Document:

Exhibit 10(a)1

THE SOUTHERN COMPANY

OMNIBUS INCENTIVE COMPENSATION PLAN

FORM OF RESTRICTED STOCK AWARD AGREEMENT

Your Restricted Stock Grant is subject to the following terms and conditions:

 

	
            1.
 	
            Grant.  The Compensation and Management Succession Committee (the “Committee”)  has granted to you (the “Participant”) a Restricted Stock Award of _________ shares (the “Restricted Stock”) of common stock of the Southern Company (the “Company”), par value $5 per share (the “Common Stock”), which shares shall be subject to the restrictions herein.  The Restricted Stock Award was granted on __________.  This award is governed by the Southern Company Omnibus Incentive Compensation Plan, as amended from time to time (the “Plan”).
 

 

	
            2.
 	
            Terms.  Terms in this Award Agreement that are defined in the Plan will have the meanings ascribed to them in the Plan.  If there is any inconsistency between the terms of this Award Agreement and the terms of the Plan, the Plan’s terms will supersede and replace the conflicting terms of this Award Agreement.
 

 

	
            3.
 	
            Vesting and Period of Restriction.  The Restricted Stock shall vest on the ________ anniversary of this grant (_______ __, 20__) (the “Vesting Date”).  With respect to any share of Restricted Stock, the period between the date of grant and the corresponding date of delivery of such share in accordance herewith shall be referred to as the “Period of Restriction.”
 

 

	
            4.
 	
            Custody of Shares. The Company shall retain custody of shares of the Restricted Stock for the duration of the Period of Restriction.
 

 

	
            5.
 	
            Impact of Termination of Employment.  The rights of the Participant to the Restricted Stock in the event of a termination of employment in the Period of Restriction are determined according to the following table: 
 

 

	
            Termination of Employment Event
 	
            Impact 
 on Restricted Stock
 
	
             
 	
             
 
	
            Disability1
 	
            Vest fully
 
	
            Death
 	
            Vest fully
 
	
            Any other type of termination not for cause2
 	
            Forfeited
 
	
            Any termination for cause2/3
 	
            Forfeited
 

 

1Disability means any physical or mental condition which would qualify you for a disability benefit under the long-term disability plan maintained by the Company and applicable to you, or if no such disability plan exists, as determined by the Committee. 

2Cause is determined by the Committee.

3Any termination for cause includes any type of termination (including, but not limited to, a voluntary or involuntary resignation by you, a voluntary or involuntary termination by the Company, your termination with severance, your retirement, or your termination because of a disability) if such termination is related to cause.

 

Restricted Stock that is not vested at the time of your termination of employment will, coincident therewith, terminate and be of no force or effect.

 

 

 

 

 

	
            7.
 	
            Nontransferability.  No rights in the shares of Restricted Stock are transferable until the expiration of the Period of Restriction. 
 

 

	
            8.
 	
            Shareholder Rights. With respect to Restricted Stock, the Participant shall have the right to receive dividends and shall have the right to vote shares of Restricted Stock during the Period of Restriction.  Any dividends received on the Restricted Stock during the Period of Restriction will be reinvested in the Participant’s account in The Southern Company Southern Investment Plan.  Any dividends so reinvested are subject to the same Period of Restriction as the associated Restricted Stock.  
 

 

	
            9.
 	
            Delivery of Shares.  As soon as practicable after the expiration of the Period of Restriction, the Company will deliver to the Participant the appropriate number of shares of Common Stock.  
 

 

	
            10.
 	
            No Right to Continued Employment. This Restricted Stock Award does not confer upon the Participant any right with respect to continuance of employment by the Company or a Subsidiary, nor shall it interfere in any way with the right of the Company or a Subsidiary to terminate the Participant’s employment at any time.
 

 

 

 

 

Exhibit A

 

LEGEND TO BE PLACED ON STOCK CERTIFICATE

 

The shares represented by this certificate are subject to the provisions of the Southern Company Omnibus Incentive Compensation Plan (the “Plan”) and a Restricted Stock Award Agreement (the “Agreement”) and may not be sold or transferred except in accordance therewith. Copies of the Plan and Agreement are kept on file by The Southern Company.ex10a.htm

     

    

    

    

    

    

    

    

    

    

    

    

    

    BELLSOUTH
      CORPORATION DIRECTORS'

    COMPENSATION
      DEFERRAL PLAN

    (As
      Amended and Restated Effective as of January 1, 2005)

    

    

    

    

    

    
      
              

                  
      
      

                  -i-      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    BELLSOUTH
      CORPORATION DIRECTORS COMPENSATION DEFERRAL PLAN

    (As
      Amended and Restated Effective as of January 1, 2005)

    

    TABLE
      OF
      CONTENTS

    

    
      
        	
                BACKGROUND
                  AND PURPOSE

              	
                1

              
	 	 	 
	
                ARTICLE
                  I – DEFINITIONS

              	
                2

              
	 	 	 
	
                1.1

              	
                "Account"

              	
                2

              
	 	 	 
	
                1.2

              	
                "Affiliate"

              	
                2

              
	 	 	 
	
                1.3

              	
                "BellSouth

              	
                2

              
	 	 	 
	
                1.4

              	
                "Beneficiary"

              	
                2

              
	 	 	 
	
                1.5

              	
                "Board"

              	
                2

              
	 	 	 
	
                1.6

              	
                "Business
                  Day"

              	
                2

              
	 	 	 
	
                1.7

              	
                "Code"

              	
                2

              
	 	 	 
	
                1.8

              	
                "Company
                  Stock"

              	
                2

              
	 	 	 
	
                1.9

              	
                "Compensation"

              	
                2

              
	 	 	 
	
                1.10

              	
                "Credited
                  Interest Rate"

              	
                2

              
	 	 	 
	
                1.11

              	
                "Deferral
                  Contributions"

              	
                3

              
	 	 	 
	
                1.12

              	
                "Deferral
                  Election

              	
                3

              
	 	 	 
	
                1.13

              	
                "Election
                  Deadline"

              	
                3

              
	 	 	 
	
                1.14

              	
                "Effective
                  Date"

              	
                3

              
	 	 	 
	
                1.15

              	
                "Election
                  Package"

              	
                3

              
	 	 	 
	
                1.16

              	
                "Interest
                  Income Option"

              	
                3

              
	 	 	 
	
                1.17

              	
                "Interest
                  Income Subaccount"

              	
                3

              
	 	 	 
	
                1.18

              	
                "Investment
                  Election"

              	
                3

              
	 	 	 
	
                1.19

              	
                "Investment
                  Options"

              	
                4

              

      

    

    
 

    
      
              

                  -i-      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      
        	
                1.19A

              	
                "Master
                  Account"

              	
                4

              
	 	 	 
	
                1.20

              	
                "Merger"

              	
                4

              
	 	 	 
	
                1.21

              	
                "Nonemployee
                  Director"

              	
                4

              
	 	 	 
	
                1.22

              	
                "Participant"

              	
                4

              
	 	 	 
	
                1.23

              	
                "Participating
                  Company"

              	
                4

              
	 	 	 
	
                1.24

              	
                "Plan"

              	
                4

              
	 	 	 
	
                1.25

              	
                "Plan
                  Administrator"

              	
                4

              
	 	 	 
	
                1.26

              	
                "Plan
                  Year"

              	
                4

              
	 	 	 
	
                1.27

              	
                "Rabbi
                  Trust Agreements"

              	
                4

              
	 	 	 
	
                1.28

              	
                "Section
                  409A"

              	
                4

              
	 	 	 
	
                1.29

              	
                "Stock
                  Grant"

              	
                5

              
	 	 	 
	
                1.30

              	
                "Stock
                  Unit"

              	
                5

              
	 	 	 
	
                1.31

              	
                "Stock
                  Unit Option"

              	
                5

              
	 	 	 
	
                1.32

              	
                "Stock
                  Unit Subaccounts"

              	
                5

              
	 	 	 
	
                1.33

              	
                "Valuation
                  Date"

              	
                5

              
	 	 	 
	
                ARTICLE
                  II – ELIGIBILITY AND PARTICIPATION

              	
                6

              
	 	 	 
	
                2.1

              	
                Annual
                  Participation

              	
                6

              
	 	 	 
	
                2.2

              	
                Interim
                  Plan Year Participation

              	
                6

              
	 	 	 
	
                2.3

              	
                Election
                  Procedures

              	
                6

              
	 	 	 
	
                2.4

              	
                Cessation
                  of Eligibility

              	
                6

              
	 	 	 
	
                2.5

              	
                Limitations
                  on New Elections

              	
                6

              

      

    

     

     

     

    
      
        -ii-

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                ARTICLE
                  III – PARTICIPANTS' ACCOUNTS; DEFERRAL CONTRIBUTIONS

              	
                7

              
	 	 	 	 	 
	
                3.1

              	
                Participants'
                  Accounts

              	
                7

              
	 	
                (a)

              	
                Establishment
                  of Accounts

              	
                7

              
	 	
                (b)

              	
                Nature
                  of Contributions and Accounts

              	
                7

              
	 	
                (c)

              	
                Several
                  Liabilities

              	
                7

              
	 	
                (d)

              	
                General
                  Creditors

              	
                7

              
	 	 	 	 	 
	
                3.2

              	
                Deferral
                  Contributions

              	
                7

              
	 	
                (a)

              	
                Effective
                  Date

              	
                7

              
	 	
                (b)

              	
                Term

              	 	
                8

              
	 	
                (c)

              	
                Amount

              	
                8

              
	 	 	
                (i)

              	
                Compensation
                  Deferrals

              	
                8

              
	 	 	
                (ii)

              	
                Stock
                  Grant Deferrals

              	
                8

              
	 	
                (d)

              	
                Revocation

              	
                8

              
	 	
                (e)

              	
                Crediting
                  of Deferral Contributions

              	
                8

              
	 	 	 	 	 
	
                3.3

              	
                Deferral
                  Elections and Multiple Participating Companies

              	
                8

              
	 	 	 	 	 
	
                3.4

              	
                Vesting

              	 	
                9

              
	 	 	 	 	 
	
                ARTICLE
                  IV – DETERMINATION AND CREDITING OF

              	
                 

              
	
                INVESTMENT
                  RETURN 

              	
                10

              
	 	 	 	 	 
	
                4.1

              	
                General
                  Investment Parameters

              	
                10

              
	 	 	 	 	 
	
                4.2

              	
                Deemed
                  Investments

              	
                10

              
	 	
                (a)

              	
                Nature
                  of Deemed Investments

              	
                10

              
	 	
                (b)

              	
                Investment
                  of Contributions

              	
                10

              
	 	
                (c)

              	
                Investment
                  of Existing Account Balances

              	
                10

              
	 	
                (d)

              	
                Investment
                  Subaccounts

              	
                11

              
	 	 	 	 	
                 

              
	
                4.3

              	
                Stock
                  Unit Option

              	
                11

              
	 	
                (a)

              	
                Stock
                  Unit Subaccounts

              	
                11

              
	 	
                (b)

              	
                Cash
                  Dividends

              	
                11

              
	 	
                (c)

              	
                Adjustments

              	
                11

              
	 	 	 	 	 
	
                4.4

              	
                Interest
                  Income Option

              	
                12

              
	 	
                (a)

              	
                Interest
                  Income Subaccounts

              	
                12

              
	 	
                (b)

              	
                Crediting
                  of Deemed Interest

              	
                12

              
	 	 	
                (i)

              	
                Amount
                  Invested

              	
                12

              
	 	 	
                (ii)

              	
                Determination
                  of Amount

              	
                12

              
	 	 	 	 	
                 

              
	
                4.5

              	
                Good
                  Faith Valuation Binding

              	
                12

              
	 	 	 	 	 
	
                4.6

              	
                Errors
                  and Omissions in Accounts

              	
                12

              

      

    

     

    
      
        -iii-

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      
        	
                ARTICLE
                  V – PAYMENT OF ACCOUNT BALANCES

              	
                13

              
	 	 	 	 
	
                5.1

              	
                Benefit
                  Amounts

              	
                13

              
	 	
                (a)

              	
                Benefit
                  Entitlement

              	
                13

              
	 	
                (b)

              	
                Valuation
                  of Benefit

              	
                13

              
	 	
                (c)

              	
                Conversion
                  of Stock Units into Dollars

              	
                13

              
	 	 	 	 
	
                5.2

              	
                Elections
                  of Timing and Form

              	
                13

              
	 	
                (a)

              	
                Timing

              	
                13

              
	 	
                (b)

              	
                Form
                  of Distribution

              	
                13

              
	 	
                (c)

              	
                Multiple
                  Selections

              	
                13

              
	 	 	 	 
	
                5.3

              	
                Benefit
                  Payments to a Participant

              	
                14

              
	 	
                (a)

              	
                Timing

              	
                14

              
	 	
                (b)

              	
                Form
                  of Distribution

              	
                14

              
	 	
                (c)

              	
                Valuation
                  of Single Lump-Sum Payments

              	
                14

              
	 	
                (d)

              	
                Valuation
                  of Installment Payments

              	
                14

              
	 	 	 	 
	
                5.4

              	
                Death
                  Benefits

              	
                14

              
	 	
                (a)

              	
                General

              	
                14

              
	 	
                (b)

              	
                Valuation

              	
                15

              
	 	 	 	 
	
                5.5

              	
                Beneficiary
                  Designation

              	
                15

              
	 	
                (a)

              	
                General

              	
                15

              
	 	
                (b)

              	
                No
                  Designation or Designee Dead or Missing

              	
                15

              
	 	
                (c)

              	
                Death
                  of Beneficiary

              	
                16

              
	 	 	 	 
	
                5.6

              	
                Taxes

              	
                16

              
	 	 	 	 
	
                ARTICLE
                  VI – SPECIAL ELECTION REGARDING RETIREMENT PLAN

              	
                17

              
	 	 	 	 
	
                6.1

              	
                Description
                  of Election

              	
                17

              
	 	 	 	 
	
                6.2

              	
                Election
                  Deadline

              	
                17

              
	 	 	 	 
	
                6.3

              	
                Amount

              	
                17

              
	 	 	 	 
	
                6.4

              	
                Deemed
                  Investment

              	
                17

              
	 	 	 	 
	
                6.5

              	
                Payment
                  of Benefits

              	
                17

              
	 	 	 	 
	
                6.6

              	
                Vesting

              	
                17

              

      

    

     

     

    
      
        -iv-

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                SECTION
                  VI-A

              	 	
                18

              
	 	 	 	 	 
	
                6.1A

              	
                Description
                  of Election

              	
                18

              
	 	 	 	 	 
	
                6.2A

              	
                Election
                  Deadline

              	 	
                18

              
	 	 	 	 	 
	
                6.3A

              	
                Effect
                  of Election

              	 	
                18

              
	 	 	 	 	 
	
                6.4A

              	
                Deemed
                  Investment

              	 	
                18

              
	 	 	 	 	 
	
                6.5A

              	
                Election
                  of Timing and Form of Payment

              	 	
                18

              
	 	
                (a)

              	
                Timing

              	 	
                18

              
	 	
                (b)

              	
                Form
                  of Distribution

              	 	
                19

              
	 	
                (c)

              	
                Benefit
                  Payments

              	 	
                19

              
	 	 	 	 	 
	
                ARTICLE
                  VII – CLAIMS

              	 	
                20

              
	 	 	 	 	 
	
                7.1

              	
                Initial
                  Claim

              	 	
                20

              
	 	 	 	 	 
	
                7.2

              	
                Appeal

              	 	
                20

              
	 	 	 	 	 
	
                7.3

              	
                Satisfaction
                  of Claims

              	 	
                20

              
	 	 	 	 	 
	
                ARTICLE
                  VIII – SOURCE OF FUNDS

              	 	
                21

              
	 	 	 	 	 
	
                ARTICLE
                  IX – PLAN ADMINISTRATION

              	 	
                22

              
	 	 	 	 	 
	
                9.1

              	
                Action
                  by the Plan Administrator

              	 	
                22

              
	 	
                (a)

              	
                Individual
                  Administrator

              	 	
                22

              
	 	
                (b)

              	
                Administrative
                  Committee

              	 	
                22

              
	 	 	 	 	 
	
                9.2

              	
                Rights
                  and Duties of the Plan Administrator

              	 	
                22

              
	 	 	 	 	 
	
                9.3

              	
                Bond;
                  Compensation

              	 	
                23

              
	 	 	 	 	 
	
                9.4

              	
                Post-Merger
                  Plan Administration

              	 	
                23

              
	 	 	 	 	 
	
                ARTICLE
                  X – AMENDMENT AND TERMINATION

              	 	
                24

              
	 	 	 	 	 
	
                10.1

              	
                Amendments

              	 	
                24

              
	 	 	 	 	 
	
                10.2

              	
                Termination
                  of Plan

              	 	
                24

              
	 	 	 	 	 
	
                10.3

              	
                Limitation
                  on Authority

              	 	
                24

              
	 	
                (a)

              	
                Plan
                  Amendments

              	 	
                24

              
	 	
                (b)

              	
                Plan
                  Termination

              	 	
                24

              
	 	
                (c)

              	
                Opinions
                  of Counsel

              	 	
                25

              

      

    

     

     

    
      
        -v-

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      
        	
                ARTICLE
                  XI – MISCELLANEOUS

              	
                26

              
	 	 	 	 
	
                11.1

              	
                Taxation

              	
                26

              
	 	 	 	 
	
                11.2

              	
                Withholding

              	
                26

              
	 	 	 	 
	
                11.3

              	
                No
                  Employment Contract

              	
                26

              
	 	 	 	 
	
                11.4

              	
                Headings

              	
                26

              
	 	 	 	 
	
                11.5

              	
                Gender
                  and Number

              	
                26

              
	 	 	 	 
	
                11.6

              	
                Assignment
                  of Benefits

              	
                26

              
	 	 	 	 
	
                11.7

              	
                Legally
                  Incompetent

              	
                26

              
	 	 	 	 
	
                11.8

              	
                Entire
                  Document

              	
                26

              
	 	 	 	 
	
                11.9

              	
                Governing
                  Law

              	
                26

              
	 	 	 	 
	
                11.10

              	
                Plan
                  to Comply with Code Section 409A

              	
                27

              

      

    

     

     

     

    
      
        -vi-

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    BELLSOUTH
      CORPORATION DIRECTORS' COMPENSATION DEFERRAL PLAN

    (As
      Amended and Restated Effective as of January 1, 2005)

    

    

    BellSouth
      Corporation ("BellSouth")
      adopted the BellSouth Corporation Directors' Compensation Deferral Plan (the
      "Plan") on November 25, 1996, and the Plan was subsequently amended from time
      to
      time.  The Plan is now amended and restated effective as of January 1,
      2005, and as so amended and restated is intended to comply with the requirements
      of Section 409A of the Internal Revenue Code of 1986, as amended, with respect
      to all benefits under the Plan that are subject to Section
      409A.  Also, the Plan as restated, among other things, provides that
      no further elections to defer compensation may be made under the Plan after
      December 31, 2005, and coordinates Plan administration provisions applicable
      after the planned merger of BellSouth and AT&T Inc. with provisions of
      BellSouth's Rabbi Trust Agreements.

    

    BACKGROUND
      AND PURPOSE

    

    A.  Goal.  BellSouth
      desires to provide nonemployee members of its Board of Directors, and
      nonemployee members of the Board of Directors of those of its affiliated
      companies that participate in the Plan, with an opportunity (i) to defer the
      receipt and income taxation of a portion of such directors' retainers, fees,
      and
      other compensation as described in the Plan; and (ii) to receive an investment
      return on those deferred amounts which approximates the return of BellSouth
      stock, and an indexed rate of interest.

    

    B.  Purpose. 
      The purpose of the Plan is to set forth the terms and conditions pursuant of
      which these deferrals may be made and deemed invested and to describe the nature
      and extent of the directors' rights to their deferred amounts.

    

    C.  Type
      of Plan.  The Plan constitutes an unfunded, nonqualified
      deferred compensation plan.

    

    D.  No
      Deferrals after 2005.  Notwithstanding anything to the
      contrary herein, no Deferral Elections will be permitted under the Plan after
      December 31, 2005.

    

    
      
              

                  -1-       
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    ARTICLE
      I

    DEFINITIONS

    

    For
      purposes of the Plan, each of the
      following terms, when used with an initial capital letter, shall have the
      meaning set forth below unless a different meaning plainly is required by the
      context.

    

    1.1  "Account"
      shall mean, with respect to a Participant or Beneficiary, the total dollar
      amount or value evidenced by the last balance posted in accordance with the
      terms of the Plan to the account record established for such Participant or
      Beneficiary with respect to the Deferral Contributions of such Participant
      for
      any Plan Year.  "Account" shall also refer to a
      Master Account.

    

    1.2  "Affiliate"
      shall mean at any time any corporation, joint venture or partnership in which
      BellSouth owns directly or indirectly, (i) with respect to a corporation, stock
      possessing at least ten percent (10%) of the total combined voting power of
      all
      classes of stock in the corporation, or (ii) in the case of a joint venture
      or
      partnership, a ten percent (10%) or greater interest in the capital or profits
      of such joint venture or partnership.

    

    1.3  "BellSouth"
      shall mean BellSouth Corporation, a Georgia corporation, or any successor
      entity.

    

    1.4  "Beneficiary"
      shall mean, with respect to a Participant, the person(s) determined in
      accordance with Section 5.5 to receive any death benefits that may be payable
      under the Plan upon the death of the Participant.

    

    1.5  "Board"
      shall mean the Board of Directors of BellSouth.

    

    1.6  "Business
      Day" shall mean each day on which the New York Stock Exchange
      operates and is open to the public for trading.

    

    1.7  "Code"
      shall mean the Internal Revenue Code of 1986, as amended.

    

    1.8  "Company
      Stock" shall mean the $1.00 par value per share voting common stock
      of BellSouth; provided that, after the Merger, "Company Stock" shall mean the
      $1.00 par value per share voting common stock of AT&T Inc.

    

    1.9  "Compensation"
      shall mean the total of the directors' fees and retainers which actually would
      be payable to a Nonemployee Director during a Plan Year absent a Deferral
      Election under this Plan.

    

    1.10  "Credited
      Interest Rate" shall mean, for each Plan Year, the rate of return
      equal to Moody's Monthly Average of Yields of Aa Corporate Bonds, as published
      by Moody's Investors Service, Inc., for the month of July immediately preceding
      such Plan Year.  If such rate (or any alternative rate described in
      this sentence) is at any time no longer available, the Plan Administrator shall
      designate an alternative rate which in the 

     

    

            

                -2-       
    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Plan
      Administrator's reasonable judgment is generally comparable to the rate
      described in the preceding sentence, and such alternative rate shall thereafter
      be the Credited Interest Rate.

    

    1.11  "Deferral
      Contributions" shall mean, for each Plan Year, that portion of a
      Participant's Compensation and that portion of a Participant's Stock Grant
      deferred under the Plan pursuant to Section 3.2.

    

    1.12  "Deferral
      Election" shall mean a written election form provided by the Plan
      Administrator on which a Nonemployee Director may elect to defer under the
      Plan
      all or a portion of such individual's Compensation and/or Stock Grant for a
      Plan
      Year.

    

    1.13  "Effective
      Date" shall mean January 1, 2005, the date as of which this most
      recent amendment and restatement of the Plan is effective, except to the extent
      that the Plan expressly provides a different effective date with respect to
      specific Plan provisions.

    

    1.14  "Election
      Deadline" shall mean, with respect to a Plan Year:

    

    (a)  For
      a
      Nonemployee Director who is then a member of the Board, the November 30 (or
      if
      November 30 is not a Business Day, the last Business Day immediately preceding
      November 30) immediately preceding the first day of such Plan Year.

    

    (b)      For
      a
      Nonemployee Director who is first elected by shareholders to be a member of
      the
      Board after (or within thirty (30) days before) the Election Deadline described
      in Section 1.14(a) above with respect to a Plan Year, the date which is thirty
      (30) days after the date the Nonemployee Director first becomes eligible to
      participate in the Plan.

    

    1.15  "Election
      Package" shall mean a package consisting of a Deferral Election, an
      Investment Election and such other forms and documents distributed to
      Nonemployee Directors by the Plan Administrator for the purpose of allowing
      them
      to elect to actively participate in the Plan for a Plan Year.

    

    1.16  "Interest
      Income Option" shall mean the Investment Option described in
      Section 4.4, pursuant to which a Participant's deemed investment earnings are
      determined on the basis of the Credited Interest Rate.

    

    1.17  "Interest
      Income Subaccount" shall mean a bookkeeping subaccount reflecting
      that portion of a Participant's Account for each Plan Year which is deemed
      to be
      invested in the Interest Income Option.

    

    1.18  "Investment
      Election" shall mean a written election form provided by the Plan
      Administrator on which a Nonemployee Director may elect to have such
      individual's Deferral Contributions for a Plan Year (and all investment earnings
      attributable thereto) deemed invested in either the Stock Unit Option and/or
      the
      Interest Income Option, to the extent permitted under the terms of the
      Plan.

    

    

    
            

                -3-       
    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    1.19  "Investment
      Options" shall mean the Stock Unit Option and the Interest Income
      Option.

    

    1.19A   "Master
      Account" shall have the meaning ascribed to such
      term in Article VI-A.

    

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

    

    1.21  "Nonemployee
      Director" shall mean a member of the Board, or a member of the
      Board of Directors of any other Participating Company, who is not concurrently
      a
      common law employee of a Participating Company.

    

    1.22  "Participant"
      shall mean any person participating in the Plan pursuant to the provisions
      of
      Article II.

    

    1.23  "Participating
      Company" shall mean BellSouth and each Affiliate which, by action
      of its Board of Directors (or equivalent governing body), adopts the Plan as
      a
      Participating Company with the approval of the Plan Administrator.

    

    1.24  "Plan"
      shall mean the BellSouth Corporation Directors' Compensation Deferral Plan,
      as
      contained herein and all amendments hereto.

    

    1.25  "Plan
      Administrator" shall mean the person(s) determined under Section
      9.4 to the extend said Section is applicable, and otherwise shall mean the
      Chief
      Executive Officer of BellSouth and any individual or committee the Chief
      Executive Officer designates to act on his or her behalf with respect to any
      or
      all of the Chief Executive Officer's responsibilities hereunder; provided,
      the
      Board may designate any other person or committee to serve in lieu of the Chief
      Executive Officer as the Plan Administrator with respect to any or all of the
      administrative responsibilities hereunder.

    

    1.26  "Plan
      Year" shall mean each fiscal year period beginning on May 1 and
      ending on April 30 of the succeeding calendar year.

    

    1.27  "Rabbi
      Trust Agreements" shall mean (i) the BellSouth Corporation Trust
      Under Board of Directors Benefit Plan(s) and (ii) the BellSouth
      Telecommunications, Inc. Trust Under Board of Directors Benefit Plan(s), as
      amended from time to time.

    

    1.28  "Section
      409A" shall mean Code Section 409A and the Treasury regulations or
      other authoritative guidance issued thereunder.  Whenever the terms
      "subject to Section 409A" or "to the extent permitted by Section 409A" (or
      any
      such similar reference so as to indicate that a Plan provision is subject to
      Section 409A) are used, such terms shall be interpreted to mean that the
      applicable Plan provision shall be effective only if and to the extent such
      provision would not trigger penalty taxes or interest under Section
      409A.

     

    
            

                -4-       
    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.29  "Stock
      Grant" shall mean for each Plan Year the annual grant of shares of
      Company Stock awarded to Nonemployee Directors.

    

    1.30  "Stock
      Unit" shall mean an accounting entry that represents an unsecured
      obligation of a Participating Company to pay to a Participant an amount which
      is
      based on the fair market value of one share of Company Stock as set forth
      herein.  A Stock Unit shall not carry any voting, dividend or other
      similar rights and shall not constitute an option or any other right to acquire
      any equity securities of BellSouth.

    

    1.31  "Stock
      Unit Option" shall mean the Investment Option described in Section
      4.3, pursuant to which a Participant's deemed investment earnings are determined
      by the rate of return (determined as provided in the Plan) applicable to Stock
      Units.

    

    1.32  "Stock
      Unit Subaccount" shall mean a bookkeeping subaccount reflecting
      that portion of a Participant's Account for each Plan Year which is deemed
      to be
      invested in the Stock Unit Option.

    

    1.33  "Valuation
      Date" shall mean (i) for purposes of Article V, each December 31
      (or, if December 31 is not a Business Day, the last Business Day immediately
      preceding December 31), and (ii) for all other purposes, each April 30, July
      31,
      October 31, and January 31 (or if any such date is not a Business Day, the
      last
      Business Day immediately preceding such date), and each other day declared
      by
      the Plan Administrator to be a Valuation Date.

    

          

              -5-       
    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    ARTICLE
      II

    ELIGIBILITY
      AND PARTICIPATION

    

    

    2.1  Annual
      Participation.  Each individual who is a Nonemployee
      Director as of the first day of a Plan Year and is a member of the Board before
      the beginning of such Plan Year shall be eligible to defer all or a portion
      of
      such individual's Compensation and Stock Grant and thereby to actively
      participate in the Plan for such Plan Year.  Such individual's
      participation shall become effective as of the first day of such Plan Year,
      assuming such individual properly and timely completes the election procedures
      described below."

    

    2.2  Interim
      Plan Year Participation.  Each individual who becomes a
      Nonemployee Director during a Plan Year shall be immediately eligible to make
      a
      Deferral Election and thereby to participate actively in the Plan for the
      remainder of such Plan Year.

    

    2.3  Election
      Procedures.  Each Nonemployee Director shall elect to
      defer all or a portion of such individual's Compensation, all or a portion
      of
      such individual's Stock Grant, or both, and thereby become an active Participant
      for a Plan Year by delivering a completed Deferral Election and an Investment
      Election by the Election Deadline.  The Plan Administrator also may
      require the Nonemployee Director to complete other forms and provide other
      data,
      as a condition of participation in the Plan.

    

    2.4  Cessation
      of Eligibility.  A Nonemployee Director's active
      participation in the Plan shall terminate, and such individual shall not be
      eligible to make any additional Deferral Contributions for any portion of a
      Plan
      Year following the date such individual's service as a Nonemployee Director
      with
      BellSouth and all Participating Companies terminates (unless such individual
      once again becomes a Nonemployee Director later in such Plan
      Year).  In addition, an individual who actively participated in the
      Plan during prior Plan Years but who is not a Nonemployee Director or does
      not
      complete the election procedures, for a subsequent Plan Year, shall cease active
      participation in the Plan for such subsequent Plan Year.  Even if an
      individual's active participation in the Plan ends, such individual shall remain
      an inactive Participant in the Plan until the earlier of (i) the date the full
      amount of such individual's Accounts is distributed from the Plan, or (ii)
      the
      date such individual again becomes a Nonemployee Director and recommences active
      participation in the Plan.  During the period of time that an
      individual is an inactive Participant in the Plan, such individual's Accounts
      shall continue to be credited with deemed earnings as provided in the
      Plan.

    

    2.5  Limitations
      on New Elections.  Notwithstanding anything to the
      contrary herein, after December 31, 2005, no Deferral Elections will be
      permitted under the Plan.

    
      
              

                  
      
      

                  -6-      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      III

    PARTICIPANTS'
      ACCOUNTS: DEFERRAL CONTRIBUTIONS

     

    
 

      
      3.1  Participants'
      Accounts.  

     

             
      (a)  Establishment
      of Accounts.  The Plan Administrator shall establish and
      maintain an Account on behalf of each Participant to each Plan Year for which
      the Participant makes Deferral Contributions.  The Plan Administrator
      shall credit each Participant's Account with the Participant's Deferral
      Contributions for such Plan Year and earnings attributable thereto, and shall
      maintain such Account until the value thereof has been distributed to or on
      behalf of the Participant or the Participant's Beneficiary.

             
      (b)  Nature
      of Contributions and Accounts.  The amounts credited to a
      Participant's Accounts shall be represented solely by bookkeeping
      entries.  Except as provided in Article VIII, no monies or other
      assets shall actually be set aside for such Participant, and all payments to
      a
      Participant under the Plan shall be made from the general assets of the
      Participating Companies.

        

             
      (c)  Several
      Liabilities.  Each Participating Company shall be
      severally (and not jointly) liable for the payment of benefits under the Plan
      under Deferral Elections executed by Nonemployee Directors with, and while
      serving as a Nonemployee Director of, such Participating Company.

     

             
      (d)  General
      Creditors.  Any assets which may be acquired by a
      Participating Company in anticipation of its obligations under the Plan shall
      be
      part of the general assets of such Participating Company.  A
      Participating Company's obligation to pay benefits under the Plan constitutes
      a
      mere promise of such Participating Company to pay such benefits, and a
      Participant or Beneficiary shall be and remain no more than an unsecured,
      general creditor of such Participating Company.

    

    3.2  Deferral
      Contributions.  Each Nonemployee Director may irrevocably
      elect to have Deferral Contributions made for a Plan Year by completing in
      a
      timely manner a Deferral Election and an Investment Election and following
      other
      election procedures as provided in Section 2.3.  Subject to any
      modifications, additions or exceptions that the Plan Administrator, in its
      sole
      discretion, deems necessary, appropriate or helpful, and that are made in
      compliance with Section 409A, the following terms shall apply to such Deferral
      Elections:

     

             
      (a)  Effective
      Date.  A Participant's Deferral Election for all or a
      portion of a Plan Year shall be effective beginning with the first Compensation
      or Stock Grant paid (i) in such Plan Year with respect to a Participant
      participating for the entire Plan Year, and (ii) with respect to a Participant
      participating for a portion of a Plan Year, in the calendar month following
      the
      calendar month in which the Participant makes a Deferral Election.  To
      be effective, a Participant's Deferral Election must be made by the Election
      Deadline.  Any Nonemployee Director who fails to deliver a Deferral
      Election, or to complete any of the other requisite
      election procedures, in a timely manner, shall be deemed to have elected not
      to
      participate in the Plan for that Plan Year.

    

    

    
      
        -7-

      

      
        
        

        
          

        

      

      
        
        

      

    

     

             
      (b)  Term.
      Each Participant's Deferral Election regarding Compensation for a Plan Year
      shall remain in effect with respect to a portion of all Compensation paid or
      payable during such Plan Year, but shall not apply to any subsequent Plan
      Year.

    

    
      	
              (c)  

            	
                  
                Amount.

            

    

     

                (i)  Compensation
      Deferrals.  To defer Compensation, a

    Nonemployee
      Director's Deferral Election shall specify a whole percentage, in increments
      of
      ten percent (10%), of Compensation for a Plan Year to be deferred.  A
      Nonemployee Director may defer for any Plan Year up to one hundred percent
      (100%) of the Nonemployee Director's Compensation for such Plan
      Year.  The percentage so elected shall be withheld from each payment
      of Compensation otherwise payable to such Nonemployee Director during the Plan
      Year.  Notwithstanding any provision of this Plan or a Deferral
      Election to the contrary, however, the amount withheld from any payment of
      Compensation shall be reduced automatically, if necessary, so that it does
      not
      exceed the amount of such payment net of all withholding, allotments and
      deductions, other than any reduction pursuant to such Deferral
      Election.  No amounts shall be withheld during any period an
      individual ceases to receive Compensation as a Nonemployee Director for any
      reason during the Plan Year.  No adjustment shall be made in the
      amount to be withheld from any subsequent payment of Compensation for a Plan
      Year to compensate for any missed or reduced withholding amounts
      above.

     

                (ii)  Stock
      Grant Deferrals.  To defer from a Stock Grant, a
      Nonemployee Director's Deferral Election shall specify the number of shares
      of
      Company Stock, in increments of one hundred (100) shares, to be
      deferred.  A Nonemployee Director may defer for any Plan Year up to
      one hundred percent (100%) of the Stock Grant awarded for such
      year.

     

             
      (d)  Revocation.  Once
      made for a Plan Year, a Participant may not revoke a Deferral Election for
      such
      Plan Year.

     

             
      (e)  Crediting
      of Deferral Contributions.  The Plan Administrator shall
      credit to each Participant's Account for a Plan Year the amount of Compensation
      or Stock Grant, or both, reflected on the Participant's Deferral Election as
      of
      the date(s) on which such Compensation or Stock Grant would have been paid
      if
      not subject to the Participant's Deferral Election.

    

    3.3  Deferral
      Elections and Multiple Participating Companies.  Any
      Deferral Election which is timely executed and delivered to the Plan
      Administrator shall be effective to defer Compensation and Stock Grant earned
      by
      the Participant from the Participating Company with respect to which such
      Participant is a Nonemployee Director at the time of the election, or any other
      Participating Company with respect to which such  

    

     

    
      
        -8-

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Participant
      is a Nonemployee Director during the Plan Year for which the Deferral Election
      is effective.  In particular, a Participant (i) who timely executes
      and delivers a Deferral Election while serving as a Nonemployee Director of
      one
      Participating Company and subsequently becomes a Nonemployee Director of another
      Participating Company, or (ii) who ceases service as a Nonemployee Director
      and
      subsequently becomes a Nonemployee Director of another Participating Company,
      shall have the Compensation and Stock Grant that is paid or payable to him
      by
      both Participating Companies reduced under the terms of the Deferral Election
      and the Plan as if the moves had not occurred; provided, that, as provided
      in
      Section 3.2(c), no amounts of Compensation shall be withheld attributable to
      any
      portion of the Plan Year during which he is not receiving Compensation as a
      Nonemployee Director of a Participating Company.

    

    3.4  Vesting.  A
      Participant shall at all times be fully vested in such Participant's Deferral
      Contributions and all deemed investment earnings attributable
      thereto.

    
      
        
           -9-

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      IV

    DETERMINATION
      AND CREDITING OF INVESTMENT RETURN

    

    

    4.1  General
      Investment Parameters.  The rate of return credited to
      each Participant's Accounts shall be determined on the basis of the Investment
      Option(s) applicable to the Participant's Accounts, as set forth in this Article
      IV.

    

    4.2  Deemed
      Investments.  The manner in which each Participant's
      Deferral Contributions for each Plan Year shall be deemed invested in and
      between the Stock Unit Option and/or the Interest Income Option, shall be
      determined in accordance with the following terms:

     

             
      (a)  Nature
      of Deemed Investments.  A deemed investment in the Stock
      Unit Option and/or Interest Income Option shall be for the sole purpose of
      determining the rate of return to be credited to a Participant's Account, and
      shall not be treated or interpreted in any manner whatsoever as a requirement
      or
      direction to actually invest assets in Company Stock, an interest income fund,
      or any other investment media.  The Plan, as an unfunded, nonqualified
      deferred compensation plan, at no time shall have any actual investment of
      assets relative to the benefits or Accounts hereunder.

     

             
      (b)  Investment
      of Contributions.  All deferrals of Compensation
      otherwise payable in the form of Company Stock, and all deferrals of Stock
      Grants, shall be deemed invested in the Stock Unit
      Option.  Notwithstanding the foregoing, all deferrals of Compensation
      otherwise payable with respect to special meetings of the Board (or a committee
      of the Board) shall be deemed invested in the Interest Income
      Option.  With respect to deferrals of Compensation otherwise payable
      in cash, a Nonemployee Director shall complete an Investment Election
      prescribing the percentage of such Deferral Contributions for the Plan Year
      that
      will be deemed to be invested in the Stock Unit Option and/or the Interest
      Income Option; provided, such Investment Election shall specify one of the
      three
      alternatives, as follows:

     

                (i)  100%
      of
      such Deferral Contributions for the Plan Year shall be deemed invested in the
      Stock Unit Option;

     

                (ii)  100%
      of
      such Deferral Contributions for the Plan Year shall be deemed invested in the
      Interest Income Option; or

     

                (iii)  50%
      of
      such Deferral Contributions for the Plan Year shall be deemed invested in the
      Stock Unit Option, and 50% of such Deferral Contributions for the Plan Year
      shall be deemed invested in the Interest Income Option.

     

             
      (c)  Investment
      of Existing Account Balances.  A Participant may not make
      an Investment Election changing the percentage of an existing Account balance
      that will be deemed to be invested in the Stock Unit Option and/or the Interest
      Income Option.  Once a deemed investment is made with respect to an
      Account, it shall continue to apply with respect to such Account until all
      amounts in such Account are distributed.

    

    

    
      
        -10-

      

      
        
        

        
          

        

      

      
        
        

      

    

    

             
      (d)  Investment
      Subaccounts.  For the sole purpose of tracking a
      Participant's investment elections and calculating investment earnings
      attributable to a Participant's Account for a Plan Year pursuant to the terms
      of
      this Article IV, the Plan Administrator shall establish and maintain for such
      Participant for such Plan Year a Stock Unit Subaccount and an Interest Income
      Subaccount, as necessary, the total of which shall equal such Participant's
      Account for such Plan Year.

    

    4.3  Stock
      Unit Options.

     

             
      (a)  Stock
      Unit Subaccount.  To the extent that a Nonemployee
      Director's Deferral Contributions for a Plan Year are deemed to be invested
      in
      the Stock Unit Option, the Participant's Stock Unit Subaccount for such Plan
      Year shall be credited, as of the date(s) on which Compensation or Stock Grants
      which comprise such Deferral Contributions would have been paid if not subject
      to the Participant's Deferral Election, with a number of Stock Units equal
      to
      (i) with respect to Stock Grants and Compensation that would be payable in
      the
      form of Company Stock if not deferred, the number of shares of Company Stock
      that would be so payable, and (ii) with respect to Compensation that would
      be
      payable in the form of cash if not deferred, the number of full and fractional
      shares of Company Stock that could have been purchased with such cash at the
      average of the high and low sales prices of one share of Company Stock on the
      New York Stock Exchange for the period of five Business Days ending on the
      date
      such Compensation is so credited (or the period of five Business Days ending
      on
      the immediately preceding Business Day if such date is not a Business
      Day).

     

             
      (b)  Cash
      Dividends.  As of each date on which a cash dividend has
      been paid on Company Stock, the number of Stock Units credited to a
      Participant's Stock Unit Subaccount for each Plan Year shall be increased by
      a
      number of additional Stock Units equal to the quotient of (i) the amount of
      dividends that would have been paid on the number of shares of Company Stock
      equivalent to the number of Stock Units credited to such subaccount as of such
      dividend payment date, divided by (ii) the average of the daily high and low
      sales prices of one share of Company Stock on the New York Stock Exchange for
      the period of five Business Days ending on such dividend payment date (or the
      period of five Business Days ending on the immediately preceding Business Day
      if
      such date was not a Business Day).

     

             
      (c)  Adjustments.  In
      the event of any change in outstanding shares of Company Stock, by
      reclassification, recapitalization, merger, consolidation, spin-off,
      combination, exchange of shares, stock split, reverse stock split or otherwise,
      or in the event of the payment of a stock dividend on Company Stock, or in
      the
      event of any other increase or decrease in the number of outstanding shares
      of
      Company Stock, other than the issuance of shares for value received by BellSouth
      or the redemption of shares for value, the Plan Administrator shall adjust
      the
      number and/or form of Stock Units in the manner it deems appropriate in its
      reasonable judgment to reflect such event, including substituting or adding
      publicly traded shares of companies other than the Company as a basis for
      determining Stock Units.  The Plan Administrator similarly shall make
      such adjustments as it deems are appropriate in its reasonable judgment in
      the
      form, including the basis of measurement, of Stock Units in the event all shares
      of Company Stock cease for any reason to be outstanding or to be actively traded
      on the New York Stock Exchange.  In the event the Plan Administrator

    

    

    
      
        -11-

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    determines
      in its reasonable judgment that it would not be possible to appropriately
      reflect an event under this paragraph (c) by adjusting the number and/or form
      of
      Stock Units, the Plan administrator shall establish a special Valuation Date
      appropriate to such event for all Stock Unit Subaccounts and shall cause such
      subaccounts, as so valued, automatically to be converted into Interest Income
      Subaccounts, which thereafter shall be subject to Section 4.4.

     

           
      4.4      Interest Income Option

     

             
      (a)  Interest
      Income Subaccount.  To the extent that a Nonemployee
      Director's Deferral Contributions for a Plan Year are deemed to be invested
      in
      the Interest Income Option, the Participant's Interest Income Subaccount for
      such Plan Year shall be credited, s of the date(s) on which Compensation which
      comprises such Deferral Contributions would have been paid if not subject to
      the
      Participant's Deferral Election, with such portion of the Nonemployee Director's
      Deferral Contributions.

     

         (b)  Crediting
      of Deemed Interest.  As of each Valuation Date, the Plan
      Administrator shall credit a Participant's Interest Income Subaccounts with
      the
      amount of earnings applicable thereto for the period since the immediately
      preceding Valuation Date.  Such crediting of earnings for each
      Interest Income Subaccount shall be effected, as follows:

     

                (i)  Amount
      Invested.  The Plan Administrator shall determine the
      amount of (A) in the case of an Interest Income Subaccount established in
      connection with a Deferral Election for the Plan Year in which such Valuation
      Date occurs, such Participant's Deferral Contributions credited to such
      Participant's Interest Income Subaccount since the immediately preceding
      Valuation Date plus the balance of such Participant's Interest Income Subaccount
      for such Plan Year as of the immediately preceding Valuation Date; and (B)
      in
      the case of an Interest Income Subaccount for a prior Plan Year, the balance
      of
      such Participant's Interest Income Subaccount as of the immediately preceding
      Valuation Date; minus the amount distributed from such Participant's Interest
      Income Subaccount since the immediately preceding Valuation Date;
      and

     

                (ii)  Determination
      of Amount.  The Plan Administrator then shall apply the
      Credited Interest Rate for such Plan Year to such Participant's adjusted
      Interest Income Subaccount (as determined in subparagraph (i) hereof), and
      the
      total amount of investment earnings resulting therefrom shall be credited to
      such Participant's Interest Income Subaccount as of such Valuation
      Date.

     

           
      4.5 
Good
      Faith Valuation Binding.  In determining the value of
      Accounts, the Plan Administrator shall exercise its best judgment, and all
      such
      determinations of value (in the absence of bad faith) shall be binding upon
      all
      Participants and their Beneficiaries.

     

           
      4.6  Errors
      and Omissions in Accounts.  If an error or omission is
      discovered in the Account of a Participant or in the amount of a Participant's
      Deferral Contributions, the Plan Administrator, in its sole discretion, shall
      cause appropriate, equitable adjustments to be made as soon
      as
      administratively practicable following the discovery of such error or
      omission.

    

    
      
                   

                  -12-      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      V

    PAYMENT
      OF ACCOUNT BALANCES

    

     

         

       
           5.1     
Benefit Amounts:

    

     

             
      (a)  Benefit
      Entitlement.  As the benefit under the Plan, each
      Participant (or Beneficiary) shall be entitled to receive the total amount
      of
      the Participant's (or Beneficiary's) Accounts, determined as of the most recent
      Valuation Date, and payable at such times and in such forms as described in
      this
      Article V.

     

             
      (b)  Valuation
      of Benefit.  For purposes hereof, each Account of a
      Participant as of any Valuation Date shall be equal to (i) the total amount
      of
      all of such Participant's Deferral Contributions credited thereto; plus (ii)
      all
      deemed investment earnings attributable thereto; minus (iii) the total amount
      of
      all benefit payments previously made therefrom.

     

             
      (c)  Conversion
      of Stock Units into Dollars.  For purposes of converting
      some or all of a Participant's Stock Units into a dollar amount in valuing
      the
      Participant's Accounts as of any Valuation Date, the value of each Stock Unit
      shall be equal to the average of the high and low sales prices of one share
      of
      Company Stock on the New York Stock Exchange for the last Business Day of each
      of the three calendar months ending on or immediately preceding such Valuation
      Date.

     

           
      5.2  Elections
      of Timing and Form.  In conjunction with, and at the time
      of, completing a Deferral Election for each Plan Year, a Nonemployee Director
      shall select the timing and form of the distribution that will apply to the
      Account of such Nonemployee Director for Deferral Contributions (and deemed
      investment earnings attributable thereto) for such Plan Year.  The
      terms applicable to this selection process are as follows:

     

             
      (a)  Timing.  For
      a Participant's Account for each Plan Year, the Participant may elect that
      distribution will be made or commence as of any January 1 following the Plan
      Year of deferral; provided, he may not select a benefit payment or commencement
      date for such Account that is later than the twentieth January 1 following
      the
      end of the Plan Year of deferral.

     

             
      (b)  Form
      of Distribution.  For a Participant's Account for each
      Plan Year, the Participant may elect that the distribution will be paid in
      one
      of the following forms:

     

                (i)       
      a single lump-sum cash payment; or

     

               (ii)
  substantially
      equal annual installments (adjusted for investment earnings between payments
      in
      the manner described in Article IV) over a period of one (1) to ten (10)
      years.

     

             
      (c)  Multiple
      Selections.  A Nonemployee Director may select a
      different benefit payment or commencement date and/or a different form of
      distribution with respect to such Nonemployee Director's Account for each Plan
      Year.  For ease of administration, the Plan

     

     

    
      
        -13-

      

      
        
        

        
          

        

      

      
        
        

      

    

    Administrator
      may combine Accounts and subaccounts of a Participant to which the
      same

    benefit
      payment/commencement date and the same form of distribution apply.

    

    
      	
              5.3  

            	
              Benefit
                Payments to a
                Participant.

            

    

    

    
      	
                                              (a)  

            	
              Timing.  A
                Participant shall receive or begin receiving a distribution
                of

            

    

    each
      of
      such Participant’s Accounts as of the earlier of (i) the January 1 selected by
      such Participant with respect to each such Account pursuant to the terms of
      Section 5.2(a); or (ii) the January 1 immediately following the date that such
      Participant’s service as a Nonemployee Director with BellSouth and all
      Affiliates ends for any reason.  An amount payable “as of” any January
      1 shall be made as soon as practicable after such January 1 and, unless
      extenuating circumstances arise, no later than January 31.

    

    (b)           Form
      of Distribution.   A Participant shall
      receive or begin receiving a distribution of each of such Participant’s Accounts
      in cash in the form selected by such Participant with respect to such Account
      pursuant to the terms of Section 5.2(b).

    

    (c)           Valuation
      of Single Lump-Sum Payments.   The
      amount of a Participant’s single lump-sum distribution of any of such
      Participant’s Accounts as of any applicable January 1 shall be equal to the
      value of such Account as of the Valuation Date immediately preceding the date
      on
      which such distribution is paid.

    

    (d)           Valuation
      of Installment Payments.  For purposes
      of determining the amount of any installment payment to be paid as of January
      1
      from an Account, the following shall apply:

    

    (i)           for
      any amount of such Account attributable to an Interest Income Subaccount as
      of
      the immediately preceding Valuation Date, such amount shall be divided by the
      number of remaining installments to be paid from such Account (including the
      current installment); and

     

                     
      (ii)    for
      any
      portion of such Account attributable to a Stock Unit Subaccount
      as of the immediately preceding Valuation Date, the total number of Stock Units
      constituting such portion shall be divided by the number of remaining
      installments to be paid from such Account (including the current installment),
      and the resulting number of Stock Units shall be converted into a dollar amount
      (pursuant to the terms of Section 5.1(c)) as of such Valuation
      Date.

    

    
      	
              5.4  

            	
              Death
                Benefits.

            

    

    

    (a)           General.  If
      a Participant dies before receiving the entire amount of the benefit under
      the
      Plan, such Participant’s Beneficiary shall receive distribution of amounts
      remaining in the Participant’s Accounts in the form, as elected by the
      Participant on a Beneficiary designation form described in Section 5.5, of
      either:

     

    
      
        -14-

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)           a
      single lump-sum cash payment of the entire balance in the Participant’s Accounts
      as of the January 1 immediately following the date of the Participant’s death;
      or

    

                  
       (ii)           (A)
      for Accounts with respect to which distribution has not commenced under Section
      5.2 at the time of the Participant’s death, substantially equal annual
      installments (adjusted for investment earnings between payments in the manner
      described in Article IV) over a period of one
      (1)
      to ten (10) years, commencing as of the January 1 immediately following the
      Participant’s death; and (B) for Accounts with respect to which distribution has
      commenced in the form of installments described in Section 5.2(b)(ii) at the
      time of the Participant’s death, continuation of such installment payment
      schedule.

    

    An
      amount
      payable “as of” any January 1 shall be made as soon as practicable after
      such

    January
      1
      and, unless extenuating circumstances arise, no later than January
      31.

    

    (b)           Valuation.
      The valuation rules described in subsection 5.3(c) and 5.3(d) shall
      apply to payments described in this Section 

    

    
      	
              5.5  

            	
              Beneficiary
                Designation.

            

    

    

    (a)           General.  A
      Participant shall designate a Beneficiary or Beneficiaries for all of such
      Participant’s Accounts by completing the form prescribed for this purpose for
      the Plan by the Plan Administrator and submitting such form as instructed by
      the
      Plan Administrator.  Once a Beneficiary designation is made, it shall
      continue to apply until and unless such Participant makes and submits a new
      Beneficiary designation form for this Plan.

    Notwithstanding
      the foregoing, after December 31, 2007, no changes may be made to the form
      or
      timing of payment of death benefits on previously submitted Beneficiary
      Designation (although the Beneficiary(ies) designated may be changed consistent
      with rules prescribed by the Plan Administrator).  Prior to January 1,
      2008, any such changes may be made only to the extent permitted by and
      consistent with Section 409A.

    

    
      	
                                   
                (b)  

            	
              No
                Designation or Designee Dead or
                Missing.  In the event
                that:

            

    

    

    
      	
                                                    
                (i)  

            	
              a
                Participant dies without designating a
                Beneficiary;

            

    

    

    (ii)           the
      Beneficiary designated by a Participant is not surviving or in existence when
      payments are to be made or commence to such designee under the Plan, and no
      contingent Beneficiary, surviving or in existence, has been designated;
      or

    

    (iii)           the
      Beneficiary designated by a Participant cannot be located by the Plan
      Administrator within 1 year from the date benefit payments are to be made or
      commence to such designee;

     

    
      
        -15-

      

      
        
        

        
          

        

      

      
        
        

      

    

    then,
      in
      any such events, the Beneficiary of such Participant shall be the Participant’s
      surviving spouse, if any can then be located, and if not, the estate of the
      Participant, and the entire balance in the Participant’s Accounts shall be paid
      to such Beneficiary in the form of a single lump-sum cash payment described
      in
      Section 5.4(a)(i).

    

    (c)           Death
      of Beneficiary.  If a Beneficiary who
      survives the Participant, and to whom payment of Plan benefits commences, dies
      before complete distribution of the Participant’s Accounts, the entire balance
      in such Accounts shall be paid to the estate of such Beneficiary in the form
      of
      a single lump-sum cash payment as of the January 1 immediately following such
      Beneficiary’s death.  An amount payable “as of” any January 1 shall be
      made as soon as practicable after such January 1 and, unless extenuating
      circumstances arise, no later than January 31.  The valuation rules
      described in subsection 5.3(c) shall apply to any payments described in this
      subsection 5.5(c).

    

    5.6           Taxes.  If
      the whole or any part of any Participant’s or Beneficiary’s benefit hereunder
      shall become subject to any estate, inheritance, income, employment or other
      tax
      which a Participating Company shall be required to pay or withhold, the
      Participating Company shall have the full power and authority to withhold and
      pay such tax out of any monies or other property in its hand for the account
      of
      the Participant or Beneficiary whose interests hereunder are so
      affected.  Prior to making any payment, the Participating Company may
      require such releases or other documents from any lawful taxing authority as
      it
      shall deem necessary.  Notwithstanding the foregoing, such withholding
      will be made with respect to a benefit under the Plan that is subject to Section
      409A unless (i) such benefit is currently distributable to the Participant,
      (ii)
      such benefit is includible in the gross income of the Participant due to a
      violation of Section 409A, or (iii) such withholding is for purposes of FICA
      tax
      or federal income tax with respect to such benefit.

     

     

    
      
        
          -16-

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      VI

    SPECIAL
      ELECTION REGARDING RETIREMENT PLAN

    

    

    6.1          Description
      of Election.  In connection with the
      freezing of benefit accruals under the BellSouth Corporation Directors
      Retirement Plan (the “Retirement Plan”) as of April
      30,
      1997, each active Nonemployee Director shall be offered a special one-time
      election to convert the entire value of the Retirement Plan benefit of such
      Nonemployee Director into a benefit described in this Article VI, and thereby
      cease participation in the Retirement Plan.  The value of a Retirement
      Plan benefit with respect to which the election described in this Section 6.1
      is
      made shall, for all purposes of this Plan (other than Sections 3.2(b), 3.2(c)
      and 4.2(b)) except as otherwise provided in this Article VI, be deemed to be
      “Compensation” and “Deferral Contributions”, and a separate Account shall be
      maintained for such Deferral Contributions as if the election was a Deferral
      Election for a separate Plan Year.

    

    
      	
                  
                6.2  

            	
              Election
                Deadline.  The Election Deadline
                for the election described in Section
                6.1 shall be April 28, 1997.

            

    

     

                  6.3           Amount.  Notwithstanding,
      any contrary provisions of Section 3.2(c), the election described in Section
      6.1
      must relate to one hundred percent (100%) of the value of the Retirement Plan
      benefit of the Nonemployee Director.

     

                 
      6.4           Deemed
      Investment.  Notwithstanding any
      contrary provisions of Section 4.2, Deferral Contributions described in Section
      6.1 shall be deemed invested in the Stock Unit
      Option.  Notwithstanding any contrary provisions of Section 4.3(a),
      the Participant’s Stock Unit Subaccount with respect to Deferral Contributions
      described in Section 6.1 shall be  credited as of May 1, 1997, with a
      number of Stock Units equal to the number of full and fractional shares of
      Company Stock that could have been purchased with the value of the Retirement
      Plan benefit (as determined by BellSouth and communicated to the Participant
      in
      connection with the election described in Section 6.1) at the average of the
      high and low sales prices of one share of Company Stock on the New York Stock
      Exchange for the last Business Day of each of January, February and March
      1997.

     

                 
      6.5           Payment
      of Benefits.  Notwithstanding any
      contrary provisions of Sections 5.2 and 5.3, amounts in each Participant’s
      Account attributable to Deferral Contributions described in Section 6.1 shall
      be
      payable commencing as of January 1 of the year during which the Retirement
      Plan
      benefit of such Nonemployee Director would have commenced, in substantially
      equal annual installments (adjusted for investment earnings between payments
      in
      the manner described in Article IV) for the number of years over which the
      Retirement Plan benefit of such Nonemployee Director would have been distributed
      had the election described in Section 6.1 not been made.  An amount
      payable “as of” any January 1 shall be made as soon as practicable after such
      January 1 and, unless extenuating circumstances arise, no later than January
      31.

     

                 
      6.6  Vesting.  Notwithstanding
      anything to the contrary in this Plan, including without limitation Section
      3.4,
      a Participant shall not be eligible for the benefits described in this Article
      VI unless the Participant shall have attained the age of fifty-five (55) years,
      or more, at the time the Participant terminates service as a Nonemployee
      Director.

     

    
      
        
          -17-

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      VI-A

    SPECIAL
      ELECTION REGARDING MASTER ACCOUNT

    

    
 

    6.1A     Description
      of Election.  Each active Nonemployee
      Director shall be offered a special one-time election to combine into a single
      Master Account all of the Nonemployee Director’s Accounts under the
      Plan.  The election shall be irrevocable upon the Election
      Deadline.

    

    6.2A     Election
      Deadline.  The Election Deadline for the
      Election described in Section 6.1A shall be April 30, 2001.

    

    6.3A     Effect
      of Election.  For each Nonemployee
      Director making the election described in Section 6.1A, all Accounts of such
      Nonemployee Director for each Plan Year under the Plan, beginning with the
      first
      Plan Year under the Plan which began May 1, 1997, through and including the
      upcoming Plan Year under the Plan which begins May 1, 2001, plus the special
      Account for any such Nonemployee Director who made the election regarding the
      Retirement Plan described in Section 6.1 of the Plan, shall be combined into
      a
      single Master Account under the Plan, with payments from such Master Account
      to
      be made under a single distribution schedule.  As a result of the
      election described in Section 6.1A, Nonemployee Directors may delay one or
      more
      scheduled benefit payments under an Account, but may not in any event accelerate
      the timing of payment of any benefit under the Plan.  Nonemployee
      Directors may not elect to combine some, but not all, of such Accounts into
      the
      Master Account.

    

    6.4A     Deemed
      Investment.  The special one-time
      election described in Section 6.1A shall not affect the Investment Election
      made
      by a Nonemployee Director with respect to Deferral Contributions for any Plan
      Year, or the deemed investment of such Deferral Contributions in either of
      the
      Stock Unit Option and/or the Interest Income Option, or the deemed investment
      of
      Deferral Contributions described in Section 6.1 in the Stock Unit
      Option.  Stock Unit Subaccounts and/or Interest Income Subaccounts
      shall continue to be maintained in accordance with Section 4.3 and 4.4 of this
      Plan, respectively, with respect to the Master Accounts of Nonemployee Directors
      who make the election described in Section 6.1A.

    

    6.5A     Election
      of Timing and Form of Payment.  In
      conjunction with, and at the time of, making the special one-time election
      described in Section 6.1A, a Nonempoyee Director shall select the timing and
      form of the distribution that will apply to the Master Account of such
      Nonemployee Director, subject to the following:

     

                
      (a)           Timing.  The
      Participant may elect that distribution will be made or commenced as of any
      January 1 after the date of such election (but in no event sooner than January
      1, 2003); provided, that the Participant may not select a benefit payment or
      a
      commencement date for the Master Account (i) that is later than the twentieth
      (20th) January
      1 following such election; or (ii) that is earlier than the latest date
      scheduled previously for distribution to be made or commenced for any Account
      of
      such Participant.

     

    
      
        -18-

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                
      (b)           Form
      of Distribution.  The Participant shall
      elect that the distribution from such Participant’s Master Account will be made
      in one of the following forms:

     

                        
      (i)           as single
      lump-sum cash payment; or

    

                    
                 
(ii)           substantially
      equal annual installments (adjusted for investment earnings between
      payments in the manner      
described
      in Article IV) over a period
      of one (1) to ten (10) years; 

    provided,
      however, that such Participant may not elect to have such distribution made
      over
      a period of years less than the number of years previously elected for the
      Plan
      Year with respect to which such Participant elected the longest payment
      schedule, or, if larger, the number of years over which the Participants Special
      Account with respect to Retirement Plan benefits, if any, is to be
      paid.

     

                
      (c)           Benefit
      Payments.  The payment of benefits from
      a Participant’s Master Account shall be made in accordance with the provisions
      of Section 5.3 of the Plan.

     

    
      
        
          -19-

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      VII

    CLAIMS

    

    

    7.1           Initial
      Claim.  Claims for benefits under the
      Plan may be filed with the Plan Administrator on forms or in such other written
      documents, as the Plan Administrator may prescribe.  The Plan
      Administrator shall furnish to the claimant written notice of the disposition
      of
      a claim within 90 days after the application therefor is filed.  In
      the event the claim is denied, the notice of the disposition of the claim shall
      provide the specific reasons for the denial, citations of the pertinent
      provisions of the Plan, and, where appropriate, an explanation as to how the
      claimant can perfect the claim and/or submit the claim for review.

    

    7.2           Appeal.  Any
      Participant or Beneficiary who has been denied a benefit shall be entitled,
      upon
      request to the Plan Administrator, to appeal the denial of the
      claim.  The claimant (or a duly authorized representative) may review
      pertinent documents related to the Plan and in the Plan Administrator’s
      possession in order to prepare the appeal.  The request for review,
      together with written statement of the claimant’s position, must be filed with
      the Plan Administrator no later than 60 days after receipt of the written
      notification of denial of a claim provided for in Section 7.1.  The
      Plan Administrator’s decision shall be made within 60 days following the filing
      of the request for review.  If unfavorable, the notice of the decision
      shall explain the reasons for denial and indicate the provisions of the Plan
      or
      other documents used to arrive at the decision.

    

    7.3           Satisfaction
      of Claims.  The payment of the benefits
      due under the Plan to a Participant or Beneficiary shall discharge the
      Participating Company’s obligations under the Plan, and neither the Participant
      nor the Beneficiary shall have any further rights under the Plan upon receipt
      by
      the appropriate person of all benefits.  In addition, (i) if any
      payment is made to a Participant or Beneficiary with respect to benefits
      described in the Plan from any source arranged by BellSouth or a Participating
      Company including, without limitation, any fund, trust, insurance arrangement,
      bond, security device, or any similar arrangement, such payment shall be deemed
      to be in full and complete satisfaction of the obligation of the Participating
      Company under the Plan to the extent of such payment as if such payment had
      been
      made directly by such Participating Company; and (ii) if any payment from a
      source described in clause (i) shall be made, in whole or in part, prior to
      the
      time payment would be made under the terms of the Plan, such payment shall
      be
      deemed to satisfy such Participating Company’s obligation to pay Plan benefits
      beginning with the benefit which would next become payable under the
      Plan  and continuing in the order in which benefits are so payable,
      until the payment from such other source is fully recovered.  The Plan
      Administrator or such Participating Company, as a condition to making any
      payment, may require such Participant or Beneficiary to execute a receipt and
      release therefor in such form as shall be determined by the Plan Administrator
      or the Participating Company.  If receipt and release is required but
      the Participant or Beneficiary (as applicable) does not provide such receipt
      and
      release in a timely enough manner to permit a timely distribution in accordance
      with the general timing of distribution provisions in the Plan, the payment
      of
      any affected distribution may be delayed until the Plan Administrator or the
      Participating Company receives a proper receipt and release.

     

    
      
        
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    ARTICLE
      VIII

    SOURCE
      OF FUNDS

    

    

    Each
      Participating Company shall
      provide the benefits described in the Plan from its general
      assets.  However, to the extent that funds in one or more trusts, or
      other funding arrangement(s), allocable to the benefits payable under the Plan
      are available, such assets may be used to pay benefits under the
      Plan.  If such assets are not sufficient or are not used to pay all
      benefits due under the Plan, then the appropriate Participating Company shall
      have the obligation, and the Participant or Beneficiary, who is due such
      benefits, shall look to such Participating Company to provide such
      benefits.  No Participant or Beneficiary shall have any interest in
      the assets of any trust, or other funding arrangement, or in the general assets
      of the

    Participating
      Companies other than as general, unsecured creditor.  Accordingly, a
      Participating Company shall not grant a security interest in the assets held
      by
      the trust in favor of the Participants, Beneficiaries or any
      creditor.

    

     

    
      
        
          -21-

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      IX

    PLAN
      ADMINISTRATION

    

    

    
      	
                    
                9.1  

            	
              Action
                by the Plan
                Administrator.

            

    

     

                                
      (a)           Individual
      Administrator.  If the Plan
      Administrator is an individual, he or she shall act and record his or her
      actions in writing.  Any matter concerning specifically such
      individual’s own benefit or rights hereunder shall be determined by the Board or
      its designee.

    
                            
      (b)           Administrative
      Committee.  If the Plan Administrator is
      a committee, action of the Plan Administrator may be taken with or without
      a
      meeting of committee members; provided, action shall be taken only upon the
      vote
      or other affirmative expression of a majority of the committee members qualified
      to vote with respect to such action.  If a member of the committee is
      a Participant or Beneficiary, he or she shall not participate in any decision
      which solely affects his or her own benefit under the Plan. For purposes of
      administering the Plan, the Plan Administrator shall choose a secretary who
      shall keep minutes of the committee’s proceedings and all records and documents
      pertaining to the administration of the Plan.  The secretary may
      execute any certificate or any other written direction on behalf of the Plan
      Administrator.

     

    9.2  Rights
      and Duties of the Plan
      Administrator.  The Plan Administrator
      shall administer the Plan and shall have all powers necessary to accomplish
      that
      purpose, including (but not limited to) the following:

     

          (a)              
      to construe, interpret and administer the Plan;

     

         
      (b)             
 to make determinations required by the Plan, and to maintain records
      regarding Participants’ and Beneficiaries’ benefits hereunder;

     

         
      (c)             
       to compute and certify to Participating Companies the amount and kinds of
      benefits payable to Participants and Beneficiaries, and to determine the time
      and manner in which such benefits are to be paid;

     

                  (d)           to
      authorize all disbursements by a Participating Company pursuant to the
      Plan;

     

          (e)           to
      maintain all the necessary records of the administration of the
      Plan;

     

          (f)           to
      make and publish such rules and procedures for the regulation of the Plan as
      are
      not inconsistent with the terms hereof;

     

          (g)           to
      delegate to other individuals or entities from time to time the performance
      of
      any of its duties or responsibilities hereunder; and

     

    
      
        -22-

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    (h)  to
      hire
      agents, accountants, actuaries, consultants and legal counsel to assist in
      operating and administering the Plan.
 

    The
      Plan
      Administrator shall have the exclusive right to construe and interpret the
      Plan,
      to decide all questions of eligibility for benefits and to determine the amount
      of such benefits, and its decisions on such matters shall be final and
      conclusive on all parties.

     

                      
      9.3      Bond;
      Compensation.  The Plan Administrator
      and (if applicable) its members shall serve as such without bond and without
      compensation for services hereunder.  All expenses of the Plan
      Administrator shall be paid by the Participating Companies.

     

                              
      9.4       Post-Merger Plan
      Administration.  Notwithstanding
      anything to the contrary in this Plan, following the Merger, responsibility
      for
      administration of the Plan shall be determined under the terms of the Rabbi
      Trust Agreements.  As provided in the Rabbi Trust Agreements, claims
      for benefits, appeals of benefit denials and Plan interpretations shall be
      made
      by a “Trust Contractor” or “Independent Fiduciary” (as such terms are defined in
      the Rabbi Trust Agreements), as the case may be.  At any time during
      which a Trust Contractor or Independent Fiduciary shall, under the terms of
      the
      Rabbi Trust Agreements, have such Plan administrative responsibilities, the
      term
“Plan Administrator” as used in this Plan shall refer to such Trust Contractor
      or Independent Fiduciary.

     

    
      
        
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    ARTICLE
      X

    AMENDMENT
      AND TERMINATION

    

    

              
      10.1      Amendments.  Subject
      to Section 10.3, the Board shall have the right, in its sole discretion, to
      amend the Plan in whole or in part at any time and from time to
      time.  In addition, the Plan Administrator shall have the right, in
      its sole discretion, to amend the Plan at any time and from time to time so
      long
      as such amendment is not of a material nature.  Notwithstanding the
      foregoing, no such action shall accelerate or postpone the time or schedule
      of
      payment of any Plan benefits except as may be permitted under Section 409A
      and
      regulations thereunder.

     

             
      10.2       Termination of
      Plan.  Subject to Section 10.3,
      BellSouth reserves the right to discontinue and terminate the Plan at any time,
      for any reason.  Any action to terminate the Plan shall be taken by
      the Board and such termination shall be binding on all Participating Companies,
      Participants and Beneficiaries.

     

             
      10.3       Limitation on
      Authority.  Except as otherwise provided
      in this Section 10.3, no contractual right created by and under any Deferral
      Election made prior to the effective date of any amendment or termination shall
      be abrogated by any amendment or termination of the Plan, absent the express,
      written consent of the Participant who made the Deferral Election.

     

             
      (a)          Plan
      Amendments.  The limitation on authority
      described in this

    Section
      10.3 shall not apply to any amendment of the Plan which is reasonably necessary,
      in the opinion of counsel, (i) to preserve the intended tax consequences of
      the
      Plan described in Sections 11.1 and 11.10, (ii) to preserve the status of the
      Plan as an unfunded, nonqualified deferred compensation plan for the benefit
      of
      a select group of management or highly compensated employees and not subject
      to
      the requirements of Part 2, Part 3 and Part 4 of Title I of ERISA, or (iii)
      to
      guard against other material adverse impacts on Participants and Beneficiaries,
      and which, in the opinion of counsel, is drafted primarily to preserve such
      intended consequences, or status, or to guard against such adverse
      impacts.

     

             
      (b)         Plan
      Termination.  The limitation on
      authority described in this Section 10.3 shall not apply to any termination
      of
      the Plan as the result of a determination that, in the opinion of counsel,
      (i)
      Participants and Beneficiaries generally are subject to federal income taxation
      (including but not limited to taxation, penalty taxes, interest or other adverse
      tax consequences under Section 409A) on Deferral Contributions or other amounts
      in Participant Accounts prior to the time of distribution of amounts under
      the
      Plan, or (ii) the Plan is generally subject to Part 2, Part 3 or Part 4 of
      Title
      I of ERISA, but in either case only if such termination is reasonably necessary,
      in the opinion of counsel, to guard against material adverse impacts on
      Participants and Beneficiaries, or BellSouth or Participating Companies. Upon
      such termination, the entire amount in each Participant’s Accounts shall be
      distributed in a single lump-sum distribution as soon as practicable after
      the
      date on which the Plan is terminated; provided, no benefit under the Plan that
      is subject to Section 409A shall be distributed prior to the earliest date
      such
      distribution would be permitted under Section 409A.  In such event,
      the Plan Administrator shall declare that the date of termination (or, if such
      day is not a Business Day, the last Business Day immediately 

     

    
      
        -24-

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    preceding
      such day) shall be a Valuation Date and all distributions shall be made based
      on
      the value of the Accounts as of such Valuation Date.

     

             
      (c)         Opinions of
      Counsel.  In each case in which an
      opinion of counsel is contemplated in this Section 10.3, any such opinion shall
      be in writing and delivered to the Board, rendered by a nationally recognized
      law firm selected or approved by the Board.

     

    
      
        
          -25-

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      XI

    MISCELLANEOUS

    

    

            
       
11.1       Taxation.  It
      is the intention of BellSouth that the benefits payable hereunder shall not
      be
      deductible by the Participating Companies nor taxable for federal income tax
      purposes to Participants or Beneficiaries until such benefits are paid by the
      Participating Company to such Participants or Beneficiaries.  When
      such benefits are so paid, it is the intention of the Participating Companies
      that they shall be deductible by the Participating Companies under Code Section
      162.

     

      
          11.2     
Withholding.  All payments
      made to a Participant or Beneficiary hereunder shall be reduced by any
      applicable federal, state or local withholding or other taxes or charges as
      may
      be required under applicable law.

     

           11.3     
      No Employment
      Contract.  Nothing herein contained is
      intended to be nor shall be construed as constituting a contract or other
      arrangement between a Participating Company and any Participant to the effect
      that the Participant will be employed by the Participating Company or continue
      to be a Nonemployee Director for any specific period of time.

     

                      
      11.4     
Headings.  The headings of
      the various articles and sections in the Plan are solely for convenience and
      shall not be relied upon in construing any provisions hereof.  Any
      reference to a section shall refer to a section of the Plan unless specified
      otherwise.

             
      

                      
      11.5      Gender and
      Number.  Use of any gender in the Plan
      will be deemed to include all genders when appropriate, and use of the singular
      number will be deemed to include the plural when appropriate, and vice versa
      in
      each instance.

     

                      
      11.6      Assignment of
      Benefits.  The right of a Participant or
      Beneficiary to receive payments under the Plan may not be anticipated,
      alienated, sold, assigned, transferred, pledged, encumbered, attached or
      garnished by creditors of such Participant or Beneficiary, except by will or
      by
      the laws of descent and distribution and then only to the extent permitted
      under
      the terms of the Plan.

     

                      
      11.7      Legally
      Incompetent.  The Plan Administrator, in its sole
      discretion, may direct that payment be made to an incompetent or disabled
      person, for whatever reason, to the guardian of such person or to the person
      having custody of such person, without further liability on the part of a
      Participating Company for the amount of such payment to the person on whose
      account such payment is made.

     

                       11.8      Entire
      Document.  This Plan document sets forth
      the entire Plan and all rights and limits.  Except for a formal
      amendment hereto, no document shall modify the Plan or create any additional
      right or benefits.

     

                      
      11.9      Governing
      Law.  The Plan shall be construed,
      administered and governed in all respects in accordance with applicable federal
      law and, to the extent not preempted by federal law, in accordance with the
      laws
      of the State of Georgia.  If any provisions of this instrument shall
      be

     

    
      
        -26-

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    held
      by a
      court of competent jurisdiction to be invalid or unenforceable, the remaining
      provisions hereof shall continue to be fully effective.

    

              
      11.10    Plan to Comply with Code Section
      409A.  Notwithstanding any provision to
      the contrary in this Plan, each provision of this Plan shall be interpreted
      to
      permit the deferral of compensation and the payment of deferred amounts in
      accordance with Code Section 409A and any provision that would conflict with
      such requirements shall not be valid or enforceable.

    

      -27-

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