination of employment requirement, or (ii) had begun to receive a
      disability allowance under Article
      2.  For purpose of determining a spouse’s benefit, it
      shall be assumed that a Participant who is receiving a disability
      allowance as of the later of the adoption date or effective date of such
      amendment will continue to receive said allowance until his or her
      death.  The Annual Basic Pay used to compute such future
      benefits under Article
      3 or Article
      4 shall be the Participant’s highest Annual Basic Pay as described
      in Section 1.04 on
      any day during the term of his or her employment completed prior to the
      later of the adoption date or the effective date of such amendments or
      termination as if the Participant had terminated employment on that
      day.

            

    

    

    Notwithstanding
the preceding, the Board may adopt any prospective or retroactive amendment that
it determines is necessary for the Plan to maintain its compliance with Code
Section 409A.

     

    8.03.       Sale,
Spin-Off, or Other Disposition of Participating Company

     

    
      	
                   
      (a)  

            	
              Subject
      to Section 8.02 of
      this Plan, in the event AT&T sells, spins off, or otherwise disposes
      of an Affiliated Corporation, or disposes of all or substantially all of
      the assets of an Affiliated Corporation such that one or more Participants
      terminate employment for the purposes of accepting employment with the
      purchaser of such stock or assets, any person employed by such Affiliated
      Corporation who ceases to be an employee of the Company or an Affiliated
      Corporation as a result of the sale, spin-off, or disposition shall be
      deemed to have terminated his or her employment with a Participating
      Company for all relevant purposes under this Plan. Notwithstanding the
      preceding, effective January 1, 2005, no distribution shall commence
      pursuant to this Section 8.03(a) unless the Participant has a separation
      from service, as defined under Code Section 409A, with all members of the
      AT&T controlled group. With respect to periods on or after November
      18, 2005, the controlled group shall be determined with respect to
      entities required to be aggregated recognizing the acquisition of AT&T
      Corp. by SBC Communications Inc. (now known as AT&T
    Inc.).

            

    

    

    
      	
                     
      (b)  

            	
              Notwithstanding
      the foregoing provisions of this Section 8.03, and
      subject to Section
      8.02 of this Plan, if the sale, spin-off, or other disposition of
      the stock or assets of an Affiliated Corporation is to a Successor Plan
      Sponsor with the effect that a Participant is or becomes a Transition
      Participant, the Successor Plan Sponsor shall be solely liable for the
      payment of the pension and death benefits described in this Plan, and the
      entitlement of the Transition Participant or his or her surviving lawful
      spouse or beneficiary to benefits under this Plan shall
      terminate.  A Transition Participant shall not be considered to
      have terminated his or her employment with AT&T or a Participating
      Company for any purpose under this
Plan.

            

    

    

     

    ARTICLE
9

    GENERAL
PROVISIONS

     

    

     

    9.01.        Effective
Date.

     

    This Plan
was first adopted with effect on March 17, 1976 and was previously amended and
restated effective January 1, 1995.  This amended and restated Plan
shall be effective with respect to Participants who are eligible for benefits
under this Plan on or after January 1, 1998.  The provisions of the
Plan in effect before January 1, 1998 shall apply to Participants who are
terminate employment with eligibility for benefits under the Plan before January
1, 1998, and the spouse of such Participant, if applicable.

     

    9.02.        Assignment
of Benefits.

     

    The
benefits payable hereunder or the right to receive future benefits under the
Plan may not be anticipated, alienated, sold, transferred, assigned, pledged,
executed upon, encumbered, or subjected to any charge or legal process; no
interest or right to receive a benefit may be taken, either voluntarily or
involuntarily, for the satisfaction of the debts of, or other obligations or
claims against, such person or entity, including without limitation, any
judgment or claim for alimony, support or separate maintenance pursuant to a
domestic relations order within the meaning of Section 206(d)(3) of ERISA and
claims in bankruptcy proceedings.  Any such attempted disposition
shall be null and void.

     

    9.03.       Claims
Release.

     

    In case
of accident resulting in injury to or death of a Participant which entitles the
Participant or his or her surviving lawful spouse to benefits under the Plan,
the Participant or his or her surviving lawful spouse may elect to accept such
benefits or to prosecute such claims at law as the Participant or the surviving
lawful spouse may have against one or more Participating
Companies.  If an election is made to accept the benefits under the
Plan, such election shall be in writing and shall release such Participating
Company or such Participating Companies from all claims and demands that the
Participant or his or her surviving lawful spouse may have against it, or
against them, otherwise than under this Plan or under any other plan maintained
by a Participating Company, on account of such accident.  The right of
the Participant to a disability allowance under Article A-2 of the Plan shall
lapse if election to accept such benefits, as above provided, is not made within
sixty days after injury, or within such greater time as the Company shall fix
for the making of such election.

     

    9.04.       Damage
Claims or Suits.

     

    Should a
claim other than under this Plan or under any other plan maintained by a
Participating Company be presented or suit brought against a Participating
Company, for damages on account of injury or death of a Participant, nothing
shall be payable under this Plan on account of such injury or death except as
provided in Section
9.05, provided, however, that the Company may, in its discretion and upon
such terms as it may prescribe waive this provision if such claims be withdrawn
or if such suit be discontinued.

     

    9.05.        Judgment
or Settlement.

     

    In case
any judgment is recovered against a Participating Company or any settlement is
made of any claim or suit on account of the injury or death of a Participant,
and the total amount which would otherwise have been payable under the Plan and
under any other plan maintained by the Participating Company is greater than the
amount paid on account of such judgment or settlement, the lesser of (a) the
difference between such two amounts or (b) the amount which would otherwise have
been payable under this Plan, may in the discretion of the Company, be
distributed to the beneficiaries who would have received benefits under this
Plan.

     

    9.06.        Forfeiture
of Benefits.

     

    All
Benefits to which a Participant and his or her lawful spouse would be otherwise
eligible hereunder may be forfeited, at the discretion of the Board or of the
Committee, if an individual without the Company’s consent establishes a
relationship with a competitor of the Company or engages in any activity in
conflict with or adverse to the interests of the Company under the standards of
the AT&T Non-Competition Guideline and as determined by the Board or the
Committee in its sole discretion.  To the extent a benefit under any
other nonqualified plan of AT&T is offset by benefits payable under this
Plan, such offset shall be determined as if a forfeiture had not
occurred.

    

     

    9.07.        Payment
under Law.

     

    In the
case of any benefit, which the Committee shall determine to be of the same
general character as a payment provided by the Plan, shall be payable to any
participant, to his or her beneficiaries, his or her estate or his or her
annuitant under any law now in force or hereafter enacted, only the excess, if
any, of the amount prescribed in the Plan above the amount of such payment
prescribed by law shall be payable under the Plan; provided, however, that no
benefit payable under the Plan shall be reduced by reason of any governmental
benefit or pension payable on account of military service or by reason of any
benefit which the recipient would be entitled to receive under the Social
Security Act or Railroad Retirement Act.  In those cases where,
because of differences in the beneficiaries or in the time or methods of payment
or otherwise, the determination of any such excess is not ascertainable by mere
comparison but adjustments are necessary, the Committee or the Administrator, as
applicable, shall, in its discretion, determine whether or not in fact any such
excess exists and make the adjustments necessary to carry out in a fair and
equitable manner the spirit of the provision for the payment of any such
excess.

    

     

    9.08.       Governing
Law.

     

    To the
extent such laws are not preempted by the laws of the United States of America,
the Plan shall be governed by the laws of the State of Texas, except as to its
principles of conflict of laws.

     

    9.09.        Severability.

     

    If any
section, clause, phrase, provision or portion of this Plan or the application
thereof to any person or circumstance shall be invalid or unenforceable under
any applicable law, such event shall not affect or render invalid or
unenforceable the remainder of this Plan and shall not affect the application of
any section, clause, provision, or portion hereof to other persons or
circumstances.

     

    9.10.       Facility
of Payment.

     

    If the
Administrator shall find that any person to whom any amount is or was payable
under the Plan is unable to care for his or her affairs because of illness or
accident, then any payment, or any part thereof, due to such person (unless a
prior claim therefore has been made by a duly appointed legal representative),
may, if the Administrator so directs AT&T, be paid to the same person or
institution that benefit with respect to such person is paid or to be paid under
the Pension Plan if applicable, or the Participant’s lawful spouse, a child, a
relative, an institution maintaining or having custody of such person, or any
other person deemed by the Administrator to be a proper recipient on behalf of
such person otherwise entitled to payment.  Any such payment shall be
in complete discharge of the liability of AT&T, the Board, the Committee,
the Administrator, and the Participating Company therefore.  If any
payment to which a Participant or beneficiary is entitled under this Plan is
unclaimed or otherwise not subject to payment to the person or persons so
entitled, such amounts representing such payment or payments shall be forfeited
after a period of two years from the date the first such payment was payable and
shall not escheat to any state or revert to any party; provided, however, that
any such payment or payments shall be restored if any person otherwise entitled
to such payment or payments makes a valid claim.

     

    
      	
              9.11.  

            	
              Headings.

            

    

     

    The
captions of the preceding the sections and articles hereof have been inserted
solely as a matter of convenience and shall not in any manner define or limit
the scope or intent of any provision of the Plan.

     

    
      	
              9.12.  

            	
              Tax
      Withholding.

            

    

     

    AT&T
shall withhold all federal, state, local or other taxes required by law to be
withheld from payments or accruals under the Plan.

     

    
      	
              9.13.  

            	
              Fiduciary
      Relationship.

            

    

     

    Nothing
contained in the Plan, and no action taken pursuant to the provisions of the
Plan, shall create or be construed to create a trust or contract of any kind, or
a fiduciary relationship between or among AT&T, any other Participating
Company, any Affiliated Corporation, the Board, the Administrator, the
Committee, any Participant, employee, any surviving lawful spouse or any other
person.

     

    
      	
              9.14.  

            	
              No
      Guarantee of Employment.

            

    

     

    Neither
the Plan nor any action taken hereunder shall be construed as (i) a contract of
employment or deemed to give any employee the right to be retained in the
employment of a Participating Company, the right to any level of compensation,
or the right to future participation in the Plan; or (ii) affecting the right of
the Participating Company to discharge or dismiss any employees at any
time.

     

    
      	
              9.15.  

            	
              Plan
      Year.

            

    

     

    For
purposes of administering the Plan, the plan year shall begin on January 1 and
end on December 31.

     

    
      	
              9.16.  

            	
              Entire
      Plan.

            

    

     

    This
written Plan document is the final and exclusive statement of the terms of this
Plan, and any claim of right or entitlement under the Plan shall be determined
in accordance with its provisions pursuant to the procedures described in Article 7.  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
8.02.

     

    
      	
              9.17.  

            	
              Overpayments.

            

    

     

    If any
overpayment is made by the Plan for any reason, the Plan shall have the right to
recover such overpayment.  The Participant shall cooperate fully with
the Plan to recover any overpayment and provide any necessary information and
required documents. Any recovery of overpayment pursuant to this Section 9.17
may be deducted from future benefits payable to or on behalf of the Participant
from this Plan.

     

    

     

    APPENDIX
A

    PRIOR
PLAN PROVISIONS

     

    

    

    This Appendix A sets forth the
provisions related to the determination of benefit amounts and payment of such
benefits payable to or with respect to a Participant whose employment terminated
prior to December 1, 2008.  A reference in this Appendix A to a
provision of Article 2, Article 3 or Article 4 means such provision as set forth
in this Appendix A, unless the reference specifically indicates
otherwise.

    

     

    ARTICLE
A-2

    DISABILITY
ALLOWANCE

     

     

    
      

      
        	
                2.01  

              	
                (a)

              	
                A
      Participant shall be considered to be “disabled” at any time during the
      first fifty-two week period (or twenty-six week period for a Participant
      “disabled” on or after January 1, 2004) following the onset of a physical
      or mental impairment, if such impairment prevents the Participant from
      meeting the performance requirements of the position held immediately
      preceding the onset of the physical or mental
  impairment.

              

      

       

    

    
      	
               
      

            	
              (b)

            	
              A
      Participant shall be considered to be “disabled” after the first fifty-two
      week period (or twenty-six week period for a Participant “disabled” on or
      after January 1, 2004) following the onset of a physical or mental
      impairment if such impairment prevents the Participant from meeting the
      performance requirements of (1) the position held immediately preceding
      the onset of the physical or mental impairment, (2) a similar position, or
      (3) any appropriate position with the Company or any other Participating
      Company which the Participant would otherwise be capable of performing by
      reason of the Participant’s background and
  experience.

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      Administrator shall make the determination of whether a Participant is
      disabled within the meaning of paragraph (a) above; the Committee shall
      make such determination with respect to paragraph (b)
    above.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Notwithstanding
      the preceding, for purposes of the Plan, a Participant shall not be
      considered disabled with respect to any disability that commences after
      December 31, 2007.

            

    

     

    
      
        	
                2.02

              	
                (a)

              	
                A
      Participant who is disabled, before January 1, 2004, during a period
      described in Section
      2.01(a) shall be eligible to receive a monthly disability allowance
      equal to one hundred percent of the Participant’s monthly base salary rate
      on the last day the Participant was on the active payroll, reduced by any
      amounts described in Section 2.05(a) which
      are attributable to the period for which benefits are provided under this
      Section 2.02.

              

      

       

    

    
      	
               
      

            	
              (b)

            	
              A
      Participant who is disabled, on or after January 1, 2004, during a period
      described in Section
      2.01(a) shall be eligible to receive a weekly disability allowance
      equal to one hundred percent of the Participant’s salary rate on the last
      day the Participant was on the active payroll, reduced by any amounts
      described in Section
      2.05(a) which are attributable to the period for which benefits are
      provided under this Section 2.02.  The
      disability allowance provided under this Section 2.02(b) shall
      commence on the eighth consecutive day of the Participant’s absence from
      work due to his or her disability, and end on the earlier of (i) the date
      the Participant ceases to be disabled under Section 2.01(a), or (ii)
      the last day of the twenty-sixth week after commencement of the short-term
      disability benefit.

            

    

    

    
      	
              2.03.          (a)

            	
              A
      Participant who is disabled, before January 1, 2004, during a period
      described in Section
      2.01(b) shall, prior to his or her sixty-fifth birthday, be
      eligible to receive a monthly disability allowance equal to sixty percent
      of the Participant’s monthly base salary rate on the last day the
      Participant was on the active payroll, reduced by any amounts described in
      Section 2.05(b)
      which are attributable to the period for which benefits are provided under
      this Section
      2.03.

            

    

    

    
      	
               
      

            	
              (b)

            	
              A
      Participant who is disabled, on or after January 1, 2004, during a period
      described in Section
      2.01(b) shall, prior to his or her sixty-fifth birthday, be
      eligible to receive a weekly disability allowance equal to sixty percent
      of the Participant’s salary rate on the last day the Participant was on
      the active payroll, reduced by any amounts described in Section 2.05(b) which
      are attributable to the period for which benefits are provided under Section
      2.03.  Benefits under this Section 2.03(b) shall be
      payable if the Participant remains disabled as a result of the same
      physical or mental impairment resulting in the payment of disability
      benefits under Section
      2.02(b).  The disability allowance provided under this
      Section 2.03(b)
      shall commence on the twenty seventh week following the date when the
      Participant commenced receiving disability benefits under Section 2.02(b) and
      shall end on the earlier of (i) the date the Participant ceases to be
      disabled under Section
      2.01(b), or (ii) the Participant’s sixty-fifth
      birthday.

            

    

    

    
      	
              2.04.  

            	
              A
      Participant who is disabled during a period described in Section 2.01(b) shall
      commencing with his or her sixty-fifth birthday or the start of the period
      described in Section
      2.01(b), if later, be eligible to receive a monthly disability
      allowance equal to the greater of:

            

    

    

    
      	
              (i)  

            	
              one
      and one-quarter percent of the Participant’s Annual Basic Pay, as defined
      in Section 1.04,
      on the last day the Participant was on the active payroll,
    or

            

    

    

    
      	
              (ii)  

            	
              if
      the Participant’s Term of Employment has been five years or more, ninety
      percent of the sum of (a) the monthly pension the Participant would have
      been entitled to receive commencing at age sixty-five under the Pension
      Plan (as in effect on the last day the Participant was on the active
      payroll, but ignoring any minimum service requirements for eligibility to
      a pension), if the period after the last day the Participant was on the
      active payroll and prior to the Participant’s sixty-fifth birthday had
      been included in the Participant’s Term of Employment as of the end of the
      applicable averaging period under the Pension Plan, plus (b) the monthly
      pension the Participant would have been entitled to receive commencing at
      age 65 under the AT&T Non-Qualified Pension Plan (as in effect on the
      last day the Participant was on the active payroll, but ignoring any
      minimum service requirements for eligibility to a pension), if the period
      after the last day the Participant was on the active payroll and prior to
      the Participant’s sixty-fifth birthday had been included in the
      Participant’s Term of  Employment as of the end of the
      applicable averaging period under the AT&T Non-Qualified Pension Plan,
      reduced by any amounts described in Section 2.05(c) that are
      attributable to the period for which benefits are provided under this
      paragraph.

            

    

    

    
      
        	
                2.05.

              	
                (a)

              	
                The
      Disability allowance determined for any period under Section 2.02 shall be
      reduced by the sum of the following benefits received by the Participant
      which are attributable to the period for which such disability allowance
      is provided: a service pension, deferred vested pension, or disability
      pension under the Pension Plan, a pension under the AT&T Excess
      Benefit and Compensation Plan, a pension under the AT&T Non-Qualified
      Pension Plan, a pension under the AT&T Mid-Career Pension Plan, an
      accident disability benefit or sickness disability benefit under the
      Disability Benefit Plan, any Workers’ Compensation Benefit, plus any
      comparable benefits provided under the plans or programs of any Successor
      Plan Sponsor and any other benefit payments required by law on account of
      the Participant’s disability.  However, no reduction shall be
      made on account of any pension under the Pension Plan at a rate greater
      than the rate of such pension on the date the Participant first received
      such pension after his or her disability, and no reduction shall be made
      on account of any pension under the AT&T Non-Qualified Pension Plan,
      the AT&T Excess Benefit and Compensation Plan, or the AT&T
      Mid-Career Pension Plan at a rate greater than the rate of such pension,
      including adjustments if any to reflect post-retirement incentive awards
      to the Participant under the Short Term Plan, as of the first date the
      Participant was entitled to receive such pension after his or her
      disability.

              

      

    

    

    
      	
               
      

            	
              (b)

            	
              The
      disability allowance determined for any period under Section 2.03 shall be
      reduced by the sum of the following benefits received by the Participant
      which are attributable to the period for which such disability allowance
      is provided: a service pension, deferred vested pension or disability
      pension under the Pension Plan, a pension under the AT&T Excess
      Benefit and Compensation Plan, a pension under the AT&T Non-Qualified
      Pension Plan, a pension under the AT&T Mid-Career Pension Plan, an
      accident disability benefit under the Disability Benefit Plan, any other
      retirement income payments from the Participant’s Participating Company or
      any Successor Plan Sponsor, any Workers’ Compensation Benefit, plus any
      Social Security Insurance Benefit.  However, no reduction shall
      be made on account of any pension under the Pension Plan at a rate greater
      than the rate of such pension on the date the Participant first received
      such pension after his or her disability, and no reduction shall be made
      on account of any pension under the AT&T Non-Qualified Pension Plan,
      the AT&T Excess Benefit and Compensation Plan, or under the AT&T
      Mid-Career Pension Plan at a rate greater than the rate of such pension,
      including adjustments if any to reflect post-retirement incentive awards
      to the Participant under the Short Term Plan, as of the first date the
      Participant was entitled to receive such pension after his or her
      disability, and no reduction shall be made on account of any Social
      Security Benefit at a rate greater than the rate which the Participant
      would have first been eligible to receive after his or her disability and
      as if no other members of his or her family were eligible for any Social
      Security Benefit.

            

    

    

    
      	
               
      

            	
              Furthermore,
      the Board, in its discretion, may reduce the disability allowance by the
      amount of outside compensation or earnings of the Participant for work
      performed by the Participant during the period for which such disability
      allowance is provided.

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      disability allowance determined for any period under Section 2.04 shall be
      reduced by the sum of the following benefits received by the Participant
      which are attributable to the period for which such disability allowance
      is provided: a service pension, deferred vested pension or disability
      pension under the Pension Plan, a pension under the AT&T Excess
      Benefit and Compensation Plan, a pension under the AT&T Non-Qualified
      Pension Plan, a pension under the AT&T Mid-Career Pension Plan, an
      accident disability benefit under the Disability Benefit Plan, any other
      retirement income payments from the Participant’s Participating Company or
      any Successor Plan Sponsor, plus any Workers’ Compensation
      Benefit.  However, no reduction shall be made on account of any
      pension under the Pension Plan at a rate greater than the rate of such
      pension on the date the Participant first received such pension after his
      or her disability, and no reduction shall be made on account of any
      pension under the AT&T Non-Qualified Pension Plan, the AT&T Excess
      Benefit and Compensation Plan, or under the AT&T Mid-Career Pension
      Plan at a rate greater than the rate of such pension, including
      adjustments if any to reflect post-retirement incentive awards to the
      Participant under the Short Term Plan, as of the first date the
      Participant was entitled to receive such pension after his or her
      disability.

            

    

    

    
      	
              2.06.

            	
              For
      purposes of Sections
      2.01(a) and 2.01(b), the measurement of time following the onset of
      a physical or mental impairment shall coincide with the measurement of
      time used to calculate periods of Sickness and Accident Disability
      Benefits under Sections 4 and 5 of the Disability Benefit
      Plan.  Successive periods of physical or mental impairment shall
      be counted together in computing the periods during which the Participant
      shall be entitled to the benefits provided under Sections 2.02 and 2.03,
      except that any disability absence after the Participant has been
      continuously engaged in the performance of duty for thirteen weeks shall
      be considered to commence a new period of physical or mental impairment
      under Section
      2.01(a), so that such Participant shall be entitled during such new
      period to the benefits provided under Section 2.02.

            

    

    

    
      	
              2.07.

            	
              With
      respect to a Participant not subject to mandatory retirement at age 65
      under the Age Discrimination in Employment Act (29 U.S.C. 631), the period
      of eligibility for the disability allowance provided in Section 2.03 and the
      period of eligibility for the disability allowance provided in Section 2.04, shall be
      the period described in Section 2.03, and the
      period described in Section 2.04,
      respectively, or such other period as is required under the Age
      Discrimination in Employment Act or under any applicable governing
      regulations or interpretations
thereunder.

            

    

     

    ARTICLE
A-3

    MINIMUM
RETIREMENT BENEFIT

     

    

    
      	
              3.01.

            	
              The
      Minimum Retirement Benefit shall be payable as described
      herein:

            

    

    

    
      	
                    
      (a)

            	
              Subject
      to the provisions of Section 3.01(b) with respect to a Participant who
      terminates employment after December 31, 1997, a Participant described in
      Section 1.11(a)
      whose Term of Employment has been five years or more and is not disabled,
      who terminates employment on or after his or her sixty-second birthday, or
      a Participant described in Section 1.11(b) who is
      retired on a service pension under the Pension Plan, shall be eligible to
      receive a monthly minimum retirement benefit equal to one and one-quarter
      percent of Participant’s Annual Basic Pay, as defined in Section 1.04, on the
      last day the Participant was on the active payroll reduced by the sum of
      the following benefits received by the Participant which are attributable
      to the period for which benefits are provided under this Article 3: a service
      pension or deferred vested pension under the Pension Plan, a pension under
      the AT&T Excess Benefit and Compensation Plan, a pension under the
      AT&T Non-Qualified Pension Plan, a pension under the AT&T
      Mid-Career Pension Plan, and by any other retirement income payments
      received by the Participant from his or her Participating Company or from
      a Successor Plan Sponsor.  However, no reduction shall be made
      on account of any pension under the Pension Plan at a rate greater than
      the rate of such pension on the date the Participant first received such
      pension after his or her retirement or other termination of employment,
      and no reduction shall be made on account of any pension under the
      AT&T Non-Qualified Pension Plan, the AT&T Excess Benefit and
      Compensation Plan, or under the AT&T Mid-Career Pension Plan at a rate
      greater than the rate of such pension, including adjustments if any to
      reflect post-retirement incentive awards to the Participant under the
      Short Term Plan, as of the first date the Participant was entitled to
      receive such pension after his or her retirement or other termination of
      employment.

            

    

    

    
      	
                  
         (b)  

            	
              The
      provisions of this Section 3.01(b) apply with respect to a Participant who
      terminates employment on or after January 1, 1998.  A
      Participant described in Section 1.11(a) whose
      Term of Employment has been five years or more and is not disabled, who
      terminates employment on or after his or her sixty-second birthday, or a
      Participant described in Section 1.11(b) who is
      Service Pension Eligible at the time of his or her termination of
      employment, shall be eligible to receive a monthly minimum retirement
      benefit equal to one and one-quarter percent of Participant’s Annual Basic
      Pay, as defined in Section 1.04, on the
      last day the Participant was on the active payroll reduced by an offset
      which is the sum of the benefits, determined in accordance with the
      following Section 3.01(c),  accrued under the Pension Plan, the
      AT&T Excess Benefit and Compensation Plan, the AT&T Non-Qualified
      Pension Plan, the AT&T Mid-Career Pension Plan, and by any other
      retirement income payments received by the Participant from his or her
      Participating Company or from a Successor Plan Sponsor (“Offset Plans”),
      which are attributable to the period for which benefits are provided under
      this Article
      3.  However, no reduction shall be made on account of any
      pension under the Pension Plan at a rate greater than the rate of such
      pension on the date the Participant first received such pension after his
      or her retirement or other termination of employment, and no reduction
      shall be made on account of any pension under the AT&T Non-Qualified
      Pension Plan, the AT&T Excess Benefits and Compensation Plan, or under
      the AT&T Mid-Career Pension Plan at a rate greater than the rate of
      such pension, including adjustments if any to reflect post-retirement
      incentive awards to the Participant under the Short Term Plan, as of the
      first date the Participant was entitled to receive such pension after his
      or her retirement or other termination of
  employment.

            

    

    

    
      	
                               
      (c)

            	
              The
      following rules shall apply for purposes of determining the offset
      described in the preceding Section 3.01(b), effective for pensions that
      commence under this Plan on or after January 1, 1998 and prior to December
      31, 2008:

            

    

    

    
      	
              (i)  

            	
              with
      respect to a Participant who commences distribution of all of his or her
      pension benefit under the Pension Plan simultaneously with commencement of
      distribution of benefits under this Plan, the offset is the sum of the
      monthly benefit payable to the Participant under the Offset Plans, or,
      with respect to the portion of the benefit paid under such Offset Plan in
      a form other than a monthly annuity, the monthly single life annuity that
      is the actuarial equivalent of the amount paid in a form other than a
      monthly annuity. For purposes of this Section 3.01(c)(i), actuarial
      equivalence is determined pursuant to the provisions of the applicable
      Offset Plan; and

            

    

    

    
      	
              (ii)  

            	
              with
      respect to a Participant who does not commence distribution of all of his
      or her pension benefit under the Pension Plan simultaneously with
      commencement of distribution of benefits under this Plan, the offset shall
      be determined (I) in accordance with Section 3.01(c)(i) with respect to
      the portion of the benefit under the Offset Plans that commences
      simultaneously with commencement of distribution under this Plan, and (II)
      with respect to the portion of the benefit under the Offset Plans that
      does not commence simultaneously with distribution under this Plan, the
      amount that would be payable, with respect to such portion of the benefit,
      in the form of a single life annuity under such Offset Plan, if such
      single life annuity payment commenced simultaneously with distribution of
      benefits under this Plan.

            

    

    

    
      	
              3.02.

            	
              If
      an amendment to the Pension Plan effective on or after January 1, 1988 and
      before December 31, 2004, provides for an increase in the service pensions
      of previously retired employees, then a Participant’s minimum retirement
      benefit shall be increased pursuant to the same terms and conditions as
      are set forth in such Pension Plan
amendment.

            

    

    

    
      	
              3.03.

            	
              Subject
      to the provisions of Section 3.03 in the main text of the Plan regarding
      payment to Specified Employees, payment of the Minimum Retirement Benefit
      shall commence at the Participant’s Termination of
    Employment.

            

    

    

    

    
      	
              3.04

            	
              A
      Participant who terminated employment before January 1, 1997 with
      eligibility for a service pension or a disability pension under the
      Pension Plan shall receive a special pension increase, effective July 1,
      1999, in accordance with the following
schedule:

            

    

     

    

    
      	
              (a)  

            	
              a
      Participant who terminated employment before January 1, 1976 shall receive
      an increase in his or her minimum retirement benefit of
    15%;

            

    

    

    
      	
              (b)  

            	
              a
      Participant who terminated employment after December 31, 1975 and before
      January 1, 1986 shall receive an increase in his or her minimum retirement
      benefit of 12.5%;

            

    

    

    
      	
              (c)  

            	
              a
      Participant who terminated employment after December 31, 1985 and before
      January 1, 1991 shall receive an increase in his or her minimum retirement
      benefit of 10%;

            

    

    

    
      	
              (d)  

            	
              a
      Participant who terminated employment during the 1991 calendar year shall
      receive an increase in his or her minimum retirement benefit of
      9%;

            

    

    

    
      	
              (e)  

            	
              a
      Participant who terminated employment during the 1992 calendar year shall
      receive an increase in his or her minimum retirement benefit of
      8%;

            

    

    

    
      	
              (f)  

            	
              a
      Participant who terminated employment during the 1993 calendar year shall
      receive an increase in his or her minimum retirement benefit of
      7%;

            

    

    

    
      	
              (g)  

            	
              a
      Participant who terminated employment during the 1994 calendar year shall
      receive an increase in his or her minimum retirement benefit of
      6%;

            

    

    

    
      	
              (h)  

            	
              a
      Participant who terminated employment during the 1995 calendar year shall
      receive an increase in his or her minimum retirement benefit of 5%;
      and

            

    

    

    
      	
              (i)  

            	
              a
      Participant who terminated employment during the 1996 calendar year shall
      receive an increase in his or her minimum retirement benefit of
      4%.

            

    

    

     

    ARTICLE
A-4

    SURVIVING
SPOUSE BENEFIT

     

    

    
      	
              4.01.            (a)

            	
              Subject
      to the provisions of Section 4.02 with respect to the Spouse of a
      Participant who terminates employment after December 31, 1997, in the
      event of the death of a Participant, who is described in Section 1.11(c), the
      surviving lawful spouse of such Participant shall be eligible to receive a
      monthly benefit equal to one and one-quarter percent of the Participant’s
      Annual Basic Pay, as defined in Section 1.04, on the
      last day the Participant was on the active payroll prior to his or her
      death reduced by the sum of the following benefits received by the
      Participant’s surviving lawful spouse on account of the death of the
      Participant and which are attributable to the period for which benefits
      are provided under this Article 4: an
      annuitant’s pension under the Pension Plan, an annuity under the Insured
      Annuitant’s Plan, an annuitant’s pension under the AT&T Excess Benefit
      and Compensation Plan, an annuitant’s pension under the AT&T
      Non-Qualified Pension Plan and any other lifetime payments to such
      surviving lawful spouse from the Participant’s Participating Company or
      from any Successor Plan Sponsor.  However, no reduction shall be
      made on account of an annuitant’s pension under the Pension Plan, or on
      account of an annuitant’s pension under the AT&T Non-Qualified Pension
      Plan or on account of an annuitant’s pension under the AT&T Excess
      Benefit and Compensation Plan, or on account of any annuity under the
      Insured Annuitant’s Plan at a rate greater than (1) the rate of such
      pension or annuity on the date such pension or annuity was first payable
      in the case of the death of a Participant who is on the active payroll or
      (2) the rate of such pension or annuity on the date such pension or
      annuity first would have been payable had the Participant died on the day
      after the last day the Participant was on the active payroll in the case
      of the death of a Participant who is not on the active
      payroll.

            

    

    

    
      	
                           
      (b)

            	
              Notwithstanding
      the preceding, if the benefit to the surviving spouse commences on or
      after January 1, 1998, and the surviving spouse does not simultaneously
      commence distribution of benefits under the Pension Plan, the reductions
      described in the preceding paragraph (a) shall be determined as if
      payments to the surviving spouse commenced in the form of a single life
      annuity at the same time as payments commence under this
    Plan.

            

    

    

    
      	
                           
      (c)

            	
              Notwithstanding
      the preceding paragraphs (a) and (b), with respect to a Participant who
      terminated employment after December 31, 2004 and prior to December 1,
      2008, if the Participant commenced distribution of the benefit under the
      Pension Plan prior to his or her death, but distribution of such benefit
      did not commence on or before December 1, 2008, the benefit payable to a
      surviving spouse pursuant to this Section 4.01 shall be further reduced by
      the single life annuity benefit, if any, which would have been payable to
      the Participant commencing on December 1, 2008 from the AT&T Excess
      Benefits and Compensation Plan and from the AT&T Non-Qualified Pension
      Plan

            

    

    

    
      	
              4.02.

            	
              Notwithstanding
      any provision of Section
      4.01 to the contrary, the surviving lawful spouse of a Participant
      shall not be eligible to receive benefits under this Article 4 if, prior to
      the Participants death, the Participant could have elected under the
      Pension Plan or under any predecessor pension plan maintained by a
      Participating Company to receive a reduced pension for his or her life in
      order to provide thereafter an annuity for the life of his or her lawful
      spouse, but he declined to make such an election. Effective for payments
      with respect to a Participant who terminates employment after December 31,
      1997 and dies after commencement of distribution of the Pension Plan, the
      provisions of this Section 4.02 shall be applied as follows, to reflect
      the expanded optional forms of payment available under the Pension
      Plan:

            

    

    

    
      	
                        
      (a)

            	
              if
      the Participant elected a lump sum or single life annuity form of payment
      under the Pension Plan, no surviving spouse benefit shall be paid under
      this Plan;

            

    

    

    
      	
                       
        (b)

            	
              if
      the Participant elected the cash payment option (with residual annuity)
      under the Pension Plan, the benefit otherwise payable to the Surviving
      Spouse pursuant to Section 4.01 shall be reduced by the actuarial
      equivalent, determined as a single life annuity, of the amount of the cash
      payment made to the Participant pursuant to the cash payment
      option.

            

    

    

    
      	
              4.03

            	
              If
      an amendment to the Pension Plan effective on or after January 1, 1988 and
      before December 31, 2004, provides for an increase in the survivor
      annuities payable under said Plan, then the Surviving Spouse Benefit
      payable under Section
      4.01 above shall be increased pursuant to the same terms and
      conditions as are set forth in such Pension Plan amendment, except that no
      such increase shall apply to the Surviving Spouse Benefit related to a
      deceased Participant who had not terminated employment or died prior to
      the effective date of such
amendment.

            

    

    

    
      	
              4.04.

            	
              The
      Surviving Spouse Benefit payable under Section 4.01 above shall
      be increased, effective July 1, 1999, in accordance with the following
      schedule:

            

    

    

    
      	
                          
      (a)  

            	
              if
      the Surviving Spouse Benefit is with respect to a Participant who
      terminated employment before January 1, 1976, the Surviving Spouse Benefit
      shall be increased by 15%;

            

    

    

    
      	
              (b)  

            	
              if
      the Surviving Spouse Benefit is with respect to a Participant who
      terminated employment after December 31, 1975 and before January 1, 1986,
      the Surviving Spouse Benefit shall be increased by
  12.5%;

            

    

    

    
      	
              (c)  

            	
              if
      the Surviving Spouse Benefit is with respect to a Participant who
      terminated employment after December 31, 1985 and before January 1, 1991 ,
      the Surviving Spouse Benefit shall be increased by
  10%;

            

    

    

    
      	
              (d)  

            	
              if
      the Surviving Spouse Benefit is with respect to a Participant who
      terminated employment during the 1991 calendar year, the Surviving Spouse
      Benefit shall be increased by 9%;

            

    

    

    
      	
              (e)  

            	
              if
      the Surviving Spouse Benefit is with respect to a Participant who
      terminated employment during the 1992 calendar year, the Surviving Spouse
      Benefit shall be increased by 8%;

            

    

    

    
      	
              (f)  

            	
              if
      the Surviving Spouse Benefit is with respect to a Participant who
      terminated employment during the 1993 calendar year, the Surviving Spouse
      Benefit shall be increased by 7%;

            

    

    

    
      	
              (g)  

            	
              if
      the Surviving Spouse Benefit is with respect to a Participant who
      terminated employment during the 1994 calendar year, the Surviving Spouse
      Benefit shall be increased by 6%;

            

    

    

    
      	
              (h)  

            	
              if
      the Surviving Spouse Benefit is with respect to a Participant who
      terminated employment during the 1995 calendar year, the Surviving Spouse
      Benefit shall be increased by 5%;
and

            

    

    

    
      	
              (i)  

            	
              if
      the Surviving Spouse Benefit is with respect to a Participant who
      terminated employment during the 1996 calendar year, the Surviving Spouse
      Benefit shall be increased by 4%.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    APPENDIX
B

    Annual
Pay Definition Prior to 1991

     

    

    Section
1.  Definition of Annual Basic Pay

    

    

    For
retirements occurring after August 10, 1980, and before April 15, 1991, the
following was the applicable definition of “Annual Basic Pay”:

    

    

    “Annual
Basic Pay” shall mean the Participant’s annual base salary rate on the last day
the Participant was on the active payroll plus, with respect to a Participant
whose last day on the active payroll occurred after August 9, 1980, an amount
determined with reference to the Short Term Plan, but excluding all
differentials regarded as temporary or extra payments and all cash payments and
distributions made under the Long Term Plan.  The amount determined
with reference to the Short Term Plan shall be the lesser of the Participant’s
standard Short Term Award in effect on the last day the Participant was on the
active payroll or the Participant’s position rate on the last day the
participant was on the active payroll multiplied by the applicable percentage
determined as follows:

    

    

    
      	
              Last Day on Active Payroll

              August
      10, 1980 through October 30, 1981

              October
      31, 1981 through September 29, 1983

              On
      or after September 30, 1983

            	
              % of Position Rate

              15%

              50%

              60%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}]]