Document:

ex10mmm.htm

    
      Exhibit
10-mmm

      

      

      

      

      

      PACIFIC
TELESIS GROUP

      1996
EXECUTIVE DEFERRED COMPENSATION PLAN

      (Adopted
Effective December 1, 1995)

      

      

      

      SECTION
1.                    Purpose.

      

      The
Pacific Telesis Group 1996 Executive Deferred Compensation Plan (the "Plan")
provides certain Officers of the Company with an opportunity to defer
compensation and accrue earnings on a pre-tax basis and with an opportunity to
receive employer matching contributions that cannot be provided to them under
the Pacific Telesis Group Supplemental Retirement and Savings Plan for Salaried
Employees ("the Savings Plan") because of the limitations imposed by section
401(a)(17) of the Internal Revenue Code of 1986, as amended (the
"Code").

      

      SECTION
2.                   
Eligibility to Participate.

      

      The
following employees are eligible to participate in the Plan:

       

      
        

        
          	
                   

                	
                  (A)    Officers of
      Pacific Telesis Group and/or Pacific
Bell;

                

         

      

      
        	
                 

              	
                (B)    The
      Officers of any Affiliate of Pacific Telesis Group who are specifically
      designated to participate by the PTG Board and the Board of Directors or
      other governing body of such
Affiliate.

              

      

      

      SECTION
3.                 Plan
Accounts.

      

      
        	
                 

              	
                3.1    Establishment
      of Account. An account shall be established for each eligible employee who
      elects to become a participant in the Plan in accordance with the
      procedures set forth in Section 4 of the Plan. The account shall be
      credited with allocations and earnings under Sections 4, 5 and 6 and
      debited with distributions under Section 7 of the
  Plan.

              

      

      

      
        	
                 

              	
                3.2    No
      Funding or Assignment. For income tax purposes under the Code and for
      purposes of Title I of the Employee Retirement Income Security Act of
      1974, as amended ("ERISA"), it is intended that this Plan constitute an
      unfunded deferred compensation arrangement. The amounts credited to Plan
      accounts for employees of each participating Company shall be held in the
      general funds of such participating Company. All amounts in such accounts,
      including all Compensation deferred by an employee, shall remain an asset
      of the participating Company. A participating Company shall not be
      required to reserve or otherwise set aside funds for the payment of
      amounts credited to Plan accounts. The obligation of a participating
      Company to pay benefits under the Plan constitutes a mere promise to make
      benefit payments in the future, and shall be unfunded as to the employee,
      whose rights shall be those of a general unsecured creditor. Title to and
      beneficial ownership of any assets which a participating Company may set
      aside or otherwise designate to make payments under the Plan shall at all
      times remain in the participating Company, and the employee shall not have
      any property interest in any specific assets of a participating Company.
      The rights of an employee or his or her beneficiary to benefit payments
      under the Plan are not subject in any manner to assignment, alienation,
      pledge or garnishment by creditors.

              

      

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      SECTION
4.                  Deferred
Compensation.

      

      
        	
                 

              	
                4.1    Annual
      Deferral and Distribution Election. An eligible employee may elect to
      participate in the Plan prior to the beginning of any calendar year, or
      within 30 days of first becoming eligible to participate in the Plan, or
      within 30 days of becoming eligible to participate in a feature of the
      Plan with respect to such Plan feature. An employee's election shall
      direct that compensation in one or more of the following categories
      (collectively "Compensation") be deferred and credited to an account under
      the Plan, subject to the limitations and effectiveness prescribed for each
      category of Compensation, and shall direct that such Compensation,
      together with all other amounts credited under the Plan with respect to
      such Compensation under Section 5 (Company Match) and Section 6
      (Earnings), shall be distributed in accordance with a distribution option
      set forth in Section 7.

              

      

      

      
        	
                 

              	
                (A)    Salary.
      An employee may elect to defer part of his or her base annual compensation
      ("Salary") otherwise payable for services performed in a calendar year,
      but not less than $2,500 nor more than 80% of salary. Such election shall
      become effective for Salary otherwise payable for services performed in
      the payroll period beginning, (i) in the case of an employee who makes an
      election within 30 days of first becoming eligible to participate in the
      Plan, immediately subsequent to the election or (ii) in all other cases,
      on the first day of the calendar year to which the election applies. An
      election related to Salary otherwise payable for services performed in any
      calendar year shall become irrevocable, (x) in the case of an election
      made within 30 days of first becoming eligible to participate in the Plan,
      on the last day before the applicable payroll period for which the
      election becomes effective, or (y) in all other cases, on the last day
      prior to the beginning of such calendar
year.

              

      

      

      
        	
                 

              	
                (B)    STIP.
      An employee may elect to defer all or part, but not less than $5,000, of
      his or her awards under the Pacific Telesis Group Short-Term Incentive
      Plan, or a similar or successor incentive compensation plan or program of
      Pacific Telesis Group or an Affiliate ("STIP"), for services performed in
      a calendar year and otherwise payable in the calendar year following such
      calendar year. Such election may be made with respect to services to be
      performed (i) in the remainder of the year in which the employee first
      becomes eligible to participate in the Plan, provided the election is made
      prior to October 1st
      of such year, which election shall become effective for STIP earned with
      respect to services performed beginning with the payroll period
      immediately subsequent to the election, or (ii) in the next following
      calendar year, which election on shall become effective on the first day
      of the calendar year to which the election applies in all other cases. An
      election related to the STIP award for services performed in a calendar
      year shall become irrevocable (x) in the case of an election made within
      30 days of first becoming eligible to participate in the Plan, on the last
      day before the applicable payroll period for which the election becomes
      effective, or (y) in all other cases, on the last day prior to the
      beginning of such calendar year.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      
        	
                 

              	
                (C)    LTIP.
      An employee may elect to defer all or part, but not less than $5,000, of
      his or her awards under the Pacific Telesis Group Senior Management
      Long-Term Incentive Plan or a similar or successor long term incentive
      compensation plan of Pacific Telesis Group or an Affiliate ("LTIP"), for
      services performed in a multiple-year performance period and otherwise
      payable in a calendar year following such performance period. An election
      related to the LTIP award otherwise payable for services performed in a
      performance period shall become irrevocable on the last day prior to the
      beginning of the performance period applicable to that LTIP
      award.

              

      

      

      
        	
                 

              	
                (D)    Other
      Awards. An employee may elect to defer all or part of his or her awards
      under any other bonus, special award, or any other similar form of
      compensation ("Other Awards") otherwise payable to him or her by a
      participating Company with respect to services performed in a calendar
      year. An election related to Other Awards otherwise payable in a calendar
      year shall become irrevocable on the last day prior to the beginning of
      such calendar year.

              

      

      

      Notwithstanding
the foregoing, in no event shall deferrals under the Plan include that portion
of Compensation required for all applicable tax, Social Security and employee
benefit plan withholding, whether or not such withholding requirement is related
to this Plan.

      

      
        	
                 

              	
                4.2    Form of
      Election, Modification or Termination. An employee's election or written
      notice of modification or termination of any prior election shall be made
      in accordance with procedures established by the Plan Administrator, in
      the form of a document approved by the Plan Administrator, executed by the
      employee and filed with the Plan Administrator or his or her designee. An
      election which has not become irrevocable may be modified, terminated or
      reinstated by the employee prior to the time such election would have
      become irrevocable as provided in Section 4.1. An election with respect to
      Salary, STIP or Other Awards for services performed in a calendar year
      and/or with respect to LTIP for services performed in a multiple-year
      performance period shall be deemed irrevocably terminated when the
      employee, whether by transfer or termination of employment, ceases to be
      eligible to participate in the Plan during such calendar year and/or such
      multiple-year performance period (as
  applicable).

              

      

      

      
        	
                 

              	
                4.3    Modification of
      Irrevocable Election by the Committee. Upon receipt of a written request
      made by or on behalf of an employee, the Committee in its sole discretion
      may modify or terminate the employee's election with respect to
      Compensation otherwise payable in a calendar year as it deems necessary to
      prevent extreme financial hardship to the employee, notwithstanding that
      the election has become effective and irrevocable as provided in Section
      4.1.

              

      

      

      
        	
                 

              	
                4.4    Allocation to
      Accounts. Deferred amounts related to Compensation which would otherwise
      have been paid by a participating Company shall be credited to the
      employee's account as of the date the Compensation would otherwise have
      been paid. Deferred amounts related to Compensation which would otherwise
      have been distributed in Pacific Telesis Group common shares shall be
      credited to the employee's account as deferred Pacific Telesis Group
      shares as of the date such Pacific Telesis Group shares would otherwise
      have been transferred to the
employee.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      SECTION
5.               
Company Match.

      

      
        	
                 

              	
                5.1    Eligibility for
      Company Match. An employee who (A) elects to defer Compensation under the
      Plan for a calendar year, and (B) has made the maximum elective deferral
      under the Savings Plan permitted by section 402(g) of the Code for such
      calendar year (except to the extent that a further limitation is required
      by section 401(k)(3) and/or section 415 of the Code), shall be eligible to
      have additional amounts based on Compensation deferred pursuant to this
      Plan ("Company  Match") credited to his or her account
      hereunder.

              

      

      

      
        	
                 

              	
                5.2    Amount
      of Company Match. The Company Match credited to an employee's account
      under this Plan with respect to Compensation deferred during a calendar
      year shall be equal to

              

      

      

      
        	
                     
      

              	
                (A)    the
      amount of Compensation deferred into the employee's Plan account,
      multiplied by

              

      

      

      
        	
                   
      

              	
                (B)    the
      percentage in effect for that calendar year at which
      the  employee's Basic Contributions to the Savings Plan are
      matched by employing Company contributions; provided, however, that the
      maximum Company Match credited to the employee's account under this Plan
      shall not exceed

              

      

      
        

        
          	
                       
      

                	
                  (C)     6% of the
      employee's Savings Plan Salary, multiplied
by

                

        

                 

      

      
        	
                 

              	
                (D)    the
      percentage in effect for that calendar year at which the employee's Basic
      Contributions to the Savings Plan are matched by employing Company
      contributions, reduced by

              

      

      

      
        	
                 

              	
                (E)    the
      total amount of matching Company contributions credited to the employee's
      account under the Savings Plan.

              

      

      

      For
purposes of determining the amount of Compensation deferred into the employee's
Plan account, deferred Pacific Telesis Group common shares shall be valued by
multiplying the number of shares deferred by the Price of Pacific Telesis Group
common shares on the deferral date.

      

      
        	
                 

              	
                5.3    Allocation to
      Account. Until fully credited for the calendar year, and subject to the
      delay provided in Section 5.4, Company Match shall be credited to an
      employee's account under this Plan as of each date that deferred
      Compensation is credited to the employee's account under this
      Plan.

              

      

      

      
        	
                 

              	
                5.4    Maximum
      Pre-Tax Savings Plan Deferrals Required. No Company Match shall be
      credited to an employee's account for a calendar year until the employee
      has made before-tax contributions under the Savings Plan equal to the
      maximum elective deferrals permitted under section 402(g) of the Code, as
      further limited by section 401(k)(3) of the Code. Thereafter, the
      employee's account shall immediately be credited with an amount equal to
      the Company Match that would otherwise have been previously credited under
      Section 5.3.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      
        	
                 

              	
                5.5    Savings
      Plan Provisions Prevail. The provisions of this Section 5 shall not limit
      or affect the application of the provisions regarding matching Company
      contributions in the Savings Plan, which shall take precedence over the
      provisions of this Section 5.

              

      

      

      SECTION
6.               Earnings
on Accounts.

      

      
        	
                 

              	
                6.1    Interest
      Allocations to Accounts. Deferred amounts related to Compensation which
      would otherwise have been paid in cash shall bear interest from the date
      the Compensation would otherwise have been paid. Interest shall be applied
      to Company Match credited to an employee's account as if such Company
      Match had been credited to the employee's account at the same time that
      the related amounts of Compensation deferred hereunder were credited to
      the employee's account. The interest credited to an account shall be
      compounded annually at the end of each calendar
  year.

              

      

      

      
        	
                 

              	
                6.2    Rate of
      Interest. The rate of interest to be applied to an employee's aggregate
      account balance under the Plan for a calendar year shall be determined by
      the Committee from time to time, and promptly communicated to eligible
      employees in advance of its application, but in no event shall (A) the
      interest rate be decreased below the average 10-Year Treasury note rate,
      (B) any reduction apply to interest already credited to Plan accounts for
      periods prior to the Committee's action, or (C) any interest rate
      previously guaranteed for a given period and communicated to eligible
      employees be reduced during such period except as may be equitable in
      light of any change in applicable law which substantially increases the
      burden to the participating Companies of paying such guaranteed
      interest.

              

      

      

      
        	
                 

              	
                6.3    Retroactive
      Limitation of Interest Accrual in Case of Early Separation.
      Notwithstanding Section 6.2, an employee whose Separation occurs before he
      or she attains age 55 will receive interest on all deferred cash
      Compensation and Company Match for all years of participation in the Plan
      based on the average 10-Year Treasury note rate, rather than the rate of
      interest established by the Committee for any particular calendar
      year.

              

      

      

      
        	
                 

              	
                6.4    Dividends and
      Adjustments for Pacific Telesis Group Shares. An employee's account
      credited with deferred Pacific Telesis Group shares shall be credited on
      each subsequent dividend payment date for Pacific Telesis Group shares
      with an amount equivalent to the dividend payable on the number of Pacific
      Telesis Group common shares equal to the number of deferred Pacific
      Telesis Group shares in the employee's account on the record date for such
      dividend. Such amount shall then be converted to a number of additional
      deferred Pacific Telesis Group shares, determined by dividing such amount
      by the Price of Pacific Telesis Group common shares on the dividend
      payment date. In the event of any change in outstanding Pacific Telesis
      Group common shares by reason of any stock dividend or split,
      recapitalization, merger, consolidation, combination or exchange of shares
      or other similar corporate change, the Committee shall make such
      adjustments, if any, that it deems appropriate in the number of deferred
      Pacific Telesis Group shares then credited to an employee's account. Any
      and all such adjustments shall be conclusive and binding upon all parties
      concerned.

              

      

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SECTION
7.              Distribution.

      

      
        	
                 

              	
                7.1    Distribution
      Elections. At the time an eligible employee makes an election to defer
      Compensation otherwise payable for services performed in a calendar year,
      the employee also shall make an election with respect to the distribution,
      during the employee's lifetime, of such deferred Compensation, together
      with Company Match and earnings credited to the employee's Plan account
      with respect to such deferred Compensation. Subject to the provisions on
      Hardship distributions in Section 7.6.3 and the provisions on Options for
      Distribution in the Event of Death in Section 7.3, distribution elections
      shall become effective and irrevocable at the same time the election to
      defer such Compensation becomes effective and irrevocable under Section
      4.1.

              

      

      

      
        	
                 

              	
                7.2    Options
      for Distribution During Life. An employee may elect to receive the amounts
      credited to the employee's Plan account with respect to a deferral
      election made pursuant to Section 4.1 (a) in one payment, or (b) in a
      number of annual installments over a period of 5, 10, or 15 years,
      calculated in accordance with procedures established by the Plan
      Administrator. As specified by the employee, distributions shall commence
      as soon as practicable after

              

      

      

      
        	
                 

              	
                (A)    the
      first day of the calendar year next following the employee's
      Separation;

              

      

      

      
        	
                 

              	
                (B)    the
      first day of the fifth calendar year next following the employee's
      Separation; or

              

      

      

      
        	
                 

              	
                (C)    the
      first day of the calendar year next following the employee's attainment of
      a specified age between 59 1/2 and
70.

              

      

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      All
amounts credited to an employee's Plan account with respect to which he or she
has elected distribution in the same form and commencing at the same time shall
be aggregated as a single Distribution Account. Notwithstanding the employee's
election under this Section 7.2 with respect to the time and form of
distribution for each such Distribution Account, if the aggregate of all amounts
credited to an employee's Distribution Account is less than $50,000 at the time
of such employee's Separation, such Distribution Account shall be distributed in
a single payment as soon as practicable after the first day of the calendar year
next following the employee's Separation.

      

      
        	
                 

              	
                7.3    Options
      for Distribution In the Event of Death. An employee may elect that, in the
      event the employee should die before full payment of all amounts credited
      to the employee's Plan account, the balance of the employee's Plan account
      shall be distributed to the beneficiary or beneficiaries designated by the
      employee

              

      

      

      
        	
                 

              	
                (A)    in one
      payment, paid as soon as practicable after the first day of the calendar
      year next following the year of the employee's
  death;

              

      

      

      
        	
                 

              	
                (B)    in 10
      annual installments, calculated in accordance with procedures established
      by the Plan Administrator, commencing as soon as practicable after the
      first day of the calendar year next following the year of the employee's
      death, provided that if the aggregate of all amounts credited to an
      employee's Plan Account is less than $50,000 at the time of such
      employee's death, such Distribution Account shall be distributed in a
      single payment as soon as practicable after the first day of the calendar
      year next following the employee's death;
or

              

      

      

      
        	
                 

              	
                (C)    by a
      continuation of the distribution times and forms elected under Section 7.2
      (in the case of an employee who dies before commencement of distributions,
      using as any specified age the date the employee would have attained that
      age if he or she had continued to live), subject to the single payment
      distribution of a Distribution Account credited with less than $50,000 at
      the time of the employee's death, as set forth in Section
    7.2.

              

      

      

      If no
election has been made under this Section 7.3, the balance of the employee's
deferred account shall be distributed in one payment as soon as practicable
after the first day of the calendar year next following the year of the
employee's death. If no beneficiary designation has been made, distribution
shall be made to the estate of the employee.

      

      
        	
                 

              	
                7.4    Form of
      Elections. Distribution elections and beneficiary designations shall be
      made in writing in the form of a document or documents approved by the
      Plan Administrator, executed by the employee and filed with the Plan
      Administrator or his or her designee. An employee may designate one or
      more individuals or a trust as his or her beneficiary, and may change the
      beneficiary designation at any time, effective upon receipt by the Plan
      Administrator or his or her
designee.

              

      

      

      
        	
                 

              	
                7.5    Form
      and Timing of Distribution. Amounts credited to an employee's Plan account
      as cash plus accumulated interest, less applicable withholding taxes,
      shall be distributed in cash. Amounts credited as deferred Pacific Telesis
      Group shares, less applicable withholding taxes, shall be distributed in
      the form of whole Pacific Telesis Group common shares, plus cash for any
      fractional share. Installment distributions subsequent to the first
      installment shall be paid on or about the anniversary date of the first
      annual installment until the entire balance of the employee's Plan account
      is paid. Account balances held pending distribution shall continue to be
      credited with interest or additional deferred Pacific Telesis Group
      shares, as applicable, determined in accordance with Section
      6.

              

      

       

      
        

        
          	
                   

                	
                  7.6    Distributions
      Not in Accordance with
Elections.

                

        

      

              

      
        	
                 

              	
                7.6.1    Postponement of
      Payment. The Committee may postpone payment of Plan benefits to an
      employee (A) who, in the year Plan benefits would otherwise be payable, is
      a "covered employee" for purposes of the $1 million limitation on
      deductible compensation under Section 162(m) of the Code, and (B) whose
      compensation for the year in which Plan benefits would otherwise be
      payable would, but for such postponement, exceed the $1 million limit on
      deductibility. In addition, notwithstanding an election pursuant to
      Section 7.2, at the sole discretion of the Committee, in the event that an
      employee's Separation is on account of total and permanent disability, as
      determined by the Committee, the Committee may postpone payment of Plan
      benefits to such employee to commence in a year later than the year in
      which his or her Plan benefits would otherwise be payable upon such
      Separation, provided that no such postponement shall extend beyond the
      earlier of (a) ten years from the date of Separation, or (b) the year in
      which such employee attains age 65.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      
        	
                 

              	
                7.6.2    Immediate
      Single Payment. Notwithstanding an election pursuant to Section 7.2, at
      the sole discretion of the Committee the entire amount then credited to
      the employee's account shall be paid as soon as practicable in a single
      payment if an employee is involuntarily terminated by his or her Company
      or becomes employed by a governmental agency having jurisdiction over the
      activities of Pacific Telesis Group or any of its
    Affiliates.

              

      

      

      
        	
                 

              	
                7.6.3    Hardship
      Distribution. Upon receipt of a written request made by or on behalf of an
      employee, the Committee in its sole discretion may authorize a Hardship
      distribution from the employee's Plan account. For purposes of the Plan,
      "Hardship" means an unanticipated emergency that is caused by an event
      beyond the control of the employee and that would result in severe
      financial hardship if early distribution were not permitted. As determined
      by the Committee in its sole discretion, Hardship may include one or more
      of the following:

              

      

       

      
        
          	
                   

                	
                  (A)    A
      sudden and unexpected illness or accident of the
  employee;

                

       

      

      
        	
                 

              	
                (B)    Extraordinary
      and unreimbursed medical or hospital expenses incurred by the employee or
      a member of his or her family or a
relative;

              

      

       

      
        
          	
                   

                	
                  (C)    The
      loss of the employee's property due to casualty;
  or

                

            

      

      
        	
                 

              	
                (D)    Any
      other similar unforeseeable emergency that is caused by and event beyond
      the control of the employee and would impose a severe financial hardship
      if early distribution were not
permitted.

              

      

      

      A
distribution based on Hardship cannot exceed the amount required to meet the
immediate financial need created by the Hardship and not reasonably available
from other resources of the employee, including reimbursement or compensation by
insurance or otherwise; provided that an employee shall not be required to
request a hardship distribution from the Savings Plan in order to receive a
Hardship distribution under this Plan.

      

      
        	
                 

              	
                7.7    Payment
      Obligation. The obligation to distribute benefits under the Plan shall be
      borne primarily by the last Company to employ an employee in a position
      eligible to participate in the Plan immediately prior to the distribution.
      A Company's withdrawal from participation in the Plan shall not affect
      that Company's liability hereunder. If for any reason the primarily liable
      Company fails to make timely payment of a amount due under the Plan,
      Pacific Telesis Group shall be secondarily liable for the
      obligation.

              

      

      

      SECTION
8.            Administration;
Claims and Review Procedures.

      

      
        	
                 

              	
                8.1    Plan
      Administrator. The Plan Administrator shall be the Executive Vice
      President - Human Resources Pacific Telesis Group, or his or her deligee.
      The Plan Administrator shall have the authority to administer and
      interpret the Plan, including sole discretion to determine the rights of
      an employee or beneficiary under the Plan, and to authorize disbursements
      under the Plan, except for decisions expressly reserved by the Plan for
      the Committee or for the PTG Board or the Board of Directors of an
      Affiliate.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      
        	
                 

              	
                8.2    Initial
      Claim Unnecessary. No claim for benefits shall be required for
      commencement of distributions in accordance with an employee's election
      under Sections 7.2 and 7.3 of the Plan. The obligation of a Company to
      make distributions under the Plan shall not be affected by any action or
      inaction (on the part of an employee, his beneficiaries or any Company)
      with respect to amounts owed, including but not limited to the failure to
      make timely demand, the granting of extensions of time or other
      indulgences, the failure to make timely payment or the failure to give
      notices other than those prescribed in Section
  8.3.

              

      

      

      
        	
                 

              	
                8.3    Review
      of Adverse Decisions. An employee or beneficiary who disagrees with a
      decision by the Plan Administrator relating to the payment of benefits
      under the Plan may submit a claim requesting Plan benefits in writing to
      the Committee, which shall respond in writing. A claim shall be deemed
      denied unless the response is sent within 90 days (or within 180 days, if
      the Committee extends the time to respond by notifying the claimant in
      writing of the special circumstances requiring an extension and the date
      by which the response is expected). If the claim is denied in whole or
      part, the response shall state (A) the specific reasons, making specific
      reference to pertinent provisions of the Plan; (B) what additional
      information, if any, would help perfect the claim for benefits; and (C)
      what steps the claimant must take to submit the claim for review. Within
      60 days after the date of a denial, a claimant may file a written request
      for the PTG Board of Directors to review the denial. Notwithstanding
      Section 8.2 of the Plan, such request for review must be made in a timely
      manner for the purpose of seeking any further review of a decision or
      determining any entitlement to a benefit under the Plan. The PTG Board
      shall notify the claimant in writing of the review decision, specifying
      the reasons for the decision and the Plan provisions on which it is based.
      A claim shall be deemed denied unless the decision on appeal is sent
      within 60 days (or within 120 days, if the PTG Board extends the time to
      respond by notifying the claimant in writing). The Plan Administrator,
      Committee and PTG Board shall retain such right, authority and discretion
      as are provided or not expressly limited in section 503 of ERISA and the
      regulations thereunder and, if the Committee denies a claim upon review,
      the claimant shall have such further rights of review as are provided
      therein.

              

      

      

      SECTION
9.             Amendment
and Termination.

      

      
        	
                9.1

              	
                9.1    Amendment. The
      PTG Board of Directors may at any time make changes in the Plan, but such
      amendment shall have prospective effect only and shall not adversely
      affect the rights of any employee, without his or her consent, to any
      benefit under the Plan to which such employee was entitled prior to the
      effective date of amendment. Changes in the interest rate applied to Plan
      account balances as determined by the Committee from time to time in
      accordance with Section 6.2 of the Plan shall not be deemed to be Plan
      amendments, notwithstanding that they apply to Compensation previously
      earned and deferred. The Executive Vice President - Human Resources of
      Pacific Telesis Group, with the approval of the Executive Vice President
      and General Counsel of Pacific Telesis Group, shall be authorized to make
      minor or administrative changes to the
Plan.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      
        	
                 

              	
                9.2    Termination.
      The PTG Board of Directors may at any time terminate the Plan. Any
      termination of the Plan shall not terminate the deferral of Compensation
      previously deferred into a Plan account, but may prevent the deferral of
      Compensation not yet earned notwithstanding the employee's prior election
      to defer such Compensation.

              

      

      

      SECTION
10.            Definitions.

      For
purposes of this Plan, the following words shall have the meaning so defined
unless the context clearly indicates otherwise:

      

      
        	
                 

              	
                10.1    "Affiliate" as
      the term relates to Pacific Telesis Group, means a subsidiary of or other
      entity that controls, is controlled by, or is under common control with
      Pacific Telesis Group, as the case may be. As used herein, "control" means
      the possession, directly or indirectly, of the power to direct or cause
      the direction of the management and policies of such entity, whether
      through ownership of voting securities or other interests, by contract or
      otherwise.

              

      

      

      
        	
                 

              	
                10.2    "PTG
      Board of Directors" or "PTG Board" means the Board of Directors of Pacific
      Telesis Group.

              

      

      

      
        	
                 

              	
                10.3    "Code"
      means the Internal Revenue Code of 1986, as amended from time to time, and
      the regulations promulgated
thereunder.

              

      

      

      
        	
                 

              	
                10.4    "Committee"
      means the Compensation and Personnel Committee of the Board of Directors
      of Pacific Telesis Group.

              

      

      

      
        	
                 

              	
                10.5    "Company" shall
      mean Pacific Telesis Group, Pacific Bell or any other corporation which is
      an Affiliate of Pacific Telesis
Group.

              

      

      

      
        	
                 

              	
                10.6    "Officer" means
      an officer of a Company, as determined by the Plan Administrator, but the
      term shall not include Assistant Secretary, Assistant Treasurer, Assistant
      Comptroller or any other assistant
officer.

              

      

      

      
        	
                 

              	
                10.7    "Price"
      with respect to Pacific Telesis Group common shares as of a particular
      date means the average of the daily high and low sale prices of Pacific
      Telesis Group common shares on the New York Stock Exchange ("NYSE") for
      the period of five trading days ending on such date, or the period of five
      trading days immediately preceding such date if the NYSE is closed on the
      date.

              

      

      

      
        	
                 

              	
                10.8    "Savings Plan"
      means the Pacific Telesis Group Supplemental Retirement and Savings Plan
      for Salaried Employees.

              

      

      

      
        	
                 

              	
                10.9    "Savings Plan
      Salary" means "Salary" as defined in the Pacific Telesis Group
      Supplemental Retirement and Savings Plan for Salaried Employees, without
      reduction for deferrals of salary under this Plan and without regard to
      the limit on compensation under section 401(a)(17) of the Code. If an
      eligible employee is employed by a participating Company for only a
      portion of a calendar year or is on a leave of absence for a portion of a
      calendar year, the employee's Savings Plan Salary is prorated to reflect
      only the period during which the employee was actively employed by a
      participating Company.

              

      

      

      
        	
                 

              	
                10.10    "Separation"
      means retirement or termination from all employment with Pacific Telesis
      Group or its
Affiliates.ex10nnn.htm

    Exhibit
10-nnn

    

    

    PACIFIC
TELESIS GROUP

    EXECUTIVE
DEFERRAL PLAN

    (Restated
as of November 1, 1994)

    

    SECTION
1.  PURPOSE.

    

          The
Pacific Telesis Group Executive  Deferral Plan (the "Plan") provides
certain Officers of the Company with  an opportunity to defer
compensation and accrue earnings on a pre-tax basis and with an opportunity to
receive employer matching  contributions  that
cannot  be provided  to  them under  the
Pacific Telesis Group Supplemental Retirement and  Savings Plan for
Salaried Employees ("the  Savings Plan") because of the limitations
imposed by section 401(a)(17) of the Internal Revenue Code of 1986, as amended
(the "Code").

    

    SECTION
2.  ELIGIBILITY TO PARTICIPATE.

    

    The
following employees are eligible to participate in the Plan:

    

    (A)  Officers of Pacific
Telesis Group and/or Pacific Bell;

    

    
      	
               
      

            	
              (B)  The
      Officers of  any corporate Affiliate  of Pacific
      Telesis  Group who are specifically designated to participate by
      the Board of Directors of Pacific  Telesis Group and
      the  Board of Directors  of such corporate
      Affiliate.

            

    

    

          Prior  to
April 1,  1994, certain  employees of  AirTouch
Communications (formerly  "PacTel Corporation") were eligible to
participate in the Plan, and they retain certain rights to benefits as provided
under the Plan.

    

    SECTION
3.  PLAN ACCOUNTS.

    

          3.1  ESTABLISHMENT
OF ACCOUNT.  An account shall be established for each eligible
employee who elects to become a participant in the Plan in accordance with the
procedures set forth in Section 4 of the Plan.  The
account  shall be credited with allocations and
earnings  under Sections 4, 5 and 6  and debited with
distributions under Section 7 of the Plan.

    

          3.2  PREDECESSOR
PLAN ACCOUNTS.  An employee's account under the Pacific
Telesis   Group  Senior   Management  Incentive   Award  Deferral   Plan  (the
"Predecessor Plan")  was transferred to this  Plan as of
January  1, 1985 (the "Effective Date"  of this Plan), if
the employee was then an eligible employee as provided in  Section
2.  In such a case,  the employee's account under this Plan
was credited  as of the  Effective Date with  the
amount credited to  the employee's  account under
the  Predecessor Plan as  of December 31,  1984,
and such  amount
shall  bear interest from  the Effective Date  in
accordance with Section 6.  Elections  regarding
distribution made under the  Predecessor Plan shall not be affected by
the transfer of an employee's account to this Plan.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

          3.3  NO  FUNDING
OR ASSIGNMENT.  For  income tax purposes under the Code and
for purposes of  Title I of the Employee Retirement Income Security
Act of 1974, as  amended ("ERISA"),  it  is
intended  that  this
Plan  constitute  an unfunded  deferred
compensation  arrangement.   The
amounts  credited to  Plan accounts for  employees
of  each participating  Company shall  be
held  in the general  funds of such  participating
Company.  All  amounts in such accounts, including
all  Compensation deferred by an employee,  shall remain an
asset of the  participating Company. A
participating  Company shall not  be required to reserve
or  otherwise set aside funds  for the payment
of  amounts credited to Plan
accounts.   The  obligation of  a
participating  Company to  pay benefits under  the
Plan  constitutes a mere  promise to  make
benefit  payments in the future, and  shall be unfunded as
to the employee, whose rights shall be those of  a general
unsecured  creditor.  Title  to and
beneficial  ownership of any assets which a participating
Company  may set aside or otherwise  designate to make
payments  under the Plan shall  at all times
remain  in the participating Company, and the employee shall not have
any property interest in any specific assets of a  participating
Company. The  rights of an  employee or his  or
her beneficiary to benefit  payments under the Plan are
not  subject in any manner to assignment, alienation, pledge or
garnishment by creditors.

    

    SECTION
4.  DEFERRED COMPENSATION.

    

          4.1  ANNUAL
DEFERRAL  AND
DISTRIBUTION  ELECTION.  An  eligible employee
may  elect to participate in the  Plan prior to
the  beginning of any calendar year or within 30 days  of
first becoming eligible to participate in  the Plan or a
feature  of the Plan (with  respect to such
Plan  feature). An employee's election  shall
direct  that  compensation in  one
or  more  of the  following
categories  (collectively  "Compensation")  be  deferred
and  credited  to  an
account  under  the  Plan,  subject  to  the  limitations  and   effectiveness
prescribed  for  each category  of
Compensation,  and  shall direct  that such
Compensation, together with  all other  amounts credited
under  the Plan  with respect to  such
Compensation under  Section 5  (Company Match)
and  Section 6 (Earnings),  shall be distributed in
accordance with a distribution option set forth in Section 7.

    

    
      	
               
      

            	
                         (A)   SALARY.  An
      employee may elect to defer part  of his or her salary otherwise
      payable for services performed in a calendar year,
      but  not  less than  $2,500 nor more
      than  80% of salary.  Such election shall become
      effective for salary otherwise payable for services performed in the
      payroll period beginning (i) immediately subsequent to the election, in
      the case of an employee who makes an election within 30 days of first
      becoming eligible to participate in the Plan, or (ii) on or after the
      first day of the calendar year to which the election applies in all other
      cases.  An election related to salary otherwise payable for
      services performed in any calendar year shall become irrevocable on the
      last day prior to the beginning of such calendar year (or the applicable
      payroll period for  which  the  election
      becomes  effective,  in  the  case
      of  an
      election  made  within  30  days  of  first  becoming  eligible  to
      participate in the Plan).

            

    

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
                         (B)   STIP.   An
      employee may elect  to defer all  or part, but not
      less  than  $5,000,  of
      his  or  her  awards  under
      the  Short-Term Incentive Plan or Short-Term Incentive
      Compensation Plan of Pacific Telesis Group or an  Affiliate, or
      a similar  or successor plan  or program ("STIP"),
      for  services performed  in a  calendar
      year  and otherwise  payable
      in  the  calendar year  following
      such  calendar year.  An election related to the STIP
      award for services performed in a calendar year  shall become
      irrevocable on the  last day prior to the year in which the
      services are performed.

            

    

    

    
      	
               
      

            	
                         (C)   LTIP.  An
      employee  may elect to  defer all or
      part,  but not less than  $5,000, of his  or
      her awards under  the Pacific Telesis Group  Senior
      Management  Long-Term Incentive  Plan
      or  the similar plan of an Affiliate  ("LTIP"), for
      services performed in  a three-year performance period and
      otherwise payable in the  calendar year following such
      three-year performance  period.  An election related
      to the LTIP  award otherwise  payable for
      services  performed in  a three-year performance
      period shall  become irrevocable on the last
      day  prior to the  beginning of  the
      three-year  performance period applicable to that LTIP
      award.

            

    

    

    
      	
               
      

            	
                         (D)  OTHER
      AWARDS.  An  employee may elect to defer all
      or  part of his or  her awards under  any
      other  bonus, special  award, or  any
      other  similar  form  of  compensation  ("Other  Awards")
      otherwise payable to  him or her by  a participating
      Company  with respect to services  performed
      in  a calendar  year.   An
      election  related to Other  Awards
      otherwise  payable in  a calendar  year
      shall  become irrevocable on the last day prior to the beginning
      of such calendar year.

            

    

    

          Notwithstanding
the  foregoing, in  no event  shall
deferrals  under the Plan include that  portion
of  Compensation required for  all
applicable  tax, Social Security and  employee
benefit  plan withholding, whether  or not  such
withholding requirement is related to this Plan.

    

          4.2    FORM
OF  ELECTION,
MODIFICATION  OR  TERMINATION.   An
employee's election
or written  notice of  modification or
termination  shall be made  in accordance  with
procedures established by the Plan Administrator, in the form of a document
approved by the Plan Administrator, executed by the employee and
filed  with  the
Plan  Administrator  or  his  or  her  designee.    The  Plan
Administrator  may permit an employee to make  a series of
annual elections to be  effective in  future
years,  in  which case  such  elections
shall  become irrevocable as  provided in  Section
4.1.   An election  which has  not become
irrevocable may be modified, terminated or reinstated by the employee prior to
the time  such election would  have become irrevocable
as  provided in Section 4.1.  An  election with
respect to  salary, STIP or Other Awards  for services
performed  in  a  calendar  year
and/or  with  respect  to  LTIP
for  services performed  in
a  three-year  performance
period  shall  be deemed  irrevocably
terminated  when  the   employee,  whether  by  transfer   or  termination  of
employment, ceases  to  be eligible  to
participate  in the  Plan during  such calendar
year and/or such three-year performance period (as applicable).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

          4.3   MODIFICATION  OF  IRREVOCABLE
ELECTION  BY  THE COMMITTEE.    Upon
receipt  of a  written  request  made
by  or  on behalf  of  an
employee,  the Committee  in
its  sole  discretion may  modify  or
terminate  the  employee's election with respect
to  Compensation otherwise payable in a calendar year as
it  deems necessary  to prevent  extreme
financial  hardship to  the employee,
notwithstanding  that the  election  has
become  effective and  irrevocable as provided in Section
4.1.

    

          4.4  ALLOCATION
TO  ACCOUNTS.  Deferred amounts related  to
Compensation which  would otherwise  have
been  paid by  a participating  Company
shall  be credited  to  the
employee's  account as  of the  date
the  Compensation would otherwise  have
been  paid.   Deferred amounts  related
to  Compensation which would otherwise have
been  distributed in Pacific Telesis Group  common shares
shall be  credited to the employee's account as deferred Pacific
Telesis Group shares as of  the date such Pacific Telesis
Group  shares would otherwise have been transferred to the
employee.

    

    SECTION
5.  COMPANY MATCH.

    

          5.1  ELIGIBILITY
FOR COMPANY MATCH.  An employee who (A) elects to defer

    Compensation
under the Plan for a calendar year,  and (B) has made the maximum
elective deferral under  the Savings Plan permitted  by
section 402(g) of  the Code for such calendar year (except to the
extent that a further limitation is required  by  section
401(k)(3)  of  the  Code),  shall
be  eligible  to  have
additional  amounts  based
on  Compensation  deferred  pursuant  to
this  Plan ("Company Match") credited to his or her account
hereunder.

    

          5.2  AMOUNT  OF
COMPANY  MATCH.    The  Company  Match  credited  to  an
employee
s  account  under this  Plan  with
respect  to  Compensation deferred during a calendar year
shall be equal to

    

    
      	
               
      

            	
                         (A)  the
      amount  of Compensation deferred into  the employee s
      Plan account, multiplied by

            

    

    

    
      	
               
      

            	
                         (B)  the
      percentage in effect  for that calendar year at  which
      the employee's Basic Contributions  to the Savings
      Plan  are matched by
      employing  Company  contributions;  provided,  however,   that  the
      maximum Company Match credited to the employee s account
      shall  not exceed

            

    

    

                       
(C)  6% of the employee's Savings Plan Salary, multiplied
by

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
                         (D)  the
      percentage in effect  for that calendar year at  which
      the employee's  Basic Contributions to the  Savings
      Plan are matched by employing Company contributions, reduced
      by

            

    

    

    
      	
               
      

            	
                         (E)  the
      total amount of matching Company contributions credited to the employee's
      account under the Savings Plan.

            

    

    

          For
purposes of determining the amount of Compensation deferred into the employee's
Plan account, deferred Pacific Telesis Group shares shall be valued by
multiplying the  number of shares deferred by the  Price of
Pacific Telesis Group common shares on the deferral date.

    

          5.3  ALLOCATION
TO ACCOUNT.  Until fully credited for the calendar year,
and  subject to  the delay  provided
in  Section 5.4,  Company Match  shall be
credited  to  an
employee's  account  under
this  Plan  as of  each  date that
deferred Compensation is credited to the employee s account under this
Plan.

    

          5.4  MAXIMUM
PRE-TAX SAVINGS PLAN DEFERRALS  REQUIRED.  No Company Match
shall  be credited  to an  employee s
account  for a  calendar year  until the employee
has made before-tax contributions under the Savings Plan equal to the
maximum  elective deferrals  permitted
under  section 402(g)  of the  Code, as further
limited by section  401(k)(3) of the Code.  Thereafter, the
employee's account shall  immediately be  credited
with  an amount  equal to  the Company Match that
would otherwise have been previously credited under Section 5.3.

    

          5.5   SAVINGS
PLAN PROVISIONS PREVAIL.  The provisions of this Section 5 shall not
limit or affect the application of the provisions regarding matching
Company  contributions in the Savings  Plan, which
shall  take precedence over the provisions of this Section
5.

    

    SECTION
6.  EARNINGS ON ACCOUNTS.

    

          6.1   INTEREST  ALLOCATIONS
TO  ACCOUNTS.   Deferred amounts  related to
Compensation
which would otherwise have been  paid in cash shall bear interest from
the date the Compensation would otherwise have been paid.  Interest
shall be  applied to  Company Match  credited
to  an employee s  account as  if such Company
Match  had been credited  to the employee
s  account at the  same time that the related
amounts  of Compensation deferred hereunder were  credited
to the  employee
s  account.   The  interest  credited  to  an
account  shall  be compounded annually at the end of each
calendar year.

    

          6.2   RATE
OF INTEREST.   The rate of interest  to be applied to
account balances for a calendar year shall be determined by the Committee from
time to time,  and promptly  communicated  to
eligible  employees  in advance  of  its
application, but  in no event shall  (A) the interest
rate  be decreased below the  average 10-Year
Treasury  note rate, (B) any  reduction apply to interest
already credited to Plan accounts for periods prior to the Committee's action,
or  (C)  any  interest
rate  previously  guaranteed  for  a
given  period  and communicated to eligible employees be
reduced during such period except as may be equitable  in
light  of any  change in  applicable
law  which substantially increases  the burden to the
participating Companies of paying such guaranteed interest.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

          6.3    RETROACTIVE  LIMITATION
OF  INTEREST  ACCRUAL  IN  CASE OF EARLY
SEPARATION.   Notwithstanding Section 6.2, an employee whose
Separation occurs before he or  she attains age 55  will
receive interest  on all deferred  cash Compensation and
Company Match based on the average 10-Year Treasury note rate for
all  years of participation in this Plan, rather than the rate of
interest established by the Committee for any particular calendar
year.

    

          6.4   DIVIDENDS  AND
ADJUSTMENTS  FOR PACIFIC  TELESIS GROUP  SHARES.
An employee's account  credited with deferred Pacific
Telesis  Group shares shall be credited on each subsequent dividend
payment date for Pacific Telesis Group shares with  an amount
equivalent  to the  dividend payable on  the
number  of Pacific Telesis  Group common shares
equal  to the number of  deferred Pacific Telesis
Group  shares in the  employee's account on  the
record date  for such
dividend.   Such  amount shall  then
be  converted to  a
number  of  additional deferred Pacific Telesis
Group  shares, determined by dividing such  amount by the
price of Pacific Telesis Group common shares on the dividend payment
date.  For purposes  of the preceding
sentence,  the price of Pacific  Telesis Group common shares
as of  a particular date shall be the average  of the daily
high and low sale prices  of Pacific Telesis  Group common
shares  on the New  York Stock  Exchange ("NYSE")
for  the period of  five trading days  ending on
such date, or  the period of five  trading days immediately
preceding  such date if the  NYSE is closed
on  the date.   In the event of  any change
in outstanding Pacific Telesis  Group common shares by reason of any
stock dividend or split, recapitalization, merger, consolidation,
combination  or exchange of shares or other  similar
corporate change, the Committee shall make such adjustments, if any, that it
deems appropriate in the number of deferred Pacific Telesis Group
shares  then credited to an employee s account.   Any
and all such adjustments shall be conclusive and binding upon all parties
concerned.

    

    SECTION
7.  DISTRIBUTION.

    

          7.1   DISTRIBUTION
ELECTIONS.  At the time an eligible employee makes an election to
defer Compensation  otherwise payable for services
performed  in a calendar year,  the employee also
shall  make an election with  respect to the
distribution  (during  the  employee's  lifetime  and  in  the  event  of  the
employee's death) of such deferred Compensation and Company Match and earnings
credited  to
the  employee's  Plan  account  with  respect  to  such  deferred
Compensation.
Subject to  the provisions on Hardship  distributions in
Section 7.6.3, distribution elections  shall become
effective  and irrevocable at  the
same  times  the election  to
defer  such  Compensation becomes  effective and
irrevocable under Section 4.1.

    

          7.2   OPTIONS
FOR DISTRIBUTION  DURING LIFE.   An employee
may  elect to receive the amounts credited to the employee's account
in one  payment or in a number  of monthly  or
annual  installments (over  a period  not
exceeding  15
years)  calculated  in  accordance
with  procedures  established  by  the
Plan Administrator.   As specified by the employee, distributions
shall commence as soon as practicable after the first day of the calendar
quarter next following the
employee's

    

               (A)  Separation;

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

               (B)  attainment
of a specified age between 59 1/2 and 70;

    

               (C)  the
earlier of attainment of a specified age not less than age 59 1/2 or Separation;
or

    

               (D)  the
earlier of age 70 or a specified number of  years (maximum of 5) after
Separation.

    

          7.3  OPTIONS  FOR
DISTRIBUTION IN THE EVENT  OF DEATH.  An  employee
may elect that, in the  event the employee should  die
before full payment of  all amounts  credited
to  the  employee's
account,  the  balance of  the  deferred
account shall be distributed to the beneficiary or beneficiaries designated by
the employee

    

               (A)  in
one payment;

    

               (B)  in
a number of  monthly or annual installments (over  a period
not exceeding  10 years), calculated in  accordance with
procedures established by the Plan Administrator; or

    

               (C)  by  a  continuation  of  the  monthly  or  annual  installment
distributions elected under Section 7.2.

    

          A  single
payment or first  installment elected under  paragraphs (A)
or (B) of this Section shall be paid  as soon as practicable after the
first  day of the  next calendar  quarter
beginning  after the employee's  death.   If
an employee who has elected to continue installment distributions under
paragraph (C)  of this  Section  dies
before  commencement  of
such  distributions,  the distributions
shall  commence in accordance with the employee's election under
Section  7.2, using  as any  specified
age  the date  the employee  would have attained
that age if he or she had continued to live.  If no election has been
made under  this Section  7.3, the  balance of
the  deferred account  shall be distributed
in  one payment.   If  no beneficiary
designation  has been  made, distribution shall be made to
the estate of the employee.

    

          7.4    FORM  OF  ELECTIONS.    Distribution  elections  and  beneficiary
designations shall be made in writing  in the form of a
document  or documents approved  by the Plan
Administrator,  executed by the  employee and filed with the
Plan Administrator or his or her  designee.  An employee may
designate one or more individuals or  a trust as his or her
beneficiary,  and may change the beneficiary  designation
at  any  time, effective  upon  receipt
by  the  Plan Administrator or his or her
designee.

    

          7.5  FORM
AND TIMING OF DISTRIBUTION.  Amounts credited to an employee's
Plan  account as cash  plus accumulated
interest,  less applicable withholding taxes, shall  be
distributed in  cash.   Amounts credited
as  deferred Pacific Telesis Group  shares, less applicable
withholding taxes, shall be distributed in the form  of whole Pacific
Telesis Group  common shares, plus cash  for any
fractional  share.     Installment  distributions  subsequent   to  the  first
installment
shall be paid on or about the anniversary date of the first annual installment
or on or about  the first day of each succeeding  month,
whichever is applicable, until  the entire  balance
of  the employee's  Plan account  is
paid.    Account  balances
held  pending  distribution  shall  continue
to  be credited with interest or additional deferred Pacific Telesis
Group shares, as applicable,  determined in  accordance with
Section  6.   Monthly distribution payments within
a  single calendar year will be uniform,  but the total
amount paid each  year will vary with changes in the  yield
on the account during the prior year.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

          7.6  DISTRIBUTION
NOT IN ACCORDANCE WITH ELECTIONS.

    

          7.6.1   POSTPONEMENT
OF PAYMENT.   With respect to Plan account balances accrued
pursuant to elections filed after February 17, 1993, the Committee may
postpone  payment of Plan  benefits to
an  employee (A) who, in  the year Plan
benefits  would otherwise be payable, is a  "covered
employee" for purposes of the $1 million limitation  on deductible
compensation under Section  162(m) of the Internal  Revenue
Code, and (B)  whose compensation for the  year in which
Plan benefits would  otherwise be  payable would,
but  for such  postponement, exceed the $1 million limit on
deductibility.

    

          7.6.2  IMMEDIATE
SINGLE PAYMENT.   Notwithstanding an election  pursuant
to Section 7.2, at the sole discretion of the Committee the entire amount then
credited to the employee's account  shall be paid as soon as
practicable  in a single payment  if  an
employee  is  involuntarily
terminated  by  his or  her Company  or
becomes employed by a governmental agency having jurisdiction over the
activities of Pacific Telesis Group or any of its Affiliates.

    

          7.6.3  HARDSHIP
DISTRIBUTION.  Upon receipt of a written request made by
or  on  behalf
of  an  employee,  the
Committee  in  its  sole discretion  may
authorize  a  Hardship distribution  from
the  employee's  Plan account.   For
purposes  of the  Plan, "Hardship"  means
an  unanticipated emergency  that is caused by an event
beyond the control of the employee and that would result in
severe  financial hardship  if  early
distribution  were  not permitted.    As
determined  by
the Committee in its  sole discretion, Hardship may include one or
more of the following:

    

               (A)  A
sudden and unexpected illness or accident of the employee;

    

    
      	
               
      

            	
              (B)  Extraordinary  and
      unreimbursed  medical or  hospital expenses
      incurred  by the employee  or a  member of
      his  or her family  or a
  relative;

            

    

    

               (C)  The
loss of  the employee s property due to casualty; or

    

    
      	
               
      

            	
              (D)  Any
      other  similar unforeseeable  emergency that
      is  caused by and  event beyond the  control
      of the  employee and would  impose a severe financial
      hardship if early distribution were not
  permitted.

            

    

    

          A  distribution
based on Hardship  cannot exceed the  amount required to
meet the immediate financial need  created by the Hardship and
not  reasonably available from  other
resources  of the  employee,
including  reimbursement or compensation by  insurance or
otherwise.   However, an  employee shall
not  be required to request a hardship distribution  from
the Savings Plan in order to receive a Hardship distribution under this
Plan.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

          7.7   PAYMENT
OBLIGATION.   The obligation to  distribute benefits
under the Plan shall be borne primarily by the last Company to employ an
employee in a position  eligible
to  participate  in
the  Plan  immediately prior  to  the
distribution.  A Company's withdrawal from participation in the Plan
shall not affect that  Company's liability
hereunder.   If for any reason  the primarily liable
Company  fails to make timely payment  of a amount
due  under the Plan, Pacific  Telesis  Group  shall  be  secondarily  liable  for  the  obligation.
Notwithstanding  the  foregoing,
Pacific  Telesis  Group
shall  be  solely and exclusively responsible for providing
the benefits accrued under the Plan by a Post-Separation AirTouch
Employee.

    

    SECTION
8.  ADMINISTRATION; CLAIMS AND REVIEW PROCEDURES.

    

          8.1   PLAN
ADMINISTRATOR.  The Plan Administrator shall be the Executive Vice
President, Human Resources Department of Pacific Telesis Group.  The
Plan Administrator shall have the  authority to administer and
interpret  the Plan,
including   sole  discretion  to  determine  the  rights  of  an  employee  or
beneficiary under the  Plan, and  to authorize
disbursements  under the  Plan, except for decisions
expressly reserved  by the Plan for the Committee  or for
the Board of Directors of Pacific Telesis Group or of an Affiliate.

    

          8.2  INITIAL
CLAIM UNNECESSARY.  No claim for benefits shall be required for
commencement of  distributions in accordance  with an
employee's  election under Sections 7.2  and 7.3 of the
Plan.  The  obligation of a Company to make distributions
under the Plan shall  not be affected by any action  or
inaction (on the part of an employee, his beneficiaries or any Company) with
respect to amounts owed, including but not limited  to the failure to
make timely demand, the granting of extensions of  time or other
indulgences, the failure  to make timely  payment or the
failure to give  notices other than those prescribed in Section
8.3.

    

          8.3   REVIEW  OF  ADVERSE
DECISIONS.    An employee  or
beneficiary  who disagrees with a decision by the Plan Administrator
relating to the payment of benefits under the Plan may submit a claim requesting
Plan benefits in writing to the Committee,  which shall
respond  in writing.   A claim shall  be
deemed denied unless the response is sent within 90 days (or
within  180 days, if the Committee extends the time to
respond  by notifying the claimant in writing of the special
circumstances  requiring an extension  and the
date  by which  the response is expected).  If the
claim is denied  in whole or part, the response shall state (A)
the  specific reasons, making specific reference  to
pertinent provisions of  the Plan; (B) what  additional
information, if any,  would help perfect the claim for benefits; and
(C)  what steps the claimant must take  to
submit  the claim for review.   Within
60  days after the date  of a denial, a
claimant  may file a  written request for  the
Pacific Telesis  Group Board of Directors to review the
denial.  Notwithstanding Section 8.2 of the Plan, such request for
review must be made in a timely  manner for the purpose of seeking any
further review of a  decision or determining any entitlement
to  a benefit under the Plan.   The Board of Directors
shall notify the  claimant in writing of the
review  decision, specifying the reasons for the  decision
and the Plan provisions on  which it is based.   A
claim shall be  deemed denied unless the decision  on appeal
is sent within  60 days (or within 120  days, if the Board
extends the  time to respond by  notifying the claimant
in  writing). The Plan Administrator,  Committee
and  Board shall  retain such  right,
authority  and discretion as  are provided or
not  expressly limited in section  503 of ERISA
and  the regulations  thereunder
and,  if  the Committee  denies a  claim
upon review, the  claimant shall have such further rights of review as
are provided therein.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECTION
9.  AMENDMENT AND TERMINATION.

    

          The  Pacific
Telesis  Group  Board of  Directors  may
at  any  time make changes  in the
Plan  or terminate the  Plan, but such  changes or
termination shall have prospective  effect only and shall not
adversely  affect the rights of any employee, without his or her
consent, to any benefit  under the Plan to which such employee was
entitled prior to the effective date of such change or termination.  Any
termination of the Plan shall not terminate  the deferral of
Compensation  previously deferred  into a  Plan
account,  but may  prevent the deferral of
Compensation  not yet  earned and the  crediting
of Company  Match
thereon,  notwithstanding   the  employee's  prior  election   to  defer  such
Compensation.  Changes in the interest rate applied  to
account balances which are made by the Committee in accordance with Section 6.2
of the Plan shall not
be   deemed  to  be  Plan  amendments,  notwithstanding  that  they  apply  to
Compensation  previously earned  and
deferred.  The Executive  Vice President, Human Resources
Department of Pacific Telesis  Group, with the approval of the
Executive Vice President and  General Counsel of Pacific
Telesis  Group, shall be authorized to make minor or administrative
changes to the Plan.

    

    SECTION
10.  DEFINITIONS.

    

          For
purposes of this Plan, the following words shall have the meaning so defined
unless the context clearly indicates otherwise:

    

          10.1   "AFFILIATES"
as the term  relates to Pacific Telesis  Group or to
AirTouch Communications (formerly  PacTel Corporation ), means
subsidiaries of or other entities that control, are controlled by, or are under
common control with Pacific Telesis Group or AirTouch Communications, as the
case may be.  As used  herein, "control" means
the  possession, directly or  indirectly, of the power to
direct or cause the direction of the management  and policies of such
entity,  whether through ownership of voting securities or other
interests, by contract or otherwise.

    

          10.2  "AIRTOUCH
GROUP" means AirTouch Communications (or  its successor)
and  its Affiliates  immediately after  the
total  and complete  separation of AirTouch Communications
from Pacific Telesis Group.

    

          10.3  "COMMITTEE"
shall mean the Compensation and Personnel Committee of the Board of Directors of
Pacific Telesis Group.

    

          10.4
"COMPANY" shall  mean Pacific  Telesis
Group,  Pacific Bell  or any other
corporation  which is an Affiliate  of Pacific Telesis
Group.   Prior to April 1,
1994,  Company  also  included  PacTel  Corporation  (now   "AirTouch
Communications")  and any other corporation  which was
an  Affiliate of PacTel Corporation.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

          10.5
"EFFECTIVE DATE" means January  1, 1985, the effective
date  of the Plan.

    

          10.6
"OFFICER" means an  officer of a Company, as determined by the Plan
Administrator, but the term  shall not include
Assistant  Secretary, Assistant Treasurer, Assistant Comptroller or
any other assistant officer.

    

          10.7
"POST-SEPARATION  AIRTOUCH  EMPLOYEES"   means  an  employee   who,
immediately after the total and complete separation of PacTel Corporation from
Pacific Telesis Group, was employed by a member of the AirTouch
Group.

    

          10.8
"SAVINGS  PLAN"  means  the   Pacific  Telesis  Group  Supplemental
Retirement and Savings Plan for  Salaried Employees.  Prior
to April  1, 1994,
"Savings  Plan"  also  means  the  PacTel  Corporation  Retirement  Plan  (for
employees who were eligible to participate therein).

    

          10.9
"SAVINGS PLAN  SALARY"  means "Salary"  as
defined  in the  Pacific Telesis Group Supplemental
Retirement and Savings Plan for Salaried  Employees
and,  prior
to  April  1,  1994,  "Compensation"  as  defined  in  the  PacTel
Corporation Retirement Plan, whichever is  applicable to the employee,
without reduction for  deferrals of salary under  this Plan
and without  regard to the limit on  compensation under
section 401(a)(17)  of the Code.   If an eligible
employee  is  employed by  a
participating  Company for  only  a
portion  of a calendar year or is  on a leave of
absence  for a portion of a  calendar year,
the  employee's Savings  Plan Salary  is
prorated  to reflect only  the period during which the
employee was actively employed by a participating Company.

    

          10.10  "SEPARATIONS"
means retirement or termination from all employment with
Pacific  Telesis  Group
or  its  Affiliates.   With  respect
to  a  Post- Separation  AirTouch
Employee,  "Separation" means  retirement  or
termination from  all employment  with
the  AirTouch Group  without employment  by
Pacific Telesis Group or its Affiliates.

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