Document:

ex10e.htm

    Exhibit
10-e

    

    

    

    

    

    

    
      

       

      SENIOR
MANAGEMENT

      DEFERRED
COMPENSATION PLAN

      OF
1988

    

    (4 Year
Units)

    

    

    

    

    

    Effective
For Units of Participation

    Having A
Unit Start Date Of

    January
1, 1988 Or Later And

    Prior To
January 1, 1991

    

    

    

    

    

    

    

    

    

    

    Effective:
January 1, 1988

    As
amended through April 1, 2002

    

    

     

    
      
        
           

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      

       

      SENIOR
MANAGEMENT

      
        DEFERRED
COMPENSATION PLAN OF 1988

         

      

    

    
      	
              Section
      1

            	
              Statement of
      Purpose.  The purpose of the Senior Management Deferred
      Compensation Plan of 1988 is to provide retirement, death, or
      termination-of-employment benefits to a select group of management
      employees consisting of Eligible Employees of SBC Communications Inc. (the
      “Company”) and its Subsidiaries (“Participating
    Companies”).

            

    

    

    
      	
              Section
      2

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

            

    

    

    1.           Administrative
Committee.  “Administrative Committee” means a committee of three or
more members, at least one of whom is a Senior Manager, who shall be designated
by the Vice President-Human Resources to administer the Plan pursuant to Section
3.

    

    2.           Agreement.  “Agreement”
means the written agreement entitled “Senior Management Deferred Compensation
Plan of 1988 Agreement” (substantially in the form attached to this Plan) that
shall be entered into by the Employer and a Participant with respect to each
Unit of Participation to carry out the Plan with respect to such
Participant.

    

    3.           Annualized
Total Unit Deferral Amount.  The “Annualized Total Unit Deferral
Amount” means the Total Unit Deferral Amount divided by four.

    

    4.         Base
Salary.  “Base Salary” means the Participant's annual base salary
before reduction pursuant to this Plan or any plan of the Employer whereby
compensation is deferred, including but not limited to a plan whereby
compensation is deferred in accordance with Section 401(k) of the Internal
Revenue Code.

    

    5.           Beneficiary.  “Beneficiary”
means the person or persons designated as such in accordance with Section
9.

    

    6.           Board.  “Board”
means the Board of Directors of SBC Communications Inc.

    

    7.           Compensation.  “Compensation”
means the Participant's monthly Base Salary plus any other compensation that is
normally matched in the SBC Communications Inc. Savings Plan for Salaried
Employees before reduction for compensation deferred pursuant to this Plan or
any plan of the Employer whereby compensation is deferred, including but not
limited to a plan whereby compensation is deferred in accordance with Section
401(k) of the Internal Revenue Code.

     

    8.           Declared
Rate.  “Declared Rate” means with respect to any Plan Year the
interest rate which will be credited during such Plan Year on a Participant's
Deferred Compensation Accounts for Units of Participation which have not yet
commenced benefit payments.  The Declared Rate for each Plan Year will
be determined by the Administrative Committee, in its complete and sole
discretion, and will be announced on or before January 1 of the applicable Plan
Year; provided that in no event will the Declared Rate for any Plan Year be less
than the Moody's Corporate Bond Yield Average-Monthly Average Corporates as
published by Moody's Investor's Service, Inc. (or any successor thereto) for the
month of September before the Plan Year in question, or, if such yield is no
longer published, a substantially similar average selected by the Administrative
Committee.

    

    9.           Deferral
Amount.  “Deferral Amount” means an amount of Base Salary deferred
with respect to a Unit of Participation under this Plan.

    

    10.           Deferred
Compensation Account.  “Deferred Compensation Account” means the
account maintained on the books of account of the Employer for each Participant
for each Unit of Participation pursuant to Section 5.1.

    

    11.           Disability.  “Disability”
means a disability as defined in the SBC Communications Inc. Sickness and
Accident Disability Benefit Plan or the SBC Communications Inc. Senior
Management Long Term Disability Plan covering the Participant, as
applicable.

    

    12.           Intentionally
Omitted.

    

    13.           Intentionally
Omitted.

    

    14.           Intentionally
Omitted.

    

    15.           Early
Retirement.  “Early Retirement” means the termination of a
Participant's employment with Employer for reasons other than death prior to
Normal Retirement and on or after the date Participant attains age
55.

    

    16.           Election
Form.  The “Election Form” means an Eligible Employee's written
election to participate in the Plan with respect to each Unit of Participation
in accordance with Section 4.

    

    17.           Eligible
Employee.  “Eligible Employee” means an Employee of the Employer who
(a) is in active service, (b) is a Senior Manager or has an employment status
which has been approved by the Board or its Chairman to be eligible to
participate in this Plan, and (c) who continuously maintains the employment
status upon which eligibility to participate in this Plan was
based.

    

    18.           Employee.  ”Employee”
means any person employed by the Employer on a regular full-time salaried
basis.

    

    19.           Employer.  “Employer”
means SBC Communications Inc. or any of its Subsidiaries.

    

    20.           Normal
Retirement.  “Normal Retirement” means attainment of age 65 during a
Participant's employment with Employer irrespective of whether there is a
termination of Participant's employment with Employer.

    

    21.           Participant.  “Participant”
means an Employee participating in the Plan in accordance with the provisions of
Section 4.

    

    22.           Plan
Year.  “Plan Year” means the calendar year.

    

    23.       Projected
Employer Contribution.  “Projected Employer Contribution” means for
purposes of computing the Pre-Retirement Survivor Benefit with respect to a Unit
of Participation pursuant to Section 6.6(a), the product of (i) the Company
Match Rate Expressed as a Percent* as in effect at the time of the Unit Start
Date, times the Participant's annual Base Salary at the Unit Start Date minus
(a) any Employer matching contribution determined as of the Unit Start Date
associated with said Base Salary at the Unit Start Date which is then being
contributed or is to be contributed to the Salaried Savings Plan and minus (b)
any Employer matching contribution which has previously been allocated to a Unit
of Participation under this or any other Employer deferred compensation plan and
(ii) the number of years in the Unit Deferral Period for the Unit of
Participation.

    

    24.        Rotational
Work Assignment Company (‘RWAC”). shall mean Bell Communications Research, Inc.
(“Bellcore”), formerly the Central Services Organization, Inc., and/or any other
entity with which SBC Communications Inc. or any of its Subsidiaries may enter
into an agreement to provide an employee for a rotational work
assignment.25.      Retirement Benefit
Option.  “Retirement Benefit Option” means with respect to any Unit of
Participation the Retirement Benefit payment option described in Section
6.

    

    25.           Senior
Manager.  “Senior Manager” means an individual employed by Employer in
a position having a Salary Grade of 29 or above or equivalent.

    

    26.           SBC
Communications Inc. Savings Plan for Salaried Employees.  “SBC
Communications Inc. Savings Plan for Salaried Employees” or “Salaried Savings
Plan” means the SBC Communications Inc. Savings Plan for Salaried Employees or
any successor plan to such plan adopted by the Employer. Participants from any
Subsidiary, permitted to participate in this Plan, shall be treated as
participating in the SBC Communications Inc. Savings Plan for Salaried Employees
for purposes of calculating any matching Employer contributions.

    
      	
               
      

            	
              *

            	
              The
      Company Match Rate Expressed as a Percent means the maximum percent of
      salary that can be received as Employer matching contribution under the
      SBC Communications Inc. Savings Plan for Salaried Employees, e.g., a match
      of 66 2/3% of the amount of basic allotment (up to 6%) of salary results
      in a Company Match Rate Expressed as a Percent of .667 x 6% --
      4%.

            

    

    

    27.           Subsidiary.  A
“Subsidiary” of the Company is any corporation, partnership, venture or other
entity in which the Company has, either directly or indirectly, at least a 10%
ownership interest.

    

    28.           Total
Unit Deferral Amount.  “Total Unit Deferral Amount” means the sum of
all amounts of Base Salary deferred during the Unit Deferral Period with respect
to a Unit of Participation, as shown in Exhibit A of Participant's Agreement for
that Unit of Participation.

    

    29.           Unit
Deferral Period.  “Unit Deferral Period” means the number of months
the Participant elects to reduce his Base Salary with respect to a Unit of
Participation, as shown in Exhibit A of Participant's Agreement for that Unit of
Participation. The Unit Deferral Period for a Unit of Participation will
commence on the Unit Start Date and end upon the earliest to occur of the
following: (i) the last day of the forty-eight (48) month period which commenced
with the Unit Start Date, or (ii) when the Participant terminates employment,
terminates the Unit of Participation or ceases to be an Eligible Employee as
described in Section 6.4 of the Plan. In no event shall the Unit Deferral Period
for a Unit of Participation end later than forty-eight (48) months after the
Unit Start Date.

    

    30.           Unit
of Participation.  “Unit of Participation” means a stated Total Unit
Deferral Amount and associated Employer contributions which provide stated
benefits pursuant to Section 6 in accordance with the Participant's Agreement
for that Unit of Participation.

    

    31.           Unit
Start Date.  “Unit Start Date” means the date for commencement of
deferrals shown in Exhibit A of a Participant's Agreement for a given Unit of
Participation. The Unit Start Date will be January 1, unless the Administrative
Committee, in its sole discretion permits a new Participant to elect a Unit
Start Date within 30 days after such Participant first becomes an Eligible
Employee.

    

    
      	
              Section
      3

            	
              Administration
      of the Plan.  The Administrative Committee shall be the sole
      administrator of the Plan and will administer the Plan, interpret,
      construe and apply its provisions in accordance with its terms. The
      Administrative Committee shall further establish, adopt or revise such
      rules and regulations as it may deem necessary or advisable for the
      administration of the Plan. All decisions of the Administrative Committee
      shall be final and binding.

            

    

     

    
      	
              Section
      4

            	
              Participation.

            

    

    

    4.1           Election
to Commence a Unit of Participation.  Any Eligible Employee may elect
to commence deferral of Base Salary with respect to a Unit of Participation
under the Plan by filing a completed Election Form with the Administrative
Committee prior to the beginning of the Unit Start Date. Pursuant to said
Election Form, the Eligible Employee shall elect a Total Unit Deferral Amount
and a Unit Deferral Period to be specified in Exhibit A of Participant's
Agreement with respect to such Unit of Participation.

    

    The
combination of deferrals from all of the Participant's Units of Participation
including the Unit of Participation with respect to which the Participant is
electing to commence deferrals and from Units of Participation under the SBC
Communications Inc. Senior Management Deferred Compensation Plan (“SBC DCP”),
must be at least six percent (6%) of Participant's Base Salary at the Unit Start
Date for the Unit of Participation with respect to which the Participant is
electing to commence deferrals. A Unit of Participation shall require a minimum
Annualized Total Unit Deferral Amount of $1,000. The sum of the Participant's
contributions, if any, to the SBC Communications Inc. Savings Plan for Salaried
Employees plus the Annualized Total Unit Deferral Amounts for all Units of
Participation under this Plan and under the SBC DCP in a given Plan Year may not
exceed thirty percent (30%) of a Participant's Compensation for that Plan
Year.

    

    4.2           Termination
of Election.  A Participant's election to defer Base Salary is
irrevocable upon the filing of his Election Form with the Administrative
Committee, provided, however, that the election may be terminated with respect
to Base Salary not yet paid by mutual agreement in writing between the
Participant and the Administrative Committee. Such termination if approved shall
be effective beginning the first day of the month following the execution of
such mutual agreement.

    

    
      	
              Section
      5

            	
              Deferred
      Compensation.

            

    

    

    5.1           Deferred
Compensation Account.  The Administrative Committee shall establish
and maintain a separate Deferred Compensation Account for each Participant for
each Unit of Participation.  The amount by which a Participant's Base
Salary is reduced each month pursuant to Section 4.1 and the amount of Employer
contribution allocated to the Participant's Units of Participation pursuant to
Section 5.3 with respect to any Unit of Participation shall be credited by the
Employer to the Participant's Deferred Compensation Account for such Unit of
Participation no later than the first day of the following month, and such
Deferred Compensation Account shall be debited by the amount of any payments
made by the Employer to the Participant or the Participant's Beneficiary with
respect to such Unit of Participation pursuant to this Plan.

    

    With
respect to each Unit of Participation, the Deferred Compensation Account of a
Participant shall be deemed to bear interest from the date such Deferred
Compensation Account was established through the date of commencement of benefit
payments at a rate equal to the applicable Declared Rate for the particular Plan
Year on the balance from month-to-month in such Deferred Compensation
Account.  Interest will be credited monthly to the Deferred
Compensation Account at one-twelfth of the annual Declared Rate, compounded
annually.  Following the commencement of benefit payments with respect
to a Unit of Participation, a Participant's Deferred Compensation Account shall
be deemed to bear interest on the balance in such Deferred Compensation Account
from month-to-month at a rate equal to one-twelfth of the average of the annual
Declared Rates for the five (5) Plan Years ending prior to commencement of
benefit payments (or, if the Plan has been in operation for less than five (5)
Plan Years, the average of the Declared Rates for all Plan Years ending prior to
commencement of benefit payments).

    

    5.2           Participant
Deferrals.  The Participant's Total Unit Deferral Amount is deferred
in equal amounts on a monthly basis over the Unit Deferral Period or as
otherwise may be permitted by the Administrative Committee.  The
amount deferred each month with respect to a given Unit of Participation shall
be credited by the Employer to the Participant's Deferred Compensation Account
for that Unit of Participation no later than the first day of the following
month.

    

    The
Participant will be permitted to defer an additional amount equal to all or a
portion of his Short Term Incentive Award. A Participant shall not be permitted
to “defer” into the Plan any monies that are not compensation paid by Employer.
Any additional deferrals by a Participant with respect to a given Unit of
Participation shall not affect Total Unit Deferral Amount and shall not result
in any change in the maximum Employer contribution pursuant to Section 5.3 for
the Plan Year during which the additional deferral is made.  In no
event shall any such additional deferral by a Participant result in any
reduction in the amounts by which the Participant's Base Salary is reduced
pursuant to Exhibit A to the Participant's Agreement with respect to such Unit
of Participation prior to completion of deferral of the Total Unit Deferral
Amount for such Unit

    of
Participation. Participant's election to defer all or a portion of his Short
Term Incentive Award shall be filed with the Administrative Committee (on a form
to be provided by said Committee for such purpose) prior to the beginning of the
fiscal year during which such Award is earned.

    

    Such
additional deferral amount shall be considered a separate part of Participant's
Deferred Compensation Account, shall be subject to the terms thereof except
survivor benefits, and shall be paid out in the same manner as the rest of such
Deferred Compensation Account.

    

    5.3           Employer
Contribution.  Participation in this Plan does not preclude
participation in the SBC Communications Inc. Savings Plan for Salaried
Employees.  For a given Plan Year, the aggregate Employer contribution
to both the SBC Communications Inc. Savings Plan for Salaried Employees and this
Plan on behalf of a Participant will be an amount equal to the Company Match
Rate Expressed as a Percent as in effect during all or portions of that Plan
year times the Participant's Compensation as in effect during all or portions of
that Plan Year which is contributed or deferred for that Plan Year by the
Participant in accordance with each plan, respectively.  Any such
amount of Employer contribution not allocated to the SBC Communications Inc.
Savings Plan for Salaried Employees will be credited to the Participant's
Deferred Compensation Accounts, as applicable.  The amount or percent
of a Participant's Base Salary to be allocated to Basic Allotments in the SBC
Communications Inc. Savings Plan for Salaried Employees shall be specified in
Paragraph 3 of a Participant's Agreement.

    

    5.4           Vesting
of Deferred Compensation Account.  A Participant's interest in his
Deferred Compensation Account shall vest at the same rate and in the same manner
as it would under the SBC Communications Inc. Savings Plan for Salaried
Employees, as in effect from time to time, had both the Deferral Amount and the
Employer contribution to this Plan with respect to that Deferral Amount for any
given Unit of Participation been contributed instead to the SBC Communications
Inc. Savings Plan for Salaried Employees.  For this purpose all years
of service recognized under the SBC Communications Inc. Savings Plan for
Salaried Employees, for purposes of determining a Participants vested interest
under that plan, shall be taken into account in determining the Participant's
vested interest under this Plan.

    

    5.5           Valuation
of Accounts.  The value of a Deferred Compensation Account as of any
date shall equal the amounts theretofore credited to such account plus the
interest on such account credited in accordance with Section 5.1 through the day
preceding such date.

    

    5.6           Statement
of Accounts.  Each Participant will receive annual statements in such
form as the Administrative Committee deems desirable setting forth the balance
standing to the credit of each of the Participant's Deferred Compensation
Accounts.

    

    
      	
              Section
      6

            	
              Retirement
      Benefits.  Section 6 shall apply to all Units of Participation
      under this Plan. The benefits specified in this Section 6 shall be
      provided under the Retirement Benefit
Option.

            

    

    

    6.1           Normal
Retirement.  Upon Normal Retirement, with respect to a Unit of
Participation, the Employer shall pay to the Participant an equal amount each
month for one hundred eighty (180) months, beginning on the first day of the
month next following the date of Normal Retirement, which will amortize over
such one hundred eighty (180) equal monthly payments the sum of (a) the value of
the Deferred Compensation Account for such Unit of Participation as of the date
of commencement of benefit payments, plus (b) the interest that will accrue on
the unpaid balance in such Deferred Compensation Account during such one hundred
eighty (180) month period pursuant to Section 5.1 (“Standard Retirement
Benefit”). Alternatively, a Participant may elect in the Agreement for any Unit
of Participation to receive an alternative retirement benefit in lieu of the
Standard Retirement Benefit (“Alternative Retirement Benefit”) for such Unit of
Participation either in a lump sum payment or in sixty (60) or one hundred
twenty (120) equal monthly payments, with the amount of each monthly payment to
be calculated in accordance with the principle stated in the preceding
sentence.

    

    6.2           Early
Retirement.  Upon Early Retirement, with respect to a Unit of
Participation, the Employer shall pay to the Participant an equal amount each
month for one hundred eighty (180) months, beginning on the first day of the
month next following the date of Early Retirement, which will amortize over such
one hundred eighty (180) equal monthly payments the sum of (a) the value of the
Deferred Compensation Account for such Unit of Participation as of the date of
commencement of benefit payments, plus (b) the interest that will accrue on the
unpaid balance in such Deferred Compensation Account during such one hundred
eighty (180) month period pursuant to Section 5.1 (“Standard Retirement
Benefit”). Alternatively, a Participant may elect in the Agreement for any Unit
of Participation to receive an alternative retirement benefit in lieu of the
Standard Retirement Benefit (“Alternative Retirement Benefit”) for such Unit of
Participation either in a lump sum payment or in sixty (60) or one hundred
twenty (120) equal monthly payments, with the amount of each monthly payment to
be calculated in accordance with the principle stated in the preceding
sentence.  A Participant may further elect in the Agreement for any
Unit of Participation to have the Early Retirement Benefit for such Unit of
Participation commence when he attains age 65.

    

    6.3           Provisions
Relating to Manner and Time of Payments.  If a Participant's Agreement
fails to show an election of a manner of payment of a Normal or Early Retirement
Benefit such Participant will receive the Standard Normal or Early Retirement
Benefit in accordance with Section 6.1 or Section 6.2,
respectively.

    

    In the
event that a final determination shall be made by the Internal Revenue Service
or any court of competent jurisdiction that by reason of Normal or Early
Retirement a Participant has recognized gross income for Federal income tax
purposes in excess of the Standard or Alternative Retirement Benefit actually
paid by the Employer to which such gross income is attributable, the Employer
shall make a lump sum payment to the Participant of the remaining balance of his
Deferred Compensation Accounts for any affected Units of
Participation.  If a benefit is payable to a Participant pursuant to
this paragraph for any Unit of Participation, no other benefits shall thereafter
be payable under this Plan with respect to such Unit of
Participation.

    

    Notwithstanding
any election made by the Participant, the Administrative Committee will pay the
Participant's Standard or Alternative Retirement Benefit in the form of a lump
sum payment if the value of his Deferred Compensation Account for a Unit of
Participation is less than $10,000 when payment of a Normal or Early Retirement
Benefit with respect to the Unit of Participation would otherwise
commence.

    

    6.4           Termination
Benefit.

    

    
      	
               
      

            	
              (a)

            	
              Termination
      of Employment Before Attaining Age 55.  Upon any termination of
      employment of the Participant for reasons other than death or Disability
      before the Participant attains age fifty-five (55), the Company shall pay
      to the Participant, with respect to a Unit of Participation, as
      compensation earned for services rendered prior to his termination of
      service, a lump sum equal to the vested portion of the amounts standing
      credited to his Deferred Compensation Account for such Unit of
      Participation as of the date of such termination of service (“Termination
      Benefit”).

            

    

    

    
      	
               
      

            	
              (b)

            	
              Termination
      of a Unit of Participation.  A Participant may discontinue a
      Unit of Participation while continuing in the service of the Employer.
      Notwithstanding any other provision of the Plan, upon such discontinuance,
      the Participant shall immediately cease to be eligible for any benefits
      other than his Termination Benefit with respect to that Unit of
      Participation except as provided under Section
  8.1.

            

    

    

    No other
benefit shall be payable with regard to such Unit of Participation to either the
Participant or any Beneficiary of such Participant. The Participant shall
continue to be credited with interest on the amounts standing credited to his
Deferred Compensation Accounts as provided under Section 5.1 and to vest in such
amounts as provided under Section 5.4 while he remains in employment with the
Employer until payment of his Termination Benefit. However, no further
Participant deferrals or Employer contributions to this Plan shall be made
pursuant to Sections 5.2 or 5.3 with respect to a Unit of Participation after a
Participant discontinues or terminates such Unit of Participation.

    

    A
Participant shall terminate a Unit of Participation if he terminates his
election to defer Base Salary with the approval of the Administrative Committee
pursuant to Section 4.2.

    

    
      	
               
      

            	
              (c)

            	
              Loss
      of Eligibility. In the event that the Participant ceases to be an Eligible
      Employee by reason of a change to an employment status which is not
      eligible to participate in this Plan, except as provided under Section
      8.1, the Participant shall immediately cease to be eligible for any
      benefits other than a modified Termination Benefit which shall consist of
      a lump sum equal to the vested amounts standing credited to his Deferred
      Compensation Accounts as of the date of such loss of eligibility, provided
      the Participant shall continue to be credited with interest on such
      amounts as provided under Section 5.1 and to vest in such amounts as
      provided under Section 5.4 while he remains in employment with the
      Employer. However, no further Participant deferrals or Employer
      contributions shall be made to this Plan pursuant to Sections 5.2 or 5.3
      subsequent to the date of such loss of eligibility.  Each such
      lump sum Termination Benefit shall be payable upon the Participant's
      termination of employment by the Employer, whether by death, Normal
      Retirement, Early Retirement or any other means. The provisions of this
      subparagraph 6.4(c) shall not apply if the Participant in his new
      employment status is an eligible employee under another similar deferred
      compensation plan of the Employer. In such event the provisions of Section
      8.6 of this Plan shall apply.

            

    

    

    
      	
               
      

            	
              (d)

            	
              No
      Other Benefits Payable.  When a Participant terminates
      employment, terminates a Unit of Participation or ceases to be an Eligible
      Employee under circumstances in which Section 6.4(a), (b) or (c) applies,
      no Survivor Benefit or other benefit shall thereafter be payable under
      this Plan to either the Participant or any Beneficiary of the Participant
      with respect to such Unit of Participation except as provided under
      Section 8.1.

            

    

    

    6.5           Disability.  In
the event that a Participant suffers a Disability, Participant deferrals and
Employer contributions that otherwise would have been credited to the Deferred
Compensation Accounts of the Participant in accordance with Sections 5.2 and 5.3
will continue to be credited to such Deferred Compensation Accounts at the same
time and in the same amounts as they would have been credited if the Participant
had not suffered a Disability for as long as he is eligible to receive monthly
disability benefits equal to 100 percent of his monthly base salary at the time
of his Disability.  At such time as the Participant is not eligible to
receive monthly disability benefits equal to 100 percent of his monthly base
salary at the time of his Disability, Participant deferrals and Employer
contributions that otherwise would have been credited to the Deferred
Compensation Accounts of the Participant in accordance with Section 5.2 and 5.3
shall cease.

    

    If the
Participant recovers from his Disability and returns within sixty (60) days
thereafter to employment with the Employer in an employment status which would
make him eligible to participate in this Plan and prior to the end of the
original Unit Deferral Period, the Participant shall continue or resume making
deferrals, as the case may be, in accordance with Section 5.2 and the Employer
shall continue or resume making contributions, as the case may be, in accordance
with Section 5.3 until the end of the original Unit Deferral
Period.

    

    If the
Participant recovers from his Disability, the Participant shall be treated as
terminating service with the Employer on the date of his recovery, unless within
sixty (60) days thereafter he returns to employment with the Employer in an
employment status which makes him eligible to participate in this
Plan.

    

    If a
Participant's Disability terminates by reason of his death, the rights of his
Beneficiary shall be determined pursuant to Section 6.6 as if the Participant
had not been disabled but rather had been in service on the date of his death
and either died or retired on such date, whichever would be most advantageous to
such Beneficiary.  If a Participant's Disability terminates by reason
of attainment of age 65, the Participant shall upon the attainment of age 65 be
entitled to a Normal Retirement Benefit determined pursuant to Section
6.1.  If a Participant's Disability terminates by reason of the
Participant's election to take Early Retirement under the Plan, the Participant
shall be treated as having an Early Retirement on the date elected by the
Participant and shall be entitled to an Early Retirement Benefit determined
pursuant to Section 6.2.

    6.6           Survivor
Benefits.

    

    
      	
               
      

            	
              (a)

            	
              If
      a Participant dies while in service with the Employer (or while suffering
      from a Disability prior to attaining age 55) prior to eligibility for
      Early Retirement with respect to a Unit of Participation, upon the
      Participant's death the Employer will pay to the Participant's Beneficiary
      with respect to each Unit of Participation an amount per month, as
      specified in paragraph 6 of his Agreement, equal to the greater of (i)
      [(50% of the sum of the Total Unit Deferral Amount plus the Projected
      Employer Contribution for such Unit of Participation) divided by 12] or
      (ii) the balance in the Deferred Compensation Account (excluding any Short
      Term Incentive Award deferred pursuant to Section 5.2 and excluding any
      interest earned on the Short Term Incentive Award) divided by the number
      of months payments are to be made as stated below, plus interest in
      accordance with the interest methodology of Section 6.2. Payments are to
      be made for the greater of one hundred twenty (120) months or the number
      of months from the date of Participant's death until he would have been
      age 65 (“Pre-Retirement Survivor
Benefit”).

            

    

    

    In
addition, the Participant's Beneficiary will receive any Short Term Incentive
Award associated with such Unit of Participation, deferred pursuant to Section
5.2, plus corresponding interest earned on the Short Term Incentive Award, paid
out over the same period as the Pre-Retirement Survivor Benefit and in
accordance with the interest methodology of Section 6.2.

    

    
      	
               
      

            	
              (b)

            	
              If
      a Participant dies while in service after eligibility for Early Retirement
      with respect to a Unit of Participation, but prior to commencement of
      payment of an Early or Normal Retirement Benefit with respect to such Unit
      of Participation, the Employer will pay to the Participant's Beneficiary
      the greater of (i) the benefit that such Participant's Beneficiary would
      have received with respect to such Unit of Participation had the
      Participant retired and commenced to receive an Early Retirement Benefit
      on the day prior to such Participant's death or (ii) a benefit equal to
      the Pre-Retirement Survivor Benefit.  The Administrative
      Committee shall determine which benefit is greater on a present value
      basis using such interest rate as the Administrative Committee may
      determine in its sole discretion.  Payments will commence upon
      the Participant's death, irrespective of when Early Retirement Benefit
      payments would have commenced if the Participant had survived. Such
      payments shall be made in accordance with the method of payment which the
      Participant had elected for payment of his Normal or Early Retirement
      Benefit.

            

    

     

    
      	
               
      

            	
              (c)

            	
              If
      a Participant dies after Early or Normal Retirement but before
      commencement of payment of an Early or Normal Retirement Benefit with
      respect to a Unit of Participation, the Employer will pay to the
      Participant's Beneficiary the installments of any such benefit that such
      Participant's Beneficiary would have received with respect to such Unit of
      Participation had the Participant commenced to receive an Early or Normal
      Retirement Benefit on the day prior to such Participant's
      death.  Payments will commence upon the Participant's death,
      irrespective of when Early or Normal Retirement Benefit payments would
      have commenced if the Participant had survived. Such payments shall be
      made in accordance with the method of payment which the Participant had
      elected for payment of his Normal or Early Retirement
    Benefit.

            

    

    

    
      	
               
      

            	
              (d)

            	
              If
      a Participant dies after the commencement of payment of an Early or Normal
      Retirement Benefit with respect to a Unit of Participation, the Employer
      will pay to the Participant's Beneficiary the remaining installments of
      any such benefit that would have been paid to the Participant had the
      Participant survived.

            

    

    

    
      	
               
      

            	
              (e)

            	
              As
      an additional benefit, if a Participant dies subsequent to eligibility to
      commence payment of a Standard or Alternative Retirement Benefit, and has
      a surviving spouse, the Employer shall pay to the spouse commencing on the
      later of (a) the sixteenth (16th) year after commencement of payment of
      any Standard or Alternative Retirement Benefit or (b) the first of the
      month following the Participant's death, an amount per month for the life
      of the spouse equal to sixty-six and two-thirds percent (66-2/3%) of the
      Standard Retirement Benefit.  If the spouse is more than three
      (3) years younger or older than the Participant on the date of
      Participant's death, the amount of such benefit shall be actuarially
      adjusted based on standard mortality
tables.

            

    

    

    6.7           Termination
with Retirement Eligibility/Involuntary Termination.  Notwithstanding
any other provisions of the Plan, if after November 17, 1995, a Participant’s
employment terminates before the Participant attains age fifty-five, and if such
termination is involuntary (which shall be deemed to include termination by
reason of death), and is for a reason other than for cause (i.e., willful and
gross misconduct on the part of the Participant that is materially and
demonstrably detrimental to the Company or any entity in which the Company has
at least a 50% ownership interest), and is on or after the date Participant is
within five years of being pension eligible, i.e., would be within five years of
being eligible to retire with a service pension under the rules for service
pension eligibility as in effect under the SBC Pension Benefit Plan, and/or is a
Senior Manager within five years of being eligible to retire with an immediate
pension based on the eligibility rules of the SBC Senior Management Supplemental
Retirement Income Plan, whether or not actually a participant in either such
plan, then the provisions of this Section 6.7 shall govern and control with
respect to the distribution of the Plan’s benefits if the benefits offered by
this Section 6.7 are elected.  In such case, the Participant, or the
Participant’s Beneficiary(ies) if the Participant’s employment terminates by
reason of the Participant’s death, may irrevocably elect in writing, in a Waiver
Agreement, as described below, filed with the Company, to waive the Termination
Benefit or the Pre-Retirement Survivor Benefit, as applicable, with respect to
any or all Units of Participation, and in lieu of said Benefit for any such
Unit, receive an “Alternative Termination Benefit”.

    

    Such
Alternative Termination Benefit for a Unit shall be the Unit as described in the
Participant’s Agreement, provided in accordance with and governed in all
respects by the terms of the Plan and said Agreement, except that the Plan and
Agreement shall be applied with respect to such Unit as if the Participant had
remained in employment and retired upon or after attaining age fifty-five,
regardless of Participant’s actual termination date.  For purposes of
applying the Plan and the Agreement, Normal Retirement shall be the
Participant’s sixty-fifth birthday and Early Retirement shall be the date
specified by the Participant as Participant’s Early Retirement date, which date
shall be specified at the time the waiver Agreement, as described below, is
filed with the Company, and which date may be no earlier than Participant’s
fifty-fifth birthday.  In the event of Participant’s death prior to
age fifty-five, the Alternative Termination Benefit for a Unit, whether such
Benefit was elected by the Participant or Participant’s Beneficiary(ies), shall
be determined, as described below, by applying the Plan and Agreement with
respect to such Unit as if the Participant had died upon reaching age
fifty-five.

    

    Accordingly,
notwithstanding any other provisions of the Plan, for purposes of application of
this Section 6.7, in the event a Participant elects an Alternative Termination
Benefit in lieu of the Termination Benefit for a Unit, or a Beneficiary(ies)
elects to receive an Alternative Termination Benefit in lieu of a Pre-Retirement
Survivor Benefit for a Unit, survivor benefits for such Unit shall be determined
as follows:  (a)  If Participant dies on or after the date
specified by Participant as Participant’s Early Retirement date, Participant’s
Beneficiary(ies) shall receive the remaining installments of Participant’s
retirement benefit; or (b)  If Participant dies on or after age
fifty-five but prior to the date specified by Participant as Participant’s Early
Retirement date, Participant’s Beneficiary(ies) will receive survivor benefits
in  accordance with Section 6.6(b), i.e., the provision of the Plan
that would have applied had Participant’s death actually been an in service
death which occurred upon or after attainment of age fifty-five,
or  (c)  If Participant’s death occurs prior to age
fifty-five, Participant’s Beneficiary(ies) will receive at such time as
Participant would have attained age fifty-five, survivor benefits in accordance
with Section 6.6(b), i.e., the provision of the Plan that would have applied had
Participant’s death actually been an in service death which occurred upon
attainment of age fifty-five; and  (d)  Finally, the benefit
described in Section 6.6(e) shall apply commencing on the later of the sixteenth
year after commencement of payments pursuant to the Alternative Termination
Benefit or the first of the month following Participant’s death.

    

    For
purposes of computing the Vested Benefits (as such term is used in rabbi trusts
(“Trusts”) established by the Company for the purpose of providing for the
payment of benefits under the Plan) corresponding to an Alternative Termination
Benefit, for all Trust purposes, including for purposes of determining the Trust
funding level applicable for such Alternative Termination Benefit, the
Participant shall be treated for each such Alternative Termination Benefit Unit
as if continuing in employment until age fifty-five if the Participant dies
before attaining age fifty-five or until the date of Participant’s death if
Participant dies after attaining age fifty-five or until reaching the
Participant’s Early Retirement Date for such Unit as selected by the Participant
if Participant survives until such date, i.e., the Trust funding for any such
Unit and the security afforded Participant or Participant’s Beneficiary(ies)
thereby shall be no different as a result of this Section 6.7 than they would
have been had Participant continued in employment in the absence of this Section
6.7 and lived until at least age fifty-five.

    

    Waiver of
a Termination Benefit with respect to a Unit by a Participant, or of a
Pre-Retirement Survivor Benefit with respect to a Unit by a Beneficiary(ies),
and in either case, receipt of an Alternative Termination Benefit in lieu
thereof, shall be conditioned upon the agreement in writing by the Participant,
or Participant’s Beneficiary(ies), as applicable, at the time of Participant’s
termination of employment, to provisions substantially as attached.

    

    6.8           Termination
Under EPR.  Notwithstanding any other provisions of the Plan, if a
Participant's employment terminates before the Participant attains age
fifty-five, and if such termination is as an EPR Terminee under the Enhanced
Pension and Retirement Program ("EPR") of the SBC Pension Benefit
Plan-Nonbargained Program ("SBC PBP") or as a Deceased Electing Employee under
EPR, and is on or after the date Participant is within five years of being
pension eligible, i.e., would be within five years of being eligible to retire
with a service pension under the rules for service pension eligibility as in
effect under the SBC PBP, and/or is a Senior Manager within five years of being
eligible to retire with an immediate pension based on the eligibility rules of
the SBC Supplemental Retirement Income Plan, whether or not actually a
participant in either such plan, or a Participant who is age 55 or over
terminates employment under EPR, then the provisions of this Section 6.8 shall
govern and control with respect to the distribution of the Plan’s benefits if
the benefits offered by this Section 6.8 are elected.  In such case,
the Participant, or the Participant’s Beneficiary(ies) if the Participant’s
employment terminates by reason of the Participant’s death, may irrevocably
elect in writing, in an EPR special election form filed with the Company, to
waive the Termination Benefit or the Pre-Retirement Survivor Benefit or the
Early Retirement Benefit, as applicable, with respect to any or all Units of
Participation, and in lieu of said Benefit for any such Unit, receive an “EPR
Alternative Termination Benefit”.

    

    Such an
EPR Alternative Termination Benefit for a Unit shall be the Unit as described in
the Participant’s Agreement, provided in accordance with and governed in all
respects by the terms of the Plan and said Agreement, except that the Plan and
Agreement shall be applied with respect to such Unit, in accordance with
Participant's special EPR election form applicable to such Unit, as if the
Participant had remained in employment and retired upon the Participant's Early
Retirement Date specified in his EPR special election form applicable to such
Unit of Participation, regardless of Participant’s actual termination
date.  For purposes of applying the Plan and the Agreement, Normal
Retirement shall be the Participant’s sixty-fifth birthday and Early Retirement
shall be the date specified by the Participant as Participant’s Early Retirement
date, which date shall be specified in Participant's special EPR election form
filed with the Company, and which date may be no earlier than Participant’s
fifty-fifth birthday.  In the event of Participant’s death prior to
age fifty-five, the EPR Alternative Termination Benefit for a Unit, whether such
Benefit was elected by the Participant or Participant’s Beneficiary(ies), shall
be determined, as described below, by applying the Plan and Agreement with
respect to such Unit as if the Participant had died upon or after reaching age
fifty-five.

    

    Accordingly,
notwithstanding any other provisions of the Plan, for purposes of application of
this Section 6.8, in the event a Participant elects an EPR Alternative
Termination Benefit in lieu of the Termination Benefit or the Early Retirement
Benefit for a Unit, or a Beneficiary(ies) elects to receive an EPR Alternative
Termination Benefit in lieu of a Pre-Retirement Survivor Benefit for a Unit, as
applicable, survivor benefits for such Unit shall be determined as
follows:  (a) If Participant dies on or after the date specified by
Participant as Participant’s Early Retirement date, Participant’s
Beneficiary(ies) shall receive the remaining installments of Participant’s
retirement benefit; or (b) If Participant dies on or after age fifty-five but
prior to the date specified by Participant as Participant’s Early Retirement
date, Participant’s Beneficiary(ies) will receive survivor benefits
in  accordance with Section 6.6(b), i.e., the provision of the Plan
that would have applied had Participant’s death actually been an in service
death which occurred upon or after attainment of age fifty-five,
or  (c) If Participant’s death occurs prior to age fifty-five,
Participant’s Beneficiary(ies) will receive at such time as Participant would
have attained age fifty-five, survivor benefits in accordance with Section
6.6(b), i.e., the provision of the Plan that would have applied had
Participant’s death actually been an in service death which occurred upon
attainment of age fifty-five; and  (d)  Finally, the benefit
described in Section 6.6(e) shall apply commencing on the later of the sixteenth
year after commencement of payments pursuant to the EPR Alternative Termination
Benefit or the first of the month following Participant’s death.

    

    For
purposes of computing the Vested Benefits (as such term is used in rabbi trusts
(“Trusts”) established by the Company for the purpose of providing for the
payment of benefits under the Plan) corresponding to an EPR Alternative
Termination Benefit, for all Trust purposes, including for purposes of
determining the Trust funding level applicable for such EPR Alternative
Termination Benefit, the Participant shall be treated for each such EPR
Alternative Termination Benefit Unit as if continuing in employment until age
fifty-five if the Participant dies before attaining age fifty-five or until the
date of Participant’s death if Participant dies after attaining age fifty-five
or until reaching the Participant’s Early Retirement Date for such Unit as
selected by the Participant if Participant survives until such date, i.e., the
Trust funding for any such Unit and the security afforded Participant or
Participant’s Beneficiary(ies) thereby shall be no different as a result of this
Section 6.8 than they would have been had Participant continued in employment in
the absence of this Section 6.8 and lived until at least age
fifty-five.

    

    
      	
              Section
      7

            	
              Intentionally
      Omitted.

            

    

    

    
      	
              Section
      8

            	
              Payment
      of Benefits.

            

    

    

    8.1           Intentionally
Omitted.

    

    8.2           Small
Benefit.  Notwithstanding any election made by the Participant, the
Administrative Committee will pay any benefit in the form of a lump sum payment
if the lump sum equivalent amount is less than $10,000 when payment of such
benefit would otherwise commence.

    8.3           Emergency
Benefit.  In the event that the Administrative Committee, upon written
petition of the Participant, determines in its sole discretion, that the
Participant has suffered an unforeseeable financial emergency, the Employer
shall pay to the Participant, as soon as practicable following such
determination, the balance of his Deferred Compensation Accounts for one or more
Units of Participation as necessary to meet the emergency (the “Emergency
Benefit”).  For purposes of this Plan, an unforeseeable financial
emergency is an unexpected need for cash arising from an illness, casualty loss,
sudden financial reversal, or other such unforeseeable
occurrence.  Cash needs arising from foreseeable events such as the
purchase of a house or education expenses for children shall not be considered
to be the result of an unforeseeable financial emergency.  Upon
payment of an Emergency Benefit with respect to any Unit of Participation, the
Unit of Participation shall thereupon terminate, and no other benefits shall be
payable under the Plan to either the Participant or any Beneficiary of the
Participant with respect to the Unit of Participation.

    

    8.4           Commencement
of Payments.  Except as otherwise provided in this Plan, commencement
of payments under this Plan shall begin sixty (60) days following the event
which entitles a Participant (or a Beneficiary) to payments under the Plan, or
at such earlier date as may be determined by the Administrative
Committee.

    

    8.5           Withholding;
Unemployment Taxes.  To the extent required by the law in effect at
the time payments are made, the Employer shall withhold from payments made
hereunder the minimum taxes required to be withheld by the federal or any state
or local government.

    

    8.6           Change
in Status.  In the event of a change in the employment status of a
Participant to a status in which he is no longer an Eligible Employee under this
Plan, but is an eligible employee under the Management Deferred Compensation
Plan of 1988 or another similar deferred compensation plan of the Employer, the
Participant and all of his Units of Participation under this Plan shall
automatically be transferred to such other deferred compensation plan for which
he is then an eligible employee, unless otherwise determined by the
Administrative Committee.  In the event of any such transfer, the
provisions of the other deferred compensation plan to which the Participant
transfers shall thereafter determine the rights and benefits of the Participant
with respect to all of his Units of Participation, unless otherwise determined
by the Administrative Committee.  The Employer may, but shall not be
required to, enter into revised Agreements with the Participant to carry out the
provisions of this Section.

    

    8.7           Transfer
to RWAC.   Effective August 1, 1990, if a Participant transfers
to a RWAC prior to completion of a Unit of Participation, deferrals which would
otherwise have been made by the Participant in accordance with Section 5.2 shall
continue to be made by the Employer until the Participant resumes employment
with the Employer but for a maximum period not to exceed 5
years.  Contributions which would have been made by the Employer in
accordance with Section 5.3 shall also continue to be made by the Employer
during such period as Participant contributions are continued in accordance with
the preceding sentence.  Benefits applicable during the period of
employment at a RWAC (not to exceed 5 years) and the methods used for crediting
the Deferred Compensation Account and repaying amounts contributed by the
Employer and reducing the Normal Retirement or Early Retirement Benefit paid to
the Participant or his Beneficiary shall be the same as those applicable
pursuant to Section 6.7 in the case of Disability, i.e., employment at a RWAC
shall be deemed a Disability for the purpose of making determinations pursuant
to Section 6.7.  If the Participant has not resumed employment with
the Employer or has not completed a Unit of Participation as result of Employer
Contributions within 5 years from date of transfer, a Termination Benefit based
on the amounts credited to the Participant's Deferred Compensation Account at
the date of transfer shall be paid upon termination of employment with a RWAC or
the expiration of such 5 year period whichever is earlier.

    

    8.8           Leave
of Absence.  If a Participant absents himself from employment on a
formally granted leave of absence (i.e., the absence is with formal permission
in order to prevent a break in the continuity of the Employee's term of
employment which permission is granted in conformity with the rules of the
Employer which employs the individual, as adopted from time to time), all of the
Participant's Units of Participation shall automatically be frozen upon such
leave of absence, unless otherwise determined by the Administrative Committee.
No Participant deferrals or Employer contributions shall be made during the
leave of absence.  However, during the leave of absence (for a period
not to exceed six (6) months), the Participant shall continue to be credited
with interest on his Deferred Compensation Accounts as provided under Section
5.1 and to vest in such amounts as provided under Section 5.4, and all benefits
shall continue to be payable to the Participant and his Beneficiaries in
accordance with Section 6 hereof, except in the case of a political leave (i.e.,
to campaign for or serve when elected to a political office, to serve if
appointed to public office or for non-candidate employees to participate in
campaigns of candidates for political office).  In the case of such a
political leave, except as provided under Section 8.1, the only benefit payable
if the Participant dies during such leave shall be a Termination Benefit based
on the amounts credited to the Participant's Deferred Compensation Accounts,
which shall be payable to the Participant's Beneficiary.  If the
Participant returns to employment with the Employer in an employment status
which makes him eligible to participate in this Plan within six (6) months from
commencement of the leave of absence, Participant deferrals and Employer
contributions will resume until the end of the original Unit Deferral
Period.  If the Participant has not resumed employment with the
Employer in an employment status which makes him eligible to participate in this
Plan within six (6) months from the commencement of the leave of absence, a
Termination Benefit based on the amounts credited to the Participant's Deferred
Compensation Accounts shall be paid to the Participant.

    

    This
Section 8.8 shall not apply with respect to any period during which a
Participant is suffering from a Disability, and such period of Disability shall
not be included under this Section 8.8 as a portion of a period of leave of
absence.

    

    8.9           Ineligible
Participant.  Notwithstanding any other provisions of this Plan to the
contrary, if any Participant is determined not to be a “management or highly
compensated employee” within the meaning of the Employee Retirement Income
Security Act of 1974, as amended (ERISA) or Regulations thereunder, such
Participant will not be eligible to participate in this Plan and shall receive
an immediate lump sum payment equal to the vested portion of the amounts
standing credited to his Deferred Compensation Accounts.  Upon such
payment no Survivor Benefit or other benefit shall thereafter be payable under
this Plan either to the Participant or any Beneficiary of the Participant,
except as provided under Section 8.1.

    

    Each
Participant shall have the right, at any time, to designate any person or
persons as his Beneficiary or Beneficiaries (both primary as well as contingent)
to whom payment under this Plan shall be made in the event of his death prior to
complete distribution to Participant of the benefits due him under the
Plan.  Each Beneficiary designation shall become effective only when
filed in writing with the Administrative Committee during the Participant's
lifetime on a form prescribed by the Administrative Committee with written
acknowledgment of receipt.

    

    The
filing of a new Beneficiary designation form will cancel all Beneficiary
designations previously filed. The spouse of a married Participant domiciled in
a community property jurisdiction shall join in any designation of Beneficiary
or Beneficiaries other than the spouse.

    

    If a
Participant fails to designate a Beneficiary as provided above, or if all
designated Beneficiaries predecease the Participant or die prior to complete
distribution of the Participant's benefits, then the Administrative Committee
shall direct the distribution of such benefits to the Participant's
estate.

    
      	
              Section
      9

            	
              Beneficiary
      Designation.  Each Participant shall have the right, at any
      time, to designate any person or persons as his Beneficiary or
      Beneficiaries (both primary as well as contingent) to whom payment under
      this Plan shall be made in the event of his death prior to complete
      distribution to Participant of the benefits due him under the
      Plan.  Each Beneficiary designation shall become effective only
      when filed in writing with the Administrative Committee during the
      Participant’s lifetime on a form prescribed by the Administrative
      Committee with written acknowledgment of
  receipt.

            

    

    

    The
filing of a new Beneficiary designation form will cancel all Beneficiary
designations previously filed.  The spouse of a married Participant
domiciled in a community property jurisdiction shall join in any designation of
Beneficiary or Beneficiaries other than the spouse.

    

    If a
Participant fails to designate a Beneficiary as provided above, or if all
designated Beneficiaries predecease the Participant or die prior to complete
distribution of the Participant’s benefits, then the Administrative Committee
shall direct the distribution of such benefits to the Participant’s
estate.

    

    
      	
              Section
      10

            	
              Discontinuation,
      Termination, Amendment.

            

    

    

    10.1           Employer's
Right to Discontinue Offering Units.  The Chairman of the Board may at
any time discontinue offerings of additional Units of Participation with respect
to any or all future Plan Years. Any such discontinuance shall have no affect
upon the deferrals or benefits or the terms or provisions of this Plan as
applicable to any then previously existing Units of Participation.

    

    10.2           Employer's
Right to Terminate Plan.  The Board may at any time terminate the
Plan. Termination of the Plan shall mean that (1) there shall be no further
offerings of additional Units of Participation with respect to any future Plan
Year; (2) Base Salary shall prospectively cease to be deferred with respect to
all Units of Participation for the then Plan Year and thereafter; and (3) all
then currently existing Units of Participation shall be treated as
follows:

    

    The
Participant's Deferred Compensation Accounts shall be 100% vested. The
Participant shall receive or continue to receive all benefits under this Plan at
such time as provided in and pursuant to the terms and conditions of his
Agreement(s) and as described in this Plan, provided however, any benefits
payable under a Unit of Participation that is not completed due to a termination
of the Plan under this Section 10.2 shall be prorated based upon the
number of months Participant made deferrals with respect to such Unit of
Participation divided by the Unit Deferral Period for that Unit of
Participation.

    

    10.3           Amendment.  The
Board may at any time amend the Plan in whole or in part, provided however, that
no amendment, including an amendment to this Section 10, shall be effective,
without the written consent of a Participant, to alter, to the detriment of such
Participant, the benefits described in this Plan as applicable to a Unit of
Participation of the Participant or to decrease amounts standing credited to
such Participant's Deferred Compensation Accounts under the Plan.  For
purposes of this Section 10.3, an alteration to the detriment of a Participant
shall mean a reduction in the period of time over which benefits are payable
under a Participant's Agreement, subject however to the proration provisions of
Section 10.2 hereof, or any change in the form of benefits payable to a
Participant under the Participant's Agreement.  Written notice of any
amendment shall be given to each Participant.

    

    
      	
              Section
      11

            	
              Miscellaneous.

            

    

    

    11.1           Unsecured
General Creditor.  Participants and their Beneficiaries, heirs,
successors, and assigns shall have no legal or equitable rights, interest, or
claims in any property or assets of Employer, nor shall they be Beneficiaries
of, or have any rights, claims, or interests in any life insurance policies,
annuity contracts, or the proceeds therefrom owned or which may be acquired by
Employer (“Policies”).  Any such Policies or other assets of Employer
shall not be held under any trust for the benefit of Participants, their
Beneficiaries, heirs, successors, or assigns, or held in any way as collateral
security for the fulfilling of the obligations of Employer under this
Plan.  Any and all of the Employer's assets and Policies shall be, and
remain, the general, unpledged, unrestricted assets of Employer. Employer's
obligation under the Plan shall be merely that of an unfunded and unsecured
promise of Employer to pay money in the future.

    

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

     

    11.3           Obligations
to Employer.  If a Participant becomes entitled to a distribution of
benefits under the Plan, the Employer may offset against the amount of benefits
otherwise distributable any claim to reimbursement for intentional wrongdoing by
the Participant against the Employer or an affiliate.  Such
determination shall be made by the Administrative Committee.

    

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

    

    11.5           Employment
Not Guaranteed.  Nothing contained in this Plan nor any action taken
hereunder shall be construed as a contract of employment or as giving any
Employee any right to be retained in the employ of the Employer or to serve as a
director.

    

    11.6           Protective
Provisions.  A Participant will cooperate with the Employer by
furnishing any and all information requested by the Employer, in order to
facilitate the payment of benefits hereunder, taking such physical examinations
as the Employer may deem necessary and taking such other relevant action as may
be requested by the Employer.  If a Participant refuses so to
cooperate, the Employer shall have no further obligation to the Participant
under the Plan.  If a Participant commits suicide during the two-year
period beginning on the Unit Start Date for a given Unit of Participation or if
the Participant makes any material misstatement of information or non-disclosure
of medical history, then no benefits will be payable with respect to that Unit
of Participation to such Participant or his Beneficiary, or in the Employer's
sole discretion, benefits may be payable in a reduced amount.

    

    11.7           Gender,
Singular and Plural.  All pronouns and any variations thereof shall be
deemed to refer to the masculine or feminine, as the identity of the person or
persons may require. As the context may require, the singular may be read as the
plural and the plural as the singular.

    

    11.8           Waiver
of Benefits.  No benefit shall be payable under the provisions of this
Plan with respect to any Participant who is or was a member of a group of
employees designated by an Employer as eligible to waive such benefit if such
Participant has waived such benefit under this Plan unless the Employer by which
such Participant is or was last employed has authorized the revocation of such
waiver and such Participant has revoked such waiver.

    

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

    

    11.10                      Applicable
Law.  This Plan shall be governed and construed in accordance with the
laws of the State of Missouri.

    

    11.11                      Validity.  In
the event any provision of this Plan is held invalid, void, or unenforceable,
the same shall not affect, in any respect whatsoever, the validity of any other
provision of this Plan.

    

    11.12                      Notice.  Any
notice or filing required or permitted to be given to the Administrative
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to the principal office of the
Employer, directed to the attention of the Vice President-Human Resources of the
Employer.  Such notice shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date shown on the postmark
on the receipt for registration or certification.

    

    11.13                      Successors
and Assigns.  This Plan shall be binding upon the Company and its
successors and assigns.

    
      
        
           

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    SBC
COMMUNICATIONS INC.

    SENIOR
MANAGEMENT

    DEFERRED
COMPENSATION PLAN OF 1988 AGREEMENT

    19___
UNIT OF PARTICIPATION

    

    THIS
AGREEMENT is made and entered into at St. Louis, Missouri as of the _____ day of
___________________________, 19___, by and between SBC Communications Inc.
(“Company”), and (“Senior Manager”).

    

    WHEREAS,
the Company has adopted a Senior Management Deferred Compensation Plan of 1988
(the “Plan”); and

    

    WHEREAS,
The Senior Manager has been determined to be eligible to participate in the
Plan; and

    

    WHEREAS,
the Plan requires that an agreement be entered into between the Company and the
Senior Manager setting out certain terms and benefits of the Plan as they apply
to the Senior Manager;

    

    NOW,
THEREFORE, the Company and the Senior Manager hereby agree as
follows:

    

    1.           The
Plan is hereby incorporated into and made a part of this Agreement, as though
set forth in full herein. The parties shall be bound by, and have the benefit
of, each and every provision of the Plan, including without limitation the
restrictions on assignability set forth in the Plan.

    

    2.           The
Senior Manager was born on ______________________.

    

    3.           The
Senior Manager's basic allotment percentage in the SBC Communications Inc.
Savings Plan for Salaried Employees (“Savings Plan”) is _____ percent
(___%).  Any subsequent change in this level of participation by the
Senior Manager before this Unit of Participation is completed will void this
Agreement and require that a new Agreement be entered into between the Employer
and the Senior Manager.

    

    4.           The
Senior Manager's Base Salary during a calendar year shall be reduced in
accordance with Exhibit A attached to this Agreement.

    

    5.           The
Senior Manager's Projected Employer Contribution associated with this Unit of
Participation is set forth in Exhibit A attached to this
Agreement.  There shall be no duplication of Employer matching
contributions, i.e., it is understood that any Employer matching contributions
corresponding to Senior Manager deferrals under this Unit of Participation that
are contributed to the Plan will preclude Employer matching contributions to the
Savings Plan with respect to such Senior Manager deferrals, and vice
versa.

    6.           The
amount per month of Pre-Retirement Survivor Benefit in accordance with Section
6.6(a) of the Plan is the greater of (i) $____________, or (ii) the balance in
the Deferred Compensation Account (excluding Short Term Incentive Awards
deferred and interest earned on such awards) divided by the number of months
payments are to be made, plus interest; such amounts shall be payable for the
greater of ten (10) years or the number of years from the date of Participant's
death until he would have been age 65.

    

    7.           The
payment option for Participant's 19___ Unit of Participation shall be the
Retirement Benefit Option in accordance with Section 6.

    

    This
payment option will also apply to payout of any Short Term Incentive Awards
deferred and interest earned on such awards. Such payout is not considered part
of the Standard Retirement Benefit.

    

    
      	
               
      

            	
              RETIREMENT
      BENEFIT OPTION

            

    

    

    (Paragraphs
8 and 9 apply to benefits paid pursuant to the Retirement Benefit
Option.)

    

    8.           Upon
Normal or Early Retirement, the Participant hereby elects: (please initial (a)
or (b))

    

    
      	
               
      

            	
              (a)

            	
              _______

            	
              To
      receive a Standard Retirement Benefit, payable for a period of one hundred
      eighty (180) months.

            

    

    

    
      	
               
      

            	
              (b)

            	
              _______

            	
              To
      receive an Alternative Retirement Benefit to be paid in accordance with
      one of the following payment modes: (please initial one of the
      following)

            

    

    

    
      	
               
      

            	
              (i)

            	
              ______

            	
              In
      a lump sum payment.

            

    

    

    
      	
               
      

            	
              (ii)

            	
              ______

            	
              In
      equal monthly installments for a period of sixty (60)
    months.

            

    

    

    
      	
               
      

            	
              (iii)

            	
              ______

            	
              In
      equal monthly installments for a period of one hundred twenty (120)
      months.

            

    

    

    9.           The
Participant hereby elects to receive any Early Retirement Benefit as follows
(please initial (a) or (b)):

    

    
      	
               
      

            	
              (a)

            	
              _______

            	
              Commencing
      at age 65.

            

    

    

    
      	
               
      

            	
              (b)

            	
              _______

            	
              Commencing
      at Early Retirement.

            

    

    

    10.           Intentionally
Omitted

    11.           Intentionally
Omitted

    

    12.           This
Agreement shall inure to the benefit of, and be binding upon, the Company, its
successors and assigns, and the Senior Manager and his
Beneficiaries.

    

    IN
WITNESS WHEREOF, the parties hereto have signed and entered into this Agreement
on and as of the date first above written.

    

    

    THE
COMPANY:

    By
___________________________________

    Its
Senior Vice President-Human Resources

    

    

    SENIOR
MANAGER                                                              ______________________                 ___________

    Signature                                      Date

    

    

    
      
        
           

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT A

    
 

    SBC
COMMUNICATIONS INC.

    SENIOR
MANAGEMENT

    DEFERRED
COMPENSATION PLAN AGREEMENT

    

     

    
      19__ Unit
of Participation

       

Unit
Start Date:  _____________, 19__

    

    Unit
Deferral Period: 48 Months

    

    Annual Amount

    Year                                                                                
           Deferred                          

    

    1.           Unit
Start Date:

    

    19__                 (commencing
the first day

     of the month of
January)                                                          
             $__________
(1)

    

    2.           19__                                                                                                        __________
(1)

    

    3.           19__                                                                                                        __________
(1)

    

    4.           19__                 (ending
the last day
of                                                                        __________
(1)

     the month of
December)

    

    Total Unit

    Deferral
Amount                                           $_____________

    

    

    Projected Employer
Contribution                                                                               $_____________

    associated with this Unit
of

    Participation

    

    Monthly Pre-Retirement
Survivor                                                                              $_____________

    Benefit associated with this
Unit

    of Participation

    

    _____________________________________________________________________

    
      	
              (1)  

            	
              This
      amount will be deferred in equal amounts on a monthly
    basis.ex10h.htm

    
      Exhibit
10-h

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      

    

    
      AT&T
HEALTH PLAN

    

    
      

    

    
      

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    Effective:  January
1, 1987

    
                 Revisions
Effective:  January 1, 2009

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
 

    
      AT&T
HEALTH PLAN

    

    
      

    

    
      

    

    ARTICLE
1   PURPOSE

    
      The
AT&T Health Plan ("Plan") provides Eligible Employees, certain Retired
Eligible Employees, and each of their Dependents with supplemental medical,
dental, and vision benefits.  

    

    
      

    

    ARTICLE
2   DEFINITIONS

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

    

    
      

    

    2.1 Basic
Plan(s). “Basic Plan(s)” shall mean AT&T’s group managed care medical
(known as the AT&T Medical Plan), dental (non-DHMO option), and vision
care plans (including the AT&T Retiree Vision Care
Program).   For a Participant who Retired on or before August 31,
1992, Basic Plans shall mean the AT&T Medical and Group Life Insurance
Plan–CustomCare (“CustomCare”) and dental (non-DHMO option) plans.

    

    2.2 CEO.  "CEO"
shall mean the Chief Executive Officer of AT&T Inc.

    

    2.3 COBRA.  “COBRA”
shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.

    

    2.4 Committee.  "Committee"
shall mean the Human Resources Committee of the Board of Directors of AT&T
Inc.

    

    2.5 Dependent(s).  “Dependent(s)”
shall mean those individuals who would qualify as an Eligible Employee’s
dependent(s) under the terms of the major medical Basic Plan in which the
Eligible Employee participates, or, if applicable, Substitute Basic
Coverage.

    

    2.6 Disability.  "Disability"
shall mean qualification for long term disability benefits under Section 3.1 of
the Officer Disability Plan.

    

    2.7 Eligible
Employee.  "Eligible Employee" shall mean an
Officer.  Notwithstanding the foregoing, the CEO may, from time to
time, exclude any Officer or group of Officers from being an “Eligible Employee”
under this Plan.  Employees of a company acquired by AT&T shall
not be considered an Eligible Employee unless designated as such by the
CEO.

    

    2.8 Employer.  "Employer"
shall mean AT&T Inc. or any of its Subsidiaries.

    

    2.9 Executive
Officer.  “Executive Officer” shall mean any executive officer
of AT&T, as that term is used under the Securities Exchange Act of
1934.

    

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

    

    2.11 Participant.  “Participant”
shall mean an Eligible Employee or Retired Eligible Employee who has been
designated to participate in the Plan and his/ her Dependent(s).

    

    2.12 Plan
Year.  ”Plan
Year” shall mean the calendar year.

    

    2.13 Qualified
Dependent.  “Qualified Dependent” shall mean a Dependent who
loses coverage under a COBRA Eligible Program due to a Qualifying
Event.

    

    2.14 Qualifying
Event. “Qualifying Event” shall
mean any of the following events if, but for COBRA continuation coverage, they
would result in a Participant’s loss of coverage under this Plan:

    
      

    

    
      
        	
                (1)

              	
                death
      of a covered Employee;

              

      

    

    
      
        	
                (2)

              	
                termination
      (other than by reason of such Employee’s gross  misconduct) of
      an Employee’s employment;

              

      

    

    
      
        	
                (3)

              	
                reduction
      in hours of an Employee;

              

      

    

    
      
        	
                (4)

              	
                divorce
      or legal separation of an Employee or dissolution of an Employee’s
      registered domestic
partnership;

              

      

    

    
      
        	
                (5)

              	
                an
      Employee’s entitlement to Medicare benefits;
or

              

      

    

    
      
        	
                (6)

              	
                a
      Dependent child ceasing to qualify as a Dependent under a
      Program.

              

      

    

    
      

    

    2.15 Retire or
Retirement.  “Retire” or "Retirement" shall mean the
termination of an Eligible Employee's employment with AT&T or any of its
Subsidiaries, for reasons other than death, on or after the earlier of the
following dates:  (1) the date such Eligible Employee has attained age
55, and, for an Eligible Employee on or after January 1, 2002, has five (5)
years of service, or (2) the date the Eligible Employee has attained one of the
following combinations of age and service at termination of employment on or
after April 1, 1997: 

    
       

      

       

      
        	Net Credited Service	
                Age 

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

      

    

    

    2.16  SEVP-HR.    “SEVP-HR”
shall mean AT&T’s highest ranking Officer, specifically responsible for
human resources matters.

    

    2.17 Subsidiary.  "Subsidiary"
shall mean any corporation, partnership, venture or other entity in which
AT&T holds, directly or indirectly, a 50% or greater ownership
interest.  The Committee may, at its sole discretion, designate any
other corporation, partnership, venture or other entity a Subsidiary for the
purpose of participating in this Plan.  Notwithstanding anything
herein to the contrary, unless designated a “Subsidiary” pursuant to the
immediately preceding sentence, Cingular Wireless LLC, Sterling Commerce, Inc.,
and their respective subsidiaries shall not be considered a Subsidiary under
this Plan.

    

    2.18 AT&T.  "AT&T"
shall mean AT&T Inc.

    

    ARTICLE
3   ELIGIBILITY

    

    3.1 Active
Participants and their Dependents. Each Eligible Employee
shall be eligible to participate in this Plan along with his/her Dependent(s)
beginning on the effective date of the employee becoming an Eligible
Employee.

    

    
      Upon
becoming an Eligible Employee, he/she shall have 90 days to elect to participate
in this Plan.  In order to continue participation, the Eligible
Employee must pay all applicable contributions.  If an Eligible
Employee terminates participation in this Plan at any time for any reason, that
Eligible Employee and his/her Dependent(s) shall be ineligible to participate in
the Plan at any time in the future.

    

    
      

    

    3.2 Retired
Participants and their Dependents.  Provisions of
this Plan will continue in effect during Retirement for each Eligible Employee
and his/her Dependent(s) with respect to any Eligible Employee who became a
Participant before January 1, 1999.  Neither an Eligible Employee who
became an Eligible Employee after December 31, 1998 nor his/her Dependent(s)
shall be eligible for participation hereunder on or after such Eligible
Employee’s Retirement.

    

    3.3 Requirement
to Enroll and Participate in Basic Plans and Medicare.  As a condition to
participation in the Plan, each Participant must be enrolled in, paying for, and
participating in (i) the Basic Plans, or, if applicable, Substitute Basic
Coverage, and (ii) all parts of Medicare for which such Participant is eligible
and for which Medicare would be primary if enrolled therein, except for Medicare
Part D relating to prescription drug coverage.

    

    
      Notwithstanding
any other provision of the Plan to the contrary, an individual who first becomes
an Eligible Employee in the middle of a Plan Year and who is enrolled in
AT&T sponsored group health plans other than the Basic Plans, will be
allowed to participate in the Plan for the remainder of the Plan Year along with
his/her Dependent(s) who are enrolled in such other AT&T sponsored health
plans, as if they were participating in the Basic Plans.  At the next
group enrollment opportunity for the Basic Plans, the Eligible Employee and
his/her Dependent(s) must enroll in the Basic Plans to continue participation in
this Plan.

    

    

    ARTICLE
4   BENEFITS

    

    4.1 Covered
Benefits. Subject to the limitations in this Article, this Plan provides
100% payment, through reimbursement or otherwise, of all medical, dental, and
vision services not paid under the Eligible Employee’s (i) Basic Plans or, if
applicable, Substitute Basic Coverage, or (ii) Medicare, provided expenses for
such services would qualify as deductible medical expenses for federal income
tax purposes, whether deducted or not. Contributions or premiums for
participation in this Plan, the Basic Plans, Medicare, or any other health plan
are not considered “services”, and are therefore not eligible benefits under
this Plan.

    

    4.2 Benefit
Limits.  Benefits paid to any Eligible Employee or any one of
his/her Dependents under this Plan shall not exceed $50,000 per Plan Year per
individual, and benefits paid to any Eligible Employee and his/her Dependents
under this Plan shall not exceed $100,000 total per Plan Year. Amounts paid to
or on behalf of an Eligible Employee or his/her Dependent(s) under (i) the Basic
Plans, or if applicable, Substitute Basic Coverage, (ii) Medicare, or (iii) any
other AT&T sponsored group health plan will not be included in these
limits.

    

    4.3 Priority
of Paying Covered Claims.  Claims for benefits will be applied
against the various health plans and coordinated with Medicare in the following
order:

     

    
      
        	
                (1)

              	
                Medicare,
      to the extent the Participant is eligible therefore and such claim is
      actually paid by Medicare,

              

      

    

    
      
        	
                (2)

              	
                Basic
      Plans,

              

      

    

    
      
        	
                (3)

              	
                CarePlus,
      if elected,

              

      

    

    
      
        	
                (4)

              	
                Long
      Term Care Plan, if elected,

              

      

    

    
      
        	
                (5)

              	
                this
      Plan.

              

      

    

    
      

    

    4.4 Substitute
Basic Coverage.  Notwithstanding any other provision of this
Plan to the contrary, if an Eligible Employee is eligible for participation
under this Plan during Retirement, but not eligible to participate under the
Basic Plans, the Plan shall provide medical, dental, and vision benefits for the
Eligible Employee and his/her Dependent(s) substantially equivalent to the
benefits under the Basic Plans through an insured product (hereinafter,
"Substitute Basic Coverage"). Eligibility for Substitute Basic Coverage is
conditioned upon the Eligible Employee’s payment of contributions in the same
amount that a similarly situated retired Basic Plan participant is required to
pay under the Basic Plans. Such Substitute Basic Coverage shall constitute such
Eligible Employee’s Basic Plans for all purposes under this Plan.  The
costs of Substitute Basic Coverage (except for the required monthly
contributions referenced in this paragraph) shall be borne by AT&T, and the
costs of Substitute Basic Coverage shall not be included in the determination of
any Participant’s annual Plan contribution amount as provided in Article
7.

    

    

    ARTICLE
5   TERMINATION OF PARTICIPATION

    

    5.1 Termination
of Participation.  Participation
will cease on the last day of the month in which one of the following conditions
occurs:

    

    
      
        
          	
                  (1)  

                	
                  The
      Participant is no longer a participant in the Basic Plans
      or Substitute Basic Coverage, in which case participation ceases for
      such Participant;

                

        

      

    

    
      

    

    
      
        
          	
                  (2)  

                	
                  A
      Participant eligible to enroll in Medicare is no longer a participant in
      all parts of Medicare for which such Participant is eligible to enroll and
      for which Medicare would be primary if enrolled therein, except for
      Medicare Part D relating to prescription drug coverage, in which case
      participation ceases for such
Participant;

                

        

      

    

    
      

    

    
      
        
          	
                  (3)  

                	
                  The
      Eligible Employee’s termination of employment for reasons other than
      Death, Disability, or Retirement, in which case participation ceases
      for the Eligible Employee and
  his/her Dependent(s);

                

        

      

    

    
      

    

    
      
        
          	
                  (4)  

                	
                  The
      demotion or designation of an Eligible Employee so as to no longer be
      eligible to participate in the Plan, in which case participation ceases
      for the Eligible employee and
  his/her Dependent(s);

                

        

      

    

    
      

    

    
      
        
          	
                  (5)  

                	
                  The
      Eligible Employee (or Retired Eligible Employee) engages
      in competitive activity under Article 8, in which case
      participation ceases for the Eligible Employee (or Retired Eligible
      Employee) and his/her Dependent(s);
or

                

        

      

    

    
      

    

    
      
        
          	
                  (6)  

                	
                  Discontinuance
      of the Plan by AT&T, or, with respect to a Subsidiary’s Eligible
      Employees (or Retired Eligible Employees), such Subsidiary’s failure to
      make the benefits hereunder available to Eligible Employees employed
      by it (or its Retired Eligible Employees), in which case
      participation ceases for the Eligible Employee (or Retired Eligible
      Employee) and
his/her Dependent(s).

                

        

      

    

    
      

    

    5.2 Dependents
Failure to Participate in Basic Plans.  If a Dependent ceases
participation under a Basic Plan or, if applicable, Substitute Basic Coverage,
such Dependent’s participation under this Plan will cease with the same
effective date.

    

    5.3 Death.  In
the event of the Eligible Employee’s (or Retired Eligible Employee’s) death, the
Eligible Employee’s (or Retired Eligible Employee’s) Dependents may continue
participation in this Plan as follows:

    

    
      	
               
      

            	
              (1)

            	
              In
      the event of the death of a Retired Eligible Employee such Retired
      Eligible Employee’s Dependents may continue participation in this
      Plan for so long as such Dependents are participating in the Basic
      Plans (or, if applicable, Substitute Basic Coverage) and are paying any
      applicable contributions for this Plan as provided in Article
      7.

            

    

    

    
      	
               
      

            	
              (2)

            	
              In
      the event of an in-service death of an Eligible Employee eligible to
      participate in the Plan in Retirement as provided under Article 3.2, such
      Eligible Employee’s surviving Dependents may
      continue participation in this Plan for so long as such Dependents
      are participating in the Basic Plans (or, if applicable Substitute
      Basic Coverage) and are paying any applicable contributions for
      this Plan as provided in Article 7.  If a surviving spouse
      of such Eligible Employee otherwise eligible for participation in the Plan
      remarries, his/her participation will cease with the effective date of
      his/ her marriage.

            

    

    

    
      	
               
      

            	
              (3)

            	
              In
      the event of an in-service death of an Eligible Employee not eligible to
      participate in the Plan in Retirement as provided in Article 3.2, such
      Eligible Employee’s Dependent(s) may continue participation in this Plan
      for a 12-month period commencing the month following the month in which
      such Eligible Employee dies as long as such Dependent(s) are participating
      in the Basic Plans and are paying any applicable contributions for this
      Plan as provided in Article 7.  If the Eligible Employee’s
      Dependent(s) are eligible for COBRA, they will automatically be enrolled
      in COBRA so that there is no lapse in coverage, and this 12-month coverage
      will be integrated and run concurrently with COBRA
    coverage.

            

    

    

    ARTICLE
6   DISABILITY

    

    6.1 Disability.  With
respect to any Eligible Employee who is receiving short term or long term
disability benefits under the Officer Disability Plan, participation under this
Plan will be as follows:

    

    
      
        
          	
                  (1)

                	
                  The
      Eligible Employee will be eligible to participate in this Plan for as long
      as he/she receives short term or long term disability benefits under the
      Officer Disability
Plan.

                

        

      

    

    
      

    

    
      
        
          	
                  (2)

                	
                  An
      individual who became an Eligible Employee on or after January
      1, 1999 will no longer be eligible to participate in this Plan once long
      term disability benefits under the Officer Disability Plan are
      discontinued, unless the Eligible Employee is otherwise eligible for
      continued benefits under this
Plan.

                

        

      

    

    
       

    

    
      
        
          	
                  (3)

                	
                  An
      Employee who became an Eligible Employee before January 1, 1999, will be
      eligible for participation in this Plan as
  follows:

                

        

      

    

    
      

    

    
      
        
          	
                  (a)

                	
                  If
      the individual is Retirement eligible at the time long term disability
      benefits under the Officer Disability Plan commence, he/she will be
      eligible to continue participation in this Plan on the same terms and
      conditions that participation would be available to such Eligible Employee
      in Retirement, regardless of his/her continued receipt of long term
      disability benefits.

                

        

      

    

    
       

      
        
          
            
              	
                      (b)

                    	
                            
                        If
      the individual is not Retirement eligible at the time long term disability
      benefits under the Officer Disability Plan commence, he/she will be
      eligible to participate in this Plan for as long as such Eligible Employee
      participates in the Basic
Plans.

                      

                    

            

          

        

        
           

           

        

      

    

    ARTICLE
7   COSTS

    

    7.1 Costs of
the Plan.  Except as provided below in this Article 7, costs
and expenses incurred in the operation and administration of this Plan will be
borne by AT&T, and each Subsidiary shall reimburse AT&T for applicable
costs and expenses attributable to Eligible Employees employed by it (and
Retired Eligible Employees formerly employed by it).

    

    7.2 Active
Participant
Contributions.  An Eligible Employee electing to participate in the
Plan will pay to participate in the Plan while in active service or while
receiving short term or long term disability benefits under the Officer
Disability Plan. The contribution for participation may change annually,
effective at the beginning of each Plan Year.  Contributions to be
made by Eligible Employees electing to participate in the Plan during active
service or while receiving short term or long term disability benefits under the
Disability Plan shall be set annually by the SEVP-HR, determined in the
SEVP-HR’s sole and absolute discretion.  The SEVP-HR may adopt tiered
rates for similarly situated groups of Eligible Employees based on factors such
as the number of Dependents covered or Medicare
eligibility.  Notwithstanding the foregoing, required contributions
for Executive Officers shall be approved by the Human Resources Committee of the
AT&T Inc. Board of Directors.

    

    7.3 Retired
Eligible Employees
Contributions.  Eligible Employees entitled to participate in
the Plan after Retirement or after termination of long term disability benefits
under the Officer Disability Plan who elect to participate will pay to
participate in the Plan. The contribution for participation may change annually,
effective at the beginning of each Plan Year.  Contributions to be made by
Eligible Employees entitled to participate in the Plan after Retirement or after
termination of long term disability benefits under the Officer Disability Plan
who elect to participate shall be set annually by the SEVP-HR (in his/her sole
and absolute discretion), to the extent their contributions have not previously
been provided for in a separate agreement.

    

    7.4 Survivor
Contributions.
 Upon the death of an Eligible Employee the contribution percentage
paid by the surviving spouse will be equal to the contribution, adjusted (if
applicable) for factors such as the number of Dependents or Medicare eligibility
that that would have been paid by the Participant had he/she
survived.  In the event there is no surviving spouse but there are
surviving eligible Dependents, such Dependents shall pay a ratable share of the
contribution, adjusted (if applicable) for factors such as the number of
Dependents or Medicare eligibility that would have been paid by the Participant
had he/she survived.

    
      

    

    
      

    

    
      In order
to continue participation, the Retired Eligible Employee or his/her Dependent(s)
must pay all applicable contributions.

    

    
      

    

    
      If a
Retired Eligible Employee terminates participation at any time for any reason,
participation of that Retired Eligible Employee and his/her Dependent(s) may not
be reinstated for any reason.

    

    

    ARTICLE
8   COVENANT NOT TO COMPETE

    

    Non-Competition.  Notwithstanding
any other provision of this Plan, no coverage shall be provided under this Plan
with respect to any Eligible Employee who shall, without the written consent of
AT&T, and while employed by AT&T or any Subsidiary thereof, or within
three (3) years after termination of employment from AT&T or any Subsidiary
thereof, engage in competition with AT&T or any Subsidiary thereof or with
any business with which a subsidiary of AT&T or an affiliated company has a
substantial interest (collectively referred to herein as "Employer
business").  For purposes of this Plan, engaging in competition with
any Employer business shall mean engaging by Eligible Employee in any business
or activity in the same geographical market where the same or substantially
similar business or activity is being carried on as an Employer
business.  Such term shall not include owning a nonsubstantial
publicly traded interest as a shareholder in a business that competes with an
Employer business.  However, engaging in competition with an Employer
business shall include representing or providing consulting services to, or
being an employee of, any person or entity that is engaged in competition with
any Employer business or that takes a position adverse to any Employer
business.  Accordingly, benefits shall not be provided under this Plan
if, within the time period and without the written consent specified, the
Eligible Employee either engages directly in competitive activity or in any
capacity in any location becomes employed by, associated with, or renders
service to any company, or parent or affiliate thereof, or any subsidiary of any
of them, if any of them is engaged in competition with an Employer business,
regardless of the position or duties the Eligible Employee takes and regardless
of whether or not the employing company, or the company that Eligible Employee
becomes associated with or renders service to, is itself engaged in direct
competition with an Employer business.

    

    ARTICLE
9  MISCELLANEOUS

    

    9.1 Administration.  Subject
to the terms of the Plan, the CEO or SEVP-HR shall establish such rules as are
deemed necessary for the proper administration of the Plan. AT&T will
compute a "gross-up" allowance which will be paid to an Eligible Employee to
offset any income tax liabilities incurred as a result of receiving benefits
under this Plan. 

    

    9.2 Amendments
and Termination.  This Plan may be modified or terminated at
any time in accordance with the provisions of AT&T's Schedule of
Authorizations.

    

    9.3 Newborns'
and Mothers' Health Protection Act of 1996.  To the extent this
Plan provides benefits for hospital lengths of stay in connection with
childbirth, the Plan will cover the minimum length of stay required for
deliveries (i.e., a 48-hour hospital stay after a vaginal delivery or a 96-hour
stay following a delivery by Cesarean section.)  The mother’s or
newborn’s attending physician, after consulting with the mother, may discharge
the mother or her newborn earlier than the minimum length of stay otherwise
required by law.  Such coverage shall be subject to all other
provisions of this Plan.

    

    9.4 Women's
Health and Cancer Rights Act of 1998.  To the extent this Plan
provides benefits for mastectomies, it will provide, for an individual who is
receiving benefits in connection with a mastectomy and who elects breast
reconstruction in connection with such mastectomy, coverage for reconstruction
on the breast on which the mastectomy was performed, surgery and reconstruction
on the other breast to give a symmetrical appearance, and prosthesis and
coverage for physical complications of all stages of the mastectomy, including
lymphedemas.  Such coverage shall be subject to all other provisions
of this Plan.

    

    9.5 Mental
Health Parity Act of 1996.  To the extent this Plan provides
mental health benefits other than treatment for substance or alcohol abuse, it
will not place annual or lifetime maximums for such benefits that are lower than
the annual and lifetime maximums for physical health benefits.  Such
coverage shall be subject to all other provisions of this Plan.

    

    9.6 Continuation
of Coverage During Family or Medical Leave.  During any period
which an Eligible Employee is on a family or medical leave as defined in the
Family or Medical Leave Act, any benefit elections in force for the Eligible
Employee shall remain in effect.  While the Eligible Employee is on
paid leave, contributions shall continue.  If the Eligible Employee is
on an unpaid leave, the Eligible Employee may elect to prepay required
contributions on a pre-tax basis before the commencement of such unpaid
leave.  Alternatively, the Eligible Employee may elect to make such
payments on an after-tax basis monthly in accordance with an arrangement that
the Plan Administrator shall provide.  If coverage is not continued
during the entire period of the family or medical leave because the Eligible
Employee declines to pay the premium, the coverage must be reinstated upon
reemployment with no exclusions or waiting periods, notwithstanding any other
provision of this Plan to the contrary. If the Eligible Employee does not return
to work upon completion of the leave, the Eligible Employee must pay the full
cost of any health care coverage that was continued on his/her behalf during the
leave.  These rules apply to the COBRA Eligible Programs.

    

    9.7 Rights
While on Military Leave.  Pursuant to the provisions of the
Uniformed Services Employment and Reemployment Rights Act of 1994, an Employee
on military leave will be considered to be on a Leave of Absence and will be
entitled during the leave to the health and welfare benefits that would be made
available to other similarly situated Employees if they were on a Leave of
Absence.  This entitlement will end if the Employee provides written
notice of intent not to return to work following the completion of the military
leave.  The Employee shall have the right to continue his/her
coverage, including any Dependent coverage, for the lesser of the length of the
leave or 18 months.  If the military leave is for a period of 31 days
or more, the Employee may be required to pay 102 percent of the total premium
(determined in the same manner as a COBRA continuation coverage
premium).  If coverage is not continued during the entire period of
the military leave because the Employee declines to pay the premium or the leave
extends beyond 18 months, the coverage must be reinstated upon reemployment with
no pre-existing condition exclusions (other than for service-related illnesses
or injuries) or waiting periods (other than those applicable to all eligible
Employees).

    

    9.8 Qualified
Medical Child Support Orders.  The Plan will comply with any
Qualified Medical Child Support Order issued by a court of competent
jurisdiction or administrative body that requires the Plan to provide medical
coverage to a Dependent child of an Eligible Employee.  The Plan
Administrator will establish reasonable procedures for determining whether a
court order or administrative decree requiring medical coverage for a Dependent
child meets the requirements for a Qualified Medical Child Support
Order.  The cost of coverage or any additional cost of such coverage,
if any, shall be borne by the Eligible Employee.

    

    9.9 Right of
Recovery.  If the Plan has
made an erroneous or excess payment to any Participant, the Plan Administrator
shall be entitled to recover such excess from the individual or entity to whom
such payments were made.  The recovery of such overpayment may be made
by offsetting the amount of any other benefit or amount payable by the amount of
the overpayment under the Plan.

    

    ARTICLE
10   COBRA

    

    10.1 Continuation
of Coverage Under COBRA.  Participants shall have all COBRA
continuation rights required by federal law and all conversion
rights.  COBRA continuation coverage shall be continued as provided in
this Article 10.

    

    10.2 COBRA
Continuation Coverage for Terminated Participants.  A covered
Participant may elect COBRA continuation coverage, at his/her own expense, if
his participation under this Plan would terminate as a result of one of the
following Qualifying Events: an Employee’s termination of employment or
reduction of hours with an Employer.

    

    10.3 COBRA
Continuation Coverage for Dependents.  A Qualified Dependent
may elect COBRA continuation coverage, at his/her own expense, if his/her
participation under this Plan would terminate as a result of a Qualifying
Event.

    

    10.4 Period of
Continuation Coverage for Covered Participants.  A covered
Participant who qualifies for COBRA continuation coverage as a result of an
Eligible Employee’s termination of employment or reduction in hours of
employment described in Subsection 10.2 may elect COBRA continuation coverage
for up to 18 months measured from the date of the Qualifying Event. 
Coverage
under this Subsection 10.4 may not continue beyond the:

    

    
      
        
          	
                  (1)  

                	
                  date
      on which the Participant’s Employer ceases to maintain this
      Plan;

                

        

      

    

    
      

    

    
      
        
          	
                  (2)  

                	
                  last
      day of the month for which premium payments have been made with respect to
      this Plan, if the individual fails to make premium payments on time, in
      accordance with Subsection
10.6;

                

        

      

    

    
      

    

    
      
        
          	
                  (3)  

                	
                  date
      the covered Participant becomes entitled to Medicare;
  or

                

        

      

    

    
      

    

    
      
        
          	
                  (4)  

                	
                  date
      the covered Participant is no longer subject to a pre-existing condition
      exclusion under the Participant's other coverage or new employer plan for
      the type of coverage available under the COBRA Eligible Program for which
      the COBRA election was
made.

                

        

      

    

    
      

    

    10.5 Period of
COBRA Continuation Coverage for Dependents.  If a Qualified
Dependent elects COBRA continuation coverage under a COBRA Eligible Program as a
result of the an Employee’s termination of employment as described in Subsection
10.2, continuation coverage may be continued for up to 18 months measured from
the date of the Qualifying Event.  COBRA continuation coverage for all
other Qualifying Events may continue for up to 36 months.

    

    Continuation
coverage under this Subsection 10.5 with respect to a COBRA Eligible Program may
not continue beyond the date:

    

    
      
        
          	
                  (1)  

                	
                  on
      which premium payments have not been made, in accordance with Subsection
      10.6 below;

                

        

      

    

    
      

    

    
      
        
          	
                  (2)  

                	
                  the
      Participant becomes entitled to
Medicare;

                

        

      

    

    
      

    

    
      
        
          	
                  (3)  

                	
                  on
      which the Employer ceases to maintain this Plan;
  or

                

        

      

    

    
      

    

    
      
        
          	
                  (4)  

                	
                  the
      Participant is no longer subject to a pre-existing condition exclusion
      under the Participant’s other coverage or new employer plan for the type
      of coverage available under this
Plan.

                

        

      

    

    
      

    

    10.6 Contribution
Requirements for COBRA Continuation Coverage.  Covered
Participants and Qualified Dependents who elect COBRA continuation coverage as a
result of a Qualifying Event will be required to pay continuation coverage
payments.  Continuation coverage payments are the payments required
for COBRA continuation coverage that is an amount equal to a reasonable estimate
of the cost to this Plan of providing coverage for all covered Participants at
the time of the Qualifying Event plus a  2% administrative
expense.  In the case of a disabled individual who receives an
additional 11-month extended coverage under COBRA, the Employer may assess up to
150% of the cost for this extended coverage period.  Such cost shall
be determined on an actuarial basis and take into account such factors as the
Secretary of the Treasury may prescribe in regulations.

    

    Covered
Participants and Qualified Dependents must make the continuation coverage
payment prior to the first day of the month in which such coverage will take
effect.  However, a covered Participant or Qualified Dependent has 45
days from the date of an affirmative election to pay the continuation coverage
payment for the first month's payment and the cost for the period between the
date medical coverage would otherwise have terminated due to the Qualifying
Event and the date the covered Participant and/or Qualified Dependent actually
elects COBRA continuation coverage.

    

    The
covered Participant and/or Qualified Dependent shall have a 30-day grace period
to make the continuation coverage payments due
thereafter.  Continuation coverage payments must be postmarked on or
before the completion of the 30-day grace period.  If continuation
coverage payments are not made on a timely basis, COBRA continuation coverage
will terminate as of the last day of the month for which timely premiums were
made.  The 30-day grace period shall not apply to the 45-day period
for the first month’s payment of COBRA premiums as set out in the section
above.

    

    If
payment is received that is significantly less than the required continuation
coverage payment, then continuation coverage will terminate as of the last day
of the month for which premiums were paid.  A payment is considered
significantly less than the amount due if it is greater than the lesser of $50
or 10% of the required continuation coverage payment.  Upon receipt of
a continuation coverage payment that is insignificantly less than the required
amount, the Plan Administrator must notify the covered Participant or Qualified
Dependent of the amount of the shortfall and provide them with an additional
30-day grace period from the date of the notice for this payment
only.

    

    10.7 Limitation
on Participant's Rights to COBRA Continuation Coverage.

    

    
      
        
          	
                  (1)  

                	
                  If
      a Qualified Dependent loses, or will lose medical coverage under this Plan
      as a result of divorce, legal separation, entitlement to Medicare, or
      ceasing to be a Dependent, such Qualified Dependent is responsible for
      notifying the Plan Administrator in writing within 60 days of the
      Qualifying Event.  Failure to make timely notification will
      terminate the Qualified Dependent's rights to COBRA continuation coverage
      under this Article.

                

        

      

    

    
      

    

    
      
        
          	
                  (2)  

                	
                  A
      Participant must complete and return the required enrollment materials
      within 60 days from the later of (a) the date of loss of coverage, or (b)
      the date the Plan Administrator sends notice of eligibility for COBRA
      continuation coverage.  Failure to enroll for COBRA continuation
      coverage during this 60-day period will terminate all rights to COBRA
      continuation coverage under this Article.  An affirmative
      election of COBRA continuation coverage by a Participant or his/her spouse
      shall be deemed to be an election for that Participant's Dependent(s) who
      would otherwise lose coverage under the
Plan.

                

        

      

    

    
      

    

    10.8 Subsequent
Qualifying Event.  If a second Qualifying Event occurs during
an 18-month extension explained above, coverage may be continued for a maximum
of 36 months from the date of the first Qualifying Event.  In the
event the Dependent loses coverage due to a Qualifying Event and after such date
the Participant becomes entitled to Medicare, the Dependent shall have available
up to 36 months of coverage measured from the date of the Qualifying Event that
causes the loss of coverage.  If the Participant was entitled to
Medicare prior to the Qualifying Event, the Dependent shall have up to 36 months
of coverage measured from the date of entitlement to Medicare.

    

    10.9 Extension
of COBRA Continuation Period for Disabled Individuals.  The
period of continuation shall be extended to 29 months in total (measured from
the date of the Qualifying Event) in the event the individual is disabled as
determined by the Social Security laws within 60 days of the Qualifying
Event.  The individual must provide evidence to the Plan Administrator
of such Social Security determination prior to the earlier of 60 days after the
date of the Social Security determination, or the expiration of the initial 18
months of COBRA continuation coverage.  In such event, the Employer
may charge the individual up to 150% of the COBRA cost of the
coverage.

    

    ARTICLE
11   PRIVACY OF MEDICAL INFORMATION

    

    11.1 Definitions.  For
purposes of this Article 11, the following defined terms shall have the meaning
assigned to such terms in this subsection:

    

    
      (1)           “Business
Associate” shall mean an outside entity or person that performs
administrative or other functions on behalf of the Plan;

    

    
      

    

    
      (2)           “Health
Care Operations” shall mean activities that involve, but are not
limited to, quality assessment and improvement, the assessment
of health care professionals, disease management, case
management, legal services, benefits fraud and abuse investigations,
and business planning and development (including cost-management
and planning analyses).  Health Care Operations
also include, but are not limited to, general health care plan
administrative functions such as management activities relating
to compliance with HIPAA’s administrative simplification requirements,
customer service involving the provision of data analysis
for the Plan Sponsor of the HIPAA Plan and other entities whose
employees participate in the HIPAA Plan, resolution of internal grievances
and due diligence in connection with the sale or
transfer of assets to a potential successor in interest if the potential
successor is a covered entity, or will become a covered entity,
under HIPAA;

    

    
      

    

    
      (3)           “HIPAA”
shall mean the Health Insurance Portability and Accountability
Act of 1996 as amended from time to time.

    

    
      

    

    
      (4)           “Payment”
shall mean any activities performed that involve making benefit
determinations and payment. These activities include, but are not limited to,
billing, reviews for medical necessity, claims management, coordination of
benefits, adjudication of health benefits claims (including appeals and other
payment-related disputes), subrogation, plan reimbursement, investigations of
potential fraud, determining employee contributions, reviews of appropriateness
of care, preauthorizations and utilization reviews;

    

    
      

    

    
      (5)           “Protected
Health Information” or “PHI” shall mean individually  identifiable
information created or retained by the HIPAA Plan beginning on or after April
14, 2003 which pertains to a person’s past, present or future physical or mental
health, the health care the person is receiving or has received in the past and
all past, present or future Payments for the person’s health
care;

    

    
      

    

    
      

    

    
      (6)           “Treatment”
means the provision, coordination or management of health
care and related services by one or more health care providers. This category
includes, but is not limited to, consultations and referrals between health care
providers, the coordination or management of health care by a health care
provider with a third party and the referral of a patient for health care from
one health care provider to another.

    

    
      

    

    11.2 Privacy
Provisions Relating to Protected Health Information
(“PHI”).  The
Plan and its Business Associates (collectively referred to in this Article 11 as
a “HIPAA Plan”) shall use and disclose PHI to the extent permitted by, and in
accordance with, HIPAA.  Specifically, each HIPAA Plan will use and
disclose PHI for Treatment, Payment and Health Care Operations.

    

    11.3 Disclosure
of De-Identified or Summary Health Information.  The HIPAA
Plan, or, with respect to the HIPAA Plan, a health insurance issuer, may
disclose de-identified or summary health information to the Plan Sponsor of the
HIPAA Plan (and its affiliates) if such entity requests the de-identified or
summary health information for the purpose of:

    

    
      (1)           Obtaining
premium bids from health plans for providing health insurance
coverage under the HIPAA Plan;

    

    
      

    

    
      (2)           Modifying,
amending or terminating the group health benefits under the
HIPAA Plan;

    

    
      

    

    
      In
addition, the HIPAA Plan or a health insurance insurer with respect to the HIPAA
Plan may disclose to the Plan Sponsor of the HIPAA Plan (or its affiliates)
information on whether an individual is participating in the group health
benefits provided by the HIPAA Plan or is enrolled in, or has ceased enrollment
with health insurance offered by the HIPAA Plan.

    

    
      

    

    11.4 The HIPAA Plan Will Use and
Disclose PHI as Required by
Law or as
Permitted by the Authorization of the Participant or
Beneficiary.

    

    Upon
submission of an authorization signed by a Participant, beneficiary, subscriber
or personal representative that meets HIPAA requirements, the HIPAA Plan will
disclose PHI to a Company (or affiliate) sponsored pension plan, long term care
plan, disability plan or other benefit plan sponsored by the Company (or an
affiliate) with a need to access this PHI for purposes related to such benefit
plan’s administration. Authorizations will also be honored when provided to the
HIPAA Plan with respect to job accommodation requests, Family Medical Leave Act
requests, drug/substance abuse testing, fitness for duty exams, and workers
compensation claims.

     

    
      In
addition, PHI will be disclosed to the extent permitted or required by law,
without the submission of an authorization form.

    

    
      

    

    11.5 Disclosure
of PHI to the
Plan Sponsor.  The HIPAA Plan
will disclose information to the Plan Sponsor only upon certification from the
Plan Sponsor that the HIPAA Plan documents have been amended to incorporate the
assurances provided below.

    

    
      The Plan
Sponsor agrees to:

    

    
      

    

    
      
        
          	
                  (1)

                	
                  not
      use or further disclose PHI other than as permitted or required by the
      HIPAA Plan document or as required by
law;

                

        

      

    

    
      

    

    
      
        
          	
                  (2)

                	
                  ensure
      that any affiliates or agents, including a subcontractor, to whom the Plan
      Sponsor provides PHI received from the HIPAA Plan, agrees to the same
      restrictions and conditions that apply to the Plan Sponsor with respect to
      such PHI;

                

        

      

    

    
      

    

    
      
        
          	
                  (3)

                	
                  not
      use or disclose PHI for employment-related actions and decisions unless
      authorized by the individual to whom the PHI
  relates;

                

        

      

    

    
      

    

    
      
        
          	
                  (4)

                	
                  not
      use or disclose PHI in connection with any other benefits or employee
      benefit plan of the Plan Sponsor or its affiliates unless permitted by the
      Plan or authorized by an individual to whom the PHI
    relates;

                

        

      

    

    
      

    

    
      
        
          	
                  (5)

                	
                  report
      to the Plan any PHI use or disclosure that is inconsistent with the uses
      or disclosures provided for of which it becomes
  aware;

                

        

      

    

    
      

    

    
      
        
          	
                  (6)

                	
                  make
      PHI available to an individual in accordance with HIPAA’s access
      rules;

                

        

      

    

    
      

    

    
      
        
          	
                  (7)

                	
                  make
      PHI available for amendment and incorporate any amendments to PHI in
      accordance with HIPAA;

                

        

      

    

    
       

      
        
          
            
              	
                      (8)

                    	
                      make
      PHI available for amendment and incorporate any amendments to PHI in
      accordance with HIPAA;

                    

            

          

        

        
           

        

      

    

    
      
        
          	
                  (9)

                	
                  make
      internal practices, books and records relating to the use and disclosure
      of PHI received from the HIPAA Plan available to the Secretary of the
      United States Department of Health and Human Resources for purposes of
      determining the Plan’s compliance with HIPAA;
  and

                

        

      

    

    
       

    

    
      
        
          	
                  (10)

                	
                  if
      feasible, return or destroy all PHI received from the HIPAA Plan that the
      Plan Sponsor still maintains in any form, and retain no copies of such PHI
      when no longer needed for the purpose for which disclosure was made (or if
      return or destruction is not feasible, limit further uses and disclosures
      to those purposes that make the return or destruction
      infeasible.)

                

        

      

    

    
      

    

    11.6 Separation
Between the Plan Sponsor and the HIPAA Plan.  In accordance
with HIPAA, only the following employees and Business Associate personnel shall
be given access to PHI:

    

    
      
        
          	
                  (1)

                	
                  employees
      of the AT&T Benefits and/or AT&T Executive Compensation
      organizations responsible for administering group health plan benefits
      under the HIPAA Plan, including those employees whose functions in the
      regular course of business include Payment, Health Care Operations or
      other matters pertaining to the health care programs under a HIPAA
      Plan;

                

        

      

    

    
      

    

    
      
        
          	
                  (2)

                	
                  employees
      who supervise the work of the employees described in (1),
      above;

                

        

      

    

    
      

    

    
      
        
          	
                  (3)

                	
                  support
      personnel, including other employees outside of the AT&T Benefits or
      AT&T Executive Compensation organizations whose duties require them to
      rule on health plan-related appeals or perform functions concerning the
      HIPAA Plan;

                

        

      

    

    
      

    

    
      
        
          	
                  (4)

                	
                  investigatory
      personnel to the limited extent that such PHI is necessary to conduct
      investigations of possible
fraud;

                

        

      

    

    
      

    

    
      
        
          	
                  (5)

                	
                  outside
      and in-house legal counsel providing counsel to the HIPAA
      Plan;

                

        

      

    

    
      

    

    
      
        
          	
                  (6)

                	
                  consultants
      providing advice concerning the administration of the HIPAA Plan;
      and

                

        

      

    

    
      

    

    
      
        
          	
                  (7)

                	
                  the
      employees of Business Associates charged with providing services to the
      HIPAA Plan.

                

        

      

    

    
      

    

    
      The
persons identified above shall have access to and use PHI to the extent that
such access and use is necessary for the administration of group health benefits
under a HIPAA Plan.  If these persons do not comply with this Plan
document, the Plan Sponsor shall provide a mechanism for resolving issues of
noncompliance, including disciplinary sanctions.

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