Document:

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                                                                    EXHIBIT 10.3

                           EMPLOYEE BENEFITS AGREEMENT

                                 BY AND BETWEEN

                                   AT&T CORP.

                                       AND

                          AT&T WIRELESS SERVICES, INC.

                                   DATED AS OF
                                  JUNE 7, 2001
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                                TABLE OF CONTENTS

ARTICLE I     DEFINITIONS....................................................  1
   1.1        Affiliate......................................................  1
   1.2        Agreement......................................................  1
   1.3        AT&T...........................................................  1
   1.4        AT&T Broadband Pension Plans...................................  2
   1.5        AT&T Closing Stock Value.......................................  2
   1.6        AT&T Common Stock..............................................  2
   1.8        AT&T Employee..................................................  2
   1.9        AT&T Entity....................................................  2
   1.10       AT&T Executive.................................................  2
   1.11       AT&T Executive Benefit Plans...................................  2
   1.12       AT&T Force Management Program..................................  2
   1.13       AT&T Long Term Incentive Plan..................................  2
   1.14       AT&TMPP........................................................  3
   1.15       AT&T Opening Stock Value.......................................  3
   1.16       AT&T Pension Plans.............................................  3
   1.17       AT&TPP.........................................................  3
   1.18       AT&T Savings Plan..............................................  3
   1.19       AT&T Toll Discount Program.....................................  3
   1.20       AT&T Transferees...............................................  3
   1.21       Auditing Party.................................................  3
   1.22       Award..........................................................  4
   1.23       AWE............................................................  4
   1.5        AT&T Closing Stock Value.......................................  4
   1.24       AWE Common Stock...............................................  4
   1.25       Close of the Disposition Date..................................  4
   1.26       COBRA..........................................................  4
   1.27       Code...........................................................  4
   1.28       Disposition Date...............................................  4
   1.29       Disposition Year...............................................  4
   1.30       Distribution Ratio.............................................  5
   1.31       EBLIP..........................................................  5
   1.32       Eligible Wireless Service......................................  5
   1.33       ERISA..........................................................  5
   1.34       Excluded Liability.............................................  5
   1.35       Health and Welfare Plans.......................................  5
   1.36       HIPAA..........................................................  5
   1.37       Immediately after the Disposition Date.........................  5
   1.39       Intrinsic Value................................................  6
   1.40       IRS............................................................  6
   1.41       Liabilities....................................................  6
   1.42       Non-parties....................................................  6
   1.43       NYSE...........................................................  6

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   1.44       Option........................................................   6
   1.45       Participating Company.........................................   7
   1.46       Person........................................................   7
   1.47       Plan..........................................................   7
   1.48       Retirement-Related Benefit Plans..............................   7
   1.49       Separation and Disposition Agreement..........................   7
   1.50       Separation Transactions.......................................   7
   1.51       SMULIP........................................................   7
   1.52       Subsidiaries..................................................   8
   1.53       SVULIP........................................................   8
   1.54       Transferred Individual........................................   8
   1.55       Transition Period.............................................   8
   1.56       U.S...........................................................   8
   1.57       Wireless Common Stock.........................................   8
   1.58       Wireless Dividend.............................................   8
   1.59       Wireless Dividend Date........................................   8
   1.60       Wireless Exchange Date........................................   8
   1.61       Wireless 401(k) Plan..........................................   8
   1.63       Wireless Services.............................................   8
   1.62       Wireless Services Adjustment Plan.............................   8
   1.64       Wireless Services Entity......................................   8
   1.65       Wireless Severance Plan.......................................   8
   1.66       Wireless Stock Value..........................................   9

ARTICLE II    GENERAL PRINCIPLES............................................   9
   2.1        Wireless Services Assumption of Liabilities...................   9
   2.2        Wireless Services Participation in AT&T Plans.................   9
   2.3        Sponsorship of Wireless Services Plans........................   9
   2.4        Terms of Participation by AT&T Transferees in
              Wireless Services Plans.......................................  10
   2.5        Service Recognition...........................................  10
   2.6        Approval by AT&T as Sole Shareholder..........................  11

ARTICLE III   DEFINED CONTRIBUTION AND DEFINED BENEFIT PLANS................  11
   3.1        Wireless 401(k) Plan..........................................  11
              (a)   401(k) Plan Trust.......................................  11
              (b)   Assumption of Liabilities and Transfer of
                    Assets..................................................  11
   3.2        AT&T ESOP.....................................................  12
   3.3        AT&T Pension Plans............................................  12

ARTICLE IV    HEALTH AND WELFARE PLANS......................................  13
   4.1        Assumption of Health and Welfare Plan Liabilities.............  13
   4.2        Health and Welfare Plan Transitional Coverage Rules...........  14
   4.3        HCRA/CECRA Post-Disposition Transitional Rules................  15
              (a)   AT&T Health Care Reimbursement Account Plan.............  15
              (b)   AT&T Child/Elder Care Reimbursement Account
                    Plan....................................................  15
   4.4        Workers' Compensation Liabilities.............................  15

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   4.5        Payroll Taxes and Reporting of Compensation...................  16
   4.6        AT&T Retirement-Related Benefits..............................  16
   4.7        COBRA and HIPAA Compliance....................................  16
   4.8        Direct Pay Arrangements.......................................  17

ARTICLE V     EXECUTIVE BENEFITS AND OTHER BENEFITS.........................  17
   5.1        Individual Agreements - Assumption of Liabilities
              and Consents..................................................  17
   5.2        AT&T Short Term Incentive Plan and AT&T Bonus Plan
              Award.........................................................  18
   5.3        AT&T Long Term Incentive Plans................................  18
              (a)   AT&T Options............................................  18
              (b)   AWE Options.............................................  22
              (c)   Vesting and Exercisability of Options...................  23
              (d)   Restricted Stock and Restricted Stock Units.............  24
              (e)   Performance Shares and Stock Units......................  24
              (e)   Performance Shares and Stock Units......................  26
              (f)   Partial Interests in Shares or Stock Units..............  26
              (g)   Incentive Stock Options; Foreign Grants/Awards..........  26
   5.4        AT&T Employee Stock Purchase Plan.............................  27
   5.5        Savings Clause................................................  27
   5.6        Registration Requirements.....................................  27
              (a)   AT&T Non-Competition Guideline..........................  27
              (b)   Wireless Services Non-Competition Guideline.............  28
              (c)   Confidentiality and Proprietary Information.............  29
   5.9        AT&T Nonqualified Pension Plans and Arrangements..............  29
   5.10       Life Insurance Programs.......................................  29
              (a)   AT&T Senior Management Universal Life
                    Insurance Program.......................................  29
              (b)   AT&T Executive Basic Life Insurance Program.............  30
              (c)   AT&T Estate Enhancement Program.........................  30
              (d)   AT&T Supplemental Variable Universal Life
                    Insurance Program.......................................  30
   5.11       Financial Counseling..........................................  30
   5.12       Toll Discount Program.........................................  31
   5.13       Relocation Plan...............................................  31
   5.14       Senior Manager Car Allowances.................................  31
   5.15       Taxable Fringe Benefits.......................................  31

ARTICLE VI    GENERAL AND ADMINISTRATIVE....................................  32
   6.1        Payment of Liabilities........................................  32
   6.2        Sharing of Participant Information............................  32
   6.3        Non-Termination of Employment; No Third-Party
              Beneficiaries.................................................  32
   6.4        Audit Rights with Respect to Information Provided.............  33
   6.5        Fiduciary Matters.............................................  33
   6.6        Collective Bargaining.........................................  33
   6.7        Consent of Third Parties......................................  34

ARTICLE VII   MISCELLANEOUS.................................................  34

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   7.1        Effect If Disposition Does Not Occur..........................  34
   7.2        Relationship of Parties.......................................  34
   7.3        Affiliates....................................................  34
   7.4        Incorporation of Separation and Distribution
              Agreement Provisions..........................................  34
   7.5        Governing Law.................................................  34

SIGNATURES OF THE PARTIES...................................................  35

SCHEDULE 1.20 LIST OF AT&T TRANSFEREES......................................  36

SCHEDULE 2.3  WIRELESS SERVICES PLANS SPONSORED BY AT&T OR AN AT&T ENTITY...  37

SCHEDULE 5.3(a)   STOCK OPTION ADJUSTMENT ILLUSTRATION......................  39

SCHEDULE 5.3(e)   PERFORMANCE SHARE ADJUSTMENT ILLUSTRATION.................  40

SCHEDULE 5.9   INDIVIDUAL NONQUALIFIED PENSION ARRANGEMENTS.................  41

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                           EMPLOYEE BENEFITS AGREEMENT

      This EMPLOYEE BENEFITS AGREEMENT, dated as of June 7, 2001 (the "Effective
Date"), is by and between AT&T Corp., a New York corporation ("AT&T"), and AT&T
Wireless Services, Inc., a Delaware corporation and wholly owned subsidiary of
AT&T ("Wireless Services").

      Capitalized terms used herein (other than the formal names of AT&T Plans
and Wireless Services Plans and related trusts of AT&T and Wireless Services)
and not otherwise defined shall have the respective meanings assigned to them in
Article I hereof or as assigned to them in the Separation and Distribution
Agreement (as defined below).

      WHEREAS, the Board of Directors of AT&T has determined that it is in the
best interests of AT&T and its shareholders to separate Wireless Services from
AT&T's existing businesses and provide for it to be an independent business;

      WHEREAS, in furtherance of the foregoing, AT&T and Wireless Services have
entered into a Separation and Distribution Agreement, dated as of even date
hereof (the "Separation and Distribution Agreement"), and other specific
agreements that will govern certain matters relating to the Separation
Transactions (as defined in the Separation and Distribution Agreement) and the
relationship of AT&T, Wireless Services, and their respective Subsidiaries
following the Disposition Date; and

      WHEREAS, pursuant to the Separation and Distribution Agreement, AT&T and
Wireless Services have agreed to enter into this Agreement allocating assets,
Liabilities, and responsibilities with respect to certain employee compensation
and benefit plans and programs between and among them.

      NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:

                                    ARTICLE I
                                   DEFINITIONS

      For purposes of this Agreement the following terms shall have the
following meanings:

      1.1   AFFILIATE has the meaning given that term in the Separation and
Distribution Agreement.

      1.2   AGREEMENT means this Employee Benefits Agreement, including all the
Schedules hereto.

      1.3   AT&T is defined in the recitals to this Agreement.
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      1.4   AT&T BROADBAND PENSION PLANS means nonqualified and qualified
pension plans, including the MediaOne Group Pension Plan (renamed as the AT&T
Broadband Pension Plan effective January 1, 2001), in effect as of the time
relevant to the applicable provision of this Agreement.

      1.5   AT&T CLOSING STOCK VALUE means the closing per-share price of the
AT&T Common Stock as listed on the NYSE as of 4:00 P.M., Eastern Standard Time
or Eastern Daylight Time (whichever shall then be in effect) on the Wireless
Dividend Date; provided, however, that if the Wireless Dividend occurs at a time
when the NYSE is open for trading, AT&T Closing Stock Value shall mean the price
at which AT&T Common Stock last trades immediately before the Wireless Dividend;
provided further, that if the Wireless Dividend occurs prior to the first trade
of AT&T Common Stock on the Wireless Dividend Date, the AT&T Closing Stock Value
shall mean the price at which AT&T Common Stock last trades on the trading day
immediately preceding the Wireless Dividend Date.

      1.6   AT&T COMMON STOCK means common shares, par value of $1.00 per share,
of AT&T denoted as "Common Stock" in Part A, Article Third of the Certificate of
Incorporation of AT&T.

      1.7   AT&T EMPLOYEE means any individual who, as of the Close of the
Disposition Date, is either actively employed by or then on a leave of absence
from AT&T or an AT&T Entity, but does not include any Transferred Individual.

      1.8   AT&T ENTITY means any Person that is, at the time relevant to the
applicable provision of this Agreement, an Affiliate of AT&T, except that, for
periods beginning after the Disposition Date, the term "AT&T Entity" shall not
include Wireless Services or a Wireless Services Entity.

      1.9   AT&T EXECUTIVE means an employee or former employee, at salary grade
level "E" or above (or comparable positions) of AT&T, an AT&T Entity, Wireless
Services or a Wireless Services Entity, who immediately before the Close of the
Disposition Date is eligible to participate in or receive a benefit under any
AT&T Executive Benefit Plan.

      1.10  AT&T EXECUTIVE BENEFIT PLANS means the executive benefit and
nonqualified plans, programs, and arrangements (exclusive of Individual
Agreements) established and sponsored by AT&T, to the extent maintained, agreed
upon, or assumed by AT&T or an AT&T Entity (other than Wireless Services or a
Wireless Services Entity) for the benefit of employees and former employees of
AT&T or an AT&T Entity (other than Wireless Services or a Wireless Services
Entity) before the Close of the Disposition Date.

      1.11  AT&T FORCE MANAGEMENT PROGRAM means the AT&T Separation Plan, the
AT&T Senior Management Separation Plan, the AT&T Special Executive Separation
Plan, and the AT&T Senior Officer Separation Plan in effect as of the time
relevant to the applicable provision of this Agreement.

      1.12  AT&T LONG TERM INCENTIVE PLAN means any of the AT&T 1987 Long Term
Incentive Program, the AT&T 1997 Long Term Incentive Program, and such other
stock-based incentive plans assumed by AT&T by reason of merger, acquisition, or
otherwise, including

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incentive plans of NCR Corporation, Teradata Corporation, Lin Broadcasting
Corporation, MediaOne Group Inc., McCaw Cellular Communications, Inc., Teleport
Communications Group, Inc., ACC Corp., and Tele-Communications Inc. and any
other incentive plan identified by AT&T before the Close of the Disposition
Date, all as in effect as of the time relevant to the applicable provisions of
this Agreement.

      1.13  AT&TMPP means the AT&T Management Pension Plan in effect as of the
time relevant to the applicable provision of this Agreement.

      1.14  AT&T OPENING STOCK VALUE means the opening per-share price of the
AT&T Common Stock as listed on the NYSE as of 9:30 A.M., Eastern Standard Time
or Eastern Daylight Time (whichever shall then be in effect) on the first
trading day after the Wireless Dividend Date; provided, however, that if the
Wireless Dividend occurs at a time when the NYSE is open for trading, AT&T
Opening Stock Value shall mean the price at which AT&T Common Stock first trades
immediately after the Wireless Dividend; provided further, that if the Wireless
Dividend occurs prior to the first trade of AT&T common Stock on the Wireless
Dividend Date, the AT&T Opening Stock Value shall mean the price at which AT&T
Common Stock first trades on the Wireless Dividend Date..

      1.15  AT&T PENSION PLANS means the AT&TMPP, the AT&TPP, the AT&T Excess
Benefit and Compensation Plan, and the AT&T Non-Qualified Pension Plan in effect
as of the time relevant to the applicable provision of this Agreement.

      1.16  AT&TPP means the AT&T Pension Plan in effect as of the time relevant
to the applicable provision of this Agreement.

      1.17  AT&T RABBI TRUST means the AT&T Corp. Benefits Protection Trust, as
amended from time to time.

      1.18  AT&T SAVINGS PLANS means the AT&T defined contribution plans, in
effect as of the time relevant to the applicable provision of this Agreement,
participating in the AT&T Savings Plan Group Trust, other than the Wireless
401(k) Plan.

      1.19  AT&T TOLL DISCOUNT PROGRAM means the AT&T Senior Manager Telephone
Discount Program and the AT&T Toll Discount Program in effect as of the time
relevant to the applicable provisions of this Agreement.

      1.20  AT&T TRANSFEREES means Transferred Individuals who, immediately
prior to the Close of the Disposition Date, performed services for Wireless
Services as employees of AT&T or an AT&T Entity (other than Wireless Services or
a Wireless Services Entity) and who became employees of Wireless Services or a
Wireless Services Entity in connection with the Separation Transactions, as
listed on Schedule 1.20 hereto, as such Schedule may be amended from time to
time by the mutual written consent of AT&T and Wireless Services.

      1.21  AUDITING PARTY is defined in Section 6.4(a).

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      1.22  AWARD, when immediately preceded by "AT&T," means an award under the
AT&T Long Term Incentive Plan. When immediately preceded by "Wireless Services,"
Award means an award under the Wireless Services Adjustment Plan.

      1.23  AWE shall mean the "Wireless Group" as that term is defined in Part
C, Article Third, of the Certificate of Incorporation of AT&T.

      1.24  AWE CLOSING STOCK VALUE means the closing per-share price of the AWE
Common Stock as listed on the NYSE as of 4:00 P.M., Eastern Standard Time or
Eastern Daylight Time (whichever shall then be in effect) on the Wireless
Dividend Date; provided, however, that if the Wireless Dividend occurs at a time
when the NYSE is open for trading, AT&T Closing Stock Value shall mean the price
at which AT&T Common Stock last trades immediately before the Wireless Dividend.

      1.25  AWE COMMON STOCK means common shares, par value of $1.00 per share,
of AT&T denoted as "Wireless Group Common Stock" in Part A, Article Third, of
the Certificate of Incorporation of AT&T.

      1.26  CLOSE OF THE DISPOSITION DATE means 11:59:59 P.M., Eastern Standard
Time or Eastern Daylight Time (whichever shall then be in effect), on the
Disposition Date.

      1.27  COBRA means the continuation coverage requirements for "group health
plans" under Title X of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and as codified in Code Section 4980B and ERISA Sections 601
through 608.

      1.28  CODE means the Internal Revenue Code of 1986, as amended, or any
successor federal income tax law. Reference to a specific Code provision also
includes any proposed, temporary, or final regulation in force under that
provision.

      1.29  DISPOSITION DATE means the last date as of which Wireless Services
is a member of AT&T's controlled group of corporations within the meaning of
Section 414 of the Code.

      1.30  DISPOSITION YEAR means the calendar year during which the
Disposition Date occurs.

      1.31  DISTRIBUTION shall have the meaning set forth in the Separation and
Distribution Agreement.

      1.32  DISTRIBUTION NUMBER shall be the denominator of the Wireless Group
Allocation Fraction (as defined in the Separation and Distribution Agreement,
defined below) as of the close of business on the Record Date (which for
purposes of clarification shall include shares of AWE Common Stock issuable upon
conversion of the AT&T Wireless Group Preferred Stock ("AWG Preferred Stock")
outstanding on the Record Date) minus the sum of (w) the number of shares of AWE
Common Stock outstanding on the Record Date, (x) 12,577,650, which represents
the number of shares of Wireless Common Stock reserved by Wireless for issuance
upon the exercise of certain outstanding options,(y) the number of Retained
Shares and (z) the number of shares of AWE Common Stock into which the shares of
AWG Preferred Stock outstanding on the Record Date are convertible.

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      1.33  DISTRIBUTION RATIO means a fraction the numerator of which shall be
the Distribution Number and the denominator of which is the number of shares of
AT&T Common Stock outstanding at the close of business on the Record Date.

      1.34  EBLIP means the AT&T Executive Basic Life Insurance Program in
effect as of the time relevant to the applicable provisions of this Agreement.

      1.35  ELIGIBLE WIRELESS SERVICE means a Transferred Individual's service
with Wireless Services or a Wireless Services Entity after the Disposition Date,
as evidenced by the Wireless Services Entity's own internal records, to the
extent that such service, in AT&T's sole determination, would have been service
credited under the AT&TMPP as "Term of Employment" if the Transferred Individual
had been employed by a Participating Company in the AT&TMPP at the time of such
service.

      1.36  ERISA means the Employee Retirement Income Security Act of 1974, as
amended. Reference to a specific provision of ERISA also includes any proposed,
temporary, or final regulation in force under that provision.

      1.37  EXCLUDED LIABILITY has the meaning given that term in the Separation
and Distribution Agreement.

      1.38  HEALTH AND WELFARE PLANS, when immediately preceded by "AT&T," means
the health and welfare plans established and sponsored by AT&T, to the extent
maintained, agreed upon, or assumed by AT&T for the benefit of employees and
retirees of AT&T and certain AT&T Entities (other than Wireless Services or a
Wireless Services Entity), and such other health and welfare plans or programs
as may apply to such employees and retirees as of the Disposition Date. When
immediately preceded by "Wireless Services," Health and Welfare Plans means the
health and welfare plans sponsored and maintained by Wireless Services or a
Wireless Services Entity.

      1.39  HIPAA means the health insurance portability and accountability
requirements for "group health plans" under the Health Insurance Portability and
Accountability Act of 1996, as amended.

      1.40  IMMEDIATELY AFTER THE DISPOSITION DATE means 12:00 A.M., Eastern
Standard Time or Eastern Daylight Time (whichever shall then be in effect), on
the day after the Disposition Date.

                                      -5-
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      1.41  INDIVIDUAL AGREEMENT means an individual contract or agreement
(whether written or unwritten), other than an Individual Deferral Agreement as
defined below, entered into between AT&T, an AT&T Entity, Wireless Services, or
a Wireless Services Entity and an AT&T Executive that establishes the right of
such individual to special executive compensation or benefits, including a
supplemental pension benefit, deferred compensation, severance, hiring bonus,
loan, guaranteed payment, special allowance, tax equalization or disability
benefit, or a share units grant (payable in the form of cash or otherwise) under
individual phantom share agreements. An Individual Agreement does not include
any individual contract, application or agreement entered into or by AT&T or an
AT&T Entity and an AT&T Executive (or his or her assignee) that relates to the
provision of nonqualified pension benefits (calculated using the defined benefit
formula), eligibility for coverage under any Retirement-Related Benefit Plan, or
life insurance coverage for the AT&T Executive under the EBLIP, the SMULIP, the
SVULIP, or the AT&T Corp. Estate Enhancement Program (including the AT&T Corp.
Alternative Death Benefit Program and the AT&T Corp. Special Death Benefit
Program).

      1.42  INDIVIDUAL DEFERRAL AGREEMENT means an agreement entered into prior
to the Close of the Disposition Date by AT&T and an AT&T Transferee for the
deferral of compensation (other than a deferral election made by an AT&T
Transferee under the AT&T Deferral Plan) and with respect to which all events
have occurred and all conditions have been satisfied entitling such individual
to payment of such deferred compensation other than termination of employment or
the mere passage of time.

      1.43  INTRINSIC VALUE means, with respect to an Option, as defined below,
the result obtained by multiplying (a) times (b) where "(a)" equals the result
obtained by subtracting the exercise price per share of the Option from (i) the
AT&T Closing Stock Value or (ii) the AT&T Opening Stock Value or (iii) the
Wireless Stock Value, whichever is applicable, as specified in Section
5.3(a)(ii), and "(b)" equals the number of shares of stock subject to such
Option, as specified in Section 5.3(a)(ii). In cases where the exercise price
per share of an Option exceeds (i) the AT&T Closing Stock Value or (ii) the AT&T
Opening Stock Value or (iii) the Wireless Stock Value, whichever is applicable,
Intrinsic Value shall be a negative number.

      1.44  IRS means the Internal Revenue Service.

      1.45  LIABILITIES has the meaning given that term in the Separation and
Distribution Agreement.

      1.46  NON-PARTIES is defined in Section 6.4(b).

      1.47  NYSE means the New York Stock Exchange.

      1.48  OPTION, when immediately preceded by "AT&T," means an option (either
nonqualified or incentive) to purchase shares of AT&T Common Stock pursuant to
an AT&T Long Term Incentive Plan. When immediately preceded by "Wireless,"
Option means an option (either nonqualified or incentive) to purchase shares of
Wireless Common Stock pursuant to the Wireless Services Adjustment Plan. When
preceded by "AWE," Option means an option (either nonqualified or incentive) to
purchase shares of AWE Common Stock.

                                      -6-
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      1.49  PARTICIPATING COMPANY means (a) AT&T, (b) any Person (other than an
individual) that AT&T has approved for participation in, and which is
participating in, a Plan sponsored by AT&T or an AT&T Entity, and (c) any Person
(other than an individual) which, by the terms of such a Plan, participates in
such Plan or any employees of which, by the terms of such Plan, participate in
or are covered by such Plan.

      1.50  PERSON has the meaning given that term in the Separation and
Distribution Agreement.

      1.51  PLAN, when immediately preceded by "AT&T," means any plan, policy,
program, payroll practice, on-going arrangement, contract, trust, insurance
policy or other agreement or funding vehicle, to the extent amended from time to
time, for which the eligible classes of participants include employees or former
employees of AT&T or an AT&T Entity. When immediately preceded by "Wireless
Services," Plan means any plan, policy, program, payroll practice, on-going
arrangement, contract, trust, insurance policy or other agreement or funding
vehicle, to the extent amended from time to time, for which the eligible classes
of participants are limited to employees or former employees of Wireless
Services or a Wireless Services Entity, but no other AT&T Entity.

      1.52  RESTRUCTURING PLAN means AT&T's spin-off of its business and
consumer units pursuant to the plan of corporate restructuring approved in
principal by the AT&T Board of Directors on October 23, 2000.

      1.53  RETAINED SHARES means a number of shares of Wireless Common Stock
(rounded to the nearest share) equal to $3 billion divided by the closing share
price of the AWE Common Stock on The New York Stock Exchange on the record date
for determining holders of AT&T common stock entitled to receive the
Distribution (without giving effect to any extended-hours trading).

      1.54  RETIREMENT-RELATED BENEFIT PLANS means the AT&T Medical Expense Plan
for Retired Employees, the AT&T Dental Expense Plan for Retired Employees, the
AT&T Group Life Insurance Plan, the AT&T Supplementary Life Insurance Plan
(provided, that in the case of the life insurance plans, the applicable
Transferred Individual was enrolled for coverage as an active employee under the
corresponding active-employee life insurance plans at the time of his or her
termination of employment), the AT&T Toll Discount Program,. For purposes of
this Agreement, the EBLIP,, the SMULIP, the SVULIP, the AT&T Corp. Estate
Enhancement Program (including the AT&T Corp. Alternative Death Benefit Program
and the AT&T Corp. Special Death Benefit Program), and any other plans,
programs, or arrangements not expressly identified in this Section 1.48 shall
not be considered Retirement-Related Benefit Plans.

      1.55  SEPARATION AND DISTRIBUTION AGREEMENT is defined in the recitals to
this Agreement.

      1.56  SEPARATION TRANSACTIONS has the meaning given that term in the
Separation and Distribution Agreement.

      1.57  SMULIP means the AT&T Senior Management Universal Life Insurance
Program in effect as of the time relevant to the applicable provisions of this
Agreement.

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      1.58  SUBSIDIARIES has the meaning given that term in the Separation and
Distribution Agreement.

      1.59  SVULIP means the AT&T Supplemental Variable Universal Life Insurance
Program in effect as of the time relevant to the applicable provisions of this
Agreement.

      1.60  TRANSFERRED INDIVIDUAL means any individual who, as of the Close of
the Disposition Date, is either (a) then actively employed by, or then on a
leave of absence from, Wireless Services or a Wireless Services Entity, or (b)
is designated by mutual written agreement of AT&T and Wireless Services as a
Transferred Individual. Nothing contained in this Agreement shall permit any
non-employee of AT&T, Wireless Services, an AT&T Entity, or a Wireless Services
Entity to participate, at any time, in any AT&T Plan or Wireless Services Plan.

      1.61  TRANSFER REQUEST means a written request made by Wireless Services
to AT&T pursuant to Section 5.8(d) for the transfer from AT&T to Wireless
Services of certain Liabilities under the AT&T Deferral Plan relating to AT&T
Deferral Plan Participants.

      1.62  TRANSITION PERIOD has the meaning set forth in Section 2.5.

      1.63  U.S. means the 50 United States and the District of Columbia.

      1.64  WIRELESS COMMON STOCK has the meaning given that term in the
Separation and Distribution Agreement.

      1.65  WIRELESS DIVIDEND shall mean the distribution by AT&T of Wireless
Common Stock to AT&T shareholders with respect to their AT&T Common Stock in
consummation of the split-off of Wireless Services described in the Separation
and Distribution Agreement.

      1.66  WIRELESS DIVIDEND DATE means the date on which the Wireless Common
Stock held by AT&T is distributed to AT&T shareholders with respect to their
AT&T Common Stock.

      1.67  WIRELESS EXCHANGE DATE means the date on which AWE Common Stock is
redeemed in exchange for Wireless Common Stock.

      1.68  WIRELESS 401(K) PLAN means the AT&T Wireless Services 401(k)
Retirement Plan.

      1.69  WIRELESS SERVICES is defined in the recitals to this Agreement.

      1.70  WIRELESS SERVICES ADJUSTMENT PLAN means the long term incentive plan
or program to be established by Wireless Services, effective immediately prior
to the Wireless Dividend Date, in connection with the treatment of Options as
described in Article V.

      1.71  WIRELESS SERVICES ENTITY means Wireless Services and any Person that
is, at the relevant time, a Subsidiary of Wireless Services or is otherwise
controlled, directly or indirectly, by Wireless Services.

      1.72  WIRELESS SEVERANCE PLAN means the AT&T Wireless Services Severance
Pay Plan.

                                      -8-
<PAGE>   14
      1.73  WIRELESS STOCK VALUE means the opening per-share price of Wireless
Common Stock as listed on the NYSE as of 9:30 A.M., Eastern Standard Time or
Eastern Daylight Time (whichever shall then be in effect) on the first trading
day after the Wireless Dividend Date; provided, however, that if the Wireless
Dividend occurs at a time when the NYSE is open for trading, WIRELESS STOCK
VALUE shall mean the price at which Wireless Common Stock trades as of the
moment after the Wireless Dividend; provided further, that if the Wireless
Dividend occurs prior to the first trade of Wireless Common Stock on the
Wireless Dividend Date, the Wireless Stock Value shall mean the price at which
Wireless Common Stock first trades on the Wireless Dividend Date..

                                   ARTICLE II
                               GENERAL PRINCIPLES

      2.1   ASSUMPTION AND RETENTION OF LIABILITIES. Wireless Services hereby
assumes and agrees to pay, perform, fulfill, and discharge, except as expressly
provided in this Agreement, (i) all Liabilities under Wireless Services Plans,
(ii) all employment-related liabilities with respect to all Transferred
Individuals other than AT&T Transferees, and other employees or former employees
of Wireless Services or a Wireless Services Entity (including any individual who
is, or was, an independent contractor, temporary employee, temporary service
worker, consultant, freelancer, agency employee, leased employee, on-call
worker, incidental worker, or nonpayroll worker of Wireless Services or a
Wireless Services Entity or in any other employment, non-employment, or retainer
arrangement, or relationship with Wireless Services or a Wireless Services
Entity), and their dependents and beneficiaries, for periods from and after the
date such individuals became employees of, or performed services for Wireless
Services or a Wireless Services Entity, as the case may be, (iii) all
employment-related liabilities with respect to all AT&T Transferees for periods
of service with Wireless Services or a Wireless Services Entity after the
Disposition Date and (iv) any AT&T Liabilities expressly transferred to Wireless
Services or a Wireless Services Entity under this Agreement. AT&T shall retain
Liabilities to or relating to Transferred Individuals, and their dependents and
beneficiaries, arising out of or resulting from employment by AT&T or an AT&T
Entity for periods on or before the Disposition Date (including without
limitation such Liabilities remaining under AT&T Plans) or that are expressly
retained by AT&T in this Agreement or any other written agreement between
Wireless Services and AT&T. Notwithstanding the foregoing, Wireless Services
shall not, by virtue of any provision of this Agreement or the Separation and
Distribution Agreement, be deemed to have assumed any Excluded Liability.

      2.2   WIRELESS SERVICES PARTICIPATION IN AT&T PLANS. Effective as of the
Close of the Disposition Date, Wireless Services and each Wireless Services
Entity shall cease to be a Participating Company in any AT&T Plan, and AT&T and
Wireless Services and each Wireless Services Entity shall take all necessary
action before the Disposition Date to effectuate such cessation as a
Participating Company.

      2.3   SPONSORSHIP OF WIRELESS SERVICES PLANS. Effective no later than
Immediately after the Disposition Date, Wireless Services shall assume, or shall
cause a Wireless Services Entity to

                                      -9-
<PAGE>   15
assume, sponsorship of (a) the Wireless 401(k) Plan, and (b) each other Wireless
Services Plan sponsored by AT&T or an AT&T Entity that is identified in Schedule
"2.3" hereto.

      2.4   SEVERANCE BENEFITS. Effective no later than Immediately after the
Disposition Date, Wireless Services shall provide to AT&T Transferees who become
eligible to receive severance benefits under the Wireless Severance Plan at any
time prior to the first anniversary of the Disposition Date, severance payments
in an amount not less than the greater of (i) the severance payment amounts that
such AT&T Transferees would have received under the AT&T Force Management
Program or (ii) the severance payment amounts otherwise payable to AT&T
Transferees under the Wireless Services severance plan. The determination of
severance benefits under either the AT&T Force Management Program or the
Wireless Severance Plan shall take into account prior AT&T service and Eligible
Wireless Services service. Effective Immediately after the Disposition Date,
Wireless Services agrees to enter into 'change in control' agreements with AT&T
Transferees who are also AT&T Executives and to amend Wireless Services Plans,
as appropriate, to provide change in control benefits to AT&T Transferees in the
event of a change in control of Wireless after (but not as a result of) the
Wireless Dividend which are substantially similar in the aggregate and in form
to the benefits they would have received from AT&T or an AT&T Entity if a change
in control of AT&T or severance had occurred immediately prior to the
Disposition Date.

      2.5   TERMS OF PARTICIPATION BY TRANSFERRED INDIVIDUALS IN WIRELESS
SERVICES PLANS. AT&T and Wireless Services shall adopt, or cause to be adopted,
all reasonable and necessary Plan amendments and procedures to prevent
Transferred Individuals from receiving duplicative benefits from the AT&T Plans
and the Wireless Services Plans. In particular, only compensation paid by a
Wireless Services Entity to a Transferred Individual shall be taken into account
in determining allocations of profit sharing contributions under the Wireless
401(k) Plan. With respect to Transferred Individuals, each Wireless Services
Plan shall provide that all service, all compensation, and all other
benefit-affecting determinations that, as of the Close of the Disposition Date,
were recognized under the corresponding AT&T Plan shall, as of Immediately after
the Disposition Date, receive full recognition, credit, and validity and be
taken into account under such Wireless Services Plan, except to the extent that
duplication of benefits would result.

      2.6   SERVICE RECOGNITION. AT&T and Wireless Services and their respective
Subsidiaries shall (i) mutually credit service recognized by the other under the
terms of their respective benefit plans and programs where appropriate (but not
for purposes of benefit accruals under any pension plan), (ii) transfer of
accounts between the AT&T Savings Plans and the Wireless 401(k) Plan, and (iii)
provide coverage and benefits relating to health and welfare plans in a manner
consistent with the provisions of Sections 4.1, 4.2, 4.3 and 4.5, with respect
to individuals who cease employment with AT&T or an AT&T Entity and who
immediately become employees of Wireless Services or a Wireless Services Entity
and Transferred Individuals who cease employment with Wireless Services or a
Wireless Services Entity and who immediately become employees of AT&T or an AT&T
Entity, in each case within a period not to exceed nine months in duration after
the Disposition Date (the "Transition Period") The service crediting described
above shall be subject to any applicable "service bridging" or "break in
service" rules under the AT&T Plans and the Wireless Services Plans.

                                      -10-
<PAGE>   16
      2.7   APPROVAL BY AT&T AS SOLE SHAREHOLDER. Prior to the Wireless Exchange
Date, AT&T shall cause Wireless Services to adopt the Wireless Services
Adjustment Plan and the AT&T Wireless Services, Inc. 2001 Long Term Incentive
Plan, which shall have terms and conditions that are substantially similar to
the AT&T 1997 Long Term Incentive Plan, and the Wireless Services Employee Stock
Purchase Plan which plans shall be approved prior to the Wireless Exchange Date
by AT&T as Wireless Services' sole shareholder. If Wireless Services adopts any
other Wireless Services Plan, one or more benefit plans for non-employee
directors of Wireless Services, or "change in control" compensation and benefit
provisions, or enters into or assumes any employment agreements with executives
of Wireless Services or a Wireless Services Entity, while Wireless Services or
the Wireless Services Entity is a wholly owned subsidiary of AT&T, and the plan,
plans, provisions, or agreements are reasonably acceptable to AT&T, and the
parties mutually agree that shareholder approval is legally required or
advisable, then AT&T shall cooperate in obtaining such shareholder approval
before the Disposition Date of any such Wireless Services Plan, non-employee
director plan, "change in control" provision, or employment agreement.

      2.8   EMPLOYMENT OF AT&T TRANSFEREES. Immediately prior to the Wireless
Dividend, all AT&T Transferees shall be deemed to have terminated their
employment with AT&T or an AT&T Entity and shall be deemed to be employees of
Wireless Services or a Wireless Services Entity.

                                   ARTICLE III
                 DEFINED CONTRIBUTION AND DEFINED BENEFIT PLANS

      3.1   WIRELESS 401(K) PLAN.

            (a)   401(K) PLAN TRUST. Effective Immediately after the Disposition
Date, the trust established and forming part of the Wireless 401(k) Plan shall
cease to be a participating trust in the AT&T Savings Plan Group Trust. AT&T and
Wireless Services shall adopt or cause to be adopted any amendments to any trust
agreements or plan documents reasonably necessary to transfer settlor
responsibility and control of such trust from AT&T to Wireless Services.

            (b)   ASSUMPTION OF LIABILITIES AND TRANSFER OF ASSETS. AT&T and
Wireless Services shall adopt, or cause to be adopted, all reasonable and
necessary Plan amendments and procedures by which each Transferred Individual
who has an account under the AT&T Savings Plans may make a one-time election to
have such account transferred to the Wireless 401(k) Plan as soon as practicable
after April 15 of the year following the Disposition Year or such earlier date
as AT&T and Wireless Services shall mutually determine, or to have such account
remain in the AT&T Savings Plans until the Transferred Individual receives a
distribution from the AT&T Savings Plans in accordance with the terms of the
AT&T Savings Plans and applicable law; provided, however, that such transfer
shall not occur if AT&T, Wireless Services or any other AT&T or Wireless
Services savings plan fiduciary reasonably believes that the transfer could
result in the failure of any AT&T Savings Plan or the Wireless 401(k) Plan to
qualify under Code Section 401(a). As of the Close of the Disposition Date, all
account balances of Transferred Individuals in the AT&T Savings Plans shall be
immediately vested. AT&T agrees to provide to Wireless Services, as soon as
practicable after the Disposition Date, a list of the Transferred Individuals
who were participants in or are otherwise entitled to benefits under the

                                      -11-
<PAGE>   17
AT&T Savings Plan, including descriptions of their respective account balances
and the protected benefits (within the meaning of Section 411(d)(6) of the Code)
attached to their accounts. Except as otherwise specifically provided above
regarding plan qualification. As soon as practicable after April 15 of the year
following the Disposition Year: (i) AT&T shall cause the accounts (including any
outstanding loan balances) of the Transferred Individuals who elect a transfer
under the AT&T Savings Plans to be transferred to the Wireless 401(k) Plan and
its related trust in cash or such other assets as mutually agreed by AT&T and
Wireless Services; (ii) Wireless Services (or any successor Wireless Services
Entity) and the Wireless 401(k) Plan shall assume and be solely responsible for
all Liabilities under each of the AT&T Savings Plans to or relating to
Transferred Individuals who elect a transfer of their accounts (to the extent
assets related to those accounts are transferred from the AT&T Savings Plans);
and (iii) Wireless Services shall cause such transferred accounts to be accepted
by the Wireless 401(k) Plan and its related trust and shall cause the Wireless
401(k) Plan to satisfy all protected benefit requirements under the Code and
applicable law with respect to the transferred accounts. In determining whether
a Transferred Individual is vested in his or her account under the Wireless
401(k) Plan, the Wireless 401(k) Plan shall credit each Transferred Individual
with all the Transferred Individual's service credited under the AT&T Savings
Plan, whether or not the Transferred Individual elects a transfer of his or her
accounts under the AT&T Savings Plans to the Wireless 401(k) Plan. AT&T shall
make a one-time payment directly to the Transferred Individuals, in the year
following the Disposition Year, of the amount of "lost savings plan matching
contributions," if any, to which they would have been entitled under existing
AT&T practices with respect to compensation earned on or before the Disposition
Date that is in excess of the annual limits imposed by Code Section 401(a)(17).
As soon as practicable following the Disposition Date, AT&T shall contribute to
the AT&T Savings Plans all matching contributions, if any, due to the
Transferred Individuals pursuant to the terms and conditions of such Plans.

      3.2   AT&T ESOP. Effective Immediately after the Disposition Date, and
thereafter, Transferred Individuals shall be entitled to receive a distribution
of their accounts under the AT&T Employee Stock Ownership Plan in accordance
with the terms of such plan as they may be amended from time to time.

      3.3   AT&T PENSION PLANS. Effective as of the Close of the Disposition
Date, the AT&T Pension Plans shall be amended to provide that:

            (a)   each Transferred Individual who is a participant in the
AT&TMPP or the AT&TPP shall be vested, as of after the Close of the Disposition
Date, in his or her accrued benefit under the AT&T Pension Plans;

            (b)   all unbridged net credited service of each Transferred
Individual who transferred, or was reassigned, to Wireless Services, or one of
its Subsidiaries, on or after September 19, 1994 from a Participating Company in
the AT&TMPP or the AT&TPP shall be bridged, provided that the unbridged net
credited service would have been eligible for bridging under the bridging rules
of the AT&TMPP or the AT&TPP in the event that the Transferred Individual had
continued to be employed as an "Employee" under the AT&TMPP or the AT&TPP and
satisfied the applicable bridging rules under those plans; and

                                      -12-
<PAGE>   18
            (c)   each Transferred Individual who transferred, or was
reassigned, to Wireless Services, or one of its Subsidiaries, on or after
September 19, 1994 from a Participating Company in the AT&TMPP or the AT&TPP who
has a portion of his or her accrued benefit under a prior formula under the AT&T
Pension Plans that has not yet been converted to cash balance shall be deemed to
have completed any minimum period of net credited service that is required for
such conversion.

                                   ARTICLE IV
                            HEALTH AND WELFARE PLANS

      4.1   ASSUMPTION OF HEALTH AND WELFARE PLAN LIABILITIES.

            (a)   All Liabilities relating to, arising out of, or resulting from
health and welfare coverage or claims incurred by or on behalf of Transferred
Individuals or their covered dependents (other than Liabilities relating to
health and welfare coverage or claims incurred under the Wireless Services
Health and Welfare Plans, if such Transferred Individuals participate in the
Wireless Services Health and Welfare Plans on or before the Disposition Date)
under the AT&T Health and Welfare Plans on or before the Disposition Date shall
remain Liabilities of AT&T, and, except as provided in Section 4.1(b), all
Liabilities relating to health and welfare coverage or claims incurred by or on
behalf of Transferred Individuals or their covered dependents after the
Disposition Date shall be Liabilities of Wireless Services under the
corresponding Wireless Services Health and Welfare Plans. Except as provided in
Section 4.1(b), a claim or Liability (i) for medical and dental benefits shall
be deemed to be incurred upon the rendering of health services giving rise to
the obligation to pay such benefits; (ii) for life insurance and accidental
death and dismemberment insurance benefits shall be deemed to be incurred upon
the occurrence of the event giving rise to the entitlement to such benefits; and
(iii) for disability benefits shall be deemed to be incurred upon the effective
date of an individual is deemed to be disabled, giving rise to the entitlement
to such benefits.

            (b)   AT&T shall be responsible for all Liabilities under the
applicable AT&T Health and Welfare Plan that relate to, arise out of, or result
from any hospitalization of a Transferred Individual or his or her covered
dependent which begins on or before the Disposition Date; under an AT&T Health
and Welfare Plan and continues after the Disposition Date; provided, however,
that AT&T shall not be responsible for Liabilities relating to, arising out of,
or resulting from the portion of any such hospitalization (i) for a medical
condition that extends beyond 120 consecutive days of confinement (with respect
to Liabilities following such 120-day period), or (ii) for a mental
health/chemical dependency condition that extends beyond 30 consecutive days of
confinement (with respect to Liabilities following such 30-day period). AT&T
also shall be responsible for all Liabilities under the applicable AT&T Health
and Welfare Plan that relate to, arise out of, or result from any denture work,
bridge work, crown installation, or root canal therapy for a Transferred
Individual or his or her covered dependent for which preparatory dental services
have been rendered under an AT&T Health and Welfare Plan on or before the
Disposition Date and such dental treatment continues after the Disposition Date,
provided that such dental treatment is concluded within allowable time
limitations under the applicable AT&T Health and Welfare Plan. Coverage for any
such hospitalization or dental services shall be provided after the Disposition
Date without interruption under the appropriate AT&T Health and Welfare Plan
until such hospitalization or treatment for such condition is

                                      -13-
<PAGE>   19
concluded or discontinued subject to applicable plan rules and limitations. The
corresponding Wireless Services Health and Welfare Plan that covers the
Transferred Individual or his or her covered dependent after the Disposition
Date shall be secondarily liable (for purposes of coordination of benefits) in
accordance with its terms and conditions with respect to any such
hospitalization or dental treatment.

      4.2   HEALTH AND WELFARE PLAN TRANSITIONAL COVERAGE RULES.

            (a)   Transferred Individuals who were employees of Wireless
Services or a Wireless Services Entity and were participants in the Wireless
Services Health and Welfare Plans as of the Close of the Disposition Date shall
continue to participate in the Wireless Services Health and Welfare Plans after
the Close of the Disposition Date, subject to the terms and conditions of such
Plans. Subject to the agreement of any applicable insurer, all compensation,
periods of service, benefit elections, deductible payments, payments toward the
applicable out-of-pocket maximums, and other benefit-affecting determinations
affecting Transferred Individuals that, as of the Close of the Disposition Date,
were recognized under the AT&T Health and Welfare Plans shall receive full
recognition, credit, and validity and be taken into account under the Wireless
Services Health and Welfare Plans Immediately after the Disposition Date in the
same manner and subject to the same terms and conditions as in effect
immediately before the Disposition Date.

            (b)   To the extent that any Transferred Individual participates in
an AT&T Health and Welfare Plan immediately before the Close of the Disposition
Date, such Transferred Individual shall be (i) treated in the same manner under
the AT&T Health and Welfare Plans as any other similarly situated employee of
AT&T or an AT&T Entity with the same years of service and age who may otherwise
terminate his or her employment with AT&T and all AT&T Entities on the
Disposition Date; and (ii) entitled to have his or her net credited service with
AT&T or an AT&T Entity on or before the Disposition Date recognized by the
Wireless Services Health and Welfare Plans for purpose of determining
eligibility to participate in the Wireless Services Health and Welfare Plans,
effective Immediately after the Disposition Date.

            (c)   Any Transferred Individual who participates in an AT&T Health
and Welfare Plan immediately before the Close of the Disposition Date and who,
after the recognition of net credited service provided for in Section 4.2(b)(ii)
satisfies the eligibility requirements under the Wireless Services Health and
Welfare Plans, shall be (i) entitled to enroll, effective Immediately after the
Disposition Date, as a newly-eligible employee of Wireless Services or a
Wireless Services Entity, in the Wireless Services Health and Welfare Plans then
available to similarly situated employees of Wireless Services or a Wireless
Services Entity, whichever is applicable; and (ii) eligible to elect such
coverages and benefit options as may then be available or provided under the
terms of the Wireless Services Health and Welfare Plans to new employees of
Wireless Services or a Wireless Services Entity.

            (d)   With respect to any Transferred Individual and his or her
dependents (if any) who were covered under an AT&T Health and Welfare Plan
immediately before the Close of the Disposition Date, Wireless Services shall
take the appropriate actions reasonably necessary to ensure that the proof of
insurability requirements (if any) and the preexisting condition exclusions (if
any) applicable to new enrollees under the corresponding Wireless

                                      -14-
<PAGE>   20
Services Health and Welfare Plan (if any) are waived with respect to such
Transferred Individual and his or her dependents, provided that such Transferred
Individual or his or her dependents enroll for coverage in the corresponding
Wireless Services Health and Welfare Plan within no more than 31 days after the
last day of the month in which the Disposition Date occurs.

            (e)   The transfer of employment from AT&T or an AT&T Entity to
Wireless Services or a Wireless Services Entity as of the Close of the
Disposition Date shall neither constitute nor be treated as a "status change"
with respect to any Transferred Individual under the AT&T Health and Welfare
Plans or the Wireless Services Health and Welfare Plans.

      4.3   HCRA/CECRA POST-DISPOSITION TRANSITIONAL RULES.

            (a)   AT&T HEALTH CARE REIMBURSEMENT ACCOUNT PLAN. To the extent any
Transferred Individual made contributions to the AT&T Health Care Reimbursement
Account Plan ("AT&T HCRA Plan") during the Disposition Year, such Transferred
Individual shall be permitted to file claims for reimbursement for qualifying
health care expenses incurred during the Disposition Year through the Close of
the Disposition Date, for a total amount not to exceed the amount elected by
such Transferred Individual for that year. Such claims may be filed at any time
on or before April 15 of the year following the Disposition Year in the manner
permitted under the AT&T HCRA Plan. Account balances, whether positive or
negative, shall not be transferred or assigned from AT&T or an AT&T Entity to
Wireless Services or a Wireless Services Entity.

            (b)   AT&T CHILD/ELDER CARE REIMBURSEMENT ACCOUNT PLAN. To the
extent any Transferred Individual made contributions to the AT&T Child/Elder
Care Reimbursement Account Plan ("AT&T CECRA Plan") during the Disposition Year
and such Transferred Individual has a positive account balance in his or her
"Child/Elder Care Reimbursement Account" under the AT&T CECRA Plan as of the
Close of the Disposition Date, such Transferred Individual shall be entitled to
file claims for reimbursement for qualifying child and elder care expenses
incurred at any time during the Disposition Year for a total amount not to
exceed the amount of such Transferred Individual's positive account balance
determined as of the Close of the Disposition Date. A Transferred Individual
shall be considered to have a "positive account balance" in the AT&T CECRA Plan
if, as of the determination date, (i) the total amount he or she actually
contributed to the AT&T CECRA Plan for the Disposition Year, minus (ii) the
total amount of reimbursements paid to such Transferred Individual for
qualifying child care and elder care expenses incurred at any time during the
Disposition Year, is a positive number. Such claims may be filed at any time on
or before April 15 of the year following the Disposition Year, in the manner
permitted under the AT&T CECRA Plan. Account balances shall not be transferred
or assigned from AT&T or an AT&T Entity to Wireless Services or a Wireless
Services Entity.

      4.4   WORKERS' COMPENSATION LIABILITIES. Except as provided below, all
workers' compensation Liabilities relating to, arising out of, or resulting from
any claim by a Transferred Individual that results from an accident or from an
occupational disease which becomes manifest on or before the Disposition Date
and while such Transferred Individual was employed by AT&T or an AT&T Entity
shall be retained by AT&T. Wireless Services and each Wireless Services Entity
shall assume and be solely responsible for all workers' compensation Liabilities

                                      -15-
<PAGE>   21
relating to, arising out of, or resulting from any claim incurred for a
compensable injury sustained (i) by Wireless Services' and each Wireless
Services Entity's employees at any time; and (ii) by a Transferred Individual
after the Disposition Date. For purposes of this Agreement, a compensable injury
shall be deemed to be sustained upon the occurrence of the event giving rise to
eligibility for workers' compensation benefits or an occupational disease
becomes manifest, as the case may be. AT&T and Wireless Services and each
Wireless Services Entity shall cooperate with respect to any notification to
appropriate governmental agencies of the disposition and the issuance of new, or
the transfer of existing, workers' compensation insurance policies and claims
handling contracts.

      4.5   PAYROLL TAXES AND REPORTING OF COMPENSATION. AT&T, Wireless
Services, and each Wireless Services Entity agrees to take such action as may be
reasonably necessary or appropriate in order to minimize Liabilities related to
payroll taxes of AT&T, Wireless Services and each Wireless Services Entity after
the Disposition Date, as described in clauses 5.3(a)(vi) through (x). AT&T,
Wireless Services and each Wireless Services Entity shall each bear its
responsibility for payroll tax obligations and for the proper reporting to the
appropriate governmental authorities of compensation earned by their respective
employees after the Disposition Date, including compensation related to the
exercise of Options, as described in clauses 5.3(a) (vii) through (x)

      4.6   AT&T RETIREMENT-RELATED BENEFITS. AT&T shall amend the
Retirement-Related Benefit Plans, to be effective Immediately after the
Disposition Date, to provide that each Transferred Individual who was an AT&T
management employee and was transferred or reassigned to a Wireless Services
Entity on or after September 19, 1994, after attaining at least ten years of net
credited service shall be eligible to participate in the Retirement Related
Benefit Plans provided that the sum of such Transferred Individual's age and net
credited service (both expressed in days), determined as of the Disposition Date
is no less than 23,725 days (which equals the product of 65 years and 365 days
per year) (referred to as the "Rule of 65").

While a Transferred Individual who is eligible to participate in the
Retirement-Related Benefits Plans is covered as an active employee of Wireless
Services or a Wireless Services Entity under the Wireless Services Health and
Welfare Plans, the coverage provided to such Transferred Individual and his or
her covered dependents (if any) under the AT&T Medical Expense Plan for Retired
Employees and the AT&T Dental Expense Plan for Retired Employees shall be
secondary to the coverage provided under the Wireless Services Health and
Welfare Plans.

      4.7   COBRA AND HIPAA COMPLIANCE. AT&T shall be responsible for
administering compliance with the health care continuation requirements of
COBRA, the certificate of credible coverage requirements of HIPAA, and the
corresponding provisions of the AT&T Health and Welfare Plans with respect to
Transferred Individuals and their covered dependents who incur a COBRA
qualifying event or loss of coverage under the AT&T Health and Welfare Plans at
any time on or before the Disposition Date. Effective Immediately after the
Disposition Date, Wireless Services or a Wireless Services Entity shall be
responsible for administering compliance with the health care continuation
requirements of COBRA, the certificate of credible coverage requirements of
HIPAA, and the corresponding provisions of the Wireless Services Health and
Welfare Plans with respect to Transferred Individuals and their covered
dependents

                                      -16-
<PAGE>   22
who incur a COBRA qualifying event or loss of coverage under the Wireless
Services Health and Welfare Plans at any time after the Close of the Disposition
Date.

      4.8   DIRECT PAY ARRANGEMENTS. AT&T shall take, or cause its third-party
vendor or insurer to take, all such actions as are or may be reasonably
necessary to enable any Transferred Individual and his or her eligible family
members covered under either the AT&T Long-Term Care Plan for Management
Employees or the AT&T Long-Term Care Plan for Occupational Employees as of the
Disposition Date, to continue such coverage on a direct pay basis after the
Close of the Disposition Date.

                                    ARTICLE V
                      EXECUTIVE BENEFITS AND OTHER BENEFITS

      5.1   INDIVIDUAL AGREEMENTS - ASSUMPTION OF LIABILITIES AND CONSENTS.

            (a)   AT&T has been providing compensation and benefits, subject to
reimbursement from a Wireless Services Entity, to AT&T Transferees, during the
period those AT&T Transferees have been providing services on a substantially
full-time basis to a Wireless Services Entity. AT&T shall continue to provide
such compensation and benefits through the Disposition Date, and be entitled to
reimbursement from a Wireless Services Entity, in accordance with established
practice.

            (b)   Certain plans and programs of AT&T, including but not limited
to the AT&T Senior Officer Separation Plan (the "SSOSP"), the AT&T Senior
Management Separation Plan (the "SMSP") and the AT&T Special Executive
Separation Plan (the "SESP"), as well as certain Individual Agreements, provide
for the payment of certain compensation and benefits in the event of the
termination of employment of the individual covered by the terms of such plans
or Individual Agreements. A termination of an AT&T Transferee's employment from
AT&T in connection with or in anticipation of the consummation of the
transactions contemplated by the Separation and Distribution Agreement shall not
be deemed to be a termination of employment for purposes of the SSOSP, the SMSP,
the SESP or other similar plans and programs. A termination of employment from
AT&T in connection with or in anticipation of the consummation of the
transactions contemplated by the Separation and Distribution Agreement of an
AT&T Transferee who is a party to an Individual Agreement, the obligations of
which are assumed by Wireless pursuant to the provisions of Section 5.1(d) of
this Agreement shall not be deemed to be a termination of employment for
purposes of administering benefits under such Individual Agreement, the payment
or vesting of which is conditioned upon termination of employment.

            (c)   AT&T shall retain liabilities with respect to any Individual
Deferral Agreement and with respect to any benefits which are or become payable
for periods after termination of employment as a result of an AT&T Transferee's
meeting the requirements of the Rule of 65.

                                      -17-
<PAGE>   23
            (d)   Effective Immediately after the Disposition Date, except as
otherwise expressly provided in Section 5.1(c), Wireless Services shall assume
all liability with respect those Individual Agreements and other matters set
forth on Schedule 5.1 to this Agreement in consideration of and with respect to
services rendered to Wireless after the Disposition Date, including payment of
any compensation or benefit which is not yet due and payable pursuant to the
terms of such Individual Agreement.

      5.2   AT&T SHORT TERM INCENTIVE PLAN AND AT&T BONUS PLAN AWARD. Wireless
Services shall be responsible for determining all Awards that would otherwise be
payable under the AT&T Short Term Incentive Plan to AT&T Transferees who are
Senior Managers, or pursuant to the AT&T Bonus Plan Award to AT&T Transferees
who are not Senior Managers, for the Disposition Year. Wireless Services shall
also determine for AT&T Transferees (a) the extent to which established
performance criteria (as interpreted by Wireless Services, in its sole
discretion, after taking into account the effects of the Separation
Transactions) have been met, and (b) the payment level for each AT&T Transferee.
Wireless Services shall assume all Liabilities with respect to any such Awards
payable to AT&T Transferees for the Disposition Year and thereafter.

      5.3   AT&T LONG TERM INCENTIVE PLANS. AT&T and Wireless Services shall use
their reasonable best efforts to take all actions necessary or appropriate so
that each outstanding Award granted under any AT&T Long Term Incentive Plan held
by any individual who is either a current or former employee of AT&T or an AT&T
Entity (as determined by AT&T) and any Transferred Individual shall be adjusted
as set forth in this Article V and as illustrated in Schedules 5.3(a) and
Schedule 5.3(e) hereto.

            (a)   AT&T OPTIONS.

                  (i)   As determined by the Committee (as that term is defined
in the AT&T 1997 Long Term Incentive Program) pursuant to its authority under
any of the AT&T Long Term Incentive Plans, each AT&T Option granted prior to
January 1, 2001 outstanding under any AT&T Long Term Incentive Plan as of the
Wireless Dividend Date shall be adjusted so that each individual who is the
holder of an AT&T Option will have such option converted, immediately prior to
the Wireless Dividend, and in the case of AT&T Transferees, immediately prior to
the termination of their employment with AT&T pursuant to the terms of Section
2.8 hereof, into adjusted AT&T Options ("adjusted AT&T Options") under the
applicable AT&T Long Term Incentive Plan and Wireless Options under the Wireless
Services Adjustment Plan, whereby the combined Intrinsic Value of all the
adjusted AT&T Options and all the Wireless Options held by such individual
immediately after the Wireless Dividend equals the Intrinsic Value of all AT&T
Options held by such individual immediately before the Wireless Dividend.

                  (ii)  The adjustment set forth in Section 5.3(a)(i) shall be
made as follows:

            EXERCISE PRICE OF ADJUSTED AT&T OPTIONS. The exercise price per
      share of AT&T Common Stock subject to an adjusted AT&T Option will be
      equal to the product obtained by multiplying (a) times (b) where "(a)"
      equals the exercise price per share of the AT&T Option with respect to
      which an adjustment is being made immediately before

                                      -18-
<PAGE>   24
      the Wireless Dividend, and "(b)" equals the quotient obtained by dividing
      the AT&T Opening Stock Value by the AT&T Closing Stock Value.

            EXERCISE PRICE OF WIRELESS OPTION. The exercise price per share of
      Wireless Common Stock subject to a Wireless Option issued pursuant to
      Section 5.3(a)(i) will be equal to the product obtained by multiplying (c)
      times (d) where "(c)" equals the exercise price per share of the AT&T
      Option with respect to which the Wireless Option is granted immediately
      before the Wireless Dividend and "(d)" equals the quotient obtained by
      dividing the Wireless Stock Value by the AT&T Closing Stock Value.

            NUMBER OF WIRELESS OPTIONS. The number of shares of Wireless Common
      Stock subject to a Wireless Option granted pursuant to Section 5.3(a)(i)
      will equal the product obtained by multiplying the number of shares of
      AT&T Common Stock subject to an AT&T Option outstanding as of the day
      before the Wireless Dividend Date times the Distribution Ratio.

            NUMBER OF ADJUSTED AT&T OPTIONS. The number of shares of AT&T Common
      Stock subject to an adjusted AT&T Option will equal the product obtained
      by dividing (a) by (b) where "(a)" equals (i) the Intrinsic Value of the
      AT&T Option with respect to which an adjustment is being made, based on
      the AT&T Closing Stock Value and the exercise price per share of such AT&T
      Option, minus (ii) the Intrinsic Value of the Wireless Option for the
      number of shares of Wireless Common Stock determined by application of the
      preceding paragraph based on the Wireless Stock Value, and "(b)" equals
      the Intrinsic Value of an Option to purchase one share of AT&T Common
      Stock based on the AT&T Opening Stock Value and the exercise price of such
      adjusted AT&T Option as set forth above.

                  (iii) As determined by the Committee pursuant to its authority
under Section 4(e) of the AT&T 1997 Long Term Incentive Program, each AT&T
Option granted on or after January 1, 2001 (an "AT&T 2001 Option") outstanding
under any AT&T Long Term Incentive Plan as of the Wireless Dividend Date shall
be adjusted so that each individual who is the holder of such an AT&T 2001
Option will receive, immediately prior to the Wireless Dividend, adjusted AT&T
2001 Options ("adjusted AT&T 2001 Options") under the applicable AT&T Long Term
Incentive Plan whereby the Intrinsic Value of the adjusted AT&T 2001 Option held
by such individual immediately after the Wireless Dividend equals the Intrinsic
Value of the AT&T 2001 Option held by such individual immediately before the
Wireless Dividend with respect to which the adjustment is being made.

      The adjustment set forth in Section 5.3(a)(iii) shall be made as follows:

            EXERCISE PRICE OF ADJUSTED AT&T 2001 OPTIONS. The exercise price per
      share of AT&T Common Stock subject to an adjusted AT&T 2001 Option will be
      equal to the product obtained by multiplying (a) times (b) where "(a)"
      equals the exercise price per share of the AT&T 2001 Option with respect
      to which an adjustment is being made immediately before the Wireless
      Dividend, and "(b)" equals the quotient obtained by dividing the AT&T
      Opening Stock Value by the AT&T Closing Stock Value.

                                      -19-
<PAGE>   25
            NUMBER OF ADJUSTED AT&T 2001 OPTIONS. The number of shares of AT&T
      Common Stock subject to an adjusted AT&T 2001 Option immediately after the
      Wireless Dividend will equal the product obtained by dividing (a) by (b)
      where "(a)" equals the Intrinsic Value of the AT&T 2001 Option with
      respect to which an adjustment is being made, based on the AT&T Closing
      Stock Value and the exercise price per share of such AT&T 2001 Option, and
      "(b)" equals the Intrinsic Value of an Option to purchase one share of
      AT&T Common Stock based on the AT&T Opening Stock Value and the exercise
      price of such adjusted AT&T 2001 Option as set forth above.

                  (iv)  AT&T and Wireless Services acknowledge that, in the
context of the Separation Transactions, the adjustment to AT&T Options as set
forth in Section 5.3(a)(ii) will be implemented by the issuance of Wireless
Options under the terms of the Wireless Services Adjustment Plan. Accordingly,
it is intended that, to the extent of the issuance of such Wireless Options in
connection with the adjustments set forth in Section 5.3(a)(ii), the Wireless
Services Adjustment Plan shall be considered a successor to the AT&T Long Term
Incentive Plan and to have assumed the obligation of the AT&T Long Term
Incentive Plan to make the adjustment of AT&T Options as set forth in Section
5.3(a)(ii).

                  (v)   After the Disposition Date, AT&T Options, including
adjusted AT&T Options and adjusted AT&T 2001 Options, regardless of by whom
held, shall be settled by AT&T pursuant to the terms of the AT&T Long Term
Incentive Plan, and Wireless Options, regardless of by whom held, shall be
settled by Wireless Services pursuant to the terms of the Wireless Services
Adjustment Plan.

                  (vi)  Except as provided pursuant to a separate agreement
between AT&T and Qwest Communications International, Inc. (the "Qwest
Agreement") AT&T shall claim the benefit of federal, state, and local tax
deductions related to the exercise of all AT&T Options, including adjusted AT&T
Options and adjusted AT&T 2001 Options, after the Disposition Date and Wireless
Services shall not claim any such tax deductions. Except as otherwise provided
pursuant to the Qwest Agreement, after the Disposition Date, AT&T shall be
responsible for the proper payroll tax treatment and the proper reporting to the
appropriate governmental authorities of compensation relating to all option
exercises by AT&T Employees and by persons, other than Transferred Individuals,
who as of the date of exercise are no longer employed by AT&T or one of its
Subsidiaries, but whose last employment with AT&T or one of its subsidiaries was
with AT&T or with a subsidiary of AT&T other than a Wireless Services Entity, of
Wireless Options, adjusted AT&T Options and adjusted AT&T 2001 Options provided,
however, that Wireless Services shall promptly reimburse AT&T for an amount
equal to the Hospital Insurance tax under Section 3111(b) of the Code (the "HI
Tax") upon the exercise of such Wireless Services Options (such reimbursement to
be treated as deductible by Wireless Services and as taxable income to AT&T,
which shall deduct the HI Tax as incurred).

                  (vii) Except with respect to Wireless Options granted pursuant
to Section 5.3(a)(i) with respect to options subject to the Qwest Agreement, a
Wireless Services Entity shall claim the benefit of federal, state and local tax
deductions related to the exercise of Wireless Options after the Disposition
Date and AT&T shall not claim any such tax deductions. Except with respect to
Wireless Options granted pursuant to Section 5.3(a)(i) with respect to options
subject to the Qwest Agreement, after the Disposition Date, a Wireless Services
Entity

                                      -20-
<PAGE>   26
shall be responsible for the proper payroll tax treatment and the proper
reporting to the appropriate governmental authorities of compensation relating
to all option exercises by Transferred Individuals and by persons who as of the
date of exercise are no longer employed by a Wireless Services Entity, but whose
last employment with any of AT&T, its subsidiaries, or any Wireless Services
Entity, was with a Wireless Services Entity, of Wireless Options, adjusted AT&T
Options and adjusted AT&T 2001 Options; provided, however, that AT&T shall
promptly reimburse Wireless Services for an amount equal to the HI Tax upon the
exercise of such AT&T Options (such reimbursement to be treated as deductible by
AT&T and as taxable income to Wireless Services, which shall deduct the HI Tax
as incurred).

                  (viii) With respect to any Wireless Option held by an AT&T
Employee and by persons, other than Transferred Individuals, who as of the date
of exercise are no longer employed by AT&T or one of its Subsidiaries, but whose
last employment with AT&T or one of its subsidiaries was with AT&T or with a
Subsidiary of AT&T other than a Wireless Services Entity, and with respect to
any adjusted AT&T Option and any adjusted AT&T 2001 Option held by a Transferred
Individual and by persons who as of the date of exercise are no longer employed
by a Wireless Services Entity, but whose last employment with any of AT&T, its
subsidiaries, or any Wireless Services Entity, was with a Wireless Services
Entity, (each, a "Crossover Option"), Salomon Smith Barney or such other entity
as mutually designated by AT&T and Wireless Services shall act as the
recordkeeper for the Crossover Options. If the exercise of Crossover Options is
made pursuant to a broker-assisted cashless exercise through the recordkeeper in
accordance with the regulations of the Federal Reserve Board, then immediately
after such exercise, the recordkeeper shall sell the number of shares necessary
to remit the following payments (which may be all the shares): (i) to the issuer
of the option, the exercise price; and (ii) to the employer of the option
holder, the employee's share of income and payroll taxes. The recordkeeper shall
thereafter remit to the Option holder (i) the balance of the proceeds from the
sale of all shares or (ii) the remaining whole shares and cash for any
fractional shares, as applicable.

                  (ix)  AT&T and Wireless Services agree to act (or to take such
action) with respect to such federal, state, or local tax deductions, and with
respect to fulfilling the payroll tax and reporting obligations on compensation,
consistent with (v) through (viii) above, as are reasonably necessary or
appropriate to achieve, maintain and/or preserve such tax results. Any amounts
required to be reimbursed by one party to another under subparagraphs (vii) and
(viii) shall be paid within 30 days of invoice.

                  (x)   If (a) as a result of a determination (as defined in
Section 1313 of the Code) or (b) in the opinion of nationally recognized tax
counsel to AT&T or Wireless Services, which opinion and tax counsel are
reasonably acceptable to the other party hereto, as a result of final or pending
Treasury Regulations, Internal Revenue Service announcement or otherwise, in
each case, there is a substantial likelihood that the tax deductions related to
the exercise of Options under this Agreement and/or the payroll tax and
reporting obligations related to the exercise of Options, will be inconsistent
with all or any part of (vi) through (viii) above, the parties shall negotiate
in good faith to restructure the arrangements set forth herein so that (I) if,
pursuant to the determination or opinion, a party gets a tax deduction it was
not entitled to claim under the terms of this Agreement, that party shall pay
over to the party entitled to claim the deduction under the terms of this
Agreement, as if and for the tax year(s) recognized through

                                      -21-
<PAGE>   27
a reduction in taxes due and/or the receipt of a refund an amount equal to the
lesser of (x) its tax benefit and (y) the benefit otherwise available to the
party entitled to such deduction under the terms of this Agreement, as if and
for the tax year(s) when such deduction would have resulted in a reduction in
taxes due and/or the receipt of a refund and (II) the reporting and financial
burden of the payroll taxes are, to the extent practicable, as described above.
Any such amounts shall be payable within 30 days of the filing of the return in
which the benefit described in (x) or (y), of the preceding sentence, whichever
is later, is reflected. If the parties are unable to reach an agreement on how
to restructure the arrangements set forth herein within 90 days of such
determination or the receipt of the opinion of counsel described in the first
sentence of this subparagraph (x) such disagreement shall be resolved by a
nationally recognized law firm or accounting firm ("Independent Third Party"),
selected in a manner similar to the procedure set forth in Section 9(e)(i) of
the Amended and Restated Tax Sharing Agreement, whose judgment shall be
conclusive and binding upon the parties. The cost of any Independent Third Party
shall be shared equally between the parties.

            (b)   AWE OPTIONS. Each AWE Option outstanding under any AT&T Long
Term Incentive Plan as of the Wireless Exchange Date shall be converted on the
Wireless Exchange Date, but prior to the Wireless Dividend, into Wireless
Options ("converted Wireless Options") under the Wireless Services Adjustment
Plan. The number of shares of Wireless Common Stock and the exercise price per
share of Wireless Common Stock subject to the Wireless Option will be determined
as follows:

            EXERCISE PRICE OF CONVERTED WIRELESS OPTIONS. The exercise price per
      share of Wireless Common Stock subject to a converted Wireless Option will
      be equal to the product obtained by multiplying (a) times (b) where "(a)"
      equals the exercise price per share of the AWE Option with respect to
      which the conversion is being made, determined immediately before the
      Wireless Dividend, and "(b)" equals the quotient obtained by dividing the
      Wireless Stock Value by the AWE Closing Stock Value.

            NUMBER OF CONVERTED WIRELESS OPTIONS. The number of shares of
      Wireless Common Stock subject to a converted Wireless Option immediately
      after the Wireless Dividend will equal the product obtained by dividing
      (a) by (b) where "(a)" equals the Intrinsic Value of the AWE Option with
      respect to which a conversion is being made, based on the AWE Closing
      Stock Value and the exercise price per share of such AWE Option, and "(b)"
      equals the Intrinsic Value of an Option to purchase one share of Wireless
      Common Stock based on the Wireless Stock Value and the exercise price of
      such converted Wireless Option as set forth above.

                                      -22-
<PAGE>   28
            (c)   VESTING AND EXERCISABILITY OF OPTIONS. Each adjusted AT&T
Option and each adjusted AT&T 2001 Option issued to a Transferred Individual as
part of the adjustment to AT&T Options and AT&T 2001 Options pursuant to Section
5.3(a) shall be fully vested and shall continue to be exercisable and
non-forfeitable after the Wireless Dividend Date for the remaining scheduled
term of the original AT&T Option or AT&T 2001 Option with respect to which the
Adjusted AT&T Option and the adjusted AT&T 2001 Option was issued.

      Each adjusted AT&T Option and each adjusted AT&T 2001 Option issued to an
AT&T Employee as part of the adjustment to AT&T Options and AT&T 2001 Options
pursuant to Section 5.3(a) shall be subject to the same terms and conditions
regarding term, vesting, and other provisions regarding exercise as set forth in
the original AT&T Option or AT&T 2001 Option with respect to which the Adjusted
AT&T Option or the adjusted AT&T 2001 Option was issued..

      Each Wireless Option issued to a Transferred Individual as part of the
adjustment to AT&T Options pursuant to Section 5.3(a) shall be subject to the
same terms and conditions regarding term, vesting, and other provisions
regarding exercise as set forth in the original AT&T Option with respect to
which the Wireless Option was received.

      Each Wireless Option issued to an AT&T Employee as part of the adjustment
to AT&T Options pursuant to Section 5.3(a) shall be fully vested and shall
continue to be exercisable and non-forfeitable after the Wireless Dividend Date
for the remaining scheduled term of the original AT&T Option with respect to
which the Wireless Option was received.

      Each converted Wireless Option issued to an AT&T Employee in exchange for
an AWE Option shall be fully vested and shall continue to be exercisable and
non-forfeitable after the Wireless Dividend Date for the remaining scheduled
term of the original AWE Option for which the Wireless Option was exchanged.

      Each converted Wireless Option issued to a Transferred Individual in
exchange for an AWE Option shall be subject to the same terms and conditions
regarding term, vesting, and other provisions regarding exercise as set forth in
the original AWE Option from which the Wireless Option was converted.

      Notwithstanding the foregoing, the adjusted AT&T Options, adjusted AT&T
2001 Options and Wireless Options shall not be exercisable until the AT&T
Opening Stock Value or Wireless Stock Value, as the case may be, is determined
immediately after the Wireless Dividend.

                                      -23-
<PAGE>   29
            (d)   RESTRICTED STOCK AND RESTRICTED STOCK UNITS. As determined by
the Committee (as that term is defined in the AT&T 1997 Long Term Incentive
Program) pursuant to its authority under any of the AT&T Long Term Incentive
Plans, each restricted share of AT&T Common Stock or restricted stock unit
relating to shares of AT&T Common Stock that is outstanding under any AT&T Long
Term Incentive Plan as of the Wireless Dividend Date shall be adjusted so that
each AT&T Employee who is the holder of an AT&T restricted share or restricted
stock unit will receive, immediately prior to the Wireless Dividend Date, an
adjusted number of AT&T restricted shares or restricted stock units under the
applicable AT&T Long Term Incentive Plan whereby the resulting number of AT&T
restricted shares or restricted stock units shall be determined by multiplying
the number of AT&T restricted shares or restricted stock units held by each AT&T
Employee immediately before the Wireless Dividend Date by the quotient of the
AT&T Closing Stock Value divided by the AT&T Opening Stock Value. Each
Transferred Individual who is the holder of an AT&T restricted share or
restricted stock unit will receive, immediately prior to the Wireless Dividend
Date and in the case of AT&T Transferees, immediately prior to the termination
of their employment with AT&T pursuant to the terms of Section 2.8 hereof,,
exchange for each such AT&T restricted share or restricted stock unit, Wireless
Services restricted shares or restricted stock units under the Wireless Services
Adjustment Plan whereby the resulting number of Wireless Services restricted
shares or restricted stock units shall be determined by multiplying the number
of AT&T restricted shares or restricted stock units held by each Transferred
Individual immediately before the Wireless Dividend Date by the quotient of the
AT&T Closing Stock Value divided by the Wireless Opening Stock Value. Each
Transferred Individual will continue to vest in his or her Wireless Services
Award under the Wireless Services Adjustment Plan during his or her employment
with Wireless Services or a Wireless Services Entity. Each AT&T Employee shall
continue to vest in his or her AT&T Award under the AT&T Long Term Incentive
Plan during his or her employment with AT&T and its Affiliates and shall
continue to be subject to the same terms and conditions which applied to the
original award. Each Wireless Services Award shall have the same terms and
conditions as were applicable to the corresponding AT&T Award as of the close of
the Wireless Dividend Date, except that references to AT&T and its Affiliates
shall be modified to refer to Wireless Services and its Affiliates and dividend
equivalent payments, if any, shall be payable after the Disposition Date with
reference to dividends on Wireless Common Stock, if any.

            (e)   PERFORMANCE SHARES AND STOCK UNITS. As determined by the
Committee (as that term is defined in the AT&T 1997 Long Term Incentive Program)
pursuant to its authority under any of the AT&T Long Term Incentive Plans:

                  (i)   each AT&T Employee who is the holder of an AT&T Award
granted prior to January 1, 2001 consisting of AT&T performance shares or AT&T
stock units that is outstanding as of the Wireless Dividend Date shall receive,
immediately prior to the Wireless Dividend:

                        (A)   an award under the applicable AT&T Long Term
Incentive Plan for the number of stock units determined by multiplying the
number of AT&T performance shares held as of the Wireless Dividend Date by the
Distribution Ratio; and

                                      -24-
<PAGE>   30
                        (B)   an adjusted award of AT&T performance shares or
AT&T stock units under the applicable AT&T Long Term Incentive Plan for a number
of AT&T performance shares determined by dividing (a) by (b) where "(a)" equals
the value of AT&T performance shares held as of the Wireless Dividend Date
reduced by the value of the adjusted stock units awarded pursuant to Section 5.3
(e)(i), and "(b)" equals the value of a single AT&T performance share based on
the AT&T Opening Stock Value.

                  (ii)  Each Transferred Individual holding an AT&T Award
consisting of AT&T performance shares for any open cycle granted prior to
January 1, 2001, that is outstanding as of the Wireless Dividend Date will
receive immediately prior to the Wireless Dividend, and in the case of an AT&T
Transferee, immediately prior to the termination of their employment with AT&T
pursuant to the terms of Section 2.8 hereof,:

                        (A)   an award under the Wireless Services Adjustment
Plan for a number of adjusted Wireless stock units determined by multiplying the
number of AT&T performance shares held as of the Wireless Dividend Date by the
Distribution Ratio; and

                        (B)   an award of under the Wireless Services Adjustment
Plan for a number of adjusted stock units determined by dividing (a) by (b)
where "(a)" equals the value of AT&T performance shares held as of the Wireless
Dividend Date reduced by the value of the adjusted stock units awarded pursuant
to Section 5.3 (e)(i), and "(b)" equals the value of a single AT&T performance
share based on the AT&T Opening Stock Value.

                  (iii) Each Transferred Individual will continue to vest or
satisfy service requirements with respect to his or her Award of adjusted stock
units under the Wireless Services Adjustment Plan in accordance with the terms
and conditions of the original AT&T Performance Share Award with respect to
which the adjusted stock units are issued, and the value and performance
criteria of adjusted stock units held by a Transferred Individual will continue
to be based on the underlying value of a share of AT&T Common Stock and AT&T
performance measures as determined by the Compensation and Employee Benefits
Committee of the AT&T Board of Directors from time to time, and the performance
criteria for each such adjusted Wireless stock unit issued pursuant to
5.3(e)(ii)(A) above shall be deemed earned at 100% of target and shall otherwise
be paid pursuant to the terms of the original Award.

                  (iv)  Each AT&T Employee shall vest or satisfy service
requirements with respect to his or her stock units issued under the AT&T Long
Term Incentive Plan Each such stock unit shall be deemed earned at 100% of
target and the value of such stock unit shall be determined by reference to the
underlying value of a share of Wireless Common Stock. The performance criteria
of each adjusted AT&T Performance Share held by an AT&T Employee will continue
to be based on AT&T measures as determined by the Compensation and Employee
Benefits Committee of the AT&T Board of Directors from time to time and shall
otherwise be paid pursuant to the terms of the original Award.

                  (v)   Except with respect to satisfaction of performance
criteria, the payment of AT&T Performance Shares or stock units under either the
AT&T Long Term Incentive Plan or the Wireless Services Adjustment Plan shall
continue to be subject to the terms and conditions of the AT&T Long Term
Incentive Plan and the Wireless Services Adjustment

                                      -25-
<PAGE>   31
Plan, as in effect from time to time, except that, with respect to stock units
the value of which is determined by reference to the underlying value of
Wireless Common Stock, shall be payable after the Disposition Date with
reference to dividends on Wireless Common Stock, if any.

            (f)   POST-2000 PERFORMANCE SHARES. As determined by the Committee
(as that term is defined in the AT&T 1997 Long Term Incentive Program) pursuant
to its authority under any of the AT&T Long Term Incentive Plans, each AT&T
Performance Share granted on or after January 1, 2001, that is outstanding as of
the Wireless Dividend Date shall be adjusted so that each AT&T Employee who is
the holder of an AT&T Award will receive, immediately prior to the Wireless
Dividend Date, an adjusted number of AT&T Performance Shares under the
applicable AT&T Long Term Incentive Plan whereby the resulting number of AT&T
Performance Shares shall be determined by multiplying the number of AT&T
Performance Shares by each AT&T Employee immediately before the Wireless
Dividend Date by the quotient of the AT&T Closing Stock Value divided by the
AT&T Opening Stock Value. Each Transferred Individual who is the holder of an
AT&T Performance Shares will receive, immediately prior to the Wireless Dividend
Date, and in the case of AT&T Transferees, immediately prior to the termination
of their employment with AT&T pursuant to the terms of Section 2.8 hereof, in
exchange for such AT&T Performance Shares, Wireless Services stock units under
the Wireless Services Adjustment Plan whereby the resulting number of Wireless
Services stock units shall be determined by multiplying the number of AT&T
Performance Shares held by each Transferred Individual immediately before the
Wireless Dividend Date by the quotient of the AT&T Closing Stock Value divided
by the Wireless Opening Stock Value. Each such stock unit shall be deemed earned
at 100% of target and the value of such stock unit shall be determined by
reference to the underlying value of a share of Wireless Common Stock. Each
Transferred Individual will continue to vest in his or her Wireless Services
stock units under the Wireless Services Adjustment Plan during his or her
employment with Wireless Services or a Wireless Services Entity. Each AT&T
Employee shall continue to vest in his or her AT&T Performance Shares under the
AT&T Long Term Incentive Plan during his or her employment with AT&T and its
Affiliates and will continue to be based on AT&T measures as determined by the
Compensation and Employee Benefits Committee of the AT&T Board of Directors from
time to time as remains applicable to AT&T employees, and shall continue to be
subject to the same terms and conditions which applied to the original award.
Each Wireless Services Award shall have the same terms and conditions as were
applicable to the corresponding AT&T Award as of the close of the Wireless
Dividend Date, except that references to AT&T and its Affiliates shall be
modified to refer to Wireless Services and its Affiliates and dividend
equivalent payments, if any, shall be payable after the Disposition Date with
reference to dividends on Wireless Common Stock, if any.

            (g)   PARTIAL INTERESTS IN SHARES OR STOCK UNITS. To the extent that
any adjustment in stock options, performance shares, stock units, restricted
stock, or restricted stock units results in any fractional interest in shares
(or stock units), such fractional interest shall be rounded down to the nearest
whole share or unit. No fractional interests in shares or stock units shall be
payable in cash or otherwise.

            (h)   INCENTIVE STOCK OPTIONS; FOREIGN GRANTS/AWARDS. AT&T and
Wireless Services agree to use their best efforts to preserve the value and tax
treatment accorded incentive stock options awarded under the AT&T Long Term
Incentive Plan, and to preserve the

                                      -26-
<PAGE>   32
value and tax treatment accorded grants/awards provided to non-U.S. employees
under any domestic or foreign equity-based incentive program sponsored by AT&T
or an AT&T Entity or Wireless Services or a Wireless Services Entity. The
parties delegate to the AT&T Executive Vice President-Human Resources, for
periods before the Disposition Date, the authority to determine an appropriate
methodology for adjusting such grants or awards in a manner that is, to the
extent possible, consistent with the treatment of such awards and grants for
U.S. employees.

      5.4   AT&T EMPLOYEE STOCK PURCHASE PLAN. In accordance with the AT&T
Employee Stock Purchase Plan, AT&T shall cause (a) all amounts credited to each
Transferred Individual's "Periodic Deposit Account" under the AT&T Employee
Stock Purchase Plan to be applied on the next exercise date coincident with or
next following the Disposition Date (the "Next Exercise Date") toward the
purchase of AT&T Common Stock, and then (b) stock certificates with respect to
whole shares of all AT&T Common Stock and any other stock held by the
recordkeeper, and cash with respect to fractional shares of AT&T Common Stock
and any other stock held by the recordkeeper to be distributed as soon as
practicable after the Next Exercise Date, and then (c) the recordkeeping
accounts of all Transferred Individuals to be terminated under the AT&T Stock
Purchase Plan.

      5.5   SAVINGS CLAUSE. Notwithstanding any other provision of Section 5.3,
if and to the extent AT&T shall determine in its reasonable judgment that any
action required to be taken by AT&T or Wireless Services under such Section may
not comply with all applicable laws or the terms of any applicable AT&T Long
Term Incentive Plan or the Wireless Services Adjustment Plan or does not
properly address all relevant financial accounting concerns or that any such
action is otherwise inappropriate or inadvisable, AT&T shall be entitled to
require that Wireless Services or AT&T instead shall take such other action that
AT&T determines in its reasonable judgment is necessary or appropriate in order
to comply with such laws or AT&T Long Term Incentive Plan or Wireless Services
Adjustment Plan or is otherwise appropriate or advisable, and any such
determination by AT&T shall be final and shall not be subject to question,
dispute, or objection by Wireless Services.

      5.6   REGISTRATION REQUIREMENTS. As soon as possible following the time as
of which the Form 10 or Form 8-A, as the case may be, is declared effective by
the Securities and Exchange Commission but in any case before the Wireless
Dividend Date and before the date of issuance or grant of any Wireless Option
and/or shares of Wireless Common Stock pursuant to this Article V, Wireless
Services agrees that it shall file a Form S-8 Registration Statement with
respect to and cause to be registered pursuant to the Securities Act of 1933, as
amended, the shares of Wireless Common Stock authorized for issuance under the
Wireless Services Adjustment Plan as required pursuant to such Act and any
applicable rules or regulations thereunder.

      5.7   NON-COMPETITION GUIDELINES

            (a)   AT&T NON-COMPETITION GUIDELINE. Effective as of the Close of
the Disposition Date, AT&T shall cause the AT&T Non-Competition Guideline, to be
amended to provide that any Transferred Individual, AT&T Transferee, and any
other AT&T Employee, who terminates employment with AT&T and becomes employed by
Wireless Services or a Wireless Services Entity at any time prior to the end of
the twenty-fourth calendar month that ends after

                                      -27-
<PAGE>   33
the Close of the Disposition Date, shall not be subject to the AT&T
Non-Competition Guideline while such individual is employed by Wireless Services
or a Wireless Services Entity; provided, however, that nothing in this Section
5.7(a) shall relieve any person including, but not limited to, Transferred
Individuals, from any obligation under the AT&T Non-Competition Guideline with
respect to engaging in conduct (e.g., recruitment or solicitation of employees
or criticism of AT&T) that is "in conflict with or adverse to the interests of"
AT&T, as such terms are defined in the AT&T Non-Competition Guideline.
Notwithstanding the foregoing, no Transferred Individual, AT&T Transferee or
other Wireless employee shall be deemed to have violated the AT&T
Non-Competition Guideline as a result of the recruitment or solicitation of any
AT&T Employee to the extent that the hiring of any AT&T employee conforms to
procedures set forth in the People Movement Guideline attached to this Agreement
as Exhibit 5.7(a). Notwithstanding the foregoing, a Transferred Individual, AT&T
Transferee, or any other AT&T Employee, who terminates employment with AT&T and
becomes employed by Wireless Services or a Wireless Services Entity at any time
prior to the end of the twenty-fourth calendar month that ends after the Close
of the Disposition Date shall be deemed to be employed by a competitor of AT&T
for purposes of determining compliance with the provisions of the AT&T
Non-Competition Guideline only if within the twenty-four month period following
such individual's termination of employment with AT&T and before the end of the
twenty-fourth calendar month that ends after the Close of the Disposition Date,
such Transferred Individual, AT&T Transferee, or other AT&T Employee becomes
employed by a company that is an active and significant competitor of AT&T. For
purposes of this paragraph, during the twenty-four month period following the
Close of the Disposition Date, "active and significant competitor" means a
company in competition with AT&T in a line of business which represents more
than five percent (5%) of the AT&T's consolidated gross revenues (excluding
Wireless revenues) for its most recently completed fiscal year. After the
twenty-four month period following the Close of the Disposition Date, whether an
employer is a competitor of AT&T will be determined pursuant to AT&T's usual and
customary practice in administering the AT&T Non-Competition Guideline.

            (b)   WIRELESS SERVICES NON-COMPETITION GUIDELINE. In the event
Wireless Services shall adopt or maintain a non-competition guideline effective
for periods after the Disposition Date, such guideline shall expressly provide
that no employee of a Wireless Services Entity who terminates employment with a
Wireless Services Entity and becomes employed by AT&T or an AT&T Entity at any
time prior to the end of the twenty-fourth calendar month that ends after the
Close of the Disposition Date, shall be treated as being employed by a
competitor of a Wireless Services Entity for purposes of determining compliance
with the non-competition provisions of such Wireless Services non-competition
guideline while such individual remains employed by AT&T or an AT&T Entity;
provided, however, that nothing in this Section 5.7(b) shall relieve any person
from any obligation under such Wireless Services non-competition guideline with
respect to engaging in conduct (e.g., recruitment or solicitation of employees
or criticism of Wireless Services) that is "in conflict with or adverse to the
interests of" Wireless Services, as such terms are defined in such guideline.
Notwithstanding the foregoing, no AT&T Employee shall be deemed to have violated
such guideline as a result of the recruitment or solicitation of any employee of
Wireless Services to the extent that the hiring of any employee of Wireless
Services conforms to procedures set forth in the People Movement Guidelines
attached to this Agreement as Exhibit 5.7(b). At the conclusion of such
twenty-four calendar month period, Wireless Services may deem employment, other
than continuing employment of a then

                                      -28-
<PAGE>   34
current employee of AT&T or an AT&T Entity, by AT&T or an AT&T Entity to be a
violation of such Wireless Services non-competition guideline.

            (c)   CONFIDENTIALITY AND PROPRIETARY INFORMATION.

      No provision of the Separation and Distribution Agreement or this
Agreement shall be deemed to release any individual for any violation of the
AT&T Non-Competition Guideline or such Wireless Services non-competition
guideline pertaining to confidential or proprietary information or any agreement
or policy pertaining to confidential or proprietary information of AT&T or any
of its Affiliates or of Wireless Services or any of its Affiliates,
respectively, or otherwise relieve any individual of his or her obligations
under such guideline or any such agreements or policies.

      5.8   AT&T NONQUALIFIED PENSION PLANS AND ARRANGEMENTS. For periods after
the Disposition Date, AT&T shall retain all Liabilities relating to Transferred
Individuals under the AT&T Non-Qualified Pension Plan, the AT&T Excess Benefit
and Compensation Plan, the AT&T Mid-Career Pension Plan, the AT&T Senior
Management Long Term Disability and Survivor Protection Plan, and any individual
nonqualified pension arrangements identified in Schedule "5.9" hereto as of the
Close of the Disposition Date, and shall make benefit payments to Transferred
Individuals at such times and in such manner as is provided for under the terms
of the respective nonqualified pension plans and arrangements.

      5.9   LIFE INSURANCE PROGRAMS.

            (a)   AT&T SENIOR MANAGEMENT UNIVERSAL LIFE INSURANCE PROGRAM. The
life insurance amount under the SMULIP shall be frozen (the "frozen SMULIP
coverage") as of the Close of the Disposition Date for any Transferred
Individual who is a SMULIP participant as of the Close of the Disposition Date
and who either (i) is then eligible to participate in the Retirement-Related
Benefit Plans; or (ii) may be eligible to participate in the Retirement-Related
Benefit Plans pursuant to the provisions of Section 4.6. AT&T shall allow such
Transferred Individual to continue to participate in the SMULIP until the
earlier of (1) the Transferred Individual's attainment of his or her "normal
termination date" under the terms of the SMULIP as such terms exist on the date
of this Agreement; or (2) the Transferred Individual's termination of employment
from Wireless Services and all Wireless Services Entities before becoming
eligible to participate in the Retirement-Related Benefit Plans pursuant to the
provisions of Section 4.6. During the Transferred Individual's participation in
the SMULIP after the Disposition Date, AT&T shall pay the premiums determined to
be due under the applicable life insurance policy (and any tax adjustment
payments, determined in accordance with the terms of the SMULIP as they exist on
the date of this Agreement) to provide the frozen SMULIP coverage amount. The
participation of all other Transferred Individuals who participate in the SMULIP
shall terminate as of the Close of the Disposition Date, and the life insurance
policy covering the life of such Transferred Individuals under the SMULIP may be
allowed to lapse, surrendered for its cash surrender value, or continued with
premium payments being made from the Transferred Individual's (or his or her
assignee's) personal assets.

                                      -29-
<PAGE>   35
            (b)   AT&T EXECUTIVE BASIC LIFE INSURANCE PROGRAM. The life
insurance amount under the EBLIP shall be frozen (the "frozen EBLIP coverage")
as of the Close of the Disposition Date for any Transferred Individual who is an
EBLIP participant as of the Close of the Disposition Date and who either (i) is
then eligible to participate in the Retirement-Related Benefit Plans; or (ii)
may be eligible to participate in the Retirement-Related Benefit Plans pursuant
to the provisions of Section 4.6. AT&T shall allow such Transferred Individual
to continue to participate in the EBLIP until the earlier of (1) the Transferred
Individual's attainment of his or her "normal termination date" under the terms
of the EBLIP as such terms exist on the date of this Agreement or (2) the
Transferred Individual's termination of employment from Wireless Services and
all Wireless Services Entities before becoming eligible to participate in the
Retirement-Related Benefit Plans pursuant to the provisions of Section 4.6.
During the Transferred Individual's period of continued participation in the
EBLIP, AT&T shall pay the premiums determined to be due under the applicable
life insurance policy to provide the frozen EBLIP coverage. Notwithstanding any
provision of this Section 5.10(b) to the contrary, after any Transferred
Individual who continues to participate in the EBLIP attains age 66, the
participant's frozen EBLIP coverage shall be reduced according to the benefit
schedule of the EBLIP for participants age 66 and older as such schedule exists
on the date of this Agreement. The participation of all other Transferred
Individuals who participate in the EBLIP shall terminate as of the Close of the
Disposition Date, and AT&T shall transfer ownership of the life insurance policy
covering the Transferred Individual ("EBLIP Policy") (after withdrawing the
total cash surrender value from the life insurance policy) to the Transferred
Individual (or his or her assignee). Following transfer of the EBLIP Policy,
AT&T shall have no further obligation with respect to the EBLIP Policy and the
Transferred Individual (or his or her assignee) may allow the EBLIP Policy to
lapse or continue the coverage under the EBLIP Policy with premium payments
being made from the Transferred Individual's (or his or her assignee's) personal
assets.

            (c)   AT&T ESTATE ENHANCEMENT PROGRAM. For periods immediately after
the Disposition Date, Transferred Individuals who are eligible to participate in
the AT&T Corp. Estate Enhancement Program, including the AT&T Corp. Alternative
Death Benefit Program and the AT&T Corp. Special Death Benefit Program, as of
the Disposition Date may continue to participate in the AT&T Estate Enhancement
Program (subject to all existing terms and conditions of the respective
programs) with respect to deferred compensation balances in the AT&T Deferral
Plan as of the Close of the Disposition Date.

            (d)   AT&T SUPPLEMENTAL VARIABLE UNIVERSAL LIFE INSURANCE PROGRAM.
The participation of all Transferred Individuals in the SVULIP shall terminate
as of the Close of the Disposition Date. Affected Transferred Individuals may,
in their sole discretion, continue, on a direct-pay basis, part or all of the
coverage previously provided to them under the SVULIP.

      5.10  FINANCIAL COUNSELING.

            (a)   AT&T shall provide financial counseling program benefits
(including preparation of income tax returns for the Disposition Year) for one
year following the Disposition Date for those AT&T Transferees who immediately
before the Close of the Disposition Date were (i) receiving financial counseling
program benefits under either the AT&T Senior Management Financial Counseling
Program or the AT&T Executive Financial Counseling Program, and (ii) eligible to
participate in the AT&T Retirement-Related Benefit

                                      -30-
<PAGE>   36
Plans. To the extent the provision of any such benefit by AT&T is taxable income
to the AT&T Transferee, AT&T shall make a tax adjustment payment to such AT&T
Transferee in accordance with AT&T's tax "gross-up" policies for similarly
situated retiring employees at the senior manager or executive salary grade
level ("E-level"), as applicable. AT&T financial counseling benefits will
terminate for all other AT&T Transferees as of the Close of the Disposition
Date.

            (b)   Except as provided in Section 5.12(a), effective Immediately
after the Disposition Date, Wireless Services shall assume all costs relating
to, arising out of, or resulting from the provision of financial counseling
services, from and after the Close of the Disposition Date to any individual who
otherwise would have been eligible for financial counseling services under the
AT&T Senior Management Financial Counseling Program and the AT&T Executive
Financial Counseling Program.

      5.11  TOLL DISCOUNT PROGRAM. Any Transferred Individual who is eligible to
participate in the Retirement-Related Benefit Plans as of the Close of the
Disposition Date shall be entitled to continue to receive toll reimbursements in
accordance with the terms of the applicable AT&T Toll Discount Program. AT&T
shall discontinue making toll reimbursements to all AT&T Transferees under the
AT&T Toll Discount Program effective as of the earlier of (a) the Close of the
Disposition Date; or (b) the date on which the AT&T Transferee would no longer
be in an eligible class of employees under the applicable AT&T Toll Discount
Program.

      5.12  RELOCATION PLAN. Wireless Services shall be responsible for all
Liabilities with respect to the relocation expenses of any Transferred
Individuals related to their employment by Wireless Services or a Wireless
Services Entity. AT&T shall be responsible for all Liabilities with respect to
the relocation expenses authorized by AT&T for any employees who, before the
Close of the Disposition Date, leave the employment of Wireless Services, a
Wireless Services Entity, or the Wireless Group to become employees of AT&T or
any AT&T Entity other than Wireless Services or a Wireless Services Entity.

      5.13  SENIOR MANAGER CAR ALLOWANCES. AT&T shall discontinue making car
allowance payments to AT&T Transferees under the AT&T Senior Manager Ground
Transportation Program effective as of the earlier of (a) the Close of the
Disposition Date, or (b) the date on which the AT&T Transferees would no longer
be in an eligible class of employees under that program.

      5.14  TAXABLE FRINGE BENEFITS. AT&T shall discontinue providing benefits
to AT&T Transferees under the AT&T Taxable Fringe Benefit Program effective as
of the earlier of (a) the Close of the Disposition Date or (b) the date on which
the AT&T Transferees would no longer be in an eligible class of employees under
that program.

                                      -31-
<PAGE>   37
                                   ARTICLE VI
                           GENERAL AND ADMINISTRATIVE

      6.1   PAYMENT OF LIABILITIES. Wireless Services shall pay directly, or
reimburse AT&T promptly for, all compensation payable to AT&T Transferees for
services rendered to the Wireless Group while in the employ of AT&T or an AT&T
Entity on or before the Disposition Date to the extent not already reimbursed.
To the extent the amount of such Liabilities is not yet determinable because the
status of individuals as AT&T Transferees is not yet determined, except as
otherwise specified herein or in another Ancillary Agreement with respect to
particular Liabilities, Wireless Services shall make such payments or
reimbursements based upon AT&T's reasonable estimates of the amounts thereof,
and when such status is determined, Wireless Services shall make additional
reimbursements or payments, or AT&T shall reimburse Wireless Services, to the
extent necessary to reflect the actual amount of such Liabilities.

      6.2   SHARING OF PARTICIPANT INFORMATION. AT&T and Wireless Services shall
share, AT&T shall cause each applicable AT&T Entity to share, and Wireless
Services shall cause each applicable Wireless Services Entity to share, with
each other and their respective agents and vendors (without obtaining releases)
all participant information necessary for the efficient and accurate
administration of each of the AT&T Plans and the Wireless Services Plans. AT&T
and Wireless Services and their respective authorized agents shall, subject to
applicable laws on confidentiality, be given reasonable and timely access to,
and may make copies of, all information relating to the subjects of this
Agreement in the custody of the other party, to the extent necessary for such
administration. Until the Close of the Disposition Date, all participant
information shall be provided in the manner and medium applicable to
Participating Companies in the AT&T Plans generally, and thereafter until
December 31, 2002, all participant information shall be provided in a manner and
medium that are compatible with the data processing systems of AT&T as in effect
as of the Close of the Disposition Date, unless otherwise agreed to by AT&T and
Wireless Services.

      6.3   NON-TERMINATION OF EMPLOYMENT; NO THIRD-PARTY BENEFICIARIES. Except
as expressly provided in this Agreement, no provision of this Agreement or the
Separation and Distribution Agreement shall be construed to create any right, or
accelerate entitlement, to any compensation or benefit whatsoever on the part of
any Transferred Individual or other future, present, or former employee of AT&T,
an AT&T Entity, Wireless Services, or a Wireless Services Entity under any AT&T
Plan or Wireless Services Plan or otherwise. Without limiting the generality of
the foregoing: (i) except as expressly provided in this Agreement or with
respect to the AT&T Pension Plans and the AT&T Retirement-Related Benefit Plans,
neither the occurrence of the Close of the Disposition Date nor the termination
of the Participating Company status of Wireless Services or a Wireless Services
Entity shall cause any employee to be deemed to have incurred a termination of
employment which entitles such individual to the commencement of benefits under
any of the Wireless Services Plans or any of the Individual Agreements; (ii)
except as expressly provided in this Agreement, nothing in this Agreement shall
preclude Wireless Services or any Wireless Services Entity, at any time after
the Close of the Disposition Date, from amending, merging, modifying,
terminating, eliminating, reducing, or otherwise altering in any respect any
Wireless Services Plan, any benefit under any Plan or any trust, insurance
policy or funding vehicle related to any Wireless Services Plan; and (iii)
except as expressly provided in this Agreement, nothing in this Agreement shall
preclude AT&T or any

                                      -32-
<PAGE>   38
AT&T Entity, at any time after the Close of the Disposition Date, from amending,
merging, modifying, terminating, eliminating, reducing, or otherwise altering in
any respect any AT&T Plan, any benefit under any Plan or any trust, insurance
policy or funding vehicle related to any AT&T Plan.

      6.4   AUDIT RIGHTS WITH RESPECT TO INFORMATION PROVIDED.

            (a)   Each of AT&T and Wireless Services, and their duly authorized
representatives, shall have the right to conduct audits with respect to all
information provided to it by the other party. The party conducting the audit
(the "Auditing Party") shall have the sole discretion to determine the
procedures and guidelines for conducting audits and the selection of audit
representatives under this Section 6.4(a). The Auditing Party shall have the
right to make copies of any records at its expense, subject to the
confidentiality provisions set forth in the Separation and Distribution
Agreement, which are incorporated by reference herein. The party being audited
shall provide the Auditing Party's representatives with reasonable access during
normal business hours to its operations, computer systems and paper and
electronic files, and provide workspace to its representatives. After any audit
is completed, the party being audited shall have the right to review a draft of
the audit findings and to comment on those findings in writing within five
business days after receiving such draft.

            (b)   The Auditing Party's audit rights under this Section 6.4(b)
shall include the right to audit, or participate in an audit facilitated by the
party being audited, of any Subsidiaries and Affiliates of the party being
audited and of any benefit providers and third parties with whom the party being
audited has a relationship, or agents of such party, to the extent any such
persons are affected by or addressed in this Agreement (collectively, the
"Non-parties"). The party being audited shall, upon written request from the
Auditing Party, provide an individual (at the Auditing Party's expense) to
supervise any audit of a Non-party. The Auditing Party shall be responsible for
supplying, at the Auditing Party's expense, additional personnel sufficient to
complete the audit in a reasonably timely manner. The responsibility of the
party being audited shall be limited to providing, at the Auditing Party's
expense, a single individual at each audited site for purposes of facilitating
the audit.

      6.5   FIDUCIARY MATTERS. AT&T and Wireless Services each acknowledge that
actions required to be taken pursuant to this Agreement may be subject to
fiduciary duties or standards of conduct under ERISA or other applicable law,
and no party shall be deemed to be in violation of this Agreement if it fails to
comply with any provisions hereof based upon its good faith determination that
to do so would violate such a fiduciary duty or standard. Each party shall be
responsible for taking such actions as are deemed necessary and appropriate to
comply with its own fiduciary responsibilities and shall fully release and
indemnify the other party for any Liabilities caused by the failure to satisfy
any such responsibility.

      6.6   COLLECTIVE BARGAINING. To the extent any provision of this Agreement
is contrary to the provisions of any collective bargaining agreement to which
AT&T or any Affiliate of AT&T is a party, the terms of such collective
bargaining agreement shall prevail. Should any provisions of this Agreement be
deemed to relate to a topic determined by an appropriate authority to be a
mandatory subject of collective bargaining, AT&T or Wireless Services may be
obligated to bargain with the union representing affected employees concerning
those subjects.

                                      -33-
<PAGE>   39
      6.7   CONSENT OF THIRD PARTIES. If any provision of this Agreement is
dependent on the consent of any third party (such as a vendor or a union) and
such consent is withheld, AT&T and Wireless Services shall use their reasonable
best efforts to implement the applicable provisions of this Agreement to the
full extent practicable. If any provision of this Agreement cannot be
implemented due to the failure of such third party to consent, AT&T and Wireless
Services shall negotiate in good faith to implement the provision in a mutually
satisfactory manner. The phrase "reasonable best efforts" as used herein shall
not be construed to require the incurrence of any non-routine or unreasonable
expense or liability or the waiver of any right.

                                   ARTICLE VII
                                  MISCELLANEOUS

      7.1   EFFECT IF DISPOSITION DOES NOT OCCUR. If the Close of the
Disposition Date does not occur, then all actions and events that are, under
this Agreement, to be taken or occur effective immediately prior to or as of the
Close of the Disposition Date, or Immediately after the Disposition Date, or
otherwise in connection with the Separation Transactions, shall not be taken or
occur except to the extent specifically agreed by Wireless Services and AT&T.

      7.2   RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be deemed
or construed by the parties or any third party as creating the relationship of
principal and agent, partnership or joint venture between the parties, it being
understood and agreed that no provision contained herein, and no act of the
parties, shall be deemed to create any relationship between the parties other
than the relationship set forth herein.

      7.3   AFFILIATES. Each of AT&T and Wireless Services shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth in this Agreement to be performed by an AT&T Entity or a
Wireless Services Entity, respectively.

      7.4   INCORPORATION OF SEPARATION AND DISTRIBUTION AGREEMENT PROVISIONS.
The following provisions of the Separation and Distribution Agreement are hereby
incorporated herein by reference, and unless otherwise expressly specified
herein, such provisions shall apply as if fully set forth herein (references in
this Section 7.4 to an "Article" or "Section" shall mean Articles or Sections of
the Separation and Distribution Agreement, and, except as expressly set forth
below, references in the material incorporated herein by reference shall be
references to the Separation and Distribution Agreement): Article VI (relating
to Mutual Releases and Indemnification); Article VIII (relating to Exchange of
Information and Confidentiality); Article IX (relating to Further Assurances and
Additional Covenants); Article X (relating to Termination); and Article XI
(relating to Miscellaneous).

      7.5   GOVERNING LAW. To the extent not preempted by applicable federal
law, this Agreement shall be governed by, construed and interpreted in
accordance with the laws of the State of New York, irrespective of the choice of
laws principles of the State of New York as to all matters, including matters of
validity, construction, effect, performance and remedies.

      7.6   REFERENCES. Except as provided in Section 7.4, all references to
Sections, Articles or Schedules contained herein mean Sections, Articles or
Schedules of or to this Agreement, as the case may be, unless otherwise stated.

                                      -34-
<PAGE>   40
      IN WITNESS WHEREOF, the parties have caused this Employee Benefits
Agreement to be duly executed as of the day and year first above written.

                                    AT&T CORP.

                                    By:  /s/ Miriam Graddick
                                       ---------------------------------
                                    Name:  Miriam Graddick
                                    Title: Executive Vice President --
                                           Human Resources

                                    AT&T WIRELESS SERVICES, INC.

                                    By:  /s/ Joseph McCabe Jr.
                                       ---------------------------------
                                    Name:  Joseph McCabe Jr.
                                    Title: Executive Vice President and
                                           Chief Financial Officer

                                      -35-<PAGE>   1
                                                                    EXHIBIT 10.8

                          REGISTRATION RIGHTS AGREEMENT

            REGISTRATION RIGHTS AGREEMENT, dated as of June 4, 2001, by and
among AT&T Corp, a New York corporation ("AT&T"), and AT&T Wireless Services,
Inc., a Delaware corporation ("Wireless").

            WHEREAS, the Board of Directors of AT&T has approved and declared
advisable the separation of the Wireless Group (as defined in AT&T's amended and
restated certificate of incorporation (the "AT&T Charter")) from AT&T (the
"Separation");

            WHEREAS, to effect the Separation, all the then issued and
outstanding shares of AT&T Wireless Group Common Stock will be redeemed in
exchange for shares of common stock of Wireless ("Wireless Common Stock") in
accordance with the AT&T Charter, and a portion of AT&T's remaining interest in
Wireless will be distributed pro rata (the "Distribution") to holders of shares
of AT&T's Common Stock, par value $1.00 per share;

            WHEREAS, following the Distribution, AT&T will retain a number of
shares of Wireless Common Stock equal to $3 billion divided by the closing share
price of shares of AT&T Wireless Group tracking stock on the New York Stock
Exchange under the symbol "AWE" on the record date for determining holders of
AT&T common stock entitled to receive the Distribution (without giving effect to
any extended-hours trading) (the "Shares");

            WHEREAS, in connection with the Separation and Distribution,
Wireless has agreed to grant certain registration rights to AT&T in respect of
the Shares, on the terms and subject to the conditions set forth herein;

            NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:

1.    Definitions.  As used herein, the following terms shall have the
following meanings.

            "Affiliate" means, as to any Person, any other Person directly or
indirectly, through one or more intermediaries, controlling, controlled by, or
under common control with such Person; provided, the term "control," as used in
this definition, shall mean with respect to any Person, the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of the controlled entity (whether through ownership of voting
securities, by contract or otherwise).

            "Convertible Securities" shall mean any securities issued or
issuable by AT&T which by their terms are convertible or exchangeable into, or
exercisable for, Registrable Securities.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
<PAGE>   2
            "Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a limited liability company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.

            "Registrable Securities" means (i) any Shares, and (ii) any
securities of Wireless or of any Person that is an Affiliate of Wireless after
the Separation issued or issuable directly or indirectly with respect to the
securities referred to in clause (i) above by way of dividend or distribution,
recapitalization, merger, consolidation, exchange or other reorganization. As to
any particular securities, such securities shall cease to be Registrable
Securities as soon as such securities (i) have been effectively registered under
the Securities Act, (ii) have been transferred in compliance with Rule 144 under
circumstances in which any legend relating to restrictions on transfer under the
Securities Act is removed, (iii) are transferable pursuant to paragraph (k) of
Rule 144, provided that the date is later than January 31, 2002, (iv) have
otherwise been transferred and a new security or securities not subject to
transfer restrictions under the Securities Act has been delivered upon such
transfer by or on behalf of AT&T, (v) would be transferable by AT&T under Rule
144 or any successor rule in 30 days or less given Wireless's trading volume at
the time and the aggregate amount of Registrable Securities of such class held
by AT&T, provided that the date is later than January 31, 2002, or (vi) such
securities shall have ceased to be outstanding.

            "Registration Expenses" means all out-of-pocket expenses incident to
any Demand Registration, including, without limitation incident to Wireless'
performance of or compliance with this Agreement, and including, without
limitation, all registration and filing fees, third party fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger and
delivery expenses, and fees and disbursements of counsel for Wireless and all
independent certified public accountants and underwriters.

            "Rule 144" means Rule 144 under the Securities Act (or any similar
rule then in force).

            "SEC" means the Securities and Exchange Commission.

            "Securities Act" means the Securities Act of 1933, as amended.

2.    Demand Registrations.

      (a) Requests for Registration of Registrable Securities. Subject to
      Section 2(b) below, commencing on the date hereof, AT&T may request
      registration, whether underwritten or otherwise, under the Securities Act
      of all or part of the Registrable Securities held by AT&T; on Form S-1 or
      any similar long-form registration (collectively, "Long-Form
      Registrations") or, if available, on Form S-2 or S-3 or any similar
      short-form registration ("Short-Form Registrations"). Each request for a
      Long-Form Registration or Short-Form Registration shall specify the
      approximate number of Registrable Securities requested to be registered
      and the anticipated price range for such offering. All registrations
      requested pursuant to this Section 2(a) are referred to herein as "Demand
      Registrations."

                                       2
<PAGE>   3
      (b)   Demand Registrations.

            (i) Number. AT&T shall be entitled to request up to two Demand
          Registrations with respect to the Registrable Securities held by AT&T.
          A registration will not count as a Demand Registration hereunder until
          such registration has become effective and unless AT&T is able to
          register at least 50% of the Registrable Securities requested to be
          included in such registration. AT&T may withdraw any request for
          registration prior to the time the registration statement is declared
          effective and in such event that registration will not be counted as a
          Demand Registration for purposes hereof. In addition, the registration
          of Shares contemplated by the Registration Statement filed with the
          SEC on May 8, 2001 (the "Debt for Equity Registration") shall not be
          included in determining the number of permitted registrations
          hereunder so long as such registration is effected substantially as
          contemplated by the Debt for Equity Registration Statement (including
          any amendment thereto) that has been filed as of the date of this
          Agreement. Wireless agrees to cooperate in connection with the
          transactions contemplated by the Debt for Equity Registration and to
          use all reasonable efforts to permit the issuance and sale of the
          securities registered thereunder.

            (ii) Suspension Period. With respect to any Demand Registration,
          Wireless shall be entitled not to file a registration statement, or if
          a registration has been filed, to cause such registration statement to
          be withdrawn and/or the effectiveness of such registration statement
          terminated, for a period not to exceed 90 days in any three-month
          period or for three periods not to exceed an aggregate of 150 days in
          any twelve-month period (each, a "Suspension Period") for valid
          business reasons, to be determined by Wireless in its sole reasonable
          judgment, including, without limitation, the acquisition or
          divestiture of assets, financings, public filings with the SEC,
          pending corporate developments and similar events. Wireless shall
          provide notice of any Suspension Period to AT&T. The foregoing
          notwithstanding, with respect to one Demand Registration only, if AT&T
          makes a request for such Demand Registration during the period from
          October 15, 2001 through January 15, 2002, Wireless shall not have the
          right under this paragraph (ii) to invoke a Suspension Period and
          accordingly to withdraw or terminate such registration or to not file
          such registration statement during the period from and including
          November 1, 2001 through and including January 31, 2002 (the
          "No-Black-Out Period") and, with respect to any Registrable Securities
          subject to such Demand Registration made during such period, clauses
          (iii) and (v) of the definition of Registrable Securities shall not
          apply.

            (iii) Registration Expenses.  AT&T shall pay, reimburse and
          indemnify Wireless for all Registration Expenses.

      (c) Short-Form Registrations. Demand Registrations will be Short-Form
      Registrations whenever Wireless is permitted to use any applicable short
      form. After Wireless has become subject to the reporting requirements of
      the Exchange Act, Wireless will use all reasonable efforts to make
      Short-Form Registration available for the sale of Registrable Securities.

                                       3
<PAGE>   4
      (d) Priority on Demand Registrations. Wireless will not include in any
      Long-Form Registration or Short-Form Registration regarding Registrable
      Securities any securities that are not Registrable Securities without the
      prior written consent of AT&T. If a Long-Form Registration or a Short-Form
      Registration regarding Registrable Securities is an underwritten offering
      and the lead managing underwriter advises Wireless in writing (with a copy
      to AT&T) that, in the opinion of such lead managing underwriter, the
      number or class of Registrable Securities and, if permitted hereunder,
      other securities requested to be included in such offering, exceeds the
      number or class of Registrable Securities and other securities, if any,
      which can be sold therein without adversely affecting the marketability of
      the offering, Wireless will exclude from such registration (i) first, any
      securities that are not Registrable Securities and (ii) second,
      Registrable Securities.

      (e) Selection of Underwriters. In the case of a Demand Registration for an
      underwritten offering made pursuant to the terms and conditions of this
      Agreement by AT&T, AT&T shall have the right to select the lead managing
      underwriter for such offering, subject to Wireless's consent, which shall
      not be unreasonably withheld.

      (f) 415 Registrations. If required in connection with the issuance or sale
      of any Convertible Securities, AT&T will be entitled to request a
      registration pursuant to Rule 415 under the Securities Act, to the extent
      required in connection with such Convertible Securities (a "415
      Registration"). As promptly as practicable and in any event within 30 days
      after Wireless receives written notice of a request for a 415
      Registration, Wireless shall file with the SEC a registration statement
      under the Securities Act for the 415 Registration. Wireless shall use all
      reasonable efforts to cause the 415 Registration to be declared effective
      under the Securities Act as soon as practical after filing and, once
      effective, Wireless shall (subject to the provisions of clause (ii) below)
      cause such 415 Registration to remain effective for such time period as is
      specified in such request, but for no time period longer than the period
      ending on the earlier of (i) the three month and one day anniversary of
      the Separation, or (ii) the date on which all Registrable Securities have
      been sold pursuant to the 415 Registration.

3.    Holdback Agreements.

      (a) Wireless agrees (i) not to effect any public sale or distribution of
      its equity securities, or any securities convertible into or exchangeable
      or exercisable for such securities, during the seven days prior to and
      during the 90-day period beginning on the effective date of any
      underwritten Demand Registration (including any 415 Registration relating
      to Convertible Securities) (except as part of such underwritten
      registration or pursuant to registrations on Forms S-4 or S-8 or any
      successor forms); and (ii) except with the prior written consent of AT&T,
      such consent not to be withheld unless AT&T intends to, or in good faith
      believes that it is reasonably likely to, request a Demand Registration
      that could reasonably be expected to be in registration or become
      effective during the No-Black-Out Period, to not file during the
      No-Black-Out Period any registration statement (except as part of a Demand
      Registration or pursuant to registrations on Forms S-4 or S-8 or any
      successor forms) relating to the public sale or distribution of its equity
      securities, or any securities convertible into or exchangeable or

                                       4
<PAGE>   5
      exercisable for such securities, and to withdraw and terminate any such
      registration statement as may have been filed or be in effect as of
      November 1, 2001 with respect to which the securities registered
      thereunder have not been sold.

4. Registration Procedures. In connection with the Debt for Equity Registration
and whenever a Demand Registration has been requested pursuant to this
Agreement, Wireless will use all reasonable efforts to effect the registration
and the sale of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto Wireless will as
expeditiously as possible:

      (a) prepare and file with the SEC a registration statement with respect to
      such Registrable Securities as promptly as practicable and in any event
      within 30 days of the request and use all reasonable efforts to cause such
      registration statement to become effective;

      (b) prepare and file with the SEC such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as
      may be necessary to keep such registration statement effective for a
      period of not less than 30 days (or such other period as may be applicable
      pursuant to this Agreement in accordance with any 415 Registration) and
      comply with the provisions of the Securities Act with respect to the
      disposition of all securities covered by such registration statement
      during such period in accordance with the intended methods of disposition
      by AT&T set forth in such registration statement;

      (c) furnish to AT&T such number of copies of such registration statement,
      each amendment and supplement thereto, the prospectus included in such
      registration statement (including each preliminary prospectus) and such
      other documents as AT&T may request in order to facilitate the disposition
      of the Registrable Securities owned by AT&T;

      (d) use all reasonable efforts to register or qualify such Registrable
      Securities under such other securities or blue sky laws of such
      jurisdictions as AT&T reasonably requests and do any and all other acts
      and things which may be reasonably necessary or advisable to enable AT&T
      to consummate the disposition in such jurisdictions of the Registrable
      Securities owned by AT&T; provided, that Wireless will not be required to
      (i) qualify generally to do business in any jurisdiction where it would
      not otherwise be required to qualify but for this subsection, (ii) subject
      itself to taxation in any such jurisdiction, or (iii) consent to general
      service of process (i.e., service of process which is not limited solely
      to securities law violations) in any such jurisdiction;

      (e) notify AT&T at any time when a prospectus relating to Registrable
      Securities is required to be delivered under the Securities Act, of the
      happening of any event as a result of which the prospectus included in
      such registration statement contains an untrue statement of a material
      fact or omits any material fact necessary to make the statements therein
      not misleading, and, at the request of AT&T, Wireless will promptly
      prepare a supplement or amendment to such prospectus so that, as
      thereafter delivered to the purchasers of such Registrable Securities,
      such prospectus will not contain an untrue

                                       5
<PAGE>   6
      statement of a material fact or omit to state any material fact necessary
      to make the statements therein not misleading;

      (f) notify AT&T (A) when the prospectus or any prospectus supplement or
      post-effective amendment included in such registration statement has been
      filed, and, with respect to any registration statement or any
      post-effective amendment thereto, when the same has become effective, (B)
      of any request by the SEC for amendments to such registration statement or
      amendments or supplements to the prospectus or for additional information
      relating thereto, and (C) of the issuance by the SEC of any stop order
      suspending the effectiveness of the registration statement under the
      Securities Act or of the suspension by any state securities commission of
      the qualification of such Registrable Securities, as applicable, for
      offering or sale in any jurisdiction, or the initiation of any proceeding
      for any of the preceding purposes;

      (g) cause all such Registrable Securities to be listed on each securities
      exchange on which similar securities issued by Wireless are then listed;

      (h) provide a transfer agent and registrar for all such Registrable
      Securities not later than the effective date of such registration
      statement;

      (i) enter into such customary agreements (including underwriting
      agreements containing such representations and warranties by Wireless and
      such other terms, including indemnity, as are customarily contained in
      underwriting agreements entered into by AT&T with respect to underwritten
      offerings of AT&T securities of this type) and take all such other actions
      as the underwriters, if any, reasonably request in order to expedite or
      facilitate the disposition of such Registrable Securities;

      (j) make available for inspection by AT&T, any underwriter participating
      in any disposition pursuant to such registration statement and any
      attorney, accountant or other agent retained by AT&T or any underwriter,
      all financial and other records, pertinent corporate documents and
      properties of Wireless, and cause the managers, officers, members,
      employees and independent accountants of Wireless to supply all
      information reasonably requested by AT&T, any underwriter, attorney,
      accountant or agent in connection with such registration statement;

      (k) otherwise use all reasonable efforts to comply with all applicable
      rules and regulations of the SEC, and make available to its security
      holders, as soon as reasonably practicable, an earnings statement covering
      the period of at least twelve months beginning with the first day of the
      first full calendar quarter of Wireless after the effective date of the
      registration statement, which earnings statement shall satisfy the
      provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
      thereunder;

      (l) in the event of the issuance of any stop order suspending the
      effectiveness of a registration statement, or of any order suspending or
      preventing the use of any related prospectus or suspending the
      qualification of any securities included in such registration statement
      for sale in any jurisdiction, Wireless will use all reasonable efforts
      promptly to obtain the withdrawal of such order;

                                       6
<PAGE>   7
      (m) use all reasonable efforts to cause such Registrable Securities
      covered by such registration statement to be registered with or approved
      by such other governmental agencies or authorities as may be necessary to
      enable AT&T to consummate the disposition of such Registrable Securities;

      (n) obtain a "cold comfort" letter from the independent public accountants
      of Wireless and opinions of counsel to Wireless in each case in customary
      form and covering such matters of the type customarily covered by "cold
      comfort" letters and opinions as AT&T reasonably requests; and

      (o)   otherwise facilitate such registration and related offering.

5.    Indemnification.

      (a) Wireless agrees to indemnify (i) AT&T, (ii) AT&T's officers,
      directors, agents, and representatives, and (iii) each Person who controls
      (within the meaning of the Securities Act) AT&T against all losses,
      claims, damages, liabilities, and expenses arising out of or based upon
      any untrue or alleged untrue statement of material fact contained in any
      registration statement, prospectus, or preliminary prospectus or any
      amendment thereof or supplement thereto or any omission or alleged
      omission of a material fact required to be stated therein or necessary to
      make the statements therein not misleading, and shall reimburse AT&T and
      such officers, directors, agents, and representatives, or controlling
      Person for any legal or other expenses reasonably incurred by AT&T and
      such officers, directors, agents, and representatives, or controlling
      Person in connection with the investigation or defense of such loss,
      claim, damage, liability or expense, except insofar as the same are caused
      by or contained in any information furnished in writing to Wireless by
      AT&T expressly for use therein or by AT&T's failure to deliver a copy of
      the registration statement or prospectus or any amendments or supplements
      thereto after Wireless has furnished AT&T with a sufficient number of
      copies of the same. In connection with an underwritten offering, Wireless
      will indemnify such underwriters, their officers, partners and directors,
      and each Person who controls such underwriters (within the meaning of the
      Securities Act) to the same extent as provided above with respect to the
      indemnification of AT&T.

      (b) AT&T will furnish to Wireless in writing such information as Wireless
      reasonably requests for use in connection with any registration statement
      or prospectus and will indemnify Wireless in connection with any
      registration of Registrable Securities, and its officers, directors,
      agents, and representatives and each Person who controls Wireless against
      any losses, claims, damages, liabilities and expenses resulting from any
      untrue or alleged untrue statement of material fact contained in such
      registration statement, prospectus or preliminary prospectus or any
      amendment thereof or supplement thereto or any omission or alleged
      omission of a material fact required to be stated therein or necessary to
      make the statements therein not misleading, but only to the extent that
      such untrue statement or omission is contained in any information or
      affidavit so furnished in writing by AT&T.

                                       7
<PAGE>   8
      (c) Any Person entitled to indemnification hereunder will (i) give prompt
      written notice to the indemnifying party of any claim with respect to
      which it seeks indemnification and (ii) unless in such indemnified party's
      reasonable judgment a conflict of interest between such indemnified and
      indemnifying parties may exist with respect to such claim, permit such
      indemnifying party to assume the defense of such claim with counsel
      reasonably satisfactory to the indemnified party. If such defense is
      assumed, the indemnifying party will not be subject to any liability for
      any settlement made by the indemnified party without its consent (but such
      consent will not be unreasonably withheld). An indemnifying party who is
      not entitled to, or elects not to, assume the defense of a claim will not
      be obligated to pay the fees and expenses of more than one counsel for all
      parties indemnified by such indemnifying party with respect to such claim,
      unless in the reasonable judgment of any indemnified party a conflict of
      interest may exist between such indemnified party and any other of such
      indemnified parties with respect to such claim.

      (d) The indemnification provided for under this Agreement will remain in
      full force and effect regardless of any investigation made by or on behalf
      of the indemnified party or any officers, directors, agents, and
      representatives, or controlling Person of such indemnified party and will
      survive the transfer of securities. Wireless, to the extent so liable,
      also agrees to make such provisions, as are reasonably requested by any
      indemnified party, for contribution to such party in the event the
      indemnification provided by Wireless pursuant to the terms and conditions
      of this Agreement is unavailable for any reason.

6. Rule 144 Reporting. With a view to making available to AT&T the benefits of
certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, Wireless agrees to
use all reasonable efforts to:

      (a) make and keep current public information available, within the meaning
      of Rule 144 or any similar or analogous rule promulgated under the
      Securities Act, at all times after it has become subject to the reporting
      requirements of the Exchange Act;

      (b) file with the SEC, in a timely manner, all reports and other documents
      required under the Securities Act and the Exchange Act (after Wireless has
      become subject to such reporting requirements); and

      (c) so long as any party hereto owns any Registrable Securities, furnish
      to such Person forthwith upon request a written statement as to the
      compliance by Wireless with the reporting requirements of said Rule 144
      (at any time commencing 90 days after the effective date of the first
      registration filed by Wireless for an offering of its securities to the
      general public), the Securities Act and the Exchange Act (at any time
      after it has become subject to such reporting requirements); a copy of its
      most recent annual or quarterly report; and such other reports and
      documents as such Person may reasonably request in availing itself of any
      rule or regulation of the SEC allowing it to sell any such securities
      without registration.

                                       8
<PAGE>   9
7. Notices. All notices or other communications under this Agreement shall be in
writing and shall be deemed to be duly given as of the date delivered, mailed or
transmitted, and shall be effective upon receipt, if delivered personally,
mailed by registered or certified mail (postage prepaid, return receipt
requested) or delivered by a nationally recognized courier service to the
parties at the following address or sent by electronic transmission to the
telecopier numbers specified below:

            If to AT&T, to:            AT&T Corp.
                                       295 North Maple Drive
                                       Basking Ridge, NJ  07920
                                       Attn:  Vice President-Law and
                                       Corporate Secretary
                                       Telecopier: (908) 221-6618

            If to Wireless to:         AT&T Wireless Services, Inc.
                                       7277 164th Avenue NE, Building 1
                                       Redmond, Washington 98052
                                       Attn:  General Counsel
                                       Telecopier: (425) 580-8333

Any party may, by notice to the other parties, change the address to which such
notices are to be given.

8. Debt for Equity Registration Exchange Agreement. Wireless agrees that it
will, promptly upon the request of AT&T, execute the Exchange Agreement and, as
and to the extent provided for therein, become a party thereto. The term
"Exchange Agreement" means an Exchange Agreement, between AT&T and one or more
purchasers of Shares from AT&T in connection with the Debt for Equity
Registration, substantially in the form provided to Wireless and to the Internal
Revenue Service prior to the date hereof, with such changes as do not affect
Wireless or such changes as do affect Wireless as to which Wireless consents,
such consent not to be withheld unreasonably.

9.    Miscellaneous.

            (a) Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.

                                       9
<PAGE>   10
            (b) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the parties hereto.

            (c) Successors and Assigns. Neither the rights nor the obligations
of any party may be assigned or delegated without the prior written consent of
the other party hereto; provided that, the foregoing notwithstanding, whether or
not any express assignment has been made, the provisions of this Agreement which
are for the benefit of AT&T are for the benefit of, and enforceable by AT&T on
behalf of, any subsequent holder of Registrable Securities that is at such time
a wholly-owned direct or indirect subsidiary of AT&T.

            (d) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

            (e) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.

            (f)   Descriptive Headings.  The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.

            (g) GOVERNING LAW. ALL ISSUES AND QUESTIONS CONCERNING THE
APPLICATION, CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER
JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF DELAWARE.

                                  * * * * *

                                       10
<PAGE>   11
            IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement as of the date first above written.

                                    AT&T Corp.

                                    By: /s/ Robert S. Feit
                                       -----------------------------------------
                                          Name:  Robert S. Feit
                                          Title: General Attorney and
                                                 Assistant Secretary

                                    AT&T Wireless Services, Inc.

                                    By: /s/ Gregory P. Landis
                                       -----------------------------------------
                                          Name:  Gregory P. Landis
                                          Title: Senior Vice President and
                                                 Secretary

               [Signature Page to Registration Rights Agreement]

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