Document:

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                                                          EXHIBIT (10)(iii)(A)39

September 7, 2001

Mr. John Polumbo

Dear John,

      This letter will confirm the terms and conditions of your transfer from
Concert to AT&T Corp. (the "Company")

ASSUMPTION OF DUTIES: Effective on or about September 15, 2001 you will assume
the position of Senior Vice President-International Ventures and Enterprise
Marketing in the AT&T Business Services organization. You will report to David
Dorman. Your work location will be San Francisco, California. It is agreed and
understood that this assignment will require frequent travel to our headquarters
in New Jersey, especially during the initial six to twelve months of the
assignment.

BASE SALARY: Your initial base salary will be $395,200 per year. Specific salary
treatment will be reviewed again in March 2002.

ANNUAL BONUS: The Annual Bonus for Senior Managers in the AT&T Business Services
organization is currently based on financial measures of the unit's performance
as well as other personal achievement measures. The 2001 target (not actual)
Annual Bonus for your position will be 60% of your salary or $237,120 and will
be prorated for your time on AT&T payroll during the performance year. AT&T
cannot make any representations regarding the future format of the Annual Bonus
or the size of individual awards.

2001 CONCERT BONUS: Your 2001 prorated Concert Annual Bonus based on your
service at Concert in 2001 will be determined and payable at the time the AT&T
2001 Annual Bonus is payable in the first quarter of 2002.

AT&T LONG TERM INCENTIVES: You will be eligible to receive AT&T Long Term
Incentives for the year 2001 and for future years to the extent that this plan
is in place for Senior Managers at your level. Your target award for 2001 is
300% of base salary. Historically, the Long Term Incentive awards have been in
the form of performance shares and stock options, and for 2001, the value of the
award will be 70% in AT&T stock options and 30% in performance shares as
described below.

      AT&T PERFORMANCE SHARES: Effective on the last trading day of the month of
      your transfer, you will receive a grant of 16,200 AT&T Performance Shares
      covering the 2001-2003 performance period (payout, if any, is in the first
      quarter of 2004).
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J. Polumbo

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            Assuming continued Company employment, payout of from 0% to 200% of
            such Performance Shares is made in the form of cash and AT&T shares
            at the end of the performance period based on a measures of AT&T
            financial performance as determined by the AT&T Board of Directors.
            The measures for 2001 will be AT&T Total Revenue and Total Net
            Income vs. Budget. The measures for 2002 and 2003 have yet to be
            determined.

            Dividend equivalents are paid quarterly on all undistributed
            Performance Shares.

      AT&T STOCK OPTIONS: For 2001 you will be granted options for 63,900 shares
      of AT&T Common Stock. These options will be granted on the last trading
      day of the month of your month of transfer (or on the last trading day of
      the month following your month of transfer in the event your date of
      transfer is after the 15th of the transfer month). For stock options
      granted under this paragraph the term of the stock option grant is ten
      years and the stock options will vest twenty-five percent (25%) annually
      beginning on the first anniversary of the date of grant. The stock option
      price of the grant shall be the fair market value of AT&T Common Stock on
      the date of grant.

As with the Annual Bonus, Long Term Incentives are closely linked with the
Company's strategy to meet the challenges of an ever-changing marketplace.
Accordingly, other than the initial grant, the Company cannot guarantee
continuation of the Long Term Incentive Plan in its current format, nor can it
guarantee annual grant levels to individual participants.

OTHER LONG TERM INCENTIVES: If AT&T Corp. issues a separate stock tracking the
performance of AT&T Consumer Services ("Consumer Tracking Stock"), then, to the
extent other similarly situated executives receive a special one-time equity
grant in the Consumer Tracking Stock you will be provided an award which is
consistent with awards provided other such executives.

CONCERT FOUNDERS GRANT AND LTIP RETENTION:

-     Your Concert Founder's Grant of $593,000 will be payable by the last
      business day of February, 2002, contingent upon your continued Company
      employment through the payment date.

-     Your Concert LTIP retention of $2,280,000 which was to be paid in cash in
      October, 2002, will be replaced by the following:

      -     Restricted Shares: The Chairman will be asked to approve a special
            one-time award of 114,000 AT&T Restricted Shares which will vest
            100% on December 31, 2002. These restricted shares will vest
            contingent upon continued Company employment (there are no
            performance criteria). Dividends are currently paid
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J. Polumbo

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            each quarter as part of the normal company dividend. The Restricted
            Share agreement prohibits certain activities which are detrimental
            to the Company, including but not limited to, employment with a
            competitor, raiding of Company employees and litigation against the
            Company, both during your employment and for twenty-four (24) months
            following the termination of your employment with the Company.
            Detrimental conduct either during your employment or within
            twenty-four (24) months thereafter will result in forfeiture of the
            entire Restricted Share grant.

SPECIAL INDIVIDUAL PENSION ARRANGEMENT: The Company will honor the terms and
conditions of your Special Individual Pension Arrangement attached as Exhibit B
to your June 17, 1999 employment agreement with AT&T/Concert (Attached herein as
Exhibit A). Provided however, instead of vesting on 7/1/2004, such Special
Individual Pension Arrangement will vest on the last day of the month which
contains the six month anniversary of your date of transfer to AT&T under this
letter agreement.

BENEFITS AND SPECIAL MID-CAREER BENEFITS: You will, of course, be eligible for
the benefit programs available to all AT&T Senior Managers as indicated on
Attachment A.

FINANCIAL COUNSELING: You will not be required to use one of three AT&T approved
financial counseling firms; provided, however, all other terms of the financial
counseling program applicable to AT&T Senior Managers will apply. AT&T will pay
for financial counseling fees provide by your personal financial counselor
during employment including income tax preparation and preparation of estate
planning documents (wills and trusts). The fees will be imputed into your income
and a tax allowance will be provided in accordance with the Company's financial
counseling program.

CIC: In the event of a Change in Control (CIC) of the Company as defined in
Section 2(e) of the AT&T 1997 Long Term Incentive Program (LTIP), the vesting of
equity awards awarded under this letter will be accelerated in accordance with
Section 11 of the LTIP and subject to all other terms of that Section. Provided,
however, as approved by the AT&T Board of Directors, the consummation of all or
any portion of the separation transactions announced by the Company on October
25, 2000 and November 15, 2000, or any actions, changes or other events that may
occur in connection therewith, shall not constitute a Change in Control for
purposes of equity granted in 2001. In the event of your termination of
employment following a CIC, you will be treated under the terms and conditions
applicable to other similarly situated Senior Managers as approved the Board of
Directors on October 23, 2000.

STOCK OWNERSHIP REQUIREMENTS: You will be subject to an AT&T stock ownership
target established by the Board of Directors for Senior Managers at your level,
currently one times your base salary.

SEVERANCE BENEFIT: In the event of a Company initiated termination for other
than Cause or as a result of Long Term Disability, you will be treated under the
terms and conditions of the AT&T Senior Management Separation Plan or any
successor plan or program which is applicable at such time, including the
requirement that any benefits will
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J. Polumbo

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be conditioned upon your signing (and not revoking), within 30 days of your
termination, a release and agreement not to sue the Company. Currently the AT&T
Senior Management Separation Plan provides a severance payment of three (3)
times base salary which is payable either in a lump sum or which may be deferred
for up to 5 years with up to 5 annual payouts. Some of the other current terms
provide that (a) Stock Options vest immediately and are exercisable until the
earlier of three years from termination or the expiration of the term of the
options, (b) Performance Shares continue to the end of the performance cycle;
and (c) you would receive a prorated annual bonus for the termination year based
on actual results. As part of this letter agreement, the Company agrees that in
the event of a termination as defined in this paragraph, unvested Restricted
Shares awarded as part of this letter agreement will immediately vest.

OTHER PROVISIONS: It is agreed and understood that you will not talk about,
write about or otherwise disclose the terms or existence of this letter or any
fact concerning its negotiation or implementation. You may, however, discuss the
contents of this letter with your spouse, legal and/or financial counselor.

      This letter reflects the entire agreement regarding the terms and
conditions of your employment. Accordingly, it supersedes and completely
replaces any prior oral or written communication on this subject. This letter is
not an employment contract and should not be construed or interpreted as
containing any guarantee of continued employment. The employment relationship at
AT&T is by mutual consent ("Employment-At-Will"). This means that managers have
the right to terminate their employment at any time and for any reason.
Likewise, the Company reserves the right to discontinue your employment with or
without cause at any time and for any reason.

      The incentive plans as well as the employee and Senior Management benefit
plans, programs and practices as briefly outlined in this letter, reflect their
current provisions. Payments and benefits under these plans, programs, and
practices, as well as other payments referred to in this letter, are subject to
IRS rules and regulations with respect to withholding, reporting, and taxation,
and will not be grossed-up unless specifically stated. The Company reserves the
right to discontinue or modify any such plans, programs and practices. All
payments and benefits outlined in this letter are subject to the terms of
applicable plans, programs and practices. As indicated above, a number of AT&T
incentive arrangements and non-qualified pension and benefit plans are subject
to non-competition constraints outlined in AT&T's Non-Competition Guideline,
ATTACHMENT C to this letter.

      All benefits offered to you under the terms of a benefit plan governed by
the Employee Retirement Income Security Act shall be governed exclusively by the
terms of the plan. To the extent that this letter contradicts a term of the
plan, the terms of the plan shall be deemed controlling.

      By acceptance of this offer, you agree that (1) no trade secret or
proprietary information belonging to any previous employer will be disclosed or
used by you at AT&T, and that no such information, whether in the form of
documents, memoranda,
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J. Polumbo

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software, drawings, etc., will be retained by you or brought with you to AT&T,
and (2) you have brought to AT&T's attention and provided it with a copy of any
agreement which may impact your future employment at AT&T, including
non-disclosure, non-competition, invention assignment agreements or agreements
containing future work restrictions. You also understand and agree that AT&T
prohibits you from disclosing or using any confidential and proprietary
information from your prior employers in the performance of your duties for
AT&T.

      By acceptance of this offer, you further understand that these terms shall
apply to the Company and its successors. The Company specifically reserves the
right to assign the terms of this agreement to any successor, whether the
successor is the result of a sale, purchase, merger, consolidation, asset sale,
divestiture or spin-off or any combination or form thereof. No sale, purchase,
merger, consolidation, asset sale, divestiture or spin-off or any combination or
form thereof by the Company shall be construed as a termination of your
employment and will not trigger the Company's obligation to pay severance
benefits.

      John, I feel the package we have developed for you is attractive and
anticipates that you will make a critical contribution to AT&T. We look forward
to having you join us. If you have any questions, please don't hesitate to call
me.

      Your signature below affirms your agreement with the foregoing and
confirms specifically that: (i) there are no agreements or other impediments
that would prevent you from providing exclusive service to the Company,
including but not limited to any non-competition agreement with your former
employer; and (ii) you will not disclose or use any confidential and proprietary
information from your previous employers in the performance of your duties for
AT&T.

      If you agree to the terms and conditions of this offer, please sign as
indicated below and return the original to me by September 11, 2001.

                                          Sincerely,

                                          /s/  Mirian M. Graddick-Weir

/s/  John Polumbo                          9/11/2001
-------------------------------           ------------
John Polumbo                                  Date

Attachments
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J. Polumbo

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                                    Exhibit A

              SPECIAL INDIVIDUAL PENSION ARRANGEMENT FOR J. POLUMBO

GENERAL TERMS AND CONDITIONS

-     AT&T/BT/JV (collectively, the Company) will establish an individual
      non-qualified pension arrangement (hereinafter Individual Pension) which,
      subject to the terms and conditions below, will provide you with a benefit
      payable from AT&T/BT/JV operating assets upon your retirement

-     Individual Pension applicable during employment by AT&T, JV, or BT

-     For departures prior to 7/1/2004 (other than death) and for termination
      for "cause" (defined), this Individual Pension will be null and void in
      its entirety.

-     In the event of a termination for "disability" (as defined, the Individual
      Pension accrued to the date of such Termination will be payable in
      accordance with the terms and conditions set forth below in the
      "Individual Pension Formula."

-     In the event of your death as an active employee after this Agreement is
      signed by both you and the Company, your surviving spouse or other
      designated beneficiary will be eligible for a pension under this
      Individual Pension calculated as provided below.

INDIVIDUAL PENSION FORMULA

-     With respect to the amount payable under this Individual Pension at your
      retirement/Termination, the amount payable will be determined as (a) minus
      (b) below.

            (a)   the pension benefits calculated in accordance with the table
                  set forth below:

<TABLE>
<CAPTION>
                                 Percentage of Final 5 Year Average
                                 Total Cash Compensation (Base Pay
                                 Plus Actual annual bonus Paid in
Date of Retirement/Termination   Year)*
<S>                              <C>
Prior to 7/1/2002                10.25
7/1/2002-6/30/2003               12.30
7/1/2003-6/30/2004               14.35
7/1/2004-6/30/2005               16.40
</TABLE>
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J. Polumbo

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<TABLE>
<S>                              <C>
7/1/2005-6/30/2006               18.45
7/1/2006-6/30/2007               20.50
7/1/2007-6/30/2008               22.55
7/1/2008-6/30/2009               24.60
7/1/2009-6/30/2010               26.65
7/1/2010-6/30/2011               28.70
7/1/2011-6/30/2012               30.75
7/1/2012-6/30/2013               32.80
7/1/2013-6/30/2014               35.00
7/1/2014-6/30/2015               35.00
7/1/2015 or later                35.00
</TABLE>

      * For purposes of this Individual Pension Formula, Total Cash Compensation
      for years prior to actual Company service and for the first year of
      employment is assumed to be $520,000 annually, e.g. calculation of this
      formula at 7/1/99 will be determined as .1025 multiplied by $520,000 or a
      single life annuity of $53,300 per year

      (b)   any pension benefits payable from AT&T/JV/BT, i.e., pension benefits
            under the AT&T Management Pension Plan (AT&TMPP), AT&T Non Qualified
            Pension Plan (AT&TNQPP), AT&T Excess Benefit and Compensation
            Pension Plan (AT&TEBCPP), AT&T Senior Management Long Term
            Disability and Survivor Protection Plan (AT&TSMLTD&SPP), and any
            other pension benefits payable under any JV or BT retirement plans

-     The payment form for you under this Individual Pension will be the same as
      the payment form (e.g., single life annuity, joint and 50% annuity, etc.)
      under the AT&TEBCP based on your actual NCS. Upon your death following
      your termination, your spouse's or other designated beneficiary's
      entitlement to a survivor annuity benefit under the Individual Pension
      will be in accordance with your election under the AT&TMPP and the
      reduction factor applicable to your Individual Pension amount for the
      survivor annuity under this Individual Pension will be in accordance with
      the election you made for your AT&T MPP benefit

DEATH AS ACTIVE EMPLOYEE

-     In the event of your death as an active employee, your surviving spouse
      will be entitled to a survivor benefit under this Individual Pension. The
      terms and conditions of such benefit shall be in accordance with the terms
      and conditions set forth in the AT&TNQPP assuming you were eligible to
      voluntarily terminate under this Individual Pension; such benefit will be
      offset by any pension payments payable from AT&T under the AT&TMPP,
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J. Polumbo

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      AT&TEBCPP, AT&TNQPP, AT&TMCPP, and AT&TSMLTD&SPP and any JV and BT pension
      payments which may be applicable

DEFINITIONS

-     For purposes of this Agreement,

-     "Cause" shall be defined as follows: (1) conviction (including a plea of
      guilty or nolo contendere) of a felony or any crime or theft, dishonesty
      or moral turpitude; or (2) gross omission or gross dereliction of any
      statutory or common-law duty of loyalty to the Company or (3) violation of
      AT&T's Code of Conduct.

-     "Disability" shall mean termination of your employment with AT&T, BT or
      the Company with eligibility to receive a disability benefit/allowance
      under any long-term disability plan of AT&T, BT or the Company.<PAGE>
                                                          EXHIBIT (10)(iii)(A)40

                                                December 1, 2003

Mr. John Polumbo

Dear John:

      This letter will confirm the recent approval by the Compensation and
Employee Benefits Committee of the AT&T Board of Directors (the Committee) of
special allowances that you are receiving from AT&T (the Company) in connection
with your assignment as President, AT&T Consumer based in Morristown, New
Jersey.

SPECIAL TEMPORARY ALLOWANCE: In lieu of relocation benefits, at this time, under
the AT&T Management Relocation Plan (the Plan) the Company will continue to
provide to you a Special Temporary Allowance (STA) of $3,000 per month until
December 31, 2004. This monthly payment will be grossed-up for federal and state
taxes, since such STA payments are considered taxable income. These STA and tax
gross-up payments are predicated upon your continued employment with the Company
and your work location remaining in New Jersey and will not be included in your
pay base for calculating any employee benefits.

In the event that you commence a formal relocation to New Jersey under the Plan
you will not be entitled to an Exploratory Trip and Interim Living Allowance.

In the event that you permanently relocate to the New Jersey area prior to
December 31, 2004, the STA will be paid through the end of the month prior to
the month of relocation.

USE OF COMPANY AIRCRAFT FOR COMMUTATION: The Committee has also approved your
continued use of Company aircraft for commutation between CA and New Jersey
until December 31, 2004, for an average of no more than five (5) one-way trips
per month. The use of Company aircraft between your residence state and your
work state is considered commutation and therefore will result in imputed
taxable income to you. The Company will provide to you federal and state tax
gross-up payments to offset the taxes payable on the imputed income resulting
from such use of the Company aircraft during both 2003 and 2004. Any such
imputed income and tax gross-up payments will not be included in your pay base
for calculating any employee benefits.

Please acknowledge your acceptance of the terms of this agreement by signing
below where indicated.

                                                Sincerely,

                                                /s/  Mirian M. Graddick-Weir

Acknowledged:

/s/  John Polumbo
--------------------
John Polumbo

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