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    CHANGE IN CONTROL SEVERANCE
PLAN

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    Effective January 1,
2007

    Amended through June 26,
2008

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AT&T INC.

    CHANGE IN CONTROL SEVERANCE
PLAN

     

     

    Article 1 -
Purpose

     

    The
purpose of the AT&T Inc. Change in Control Severance Plan (the “Plan”) is to foster the
continuous employment of key management personnel of the Company and its
Subsidiaries and to reinforce and encourage their continued attention and
dedication to their duties in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control (as defined in Section 2) of
the Company, although no such change is now apparent or
contemplated.

     

    Article 2  -
Definitions

     

    As used
in this Plan, the following terms shall have the respective meanings set forth
below, and, when the meaning is intended, the initial letter of the word is
capitalized:

     

    “Base Salary”
means the Participant’s annual rate of base salary in effect immediately prior
to the occurrence of the circumstance giving rise to the Participant’s
Termination of Employment, or, if greater, the Participant’s annual rate of base
salary in effect immediately prior to the Change in Control. 

     

    “Board” means
the Board of Directors of the Company and, after a Change in Control, the “board
of directors” of the Ultimate Parent (as defined below under Change in
Control). 

     

    “Bonus Amount”
means a Participant’s target annual bonus for the fiscal year in which the
Change in Control occurs or in which Participant’s Date of Termination occurs,
whichever is greater; provided that, if a target annual bonus has not been
established for the applicable fiscal year, then the target annual bonus
established for the preceding fiscal year shall be substituted in lieu
thereof.

     

    “Cause” means
(i) the willful and continued failure by a Participant to substantially perform
his or her duties with the Company and its Subsidiaries (other than any such
failure resulting from his or her incapacity due to physical or mental
impairment, or any such actual or anticipated failure after the issuance of a
notice of termination by him or her for Good Reason) after a written demand for
substantial performance is delivered to the Participant by the Company which
demand specifically identifies the manner in which the Company believes that he
or she has not substantially performed his or her duties, or (ii) the willful
engaging by a Participant in conduct which is demonstrably and materially
injurious to the Company or any Subsidiary, monetarily or
otherwise.  For purposes of this definition, no act, or failure to
act, on a Participant’s part shall be deemed “willful” unless done, or omitted
to be done, by the Participant not in good faith and without reasonable belief
that his or her action or omission was in the best interest of the Company and
its Subsidiaries.  Notwithstanding the foregoing, a Participant shall
not be deemed to have been terminated for Cause unless and until there shall
have been delivered to him or her a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership
of the Board at a meeting of the Board called and held for such purpose (after
reasonable notice to the Participant and an opportunity for him or her, together
with counsel, to be heard before the Board), finding that in the good faith
opinion of the Board the Participant was guilty of the conduct set forth above
in clauses (i) or (ii) of the first sentence of this definition and specifying
the particulars thereof in detail.

     

    
      
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    “Change in
Control” shall be deemed to have occurred if (i) any “person” (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned directly or indirectly by the shareowners of
the Company in substantially the same proportions as their ownership of stock of
the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the total voting power represented
by the Company’s then outstanding voting securities, or (ii) during any period
of two (2) consecutive years, individuals who at the beginning of such period
constitute the Board of Directors and any new Director whose election by the
Board of Directors or nomination for election by the Company’s shareowners was
approved by a vote of at least two-thirds (2/3) of the Directors then still in
office who either were Directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (iii) the consummation of a merger
or consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation (such post-merger
surviving entity the "Ultimate
Parent"), or the shareowners of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company’s assets.

     

    “Committee”
means the Human Resources Committee of the Board.

     

    “Company” means
AT&T Inc.

     

    “Date of
Termination” means the date of the Participant's Termination of
Employment with the Company and its Subsidiaries as determined under Section 4.1
of the Plan.

     

    “Disability”
has the meaning ascribed under the relevant Employer’s long-term disability
plan.

     

    “Employee”
means any person employed as an employee by an Employer and paid on an
Employer’s employee 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 the Employer.  For purposes of
this Plan, a person on a Leave of Absence who otherwise would be an Employee
shall be deemed to be an Employee.

     

    
      
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    “Employer”
means the Company or any of its Subsidiaries provided that, if an entity ceases
to be a Subsidiary during the Termination Period, such entity shall continue to
be an Employer and the Employee shall continue to be a Participant until the
second anniversary of the Change in Control and, notwithstanding any other
provision to the contrary, any benefits under the Plan shall be paid or provided
by the Company.

     

    “Exchange Act”
means the Securities Exchange Act of 1934.

     

    “Executive
Officer” means a person who has been identified by the Company as
an executive officer under Rule 3b-7 of the Securities Exchange Act of 1934
prior to a Change in Control.

     

    “Good Reason”
means, without the Participant’s express written consent, the occurrence of any
of the following events after a Change in Control:  (i) the assignment
to the Participant of any duties inconsistent with his or her title(s) or status
immediately prior to the Change in Control, or a substantial adverse alteration
in the nature or status of his or her responsibilities from those in effect
immediately prior to the Change in Control; (ii) a reduction in the
Participant’s annual base salary, target short-term or long term incentive award
opportunity (including any current payments that may be made thereunder, such as
the payment of dividend equivalents) as in effect immediately prior to the
Change in Control, except for across-the-board salary reductions similarly
affecting all officers of the Company and its Subsidiaries and all managers in
equivalent positions of any person in control of the Company; (iii) the failure
to pay to the Participant any portion of his or her current compensation or
deferred compensation under any compensation or benefit program within seven (7)
days of the date such payment is due; (iv)  the failure to continue to
provide the Participant with benefits substantially similar to those enjoyed by
him or her under the pension, life insurance, medical, health, accident and
disability plans, or any fringe benefit  material to the Participant
that he or she was eligible for at the time of the Change in Control; the direct
or indirect material reduction in any of such benefits; or the failure to
provide the Participant with the number of paid vacation days to which he or she
is entitled on the basis of his or her duration of service with the Company and
its Subsidiaries, in accordance with the Employer's normal vacation policy in
effect immediately prior to the Change in Control; (v) the failure to obtain a
satisfactory agreement from any successor to assume and agree to perform this
Plan, as contemplated in Article 7; or (vi) any purported termination of the
Participant’s employment after a Change in Control which is not effected
pursuant to a notice of termination satisfying the requirements of Sections 4.1
and 8.1 (for purposes of this Plan, no such purported termination shall be
effective); provided, however, that a good faith determination within ninety
(90) days of the occurrence of a Change in Control by a Participant who is the
Chief Executive Officer of the Company (the “CEO”) or who was an Executive
Officer on January 1, 1990 that, as a result of such Change in Control, he or
she is not able to discharge his or her duties effectively shall constitute Good
Reason.

     

    An
isolated, insubstantial and inadvertent action taken in good faith implicating
clauses (i), (iv), (v) or (vi) of this definition which is fully corrected by
the Company prior to the Date of Termination specified in the notice of
termination shall not constitute Good Reason.  A Participant’s right
to terminate his or her employment for Good Reason shall not be affected by his
or her incapacity due to physical or mental impairment.  A
Participant’s continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason
hereunder.

     

    
      
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    “Leave of
Absence” shall mean when a
Participant is absent from employment with an Employer on a leave of absence
military leave, or sick leave, where the leave is given in order to prevent a
break in the continuity of term of employment, and permission for such leave is
granted (and not revoked) in conformity with the rules of the Employer that
employs the individual, as adopted from time to time and the Employee is
reasonably expected to return to service.  Except as set forth below,
the leave shall not exceed six (6) months for purposes of this Plan, and the
Employee shall incur a Termination of Employment upon cessation of such leave if
the Employee does not return to work prior to that time, 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)), and the Employee shall incur a
Termination of Employment upon cessation of such leave.  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.  For purposes of
this Plan, a Leave of Absence shall be deemed to also include a transfer by an
Employer of a person to, and continuous employment by, an entity for a
rotational work assignment.  To be a rotational work assignment, the
Employer must have indicated in writing to the person that the person was to be
rehired by the Employer upon the earlier of the termination of the rotational
work assignment and the end of the six month period commencing on the first day
of such potential work assignment.

     

    “Officer Level
Employee” means any Executive Officer and any Employee who is an
“officer level” Employee for compensation purposes as shown on the records of
the Company and its Subsidiaries.

     

    “Participant”
means the CEO, each Officer Level Employee who had in effect on September 28,
2006 a Severance Benefits – Change in Control Agreement with the Company, and
each other Officer Level Employee (i) who is designated from time to time in
writing by the CEO and (ii) whose designation is evidenced in writing by a
notification of participation to the Employee signed by the CEO.  A
person shall cease to be a Participant upon (a) the Participant’s Termination of
Employment prior to a Potential Change in Control or (b) the Board, the
Committee or the CEO determining, in their sole discretion, that the person
shall cease to qualify for benefits under this Plan (but any such determination
made in respect of a Participant shall be considered an amendment of the Plan
adverse to the interests of the affected Participant and is subject to the
provisions of Section 8.5).

     

    “Potential Change in
Control” shall be deemed to have occurred if (i) the Company
enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control or (ii)  the Board adopts a
resolution to the effect that, for purposes of this Plan, a potential change in
control of the Company has occurred.

     

    “Qualifying
Termination” means a Participant’s Termination of Employment
during the Termination Period (i) by the Employer other than for Cause or (ii)
by the Participant for Good Reason.  Termination of Employment on
account of death, Disability or Retirement shall not be treated as a Qualifying
Termination.

     

    
      
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    “Retirement”
means the Participant’s mandatory retirement in accordance with the Employer’s
mandatory retirement age policy, if any, for officers as in effect immediately
prior to a Change in Control or in accordance with any retirement arrangement
established with the Participant’s consent with respect to him or her; provided,
however, that a Participant's termination for Good Reason shall not constitute
Retirement.

     

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

     

    “Subsidiary”
means any corporation, partnership, venture or other entity in which the Company
holds, directly or indirectly, a fifty percent (50%) or greater ownership
interest.  The Committee may, at its sole discretion, designate, on
such terms and conditions as the Committee shall determine, any other
corporation, partnership, limited liability company, venture or other entity a
Subsidiary for purposes of this Plan.

     

    “Termination of
Employment” means the event where the Participant has a
“separation from service,” as defined under Section 409A, with the
Employer. 

     

    “Termination
Period” means the period of time beginning with a Change in
Control and ending on the second anniversary of such Change in
Control.

     

    Article 3  - Effectiveness
of the Plan

     

    This Plan
shall be effective as of January 1, 2007.  Nothing in this Plan shall
be deemed to entitle any Participant to continued employment with any Employer,
and if a Participant's employment with any Employer terminates prior to a Change
in Control, the Participant shall have no rights under this Plan (except in the
case of a Qualifying Termination).

     

    Article 4 - Payments Upon a
Qualifying Termination

     

    4.1  Termination of
Employment.

     

    (a)  Notice of
Termination.  Any purported termination of a
Participant’s employment during the Termination Period by an Employer or by a
Participant shall be communicated by written notice of termination to the other
party in accordance with this Section 4.1 and Section 8.1 (regarding
notices).  For purposes of this Plan, a “notice of termination” shall
mean a notice which shall indicate the specific termination provision in this
Plan relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for the Participant’s Termination of
Employment under the provision so indicated.  The failure by the
Participant or the Employer to set forth in such notice any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any right
of the Participant or the Employer hereunder or preclude the Participant or the
Employer from asserting such fact or circumstance in enforcing the Participant’s
or the Employer’s rights hereunder.

     

    
      
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      (b)  Date of
Termination.  If a Participant has a Qualifying
Termination, the Date of Termination shall be the date specified in the notice
of termination (which, in the case of a termination other than for Cause or a
termination for Good Reason shall not be less than fifteen (15) nor more than
sixty (60) days from the date such notice is given).  If a
Participant's Termination of Employment is for Cause, the Date of Termination
shall not be less than thirty (30) days from the date notice is
given.  In the event of a dispute arising out of the Participant’s
Termination of Employment, the Date of Termination will be determined in
accordance with Section 4.1(c).

    

     

    (c)  Disputes Involving
Termination.  If within fifteen (15) days after any
notice of termination is given, or, if later, prior to the Date of Termination
(as determined without regard to this provision), the party receiving such
notice of termination notifies the other party that a dispute exists concerning
whether the termination is a Qualifying Termination or for Cause, the Date of
Termination for purposes of Section 4.2 hereof shall be the date on which the
dispute is finally resolved either by mutual written agreement of the parties,
or by a final judgment, order or decree of a court of competent jurisdiction
(which is not appealable or with respect to which the time for appeal therefrom
has expired and no appeal has been perfected); provided, however, that if the
dispute is not resolved prior to the end of the Termination Period, the
Termination Period shall be extended so as not to deprive the Participant of the
benefits under Section 4.2 in respect of such termination;  provided
further, that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.  During the
pendency of any such dispute (the “Dispute Period”), subject to Section 6.1, the
Employer will (i) continue to pay the Participant his or her full Base Salary in
accordance with the Company’s payroll practice in effect from time to time
(provided that the amount paid in any calendar year shall be equal to the
Participant’s annual rate of Base Salary or a proportionate fraction thereof
with respect to portions of calendar years during the Dispute Period (other than
amounts that are required to be paid in a subsequent calendar year pursuant to
Section 6.1)), and (ii) continue the Participant as a participant in all Health
Benefits as described in Section 4.2(c) of the Plan (subject to Section 6.2 of
the Plan) on the same basis as provided under Section 4.2(c).  Amounts
paid under this provision are in addition to all other amounts due under this
Plan and shall not be offset against or reduce any other amounts due under this
Plan.

     

    
      
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    4.2  Severance
Payments.

     

             If the Participant has a Qualifying
Termination, then the Company shall or shall cause the Employer to provide
to the Participant:

     

    (a)  his or
her full base salary through the Date of Termination at the rate in effect at
the time notice of termination is given, plus all other amounts to which he or
she is entitled under any compensation plan in effect immediately prior to the
Change in Control, at the time such payments are due; provided that, subject to
the Participant’s execution of (and not revoking) a Release in the form attached
to this Plan as Schedule A (the “Release”) for purposes of
determining the amount to which a Participant is entitled under the Financial
Counseling Program, he or she shall be regarded as having retired under the
terms of the program; and

     

    (b)  subject
to the Participant’s execution of (and not revoking) a Release, a lump sum cash
payment equal to the result of multiplying (i) the sum of (A) the Participant’s
Base Salary, plus (B) the Participant’s Bonus Amount by (ii) 2.99; provided,
however, that if the amount of such payment cannot be finally determined on or
before such day, the Participant shall be paid an estimate, as determined in
good faith by the Company of the minimum amount of such payment and the
remainder of such payment (together with interest at the rate provided in
section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as amended (the
“Code”)) as soon as the
amount thereof can be determined; provided further that, in the event that the
amount of the estimated payment exceeds the amount subsequently determined to
have been due, such excess shall be reimbursed by the Participant, payable on
the fifth (5th) day after demand
by the Company (together with interest at the rate provided in section
1274(b)(2)(B) of the Code); and

     

    (c)  subject
to the Participant’s execution of (and not revoking) a Release, if the
Participant is not otherwise entitled to such benefits at no cost to him or her
pursuant to the terms of such plans, subject to section 6.2 of the Plan, for a
thirty six (36) month period from the Date of Termination or until December 31
of the year in which the Participant reaches age sixty-five (65), whichever is
the shorter period (the “Benefit Period”), life, health
and dental benefits (including spouse and dependent coverage) (“Health
Benefits”) substantially similar to those that he or she was  receiving
immediately prior to the Date of Termination and such benefits shall be provided
at no cost to the Participant (or spouse and
dependents).  Notwithstanding the foregoing, the Participant shall not
be provided any Health Benefit pursuant to this Section 4(c) if an equivalent
benefit is actually received by the Participant during the Benefit Period from
another Employer following his or her Date of Termination and any such Health
Benefit actually received by the Participant shall be reported by the
Participant to the Company; and

     

    (d)  subject
to the Participant’s execution of (and not revoking) a Release, if the
Participant is subject to any excise tax imposed under Section 4999 of the Code
(the “Excise Tax”)
by reason of the Change in Control and the prior deferral of income (whether or
not the Participant has a Qualifying Termination), then the Company shall pay to
the Participant an amount as specified in Schedule B.

     

    
      
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(e)  Except as
otherwise expressly provided pursuant to this Plan, this Plan shall be construed
and administered in a manner which avoids duplication of compensation and
benefits which may be provided under any other plan, program, policy, or other
arrangement or individual contract.  In the event a Participant is
covered by any other plan, program, policy, individually negotiated agreement or
other arrangement, in effect as of his or her Date of Termination, that may
duplicate the payments and benefits provided for in this Article 4, the Company
may reduce or eliminate the duplicative benefits provided for under the Plan but
solely to the extent such reduction or elimination  does not cause the
Participant to be subject to penalty taxes under Section
409A.  

    

     

    (f)  This Plan
does not abrogate any of the usual entitlements which a Participant has or will
have, first, while a regular employee, and subsequently, after termination, and
thus a Participant shall be entitled to receive all benefits payable to him or
her under each and every qualified plan, welfare plan and any other plan or
program relating to benefits and deriving from his or her employment with the
Company and it Subsidiaries, but solely in accordance with the terms and
provisions thereof. 

     

    Article 5 - Withholding
Taxes

     

    The
Company and its Subsidiaries may withhold from all payments due to the
Participant (or his beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local or other law, is required to be
withheld.

     

    Article 6 - Certain Additional
Agreements under Section 409A

     

    6.1  Delay of
Payment.  In the event that
a payment to be made pursuant to Sections 4.1(c), 4.2(b) or Schedule B or any
other amounts under this Plan that constitutes non-qualified deferred
compensation under Section 409A of the Code ("Section 409A") is to be made
to a “Specified Employee,” such payment will be delayed for six (6) months after
the Date of Termination if required in order to avoid additional tax under
Section 409A and paid in a single lump sum on the first business day of the
month following the end of such six (6) month period.  If a
Participant who is a Specified Employee dies within six (6) months following
such Termination of Employment, any such delayed payments shall not be further
delayed, and shall be immediately payable within thirty (30) days to his or her
estate in accordance with the applicable provisions of this Plan.

     

    6.2  Health
Benefits.  Health Benefits shall be provided in such a manner
that such benefits (and the costs and premiums thereof) are excluded from the
Participant’s income for federal income tax purposes and, if the Company
reasonably determines that providing continued coverage under one or more of its
health care benefit plans contemplated herein could be taxable to the
Participant, the Company shall provide such benefits at the level required
hereby through the purchase of individual insurance coverage. 

     

    
      
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    6.3  Cash Payments.  The
Company shall use its best efforts to pay, or shall use its best efforts to
cause the Employer to pay, to the Participant the cash lump sum described
in  Section 4.2(b) within eight (8) days following the execution by
the Participant of the Release (subject to the Participant not revoking such
Release); provided, however, that in no event shall such payment be made later
than the later of (i) the date provided in Section 6.1, if applicable, and (ii)
the end of the ninety (90) day period commencing with the Date of
Termination.

     

    6.4  No Adverse
Action.  No Employer will take any action that
would expose any payment or benefit to a Participant under this Plan to the
additional tax imposed under Section 409A unless (i) the Employer is obligated to
take the action under an agreement, plan or arrangement, (ii) a Participant
requests the action, (iii) the Employer advises such Participant in writing that
the action may result in the imposition of the additional tax and (iv) such
Participant subsequently requests the action in a writing that acknowledges that
he or she will be responsible for any effect of the action under Section
409A.

     

    Article 7 - Successors; Binding
Agreement

     

    7.1  The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to
unconditionally assume all of the obligations of the Employer hereunder.  Failure of the Company to
obtain such assumption prior to the effectiveness of any such succession shall
constitute Good Reason hereunder and shall entitle the Participants to
compensation and other benefits in the same amount and on the same terms as the
Participants would be entitled hereunder if they had a Qualifying Termination,
except that for purposes of implementing the foregoing, the date on which any
succession becomes effective shall be deemed the Date of
Termination.

     

    7.2  The benefits provided under this Plan
shall inure to the benefit of and be enforceable by the Participant’s personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.  If the Participant shall die
while any amounts would be payable to the Participant hereunder had the
Participant continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Plan to such person
or persons appointed in writing by the Participant to receive such amounts or,
if no person is so appointed, to the Participant’s estate.

     

    Article 8 - Miscellaneous

     

    8.1  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 on forms prepared by the Company or its General Counsel, Secretary
or Assistant Secretary, or their respective delegates or shall be made in such
other manner as permitted or required by the Company or its 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 the Company (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.

     

    
      
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    If not otherwise specified by this Plan
or the Company, any notice or filing required or permitted to be given to the
Company under the Plan shall be delivered to the principal office of the
Company, directed to the attention of the Senior Executive Vice President in
charge of Human Resources for the Company 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 the Employer or, at the option of the
Company, to the Participant’s e-mail address as shown on the records of the
Employer.  It is the Participant’s responsibility to ensure that the
Participant’s addresses are kept up to date on the records of the
Employer.  In the case of notices affecting multiple Participants, the
notices may be given by general distribution at the Participants’ work
locations.

     

    8.2  No Mitigation; Resolution of
Disputes and Costs.

     

            (a)  In no event shall the Participant be
obligated to seek other employment or take other action by way of mitigation of
the amounts payable to the Participant under any of the provisions of this Plan
and, except as provided in Section 4.2(c), such amounts shall not be reduced
whether or not the Participant obtains other employment.

     

            (b)  Participants may submit claims for
benefits by giving notice to the Company pursuant to Section 8.1.  If
a Participant believes that he or she has not received coverage or benefits to
which he or she is entitled under the Plan, the Participant may notify the
Company in writing of a claim for coverage or benefits.  If the claim
for coverage or benefits is denied in whole or in part, the Company shall notify
the applicant in writing of such denial within thirty (30) days (which may be
extended to sixty (60) days under special circumstances), with such notice
setting forth: (i) the specific reasons for the denial; (ii) the Plan provisions
upon which the denial is based; (iii) any additional material or information
necessary for the applicant to perfect his or her claim; and (iv) the procedures
for requesting a review of the denial.  Upon a denial of a claim by
the Company, the Participant may:  (i) request a review of the denial
by the Board or, where review authority has been so delegated, by such other
person or entity as may be designated by the Board for this purpose; (ii) review
any Plan documents relevant to his or her claim; and (iii) submit issues and
comments to the Board or its delegate that are relevant to the
review.  Any request for review must be made in writing and received
by the Board or its delegate within sixty (60) days of the date the applicant
received notice of the initial denial, unless special circumstances require an
extension of time for processing.  The Board or its delegate will make
a written ruling on the applicant’s request for review setting forth the reasons
for the decision and the Plan provisions upon which the denial, if appropriate,
is based.  This written ruling shall be made within thirty (30) days
of the date the Board or its delegate receives the applicant’s request for
review unless special circumstances require an extension of time for processing,
in which case a decision will be rendered as soon as possible, but not later
than sixty (60) days after receipt of the request for review.  All
extensions of time permitted by this Section 18 will be permitted at the sole
discretion of the Board or its delegate.  If the Board does not
provide the Participant with written notice of the denial of his or her appeal,
the Participant’s claim shall be deemed denied.

     

    
      
        11

      

      
        
        

      

      
        
          

        

      

       

                
(c)  Notwithstanding
anything in this Plan to the contrary, any court, tribunal or arbitration panel
that adjudicates any dispute, controversy or claim arising between a Participant
and any Employer, or any of their delegates or successors, in respect of a
Participant’s Qualifying Termination, will apply a denovo standard of
review to any determinations made by such person. Such denovo standard shall
apply notwithstanding the grant of full discretion hereunder to any such person
or characterization of any such decision by such person as final, binding or
conclusive on any party.

    

     

            (d)  If any
contest or dispute shall arise under this Plan involving a Participant’s Termination of
Employment or involving the failure or refusal of any Employer to perform fully
in accordance with the terms hereof, the Company shall or shall cause the
Employer to reimburse the Participant on a current basis for all reasonable
legal fees and related expenses, if any, incurred by the Participant at any time from the Effective Date of
this Plan through the Participant’s remaining lifetime (or, if longer, through
the 20th anniversary of the Change in Control) in connection with such contest or
dispute (regardless of the result thereof), together with interest at the rate
provided in section 1274(b)(2)(B) of the Code, such interest to accrue thirty
(30) days from the date the Company receives the Participant’s statement
for such fees and expenses through the date of payment thereof, regardless of
whether or not the Participant’s claim is upheld by a court of competent
jurisdiction or an arbitration panel; provided, however, that the
Participant shall be required to repay immediately any such amounts to the
Employer to the extent that a court or an arbitration panel issues a final and
non-appealable order setting forth the determination that the position taken by
the Participant was frivolous or
advanced by the Participant in bad faith. To comply with Section 409A, in no event
shall the payments by the Employer under this Section 8.2(d) be made later than
the end of the calendar year next following the calendar year in which such fees
and expenses were incurred, provided, that the Participant shall have submitted
an invoice for such fees and expenses at least ten (10) days before the end of
the calendar year next following the calendar year in which such fees and
expenses were incurred.  The amount of such legal fees and expenses
that the Employer is obligated to pay in any given calendar year shall not
affect the legal fees and expenses that the Employer is obligated to pay in any
other calendar year, and the Participant’s right to have the Employer pay such
legal fees and expenses may not be liquidated or exchanged for any other
benefit. 

     

    8.3  Survival.  The respective obligations
and benefits afforded to the Company and the Participant as provided in Articles
4 (to the extent that payments or benefits are owed as a result of a Qualifying
Termination that occurs during the term of this Plan), 5, 6, 7 and 8 shall
survive the termination of this Plan.

     

    
      
        12

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.4  Governing Law;
Validity.

     

    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 Delaware, 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.

     

    8.5  Amendment and
Termination.  The Board or the Committee
may amend (and, by amendment, terminate) this Plan at any time; provided, however, that (i) no amendment that reduces or
eliminates any benefit or other entitlement of any Participant or that is
otherwise adverse to the interests of a Participant (an “Adverse Amendment”) may take effect prior to the
beginning of any calendar year, and any such amendment shall be void
and of no effect, unless the Participant was notified of
such amendment by September 30 of the prior year, (ii) no Adverse Amendment may
be adopted during the period of time beginning on a Potential Change in Control
and ending on the earlier of (a) the termination of the agreement that
constituted the Potential Change in Control and (b) the second anniversary of the resulting Change in
Control, without the Participant’s written consent, and (iii) no Adverse
Amendment may be adopted during the period commencing on a Change in Control and
ending on the second anniversary of the Change in Control without the
Participant’s written consent. The restrictions on amendments set forth
in the prior sentence shall not apply to any amendment adopted within the period
specified in clauses (ii) or (iii), above, if the following three conditions are
satisfied: (1) the amendments do not take effect until the expiration of the
periods, as applicable, set forth in such clauses, (2) each adversely affected
Participant receives written notice of the adoption of such amendments within
ten (10) days of such adoption and (3) such written notice is provided at least
ninety (90) days prior to such amendments taking effect.

     

    8.6  Interpretation and
Administration.  The Plan shall be
administered by the Board.  The Board may delegate any of its powers
under the Plan to a committee thereof or prior to a Change in Control, to the
CEO.  Unless otherwise provided in this Plan, actions of the Board or
such committee shall be taken by a majority vote of its members.  All
references to the “Board” herein shall be deemed to be references to such
delegate, as appropriate.  The Board shall have the authority (i) to
exercise all of the powers granted to it under the Plan, (ii) to construe,
interpret and implement the Plan, (iii) to prescribe, amend and rescind rules
and regulations relating to the Plan, (iv) to make all determinations necessary
or advisable in administration of the Plan and (v) to correct any defect, supply
any omission and reconcile any inconsistency in the Plan.

     

    8.7  Type of
Plan.  This Plan is intended to be,
and shall be interpreted as an unfunded employee welfare plan under Section 3(1)
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and
Section 2520.104-24 of the Department of Labor Regulations, maintained primarily
for the purpose of providing employee welfare benefits, to the extent that it
provides welfare benefits, and under Sections 201, 301 and 401 of ERISA, as a
plan that is unfunded and maintained primarily for the purpose of providing
deferred compensation, to the extent that it provides such compensation, in each
case for a select group of management or highly compensated
employees.

     

    8.8  Nonassignability.  Benefits under the Plan may
not be sold, assigned, transferred, pledged, anticipated, mortgaged, or
otherwise encumbered, transferred, hypothecated, or conveyed in advance of
actual receipt of the amounts, if any, payable hereunder, or any part thereof by
the Participant.

     

    
      
        13

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule A

     

    RELEASE AND WAIVER

     

    I, ________________, hereby fully waive
and forever release and discharge Company, AT&T, any and all other
subsidiaries of Company and of AT&T, their officers, directors, agents,
servants, employees, successors and assigns and any and all employee benefit
plans maintained by AT&T or any subsidiary thereof and/or any and all
fiduciaries of any such plan from any and all common law and/or statutory
claims, causes of action or suits of any kind whatsoever arising from or in
connection with my past employment by Company (and any AT&T subsidiary to
the extent applicable) and/or my separation therefrom, including but not limited
to claims, actions, causes of action or suits of any kind allegedly arising
under the Employee Retirement Income Security Act (ERISA), as amended, 29 USC §§
1001 et seq.; the Rehabilitation Act of 1973, as amended, 29 USC §§ 701 et seq.;
the Civil Rights Acts of 1866 and 1870, as amended, 42 USC §§ 1981, 1982 and
1988; the Civil Rights Act of 1871, as amended, 42 USC §§ 1983 and 1985; the
Civil Rights Act of 1964, as amended, 42 USC § 2000d et seq.; the Americans With
Disabilities Act, as amended, 42 USC §§ 12101 et seq., and the Age
Discrimination in Employment Act of 1967 (ADEA), as amended, 29 USC §§ 621 et
seq., known and unknown. In addition, I, ___________, agree not to file any
lawsuit or other claim seeking monetary damage or other relief in any state or
federal court or with any administrative agency against any of the
aforementioned parties in connection with or relating to any of the
aforementioned matters. Provided, however, by executing this Release and Waiver,
I, ________________, do not waive rights or claims that may arise after the date
of execution; provided further, however, this Release and Waiver shall not
affect my right to receive or enforce through litigation, any indemnification
rights to which I am entitled as a result of my past employment by the Company
or contract rights pursuant to the Agreement and Release and Waiver of Claims
entered into contemporaneously herewith and, if applicable, any subsidiary of
AT&T; and, provided further, this Release and Waiver shall not affect the
ordinary distribution of benefits/entitlements, if any, to which I am entitled
upon termination from Company; it being understood by me that said
benefits/entitlements, if any, will be subject to and provided in accordance
with the terms and conditions of their respective governing plan and this
Agreement.

     

    
      
        A-1

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule B

     

    Additional Reimbursement
Payments by the Company

     

    (a)           Pursuant to Section 4.2(d) of the Plan,
in the event it shall be determined that any payment, award, benefit or
distribution (or any acceleration of any payment, award, benefit or
distribution) by the Company (or any of its affiliated entities) or any entity
which effectuates a Change in Control (or any of its affiliated entities) to or
for the benefit of the Participant (whether pursuant to the terms of this Plan
or otherwise, but determined without regard to any additional payments required
under this Schedule B) (the “Payments”) would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”), or any interest or penalties are
incurred by the Participant with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise
Tax”), then
the Company shall
remit to the Internal
Revenue Service or any other applicable taxing authority an additional payment (a “Reimbursement
Payment”) in
an amount such that after payment by the Participant of all taxes (including any
Excise Tax) imposed upon the Reimbursement Payment, the Participant retains an
amount of the Reimbursement Payment equal to the Excise Tax imposed upon the
Payments; provided, however, that the Company shall have the obligation to make
a Reimbursement Payment only to the extent the Participant is subject to the
Excise Tax by virtue of the reduction of his or her “base amount” (as defined in
Section 280G(b)(3) of the Code) by reason of his or her election to defer a
portion of his or her compensation payable during the applicable period (such
Excise Tax, a “Qualifying Excise
Tax”).  For purposes of
determining the amount of the Reimbursement Payment, the Participant shall be
deemed to (i) pay federal income taxes at the highest marginal rates of federal
income taxation for the calendar year in which the Reimbursement Payment is to
be made and (ii) pay applicable state and local income taxes at the highest
marginal rate of taxation for the calendar year in which the Reimbursement
Payment is to be made, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local
taxes.

     

    (b)           Subject to the provisions of Paragraph
(a), all determinations required to be made under this Schedule B, including
whether and when a Reimbursement Payment is required, the amount of such
Reimbursement Payment, the amount of any Option Redetermination (as defined
below), and the assumptions to be utilized in arriving at such determinations,
shall be made by a public accounting firm that is retained by the Company as of
the date immediately prior to the Change in Control (the “Accounting
Firm”) which
shall provide detailed supporting calculations both to the Company and the
Participant within fifteen (15) business days of the receipt of notice from the
Company or the Participant that there has been a Payment, or such earlier time
as is requested by the Company (collectively, the “Determination”).  For the avoidance of
doubt, the Accounting Firm may use the Option Redetermination amount in
determining the reduction of the Payments to the Safe Harbor
Cap.  Notwithstanding the foregoing, in the event (i) the Board shall
determine prior to the Change in Control that the Accounting Firm is precluded
from performing such services under applicable auditor independence rules or
(ii) the Audit Committee of the Board determines that it does not want the
Accounting Firm to perform such services because of auditor independence
concerns or (iii) the Accounting Firm is serving as accountant or auditor for
the person(s) effecting the Change in Control, the Board shall appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder).  All fees and expenses of the Accounting Firm shall
be borne solely by the Company, and the Company shall enter into any agreement
reasonably requested by the Accounting Firm in connection with the performance
of the services hereunder.  The Reimbursement Payment under this
Schedule B with respect to any Payments shall be made no later than thirty (30)
days following such Payment.  If the Accounting Firm determines that
no Qualifying Excise Tax is payable by a Participant, it shall furnish the
Participant with a written opinion to such effect, and to the effect that
failure to report the Qualifying Excise Tax, if any, on the Participant’s
applicable federal income tax return will not result in the imposition of a
negligence or similar penalty.  The Determination by the Accounting
Firm shall be binding upon the Company and the Participant.

     

    
      
        B-1

      

      
        
        

        
          

        

      

      
        
        

      

    

    As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the Determination, it is
possible that Reimbursement Payments which will not have been made by the
Company should have been made (“Underpayment”) or Reimbursement Payments are made by
the Company which should not have been made (“Overpayment”), consistent with the calculations
required to be made hereunder.  In the event the amount of the
Reimbursement Payment is less than the amount necessary to reimburse the
Participant for the Qualifying Excise Tax, the Accounting
Firm shall determine the amount of the Underpayment that has occurred and any
such Underpayment (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) shall be promptly remitted to the Internal Revenue Service
or any other applicable taxing authority an additional payment (to or for the benefit of the
Participant.  In the event the amount of the Reimbursement Payment
exceeds the amount necessary to reimburse the Participant for the Qualifying Excise Tax, the Accounting Firm shall
determine the amount of the Overpayment that has been made and any such
Overpayment (together with interest at the rate provided in Section 1274(b)(2)
of the Code) shall be promptly paid by the Participant (to the extent the
Participant has received a refund if the applicable Qualifying Excise Tax has
been paid to the Internal Revenue Service) to or for the benefit of the
Company.  The Participant shall cooperate, to the extent his or
her expenses are reimbursed by the Company,
with any reasonable requests by the Company in connection with any contests or
disputes with the Internal Revenue Service in connection with the Excise
Tax.  In the event that the Company makes a Reimbursement Payment to
the Participant and subsequently the Company determines that the value of any
accelerated vesting of stock options held by the Participant shall be
redetermined within the context of Treasury Regulation §1.280G-1 Q/A 33 (the
“Option
Redetermination”), the Participant shall (i) file with
the Internal Revenue Service an amended federal income tax return that claims a
refund of the overpayment of the Qualifying Excise Tax attributable to such
Option Redetermination and (ii) promptly pay the refunded Qualifying Excise Tax to the Company; provided that the Company shall pay all
reasonable professional fees incurred in the preparation of the Participant’s
amended federal income tax return.  If the Option Redetermination
occurs in the same year that the Reimbursement Payment is included in the
Participant’s taxable income, then in addition to returning the refund to the
Company, the Participant will also promptly return to the Company any tax
benefit realized by the return of such refund and the return of the additional
tax benefit payment (all determinations pursuant to this sentence shall be made
by the Accounting Firm).

     

    Notwithstanding any other provision to
the contrary, a Reimbursement Payment described in this Schedule B shall be made
by the end of the calendar year next following the calendar year in which the
related taxes are remitted to the taxing authority by the
Participant. 

     

     

     

     

     

    B-3ex10d.htm

    
 

     

     

     

     

     

     

    
 

    
      AT&T
Inc.

      2006
Incentive Plan

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Plan
Effective:  May 1, 2006

    Amended
Through:  June 26, 2008

    

    
      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

    

    AT&T
INC.

    2006
INCENTIVE PLAN

     

    
      	
              Article
      1

            	
              Establishment
      and Purpose.

            

    

     

    
      	
               

            	
              1.1

            	
              Establishment
      of the Plan.  AT&T Inc., a Delaware corporation (the
      "Company" or "AT&T"), hereby establishes an incentive compensation
      plan (the "Plan"), as set forth in this
  document.

            

    

     

    
      	
               

            	
              1.2

            	
              Purpose
      of the Plan.  The purpose of the Plan is to promote the
      success and enhance the value of the Company by linking the personal
      interests of Participants to those of the Company’s shareowners, and by
      providing Participants with an incentive for outstanding
      performance.

            

    

     

    
      	
               

            	
              1.3

            	
              Effective
      Date of the Plan.  The Plan was originally effective on
      May 1, 2006.

            

    

    
 

     

    
      	
              Article
      2

            	
              Definitions.  Whenever
      used in the Plan, the following terms shall have the meanings set forth
      below and, when the meaning is intended, the initial letter of the word is
      capitalized:

            

    

     

    (a)
 "Award" means, individually or collectively, a grant or award under this
Plan of Stock Options, Restricted Stock (including unrestricted Stock),
Restricted Stock Units, Performance Units, or Performance Shares.

     

    (b)  "Award
Agreement" means an agreement which may be entered into by each Participant and
the Company, setting forth the terms and provisions applicable to Awards granted
to Participants under this Plan.

     

    (c)   "Board"
or "Board of Directors" means the AT&T Board of Directors.

     

    (d)  "Cause"
shall mean willful and gross misconduct on the part of an Employee that is
materially and demonstrably detrimental to the Company or any Subsidiary as
determined by the Company in its sole discretion.

     

    (e)  "Change in
Control" shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or a corporation owned directly or indirectly by the shareowners of the Company
in substantially the same proportions as their ownership of stock of the
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
said Act), directly or indirectly, of securities of the Company representing
twenty percent (20%) or more of the total voting power represented by the
Company's then outstanding voting securities, or (ii) during any period of two
(2) consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new Director whose
election by the Board of Directors or nomination for election by the Company's
shareowners was approved by a vote of at least two-thirds (2/3) of the Directors
then still in office who either were Directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute a majority thereof, or (iii) the consummation of a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the shareowners
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
the Company's assets.

    
       

      
        
          1

        

        
          
          

          
          

        

        
          
          

        

      

    

    (f)  "Code"
means the Internal Revenue Code of 1986, as amended from time to
time.

     

    (g)  "Committee"
means the committee or committees of the Board of Directors given authority to
administer the Plan as provided in Article 3.

     

    (h)  "Director"
means any individual who is a member of the AT&T Board of
Directors.

     

    (i)  "Disability"
shall mean absence of an Employee from work under the relevant Company or
Subsidiary long term disability plan.

    
       

    (j)  "Employee"
means any employee of the Company or of one of the Company's
Subsidiaries.  "Employment" means the employment of an Employee by the
Company or one of its Subsidiaries.  Directors who are not otherwise
employed by the Company shall not be considered Employees under this
Plan.

     

    (k)  "Exchange
Act" means the Securities Exchange Act of 1934, as amended from time to time, or
any successor Act thereto.

     

    (l)  "Exercise
Price" means the price at which a Share may be purchased by a Participant
pursuant to an Option, as determined by the Committee.

     

    (m)  "Fair
Market Value" shall mean the closing price on the New York Stock Exchange
("NYSE") for a Share on the relevant date, or if such date was not a trading
day, the next preceding trading date, all as determined by the
Company.  A trading day is any day that the Shares are traded on the
NYSE.  In lieu of the foregoing, the Committee may, from time to time,
select any other index or measurement to determine the Fair Market Value of
Shares under the Plan, including but not limited to an average determined over a
period of trading days.

    
       

      
        
          2

        

        
          
          

          
          

        

        
          
          

        

      

    

    (n)  "Insider"
shall mean an Employee who is, on the relevant date, an officer, director, or
ten percent (10%) beneficial owner of the Company, as those terms are defined
under Section 16 of the Exchange Act.

     

    (o)  "Option"
means an option to purchase Shares from AT&T.

     

    (p)  "Participant"
means an Employee or former Employee who holds an outstanding Award granted
under the Plan.

     

    (q)  "Performance
Unit" and "Performance Share" shall each mean an Award granted to an Employee
pursuant to Article 8 herein.

     

    (r)  "Plan"
means this 2006 Incentive Plan.  The Plan may also be referred to as
the "AT&T 2006 Incentive Plan" or as the "AT&T Inc. 2006 Incentive
Plan."

     

    (s)  "Retirement"
or to "Retire" shall mean the Participant’s Termination of Employment for any
reason other than death, Disability or for Cause, on or after the earlier of the
following dates, or as otherwise provided by the Committee: (1) for Officer
Level Employees (Participants deemed officer level Employees for compensation
purposes as indicated on the records of AT&T), the date the Participant is
at least age 55 and has five (5) years of net credited service); or (2) the date
the Participant has attained one of the following combinations of age and
service, except as otherwise indicated below:

     

                            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 that may be 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.

     

    (t)  "Rotational
Work Assignment Company" ("RWAC") shall mean any entity with which AT&T Inc.
or any of its Subsidiaries may enter into an agreement to provide an employee
for a rotational work assignment.

     

    (u)  "Shares" or
"Stock" means the shares of common stock of the Company.

     

    (v)
 "Subsidiary" shall mean any corporation, partnership, venture or other
entity in which AT&T holds, directly or indirectly, a fifty percent (50%) or
greater ownership interest.  The Committee may, at its sole
discretion, designate, on such terms and conditions as the Committee shall
determine, any other corporation, partnership, limited liability company,
venture other entity a Subsidiary for purposes of this Plan.  Unless
otherwise provided by the Committee, Cingular and its direct or indirect
majority-owned subsidiaries shall each be deemed a Subsidiary so long as
AT&T holds a direct or indirect twenty five percent (25%) or greater
ownership interest in Cingular Wireless LLC or its successor.

    
 

    
      
        3

      

      
        
        

        
        

      

      
        
        

      

    

    (w)  "Termination
of Employment" or a similar reference shall mean the event where the Employee is
no longer an Employee of the Company or of any Subsidiary, including but not
limited to where the employing company ceases to be a
Subsidiary.  With respect to any Award that constitutes a
“nonqualified deferred compensation plan” within the meaning of Section 409A of
the Code, “Termination of Employment” shall mean a “separation from service” as
defined under Section 409A of the Code.

     

     

    
      	
              Article
      3

            	
              Administration.

            

    

     

    
      	
               

            	
              3.1

            	
              The
      Committee.  Administration of the Plan shall be as
      follows:

            

    

     

    (a)  With
respect to Insiders, the Plan and Awards hereunder shall be administered by the
Human Resources Committee of the Board or such other committee as may be
appointed by the Board for this purpose (each of the Human Resources Committee
and such other committee is the "Disinterested Committee"), where each Director
on such Disinterested Committee is a "Non-Employee Director", as that term is
used in Rule 16b-3 under the Exchange Act (or any successor designation for
determining the committee that may administer plans, transactions or awards
exempt under Section 16(b) of the Exchange Act), as that rule may be modified
from time to time.

     

    (b)  With
respect to persons who are not Insiders, the Plan and Awards hereunder shall be
administered by each of the Disinterested Committee and such other committee, if
any, to which the Board may delegate such authority (such other Committee shall
be the "Non-Insider Committee"), and each such Committee shall have full
authority to administer the Plan and all Awards hereunder, except as otherwise
provided herein or by the Board.  The Disinterested Committee may,
from time to time, limit the authority of the Non-Insider Committee in any
way.  Any Committee may be replaced by the Board at any
time.

     

    (c)  Except as
otherwise indicated from the context, references to the “Committee” in this Plan
shall be to either of the Disinterested Committee or the Non-Insider
Committee.

     

    
      
        4

      

      
        
        

        
        

      

      
        
        

      

    

     

    
      	
               

            	
              3.2

            	
              Authority
      of the Committee.  The Committee shall have complete
      control over the administration of the Plan and shall have the authority
      in its sole discretion to (a) exercise all of the powers granted to it
      under the Plan, (b) construe, interpret and implement the Plan, grant
      terms and grant notices, and all Award Agreements, (c) prescribe, amend
      and rescind rules and regulations relating to the Plan, including rules
      governing its own operations, (d) make all determinations necessary or
      advisable in administering the Plan, (e) correct any defect, supply any
      omission and reconcile any inconsistency in the Plan, (f) amend the Plan
      to reflect changes in applicable law (whether or not the rights of the
      holder of any Award are adversely affected, unless otherwise provided by
      the Committee), (g) grant Awards and determine who shall receive Awards,
      when such Awards shall be granted and the terms and conditions of such
      Awards, including, but not limited to, conditioning the exercise, vesting,
      payout or other term of condition of an Award on the achievement of
      Performance Goals (defined below), (h) unless otherwise provided by the
      Committee, amend any outstanding Award in any respect, not materially
      adverse to the Participant, including, without limitation, to (1)
      accelerate the time or times at which the Award becomes vested,
      unrestricted or may be exercised (and, in connection with such
      acceleration, the Committee may provide that any Shares acquired pursuant
      to such Award shall be Restricted Shares, which are subject to vesting,
      transfer, forfeiture or repayment provisions similar to those in the
      Participant’s underlying Award), (2) accelerate the time or times at which
      shares of Common Stock are delivered under the Award (and, without
      limitation on the Committee’s rights, in connection with such
      acceleration, the Committee may provide that any shares of Common Stock
      delivered pursuant to such Award shall be Restricted Shares, which are
      subject to vesting, transfer, forfeiture or repayment provisions similar
      to those in the Grantee’s underlying Award), or (3) waive or amend any
      goals, restrictions or conditions applicable such Award, or impose new
      goals, restrictions and (i) determine at any time whether, to what extent
      and under what circumstances and method or methods (1) Awards may be (A)
      settled in cash, shares of Stock, other securities, other Awards or other
      property (in which event, the Committee may specify what other effects
      such settlement will have on the Participant’s Award), (B) exercised or
      (C) canceled, forfeited or suspended, (2) Shares, other securities, cash,
      other Awards or other property and other amounts payable with respect to
      an Award may be deferred either automatically or at the election of the
      Participant or of the Committee, or (3) Awards may be settled by the
      Company or any of its Subsidiaries or any of its or their
      designees.

            

    

     

    No Award may be made under
the Plan more than ten years after its effective date.

     

    References to
determinations or other actions by AT&T or the Company, herein, shall mean
actions authorized by the Committee, the Chairman of the Board of AT&T, 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, provided, however, only the Disinterested Committee
may take action with respect to Insiders with regard to granting or determining
the terms of  Awards or other matters that would require the
Disinterested Committee to act in order to comply with Rule 16b-3 promulgated
under the Exchange Act.

     

    
      
        5

      

      
        
        

        
        

      

      
        
        

      

    

    All
determinations and decisions made by AT&T pursuant to the provisions of the
Plan and all related orders or resolutions of the Board shall be final,
conclusive, and binding on all persons, including but not limited to the
Company, its stockholders, Employees, Participants, and their estates and
beneficiaries.

     

    
      	
              Article
      4

            	
              Shares
      Subject to the Plan.

            

    

     

    
      	
               

            	
              4.1

            	
              Number
      of Shares.  Subject to adjustment as provided in Section
      4.3 herein, the number of Shares available for issuance under the Plan
      shall not exceed 90 million Shares.  The Shares granted under
      this Plan may be either authorized but unissued or reacquired
      Shares.  The Disinterested Committee shall have full discretion
      to determine the manner in which Shares available for grant are counted in
      this Plan.

            

    

     

    
      	
               

            	
              4.2

            	
              Share
      Accounting.  Without limiting the discretion of the
      Committee under this section, unless otherwise provided by the
      Disinterested Committee, the following rules will apply for purposes of
      the determination of the number of Shares available for grant under the
      Plan or compliance with the foregoing
limits:

            

    

     

    (a)  If an
outstanding Award for any reason expires or is terminated or canceled without
having been exercised or settled in full, or if Shares acquired pursuant to an
Award subject to forfeiture or repurchase are forfeited or repurchased by the
Company for an amount not greater than the Participant's original purchase
price, the Shares allocable to the terminated portion of such Award or such
forfeited or repurchased Shares shall again be available for issuance under the
Plan.

     

    (b)  Shares
shall not be deemed to have been issued pursuant to the Plan with respect to any
portion of an Award that is settled in cash, other than an Option.

     

    (c)  Shares
withheld or reacquired by the Company in satisfaction of tax withholding
obligations under a Restricted Stock Award shall not again be available for
issuance under the Plan; however Shares withheld for tax withholding from other
awards shall be available for issuance again.

     

    (d)  If the
exercise price of an Option is paid by tender to the Company, or attestation to
the ownership, of Shares owned by the Participant, or an Option is settled
without the payment of the exercise price, the number of shares available for
issuance under the Plan shall be reduced by the gross number of shares for which
the Option is exercised.

    
       

      
        
          6

        

        
          
          

          
          

        

        
          
          

      

    

    
      	
               

            	
              4.3

            	
              Adjustments
      in Authorized Plan Shares.  In the event of any merger,
      reorganization, consolidation, recapitalization, separation, liquidation,
      Stock dividend, split-up, Share combination, or other change in the
      corporate structure of the Company affecting the Shares, an adjustment
      shall be made in the number and class of Shares 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 subject to outstanding
      Awards granted under the Plan, and/or the number of outstanding Options,
      Shares of Restricted Stock, and Performance Shares (and Performance Units
      and other Awards whose value is based on a number of Shares) constituting
      outstanding Awards, as may be determined to be appropriate and equitable
      by the Disinterested Committee, in its sole discretion, to prevent
      dilution or enlargement of rights.

            

    

     

     

    
      	
              Article
      5

            	
              Eligibility
      and Participation.

            

    

     

    
      	
               

            	
              5.1

            	
              Eligibility.  All
      management Employees are eligible to receive Awards under this
      Plan.

            

    

     

    
      	
               

            	
              5.2

            	
              Actual
      Participation.  Subject to the provisions of the Plan,
      the Committee may, from time to time, select from all eligible Employees,
      those to whom Awards shall be granted and shall determine the nature and
      amount of each Award.  No Employee is entitled to receive an
      Award unless selected by the
Committee.

            

    

     

     

    
      	
              Article
      6

            	
              Stock
      Options.

            

    

     

    
      	
               

            	
              6.1

            	
              Grant
      of Options.  Subject to the terms and provisions of the
      Plan, Options may be granted to eligible Employees at any time and from
      time to time, and under such terms and conditions, as shall be determined
      by the Committee. In addition, the Committee may, from time to time,
      provide for the payment of dividend equivalents on Options, prospectively
      and/or retroactively, on such terms and conditions as the Committee may
      require.  The Committee shall have discretion in determining the
      number of Shares subject to Options granted to each Employee; provided,
      however, that no single Employee may receive Options under this Plan for
      more than one percent (1%) of the Shares approved for issuance under this
      Plan during any calendar year.  The Committee may not grant
      Incentive Stock Options, as described in Section 422 of the Code, under
      this Plan.

            

    

     

    
      	
               

            	
              6.2

            	
              Form
      of Issuance.  Each Option grant may be issued in the form
      of an Award Agreement and/or may be recorded on the books and records of
      the Company for the account of the Participant. If an Option is not issued
      in the form of an Award Agreement, then the Option shall be deemed granted
      as determined by the Committee.  The terms and conditions of an
      Option shall be set forth in the Award Agreement, in the notice of the
      issuance of the grant, or in such other documents as the Committee shall
      determine.  Such terms and conditions shall include the Exercise
      Price, the duration of the Option, the number of Shares to which an Option
      pertains (unless otherwise provided by the Committee, each Option may be
      exercised to purchase one Share), and such other provisions as the
      Committee shall determine.

            

    

     

    
       

      
        
          7

        

        
          
          

          
          

        

        
          
          

        

      

    

    
      	
               

            	
              6.3

            	
              Exercise
      Price.  Unless a greater Exercise Price is determined by
      the Committee, the Exercise Price for each Option Awarded under this Plan
      shall be equal to one hundred percent (100%) of the Fair Market Value of a
      Share on the date the Option is
granted.

            

    

     

     

    
      	
                   
      6.4  

            	
              Duration
      of Options.  Each Option shall expire at such time as the
      Committee shall determine at the time of grant (which duration may be
      extended by the Committee); provided, however, that no Option shall be
      exercisable later than the tenth (10th) anniversary date of its
      grant.  In the event the Committee does not specify the
      expiration date of an Option, then such Option will expire on the tenth
      (10th)
      anniversary date of its grant, except as otherwise provided
      herein.

            

    

     

    
      	
               

            	
              6.5

            	
              Vesting
      of Options.  Options shall vest at such times and under
      such terms and conditions as determined by the Committee; provided,
      however, unless another vesting period is provided by the Committee at or
      before the grant of an Option, one-third of the Options will vest on each
      of the first three anniversaries of the grant; if one Option remains after
      equally dividing the grant by three, it will vest on the first anniversary
      of the grant, if two Options remain, then one will vest on each of the
      first two anniversaries.  The Committee shall have the right to
      accelerate the vesting of any Option; however, the Chairman of the Board
      or the Senior Executive Vice President-Human Resources, or their
      respective successors, or such other persons designated by the Committee,
      shall have the authority to accelerate the vesting of Options for any
      Participant who is not an Insider.

            

    

     

     

    
      	
               

            	
              6.6

            	
              Exercise
      of Options.  Options granted under the Plan shall be
      exercisable at such times and be subject to such restrictions and
      conditions as the Committee shall in each instance approve, which need not
      be the same for each grant or for each Participant. Exercises of Options
      may be effect only on days and during the hours that the New York Stock
      Exchange is open for regular trading.  The Company may change or
      limit the times or days Options may be exercised.  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.

            

    

     

    Options
shall be exercised by providing notice to the designated agent selected by the
Company (if no such agent has been designated, then to the Company), in the
manner and form determined by the Company, which notice shall be irrevocable,
setting forth the exact number of Shares with respect to which the Option is
being exercised and including with such notice payment of the Exercise
Price.  When Options have been transferred, the Company 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.

    
       

      
        
          8

        

        
          
          

          
          

        

        
          
          

      

    

    
      	
               

            	
              6.7

            	
              Payment.  Unless
      otherwise determined by the Committee, the Exercise Price shall be paid in
      full at the time of exercise.  No Shares shall be issued or
      transferred until full payment has been
  received.

            

    

     

    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 the Committee or the Company may
impose from time to time, and further subject to suspension or termination of
this provision by the Committee or Company at any time, by:

     

    
      	
               

            	
              (i)

            	
              delivery of Shares
      owned by the Participant in partial (if in partial payment, then together
      with cash) or full payment; provided, however, as a condition to paying
      any part of the Exercise Price in Shares, at the time of exercise of the
      Option, the Participant must establish to the satisfaction of the Company
      that the Stock tendered to the Company has been held by the Participant
      for a minimum of six (6) months preceding the tender;
  or

            

    

     

    
      	
               

            	
              (ii)

            	
              if the Company has
      designated a stockbroker to act as the Company’s agent to process Option
      exercises, issuance of an exercise notice together with instructions to
      such stockbroker irrevocably instructing the stockbroker:  (A)
      to immediately sell (which shall include an exercise notice that becomes
      effective upon execution of a sale order) a sufficient portion of the
      Shares to be received from the Option exercise 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 the
      Company.  In the event the stockbroker sells any Shares on
      behalf of a Participant, the stockbroker shall be acting solely as the
      agent of the Participant, and the Company disclaims any responsibility for
      the actions of the stockbroker in making any such sales.  No
      Shares shall be issued until the settlement date and until the proceeds
      (equal to the Option Price and tax withholding) are paid to the
      Company.

            

    

     

    If
payment is made by the delivery of Shares, the value of the Shares delivered
shall be equal to the then most recent Fair Market Value of the Shares
established before the exercise of the Option.

     

    Restricted Stock may not
be used to pay the Exercise Price.

    
       

      
        
          9

        

        
          
          

          
          

        

        
          
          

      

    

    
      	
               

            	
              6.8

            	
              Termination
      of Employment.  Unless otherwise provided by the
      Committee, the following limitations on exercise of Options shall apply
      upon Termination of Employment:

            

    

     

    (a)  Termination
by Death or Disability.  In the event of the Participant's
Termination of Employment by reason of death or Disability, all outstanding
Options granted to that Participant shall immediately vest as of the date of
Termination of Employment and may be exercised, if at all, no more than three
(3) years from the date of the Termination of Employment, unless the Options, by
their terms, expire earlier.  However, in the event the Participant
was eligible to Retire at the time of Termination of Employment, notwithstanding
the foregoing, the Options may be exercised, if at all, no more than five (5)
years from the date of the Termination of Employment, unless the Options, by
their terms, expire earlier.

     

    (b)  Termination
for Cause.  In the event of the Participant's Termination of
Employment by the Company for Cause, all outstanding Options held by the
Participant shall immediately be forfeited to the Company and no additional
exercise period shall be allowed, regardless of the vested status of the
Options.

     

    (c)  Retirement
or Other Termination of Employment.  In the event of the
Participant's Termination of Employment for any reason other than the reasons
set forth in (a) or (b), above:

    
      	
               

            	
              (i)

            	
              If upon the
      Participant's Termination of Employment, the Participant is eligible to
      Retire (and if the Participant is an officer level employee for
      compensation purposes as determined by AT&T, the employee must also be
      age 55 or older at Termination of Employment), then all outstanding
      unvested Options granted to that Participant shall immediately vest as of
      the date of the Participant's Termination of
  Employment;

            

    

     

    
      	
               

            	
              (ii)

            	
              All outstanding
      Options which are vested as of the effective date of Termination of
      Employment may be exercised, if at all, no more than five (5) years from
      the date of Termination of Employment if the Participant is eligible to
      Retire, or three (3) months from the date of the Termination of Employment
      if the Participant is not eligible to Retire, as the case may be, unless
      in either case the Options, by their terms, expire earlier;
      and

            

    

     

    
      	
               

            	
              (iii)

            	
              In the event of the
      death of the Participant after Termination of Employment, this paragraph
      (c) shall still apply and not paragraph (a),
  above.

            

    

     

    (d)  Options
not Vested at Termination.  Except as provided in paragraphs
(a) and (c)(i), above, all Options held by the Participant which are not vested
on or before the effective date of Termination of Employment shall immediately
be forfeited to the Company (and the Shares subject to such forfeited Options
shall once again become available for issuance under the Plan).

     

    
      
        10

      

      
        
        

        
        

      

      
        
        

      

    

    (e)  Notwithstanding
the foregoing, the Committee may, in its sole discretion, establish different,
or waive, terms and conditions pertaining to the effect of Termination of
Employment on Options, whether or not the Options are outstanding, but no such
modification shall shorten the terms of Options issued prior to such
modification or otherwise be materially adverse to the Participant.

     

    
      	
               

            	
              6.9

            	
              Employee
      Transfers.  For purposes of the Plan, transfer of
      employment of a Participant between the Company and any one of its
      Subsidiaries (or between Subsidiaries) or between the Company or a
      Subsidiary and a RWAC, to the extent the period of employment at a RWAC is
      equal to or less than five (5) years, shall not be deemed a Termination of
      Employment.  Provided, however, for purposes of this Article 6,
      termination of employment with a RWAC without a concurrent transfer to the
      Company or any of its Subsidiaries shall be deemed a Termination of
      Employment as that term is used herein.  Similarly, termination
      of an entity’s status as a Subsidiary or as a RWAC shall be deemed a
      Termination of Employment of any Participants employed by such Subsidiary
      or RWAC.

            

    

     

    
      	
               

            	
              6.10

            	
              Restrictions
      on Exercise and Transfer of Options.  Unless otherwise
      provided by the Committee:

            

    

     

    (a)  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, except as
otherwise provided by AT&T’s Rules for Employee Beneficiary Designations, 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.

     

    (b)  No Option
shall be transferable except: (i) in the case of the Participant, only upon the
Participant’s death and in accordance with the AT&T Rules for Employee
Beneficiary Designations; and (ii) in the case of any holder after the
Participant’s death, only by will or by the laws of descent and
distribution.

     

    
      	
                    6.11  

            	
              Competition
      and Solicitation.  In the event a Participant directly or
      indirectly, engages in competitive activity, or has become associated
      with, employed by, controls, or renders service to any business that is
      engaged in competitive activity, with (i) the Company, (ii) any
      Subsidiary, or (iii) any business in which any of the foregoing have a
      substantial interest, or if the Participant attempts, directly or
      indirectly, to induce any employee of the Company or a Subsidiary to be
      employed or perform services elsewhere without the permission of the
      Company, then the Company may (i) cancel any Option granted to such
      Participant, whether or not vested, in whole or in part; and/or (ii)
      rescind any exercise of the Participant’s Options that occurred on or
      after that date six months prior to engaging in such activity, in which
      case the Participant shall pay the Company the gain realized or received
      upon such exercise of Options.  "Has become associated with"
      shall include, among other things, beneficial ownership of 1/10 of 1% or
      more of a business engaged in competitive activity.  The
      determination of whether a Participant has engaged in any such activity
      and whether to cancel Options and/or rescind the exercise of Options shall
      be made by AT&T, and in each case such determination shall be final,
      conclusive and binding on all
persons.

            

    

     

    
      
        11

      

      
        
        

        
        

      

      
        
        

      

    

     

    
      	
              Article
      7

            	
              Restricted
      Stock.

            

    

     

    
      	
               

            	
              7.1

            	
              Grant
      of Restricted Stock.  Subject to the terms and provisions
      of the Plan, the Committee, at any time and from time to time, may grant
      Shares of Restricted Stock to eligible Employees in such amounts and upon
      such terms and conditions as the Committee shall determine.  In
      addition to any other terms and conditions imposed by the Committee,
      vesting of Restricted Stock may be conditioned upon the achievement of
      Performance Goals in the same manner as provided in Section 8.4, herein,
      with respect to Performance Shares.  No Employee may be awarded,
      in any calendar year, a number of Shares in the form of Restricted Stock
      (or Restricted Stock Units) exceeding one percent (1%) of the Shares
      approved for issuance under this
Plan.

            

    

     

    
      	
               

            	
              7.2

            	
              Restricted
      Stock Agreement.  The Committee may require, as a
      condition to receiving a Restricted Stock Award, that the Participant
      enter into a Restricted Stock Award Agreement, setting forth the terms and
      conditions of the Award.  In lieu of a Restricted Stock Award
      Agreement, the Committee may provide the terms and conditions of an Award
      in a notice to the Participant of the Award, on the Stock certificate
      representing the Restricted Stock, in the resolution approving the Award,
      or in such other manner as it deems
appropriate.

            

    

     

    
      	
               

            	
              7.3

            	
              Transferability.  Except
      as otherwise provided in this Article 7, and subject to any additional
      terms in the grant thereof, Shares of Restricted Stock granted herein may
      not be sold, transferred, pledged, assigned, or otherwise alienated or
      hypothecated until fully vested.

            

    

     

    
      	
               

            	
              7.4

            	
              Restrictions.  The
      Restricted Stock shall be subject to such vesting terms, including the
      achievement of Performance Goals (as described in Section 8.4), as may be
      determined by the Committee.  Unless otherwise provided by the
      Committee, to the extent Restricted Stock is subject to any condition to
      vesting, if such condition or conditions are not satisfied by the time the
      period for achieving such condition has expired, such Restricted Stock
      shall be forfeited. The Committee may impose such other conditions and/or
      restrictions on any Shares of Restricted Stock granted pursuant to the
      Plan as it may deem advisable including but not limited to a requirement
      that Participants pay a stipulated purchase price for each Share of
      Restricted Stock and/or restrictions under applicable Federal or state
      securities laws; and may legend the certificates representing Restricted
      Stock to give appropriate notice of such restrictions.  The
      Committee may also grant Restricted Stock without any terms or conditions
      in the form of vested Stock Awards.

            

    

     

    
    

     

    
      	 	The Company shall
      also have the right to retain the certificates representing Shares of
      Restricted Stock in the Company's possession until such time as the Shares
      are fully vested and all conditions and/or restrictions applicable to such
      Shares have been satisfied.

    

     

     

    
      	
               

            	
              7.5

            	
              Removal
      of Restrictions.  Except as otherwise provided in this
      Article 7 or otherwise provided in the grant thereof, Shares of Restricted
      Stock covered by each Restricted Stock grant made under the Plan shall
      become freely transferable by the Participant after completion of all
      conditions to vesting, if any.  However, the Committee, in its
      sole discretion, shall have the right to immediately vest the shares and
      waive all or part of the restrictions and conditions with regard to all or
      part of the Shares held by any Participant at any
  time.

            

    

     

    
      
        12

      

      
        
        

        
        

      

      
        
        

      

    

    
      	
               

            	
              7.6

            	
              Voting
      Rights, Dividends and Other Distributions.  Participants
      holding Shares of Restricted Stock granted hereunder may exercise full
      voting rights and shall receive all regular cash dividends paid with
      respect to such Shares.  Except as provided in the following
      sentence, in the sole discretion of the Committee, other cash dividends
      and other distributions paid to Participants with respect to Shares of
      Restricted Stock may be subject to the same restrictions and conditions as
      the Shares of Restricted Stock with respect to which they were
      paid.  If any such dividends or distributions are paid in
      Shares, the Shares shall be subject to the same restrictions and
      conditions as the Shares of Restricted Stock with respect to which they
      were paid.

            

    

     

    
      	
               

            	
              7.7

            	
              Termination
      of Employment Due to Death or Disability.  In the event
      of the Participant's Termination of Employment by reason of death or
      Disability, all restrictions imposed on outstanding Shares of Restricted
      Stock held by the Participant shall immediately lapse and the Restricted
      Stock shall immediately become fully vested as of the date of Termination
      of Employment.

            

    

     

    
      	
               

            	
              7.8

            	
              Termination
      of Employment for Other Reasons.  Unless otherwise
      provided by the Committee, in the event of the Participant's Termination
      of Employment for any reason other than those specifically set forth in
      Section 7.7 herein, all Shares of Restricted Stock held by the Participant
      which are not vested as of the effective date of Termination of Employment
      immediately shall be forfeited and returned to the
  Company.

            

    

     

    
      	
               

            	
              7.9

            	
              Employee
      Transfers.  For purposes of the Plan, transfer of
      employment of a Participant between the Company and any one of its
      Subsidiaries (or between Subsidiaries) or between the Company or a
      Subsidiary and a RWAC, to the extent the period of employment at a RWAC is
      equal to or less than five (5) years, shall not be deemed a Termination of
      Employment.  Provided, however, for purposes of this Article,
      termination of employment with a RWAC without a concurrent transfer to the
      Company or any of its Subsidiaries shall be deemed a Termination of
      Employment as that term is used herein.  Similarly, termination
      of an entity’s status as a Subsidiary or as a RWAC shall be deemed a
      Termination of Employment of any Participants employed by such Subsidiary
      or RWAC.

            

    

     

    
      	
               

            	
              7.10

            	
              Restricted
      Stock Units.  In lieu of or in addition to Restricted
      Stock, the Committee may grant Restricted Stock Units (“Units”) under such
      terms and conditions as shall be determined by the
      Committee.  Units shall otherwise be subject to the same terms
      and conditions under this Plan as Restricted Stock (including but not
      limited to Change in Control provisions), except that upon vesting, the
      Participant holding such Units shall receive Shares (or cash equal to the
      Fair Market Value of the number of Shares) equal to the number of such
      Units no later than ninety (90) days after the date of such vesting. Units
      shall have no voting rights, and Units shall not receive dividends, but
      shall, unless otherwise provided by the Committee, receive dividend
      equivalents at the time and at the same rate per Unit as dividends are
      paid per Share with the same record and pay
  dates.

            

    

     

     

    
      
        13

      

      
        
        

        
        

      

      
        
        

      

    

    
      	
              Article
      8

            	
              Performance
      Units and Performance
Shares.

            

    

     

    
      	
               

            	
              8.1

            	
              Grants
      of Performance Units and Performance Shares.  Subject to
      the terms of the Plan, Performance Shares and Performance Units may be
      granted to eligible Employees at any time and from time to time, as
      determined by the Committee.  The Committee shall have complete
      discretion in determining the number of Performance Units and/or
      Performance Shares Awarded to each Participant and the terms and
      conditions of each such Award.

            

    

     

    
      	
               

            	
              8.2

            	
              Value
      of Performance Shares and
Units.

            

    

     

    (a)  A
Performance Share is equivalent in value to a Share.  In any calendar
year, no individual may be awarded Performance Shares having a potential payout
of Shares exceeding one percent (1%) of the Shares approved for issuance under
this Plan.

     

    (b)  A
Performance Unit shall be equal in value to a fixed dollar amount determined by
the Committee.  In any calendar year, no individual may be Awarded
Performance Units having a potential payout equivalent exceeding the Fair Market
Value, as of the date of  granting the Award, of one percent (1%) of
the Shares approved for issuance under this Plan.  The number of
Shares equivalent to the potential payout of a Performance Unit shall be
determined by dividing the maximum cash payout of the Award by the Fair Market
Value per Share on the effective date of the grant.  The Committee may
denominate a Performance Unit Award in dollars instead of Performance
Units.  A Performance Unit Award may be referred to as a "Key
Executive Officer Short Term Award."

     

    
      	
               

            	
              8.3

            	
              Performance
      Period.  The Performance Period for Performance Shares
      and Performance Units is the period over which the Performance Goals are
      measured.  The Performance Period is set by the Committee for
      each Award; however, in no event shall an Award have a Performance Period
      of less than one year.

            

    

    
       

      
        
          14

        

        
          
          

          
          

        

        
          
          

      

    

    
      	
               

            	
              8.4

            	
              Performance
      Goals.  For each Award of Performance Shares or
      Performance Units, the Committee shall establish (and may establish for
      other Awards) performance objectives ("Performance Goals") for the
      Company, its Subsidiaries, and/or divisions of any of foregoing, using the
      Performance Criteria and other factors set forth in (a) and (b),
      below.  It may also use other criteria or factors in
      establishing Performance Goals in addition to or in lieu of the
      foregoing.  A Performance Goal may be stated as an absolute
      value or as a value determined relative to an index, budget, prior period,
      similar measures of a peer group of other companies or other standard
      selected by the Committee.  Performance Goals shall include
      payout tables, formulas or other standards to be used in determining the
      extent to which the Performance Goals are met, and, if met, the number of
      Performance Shares and/or Performance Units which would be converted into
      Stock and/or cash (or the rate of such conversion) and distributed to
      Participants in accordance with Section 8.6.  Unless previously
      canceled or reduced, Performance Shares and Performance Units which may
      not be converted because of failure in whole or in part to satisfy the
      relevant Performance Goals or for any other reason shall be canceled at
      the time they would otherwise be distributable.  When the
      Committee desires an Award of Performance Shares, Performance Units,
      Restricted Stock or Restricted Stock Units to qualify under Section 162(m)
      of the Code, as amended, the Committee shall establish the Performance
      Goals for the respective Award prior to or within 90 days of the beginning
      of the Performance Period relating to such Performance Goal, and not later
      than after 25% of such period has elapsed.  For all other
      Awards, the Performance Goals must be established before the end of the
      respective Performance Period.

            

    

     

    (a)  The
Performance Criteria which the Committee is authorized to use, in its sole
discretion, are any of the following criteria or any combination thereof,
including but not limited to the offset against each other of any combination of
the following criteria:

     

    
      	
               

            	
              (1)

            	
              Financial
      performance of the Company (on a consolidated basis), of one or more of
      its Subsidiaries, and/or a division of any of the
      foregoing.  Such financial performance may be based on net
      income, Value Added (after-tax cash operating profit less depreciation and
      less a capital charge), EBITDA (earnings before interest, taxes,
      depreciation and amortization), revenues, sales, expenses, costs, gross
      margin, operating margin, profit margin, pre-tax profit, market share,
      volumes of a particular product or service or category thereof, including
      but not limited to the product's life cycle (for example, products
      introduced in the last 2 years), number of customers or subscribers,
      number of items in service, including but not limited to every category of
      access or other telecommunication or television lines, return on net
      assets, return on assets, return on capital, return on invested capital,
      cash flow, free cash flow, operating cash flow,  operating
      revenues, operating expenses, and/or operating
  income.

            

    

     

    
      	
               

            	
              (2)

            	
              Service performance
      of the Company (on a consolidated basis), of one or more of its
      Subsidiaries, and/or of a division of any of the
      foregoing.  Such service performance may be based upon measured
      customer perceptions of service quality. Employee satisfaction, employee
      retention, product development, completion of a joint venture or other
      corporate transaction, completion of an identified special project, and
      effectiveness of management.

            

    

    
       

      
        
          15

        

        
          
          

          
          

        

      

    

    
      	
               

            	
              (3)

            	
              The Company’s Stock
      price, return on stockholders’ equity, total stockholder return (Stock
      price appreciation plus dividends, assuming the reinvestment of
      dividends), and/or earnings per
Share.

            

    

    
       

    

    
      	
               

            	
              (4)

            	
              Impacts of
      acquisitions, dispositions, or restructurings, on any of the
      foregoing.

            

    

     

    (b)  Except to
the extent otherwise provided by the Committee in full or in part, if any of the
following events occur during a Performance Period and would directly affect the
determination of whether or the extent to which Performance Goals are met, the
effects of such events shall be disregarded in any such computation: changes in
accounting principles; extraordinary items; changes in tax laws affecting net
income and/or Value Added; natural disasters, including but not limited to
floods, hurricanes, and earthquakes; and intentionally inflicted damage to
property which directly or indirectly damages the property of the Company or its
Subsidiaries.  No such adjustment shall be made to the extent such
adjustment would cause the Award to fail to satisfy the performance based
exemption of Section 162(m) of the Code.

     

    
      	
                     
      8.5  

            	
              Dividend
      Equivalents on Performance Shares.  Unless reduced or
      eliminated by the Committee, a cash payment in an amount equal to the
      dividend payable on one Share will be made to each Participant for each
      Performance Share held by a Participant on the record date for the
      dividend.

            

    

     

    
      	
               

            	
              8.6

            	
              Form
      and Timing of Payment of Performance Units and Performance
      Shares.  As soon as practicable (but in no event more
      than ninety (90) days) after the applicable Performance Period has ended
      and all other conditions (other than Committee actions) to conversion and
      distribution of a Performance Share and/or Performance Unit Award have
      been satisfied (or, if applicable, at such other time determined by the
      Committee at or before the establishment of the Performance Goal), the
      Committee shall determine whether and the extent to which the Performance
      Goals were met for the applicable Performance Units and Performance
      Shares.  If Performance Goals have been met, then the number of
      Performance Units and Performance Shares to be converted into Stock and/or
      cash and distributed to the Participants shall be determined in accordance
      with the Performance Goals for such Awards, subject to any limits imposed
      by the Committee.  Unless the Participant has elected to defer
      all or part of his Performance Units or Performance Shares as provided in
      Article 10, herein, payment of Performance Units and Performance Shares
      shall be made in a single lump sum, as soon as reasonably administratively
      possible following the determination of the number of Shares or amount of
      cash to which the Participant is entitled.  Performance Units
      will be distributed to Participants in the form of
      cash.  Performance Shares will be distributed to Participants in
      the form of 50% Stock and 50% Cash, or at the Participant’s election, 100%
      Stock or 100% Cash. In the event the Participant is no longer an Employee
      at the time of the distribution, then the distribution shall be 100% in
      cash, provided the Participant may elect to take 50% or 100% in
      Stock.  At any time prior to the distribution of the Performance
      Shares and/or Performance Units (or if distribution has been deferred,
      then prior to the time the Awards would have been distributed), unless
      otherwise provided by the Committee or prohibited by this Plan (such as in
      the case of a Change in Control), the Committee shall have the authority
      to reduce or eliminate the number of Performance Units or Performance
      Shares to be converted and distributed, or to cancel any part or all of a
      grant or award of Performance Units or Performance Shares, or to mandate
      the form in which the Award shall be paid (i.e., in cash, in Stock or
      both, in any proportions determined by the
  Committee).

            

    

     

    
      
        16

      

      
        
        

        
        

      

      Unless otherwise provided
by the Committee, any election to take a greater amount of cash or Stock with
respect to Performance Shares must be made in the calendar year prior to the
calendar year in which the Performance Shares are distributed (or if
distribution has been deferred, then in the year prior to the year the
Performance Shares would have been distributed absent such
deferral).

    

     

    For
the purpose of converting Performance Shares into cash and distributing the same
to the holders thereof (or for determining the amount of cash to be deferred),
the value of a Performance Share shall be the Fair Market Value of a Share on
the date the Committee authorizes the payout of Awards.  Performance
Shares to be distributed in the form of Stock will be converted at the rate of
one (1) Share per Performance Share.

     

    
      	
               

            	
              8.7

            	
              Termination
      of Employment Due to Death or Disability.  In the event
      of the Participant's Termination of Employment by reason of death or
      Disability, the Participant shall receive a lump sum payout of all
      outstanding Performance Units and Performance Shares calculated as if all
      unfinished Performance Periods had ended with 100% of the Performance
      Goals achieved, payable in the year following the date of Termination of
      Employment.

            

    

     

    
      	
               

            	
              8.8

            	
              Termination
      of Employment for Other Reasons.  Unless the Committee
      determines otherwise, in the event of the Participant's Termination of
      Employment for other than a reason set forth in Section 8.7 (and other
      than for Cause), if the Participant is not Retirement eligible at
      Termination of Employment, then upon Termination, the number of the
      Participant’s Performance Units and/or Performance Shares shall be reduced
      at the time of the Termination of Employment so that the Participant may
      receive no more than a prorated payout of all Performance Units and
      Performance Shares granted, based on the number of months the Participant
      worked at least one day during the respective Performance Period divided
      by the number of months in the Performance Period, to be paid, if at all,
      at the same time and under the same terms that such outstanding
      Performance Units and Performance Shares would otherwise be
      paid.

            

    

     

    
      	
               

            	
              8.9

            	
              Termination
      of Employment for Cause.  In the event of the Termination
      of Employment of a Participant by the Company for Cause, all Performance
      Units and Performance Shares shall be forfeited by the Participant to the
      Company.

            

    

     

    
      	
               

            	
              8.10

            	
              Nontransferability.  Performance
      Units and Performance Shares may not be sold, transferred, pledged,
      assigned, or otherwise alienated or hypothecated, other than in accordance
      with the AT&T Rules for Employee Beneficiary
    Designations.

            

    

     

    
      
        17

      

      
        
        

        
        

      

      
        
        

      

    

     

    
      	
              Article
      9

            	
              Beneficiary
      Designation.  In the event of the death of a Participant,
      distributions or Awards under this Plan, other than Restricted Stock,
      shall pass in accordance with the AT&T Rules for Employee Beneficiary
      Designations, as the same may be amended from time to
      time.  Beneficiary Designations of a Participant received by
      AT&T prior to November 16, 2001, that were applicable to awards under
      the 1996 Stock and Incentive Plan will also apply to awards under this
      Plan unless and until the Participant provides to the contrary in
      accordance with the procedures set forth in such
  Rules.

            

    

     

     

    
      	
              Article
      10

            	
              Deferrals. Unless
      otherwise provided by the Committee, a Participant may, as permitted by
      the Company, defer all or part of Awards made under this Plan in
      accordance with and subject to the terms of such plans so long as such
      deferral is determined by the Company to be consistent in all respects
      with Section 409A of the Code.

            

    

     

     

    
      	
              Article
      11

            	
              Employee
      Matters.

            

    

     

    
      	
               

            	
              11.1

            	
              Employment
      Not Guaranteed.  Nothing in the Plan shall interfere with
      or limit in any way the right of the Company or any Subsidiary to
      terminate any Participant's Employment at any time, nor confer upon any
      Participant any right to continue in the employ of the Company or one of
      its Subsidiaries.

            

    

     

    
      	
               

            	
              11.2

            	
              Participation.  No
      Employee shall have the right to be selected to receive an Award under
      this Plan, or, having been so selected, to be selected to receive a future
      Award.

            

    

     

     

    
      	
              Article
      12

            	
              Change
      in Control.

            

    

     

    Unless
the Committee provides otherwise prior to the grant of an Award, upon the
occurrence of a Change in Control, the following shall apply to such
Award:

     

    (a)  Any and all
Options granted hereunder to a Participant immediately shall become vested and
exercisable upon the Termination of Employment of the Participant by the Company
or by the Participant for “Good Reason”;

     

    (b)  Any
Restriction Periods and all restrictions imposed on Restricted Stock shall lapse
and they shall immediately become fully vested upon the Termination of
Employment of the Participant by the Company or by the Participant for “Good
Reason”;

     

    (c)  Unless
otherwise determined by the Committee, the payout of Performance Units and
Performance Shares shall be determined exclusively by the attainment of the
Performance Goals established by the Committee, which may not be modified after
the Change in Control, and AT&T shall not have the right to reduce the
Awards for any other reason;

     

    (d)  For
purposes of this Plan, “Good Reason” means in connection with a termination of
employment by a Participant within two (2) years following a Change in Control,
(a) a material adverse alteration in the Participant’s position or in the nature
or status of the Participant’s responsibilities from those in effect immediately
prior to the Change in Control, or (b) any material reduction in the
Participant’s base salary rate or target annual bonus, in each case as in effect
immediately prior to the Change in Control, or (c) the relocation
of  the Participant’s principal place of employment to a location that
is more than fifty (50) miles from the location where the Participant was
principally employed at the time of the Change in Control or materially
increases the time of the Participant’s commute as compared to the Participant’s
commute at the time of the Change in Control (except for required travel on the
Company’s business to an extent substantially consistent with the Participant’s
customary business travel obligations in the ordinary course of business prior
to the Change in Control).

     

    
      
        18

      

      
        
        

        
        

      

      
        
        

      

    

    In order
to invoke a Termination of Employment for Good Reason, a Participant must
provide written notice to AT&T or the Employer with respect to which the
Participant is employed or providing services of the existence of one or more of
the conditions constituting Good Reason within ninety (90) days following the
Participant’s knowledge of the initial existence of such condition or
conditions, specifying in reasonable detail the conditions constituting Good
Reason, and AT&T shall have thirty (30) days following receipt of such
written notice (the “Cure Period”) during which it may remedy the
condition.  In the event that AT&T or the Employer fails to remedy
the condition constituting Good Reason during the applicable Cure Period, the
Participant’s “separation from service” (within the meaning of Section 409A of
the Code) must occur, if at all, within two (2) years following such Cure Period
in order for such termination as a result of such condition to constitute a
Termination of Employment for Good Reason. 

     

     

    
      	
              Article
      13

            	
              Amendment,
      Modification, and
Termination.

            

    

     

    
      	
               

            	
              13.1

            	
              Amendment,
      Modification, and Termination.  The Board or the
      Disinterested Committee may at any time and from time to time, alter or
      amend the Plan or any Award in whole or in part or suspend or terminate
      the Plan in whole or in part.

            

    

     

    
      	
               

            	
              13.2

            	
              Awards
      Previously Granted.  No termination, amendment, or
      modification of the Plan or any Award shall adversely affect in any
      material way any Award previously granted under the Plan, without the
      written consent of the Participant holding such Award; provided, however,
      that any such modification made for the purpose of complying with Section
      409A of the Code may be made by the Company without the consent of any
      Participant

            

    

     

    
      	
               

            	
              13.3

            	
              Delay
      in Payment.  To the extent required in order to avoid the
      imposition of any interest and/or additional tax under Section
      409A(a)(1)(B) of the Code, any amount that is considered deferred
      compensation under the Plan or Agreement and that is required to be
      postponed pursuant to Section 409A of the Code,following the a
      Participant’s Termination of Employment shall be delayed for six months if
      a Participant is deemed to be a “specified employee” as defined in Section
      409A(a)(2)(i)(B) of the Code; provided that, if the Participant dies
      during the postponement period prior to the payment of the postponed
      amount, the amounts withheld on account of Section 409A shall be paid to
      the executor or administrator of the decedent’s estate within 60 days
      following the date of his death. A “Specified Employee” means 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 twelve (12) month period
      ending on each December 31st (such twelve (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 Specified Employees for purposes of the Plan during the twelve
      (12) month period that begins on the first day of the 4th month following
      the close of such identification
period.

            

    

     

     

    
      	
              Article
      14

            	
              Withholding.

            

    

     

    
      	
               

            	
              14.1

            	
              Tax
      Withholding.  Unless otherwise provided by the Committee,
      the Company shall deduct or withhold an amount sufficient to satisfy
      Federal, state, and local taxes (including but not limited to the
      Participant's employment tax obligations) required by law to be withheld
      with respect to any taxable event arising or as a result of this Plan
      ("Withholding Taxes").

            

    

     

    
      	
                     
      14.2  

            	
              Share
      Withholding.  Unless otherwise provided by the Committee,
      upon the exercise of Options, the lapse of restrictions on Restricted
      Stock, the distribution of Performance Shares in the form of Stock, or any
      other taxable event hereunder involving the transfer of Stock to a
      Participant, the Company shall withhold Stock equal in value, using the
      Fair Market Value on the date determined by the Company to be used to
      value the Stock for tax purposes, to the Withholding Taxes applicable to
      such transaction.

            

    

     

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

     

    
      
        19

      

      
        
        

        
        

      

      
        
        

      

    

    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 6.7(b)(ii),
herein, 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 Fair Market Value of the
Stock.

     

    If
permitted by the Committee, prior to the end of any Performance Period a
Participant may elect to have a greater amount of Stock withheld from the
distribution of Performance Shares to pay withholding taxes; provided, however,
the Committee may prohibit or limit any individual election or all such
elections at any time.

     

     

    
      	
              Article
      15

            	
              Successors.

            

    

     

    All
obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

     

     

    
      	
              Article
      16

            	
              Legal
      Construction.

            

    

     

    
      	
               

            	
              16.1

            	
              Gender
      and Number.  Except where otherwise indicated by the
      context, any masculine term used herein also shall include the feminine;
      the plural shall include the singular and the singular shall include the
      plural.

            

    

     

    
      	
               

            	
              16.2

            	
              Severability.  In
      the event any provision of the Plan shall be held illegal or invalid for
      any reason, the illegality or invalidity shall not affect the remaining
      parts of the Plan, and the Plan shall be construed and enforced as if the
      illegal or invalid provision had not been
  included.

            

    

     

    
      	
                     
      16.3  

            	
              Requirements
      of Law.  The granting of Awards and the issuance of
      Shares under the Plan shall be subject to all applicable laws, rules, and
      regulations, and to such approvals by any governmental agencies or
      national securities exchanges as may be
  required.

            

    

     

    
      	
                     
      16.4  

            	
              Errors.  At
      any time AT&T may correct any error made under the Plan without
      prejudice to AT&T.  Such corrections may include, among
      other things, changing or revoking an issuance of an
  Award.

            

    

     

    
      	
                     
      16.5  

            	
              Elections
      and Notices.  Notwithstanding anything to the contrary
      contained in this Plan, all elections and notices of every kind shall be
      made on forms prepared by AT&T or the General Counsel, Secretary or
      Assistant Secretary, or their respective delegates or shall be made in
      such other manner as permitted or required by AT&T or the General
      Counsel, Secretary or Assistant Secretary, or their respective delegates,
      including but not limited to elections or notices 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.  AT&T may limit the time an election may be made in
      advance of any deadline.

            

    

     

    Where any
notice or filing required or permitted to be given to AT&T under the Plan,
it shall be delivered to the principal office of AT&T, directed to the
attention of the Senior Executive Vice President-Human Resources of 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.

     

    
      
        20

      

      
        
        

        
        

      

      
        
        

      

    

    
      	
                     
      16.6  

            	
              Governing
      Law.  To the extent not preempted by Federal law, the
      Plan, and all awards 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.

            

    

     

    
      	
                     
      16.7  

            	
              Venue.  Because
      awards under the Plan are granted in Texas, records relating to the Plan
      and awards thereunder are located in Texas, and the Plan and awards
      thereunder are administered in Texas, the Company and the Participant to
      whom an award under this Plan is granted, 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 awards under this Plan, including
      but not limited to any disputes arising out of or relating to the
      interpretation and enforceability of any awards 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 Bexar 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.

            

    

     

     

     

    21

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