-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UhNQHKe/QQzb0a8u3RBfm/XT6CJojF89VqkmUNkw5dxc/apmNOr80tut5UMx66Cp XK103+VuaCXsrvwyHxY27Q== 0000005907-05-000031.txt : 20050125 0000005907-05-000031.hdr.sgml : 20050125 20050125140223 ACCESSION NUMBER: 0000005907-05-000031 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050118 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050125 DATE AS OF CHANGE: 20050125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AT&T CORP CENTRAL INDEX KEY: 0000005907 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 134924710 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01105 FILM NUMBER: 05546770 BUSINESS ADDRESS: STREET 1: ONE AT&T WAY CITY: BEDMINSTER STATE: NJ ZIP: 07921 BUSINESS PHONE: 9082212000 MAIL ADDRESS: STREET 1: ONE AT&T WAY CITY: BEDMINSTER STATE: NJ ZIP: 07921 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN TELEPHONE & TELEGRAPH CO DATE OF NAME CHANGE: 19920703 8-K 1 eightkcebc.txt FORM 8-K DATED JANUARY 18, 2005 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: January 18, 2005 AT&T CORP. (Exact Name of Registrant as Specified in Charter) New York (State or Other Jurisdiction of Incorporation) 1-1105 13-4924710 (Commission File Number) (IRS Employer Identification No.) One AT&T Way Bedminster, New Jersey 07921 (Address of Principal Executive (Zip Code) Offices) Registrant's telephone number, including area code: (908) 221-2000 Not Applicable (Former Name or Former Address, If Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Section 1. Registrant's Business and Operations Item 1.01. Entry into a Material Definitive Agreement On January 18, 2005, our Compensation and Employee Benefits Committee (the Committee) exercised its discretion to approve adjustments to the performance metrics for the Company's 2004 Bonus Plan to exclude the net income impacts of the Company's asset impairment charge, business restructuring charge and three other non-operating events. The Committee also established the performance metrics for the Company's 2005 Bonus Plan which will be based on 50% net income and 50% revenue, and a discretionary modifier (plus or minus up to 25%) based on competitive performance. The Company's senior executives participate in the Company's Bonus Plans subject to the terms of the AT&T Short Term Incentive Program, as amended, filed by the Company as Exhibit (10)(iii)(A)(1) to its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004 (Commission file number 1-1105). The Committee approved effective January 20, 2005 a payout level of 100% of target for performance share awards for senior executives outstanding from the 2002-2004 performance cycle. These performance share awards were made under the Company's 1997 Long Term Incentive Program, as amended, filed by the Company as Exhibit (10)(iii)(A)(2) to its Annual Report on Form 10-K for 1997 (Commission file number 1-1105). In addition, the Committee approved the 2005 compensation structure for equity awards, which in the case of senior executives will consist of 70% performance shares for a 2005-2007 performance cycle and 30% restricted stock units. The performance criteria for outstanding performance shares for 2005 will be the same as those established under the 2005 Bonus Plan. The restricted stock units will vest 50% after two years and 25% each after the third and fourth year. The Company's equity awards for 2005 will be made under the Company's 2004 Long Term Incentive Plan, which was filed by the Company as Exhibit 4.1 to Form S-8 filed May 26, 2004 (Commission file number 333-115909). The 2004 Bonus Plan payments, and 2005 restricted stock awards and performance share awards, approved by the Committee for AT&T's named executive officers based upon 2004 compensation are set forth in the table below: - --------------------------------- ------------------------------- ------------------------------- ------------------------------- Name 2004 Bonus Plan Payment Restricted Stock Units Performance Shares - --------------------------------- ------------------------------- ------------------------------- ------------------------------- David W. Dorman $1,970,000 146,100 340,900 - --------------------------------- ------------------------------- ------------------------------- ------------------------------- James W. Cicconi $616,000 29,300 68,200 - --------------------------------- ------------------------------- ------------------------------- ------------------------------- Hossein Eslambolchi $708,000 51,300 119,400 - --------------------------------- ------------------------------- ------------------------------- ------------------------------- William J. Hannigan $1,147,000 92,100 214,800 - --------------------------------- ------------------------------- ------------------------------- ------------------------------- Thomas W. Horton $697,000 56,300 131,200 - --------------------------------- ------------------------------- ------------------------------- -------------------------------
The Company is filing as exhibits to this Form 8-K the forms of performance share award agreement and restricted stock unit award agreement that the Committee has approved for awards to senior executives during 2005. Item 9.01. Financial Statements and Exhibits The following exhibit is filed as part of this Report: (c) Exhibits Exhibit No. Description (10)(a) Form of Performance Share Award Agreement (10)(b) Form of Restricted Stock Unit Award Agreement SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AT&T CORP. /s/ Robert S. Feit ---------------------------------- By: Robert S. Feit Vice President - Law and Secretary January 24, 2005 EXHIBIT INDEX Exhibit No. Description (10)(a) Form of Performance Share Award Agreement (10)(b) Form of Restricted Stock Unit Award Agreement EX-10 2 exh10aeightkcebc.txt FORM OF PERFORMANCE SHARE AWARE AGREEMENT AT&T 2004 Long Term Incentive Program Performance Share Award Agreement [GRAPHIC OMITTED] ****EMPLOYEE MUST RETURNED SIGNED AGREEMENT ON OR BEFORE [date] OR THIS AWARD WILL BECOME NULL AND VOID**** Pursuant to the AT&T 2004 Long Term Incentive Program (the "Plan") of AT&T Corp. ("AT&T" or the "Company"), and in accordance with the terms and conditions of the Plan, a copy of which is available to you*, and your agreement to the further terms, conditions and restrictions set forth below, you have been granted, as of the date of grant set forth below, a number of performance shares ("Performance Shares"), as set forth below. The Plan is hereby incorporated by reference and made a part hereof. The grant and this Agreement are subject to all terms and conditions of the Plan, and the parties agree to be bound by the terms thereof. In the event of any conflict between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan shall control. The Committee shall have the right, in its discretion, to alter or amend the Plan and this Agreement, from time to time, consistent with the terms of the Plan. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan. - -------------------------------------------------------------------------------- Participant - -------------------------------------------------------------------------------- Social Security Number - -------------------------------------------------------------------------------- Number of Performance Shares Granted - -------------------------------------------------------------------------------- Date of Grant - -------------------------------------------------------------------------------- Performance Period January 1, 2005 - December 31, 2007 - -------------------------------------------------------------------------------- Your Performance Share Award will be distributed only after the end of the Performance Period, except in certain circumstances as indicated in the terms and conditions set forth in this Agreement. o The percentage of the Performance Share Award that will be distributed to you shall depend on the satisfaction, at the completion of the Performance Period, of performance criteria that have been established by the AT&T Board of Directors ("the AT&T Board") or the Committee. Distribution Period and Form of Payout o The determination of whether, and to what extent, such criteria have been satisfied, and the determination of the percentage of the Performance Share Award to be distributed to you shall be conclusively determined by the AT&T Board or the Committee. o The Performance Shares to which you become entitled based on the satisfaction of such criteria are called ("Retained Shares"). The number of Retained Shares will be determined as soon as practicable after the completion of the Performance Period and shall be distributed in Shares of AT&T common stock, except in certain circumstances as indicated in the termination of employment provisions set forth in this Agreement. - -------------------------------------------------------------------------------- This Performance Share Award Agreement (this "Agreement") Effectiveness shall be effective only if and when AT&T receives your of Agreement signature of acceptance of the terms of this Agreement as required below. - -------------------------------------------------------------------------------- As soon as administratively practicable after the completion of the distribution period described above (the "Distribution Period"), (or to the extent applicable, the completion of any elected deferral period for any Book Entry upon Performance Share), and subject to the income tax Completion of withholding provisions described in the Agreement, AT&T Distribution will deliver to you or your legal representative a statement Period reflecting ownership of the corresponding Shares in book entry form. You are responsible for complying with any securities and exchange control laws or any other legal requirements applicable to you in connection with the distribution of such Shares. - -------------------------------------------------------------------------------- Upon the distribution of any Retained Shares, and in accordance with ordinary payroll practices, you will receive Dividend a cash payment in an amount equal to all dividends payable Equivalent on one Share (subject to any appropriate adjustment pursuant Payments to Section 4(c) of the Plan) on all record dates within the Performance Period with respect to which this Performance Share Award was outstanding, multiplied by the number of Retained Shares distributed to you upon the distribution. - -------------------------------------------------------------------------------- You may irrevocably elect, in accordance with policies adopted by the Committee, to defer the distribution of all Deferral or any portion of this Performance Share Award that you Election otherwise would have become entitled to receive upon the conclusion of the distribution period pursuant to the terms of this Agreement. - -------------------------------------------------------------------------------- * AT&T employees should access the Corporate Forms Library in the AT&T Workforce Services web site for these documents. - -------------------------------------------------------------------------------- You agree that the Company is not responsible for the tax consequences to you of the granting or distribution of this Performance Share Award and the distribution of Shares in respect thereof, and that it is your responsibility to consult with a personal tax advisor regarding all matters with respect to the tax consequences of the granting and vesting of the Performance Shares and the distribution of Income Tax Shares in respect thereof. At the conclusion of the Withholding Distribution Period, AT&T (or your local employer, as Requirements applicable) shall determine and report to the proper taxing (Applicable to authorities the ordinary income recognized by you based on all Participants) the number of Retained Shares to be issued to you on such date multiplied by the Fair Market Value on such date. AT&T (and your local employer, as applicable) shall have the right to deduct or cause to be deducted from, or collect or cause to be collected with respect to, any distribution of Shares or payment of dividend equivalent amounts, any federal, state, or local taxes and/or social insurance contributions required by law to be withheld or paid with respect to such distribution and or payment, and you or your legal representative or beneficiary hereby consent to such deductions. Subject to applicable securities laws, AT&T (and your local employer, as applicable) is authorized to automatically withhold an appropriate number of Retained Shares to satisfy such tax and/or social insurance withholding and distribute only the net number of Shares to you. - -------------------------------------------------------------------------------- Termination of Your termination of employment from the Company or one of Employment and its Affiliates, will cause this Performance Share Award to this Performance be cancelled effective upon your termination date, except as Share Award described below: Agreement normal retirement a) upon termination of employment after the attainment of age and AT&T service equal to: Age and AT&T service of Any age 30 years 50 25 years 55 20 years 65 10 years; the Performance Shares shall be prorated based on the number of full months** of employment in the Performance Period and distributed to you as soon as practicable following the year of your retirement. The payout level for this Award will be determined by the level of performance criteria met from the beginning of the applicable Performance Period through the end of the calendar year of your retirement. under an FMP, b) upon termination of employment, under the AT&T Force sale, divestiture, Management Program or the AT&T E-Band and Officer outsourcing separation plans; sale, divestiture or outsourcing of your business unit or position from AT&T; the Performance Shares shall be prorated based on the number of full months** of employment in the Performance Period and distributed to you as soon as practicable following the year of your termination. The payout level for this Award will be determined by the level of performance criteria met from the beginning of the applicable Performance Period through the end of the calendar year of your termination. Disability c) upon termination of employment due to disability entitling you to Company provided long term disability benefits under a Company provided long term disability plan, then this Award shall be prorated based on the number of full months** of employment in the Performance Period and distributed to you as soon as practicable following the year of your termination. The payout level for this Award will be determined by the level of performance criteria met from the beginning of the applicable Performance Period through the end of the calendar year of your termination. ** Terminations on or after the 16th of a month will be treated as occurring at the end of the month of the proration calculation; terminations prior to the 16th of a month will be treated as occurring at the end of the previous month for the proration calculation. Fractional Shares will be rounded up to the nearest whole Share. - -------------------------------------------------------------------------------- In the case of your death, any distribution in respect of this Performance Share Award granted hereunder shall be made to your estate. You may, in accordance with procedures established by the Committee, designate one or more beneficiaries to receive all or part of any distribution to be made hereunder in case of your death, and you may change or revoke such designation at any time. In the event of your Distribution death, any distribution hereunder that is subject to such a Upon Death designation (to the extent such designation is valid and enforceable under applicable law) shall be made to such beneficiary or beneficiaries in accordance with this Agreement. If there shall be any question as to the legal right of any beneficiary to receive a distribution hereunder, the amount in question shall be distributed to your estate, in which event neither AT&T nor any Affiliate shall have any further liability to anyone with respect to such distribution. In case of your death prior to the end of the Performance Period, the number of Performance Shares shall be prorated, based on the number of full months*** of employment in the Performance Period. The prorated Performance Shares shall be distributed in cash (valued in accordance with procedures established by the Committee) within a reasonable time after your death. All other Performance Shares granted hereunder shall be cancelled. *** The month of death will be counted as a full month, unless this Award was previously prorated as set forth in a, b, or c of the Termination of Employment provisions of this Agreement. Fractional Shares will be rounded up to the nearest whole Share. - -------------------------------------------------------------------------------- Transfer to or from AT&T and any Affiliate, shall not be Transfer or considered a termination of employment for purposes of this Leave of Agreement. Nor shall it be considered a termination of Absence employment for purposes of this Agreement if you are placed on a military leave or other approved leave of absence, unless the Committee shall otherwise determine. - -------------------------------------------------------------------------------- This Performance Share Award shall be forfeited and cancelled if, prior to the distribution of this Award, without the consent of AT&T, while employed by AT&T, or Competition after termination of such employment, you establish a relationship with a competitor of the Company or engage in activity which is in conflict with or adverse to the interest of AT&T, as determined in accordance with the AT&T Non-Competition Guideline (the "Guideline"), a copy of which is available to you*. - -------------------------------------------------------------------------------- Employment Neither the Plan nor this Agreement shall be construed as Rights giving you the right to be retained in the employ of AT&T or any Affiliate. - -------------------------------------------------------------------------------- At all times during the Performance Period (or to the extent applicable, any elected deferral period for this Performance Transferability Share Award), such Performance Share Award shall be nontransferable and may not be pledged, assigned or alienated in any way. - -------------------------------------------------------------------------------- You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, your employer and AT&T and its Subsidiaries and its Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that AT&T and your employer hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in AT&T, details of all Performance Shares or any other entitlement to shares of stock awarded, canceled, distributed or outstanding in your favor, for the purpose of implementing, administering and Data managing the Plan ("Data"). You understand that Data may be Privacy transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country, or elsewhere, and that the recipient's country may have different data privacy laws and protections than your country. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom you deposit any Shares acquired upon distribution of the Performance Share. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or withdraw the consents herein by contacting in writing your local human resources representative. You understand that withdrawal of consent may affect your ability to realize benefits from the Performance Shares. - -------------------------------------------------------------------------------- Upon a Change in Control (as defined in Section 2(e) of the Plan), this Performance Share Award will be prorated for the Change in number of full months within the Performance Period prior to Control the Change in Control and distributed based upon the level of performance achieved within such Performance Period in accordance with Section 11(d) of the Plan. - -------------------------------------------------------------------------------- * AT&T employees should access the Corporate Forms Library in the AT&T Workforce Services web site for these documents. - -------------------------------------------------------------------------------- You shall not have the right to vote the Shares underlying the Performance Shares or, except as set forth above with respect to dividend equivalents, any other rights as a holder of Shares until such time as the Performance Shares shall have been delivered to you. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the issuance of Shares to you, any law, regulation or requirement of any governmental authority having jurisdiction shall require either the Company or you to take any action in connection with the Shares then to be issued, the issuance of such Shares shall be deferred until such action shall have been taken. Any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Agreement shall be determined by the Committee in its absolute and uncontrolled discretion, and any such determination or any other determination by the Committee under or pursuant to this Agreement and any interpretation by the Committee of the terms of this Agreement shall be final, binding and conclusive on all persons affected thereby. This Agreement may be amended by the AT&T Board of Directors or the Committee provided that no such amendment shall impair your rights hereunder without your consent. Notwithstanding any other provision to the contrary herein, the AT&T Board, if it determines in its sole discretion that it is necessary or desirable under the circumstances, may authorize the proration or early distribution (or a combination thereof) of the Performance Shares in the case of termination of the Plan. The validity, construction and effect of this Agreement shall be determined in accordance with the laws of the State of New York and applicable Federal law. Notwithstanding any other provisions contained in this Agreement, the following provisions shall apply to any Participant who is a "covered employee" within the meaning Other of Section 162(m) of the Code (i.e., the CEO and four most Corporate highly compensated officers of the Company, other than the Provisions CEO, as of the end of the Performance Period): (a) The Awards to all such Participants who are "covered employees" shall be Other Stock Unit Awards having a total value as of the end of the Period equal to 0.13% of the "Net Cash Provided by Operating Activities," as publicly disclosed in the Company's consolidated financial statements for each year in the Performance Period, adjusted by the percentage change in the Fair Market Value of a Share from the first trading day to the last trading day in the Performance Period, and the value of the Award to each Participant with respect to such Performance Period, as of the end of the Performance Period, shall be such total value divided by the number of Participants who are "covered employees" as of the end of such Performance Period, subject to adjustment as described in (b) below. "Fair Market Value" of a Share on the applicable trading day shall be the average of high and low per Share sale prices on the New York Stock Exchange on such day. Prior to the payment of any Award to a "covered employee" with respect to a Performance Period, the Committee shall certify the amounts under this paragraph (a) with respect to such Performance Period. (b) The Committee, in its sole discretion, shall have the authority to set the actual Other Stock Unit Award to any Participant at any amount lower than the amount described in paragraph (a) above, based on factors, including but not limited to the financial and other criteria of the Company established by the Committee, and individual merit. The Other Stock Unit Award to any Participant may have a value less than (including no award), but never more than, the value determined under (a) above. (c) The value of the actual Other Stock Unit Award payable to any Participant shall be distributed in cash and/or Shares as determined by the Committee. Notwithstanding any other provisions contained in this Agreement, the Committee, at the time of the distribution may elect in its sole discretion to substitute a cash payment in lieu of all or any portion of the Shares. - -------------------------------------------------------------------------------- Please indicate your acceptance of the terms of this Performance Share Award Agreement and acknowledge that you have reviewed copies of the Plan and the Guideline summary, in each case as currently in effect and available to you*, by signing at the place provided and returning original of this Performance Share Award Agreement. IF YOU FAIL TO SIGN AND RETURN THIS DOCUMENT, ACCEPTING THE TERMS OF THIS AWARD AGREEMENT FOR ANY REASON WHATSOEVER ON OR BEFORE [date], YOU WILL BE DEEMED TO HAVE REJECTED YOUR PERFORMANCE SHARE AWARD AND YOUR AWARD WILL BE NULL AND VOID. ACCEPTED AND AGREED: /s/ Mirian Graddick-Weir - ------------------------------ Mirian Graddick-Weir - -------------------------------------------------------------------------------- AT&T Corp. Employee Signature * AT&T employees should access the Corporate Forms Library in the AT&T Workforce Services web site for these documents. EX-10 3 exh10beightkcebc.txt RESTRICTED STOCK UNIT AWARD AGREEMENT AT&T 2004 Long Term Incentive Program Restricted Stock Unit Award Agreement [GRAPHIC OMITTED] ****EMPLOYEE MUST ACCEPT ELECTRONICALLY ON OR BEFORE [date] OR FORFEIT THIS AWARD**** Pursuant to Section 10 of the AT&T 2004 Long Term Incentive Program (the "Plan") of AT&T Corp. ("AT&T" or the "Company"), and in accordance with the terms and conditions of the Plan, a copy of which is available to you*, and your agreement to the further terms, conditions and restrictions set forth below, you have been granted, as of the date of grant set forth below, a number of restricted stock units ("Restricted Stock Units"), as set forth below. Each Restricted Stock Unit, upon termination of the restrictions related thereto and any elected deferral period related to this grant, will be converted into one share of AT&T common stock ("Share"). The Plan is hereby incorporated by reference and made a part hereof. The grant and this Agreement are subject to all terms and conditions of the Plan, and the parties agree to be bound by the terms thereof. In the event of any conflict between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan shall control. The Committee shall have the right, in its discretion, to alter or amend the Plan and this Agreement, from time to time, consistent with the terms of the Plan. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan. - -------------------------------------------------------------------------------- Participant - -------------------------------------------------------------------------------- Social Security Number This data is specific to participant and - -------------------------------------------------------------------------------- Number of Restricted Stock is located on award listing in Units Granted electronic account. - -------------------------------------------------------------------------------- Date of Grant - -------------------------------------------------------------------------------- Subject to your continued employment with AT&T or one of its Affiliates and subject to early vesting ("Early Vesting") in certain circumstances as set forth in this Agreement, the Restricted Stock Units shall vest and become nonforfeitable as follows (each, a "Scheduled Vesting Date"): Scheduled o 50% of this Restricted Stock Unit Award will vest on Vesting the second anniversary date of this grant; Dates o 25% of this Restricted Stock Unit Award will vest on the third anniversary date of this grant; and o the final 25% of this Restricted Stock Unit Award will vest on the fourth anniversary date of this grant. All Shares will be rounded down to the nearest whole Share and all rounded Shares will become vested in the final period. - -------------------------------------------------------------------------------- This Restricted Stock Unit Award Agreement (this Effectiveness "Agreement") shall be effective only if and when AT&T of Agreement receives your electronic acceptance of the terms of this Agreement as required below. - -------------------------------------------------------------------------------- Fair Market Value shall mean the average of the high and low per Share sale prices of AT&T common stock trading on the Fair Market New York Stock Exchange on any date of determination (or, if Value no sales are reported on such date, the average of the high and low per Share sale prices of AT&T common stock trading on the New York Stock Exchange on the next trading date), or as defined under applicable law for non-U.S. jurisdictions. - -------------------------------------------------------------------------------- As soon as administratively practicable after any Restricted Stock Units vest (or to the extent applicable, expiration of any elected deferral period for vested Restricted Stock Units), and subject to the income tax withholding provisions Book Entry described below, AT&T will deliver to you or your legal of Shares representative a statement reflecting ownership of the corresponding Shares in book entry form. You are responsible for complying with any securities and exchange control laws or any other legal requirements applicable to you in connection with the vesting and/or distribution of Shares in respect of the Restricted Stock Units. - -------------------------------------------------------------------------------- A cash payment in an amount equal to the dividend payable on one Share, on the record date for such dividend, will be made to you for each Restricted Stock Unit held by you that has not been forfeited, cancelled or converted to a Share in accordance with ordinary payroll practices as soon as Dividend reasonably practicable following such dividend record date, Equivalent provided that in non-U.S. jurisdictions where such payment Payments may result in negative tax consequences to the participant, then at the Company's election, a single cash payment may be made for the entire dividend equivalent amount payable in respect of this award of Restricted Stock Units upon the expiration of the final Scheduled Vesting Date or applicable Early Vesting. Applicable withholding taxes shall be deducted from any such dividend equivalent payments. - -------------------------------------------------------------------------------- * AT&T employees should access the Corporate Forms Library in the AT&T Workforce Services web site for these documents. - -------------------------------------------------------------------------------- You may irrevocably elect, in accordance with policies adopted by the Committee, to defer the distribution of all Deferral or any portion of the Restricted Stock Unit that you Election otherwise would have become entitled to receive upon each Scheduled Vesting Date pursuant to the terms of this Agreement. - -------------------------------------------------------------------------------- You agree that the Company is not responsible for the tax consequences to you of the granting or vesting of the Restricted Stock Units and the distribution of Shares in respect thereof, and that it is your responsibility to consult with a personal tax advisor regarding all matters with respect to the tax consequences of the granting and vesting of the Restricted Stock Units and the distribution of Shares in respect thereof. Upon vesting of Restricted Income Tax Stock Units (or to the extent applicable, upon distribution Withholding following an elected deferral period), AT&T (or your local Requirements employer, as applicable) shall determine and report to the (Applicable to proper taxing authorities the ordinary income recognized by all participants) you based on the number of Restricted Stock Units vesting on such date multiplied by the Fair Market Value on such date. AT&T (and your local employer, as applicable) shall have the right to deduct or cause to be deducted from, or collect or cause to be collected with respect to, the vesting of any Restricted Stock Units granted hereunder, distribution of Shares or payment of dividend equivalent amounts, any federal, state, or local taxes and/or social insurance contributions required by law to be withheld or paid with respect to such vesting, distribution and or payment, and you or your legal representative or beneficiary hereby consent to such deductions. Subject to applicable securities laws, AT&T (and your local employer, as applicable) is authorized to automatically withhold an appropriate number of vested Shares to satisfy such tax and/or social insurance withholding and distribute only the net number of Shares to you. - -------------------------------------------------------------------------------- Termination of Your termination of employment from the Company or one of Employment and its Affiliates, will cause all Restricted Stock Units not this Restricted previously vested to be cancelled effective upon your Stock Unit Award termination date, except as described below: Agreement normal retirement a) upon termination of employment after the attainment of age and AT&T service equal to: Age and AT&T service of Any age 30 years 50 25 years 55 20 years 65 10 years; the Restricted Stock Units shall be subject to Early Vesting in part and be cancelled in part. The portion of the Restricted Stock Units that will be subject to Early Vesting will be calculated by using the proration provision set forth below, and the remaining portion of the Restricted Stock Units will be cancelled effective on the date of termination. under an FMP, b) upon termination of employment, under the AT&T Force sale, divestiture, Management Program or the AT&T E-Band and Officer Level or outsourcing separation plans; or due to the sale, divestiture or outsourcing of your business unit or position from AT&T, the Restricted Stock Units shall be subject to Early Vesting in part and be cancelled in part. The portion of the Restricted Stock Units that will be subject to Early Vesting will be calculated by using the proration provision set forth below, and the remaining portion of the Restricted Stock Units will be cancelled effective on the date of termination. Death c) Upon termination of employment due to death, or or disability disability entitling you to Company provided long term disability benefits under a Company provided long term disability plan, the Restricted Stock Units will be subject to Early Vesting in part and be cancelled in part. The portion of the Restricted Stock Units that will be subject to Early Vesting will be calculated by using the proration provision described below; and the remaining portion of the Restricted Stock Units will be cancelled effective on the date of termination. - -------------------------------------------------------------------------------- Not withstanding anything to the contrary, any portion of this Restricted Stock Unit that becomes subject to vesting prior to a Scheduled Vesting Date in accordance with the Early termination of employment provisions of this Agreement, as Vesting set forth above, will be determined weekly by AT&T and processed by the recordkeeper as soon as practicable following verification of termination of employment by AT&T. No distribution of Shares with respect to such Early Vesting of Restricted Stock Units shall occur prior to verification of termination of employment by AT&T. - -------------------------------------------------------------------------------- Effective upon your qualifying termination of employment from the Company or one of its Affiliates, as set forth above in the termination of employment provisions of this Agreement, the portion of the Restricted Stock Units that Proration of are subject to Early Vesting will be calculated by (i) this Restricted multiplying the total number of Restricted Stock Units Stock Award Unit granted under this Agreement by a fraction the numerator of which is equal to the full number of months** of employment from the date of grant to the date of your termination of employment, and the denominator of which is number of months from the date of grant of this Restricted Stock Unit to the final Scheduled Vesting Date, (ii) and then subtracting any portion of the Restricted Stock Units that had previously vested. ** Terminations on or after the 16th of a month will be treated as occurring at the end of the month for the proration calculation; terminations prior to the 16th of a month will be treated as occurring at the end of the previous month for the proration calculation. Fractional Shares will be rounded up to the nearest whole Share. - -------------------------------------------------------------------------------- In the case of your death, any distribution of Shares in respect of the Restricted Stock Units granted hereunder shall be made to your estate. You may, in accordance with procedures established by the Committee, designate one or more beneficiaries to receive all or part of any distribution to be made hereunder in case of your death, and Distribution you may change or revoke such designation at any time. In upon Death the event of your death, any distribution hereunder that is subject to such a designation (to the extent such designation is valid and enforceable under applicable law) shall be made to such beneficiary or beneficiaries in accordance with this Agreement. If there shall be any question as to the legal right of any beneficiary to receive a distribution hereunder, the amount in question shall be distributed to your estate, in which event neither AT&T nor any Affiliate shall have any further liability to anyone with respect to such distribution. - -------------------------------------------------------------------------------- Transfer to or from AT&T and any Affiliate, shall not be Transfer or considered a termination of employment for purposes of this Leave of Agreement. Nor shall it be considered a termination of Absence employment for purposes of this Agreement if you are placed on a military leave or other approved leave of absence, unless the Committee shall otherwise determine. - -------------------------------------------------------------------------------- At all times prior to the vesting of a Restricted Stock Unit (or to the extent applicable, the expiration of any elected Transferability deferral period), such Restricted Stock Unit shall be nontransferable and may not be pledged, assigned or alienated in any way. - -------------------------------------------------------------------------------- Restricted Stock Units granted under this Agreement shall be forfeited and cancelled if, prior to any Scheduled Vesting Dates of such Restricted Stock Units, without the consent of Competition AT&T, while employed by AT&T, you establish a relationship with a competitor of the Company or engage in activity which is in conflict with or adverse to the interest of AT&T, as determined in accordance with the AT&T Non-Competition Guideline (the "Guideline"), a copy of which is available to you.* - -------------------------------------------------------------------------------- Upon a Change in Control (as defined in Section 2(e) of the Change in Plan), this Restricted Stock Unit Award will vest Control immediately in full in accordance with Section 11(e) of the Plan, and the Shares in respect of such Restricted Stock Units will be distributed immediately. - -------------------------------------------------------------------------------- Employment Neither the Plan nor this Agreement shall be construed as Rights giving you the right to be retained in the employ of AT&T or any Affiliate. - -------------------------------------------------------------------------------- * AT&T employees should access the Corporate Forms Library in the AT&T Workforce Services web site for these documents. - -------------------------------------------------------------------------------- You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, your employer and AT&T and its Subsidiaries and its Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that AT&T and your employer hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in AT&T, details of all Restricted Stock Units or any other entitlement to shares of stock awarded, canceled, vested, unvested or outstanding in your favor, for the purpose of implementing, Data Privacy administering and managing the Plan ("Data"). You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country, or elsewhere, and that the recipient's country may have different data privacy laws and protections than your country. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom you deposit any Shares acquired upon distribution of the vested Restricted Stock Units. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or withdraw the consents herein by contacting in writing your local human resources representative. You understand that withdrawal of consent may affect your ability to realize benefits from the Restricted Stock Units. - -------------------------------------------------------------------------------- Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the issuance of Shares to you, any law, regulation or requirement of any governmental authority having jurisdiction shall require either the Company or you to take any action in connection with the Shares then to be issued, the issuance of such Shares shall be deferred until such action shall have been taken. Any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Agreement shall be determined by the Committee in its absolute and uncontrolled discretion, and any such determination or any other determination by the Committee under or pursuant to this Agreement and any interpretation by the Committee of the Other Corporate terms of this Agreement shall be final, binding and Provisions conclusive on all persons affected thereby. Any determinations or decisions made or actions taken arising out of or in connection with the interpretation and administration of this Agreement and the Plan by the AT&T Board of Directors or the Committee shall be final and conclusive. The AT&T Board of Directors or the Committee may amend this Agreement provided that no such amendment shall impair your rights hereunder without your consent. You shall not have the right to vote the Shares underlying the Restricted Stock Units or, except as set forth above with respect to dividend equivalents, any other rights as a holder of Shares until such time as the Restricted Stock Units shall have vested and the Shares underlying the vested Restricted Stock Units shall have been delivered to you. The validity, construction and effect of this Agreement shall be determined in accordance with the laws of the State of New York and applicable Federal law. - -------------------------------------------------------------------------------- Please indicate your acceptance of the terms of this Restricted Stock Unit Award Agreement, as provided to you electronically, and acknowledge that you have reviewed copies of the Plan and the Guideline summary, in each case as currently in effect and available to you*, by checking the appropriate acceptance box within your Restricted Stock Unit account on this web site. You should print and retain a copy of this document for your personal records. IF YOU FAIL TO ACCEPT THE TERMS OF THIS RESTRICTED STOCK UNIT AWARD AGREEMENT ELECTRONICALLY FOR ANY REASON WHATSOEVER ON OR BEFORE [date], YOU WILL BE DEEMED TO HAVE REJECTED YOUR RESTRICTED STOCK UNIT AWARD AND YOUR AWARD WILL BE NULL AND VOID. ACCEPTED AND AGREED: /s/ Mirian Graddick-Weir - ------------------------------ Employee accepts electronically, no Mirian Graddick-Weir signature required - -------------------------------------------------------------------------------- AT&T Corp. Employee Signature * AT&T employees should access the Corporate Forms Library in the AT&T Workforce Services web site for these documents. -----END PRIVACY-ENHANCED MESSAGE-----