AT&T INC.
PACIFIC TELESIS GROUP EXECUTIVE DEFERRAL PLAN
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<DESCRIPTION>PACIFIC TELESIS GROUP EXECUTIVE DEFERRAL PLAN
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TELESIS GROUP</font></div>
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DEFERRAL PLAN</font></div>
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as of November 20, 2008)</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0.5pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PACIFIC
TELESIS GROUP</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0.5pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">EXECUTIVE DEFERRAL
PLAN</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0.5pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Restated
as of December 1, 1995)</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION
1. <font style="DISPLAY: inline; TEXT-DECORATION: underline">Purpose.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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").</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION
2. <font style="DISPLAY: inline; TEXT-DECORATION: underline">Eligibility to
Participate</font></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following employees are eligible to participate in the Plan:</font></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(A)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Officers
of Pacific Telesis Group and/or Pacific Bell;</font></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(B)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION
3. <font style="DISPLAY: inline; TEXT-DECORATION: underline">Plan
Accounts.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.1&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Establishment of
Account.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.2&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Predecessor Plan
Accounts.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.3&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">No Funding or
Assignment.</font> For income tax purposes under the Code and for purposes of
Title I of the Employee Retirement Income Security Act of 1974, as amended
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">("ERISA"),
<font style="DISPLAY: inline; FONT-SIZE: 10pt">it is intended that this
</font>Plan <font style="DISPLAY: inline; FONT-SIZE: 10pt">constitute an
unfunded defer</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: super">r</font><font style="DISPLAY: inline; FONT-SIZE: 10pt">ed compensation </font>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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION
4. <font style="DISPLAY: inline; TEXT-DECORATION: underline">Deferred
Compensation.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Annual Deferral and
Distribution Election.</font> 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.</font></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(A)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Salary.</font> 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).</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(B)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">STIP.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(C)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">LTIP.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(D)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Other Awards.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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, and no deferral election made under this Section 4.1 shall be
effective with respect to salary or other awards payable during any calendar
year after 1995, STIP payable during any calendar <font style="DISPLAY: inline; FONT-SIZE: 10pt">year </font>after 1996 and LTIP payable
during any calendar year after 1998, except LTIP as may have already been
elected for deferral on forms on file as of December 31, 1994.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.2&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Form of Election.
Modification or Termination.</font> 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, ST1P
or her 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).</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.3&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Modification of Irrevocable
Election by the Committee.</font> 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<font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font>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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">4.4</font>&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; TEXT-DECORATION: underline">Allocation
to Accounts.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt"> Deferred
amounts related to Compensation </font>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<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION
5. <font style="DISPLAY: inline; TEXT-DECORATION: underline">Company
Match.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.1&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Eligibility for Company
Match.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.2&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Amount of Company
Match.</font> 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</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(A)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
amount of Compensation deferred into the employee's Plan account, multiplied
by</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(B)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">provided,
however, that the maximum Company Match credited to the employee's account shall
not exceed</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(C)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6% of the
employee's Savings Plan Salary, multiplied by</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(D)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
percentage in effect for that calendar year at which the<font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt">employee's</font><font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt">Basic </font><font style="DISPLAY: inline; FONT-SIZE: 10pt">Contributions</font><font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt">to the Savings Plan are matched
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt">by </font><font style="DISPLAY: inline; FONT-SIZE: 10pt">employing Company contributions,
reduced </font>by</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(E)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the total
amount of matching Company contributions credited to the employee's account
under the Savings Plan.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">For </font>purposes <font style="DISPLAY: inline; FONT-SIZE: 10pt">of </font>determining <font style="DISPLAY: inline; FONT-SIZE: 10pt">the amount of Compensation
defer</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: super">r</font><font style="DISPLAY: inline; FONT-SIZE: 10pt">ed into the employee's </font>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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.3&#160;
<font style="DISPLAY: inline; TEXT-DECORATION: underline">Allocation to
Account.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.4&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Maximum Pre-Tax Savings Plan
Deferrals Required.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.5&#160;&#160;
<font style="DISPLAY: inline; TEXT-DECORATION: underline">Savings Plan
Provisions Prevail</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: sub; TEXT-DECORATION: underline">.</font><font style="DISPLAY: inline; TEXT-DECORATION: underline">.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION
6.&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Earnings on
Accounts.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.1&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Interest Allocations to
Accounts.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.2&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Rate of Interest.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.3&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Retroactive Limitation of
Interest Accrual in Case of Early Separation.</font> 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 tt rate of interest established by the Committee for any
particular calendar year.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.4&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Dividends and Adjustments
for Pacific Telesis Group Shares.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION
7. <font style="DISPLAY: inline; TEXT-DECORATION: underline">Distribution.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.1&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Distribution
Elections.</font> 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 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 times the election
to defer such Compensation becomes effective and irrevocable under Section
4.1.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.2&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Options for Distribution
During Life.</font> 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</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(A)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Separation;</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(B)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">attainment
of a specified age between 59 1/2 and 70;</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(C)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
earlier of attainment of a specified age not less than age 59 1/2 or Separation;
or</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(D)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
earlier of age 70 or a specified number of years (maximum of 5) after
Separation.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.3&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Options for Distribution In
the Event of Death.</font> 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</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(A)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">in one
payment;</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(B)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(C)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">by a
continuation of the monthly or annual installment distributions elected under
Section 7.2.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A single
payment or first installment elected under paragraphs (A) or (8) 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At any
time an employee who is a participant in the Pacific Telesis Group 1996
Executive Deferred Compensation Plan may revoke all elections made with respect
to the time and form of distribution of all remaining amounts credited to the
employee's account in the event of death, and make an irrevocable election
directing that all remaining amounts credited to the employee's account in the
event of death shall be distributed at the same time and in the same manner as
such employee has elected with respect to distribution of his or her account
under the Pacific Telesis Group 1996 Executive Deferred Compensation Plan in the
event of death. At any time an employee who is not a participant in the Pacific
Telesis Group 1996 Executive Deferred Compensation Plan may revoke all elections
made with respect to the time and form of distribution of all remaining amounts
credited to the employee's account in the event of death, and make an
irrevocable election directing that all remaining amounts credited to the
employee's account in the event of death shall be distributed at the same time
and in the same form, in accordance with one of the above methods described in
(A), (B) or (C) above. Such election shall be effective upon receipt by the Plan
Administrator or his or her designee.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font>7.4&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Form of Elections.</font>
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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font>7.5&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Form and Timing of
Distribution.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font>7.6&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Distributions</font> <font style="DISPLAY: inline; TEXT-DECORATION: underline">Not</font> <font style="DISPLAY: inline; TEXT-DECORATION: underline">in</font> <font style="DISPLAY: inline; TEXT-DECORATION: underline">Accordance</font> <font style="DISPLAY: inline; TEXT-DECORATION: underline">with</font> <font style="DISPLAY: inline; TEXT-DECORATION: underline">Elections.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;
7.6.1&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Postponement of
Payment.</font> 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. In addition, notwithstanding an election pursuant to Section 7.2,
at the sole discretion of the Committee, in the event an employee's Separation
is on account of total and permanent disability, the Committee may postpone
payment of benefits to such employee to commence in a year later than the year
in which his or her Plan benefits would otherwise be payable, provided that no
such postponement shall extend beyond the earlier of (a) 10 years from the date
of Separation or (b) the year in which such employee attains age
65.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notwithstanding
the foregoing, the following shall apply with respect to Plan participants who,
as of December 31, 2004, were employed by an affiliate of AT&amp;T Inc. and who
had not attained age fifty-five (55):</font></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.6.1</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Postponement of
Payment.&#160;&#160;</font>If the Committee reasonably anticipates that the
payment of any or all of an employee&#8217;s Plan benefits, if made as scheduled,
would not be deductible due to the application of Code Section 162(m), the
distribution of such employee&#8217;s Plan benefits may be delayed to (A) the end of
the employee&#8217;s first taxable year in which the Committee reasonably anticipates
(or should reasonably anticipate) that the deduction of such payment would not
be barred by application of Code Section 162(m), or (B) the 15<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: super">th</font> day of
the third month of the year following the year of the employee&#8217;s separation from
service; provided, however, this delayed payment provision shall apply only to
the extent all payments of non-qualified deferred compensation from plans
sponsored by AT&amp;T Inc. (or any affiliate) are similarly
delayed.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.6.2&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Immediate Single
Payment.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notwithstanding
the foregoing, the following shall apply with respect to Plan participants who,
as of December 31, 2004, were employed by an affiliate of AT&amp;T Inc. and who
had not attained age fifty-five (55):</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.6.2</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Immediate Single
Payment.&#160;&#160;</font>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 becomes employed by a governmental agency having jurisdiction over
the activities of Pacific Telesis Group or any of its Affiliates to the extent
(A) necessary for any employee in the executive branch of the United States
government to comply with an ethics agreement with the Federal government, or
(B) reasonably necessary to avoid the violation of an applicable Federal, state
or local ethics law or conflicts of interest law (including where such payment
is reasonably necessary to permit the employee to participate in activities in
the normal course of the employee&#8217;s position in which the employee would
otherwise not be able to participate under an applicable rule).&#160;&#160;For
purposes of this section, a payment is reasonably necessary to avoid the
violation of a Federal, state or local ethics law or conflicts of interest law
if the payment is a necessary part of a course of action that results in
compliance with a Federal, state or local ethics law or conflicts of interest
law that would be violated absent such course of action, regardless of whether
other actions would also result in compliance with Federal, state or local
ethics law or conflicts of interest law.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.6.3&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Hardship
Distribution.</font> 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:</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(A)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A sudden
and unexpected illness or accident of the employee;</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(B)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Extraordinary
and unreimbursed medical or hospital expenses incurred by the employee or a
member of his or her family or a relative;</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(C)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The loss
of the employee's property due to casualty; or</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(D)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notwithstanding
the foregoing, the following shall apply with respect to Plan participants who,
as of December 31, 2004, were employed by an affiliate of AT&amp;T Inc. and who
had not attained age fifty-five (55):</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;7.6.3</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Unforeseeable Emergency
Distribution.&#160;&#160;</font>Upon receipt of a written request made by or on
behalf of an employee, the Committee in its sole discretion may authorize a
distribution from the employee's Plan account in the event of an unforeseeable
emergency. For purposes of the Plan, "unforeseeable emergency" means (A) a
severe financial hardship to the employee resulting from an illness or accident
of the employee, the employee&#8217;s spouse, the employee&#8217;s beneficiary, or the
employee&#8217;s dependent (as defined in Code Section 152 without regard to Code
Section 152(b)(1), (b)(2) and (d)(1)(B)), (B) loss of he employee&#8217;s property due
to casualty, or (C) other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the employee.&#160;&#160;As
determined by the Committee in its sole discretion, Hardship may include one or
more of the following:</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(A)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      imminent foreclosure of or eviction from the employee&#8217;s primary residence;
      ;</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(B)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      need to pay for medical expenses, including non-refundable deductibles, as
      well as for the costs of prescription drug medication;
  or</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(C)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      need to pay for the funeral expense of a spouse, a beneficiary, or a
      dependent (as defined in Code Section 152 without regard to Code Section
      152(b)(1), (b)(2) and (d)(1)(B))</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
distribution on account of an unforeseeable emergency may not be made to the
extent that such emergency is or may be relieved through reimbursement or
compensation from insurance or otherwise, or by liquidation of the employee&#8217;s
assets, to the extent the liquidation of such assets would not cause severe
financial hardship. Distributions based on an unforeseeable emergency cannot
exceed the amount reasonably necessary to meet the emergency need (which may
include amounts necessary to pay any Federal, state or local income taxes or
penalties reasonably anticipated to result from the
distribution).&#160;&#160;However, an employee shall not be required to request
a&#160;&#160;hardship distribution or unforeseeable emergency distribution that
might be available from the 401(k) plan or other nonqualified deferred
compensation plan in which the employee participates.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following two provisions shall apply with respect to Plan participants who, as
of December 31, 2004, were employed by an affiliate of AT&amp;T Inc. and who had
not attained age fifty-five (55):</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;7.6.4</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Distributions to Specified
Employees.&#160;&#160;&#160;</font>Notwithstanding any other provision of the
Plan to the contrary (other than Plan Section 7.6.2), if an employee is a
&#8220;specified employee&#8221; within the meaning of Treasury Regulation Section
1.409A-1(i), distribution shall be made in accordance with the employee&#8217;s
distribution election, provided, however, that no distribution shall be made to
such employee on account of separation from service before the date that is six
(6) months after the date of separation from service (or, if earlier, the date
of death of such employee).</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;7.6.5</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Distributions Upon Income
Inclusion Under Code Section 409A.&#160;&#160;&#160;</font>Distributions to an
employee may commence at any time the Plan fails to meet the requirements of
Code Section 409A and the regulations issued thereunder, as applicable to and
with respect to such employee; provided, however, the amount of such
distribution shall not exceed the amount required to be included in income as a
result of the failure to comply with such requirements.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.7&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Payment</font> <font style="DISPLAY: inline; TEXT-DECORATION: underline">Obligation.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION
8. <font style="DISPLAY: inline; TEXT-DECORATION: underline">Administration:
Claims and Review Procedures.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.1&#160;&#160;&#160;
&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Plan
Administrator.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.2&#160;&#160;&#160;
&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Initial Claim
Unnecessary.</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.3&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Review of Adverse
Decisions.</font> 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) at 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<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: sub">:</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION
9. <font style="DISPLAY: inline; TEXT-DECORATION: underline">Amendment and
Termination.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.7pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 <font style="DISPLAY: inline; FONT-SIZE: 10pt">termination. Any </font>termination
<font style="DISPLAY: inline; FONT-SIZE: 10pt">of the </font>Plan <font style="DISPLAY: inline; FONT-SIZE: 10pt">shall not terminate the
defer</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: super">r</font><font style="DISPLAY: inline; FONT-SIZE: 10pt">al of </font>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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION
10. <font style="DISPLAY: inline; TEXT-DECORATION: underline">Definitions.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
purposes of this Plan, the following words shall have the meaning so defined
unless the context clearly indicates otherwise:</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">"Affiliate"</font> as the
term relates to Pacific Telesis Group or to AirTouch Communications (formerly
"PacTel Corporation"), means a subsidiary of or other entity that controls, is
controlled by, or is 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 use the direction
of the management and policies of such entity, whether through ownership of
voting securities or other interests, by contract or otherwise.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">"AirTouch Group"</font>
means AirTouch Communications (or its successor) and its Affiliates immediately
after the total and complete separation of AirTouch Communications from Pacific
Telesis Group.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">"Committee"</font> shall
mean the Compensation and Personnel Committee of the Board of Directors of
Pacific Telesis Group.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.4&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">"Company"</font> 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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.5&#160;&#160;&#160;&#160;
<font style="DISPLAY: inline; TEXT-DECORATION: underline">"Effective
Date"</font> means January 1, 1985, the effective date of the Plan.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.6&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">"Officer'</font> means an
officer of a Company, as determined by the Plan</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Administrator,
but the term shall not include Assistant Secretary, Assistant Treasurer,
Assistant Comptroller or any other assistant officer.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.7&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">"Post-Separation AirTouch
Employee"</font> 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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.8&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: super; TEXT-DECORATION: underline">"</font><font style="DISPLAY: inline; TEXT-DECORATION: underline">Savings Plan"</font> 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).</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.9&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: super; TEXT-DECORATION: underline">"</font><font style="DISPLAY: inline; TEXT-DECORATION: underline">Savings Plan Salary"</font>
means "Salary" as defined in the Pacific Telesis Group Supplemental Retirement
and Savings Plan for Salaried Employees and, prior to April 1, 1994, <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: super">"</font>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.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.10&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">"Separation"</font> 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.</font></div><br></body>
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