Document:

Exhibit 10.1

    
      
        

      

    

    Exhibit
      10.1

    

    BENIHANA
      EXECUTIVE INCENTIVE COMPENSATION PLAN

    

    The
      Benihana Executive Incentive Compensation Plan (the "Plan) is adopted by
      Benihana Inc., a Delaware corporation, and its subsidiaries (collectively,
      the
      "Company").

    

    1.    Purpose
      of the Plan.

    

    The
      purpose of this Plan is to improve the long-term results of operations of the
      Company by more fully aligning the interests of certain designated employees
      of
      the Company with the interests of the shareholders of the Company, by providing
      financial incentives to such employees to produce excellent results based on
      a
      combination of Company-wide financial targets and upon individually-designed
      performance objectives.

    

    2.    Definitions.

    

    2.1.     Board
      of
      Directors" means the Board of Directors of Benihana Inc.

    

    2.2.    "Bonus"
      has the meaning set forth in Section 4.1.

    

    2.3.    "Bonus
      Opportunity" has the meaning set forth in Section 4.6.

     

    2.4.    "Chief
      Executive Officer" means the Chief Executive Officer of the
      Company.

    

    2.5.    "Committee"
      means the Compensation and Stock Option Committee of the Board of Directors
      of
      the Company.

    

    2.6.    "Eligible
      Salary" means, for each Participant for any Fiscal Year, the amount of such
      Participant’s annual base compensation (determined as of the first day of such
      Fiscal Year) as shown on the Company's payroll records.

    

    2.7.    "Executive
      Employees" means, as of any date, the Chief Executive Officer, the President,
      the Chief Operating Officer, the Chief Financial Officer, all Vice Presidents,
      the Controller, the Executive Sushi Chef, and all employees who have the title
      "Senior Director," in each case, of the Company.

    

    2.8.    "Fiscal
      Year" means the fiscal year of the Company. Fiscal years are referred to in
      terms of the calendar year in which the last day of the fiscal year occurs.
      Thus, for example, “Fiscal Year 2008” refers to the Fiscal Year ending on or
      about April 1, 2008.

    

    2.9.    “Net
      Income” means for any Fiscal Year the net income as reported on the Company's
      audited Consolidated Statement of Operations for such Fiscal Year.

    

    2.10.    "Non-Executive
      Employees" means employees of the Company who are not Executive
      Employees.

    

    2.11.    "Participant"
      has the meaning set forth in Section 3.1.

    

    2.12.    “Payment
      Date” has the meaning set forth in Section 5.

    

    2.12.    "Plan"
      means this Benihana Executive Incentive Compensation Plan.

    

    2.13.    "ROE"
      means the Company’s return on equity for the Fiscal Year, computed as a
      percentage by dividing Net Income for such Fiscal Year by Stockholders' Equity
      as of the beginning of such Fiscal Year.

    

    2.14.    "Stockholders'
      Equity" means, for any Fiscal Year, the amount stated as of the first day of
      such Fiscal Year in the line item "Total Stockholders’ Equity" on the Company's
      audited Consolidated Balance Sheets.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.    Eligibility
      to Participate In the Plan.

    

    3.1.    Prior
      to
      the beginning of each Fiscal Year, the Chief Executive Officer shall recommend
      to the Committee certain Executive Employees and certain Non-Executive Employees
      for participation in the Plan with respect to such Fiscal Year. No later than
      six (6) months after the beginning of such Fiscal Year, the Chief Executive
      Officer may also recommend to the Committee for participation in the Plan any
      person who was not an Executive Employee as of the beginning of such Fiscal
      Year
      but who is an Executive Employee at the time of such recommendation (a "Mid-Year
      Participant"). In either case, the Committee, in its sole discretion, will
      designate from among such recommendations those persons who will be entitled
      to
      participate in the Plan for such Fiscal Year (each of whom will be referred
      to
      herein as a “Participant”). 

    

    3.2.    Notwithstanding
      that a person may be designated as a Participant in the Plan with respect to
      a
      Fiscal Year, such person will not be entitled to a Bonus under the Plan if
      such
      person is not employed by the Company on the Payment Date relating to such
      Bonus, and any Bonus otherwise payable to such person in accordance with Section
      4 will instead be forfeited. For purposes of this Section 3.2, (i) an employee
      of the Company who is receiving short-term disability payments on the Payment
      Date will be treated as employed by the Company on such Payment Date; and (ii)
      an employee of the Company who is receiving long-term disability payments or
      who
      is receiving salary from the Company only as part of a severance arrangement
      or
      plan entered into prior to the Payment Date will not be considered to be
      employed by the Company on the Payment Date. 

    

    4.    Determination
      of Bonus.

    

    4.1.    Each
      Participant will be eligible to earn a bonus for the Fiscal Year (the “Bonus”)
      in an amount equal to such Participant’s Bonus Opportunity, or such lesser (or
      greater) amount as set forth in this Section 4. A portion of a Participant’s
      Bonus Opportunity (not to exceed three-quarters of such Bonus Opportunity)
      (the
“Financial Performance Bonus Opportunity”) will depend on the attainment of
      Financial Performance Targets, as described in Sections 4.2 and 4.3 below.
      The
      other portion of the Participant’s Bonus Opportunity (not to exceed one-half of
      such Bonus Opportunity) (the “Individual Performance Bonus Opportunity”) will
      depend on the attainment of Individual Performance Targets, as described in
      Section 4.4 below. The Committee will determine for each Participant the portion
      of that Participant’s Bonus Opportunity that will depend on Financial
      Performance Targets and the portion that will depend on Individual Performance
      Targets. Except as set forth in Section 4.3 below, the sum of the Participant’s
      Financial Performance Bonus Opportunity and the Participant’s Individual
      Performance Bonus Opportunity will not exceed such Participant’s Bonus
      Opportunity for the Fiscal Year.

     

    4.2.    Prior
      to
      the beginning of each Fiscal Year the Committee will establish financial
      performance targets for the Company (or one of its units or divisions) for
      the
      Fiscal Year (the “Financial Performance Targets”). The Financial Performance
      Targets will be based on achievement by the Company of levels of ROE, or on
      such
      other financial measurement as may be selected by the Committee as may be
      applicable to comparable publicly-traded restaurant companies (or to units
      or
      divisions thereof). Subject to the provisions of Section 3.2, the Participant
      will be entitled to receive that portion of his Financial Performance Bonus
      Opportunity for the Fiscal Year that correlates to the Financial Performance
      Target that is met by the Company for such Fiscal Year.

     

       4.3.    When
      establishing Financial Performance Targets for a Fiscal Year, the Committee
      in
      its discretion may establish Financial Performance Targets which, if satisfied,
      would entitle each designated Participant to earn more than 100% (but not more
      than 150%) of such Participant’s Financial Performance Bonus Opportunity for
      such Fiscal Year, subject to the provisions of Section 3.2 above. In that event,
      a Participant may be eligible to receive an amount that exceeds his Bonus
      Opportunity for the Fiscal Year. 

    

    4.4.    Prior
      to
      the beginning of each Fiscal Year (except in the case of a Mid-Year Participant,
      in which case within 30 days after he becomes a Mid-Year Participant), each
      Participant will prepare jointly with his immediate supervisor (subject to
      the
      approval of the Chief Executive Officer) a list of such Participant’s personal
      performance goals and objectives for the upcoming Fiscal Year (the “Individual
      Performance Targets”). This list will be submitted to the Committee, which will
      make such modifications thereto as it in its sole discretion determines. The
      Committee will send a copy of the finalized Individual Performance Targets
      to
      the Participant and his supervisor. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.5    At
      such
      time as the Company issues its audited financial statements for the Fiscal
      Year,
      the Committee will determine, based on the attainment of the relevant Financial
      Performance Target, that portion of each Participant’s Financial Performance
      Bonus Opportunity that was satisfied for the Fiscal Year. After consultation
      with the Chief Executive Officer and such other personnel as the committee
      may
      deem appropriate, the Committee will also determine, in its sole discretion,
      whether and to what extent the Individual Performance Targets were met and
      what
      portion of the Participant’s Individual Performance Bonus Opportunity was
      satisfied by the Participant for the Fiscal Year. As soon as practicable but
      no
      later than 120 days after the end of the Fiscal Year, the Committee will issue
      its report setting forth the Bonus payable to each Participant for the Fiscal
      Year. Subject to the provisions of Section 3.2, the Participant will be entitled
      to receive the Bonus for the Fiscal Year as so determined.

    

    4.6.    For
      purposes of this Section 4, the term “Bonus Opportunity” for any Participant and
      any Fiscal Year means an amount equal to that percentage (as determined by
      the
      Committee) of the Participant’s Eligible Salary. 

     

    5.    Payment
      of Bonus.

    

    Subject
      to Section 3.2, the Bonus payable for any Fiscal Year under the Plan will be
      paid in cash no later than 30 days after the Company has filed its Annual Report
      on Form 10-K with respect to such Fiscal Year with the Securities Exchange
      Commission, but no later than the last day of the calendar year in which the
      Fiscal Year ends. The date of actual payment of the Bonus with respect to any
      Fiscal Year is referred to as the “Payment Date”. 

    

    6.    Administration. 

    

    The
      Plan
      will be administered by the Committee, which will have plenary authority to
      take
      all action in connection with the Plan as it deems advisable or necessary.
      The
      interpretation, construction and administration by the Committee of the Plan
      and
      the Committee’s decisions with respect to the awarding and the amount of any
      Bonus hereunder will be binding and conclusive on the Company and the
      Participants.

    

    7.    No
      Right of Employment.

    

    No
      Participant will have any right to continued employment with the Company by
      virtue of his participation in the Plan. No employee of the Company will have
      any right to participate in the Plan except as stated herein.

    

    8.    No
      Alienation.

    

    No
      Participant in the Plan will have any right to pledge, transfer, assign or
      otherwise alienate his right to receive any payment under the Plan except
      pursuant to an order of a court of competent jurisdiction.

    

    9.    Term
      of Plan.

    

    Subject
      to the provisions of Section 10 below, Bonuses will be awarded under the Plan
      with respect to Fiscal Year 2008 through and including Fiscal Year
      2018.

    

    10.    Amendment.

    

    The
      Board
      of Directors will have the right to amend the Plan at any time and from time
      to
      time (including the right to terminate the Plan) except that no such amendment
      of the Plan will adversely affect the right of any Participant to receive a
      Bonus under the Plan with respect to any Fiscal Year that has ended prior to
      the
      date of such amendment.

    

    11.    Choice
      of Law.

    

    The
      interpretation, enforceability and validity of the Plan, and all rights
      hereunder, will be governed by the substantive laws (but not the choice of
      law
      rules) of the State of Delaware.

    

    12.    Tax
      Withholding.

    

    All
      payments to be made to a Participant under the Plan will be subject to all
      required withholding of federal, state and local income and employment
      taxes.Form of Global Note due 2037

 Exhibit 4.1 
 (FACE OF NOTE) 
 THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM IN ACCORDANCE WITH THE PROVISIONS OF THE INDENTURE AND THE TERMS OF THE SECURITIES, THIS
GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. 
 UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO AT&T INC., OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 AT&T INC.

 6.500% Global Notes due 2037 
 CUSIP NO. 00206R AD4 
 ISIN NO. US00206RAD44 
 No. R-1 
 $500,000,000 
 AT&T Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called “AT&T”, which term includes any successor Person under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co., or registered assigns, the principal sum of Five Hundred Million Dollars ($500,000,000) on September 1, 2037 (the “Maturity Date”), and to pay interest on said principal sum from
August 31, 2007 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears on March 1 and September 1 in each year, commencing on March 1, 2008 (each an
“Interest Payment Date”) and on the Maturity Date, at the interest rate of 6.500% per annum, until the principal hereof is paid or made available for payment. The interest so 

 
payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this
Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be the close of business on February 15 or August 15, as the case may be (each, a “Regular Record
Date”), next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name
this Note (or one or more Predecessor Notes) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes not less than 15
days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture. 
 Any money that AT&T deposits with the Trustee or any Paying Agent for the payment of
principal or any interest on this Note that remains unclaimed for two years after the date upon which the principal and interest are due and payable, will be repaid to AT&T upon AT&T’s request unless otherwise required by mandatory
provisions of any applicable unclaimed property law. After that time, unless otherwise required by mandatory provisions of any unclaimed property law, the Holder of this Note will be able to seek any payment to which such Holder may be entitled to
collect only from AT&T. 
 If the Notes are issued in definitive form, payment of the principal and interest on this Note due at the
Maturity Date or upon redemption will be made at the Maturity Date or upon redemption, as the case may be, upon presentation of this Note, in immediately available funds, at the office of The Bank of New York, the Paying and Transfer Agent and
Registrar for the Notes, currently located at 101 Barclay Street, New York, New York 10286. 
 Payment of interest on this Note due on an
Interest Payment Date, other than interest at maturity or upon redemption, may be paid by check mailed to the address of the Holder entitled thereto as such address shall appear in the Note register. Notwithstanding the foregoing, (1) the
Depository as Holder of the Notes or (2) a Holder of more than U.S.$5,000,000 in aggregate principal amount of Notes in definitive form is entitled to require the Paying Agent to make payments of interest, other than interest due at maturity or
upon redemption, by wire transfer of immediately available funds into an account maintained by the Holder in the United States, by sending appropriate wire transfer instructions as long as the Paying Agent receives the instructions not less than ten
days prior to the applicable Interest Payment Date. 
 Reference is hereby made to the further provisions of this Note set forth on the
reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 
  

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 Unless the certificate of authentication hereon has been executed by the Trustee referred to on the
reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 
  

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 IN WITNESS WHEREOF, AT&T INC. has caused this instrument to be signed in its corporate name, manually
or by facsimile, by its duly authorized officers and has caused its corporate seal to be imprinted hereon. 
  

					
	Dated: August 31, 2007	 	AT&T INC.
			
	[SEAL]	 		 	
		 	By:	 	 /s/ Richard G. Lindner

		 		 	Richard G. Lindner
		 		 	Senior Executive Vice President and Chief Financial Officer
			
		 	By:	 	 /s/ Jonathan P. Klug

		 		 	Jonathan P. Klug
		 		 	Senior Vice President and Treasurer

 Trustee’s Certificate of Authentication 
 This is one of the 6.500% Global Notes of 
 the series designated herein referred to 
 in the within-mentioned Indenture. 
  

			
	THE BANK OF NEW YORK, as Trustee
		
	By:	 	/s/ Beata Hryniewicka
		 	Authorized Signatory

  

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 REVERSE OF NOTE 
 This Note is one of a duly authorized issue of debt securities of AT&T of the series specified on the face hereof, issued under and pursuant to an Indenture, dated as of November 1, 1994, between AT&T and
The Bank of New York, as Trustee (the “Trustee,” which term includes any successor Trustee under the Indenture), to which indenture and all indentures supplemental thereto (collectively, the “Indenture”) reference is hereby made
for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, AT&T and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. The
Notes will be issued in fully registered form only and in denominations of $2,000 and integral multiples of $1,000. 
 The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of AT&T and the rights of the Holders of the Notes under the Indenture at any time by AT&T and the Trustee with the consent
of the Holders of a majority in principal amount of the Notes at the time outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes at the time outstanding to waive
compliance by AT&T with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. 
 No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of AT&T, which is
absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. 
 Registrar and Paying Agent 
 AT&T shall maintain in the Borough of Manhattan, The City of New
York, an office or agency where Notes may be surrendered for registration of transfer or exchange (“Registrar”) and an office or agency where Notes may be presented for payment or for exchange (“Paying Agent”). AT&T has
initially appointed the Trustee, The Bank of New York, as its Registrar and Paying Agent. AT&T may vary or terminate the appointment of any of its paying or transfer agencies, and may appoint additional paying or transfer agencies. 

Optional Redemption by AT&T 
 The Notes will be redeemable, as a whole or in part, at AT&T’s option, at any time on at least 30 days’, but not more than 60 days’, prior notice mailed to the registered address of each Holder of the Notes. The
redemption price will be equal to the greater of (1) 100% of the 

  

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principal amount of the Notes to be redeemed or (2) the sum of the present values of the Remaining Scheduled Payments (as defined below) discounted to
the redemption date, on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months), at a rate equal to the sum of the Treasury Rate (as defined below) and 25 basis points. In either case, accrued interest will be payable to the
redemption date. 
 “Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semiannual
equivalent yield to maturity or interpolation (on a day count basis) of the interpolated Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. 
 “Comparable Treasury Issue” means the United States Treasury security or securities
selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of such Notes. 
 “Independent Investment Banker” means one of the Reference Treasury Dealers, appointed by the Trustee after consultation with AT&T. 
 “Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date after excluding the highest and lowest of
such Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such quotations. 
 “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m., New York City
time, on the third Business Day preceding such redemption date. 
 “Reference Treasury Dealer” means Banc of America Securities
LLC, Barclays Capital Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and their respective affiliates, all of which are primary U.S. Government securities dealers, and their respective successors and, at the option of AT&T,
other nationally recognized investment banking firms that are primary U.S. Government securities dealers. If any of the foregoing or their affiliates shall cease to be a primary U.S. Government securities dealer in The City of New York (a
“Primary Treasury Dealer”), AT&T shall substitute therefore another Primary Treasury Dealer. 
 “Remaining Scheduled
Payments” means, with respect to each Note to be redeemed, the remaining scheduled payments of principal of and interest on the Note that would be due after the related redemption date but for the redemption. If that redemption date is not an
interest payment date with respect to a Note, the amount of the next succeeding scheduled interest payment on the Note will be reduced by the amount of interest accrued on the Note to the redemption date. 
  

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 On and after the redemption date, interest will cease to accrue on the Notes or any portion of the Notes
called for redemption, unless AT&T defaults in the payment of the redemption price and accrued interest. On or before the redemption date, AT&T will deposit with a Paying Agent or the Trustee money sufficient to pay the redemption price of
and accrued interest on the Notes to be redeemed on that date. If less than all of the Notes of any series are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by lot or by such other method as the Trustee in its sole
discretion deems to be fair and appropriate. 
 Payment of Additional Amounts 
 AT&T will, subject to certain exceptions and limitations set forth below, pay as additional interest on the Notes such additional amounts
(“Additional Amounts”) as are necessary so that the net payment by AT&T or a Paying Agent of the principal of and interest on this Note to a person that is a United States Alien Holder, after deduction for any present or future tax,
assessment or governmental charge of the United States or a political subdivision or taxing authority thereof or therein, imposed by withholding with respect to the payment, will not be less than the amount that would have been payable in respect of
the Notes had no withholding or deduction been required; provided, however, that the foregoing obligation to pay additional amounts shall not apply: 
 (1) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial owner, or a fiduciary,
settlor, beneficiary or member of the beneficial owner if the beneficial owner is an estate, trust or partnership, or a person holding a power over an estate or trust administered by a fiduciary holder: 
 (a) is or was present or engaged in trade or business in the United States or has or had a permanent establishment in the United States;

 (b) is or was a citizen or resident or is or was treated as a resident of the United States; 
 (c) is or was a foreign or domestic personal holding company, a passive foreign investment company or a controlled foreign corporation
with respect to the United States or is or was a corporation that has accumulated earnings to avoid United States federal income tax; or 
 (d) is or was a “10-percent shareholder” of AT&T; 
 (2) to any Holder that is
not the sole beneficial owner of the Notes, or a portion thereof, or that is a fiduciary or partnership, but only to the extent that the beneficial owner, a beneficiary or settlor with respect to the fiduciary, or a member of the partnership would
not have been entitled to the payment of an additional amount had such beneficial owner, beneficiary, settlor or member received directly its beneficial or distributive share of the payment; 
  

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 (3) to any tax, assessment or governmental charge that is imposed or withheld solely
because the beneficial owner or any other person failed to comply with certification, identification or information reporting requirements concerning the nationality, residence, identity or connection with the United States of the Holder or
beneficial owner of the Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax,
assessment or other governmental charge; 
 (4) to any tax, assessment or governmental charge that is imposed other than by
deduction or withholding by AT&T or a Paying Agent from the payment; 
 (5) to any tax, assessment or governmental charge
that is imposed or withheld solely because of a change in law, regulation, or administrative or judicial interpretation that becomes effective after the day on which the payment becomes due or is duly provided for, whichever occurs later;

 (6) to an estate, inheritance, gift, sales, excise, transfer, wealth or personal property tax or any similar tax,
assessment or governmental charge; 
 (7) to any tax, assessment or other governmental charge any paying agent (which term may
include us) must withhold from any payment of principal of or interest on any note, if such payment can be made without such withholding by any other paying agent; or 
 (8) in the case of any combination of the above items. 
 Except as specifically provided herein, AT&T shall not be required to make any payment with respect to any tax, assessment or governmental charge imposed by any government or a political subdivision or taxing
authority thereof or therein. 
 “United States Alien Holder” means (a) a nonresident alien individual, (b) a foreign
corporation, (c) a foreign partnership or (d) an estate or trust that in either case is not subject to United States federal income tax on a net income basis or income or gain from a Note. 
 Redemption Upon a Tax Event 
 If
(a) AT&T becomes or will become obligated to pay Additional Amounts as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States (or any political subdivision or taxing
authority thereof or therein), or any change in, or amendment to, any official position regarding the application or interpretation of such laws, regulations or rulings, which change or amendment is announced or becomes 

  

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effective on or after August 28, 2007, or (b) a taxing authority of the United States takes an action on or after August 28, 2007, whether or
not with respect to AT&T or any of its affiliates, that results in a substantial probability that AT&T will or may be required to pay such Additional Amounts, then AT&T may, at its option, redeem, as a whole, but not in part, the Notes
on any interest payment date on not less than 30 nor more than 60 calendar days’ prior notice, at a redemption price equal to 100% of their principal amount, together with interest accrued thereon to the date fixed for redemption. However,
AT&T may determine, in its business judgment, that the obligation to pay these Additional Amounts cannot be avoided by the use of reasonable measures available to it, not including substitution of the obligor under the Notes. No redemption
pursuant to (b) above may be made unless AT&T shall have received an opinion of independent counsel to the effect that an act taken by a taxing authority of the United States results in a substantial probability that AT&T will or may be
required to pay the Additional Amounts and AT&T shall have delivered to the Trustee a certificate, signed by a duly authorized officer stating, that based on such opinion, AT&T is entitled to redeem the Notes pursuant to their terms.

 Further Issues 
 AT&T reserves the right from time to time, without notice to or the consent of the Holders of the Notes, to create and issue further notes ranking equally and ratably with the Notes in all respects, or in all respects except for the
payment of interest accruing prior to the issue date or except for the first payment of interest following the issue date of those further notes. Any further notes will have the same terms as to status, redemption or otherwise as the Notes. Any
further notes shall be issued pursuant to a resolution of the board of directors of AT&T, a supplement to the Indenture, or under an officers’ certificate pursuant to the Indenture. 
 Notes in Definitive Form 
 If
(1) an Event of Default has occurred with regard to the Notes represented by this Note and has not been cured or waived in accordance with the Indenture, or (2) the Depository is at any time unwilling or unable to continue as depository
and a successor depository is not appointed by AT&T within 90 days, AT&T may issue notes in definitive form in exchange for this Note. In either instance, an owner of a beneficial interest in the Notes will be entitled to the physical
delivery in definitive form in exchange for this Note, equal in principal amount to such beneficial interest and to have such Notes registered in its name. 
 Notes so issued in definitive form will be issued as registered notes in minimum denominations of $2,000 and integral multiples of $1,000, unless otherwise specified by AT&T. 
 Notes so issued in definitive form may be transferred by presentation for registration to the Registrar at its New York office and must be duly endorsed
by the Holder or the Holder’s attorney duly authorized in writing, or accompanied by a written instrument or instruments of transfer in form satisfactory to AT&T or the Trustee duly executed by the Holder or his attorney duly authorized in
writing. 
  

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 AT&T may require payment of a sum sufficient to cover any tax or other governmental charge that may
be imposed in connection with any exchange or registration of transfer of definitive Notes. 
 Default 
 In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal hereof may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. 
 Miscellaneous 
 For purposes of the Notes, a Business Day means a Business Day in The City of New York and London.

 No director, officer, employee or stockholder, as such, of AT&T shall have any liability for any obligations of AT&T under this
Note, the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting this Note waives and releases all such liability. The waiver and release are part of the consideration for the
issue of this Note. 
 The Notes are the unsecured and unsubordinated obligations of AT&T and will rank pari passu with all other
evidences of indebtedness issued in accordance with the Indenture. 
 Notices to Holders of the Notes will be published in authorized
newspapers in The City of New York and in London. AT&T is deemed to have given the notice on the date of each publication or, if published more than once, on the date of the first publication. 
 Prior to due presentment of this Note for registration of transfer, AT&T, the Trustee and any agent of AT&T or the Trustee may treat the Person
in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither AT&T, the Trustee nor any such agent shall be affected by notice to the contrary. 
 All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 
 The Indenture and this Note shall be governed by and construed in accordance with the laws of the State of New York. 
  

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