Document:

Exhibit 10-g

2005 SUPPLEMENTAL EMPLOYEE
RETIREMENT PLAN

Adopted:  November
 19, 2004

Effective:  November 18, 2005

Amended and Restated: 
December 12, 2019

 

 

1                    
 Purpose.

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

2                    
 Definitions.  

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

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

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

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

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

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

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

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

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

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

 

Human Resources Committee.  “Human Resources Committee”
means the Human Resources Committee of the AT&T Inc. Board of Directors.

 

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

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

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

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

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

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

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

 

Participant. "Participant"
means:

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

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

(c)      An Officer of AT&T or an
AT&T affiliate who is designated by the Human Resources Committee as
eligible to participate in the Plan.

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

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

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

Years of Service                                                                                 Age 

25 years or more                                                                  50
or older

30 years or more                                                                  Any
age

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

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

SERP Effective Date.  “SERP Effective Date” means
the date of the written designation of the Participant’s eligibility to
participate in SERP, signed by the CEO or authorized by the Human Resources
Committee, as required by the Plan.

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

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

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

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

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

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

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

Years of Service.  "Years of
Service" means the number of each complete Years of full-time service as
an employee of AT&T or an AT&T affiliate beginning with the
Participant’s Service Commencement Date through each annual anniversary of such
date, including service prior to the adoption of this Plan. “Years of Service”
shall also include, without duplication, (i.) a Participant’s Years of service
that are recognized for purposes of the BellSouth Corporation Supplemental
Employee Retirement Plan, or (ii.) a Participant’s years of service on the
Cingular Wireless payroll during the period beginning on 10/28/01 and ending on
or prior to 12/31/04 that were recognized for purposes of the Cingular Wireless
SBC Executive Transition Supplemental Retirement Income Plan, but that are not
otherwise included pursuant to the immediately preceding sentence.

3                    
 Plan ("SERP") Benefits.  

3.1               
 SERP Benefit Formula.

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

      Final Average Earnings

 

x
Revised Retirement Percentage                                                                                                                     

= Target Retirement Benefit

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

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

=  Target Benefit

-  Age Discount                                                                                                                                                  

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

- Immediate Annuity Value of
SRIP                                                                                                              

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

 

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

Final Average Earnings

X   Revised Retirement
Percentage                                                                                                                

=    Target Retirement Benefit

-     Age Discount                                                                                                                                               

=    Discounted Target Benefit

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

-
Immediate Annuity Value of SRIP

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

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

Where in both of the above cases the following apply:

(a)           Revised
Retirement Percentage = Retirement Percent + Service Factor

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

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

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

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

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

3.2.             
 Vesting.

Notwithstanding any other provision of this Plan:

 

(a)                
 upon any
Termination of Employment of the Participant for a reason other than death or
Disability, AT&T shall have no obligation to the Participant under this
Plan if the Participant has less than five (5) Years of Service or, for
Participants who are informed, in writing, of their SERP eligibility on or
after September 28, 2006, less than four (4) Years of Participation, at the
time of Termination of Employment; provided, however, for any Participant whose
Termination of Employment occurs on September 30,2010 and who timely executes
and does not revoke a Release and Waiver in favor of the Company, shall be
deemed to satisfy the Years of Service and Years of Participation vesting
requirements of this Section as of their Termination of Employment; and

(b)               
 the terms
and conditions set forth in Section 8.2 shall apply to any benefits
accrued on or after January 1, 2010, and in order for a Participant to accrue
(or collect) such Plan benefits on or after January 1, 2010, the Participant
must comply with the terms and conditions set forth in Section 8.2. 

4                    
 Election and Form of Distribution of SERP Benefits.

4.1               
 Normal Form.

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

 

 

4.2               
 Election Alternatives.

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

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

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

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

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

 

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

4.3               
 Distribution Election.

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

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

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

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

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

 

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

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

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

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

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

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

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

5                    
 Death or Disability Benefits.  

5.1               
 Death Following Termination of Employment.

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

5.2               
 Death Prior to Termination of Employment

 

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

5.3               
 Disability.  

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

(a)           Recovery from
Disability,

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

(c)           Death. 

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

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

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

 

6.                  
 Payment of Benefits.  

6.1               
 Commencement of Payments.   

 

 

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

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

 

6.2               
 Withholding; Unemployment Taxes.  

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

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

 

 

6.3               
 Recipients of Payments; Designation of Beneficiary.  

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

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

6.4               
 No Other Benefits.  

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

6.5               
 Small Benefit.  

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

7.                  
 Conditions Related to Benefits.  

7.1               
 Administration of Plan.  

The Administrative Committee and the SEVP-HR with
respect to specific functions identified in the Plan, shall be the sole
administrators of the Plan and will, in their discretion, administer,
interpret, construe and apply the Plan in accordance with its terms.  The
Administrative Committee or the SEVP-HR shall further establish, adopt or
revise such rules and regulations as each may deem necessary or advisable for
the administration of the Plan.  The Administrative Committee shall serve as
the Plan’s “administrator” within the meaning of the Employee Retirement Income
Security Act of 1974, as amended, and regulations thereunder (“ERISA”).  All
decisions of the Administrative Committee or the SEVP-HR shall be final and
binding unless the Board of Directors should determine otherwise. 

 

7.2               
 No Right to AT&T Assets.  

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

7.3               
 Trust Fund.  

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

7.4               
 No Employment Rights.  

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

 

7.5               
 Modification or Termination of Plan.  

 

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

 

7.6               
 Offset.  

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

7.7               
 Change in Status.  

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

7.8          Special Provisions.

This Plan shall be subject to the special provisions
contained in Attachments F, G, H, and I.

8.                  
 Miscellaneous.  

8.1               
 Nonassignability.  

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

8.2               
 Non-Competition.  

 

AT&T would be unwilling to
provide Plan benefits but for the loyalty conditions and covenants set forth in
this Section 8.2, and the conditions and covenants herein are a material
inducement to AT&T’s willingness to sponsor the Plan and to offer Plan benefits
for the Participants on or after January 1, 2010.  Accordingly, as a condition
of accruing and/or receiving any Plan benefits on or after January 1, 2010,
each Participant is deemed to agree that he shall not, without obtaining the
written consent of AT&T in advance, participate in activities that
constitute engaging in competition with AT&T or engaging in conduct
disloyal to AT&T, as those terms are defined in this Section 8.2.  Further,
notwithstanding any other provision of this Plan, all benefits provided under
the Plan with respect to a Participant shall be subject to the enforcement
provisions of this Section 8.2 if the Participant, without the consent of
AT&T, participates in an activity that constitutes engaging in competition
with AT&T or engaging in conduct disloyal to AT&T, as so defined
below.  Furthermore, for benefits accrued before January 1, 2010, the
provisions of this Section 8.2 as in effect immediately before such date shall
also be applicable to the Participant’s Plan benefits, with such provisions and
those herein being each separately applicable and effective.

(a)           Definitions. 
For purposes of this Section 8.2 and of the Plan generally:

(i)    an “Employer Business”
shall mean AT&T, any subsidiary of AT&T, or any business in which
AT&T or a subsidiary or affiliated company of AT&T has a substantial
interest or joint venture interest;

(ii)   “engaging in
competition with AT&T” shall mean, while employed by an Employer Business
or within two (2) years after the Participant’s Termination of Employment,
engaging by the Participant in any business or activity in all or any portion
of the same geographical market where the same or substantially similar
business or activity is being carried on by an Employer business.  “Engaging in
competition with AT&T” shall not include owning a nonsubstantial publicly
traded interest as a shareholder in a business that competes with an Employer
Business. However, “engaging in competition with AT&T shall include
representing or providing consulting services to, or being an employee or
director of, any person or entity that is engaged in competition with any
Employer Business or that takes a position adverse to any Employer Business.  

(iii)   “engaging in disloyal conduct
disloyal to AT&T” means, while employed by an Employer Business or within
two  (2) years after the Participant’s Termination of Employment, (i)
soliciting for employment or hire, whether as an employee or as an independent
contractor, for any business in competition with an Employer Business, any
person employed by AT&T or its affiliates during the one (1) year prior to
Participant’s Termination of Employment, whether or not acceptance of such
position would constitute a breach of such person’s contractual obligations to
AT&T and its affiliates; (ii) soliciting, encouraging, or inducing any
vendor or supplier with which Participant had business contact on behalf of any
Employer Business during the two (2) years prior to Participant’s Termination
of Employment, to terminate, discontinue, renegotiate, reduce, or otherwise
cease or modify its relationship with AT&T or its affiliate; or (iii)
soliciting, encouraging, or inducing any customer or active prospective
customer with whom Participant had business contact, whether in person or by
other media (“Customer”), on behalf of any Employer Business during the two (2)
years prior to Participant’s Termination of Employment, to terminate,
discontinue, renegotiate, reduce, or otherwise cease or modify its relationship
with any Employer Business, or to purchase competing goods or services from a
business competing with any Employer Business, or accepting or servicing
business from such Customer on behalf of himself or any other business. 
“Engaging in conduct disloyal to AT&T” also means, disclosing Confidential
Information to any third party or using Confidential Information, other than
for an Employer Business, or failing to return any Confidential Information to
the Employer Business following termination of employment.

 

(iv)     “Confidential Information”
shall mean all information belonging to, or otherwise relating to, an Employer
Business, which is not generally known, regardless of the manner in which it is
stored or conveyed to Participant, and which the Employer Business has taken
reasonable measures under the circumstances to protect from unauthorized use or
disclosure.  Confidential Information includes trade secrets as well as other
proprietary knowledge, information, know-how, and non-public intellectual
property rights, including unpublished or pending patent applications and all
related patent rights, formulae, processes, discoveries, improvements, ideas,
conceptions, compilations of data, and data, whether or not patentable or
copyrightable and whether or not it has been conceived, originated, discovered,
or developed in whole or in part by Participant.  For example, Confidential
Information includes, but is not limited to, information concerning the Employer
Business’ business plans, budgets, operations, products, strategies, marketing,
sales, inventions, designs, costs, legal strategies, finances, employees,
customers, prospective customers, licensees, or licensors; information received
from third parties under confidential conditions; or other valuable financial,
commercial, business, technical or marketing information concerning the
Employer Business, or any of the products or services made, developed or sold
by the Employer Business.  Confidential Information does not include
information that (i) was generally known to the public at the time of
disclosure; (ii) was lawfully received by Participant from a third party; (iii)
was known to Participant prior to receipt from the Employer Business; or (iv)
was independently developed by Participant or independent third parties; in
each of the foregoing circumstances, this exception applies only if such public
knowledge or possession by an independent third party was without breach by
Participant or any third party of any obligation of confidentiality or non-use,
including but not limited to the obligations and restrictions set forth in this
Plan.

(b)           Forfeiture of
Benefits.  A Participant’s right to receive benefits accrued on or after
January 1, 2010 shall terminate and no benefits accrued on or after January 1,
2010 shall be provided under this Plan if the Administrative Committee
determines that, within the time period and without the written consent
specified, Participant has been either engaging in competitive activity with
AT&T or engaging in conduct disloyal to AT&T.

(c)                
 Equitable
Relief.  The
parties recognize (i) that any Participant’s breach of any of the covenants in
this Section 8.2 will cause irreparable injury to AT&T, and will represent
a failure of the consideration under which AT&T (in its capacity as creator
and sponsor of the Plan) agreed to provide the Participant with the opportunity
to accrue or receive Plan benefits on and after January 1, 2010, and (ii) that
monetary damages would not provide AT&T with an adequate or complete remedy
that would warrant AT&T’s continued sponsorship of the Plan and payment of
Plan benefits for all Participants.  Accordingly, in the event of a
Participant’s actual or threatened breach of covenants in this Section 8.2, the
Administrative Committee, in addition to all other rights and acting as a
fiduciary under ERISA on behalf of all Participants, shall have a fiduciary
duty (in order to assure that AT&T receives fair and promised consideration
for its continued Plan sponsorship and funding) to seek an injunction
restraining the Participant from breaching the covenants in this Section 8.2. 
To enforce its repayment rights with respect to a Participant, the Plan shall
have a first priority, equitable lien on all Plan benefits that are paid to the
Participant.  In addition, AT&T shall pay for any Plan expenses that the
Administrative Committee incurs hereunder, and shall be entitled to recover
from the Participant its reasonable attorneys’ fees and costs incurred in
obtaining such injunctive remedies.  In the event the Administrative Committee
succeeds in enforcing the terms of this Section through a written settlement
with the Participant or a court order granting an injunction hereunder, the
Participant shall be entitled to collect Plan benefits prospectively, if the
Participant is otherwise entitled to such benefits, net of any fees and costs
assessed pursuant hereto (which fees and costs shall be paid to AT&T as a
repayment on behalf of the Participant), provided that the Participant complies
with said settlement or injunction.

(d)               
 Uniform
Enforcement. 
In recognition of AT&T’s need for nationally uniform standards for the Plan
administration, it is an absolute condition in consideration of any
Participant’s accrual or receipt of benefits under the Plan on or after January
1, 2010 that each and all of the following conditions apply to all Participants
and to any benefits that are accrued on or after January 1, 2010 and that are
thereafter paid or are payable under the Plan: 

                                                                    
(i)        
 ERISA shall control
all issues and controversies hereunder, and the Administrative Committee shall
serve for purposes hereof as a “fiduciary” of the Plan and as its “named
fiduciary” within the meaning of ERISA.

 

                                                                     
(ii)     
 All litigation between
the parties relating to this Section shall occur in federal court, which shall
have exclusive jurisdiction, any such litigation shall be held in the United
States District Court for the Northern District of Texas, and the only remedies
available with respect to the Plan shall be those provided under ERISA. 

                                                                   
(iii)     
 If the Administrative
Committee determines in its sole discretion either (I) that AT&T or its
affiliate that employed the Participant terminated the Participant’s employment
for cause, or (II) that equitable relief enforcing the Participant’s covenants
under this Section 8.2 is either not reasonably available, not ordered by a court
of competent jurisdiction, or circumvented because the Participant has sued in
state court, or has otherwise sought remedies not available under ERISA, then
in any and all of such instances the Participant shall not be entitled to
collect any Plan benefits accrued on or after January 1, 2010, and if any such
Plan benefits have been paid to the Participant, the Participant shall
immediately repay all such Plan benefits to the Plan (which shall be used to
pay Plan administrative expenses or Plan benefits) upon written demand from the
Administrative Committee.  Furthermore, the Participant shall hold AT&T and
its affiliates harmless from any loss, expense, or damage that may arise from
any of the conduct described in clauses (I) and (II) hereof. 

8.3               
 Notice.  

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

 

8.4               
 Validity.  

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

8.5               
 Applicable Law.  

This Plan shall be governed and construed in
accordance with ERISA, and the laws of the State of Texas to the extent not
preempted by ERISA.

9.                  
 Claims and Appeal. 

9.1               
 Claims. 

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

9.2               
 Claim Decision. 

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

 

 

If the claim is denied by the
AT&T Executive Compensation Department, in whole or in part, the AT&T
Executive Compensation Department shall provide a written decision using
language calculated to be understood by the Claimant and setting forth:  (i)
the specific reason or reasons for such denial; (ii) specific references to
pertinent provisions of this Plan on which such denial is based; (iii) a description
of any additional material or information necessary for the Claimant to perfect
his or her claim and an explanation of why such material or such information is
necessary; (iv) a description of the Plan’s procedures for review of denied
claims and the steps to be taken if the Claimant wishes to submit the claim for
review; (v) the time limits for requesting a review of a denied claim under
Section 9.3 and for conducting the review under Section 9.4; and (vi) a
statement of the Claimant’s right to bring a civil action under Section 502(a)
of ERISA if the claim is denied following review under Section 9.4.

9.3               
 Request for Review. 

Within sixty (60) days after the receipt by the
Claimant of the written decision on the claim provided for in Section 9.2, the
Claimant may request in writing that the Administrative Committee review the
determination of the AT&T Executive Compensation Department. Such request
must be addressed to the Administrative Committee at the address for giving
notice pursuant to Section 8.3. To assist the Claimant in deciding whether to request a review
of a denied claim or in preparing a request for review of a denied claim, a
Claimant shall be provided, upon written request to the Administrative
Committee and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant to the claim. The Claimant or
his or her duly authorized representative may, but need not, submit a statement
of the issues and comments in writing, as well as other documents, records or
other information relating to the claim for consideration by the Administrative
Committee. If the Claimant does not request a review of the AT&T Executive
Compensation Department’s decision by the Administrative Committee within such
sixty (60)-day period, the Claimant shall be barred and estopped from
challenging the determination of the AT&T Executive Compensation
Department.

9.4               
 Review of Decision. 

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

During its review of the claim, the Administrative Committee
shall:

(a)                
 Take into account all
comments, documents, records, and other information submitted by the Claimant
relating to the claim, without regard to whether such information was submitted
or considered in the initial review of the claim conducted pursuant to Section
9.2; 

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

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

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

 

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

In any case, a Participant or Beneficiary may have further rights
under ERISA. The Plan provisions require that Participants or Beneficiary
pursue all claim and appeal rights described in this Section 9 before they seek
any other legal recourse regarding claims for benefits.  In any case, a
Participant or Beneficiary may have further rights under ERISA. The Plan
provisions require that Participants or Beneficiary pursue all claim and appeal
rights described in this Section 9 before they seek any other legal recourse
regarding claims for benefits. 

 

 

LUMP SUM DISTRIBUTION AGREEMENT

 

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

 

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

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

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

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

1.                  
 If Participant
is age sixty (60) or over as of the date of his Termination of Employment,
Company shall pay to 

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

2.                  
 In exchange for the right to receive the payment described in
Paragraph 1, above, Participant acknowledges and agrees to the terms and
conditions of Section 8.2 of the Plan in the form attached hereto. 

 

3.                  
 Participant acknowledges and agrees that he shall
promptly return to the Company and forfeit all consideration previously
received pursuant to this Lump Sum Distribution Agreement, specifically the
payment referred to in Paragraph 1, if he violates the provisions of Paragraph
2.

4.                  
 Participant may submit a description of any proposed activity
that could arguably violate Section 8.2 of the Plan in writing to AT&T and AT&T shall advise
Participant  in writing
within fifteen (15) business days whether such proposed activity would
constitute engaging in competition with an Employer business, within the meaning
of this Lump Sum Distribution Agreement.

 

5.                  
 It is hereby specifically agreed that the terms of this Lump Sum
Distribution Agreement shall be kept strictly confidential and that neither
party shall, except as necessary for performance of the terms hereof or as
specifically required by law, disclose the existence of this Lump Sum
Distribution Agreement or any of its terms to third persons without the express
consent of the other party.

6.                  
 Participant  agrees that for any breach or threatened breach
of any of the provisions of this Lump Sum Distribution Agreement by Participant, including
but not limited to the provisions in Section 8.2 of the Plan, incorporated
herein pursuant to Paragraph 2 of this Lump Sum Distribution Agreement, the
Company shall have no adequate legal remedy, and in addition to any other
remedies available, including the repayment and forfeiture remedies described
in Paragraph 3, a restraining order and/or an injunction may be issued against Participant  to prevent or
restrain any such breach.

7.                  
 Any notice required hereunder to be given by either party will be
in writing and will be deemed effectively given upon personal delivery to the
party to be notified, or five (5) days after deposit with the United States
Post Office by certified mail, postage prepaid, to the other party at the
address set forth below, or to such other address as either party may from time
to time designate by ten (10) days advance written notice pursuant to this
Paragraph.

8.                  
 In the event any provision of this Lump Sum Distribution Agreement
is held invalid, void, or unenforceable, the same shall not affect in any
respect whatsoever the validity of any other provision of this Lump Sum
Distribution Agreement, except that should any part of the non-compete
provisions of Paragraph 2 of this Agreement be held invalid, void, or
unenforceable as applicable to and as asserted by Participant, this Lump
Sum Distribution Agreement, at the Company's option, may be declared by the
Company null and void.  If this Lump Sum Distribution Agreement is declared
null and void by Company pursuant to the provisions of this Paragraph, Participant shall return
to Company all consideration previously received pursuant to this Lump Sum
Distribution Agreement.

 

AT&T Inc.

 

 

 

 

                                                                                                                                                                                               

By: Senior Executive Vice                                                                 

            President-Human
Resources

            208 S. Akard

            Dallas, Texas 
75202

 

 

                                                                                                                                                                                               

Date                                                                                                       Date

 

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

 

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

  

 

 

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

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

 

 

 

 

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

 

 

Attachment E
applies with respect to any Participant who:

 

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

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

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

SPECIAL
PROVISIONS APPLICABLE TO NAMED PARTICIPANTS

I.

SCOPE OF ATTACHMENT

 

1.1               
 The provisions of
this Attachment apply to specifically named Participants (a “Named
Participant”).  To the extent the provisions of this Attachment conflict with
other provisions of the Plan, this Attachment will control with respect to the
named Participants.

1.2               
 Capitalized terms
used in this Attachment shall have the meaning assigned to such terms in the
Plan, unless defined otherwise in this Attachment F or the context clearly
indicates to the contrary.

1.3               
 As of the
Determination Date, a Named Participant’s Target Retirement Benefit shall be
converted to a lump sum amount (“Target Retirement Cash Balance Account”), to
which interest credits shall be applied.  At the Named Participant’s
Termination of Employment, the lump sum account balance (including interest
credits) shall be converted to a Life with 10 Year Certain SERP Benefit for
purposes of applying any applicable offsets and the net benefit shall then be
converted, as applicable, to the Benefit Payout Alternative elected by the
Named Participant.

 

II.

2.1               
 Target Retirement Cash Balance
Account.  The SERP Benefit formula of Plan
Section 3.1 shall be applied using the following elements for the Named
Participant as of the Determination Date, except in the case of the named
Participant’s earlier Termination of Employment, to determine the Named
Participant’s Target Retirement Cash Balance Account: 

	
  Named
  Participant:

  	
  Determination
  Date

  	
  Service
  Factor Determined as of:

  	
  Final
  Average Earnings Determined as of:

  	
  Age
  Discount Determined as of:

  	
  Applicable Interest Rate and Mortality Table

  
	
  Randall
  Stephenson

  	
  December
  31, 2012

  	
  December
  31, 2012

  	
  June 30,
  2010

  	
  December
  31, 2012

  	
  5.8%;
  2011 Applicable PPA Mortality Rates

  

 

2.2               
 Interest Credits.  From and after the Determination Date, the SEVP-HR shall
maintain a record of each Named Participants’ Target Retirement Cash Balance
Account.  During such period of time that all or any portion of a Named
Participant’s Target Retirement Cash Balance Account is not paid, interest
shall be credited at the Applicable Interest Rate.

2.3               
 Action at Named Participant’s
Termination of Employment. Upon
Termination of Employment: 

(a)              
 a Named Participant’s
Target Retirement Cash Balance Account, as adjusted for interest credits, shall
be converted to an equivalent Life with a 10-Year Certain Benefit (as described
in Plan Section 4.2(a)).  For purposes of such conversion, the Applicable
Interest Rate and Mortality Table in the table above shall apply; provided,
however, the Named Participant’s age on his or her Termination of Employment
date shall apply. 

(b)              
 The resulting Life with a
10-Year Certain Benefit shall be offset by the amounts described in Plan
Section 3.1 (such as other pension values and age discount) to obtain the
Annual Value of Life with 10 Year Certain SERP Benefit payable as a result of
Termination of Employment. 

(c)              
 The Named Participant’s
Annual Value of Life with 10 Year Certain SERP Benefit payable as a result of
Termination of Employment shall be converted, as necessary, to the actuarial
equivalent of the Benefit Payout Alternative elected by the Named Participant
using the Applicable Interest Rate and Mortality Table in the table above;
provided, however, the Named Participant’s age on his Termination of Employment
date shall apply. 

 

 

 

PROVISIONS
APPLICABLE TO NAMED PARTICIPANTS

TRANSFERRING TO EMPLOYMENT WITH YP
HOLDINGS LLC

I.

SCOPE OF ATTACHMENT

 

1.1               
 On April 7, 2012,
AT&T reached an agreement to sell its Advertising Solutions (AS) business
to Cerberus Capital Management, L.P. pursuant to an agreement entitled the
“Purchase Agreement by and between AT&T Inc. and Congo Buyer LLC” (with
this transaction known as the “YP Transaction”). The closing of the YP
Transaction shall be referred to as the “Closing.”  The provisions of this Attachment G apply
to specifically named Participants (see section 1.3, below) who, as part of the
YP Transaction, cease employment
at an AT&T controlled group company and transfer employment to YP Holdings
LLC (“YP Holdings”) at Closing.  A Participant specifically named in Section
1.3, below shall be referred to herein as a “Named YP Participant”.  To the extent the provisions of this
Attachment G conflict with other provisions of the Plan, this Attachment will
control with respect to a Named YP Participant.

1.2               
 Capitalized terms used
in this Attachment shall have the meaning assigned to such terms in the Plan,
unless defined otherwise in this Attachment G or the context clearly indicates
to the contrary.

1.3          Named YP Participant
shall mean Gale Wickham.

II.

PROVISIONS FOR NAMED YP PARTICIPANTS

 

2.1          In
compliance with Code section 409A, a Termination of Employment will not occur
for a Named YP Participant as a result of the Closing for purposes of Plan
Section 6, “Payment of Benefits.”  However, a Named YP Participant realizes a
Termination of Employment at Closing for other purposes under the Plan,
including for purposes of determining the Named YP Participant’s Final Average
Earnings and, absent the provisions of this Attachment G, Years of Service.

 

2.2          Years of Service
under the Plan shall include a Named YP Participant’s actual years of service
with YP Holdings, up to a maximum of four years from the Closing. 

2.3          Furthermore, if
the Plan Administrator determines that a Named YP Participant’s employment was
involuntarily terminated by YP Holdings for any reason other than for cause
within the four year period immediately following the Closing, then the Named
YP Participant shall be deemed to have completed 30 Years of Service under the
Plan.  For purposes of clarity, if the Named YP Participant is involuntarily
terminated for cause or voluntarily terminates his employment (as determined by
the Plan Administrator), then his actual service with YP Holdings through the
time of such termination will be recognized by the Plan for the purposes
described above in Section 2.2.

2.4          The Named YP Participant’s age upon his actual
termination of employment from YP Holdings will be used to determine the Age
Discount, if any, as well as eligibility for the Named YP Participant’s elected
Benefit Payout Alternatives.

 

 

SPECIAL
PROVISIONS APPLICABLE TO NAMED PARTICIPANTS

I.

SCOPE OF ATTACHMENT

 

1.4               
 The provisions of
this Attachment apply to specifically named Participants (a “Named
Participant”).  To the extent the provisions of this Attachment conflict with
other provisions of the Plan, this Attachment will control with respect to the
Named Participants.

1.5               
 Capitalized terms
used in this Attachment shall have the meaning assigned to such terms in the
Plan, unless defined otherwise in this Attachment F or the context clearly
indicates to the contrary.

1.6               
 As of the
Determination Date, a Named Participant’s Target Retirement Benefit shall be
converted to a lump sum amount (“Target Retirement Cash Balance Account”), to
which interest credits shall be applied.  At the Named Participant’s
Termination of Employment, the lump sum account balance (including interest
credits) shall be converted to a Life with 10 Year Certain SERP Benefit for
purposes of applying any applicable offsets and the net benefit shall then be
converted, as applicable, to the Benefit Payout Alternative elected by the
Named Participant.

 

II.

2.4               
 Target Retirement Cash Balance
Account.  The SERP Benefit formula of Plan
Section 3.1 shall be applied using the following elements for the Named
Participant as of the Determination Date, to determine the Named Participant’s
Target Retirement Cash Balance Account: 

	
   Named
   Participant

   	
   Determination
   Date

   	
   Service
   Factor Determined as of:

   	
   Final
   Average Earnings Determined as of:

   	
   Age
   Discount Determined as of:

   	
   Applicable Interest Rate and Mortality Table

   
	
  Ralph de
  la Vega

  	
  12/31/2014

  	
  12/31/2014

  	
  12/31/2014

  	
  12/31/2014

  	
  4.3%;
  2013 Applicable PPA Mortality Rates

  
	
  Wayne
  Watts

  	
  12/31/2014

  	
  12/31/2014

  	
  12/31/2014

  	
  12/31/2014

  	
  4.3%;
  2013 Applicable PPA Mortality Rates

  
	
   

   

  John
  Stankey

  	
   

   

   

  12/31/2019

  	
   

   

   

  12/31/2019

  	
   

   

   

  12/31/2019

  	
   

   

   

  12/31/2019

  	
  3.7%;
  2018 Applicable PPA Mortality Rates

  
	
   

   

  John
  Stephens

  	
   

   

   

  12/31/2019

  	
   

   

   

  12/31/2019

  	
   

   

   

  12/31/2019

  	
   

   

   

  12/31/2019

  	
  3.7%;
  2018 Applicable PPA Mortality Rates

  

 

The Committee may designate additional Named Participants
whose Target Retirement Benefit shall be converted to a Target Retirement Cash
Balance Account with a Determination Date as of December 31 of the calendar
year in which such Named Participant is designated by the Committee; provided,
if the Named Participant’s Termination of Employment precedes the Determination
Date, no conversion to a Target Retirement Cash Balance Account shall apply. 
For purposes of converting the Named Participant’s Target Retirement Benefit to
a Target Retirement Cash Balance Account, the Applicable Interest Rate and
Mortality Table shall be those in effect under the Plan for a Termination of
Employment that occurs on the day preceding the Determination Date.

 

2.5               
 Interest Credits.  From and after the Determination Date, the SEVP-HR shall
maintain a record of each Named Participants’ Target Retirement Cash Balance
Account.  During such period of time that all or any portion of a Named
Participant’s Target Retirement Cash Balance Account is not paid, interest
shall be credited at the Applicable Interest Rate that was used for purposes of
converting the Named Participant’s Target Retirement Benefit to a Target Retirement
Cash Balance Account.

 

2.6               
 Action at Named Participant’s
Termination of Employment. Upon
Termination of Employment: 

 

(d)              
 a Named Participant’s
Target Retirement Cash Balance Account, as adjusted for interest credits, shall
be converted to an equivalent Life with a 10-Year Certain Benefit (as described
in Plan Section 4.2(a)).  For purposes of such conversion, the Applicable
Interest Rate and Mortality Table that were used for purposes of the converting
the Named Participant’s Target Retirement Benefit to a Target Retirement Cash
Balance Account shall apply; provided, however, the Named Participant’s age on
his or her Termination of Employment date shall apply. 

(e)              
 The resulting Life with a
10-Year Certain Benefit shall be offset by the amounts described in Plan
Section 3.1 (such as other pension values and age discount) to obtain the
Annual Value of Life with 10 Year Certain SERP Benefit payable as a result of
Termination of Employment. 

(f)               
 The Named Participant’s
Annual Value of Life with 10 Year Certain SERP Benefit payable as a result of
Termination of Employment shall be converted, as necessary, to the actuarial
equivalent of the Benefit Payout Alternative elected by the Named Participant
using the Applicable Interest Rate and Mortality Table that were used for
purposes of the converting the Named Participant’s Target Retirement Benefit to
a Target Retirement Cash Balance Account; provided, however, the Named
Participant’s age on his Termination of Employment date shall apply. 

 

 

 

2017 SPECIAL PROVISIONS APPLICABLE TO NAMED PARTICIPANTS

 

I.

SCOPE OF ATTACHMENT

 

1.7               
 The provisions of
this Attachment apply to specifically named Participants (a “Named
Participant”).  To the extent the provisions of this Attachment conflict with
other provisions of the Plan, this Attachment will control with respect to the
Named Participants.

1.8               
 Capitalized terms
used in this Attachment shall have the meaning assigned to such terms in the
Plan, unless defined otherwise in this Attachment I or the context clearly
indicates to the contrary.

1.9               
 A Named
Participant’s Earnings will be defined by this Attachment I.

II.

EARNINGS

2.7               
 On and after the Earnings Effective
Dates in the table below, the Named Participant’s Earnings for purposes of
calculating Final Average Earnings shall be an annual rate as shown in the
table below:

	
  Named Participant

  	
  Earnings Effective Date

  	
  Earnings

  
	
  John Donovan

  	
  September 1, 2017

  	
  $3,000,000

  
	
  John Stankey

  	
  The first day of the payroll
  period following close of the AT&T/Time Warner merger

  
	
  John Stephens

  

 

The above Earnings rate will apply
regardless of actual base salary and bonuses paid to the Named Participants.  

 

Before the Earnings
Effective Date, the Named Participant’s Earnings for purposes of calculating
Final Average Earnings shall be an annual rate equal to the sum of (1) bonus
earned as a short term award during the calendar year but not exceeding 200% of
the target amount of such bonus (or such other portion of the bonus or target
bonus as may be determined by the Human Resources Committee of the Board of
AT&T), plus (2) base salary before reduction due to any contribution
pursuant to any deferred compensation plan or agreement sponsored by AT&T
or an AT&T affiliate, including but not limited to compensation deferred in
accordance with Sections 401(k), 125, or 132(f) of the Internal Revenue Code.

 

CLAIMS AND APPEALS PROCEDURES

(related to “Disability” or Being
“Disabled” under the Plan”)

 

 

Claims Regarding
“Disability” or Being “Disabled”

 

When you make a claim based on a
“Disability” or being “Disabled” under the Plan, the Plan’s claims
administrator will notify you of the decision regarding your claim within 45
days of the date your claim is received by the claims administrator. The claims
administrator may extend this 45-day period for up to 30 days (plus an
additional 30 days if needed) if it determines that special circumstances
outside of the Plan’s control require more time to determine your claim. You
will be notified within the initial 45-day period (and within the first 30-day
extension period if an additional 30 days are needed) whether additional time
is needed and what special circumstances require the extra time. If extensions
are required because the claims administrator needs additional information from
you, you will have 45 days from the claims administrator’s notification to
provide that information. Once you have provided the information, the claims
administrator will decide your claim within the time remaining within either
the initial or the extended review period. If you do not receive a written
response within the time limits described in this paragraph, your claim will be
deemed denied and you will have the right to file an appeal.

 

If your claim for benefits is denied in
whole or in part, the claims administrator will provide you with a written or
electronic notification of the denial that will include:

 

• Information
sufficient to identify the claim (including the health care provider or
vocational expert whose opinion was relied on in denying your claim), the claim
amount (if applicable), a statement describing the availability, upon request,
of the diagnosis code and its corresponding meaning and the treatment code and
its corresponding meaning.

• Specific reasons for
the denial.

• A full description of
why the Plan denied the claim, including, if applicable, why the claims
administrator disagreed with the disability determination made by your treating
physician, a Social Security Administration disability determination or a
third-party disability payer.

• Specific reference(s)
to the Plan provisions, or applicable law upon which the denial is based, where
applicable.

• If applicable, a
statement that an internal rule, guideline, protocol or other similar criterion
was relied upon in making the determination and that a copy of the rule,
guideline, protocol or criterion will be provided free of charge upon request.

• An explanation of the
scientific or clinical judgment for the determination and how the terms of the
Plan were applied to your medical circumstances if the determination is based
on medical necessity, experimental treatment or a similar exclusion or limit
and that a copy of this explanation will be provided free of charge upon
request.

• A statement that the
entire claim file is available for your review and that you can present
evidence and testimony during the Appeal process.

• If applicable, a
description of any additional information needed to make your claim acceptable
and the reason the information is needed.

• A description of the
Plan’s appeal procedures.

• A statement that you
have an opportunity to respond to any new evidence in advance of any appeal
decision. You will be given adequate notice and an opportunity to respond to
any new evidence in advance of a claim denial being issued.

• A statement
concerning your right to file a civil action under ERISA after the required
review and all appeals have been completed.

• A statement that if
the Plan does not follow the claims procedures, except for minor errors, you
will be deemed to have exhausted your administrative remedies and your claim is
deemed denied.

• Where applicable, a
statement in the relevant non-English language about the availability of
language services.

 

 

 

How to Appeal a Denial Related to a Claim
of “Disability” or Being “Disabled”

 

When You May File an Appeal

If your claim of “Disability” or being
“Disabled” under the Plan is denied in whole or in part (or you have not
received a decision or a notice of extension within the applicable period) and
you disagree with the decision, you or your authorized representative may
appeal the decision by filing a written request for review. You or your
authorized representative must make the request for review within 180 days of
receipt of the denial notice (or within 180 days after the review period has
expired).

 

Who Decides Your Appeal

The Plan
administrator has delegated discretion and authority to decide appeals to the
claims administrator. The claims administrator will have full and exclusive
authority and discretion to grant and deny appeals under the Plan. The decision
of the claims administrator regarding any appeal will be final and conclusive.

 

How to Appeal a Denied Claim

If you or your authorized representative
sends a written request for review of a denied claim, you or your
representative has the right to:

 

• Send a written
statement of the issues and any other comments along with any new or additional
evidence or materials in support of your appeal.

• Upon request and free
of charge, reasonable access to and copies of all documents, records and other
information relevant to your claim for benefits.

• Request and receive,
free of charge, documents that bear on your claim, such as any internal rule,
guideline, protocol or other similar criterion relied on in denying your claim.
In your appeal, you should state as clearly and specifically as possible any
facts and/or reasons why you believe the claims administrator’s action is incorrect.
You should also include any new or additional evidence or materials in support
of your appeal that you wish the claims administrator to consider. Such
evidence or material must be submitted along with your written statement at the
time you file your appeal.

 

Your appeal will be assigned to a
qualified individual or committee who has had no involvement with the denial of
your claim for benefits. This individual or committee will decide the appeal
based upon the evidence that was considered by the claims administrator without
regard to the information in the claims denial; the issues, records and
comments submitted by you; and such other evidence as the individual or
committee may independently discover.

 

If your claim was denied based upon
medical judgment, the review will be done in consultation with a health care
professional with appropriate expertise in the field and who was not involved
in the initial determination. The claims administrator may consult with, or
seek the participation of, medical experts as part of the appeal resolution
process. When you file your appeal, you consent to this referral and the
sharing of pertinent information.

 

Your appeal may be decided entirely on the
basis of evidence submitted in writing. You are not entitled to a hearing, nor
do you have the right to present oral testimony or cross-examine authors of
written evidence submitted. You will be provided with the identity of any
medical or vocational experts whose advice the Plan obtained in connection with
denial of your appeal, without regard to whether the advice was relied upon in
making the benefit determination.

 

Unless you are notified in writing that
more time is needed, a review and decision on your appeal must be made within
45 days after your appeal is received. If special circumstances require more
time to consider your appeal, the claims administrator may take an additional
45 days to reach a decision, but you must be notified in writing that there
will be a delay.

 

If your appeal is denied in whole or in
part, the claims administrator will provide you with written or electronic
notification that will contain:

• Information
sufficient to identify the claim (including the health care provider or
vocational expert whose opinion was relied on in denying your claim), the claim
amount (if applicable), a statement describing the availability, upon request,
of the diagnosis code and its corresponding meaning and the treatment code and
its corresponding meaning.

• Specific reasons for
the denial.

• A full description of
why the Plan denied the claim, including, if applicable, why the claims
administrator disagreed with the disability determination made by your treating
physician, a Social Security Administration disability determination or a
third-party disability payer.

• Specific references
to the Plan provisions on which the denial is based.

• A statement that you
are entitled to receive, upon request and free of charge, reasonable access to,
and copies of, all documents, records and other information relevant to your
claim.

• If applicable, a
statement that an internal rule, guideline, protocol or other similar criterion
was relied upon in making the determination and that a copy of the rule,
guideline, protocol or criterion will be provided free of charge upon request.

• An explanation of the
scientific or clinical judgment for the determination and how the terms of the
Plan were applied to your medical circumstances if the determination is based
on medical necessity, experimental treatment or a similar exclusion or limit
and that a copy of the explanation will be provided free of charge upon
request.

• A statement that the
entire claim file is available for your review and that you can present
evidence and testimony during the Appeal process.

• A description of any
additional material or information required for payment of benefits under the
Plan.

• A statement of your right to file a civil action under ERISA after you
have exhausted all opportunities to appeal under the Plan and the date on which
the contractual time limit to file a lawsuit will expire.

• The following
statement:

 

You and your plan may
have other voluntary alternative dispute resolution options, such as mediation.
One way to find out what may be available is to contact your local U.S.
Department of Labor Office and your State insurance regulatory agency.

The appeal will take
into account all comments, documents, records and other information you submit
relating to the claim for benefits, without regard to whether such information
was submitted or considered in the initial claim for benefits determination. If
you wish, you or your authorized representative may review the appropriate Plan
and Plan documents and submit written information supporting your claim for
benefits to the claims administrator or Plan Administrator.

 

The process is intended
to be interactive and you will be provided a reasonable period of time to
respond to any new evidence or information before a final decision is made.
Prior to denying your appeal, the claims administrator will provide you with
any new evidence it plans to rely upon in making a decision. This information
will be provided to you as soon as possible and provide you with a reasonable
amount of time to address the new evidence or rationale before the decision on
appeal is made. As part of this process, the claims administrator must also
consider any response made by you to this new information as part of its
decision-making process.

 

Contact the Plan
administrator for information regarding the claims administrator and the
address or other contact information for the claims administrator.Exhibit
10-j

AT&T
INC.

 

STOCK
PURCHASE AND DEFERRAL PLAN

 

 

Article 1 - Statement of Purpose

 

The purpose of the Stock Purchase and Deferral Plan (“Plan”) is to
increase stock ownership by, and to provide savings opportunities to, a select
group of management employees of AT&T Inc. (“AT&T”) and its
Subsidiaries. 

 

Article 2 -
Definitions

 

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

 

Annual Bonus.  The
award designated the “Annual Bonus” by AT&T (including but not limited to
an award that may be paid in more frequent installments than annually),
together with any individual discretionary award made in connection therewith,
or comparable awards, if any, determined by AT&T to be used in lieu of
these awards.  

  

                Base
Compensation.  The following types of
cash-based compensation paid by an Employer (but not including payments made by
a non-Employer, such as state disability payments), before reduction due to any
contribution pursuant to this Plan or reduction pursuant to any deferral plan
of an Employer, including but not limited to a plan that includes a qualified
cash or deferral arrangement under Section 401(k) of the Code: 

 

(a)    
 base salary; 

 

                (b) 
lump sum payments in lieu of a base salary increase; and

 

(c) Annual Bonus. 

 

Payments by an Employer under a disability
plan made in lieu of any compensation described above shall be deemed to be a
part of the respective form of compensation it replaces for purposes of this
definition.  Base Compensation does not include zone allowances or any other
geographical differential and shall not include payments made in lieu of unused
vacation or other paid days off, and such payments shall not be contributed to
this Plan. 

 

Determinations by AT&T (the Committee
with respect to Officer Level Employees) of the items that make up Base
Compensation shall be final.  The Committee may, from time to time, add or
subtract types of compensation to or from the definition of “Base Compensation”
provided, however, any such addition or subtraction shall be effective only
with respect to the next period in which a Participant may make an election to
establish a Share Deferral Account.  Base Compensation that was payable in a
prior Plan Year but paid in a later Plan Year shall not be used to determine
Employee Contributions or Matching Contributions in such later Plan Year.  

 

 

 

 

 

Business Day.  Any day
during regular business hours that AT&T is open for business.

 

Change in Control. 
With respect to AT&T’s direct and indirect ownership of an Employer, a
“Change in the effective control of a Corporation,” as defined in Treasury
Regulation Section 1.409A-3(i)(5)(vi)(A)(1), regardless of whether the Employer
is a corporation or non corporate entity as permitted by the regulation, and
using “50 percent” in lieu of “30 percent” in such regulation.  A Change in
Control will not apply to AT&T itself.  

 

Chief Executive Officer.  The Chief Executive Officer of AT&T Inc.

 

                Code. 
References to the Code shall be to provisions of the Internal Revenue Code
of 1986, as amended, including regulations promulgated thereunder and successor
provisions.  Similarly, references to regulations shall include amendments and
successor provisions.

 

Committee.  The Human
Resources Committee of the Board of Directors of AT&T Inc.

 

Disability. Absence of
an Employee from work with an Employer under the relevant Employer's disability
plan.

 

Eligible Employee.  An
Employee who:

(a) is a full or part time, salaried Employee of AT&T or an Employer
in which AT&T has a direct or indirect 100% ownership interest and who is
on active duty or Leave of Absence (but only while such Employee is deemed by
the Employer to be an Employee of such Employer); 

 

(b) is, as determined by AT&T, a member of Employer's “select group
of management or highly compensated employees” within the meaning of the
Employee Retirement Income Security Act of 1974, as amended, and regulations
thereunder (“ERISA”), which is deemed to include each Officer Level Employee;
and 

 

(c) has an employment status which has been approved by AT&T to be
eligible to participate in this Plan or is an Officer Level Employee. 

  

Notwithstanding the foregoing, AT&T (the Committee with respect to
Officer Level Employees) may, from time to time, exclude any Employee or group
of Employees from being deemed an “Eligible Employee” under this Plan. 

 

In the event a court or other governmental authority determines that an
individual was improperly excluded from the class of persons who would be
permitted to make Employee Contributions during a particular time for any
reason, that individual shall not be permitted to make such contributions for
purposes of the Plan for the period of time prior to such determination. 

 

                Employee.  Any person employed by an Employer and paid on an
Employer’s payroll system, excluding persons hired for a fixed maximum term and
excluding persons who are neither citizens nor permanent residents of the United States, all as determined by AT&T.  For purposes of this Plan, a person
on Leave of Absence who otherwise would be an Employee shall be deemed to be an
Employee.               

 

 

 

 

 

                Employee Contributions.  Amounts credited to a Share Deferral Account pursuant to
Section 4.1 (Election to Make Contributions) of the Plan.

 

Employer.  AT&T
Inc. or any of its Subsidiaries. 

 

Exercise Price.  The
price per share of Stock purchasable under an Option. 

 

                Fair
Market Value or FMV.  In valuing Stock or
any other item subject to valuation under this Plan, the Committee may use such
index or measurement as the Committee may reasonably determine from time to
time, and such index or measurement shall be the FMV of such Stock or other
item, provided that for purposes of determining the Exercise Price of Stock Options,
the Committee shall use a value consistent with the requirements of Section
409A.  In the absence of such action by the Committee, FMV means, with respect
to Stock, the closing price on the New York Stock Exchange (“NYSE”) of the
Stock on the relevant date, or if on such date the Stock is not traded on the
NYSE, then the closing price on the immediately preceding date such Stock is so
traded. 

 

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

 

                Officer
Level Employee.  Any executive officer of
AT&T, as that term is used under the Securities Exchange Act of 1934, as
amended, and any Employee that is an “officer level” Employee for compensation
purposes as shown on the records of AT&T.

 

Options or Stock Options.  Options to purchase Stock issued pursuant to this Plan.

 

Participant.  An
Employee or former Employee who participates in this Plan.

 

Plan Year.  Each of
the following shall be a Plan Year:  the period January
 1, 2005, through January 15, 2006; the period January
 16, 2006, through December 31, 2006; and, for all later Plan Years, it is
defined as the period from January 1 through December 31.

 

Retirement or Retire. 
Termination of Employment on or after the earlier of the following dates,
unless otherwise provided by the Committee:  (a) for Officer Level Employees,
the date the Participant is at least age 55 and has five (5) years of Net
Credited Service; or (b) the date the Participant has attained one of the
following combinations of age and Net Credited Service:

 

 

 

 

 

 

 

Net Credited Service                               Age

                                10
years or more                  65 or older

                                20
years or more                  55 or older

                                25
years or more                  50 or older

                                30
years or more                  Any age

 

For purposes of this Plan only, Net Credited Service shall be calculated
in the same manner as “Pension Eligibility Service” under the AT&T Pension
Benefit Plan – Nonbargained Program (“Pension Plan”), as amended from time to
time, except that service with an Employer shall be counted as though the
Employer were a “Participating Company” under the Pension Plan and the Employee
was a participant in the Pension Plan.  

 

                Senior
Manager.  Any Employee who is a “senior
manager” for compensation purposes as shown on the records of AT&T.

 

Shares or Share Units. 
An accounting entry representing the right to receive an equivalent number of
shares of Stock.

 

                Share
Deferral Account or  Account.   The Account or Accounts established
annually by an election by a Participant to make Employee Contributions to the
Plan, with each Account relating to a Plan Year.  For each Plan Year after
2008, there shall be (1) a separate Share Deferral Account for Share Units
purchased with Employee Contributions of Base Compensation (excluding Annual
Bonus) and related Matching Share Units and (2) a separate Share Deferral
Account for Share Units purchased with Employee Contributions of Short Term
Incentive Award and/or Annual Bonus and any related Matching Share Units. 
Earnings on Share Units and Matching Share Units shall accrue to the respective
Share Deferral Accounts where they are earned.  

 

Short Term Incentive Award.  A cash award paid by an Employer (and
not by a non-Employer, such as state disability payments) under the Short Term
Incentive Plan or any successor plan, together with any individual
discretionary award made in connection therewith; an award under a similar plan
intended by the Committee to be in lieu of an award under such Short Term
Incentive Plan, including, but not limited to, Performance Units granted under
the 2006 Incentive Plan or any successor plan.  It shall also include any other
award that the Committee designates as a Short Term Incentive Award
specifically for purposes of this Plan (regardless of the purpose of the award)
provided the deferral election is made in accordance with Section 409A.

 

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

 

 

 

 

 

Stock.  The common
stock of AT&T Inc.

 

Subsidiary.  Any
corporation, partnership, venture or other entity or business with which
AT&T would be considered a single employer under Sections 414(b) and (c) of
the Code, using 50% as the ownership threshold as provided under Section 409A
of the Code.

 

Termination of Employment. References herein to “Termination of Employment,"
“Terminate Employment” or a similar reference, shall mean the event where the
Employee has a “separation from service,” as defined under Section 409A, with
all Employers. For purposes of this Plan, a Termination of Employment with
respect to an Employer shall be deemed to also occur when such Employer incurs
a Change in Control. 

 

 

Article 3 -
Administration of the Plan

 

3.1          The
Committee.  

Except as delegated by this Plan or by the Committee, the Committee shall
be the administrator of the Plan and will administer the Plan, interpret,
construe and apply its provisions and determine all questions of
administration, interpretation and application of the Plan, including, without
limitation, questions and determinations of eligibility, entitlement to
benefits and payment of benefits, all in its sole and absolute discretion.  The
Committee may further establish, adopt or revise such rules and regulations and
such additional terms and conditions regarding participation in the Plan as it
may deem necessary or advisable for the administration of the Plan.  References
in this Plan to determinations or other actions by AT&T, herein, shall mean
actions authorized by the Committee, the Chief Executive Officer, the Senior
Executive Vice President of AT&T in charge of Human Resources, or their
respective successors or duly authorized delegates, in each case in the
discretion of such person.  All decisions by the Committee, its delegate or AT&T,
as applicable, shall be final and binding. 

 

3.2          Authorized
Shares of Stock.  

(a) Except as provided below, the number of shares of Stock which may be
distributed pursuant to the Plan, exclusive of Article 8 - Options, is
76,000,000.  The number of shares of Stock which may be issued pursuant to the
exercise of Stock Options is 34,000,000 (together with an equal number of Stock
Options).  In determining the number of authorized shares remaining available
for issuance, shares withheld for taxes in a distribution shall not be
considered issued and shall not reduce the number of authorized shares.  When
an Option is exercised, the authorized shares of Stock that may be issued
pursuant to an Option exercise shall be reduced by the number of Options so
exercised.  To the extent an Option issued under this Plan is canceled,
terminates, expires, or lapses for any reason, such Option shall again be
available for issuance under the Plan.  Conversions of Stock awards into Share
Units and their eventual distribution (excluding the effects of any dividends
on such Share Units) shall count only against the limits of the plans from
which they originated and shall not be applied against the limits in this
Plan.  To the extent Share Units are credited through deferrals of Stock or
Employee Contributions where the distribution of which would be deductible by
AT&T under Section 162(m) of the Code without regard to the size of the
distribution, and such deductible Share Units are available for distribution,
such Share Units shall be distributed first.  

 

 

 

 

 

(b) In the event the Committee determines that continuing
the issuance of Share Units under the Plan or Stock Options under the Plan may
cause the number of shares of Stock that are to be distributed under this Plan
or the number of Stock Options (as determined pursuant to subsection (a),
above) to exceed the number of authorized shares of Stock, then in lieu of
distributing Stock, the Committee may provide after such determination and only
with respect to Share Units that have not theretofore been credited to a Share
Deferral Account, that such Share Units may be settled in cash equal to the
value of the Stock that would otherwise be distributed based on the FMV of the
Stock on the date of the distribution of such Share Unit.  The Committee may
also provide after such determination and only with respect to Stock Options
that have not theretofore been issued that such Stock Options may only be
settled on a Net-Settled basis in cash equal to the value of the Stock that
would otherwise be distributed based on the FMV of the Stock on the day of
exercise.  

 

(c) In the event of a merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, stock split, share
combination, or other change in the corporate structure of AT&T affecting
the shares of Stock (including a conversion of Stock into cash or other
property), such adjustment shall be made to the number and class of the shares
of Stock which may be delivered under the Plan (including but not limited to
individual limits), and in the number and class of and/or price of shares of
Stock subject to outstanding Options granted under the Plan, and/or in the
number of outstanding Options and Share Units, or such other adjustment
determined by the Committee, in each case as may be determined to be
appropriate and equitable by the Committee, in its sole discretion, to prevent
dilution or enlargement of rights.

 

3.3          Claims and Appeals.

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

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

If
the claim is denied by the AT&T Executive Compensation Administration
Department, in whole or in part, the AT&T Executive Compensation
Administration Department shall provide a written decision using language
calculated to be understood by the Claimant and setting forth:  (i) the
specific reason or reasons for such denial; (ii) specific references to
pertinent provisions of this Plan on which such denial is based; (iii) a
description of any additional material or information necessary for the
Claimant to perfect his or her claim and an 

 

 

 

explanation
of why such material or such information is necessary; (iv) a description of
the Plan’s procedures for review of denied claims and the steps to be taken if
the Claimant wishes to submit the claim for review; (v) the time limits for
requesting a review of a denied claim under this section and for conducting the
review under this section; and (vi)  a statement of the Claimant’s right to
bring a civil action under Section 502(a) of ERISA if the claim is denied
following review under this section. 

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

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

During
its review of the claim, the Committee shall:

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

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

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

After
considering all materials presented by the Claimant, the Committee will render
a decision, written in a manner designed to be understood by the Claimant.  If
the Committee denies the claim on review, the written decision will include (i)
the specific reasons for the decision; (ii) specific references to the
pertinent provisions of this Plan on which the decision is based; (iii) a
statement that the Claimant is entitled to receive, upon request to the 

 

 

 

Committee
and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the claim; and (iv) a statement of
the Claimant’s right to bring a civil action under Section 502(a) of ERISA. 

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

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

 

Article 4 -
Contributions

 

4.1          Election
to Make Contributions.   

(a)      The Committee shall establish dates and
other conditions for participation in the Plan and making contributions as it
deems appropriate.  Except as otherwise provided by the Committee, each year an
Employee who is an Eligible Employee as of September 30 may thereafter make an
election on or prior to the last Business Day of the immediately following
November (such election shall be cancelled if the Employee is not an Eligible
Employee on the last day such an election may be made) to contribute on a
pre-tax basis, through payroll deductions, any combination of the following:

 

(1) 
From 6% to 30% (in whole percentage increments) of the Participant’s monthly
Base Compensation, other than Annual Bonus, during the calendar year (the Plan
Year for such contributions) following the calendar year of such election.  The
Employee Contributions shall be used to acquire Share Units to be credited to
the Share Deferral Account for that Plan Year.  

 

(2)  Up
to 95% (in whole percentage increments or limited to the target amount) of a
Short Term Incentive Award, or from 6% to 30% (in whole percentage increments)
of Annual Bonus, in each case such contributions shall be made during the
second calendar year (which is the Plan Year for such contributions) following
the year of such election, except that in 2008 a separate election may be made
with respect to contributions to be made in 2009. An Employee may make such an
election with respect to the type of Award (Short Term Incentive Award or
Annual Bonus) that the Employee is under as of the time the Employee’s
eligibility to make such election is determined.  If because of a promotion or
otherwise, the Employee receives a different type of Award instead of, or in
partial or full replacement for, the type of Award subject to the Employee’s
election for the relevant Plan Year, the election will apply to the other Award
as well, including but not limited to any individual discretionary award
related thereto.  

 

 

 

 

 

 

                (b)  The Committee may permit an Eligible
Employee to make an election to purchase Share Units under this Plan with
compensation other than Base Compensation or Short Term Incentive Awards on
such terms and conditions as such Committee may permit from time to time,
provided that any such election is made in accordance with Section 409A of the
Code.  In no event shall an acquisition of Share Units pursuant to this paragraph
(b) or pursuant to the conversion of a right to receive Stock into Share Units
(such as through a distribution of Stock under the 2001 Incentive Plan) result
in the crediting of an AT&T Matching Contribution or Options.

 

(c) Notwithstanding anything to the
contrary in this Plan, no election shall be effective to the extent it would
permit an Employee Contribution or distribution to be made that is not in
compliance with Section 409A of the Code.  To the extent such election related
to Employee Contributions that complied with such statute and regulations
thereunder, that portion of the election shall remain valid, except as
otherwise provided under this Plan.  

 

(d)  To the extent permitted by Section
409A of the Code, AT&T may refuse or terminate, in whole or in part, any
election to purchase Share Units in the Plan at any time; provided, however,
that only the Committee may take such action with respect to persons who are
Officer Level Employees.

 

(e)  In the event the Participant takes a
hardship withdrawal pursuant to Treasury Regulation §1.401(k)-1 from a benefit
plan qualified under the Code and sponsored by an Employer, any election to
make Employee Contributions by such Participant shall be cancelled on a
prospective basis, and the Participant shall not be permitted to make a new election
with respect to Employee Contributions that would be contributed during the
then current and immediately following calendar year.  

 

4.2          Purchase
of Share Units.  

(a) Employee Contributions (as well as any corresponding AT&T
Matching Contributions) shall be made pursuant to a proper election, only
during the Participant’s lifetime; provided, however, with respect to Employee
Contribution elections made prior to 2007, the Employee must remain an Eligible
Employee while making any such contributions.  In the event of a Change in
Control of an Employer, subsequent compensation from the Employer may not be
contributed to the Plan.  The Employer may continue the then current elections
of the participants under a subsequent plan in order to comply with applicable
tax laws.  

 

(b)  The number of Share Units purchased by a Participant during a
calendar month shall be found by dividing the Participant's Employee
Contributions during the month by the FMV of a share of Stock on the last day
of such month.

 

(c)  A contribution to the Plan shall be
made when the compensation – from which the contribution is to be deducted – is
to be paid (“paid,” as used in this Plan, includes amounts contributed to the
Plan that would have been paid were it not for an election under this Plan), as
determined by the relevant Employer.   The Committee may modify or change this
paragraph (c) from time to time.  

 

4.3          Reinvestment
of Dividends.    

In the month containing a record date for a cash dividend on Stock, each
Share Deferral Account shall be credited with that number of Share Units equal
to the declared dividend per share of Stock, multiplied by the number of Share
Units held in such Share Deferral Account as 

 

 

 

 

of such record date, and
dividing the product by the FMV of a share of Stock on the last day of such
month.  

 

 

Article 5 -
AT&T Matching Contributions

 

5.1          AT&T
Match.   

                (a)
Each month AT&T shall credit the Participant's relevant Share Deferral
Account with  the number of “Matching Share Units” found by taking eighty
percent (80%) of the Participant's Employee Contributions from Base
Compensation made to this Plan and to the Cash Deferral Plan during the month
with respect to the first six percent (6%) of the Participant’s monthly Match
Eligible Compensation (as defined below) and dividing the resulting figure by
the FMV of the Stock on the last day of such month (such resulting amount shall
be the “Matching Contribution”).  The monthly “Match Eligible Compensation”
shall be the sum of:

 

(1) the monthly Employee Contributions from Base Compensation to this
Plan and the Cash Deferral Plan (in the aggregate, “Deferred BC”), plus 

 

(2) the amount of the Participant’s monthly Base Compensation in excess
of the Deferred BC (“Non-Deferred BC”) but only to the extent such monthly
Non-Deferred BC, when aggregated with the Participant’s total Non-Deferred BC
for prior months in such Plan Year, as determined by the relevant Employer,
exceeds the limit in effect under Section 401(a)(17) of the Code applicable
with respect to such Plan Year.  

 

The foregoing formula shall apply regardless of whether or not the
Participant makes contributions to a 401(k) plan.  

 

                A
Participant may receive Matching Share Units in a Share Deferral Account for a
particular form of compensation only if the Participant is then making
contributions to the same Share Deferral Account; provided, however, this condition
shall not apply for purposes of determining under Section 5.1(a)(2) whether the
limit described therein has been reached.

    

                As
provided in the definition of Share Deferral Account, Matching Share Units
shall be credited to the respective Share Deferral Account that is related to
the same form of Employee Contributions (either (1) Base Compensation excluding
Annual Bonus or (2) Annual Bonus). 

 

(b) In the event the Participant is not eligible to earn pension accruals
under a pension plan offered by AT&T or a Subsidiary and either (1) first
becomes an Employee on or after January 1, 2015, or (2) the Participant
Terminates Employment on or after January 1, 2015, and the Participant is
subsequently rehired as an Employee, then the “eighty percent (80%)” reference
in section 5.1(a) shall be replaced with “one hundred percent (100%)” for
purposes of determining the number of Matching Share Units to which the
Participant would be entitled pursuant to contribution elections made after
such hiring or rehiring.

 

                (c)
In the sole discretion of the Committee, in the event the Committee reduces the
number of Options that AT&T issues for each Share Unit purchased, the
Committee may provide for the contribution of a Bonus Matching Contribution on
such terms as the Committee determines.  Such Bonus Matching Contribution may
not exceed 20% of the Participant’s Employee Contributions for the month.  The
Bonus Matching Contribution shall be subject to such terms and conditions as
required by the Committee and, unless otherwise provided by the 

 

 

Committee, to the same
distribution requirements as Matching Contributions.  Pursuant to the foregoing
authority and until otherwise provided by the Committee, effective for Share
Accounts created pursuant to Employee Contribution elections where such
elections are made after January 1, 2010,  AT&T shall make Bonus Matching
Contributions equal to 20% of the Participant’s monthly Employee Contributions
from each of Base Compensation and Short Term Incentive Award (not to exceed
the target amount of such award, which limit shall be pro rated for any partial
year award).  Such Bonus Matching Contribution shall be used to purchase that
number of Matching Share Units found by dividing the relevant Bonus Matching
Contribution for the month by the FMV of the Stock on the last day of such
month.

 

5.2          Distribution
of Share Units Acquired with Matching Contributions.  

A Participant's Matching Share Units shall be distributed in a lump sum,
in accordance with the Plan's distribution provisions, in the earlier of: (a)
the calendar year following the calendar year of the Termination of Employment
of the Participant, or (b) the calendar year in which the Participant reaches
age 55, in each case only with respect to Matching Share Units relating to
Share Deferral Accounts for Plan Years before such distribution calendar year. 

 

Matching Share Units acquired as part of a Share Deferral Account that
commences in or after the calendar year the Employee reaches age 55 or after
the calendar year in which the Employee Terminates Employment will be
distributed in the same manner and time as other Share Units in such Share
Deferral Account.  

 

Notwithstanding anything to the contrary in this section, Matching Share
Units acquired in 2008 and later shall be distributed at the same time as other
Share Units (including those acquired with Employee Contributions) in the same
Share Deferral Account.  

 

 

Article 6 -
Distributions

 

6.1          Distributions of Share Units.   

(a)  Initial Election with Respect to a Share Deferral Account.  At the
time the Participant makes an election to make Employee Contributions with
respect to a Share Deferral Account, the Participant shall also elect the
calendar year the Share Deferral Account shall be distributed, which may be
from the first through fifth calendar years after the Plan Year the Account
commenced (except as otherwise provided in this Plan with respect to Matching
Share Units).  For example, if an Account commenced in 2005, the Participant
may elect to commence the distribution in any calendar year from and including
2006 to and including 2010.  If no timely distribution election is made by the
Participant, then the Participant will be deemed to have made an election to
have the Share Deferral Account distributed in a single installment in the
first calendar year after the calendar year the Account commenced.  

 

(b)  Election to Delay a Scheduled Distribution.  

(i)        
 An Employee may elect to defer a scheduled distribution of a Share
Deferral Account for five (5) additional calendar years beyond that previously
elected (except as otherwise provided in this Plan with respect to Matching
Share Units).  Unless otherwise provided by AT&T, the election to defer the
distribution must be made on or after October 16, and on or before the last
Business Day of the next following December, of the calendar year that is the
second calendar year preceding the calendar year of the relevant scheduled
distribution.    

 

 

 

(ii)        To
make this election, the Participant must be an Employee that is, as determined
by AT&T, a member of Employer’s “select group of management or highly
compensated employees” within the meaning of ERISA on the September 30
immediately preceding such election and on the day of such election.  

(iii)      An
election to defer the distribution of a Share Deferral Account may not be made
in the same calendar year that the election to establish the Share Deferral
Account is made.  Notwithstanding anything to the contrary in this Plan: 

a.       
 an election to defer the distribution of a Share Deferral Account
must be made at least 12 months prior to the date of the first scheduled
payment under the prior distribution election, and 

b.        the
election shall not take effect until at least 12 months after the date on which
the election is made.

  

(c)  A Participant’s Share Deferral Account shall be distributed to the
Participant on March 10 (or as soon thereafter as administratively practicable
as determined by AT&T) of the calendar year elected by the Participant for
that Account.  In the event the distribution is to be made to a “Specified
Employee” as a result of the Participant’s Termination of Employment (other
than as a result of a Change in Control), the distribution shall not occur
until the later of such March 10 or six (6) months after the Termination of
Employment, except it shall be distributed upon the Participant’s earlier death
in accordance with this Plan.

 

6.2          Death
of the Participant.

In the event of the death of a Participant, notwithstanding anything to
the contrary in this Plan, all undistributed Share Deferral Accounts shall be
distributed to the Participant's beneficiary in accordance with the AT&T
Rules for Employee Beneficiary Designations, as the same may be amended from
time to time, within the later of 90 days following such determination or the
end of the calendar year in which determination was made.   

 

6.3          Unforeseeable
Emergency Distribution.  

If a Participant experiences an “Unforeseeable Emergency,” the
Participant may submit a written petition to AT&T (the Committee in the
case of Officer Level Employees), to receive a partial or full distribution of
his Share Deferral Account(s).  In the event that AT&T (the Committee in
the case of Officer Level Employees), upon review of the written petition of
the Participant, determines in its sole discretion that the Participant has
suffered an “Unforeseeable Emergency,” AT&T shall make a distribution to
the Participant from the Participant’s Share Deferral Accounts (other than
Matching Share Units), on a pro-rata basis, within the later of 90 days
following such determination or the end of the calendar year in which
determination was made, subject to the following:  

 

(a)     “Unforeseeable Emergency” shall mean a severe financial hardship
to the Participant resulting from an illness or accident of the Participant,
the Participant’s legal spouse, the Participant’s beneficiary, or the
Participant’s dependent (as defined in Code Section 152, without regard to Code
Section 152(b)(1), (b)(2), and (d)(1)(B)); loss of the Participant’s property
due to casualty; or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant, all as
determined in the sole discretion of the Committee.  Whether a Participant is
faced with an Unforeseeable Emergency permitting a distribution is to be
determined based on the relevant facts and circumstances of each case, but, in
any case, a distribution on account of Unforeseeable Emergency shall not be
made to the extent that such emergency is or may be relieved through
reimbursement or compensation from insurance or otherwise, by liquidation of
the Participant’s assets, to the extent the liquidation of 

 

 

such assets would not cause
severe financial hardship, or by cessation of deferrals under the Plan.  

 

(b)     The amount of a distribution to be made because of an
Unforeseeable Emergency shall not exceed the lesser of (i) the FMV of the
Participant's vested Share Deferral Account, calculated as the date on which
the amount becomes payable, as determined by AT&T (the Committee in the
case of Officer Level Employees) in its sole discretion, and (ii) the amount
reasonably necessary, as determined by the AT&T (the Committee in the case
of Officer Level Employees) in its sole discretion, to satisfy the emergency need
(which may include amounts necessary to pay any Federal, state, local, or
foreign income taxes or penalties reasonably anticipated to result from the
distribution).  Determinations of the amount reasonably necessary to satisfy
the emergency need shall take into account any additional compensation that is
available if the plan provides for cancellation of a deferral election upon a
payment due to an Unforeseeable Emergency.  The determination of amounts
reasonably necessary to satisfy the Unforeseeable Emergency need is not
required to, but may, take into account any additional compensation that, due
to the Unforeseeable Emergency, is available under another nonqualified
deferred compensation plan but has not actually been paid, or that is available
due to the Unforeseeable Emergency under another plan that would provide for
deferred compensation except due to the application of the effective date
provisions under Treasury Regulation §1.409A-6.  

 

(c)     Upon such distribution on account of an Unforeseeable Emergency
under this Plan, any election to make Employee Contributions by such
Participant shall be immediately cancelled, and the Participant shall not be
permitted to make a new election with respect to Employee Contributions that
would be contributed during the then current and immediately following calendar
year.

 

6.4          Ineligible
Participant.  

Notwithstanding any other provisions of
this Plan to the contrary, if AT&T receives an opinion from counsel
selected by AT&T, or a final determination is made by a Federal, state or
local government or agency, acting within its scope of authority, to the effect
that an individual’s continued participation in the Plan would violate
applicable law, then such person shall not make further contributions to the
Plan to the extent permitted by Section 409A of the Code.  

 

6.5          Conflict
of Interest Distribution.

                AT&T
may in its sole discretion accelerate a distribution(s) to the Participant,
provided he or she is no longer actively employed by AT&T: (a) to the
extent necessary for any Federal officer or employee in the executive branch to
comply with an ethics agreement with the Federal government or (b) to the
extent reasonably necessary to avoid the violation of an applicable Federal,
state, local, or foreign ethics law or conflicts of interest law (including
where such payment is reasonably necessary to permit the service provider to
participate in activities in the normal course of his or her position in which
the service provider would otherwise not be able to participate under an
applicable rule).  Any such distribution may only be made in accordance with
Section 409A of the Code and the regulations thereunder.

 

6.6          Distribution Process.         

A Share Deferral Account shall be distributed under this Plan by taking
the number of Share Units comprising the Account to be distributed and
converting them into an equal number of shares of Stock.  (Once distributed, a
Share Unit shall be canceled.) 

 

 

 

 

Article 7 - Transition Provisions

 

7.1          Stockholder Approval   

The Plan was approved by Stockholders at the 2005 Annual Meeting of
Stockholders.    

 

7.2          2005
Share Deferral Accounts.   

Notwithstanding Article 4 to the contrary, if an Employee is an Eligible
Employee on September 30, 2004, the Employee may make an election under Article
4 on or prior to December 15, 2004, with respect to the establishment of a
Share Deferral Account for the (i) contribution of Base Compensation and/or
Short Term Incentive Awards paid during the period from January 1, 2005,
through January 15, 2006, which shall be the Plan Year for such Share Deferral
Account; and/or (ii) the conversion of a distribution of Stock that would be
made during the same Plan Year pursuant to the 2001 Incentive Plan into an
equal number of Share Units, so long as such conversion would not cause the
recognition of income for Federal income tax purposes in respect of such
distribution of Stock prior to distribution of Share Units under this Plan.

 

7.3          2007
Amendments.

(a) Amendments made to the Plan on November 15, 2007, shall be effective
January 1, 2008. except for amendments to this Article 7, which shall be
effective upon adoption.  Any Participants electing prior to November 15, 2007,
to make Employee Contributions in 2008 shall have their elections canceled if
they do not consent by December 14, 2007, to all prior amendments to this Plan
and to the Cash Deferral Plan.  Subject to the foregoing consent requirements,
all Employee Contribution elections made prior to 2008, including but not
limited to elections to contribute Stock that would be distributed under the
2001 Incentive Plan or a successor plan, shall remain in force, subject to all other
terms of the amended Plan. In addition, all unvested but not forfeited Matching
Share Units shall vest on November 15, 2007.  Matching Shares that have been
forfeited shall not be reinstated, and no amendment to this Plan shall be
interpreted as reinstating such forfeitures.  

 

 (b)  Not withstanding anything to the contrary in this Plan, a
Participant who as of December 29, 2006, was eligible for an additional payment
pursuant to Section 4A of the BellSouth Corporation Executive Incentive Award
Deferral Plan shall not, with respect to the 2008 Plan Year, receive Matching
Share Units on Base Compensation that exceeds $230,000.

 

7.4          2008
Amendments.

                For
Plan Years prior to 2009, Participants who, at the time of the determination of
their eligibility to participate in an Account, are paid through a “sales plan”
involving the use of commissions may elect to contribute up to 40% of Base
Compensation.  For the 2008 Plan Year, only Salary and Short Term Incentive
Awards paid after Termination of Employment may be contributed to the Plan.

 

 

 

 

 

Article 8 - Options

 

8.1          Grants.   

Options may be issued in definitive form or recorded on the books and
records of AT&T for the account of the Participant, at the discretion of
AT&T.  If AT&T elects not to issue the Options in definitive form, they
shall be deemed issued, and the Participants shall have all rights incident
thereto as if they were issued on the dates provided herein, without further
action on the part of AT&T or the Participant.  In addition to the terms
herein, all Options shall be subject to such additional provisions and
limitations as provided in any Administrative Procedures adopted by the
Committee prior to the issuance of such Options.  The number of Options issued
to a Participant shall be reflected on the Participant's annual statement of
account.  

 

8.2          Term
of Options.   

The Options may only be exercised:  (a) after the earlier of (i) the
expiration of one (1) year from date of issue or (ii) the Participant's
Termination of Employment, and (b) no later than the tenth (10th)
anniversary of their issue; and Options shall be subject to earlier termination
as provided herein. 

 

8.3          Exercise
Price.   

The Exercise Price of an Option shall be the FMV of the Stock on the date
of issuance of the Option, and an Option may not be repriced. 

 

8.4          Issuance
of Options. 

 

(a)  For each Share Deferral Account established by a Participant
pursuant to an Employee Contribution election where such election was made
prior to January 1, 2010:

 

(1)  on June 15 of the Plan Year for the Share Deferral Account, the
Participant shall receive two (2) Options for each Share Unit acquired by the
Participant as part of such Share Deferral Account during the immediately
preceding January through May period with Employee Contributions of Base
Compensation and/or Short Term Incentive Award.  A fractional number of Options
shall be rounded up to the next whole number.

 

(2)  on the February 15 immediately following the Plan Year for the Share
Deferral Account, a Participant shall receive:

 

(i)     
 two (2) Options for each Share Unit
acquired by the Participant as part of such Share Deferral Account during the
immediately preceding June through the remainder of the relevant Plan Year with
Employee Contributions of Base Compensation and/or Short Term Incentive Award;
and

 

(ii)   two
(2) Options for each Share Unit acquired prior to such date by the Participant
with dividend equivalents that were derived, directly or indirectly (such as
dividend equivalents paid on Share Units acquired with dividend equivalents),
from Share Units acquired with Employee Contributions as part of such Share
Deferral Account.  

 

(b) A fractional number of Options shall be rounded up to the next whole
number.

 

 

 

 

(c) If Stock is not traded on the NYSE on any of the
foregoing Option issuance dates, then the Options shall not be issued until the
next such day on which Stock is so traded.

 

(d) If a Participant Terminates Employment other than (i) while
Retirement eligible or (ii) because of death or Disability, no further Options
shall be issued to or with respect to such Participant.  In the event of
re-Employment following a Termination of Employment, the preceding sentence
shall not apply to those Options resulting from participation in the Plan after
such re-Employment until a subsequent Termination of Employment.

 

(e) No more than 400,000 Options shall be issued to any individual under
this Plan during a calendar year.  No Share Unit may be counted more than once
for the issuance of Options.  

 

(f) The Committee may, in its sole discretion, at any time, increase or
lower the number of Options that are to be issued for each Share Unit acquired,
not to exceed two (2) Options per Share Unit purchased.  However, if the
Committee lowers the number of Options, then such change shall only be
effective with respect to the next Share Deferral Account a Participant may
elect to establish. 

 

(g) The Committee may also, at any time and in any manner, limit the
number of Options which may be acquired as a result of the Short Term Incentive
Award being contributed to the Plan.  Further, except as otherwise provided by
the Committee, in determining the number of Options to be issued to a Participant
with respect to a Participant's contribution of a Short Term Incentive Award to
the Plan and subsequent crediting of Share Units, Options may be issued only
with respect to an amount which does not exceed the target amount of such award
(or such other portion of the award as may be determined by the Committee). 
Where a Participant’s election to contribute a Short Term Incentive Award to
the Plan becomes applicable to Annual Bonus, the above limitation on options
shall apply to the contribution of Annual Bonus as though it were a Short Term
Incentive Award. 

 

 

(h) No options shall be issued to or in respect of a Participant for a
particular issuance, unless at least ten (10) Options will be issued to that
Participant. 

 

8.5          Exercise
and Payment of Options.  

Options shall be exercised by providing notice to the designated agent
selected by AT&T (if no such agent has been designated, then to AT&T),
in the manner and form determined by AT&T, which notice shall be
irrevocable, setting forth the exact number of shares of Stock with respect to
which the Option is being exercised and including with such notice payment of
the Exercise Price.  When Options have been transferred, AT&T or its designated
agent may require appropriate documentation that the person or persons
exercising the Option, if other than the Participant, has the right to exercise
the Option.  No Option may be exercised with respect to a fraction of a share
of Stock. 

 

Exercises of Options may be effected only
on days and during the hours that the New York Stock Exchange is open for
regular trading or as otherwise provided or limited by AT&T.  If an Option
expires on a day or at a time when exercises are not permitted, then the
Options may be exercised no later than the immediately preceding date and time
that the Options were exercisable. 

 

 

 

 

 

The Exercise Price shall be paid in full at the time of
exercise.  No Stock shall be issued or transferred until full payment has been
received therefore.

 

Payment may be made:

 

(a) in cash, or

 

(b) unless otherwise provided by the Committee at any time,
and subject to such additional terms and conditions and/or modifications as
AT&T may impose from time to time, and further subject to suspension or
termination of this provision by AT&T at any time, by:

 

(i) electing a Stock-Settled Exercise on or after February
1, 2013.  Upon exercise of Options through a Stock-Settled Exercise, the
Participant shall receive that number of shares of Stock found by (1)
subtracting the Exercise Price of an Option being exercised (on a per share
basis) from the FMV of the Stock as of the immediately preceding day that the
Stock was traded on the NYSE, (2) multiplying the difference by the number of
Options being exercised, and (3) dividing the result by the same FMV.  For
example, a Participant exercises 1,000 Options with an Exercise Price of $30
(exercises may only occur on a day when the NYSE is open for regular trading)
and the FMV for the immediately preceding trading day was $40.  In that case,
the Participant would receive his $10,000 profit in the form of 250 shares of
Stock, subject to tax withholding and any other costs provided under this Plan.

 

or;

 

(ii) if AT&T has designated a stockbroker to act as
AT&T's agent to process Option exercises, issuance of an exercise notice to
such stockbroker together with instructions irrevocably instructing the
stockbroker:  (A) to immediately sell (which shall include an exercise notice
that becomes effective upon execution of a sell order) a sufficient portion of
the Stock to pay the Exercise Price of the Options being exercised and the
required tax withholding, and (B) to deliver on the settlement date the portion
of the proceeds of the sale equal to the Exercise Price and tax withholding to
AT&T.  In the event the stockbroker sells any Stock on behalf of a
Participant, the stockbroker shall be acting solely as the agent of the
Participant, and AT&T disclaims any responsibility for the actions of the
stockbroker in making any such sales.  No Stock shall be issued until the
settlement date and until the proceeds (equal to the Exercise Price and tax
withholding) are paid to AT&T.

 

 

8.6          Restrictions
on Exercise and Transfer.   

No Option shall be transferable except: (a) upon the death of a
Participant in accordance with AT&T's Rules for Employee Beneficiary
Designations, as the same may be amended from time to time; and (b) in the case
of any holder after the Participant's death, only by will or by the laws of
descent and distribution.  During the Participant's lifetime, the Participant's
Options shall be exercisable only by the Participant or by the Participant's
guardian or legal representative.  After the death of the Participant, an
Option shall only be exercised by the holder thereof (including but not limited
to an executor or administrator of a decedent's estate) or his or her 

 

 

 

guardian or legal representative. 
In each such case the Option holder shall be considered a Participant for the
limited purpose of exercising such Options.  

 

8.7          Termination
of Employment.  

(a)  Not Retirement Eligible.  Unless otherwise provided by the
Committee, if a Participant Terminates Employment while not Retirement
eligible, a Participant's Options may be exercised, to the extent then
exercisable:  

 

(i) if such Termination of Employment is by reason of death
or Disability, then for a period of three (3) years from the date of such
Termination of Employment or until the expiration of the stated term of such
Option, whichever period is shorter; or

 

(ii) if such Termination of Employment is for any other
reason, then for a period of one (1) year from the date of such Termination of
Employment or until the expiration of the stated term of such Option, whichever
period is shorter.

 

(b)  Retirement Eligible.  Unless otherwise provided by the
Committee, if a Participant Terminates Employment while Retirement eligible,
the Participant's Option may be exercised, to the extent then exercisable:  (i)
for a period of five (5) years from the date of Retirement or (ii) until the
expiration of the stated term of such Option, whichever period is shorter.   

 

                (c)
Re-Employment of a Participant after a Termination of Employment shall have no
effect on the periods during which Options resulting from the prior Employment
may be exercised.  For example, if the Option exercise period has been
shortened because of the prior Termination of Employment, it shall not be
extended because of the re-Employment. 

 

                (d) 
Notwithstanding any other definition of Termination of Employment under this
Plan, for purposes of this Article 8 – Options only, a Termination of
Employment shall mean the cessation of the Employee being employed by any
corporation, partnership, venture or other entity in which AT&T holds,
directly or indirectly, a 50% or greater ownership interest, including but not
limited to where AT&T ceases to hold such interest in the employing
company.  In addition, the definition of Retirement for purposes of this
Article 8 shall use the immediately foregoing definition of Termination of
Employment in  lieu of any other definition. 

 

 

Article 9 -
Discontinuation, Termination, Amendment.

 

9.1          AT&T's
Right to Discontinue Offering Share Units. 
 

The Committee may at any time discontinue offerings of Share Units under
the Plan.  Any such discontinuance shall have no effect upon existing Share
Units or the terms or provisions of this Plan as applicable to such Share
Units. 

 

9.2          AT&T's
Right to Terminate Plan.   

The Committee may terminate the Plan at any time.  Upon termination of
the Plan, contributions shall no longer be made under the Plan.

 

After termination of the Plan, Participants shall continue to earn
dividend equivalents in the form of Share Units on undistributed Share Units
and shall continue to receive all distributions under this Plan at such time as
provided in and pursuant to the terms and conditions 

 

 

 

 

of Participant's elections and
this Plan.  Notwithstanding the foregoing, the termination of the Plan shall be
made solely in accordance with Section 409A of the Code and in no event shall
cause the accelerated distribution of any Account unless such termination is
effected in accordance with Section 409A of the Code.  

 

9.3          Amendment. 

The Committee may at any time amend the Plan in whole or in part
including but not limited to changing the formulas for determining the amount
of AT&T Matching Contributions under Article 5 or decreasing the number of
Options to be issued under Article 8; provided, however, that no amendment,
including but not limited to an amendment to this section, shall be effective,
without the consent of a Participant, to alter, to the material detriment of
such Participant, a Share Deferral Account of the Participant, other than as
provided elsewhere in this section.   For purposes of this section, an
alteration to the material detriment of a Participant shall include, but not be
limited to, a material reduction in the period of time over which Stock may be
distributed to a Participant, any reduction in the Participant's number of
vested Share Units or Options, or an increase in the Exercise Price or decrease
in the term of an Option.   Any such consent may be in a writing, telecopy, or
e-mail or in another electronic format. An election to acquire Share Units with
Employee Contributions shall be conclusively deemed to be the consent of the
Participant to any and all amendments to the Plan prior to such election, and
such consent shall be a condition to making any election with respect to
Employee Contributions. 

 

Notwithstanding anything to the contrary contained in this section of the
Plan, the Committee may modify this Plan with respect to any person subject to
the provisions of Section 16 of the Securities Exchange Act of 1934, as amended
(“Exchange Act”) to place additional restrictions on the exercise of any Option
or the transfer of any Stock not yet issued under the Plan. 

 

The Plan is established in order to provide deferred compensation to a
select group of management and highly compensated employees with in the meaning
of Sections 201(2) and 301(a)(3) of ERISA. To the extent legally required, the
Code and ERISA shall govern the Plan, and if any provision hereof is in
violation of an applicable requirement thereof, the Company reserves the right
to retroactively amend the Plan to comply therewith to the extent permitted
under the Code and ERISA.  The Company also reserves the right to make such
other changes as may facilitate implementation of Section 409A of the Code. 
Provided, however, that in no event shall any such amendments be made in
violation of the requirements of Section 409A of the Code.

 

Article 10 – Miscellaneous.

 

10.1        Tax
Withholding.  

Upon distribution of Stock, including but not limited to, shares of Stock
issued upon the exercise of an Option, AT&T shall withhold shares of Stock
sufficient in value, using the FMV on the date determined by AT&T to be
used to value the Stock for tax purposes, to satisfy the minimum amount of
Federal, state, and local taxes required by law to be withheld as a result of
such distribution. Employment taxes incurred by a Participant on Employee
Contributions and on Matching Contributions shall be withheld from the
Participant’s regular wages or paid in cash by the Participant as they become
due.

 

Any fractional share of Stock payable to a Participant shall be withheld
as additional Federal withholding, or, at the option of AT&T, paid in cash
to the Participant. 

 

 

 

Unless
otherwise determined by the Committee, when the method of payment for the
Exercise Price is from the sale by a stockbroker pursuant to Section 8.5,
hereof, of the Stock acquired through the Option exercise, then the tax
withholding shall be satisfied out of the proceeds.  For administrative
purposes in determining the amount of taxes due, the sale price of such Stock
shall be deemed to be the FMV of the Stock.  

 

10.2        Elections
and Notices.   

Notwithstanding anything to the contrary contained in this
Plan, all elections and notices of every kind under this Plan shall be made (1)
on forms prepared by AT&T or the General Counsel, Secretary or Assistant
Secretary, or their respective delegates, or (2) in such other manner as
permitted or required by AT&T or the General Counsel, Secretary or
Assistant Secretary, or their respective delegates, including through
electronic means, over the Internet or otherwise. An election shall be deemed
made when received by AT&T (or its designated agent, but only in cases
where the designated agent has been appointed for the purpose of receiving such
election), which may waive any defects in form. Unless made irrevocable by the
electing person, each election with regard to making Employee Contributions or
distributions of Share Deferral Accounts shall become irrevocable at the close
of business on the last day the Employee is permitted to make such election.
Notwithstanding anything to the contrary in this Plan, AT&T may place
additional limits on the times during which elections may be made to make
contribution(s) or to delay distribution(s). 

 

                If
not otherwise specified by this Plan or AT&T, any notice or filing required
or permitted to be given to AT&T under the Plan shall be delivered to the
principal office of AT&T, directed to the attention of the Senior Executive
Vice President in charge of Human Resources for AT&T or his or her
successor.  Such notice shall be deemed given on the date of delivery.

 

Notice to the Participant shall be deemed given when mailed (or sent by
telecopy) to the Participant's work or home address as shown on the records of
AT&T or, at the option of AT&T, to the Participant's e-mail address as
shown on the records of AT&T.  It is the Participant's responsibility to
ensure that the Participant's addresses are kept up to date on the records of
AT&T.  In the case of notices affecting multiple Participants, the notices
may be given by general distribution at the Participants' work locations.

 

By participating in the Plan, each Participant agrees that AT&T may
provide any documents required or permitted under the Federal or state
securities laws, including but not limited to the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, by e-mail, by
e-mail attachment, or by notice by e-mail of electronic delivery through
AT&T's Internet Web site or by other electronic means.

 

10.3        Unsecured
General Creditor.  

Participants and their beneficiaries, heirs, successors, and assigns
shall have no legal or equitable rights, interest, or claims in any property or
assets of any Employer.  No assets of any Employer shall be held under any
trust for the benefit of Participants, their beneficiaries, heirs, successors,
or assigns, or held in any way as collateral security for the fulfilling of the
obligations of any Employer under this Plan.  Any and all of each Employer's
assets shall be, and remain, the general, unpledged, unrestricted assets of
such Employer.  The only obligation of an Employer under the Plan shall be merely
that of an unfunded and unsecured promise of AT&T to distribute shares of
Stock corresponding to Share Units and Options, under the Plan. 

 

 

 

 

10.4        Non-Assignability.  

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

 

10.5        Employment
Not Guaranteed.  

Nothing contained in this Plan nor any action taken hereunder shall be
construed as a contract of employment or as giving any employee any right to be
retained in the employ of an Employer or to serve as a director.

 

10.6        Errors.

At any time AT&T or an Employer may correct any error made under the
Plan without prejudice to AT&T or any Employer.  Neither AT&T nor any
Employer shall be liable for any damages resulting from failure to timely allow
any contribution to be made to the Plan or for any damages resulting from the
correction of, or a delay in correcting, any error made under the Plan.  In no
event shall AT&T or any Employer be liable for consequential or incidental
damages arising out of a failure to comply with the terms of the Plan. 

 

10.7        Captions. 

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

 

10.8        Governing
Law.

To the extent not preempted by Federal law, the
Plan, and all benefits and agreements hereunder, and any and all disputes in
connection therewith, shall be governed by and construed in accordance with the
substantive laws of the State of Texas, without regard to conflict or choice of
law principles which might otherwise refer the construction, interpretation or
enforceability of this Plan to the substantive law of another jurisdiction.   

 

Because benefits under the Plan are granted in Texas, records relating to
the Plan and benefits thereunder are located in Texas, and the Plan and
benefits thereunder are administered in Texas, AT&T and the Participant
under this Plan, for themselves and their successors and assigns, irrevocably
submit to the exclusive and sole jurisdiction and venue of the state or Federal
courts of Texas with respect to any and all disputes arising out of or relating
to this Plan, the subject matter of this Plan or any benefits under this Plan,
including but not limited to any disputes arising out of or relating to the
interpretation and enforceability of any benefits or the terms and conditions
of this Plan.  To achieve certainty regarding the appropriate forum in which to
prosecute and defend actions arising out of or relating to this Plan, and to
ensure consistency in application and interpretation of the Governing Law to
the Plan, the parties agree that (a) sole and exclusive appropriate venue for
any such action shall be an appropriate Federal or state court in Dallas
County, Texas, and no other, (b) all claims with respect to any such action
shall be heard and determined exclusively in such Texas court, and no other,
(c) such Texas court shall have sole and exclusive jurisdiction over the person
of such parties and over the subject matter of 

 

 

 

any dispute relating hereto and (d) that the parties waive
any and all objections and defenses to bringing any such action before such
Texas court, including but not limited to those relating to lack of personal
jurisdiction, improper venue or forum non conveniens. 

 

10.9        Plan
to Comply with Section 409A.  

In the event any provision of this Plan is held invalid, void, or
unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provision of this Plan.  Notwithstanding any provision to
the contrary in this Plan, each provision in this Plan shall be interpreted to
permit the deferral of compensation in accordance with Section 409A of the Code
and any provision that would conflict with such requirements shall not be valid
or enforceable.  

 

10.10      Successors
and Assigns.  

This Plan shall be binding upon AT&T and its successors and assigns.

 

10.11 
Loyalty Conditions for Officer Level
Employees and Senior Managers

 

                Each
Officer Level Employee or a Senior Manager who elects to make Employee
Contributions under Section 4.1 of this Plan shall be subject to the agreements
and conditions of this section.  

 

(a)                
 By making an Employee
Contribution election under Section 4.1 of this Plan after September 1, 2009, a
Participant acknowledges that AT&T would be unwilling to provide for such
an election but for the loyalty conditions and covenants set forth in this
section, and that the conditions and covenants herein are a material inducement
to AT&T’s willingness to sponsor the Plan and to offer Plan benefits for
the Participants.  Accordingly, as a condition to making an Employee
Contribution election under Section 4.1 of this Plan after September 1, 2009,
each such electing Participant is deemed to agree that he shall not, without
obtaining the written consent of the Committee in advance, participate in
activities that constitute engaging in competition with AT&T or engaging in
conduct disloyal to AT&T, as those terms are defined in this section.  

(b)               
 Definitions.  For purposes of this section and of the
Plan generally:

(i)                 
 an “Employer Business”
shall mean AT&T Inc. and any of its Subsidiaries, or any business in which
they or any affiliate of theirs has a substantial ownership or joint venture
interest; 

(ii)               
 “engaging in
competition with AT&T” shall mean, while employed by AT&T or any of its
Subsidiaries, or within two (2) years after Participant’s Termination of
Employment, engaging by the Participant in any business or activity in all or
any portion of the same geographical market where the same or substantially
similar business or activity is being carried on by an Employer Business. 
“Engaging in competition with AT&T” shall not include owning a
non-substantial publicly traded interest as a shareholder in a business that
competes with an Employer Business.  “Engaging in competition with AT&T”
shall include representing or providing consulting services to, or being an
employee of, any person or entity that is engaged in competition with any
Employer Business or that takes a position adverse to any Employer Business. 

 

 

 

 

(iii)             
 “engaging in conduct
disloyal to AT&T” means, while employed by AT&T or any of its
Subsidiaries, or within two (2) years after Participant’s Termination of
Employment, (i) soliciting for employment or hire, whether as an employee or as
an independent contractor, for any business in competition with an Employer
Business, any person employed by AT&T or any of its Subsidiaries during the
one (1) year prior to the Participant’s Termination of Employment, whether or
not acceptance of such position would constitute a breach of such person’s
contractual obligations to AT&T or any of its Subsidiaries; (ii)
soliciting, encouraging, or inducing any vendor or supplier with which
Participant had business contact on behalf of any Employer Business during the
two (2) years prior to the Participant’s Termination of Employment (regardless
of the reason for that termination) to terminate, discontinue, renegotiate,
reduce, or otherwise cease or modify its relationship with AT&T or any of
its Subsidiaries; or (iii) soliciting, encouraging, or inducing any customer or
active prospective customer with whom Participant had business contact, whether
in person or by other media (“Customer”), on behalf of any Employer Business
during the two (2) years prior to the Participant’s Termination of Employment
(regardless of the reason for that termination), to terminate, discontinue,
renegotiate, reduce, or otherwise cease or modify its relationship with any
Employer Business, or to purchase competing goods or services from a business
competing with any Employer Business, or accepting or servicing business from
such Customer on behalf of himself or any other business.  “Engaging in conduct
disloyal to AT&T” shall also mean, disclosing Confidential Information to
any third party or using Confidential Information, other than for an Employer
Business, or failing to return any Confidential Information to the Employer
Business following termination of employment.

(iv)              
 “Confidential
Information” shall mean all information belonging to, or otherwise relating to,
an Employer Business, which is not generally known, regardless of the manner in
which it is stored or conveyed to Participant, and which the Employer Business
has taken reasonable measures under the circumstances to protect from
unauthorized use or disclosure.  Confidential Information includes trade
secrets as well as other proprietary knowledge, information, know-how, and
non-public intellectual property rights, including unpublished or pending
patent applications and all related patent rights, formulae, processes,
discoveries, improvements, ideas, conceptions, compilations of data, and data,
whether or not patentable or copyrightable and whether or not it has been
conceived, originated, discovered, or developed in whole or in part by
Participant.  For example, Confidential Information includes, but is not
limited to, information concerning the Employer Business’ business plans,
budgets, operations, products, strategies, marketing, sales, inventions,
designs, costs, legal strategies, finances, employees, customers, prospective
customers, licensees, or licensors; information received from third parties
under confidential conditions; or other valuable financial, commercial,
business, technical or marketing information concerning the Employer Business,
or any of the products or services made, developed or sold by the Employer
Business.  Confidential Information does not include information that (i) was
generally known to the public at the time of disclosure; (ii) was lawfully
received by Participant from a third party; (iii) was known to Participant
prior to receipt from the Employer Business; or (iv) was independently
developed by Participant or independent third parties; in each of 

 

 

 

 

the foregoing circumstances, this
exception applies only if such public knowledge or possession by an independent
third party was without breach by Participant or any third party of any
obligation of confidentiality or non-use, including but not limited to the
obligations and restrictions set forth in this Plan.

(c)                
 Equitable Relief.  The
parties recognize that any Participant’s breach of any of the covenants in this
section will cause irreparable injury to the AT&T, will represent a failure
of the consideration under which AT&T (in its capacity as creator and
sponsor of the Plan) agreed to provide the Participant with the opportunity to
receive Plan benefits, and that monetary damages would not provide AT&T
with an adequate or complete remedy that would warrant AT&T’s continued
sponsorship of the Plan (including the accrual or granting of Share Units,
Matching Share Units and Options) for all Participants.  Accordingly, in the
event of a Participant’s actual or threatened breach of the covenants in this
section, the Committee, in addition to all other rights and acting as a
fiduciary under ERISA on behalf of all Participants, shall have a fiduciary
duty (in order to assure that AT&T receives fair and promised consideration
for its continued Plan sponsorship and funding) to seek an injunction
restraining the Participant from breaching the covenants in this Section. 
AT&T shall pay for any Plan expenses that the Committee incurs hereunder,
and shall be entitled to recover from the Participant its reasonable attorneys’
fees and costs incurred in obtaining such injunctive remedies.  

(d)               
 Uniform Enforcement. 
In recognition of AT&T’s need for nationally uniform standards for the Plan
administration, it is an absolute condition in consideration of any
Participant’s ability to make Employee Contribution elections under Section 4.1
of this Plan after September 1, 2009, that each and all of the following
conditions apply to all such electing Participants: 

(i)                 
 ERISA shall control
all issues and controversies hereunder, and the Committee shall serve for
purposes hereof as a “fiduciary” of the Plan and its “named fiduciary” within
the meaning of ERISA.

(ii)               
 All litigation between
the parties relating to this section shall occur in federal court, which shall
have exclusive jurisdiction; any such litigation shall be held in the United
States District Court for the Northern District of Texas, and the only remedies
available with respect to the Plan shall be those provided under ERISA.

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