DEF 14A

   
                                                                        
(AT&T LOGO) 
                                                                        

1994 
Notice of 
Annual Meeting 
and 
Proxy Statement 

Wednesday, April 20, 1994 
at 9:30 a.m. 
Georgia World Congress Center 
285 International Boulevard, N.W. 
Atlanta, Georgia 
    




 

                              NOTICE OF MEETING 

The 109th Annual Meeting of Shareholders of American Telephone and Telegraph 
Company will be held at the Georgia World Congress Center, 285 International 
Boulevard, N.W., Atlanta, Georgia, on Wednesday, April 20, 1994, at 9:30 a.m. 
for the following purposes: 

   
* To elect directors for the ensuing year (page 7); 
    

   
* To ratify the appointment of auditors to examine the Company's accounts for 
the year 1994 (page 14); 
    

   
* To approve an amendment to the Restated Certificate of Incorporation to 
change the name of the Company to "AT&T Corp." (page 14); 
    

   
* To approve the 1995 AT&T Employee Stock Purchase Plan (page 16); 
    

   
* To approve the 1994 Employee Stock Purchase Plan for AT&T Global 
Information Solutions Company (formerly NCR Corporation) (page 19); 
    

   
* To approve the AT&T Short Term Incentive Plan (page 22); and 
    

   
* To act upon such other matters, including shareholder proposals (beginning 
on page 27 of the accompanying proxy statement), as may properly come before 
the meeting. 
    

Holders of common shares of record at the close of business on March 1, 1994, 
will be entitled to vote with respect to this solicitation. 

   
Robert E. Scannell 
Vice President - Law and Secretary 
    

March 1, 1994 



 

(AT&T LOGO) 
American Telephone and 
Telegraph Company 
32 Avenue of the Americas 
New York, NY 10013-2412 

Robert E. Allen 

Chairman of the Board 
March 1, 1994 

Dear Shareholder: 

It is a pleasure to invite you to your Company's 1994 Annual Meeting in 
Atlanta, Georgia, on Wednesday, April 20th. This will be AT&T's 109th Annual 
Meeting of Shareholders, and I hope that those who find it convenient will 
attend. 

The Georgia World Congress Center is fully accessible to disabled persons, 
and we will provide hearing-amplification and sign interpretation for our 
hearing-impaired shareholders. AT&T products and services will be exhibited 
and employees representing various business units will be on hand to answer 
questions before and after the meeting. 

Whether you own a few or many shares of stock and whether or not you plan to 
attend in person, it is important that your shares be voted on matters that 
come before the meeting. I urge you to specify your choices by marking the 
enclosed proxy card and returning it promptly. If you sign and return your 
proxy card without specifying your choices, it will be understood that you 
wish to have your shares voted in accordance with the directors' 
recommendations. 

I look forward to seeing you at the meeting. 

Sincerely, 

(SIGNATURE Robert E. Allen) 


 

American Telephone and Telegraph Company 
Executive Offices 
32 Avenue of the Americas 
New York, NY 10013-2412 

                               PROXY STATEMENT 
This proxy statement and the accompanying proxy/voting instruction card 
(proxy card) are being mailed beginning March 1, 1994, to holders of common 
shares in connection with the solicitation of proxies by the board of 
directors for the 1994 Annual Meeting of Shareholders in Atlanta, Georgia. 
Proxies are solicited to give all shareholders of record at the close of 
business on March 1, 1994, an opportunity to vote on matters that come before 
the meeting. This procedure is necessary because shareholders live in all 
states and abroad and most will not be able to attend. Shares can be voted 
only if the shareholder is present in person or is represented by proxy. 

When your proxy card is returned properly signed, the shares represented will 
be voted in accordance with your directions. You can specify your choices by 
marking the appropriate boxes on the enclosed proxy card. If your proxy card 
is signed and returned without specifying choices, the shares will be voted 
as recommended by the directors. Abstentions are voted neither "for" nor 
"against," but are counted in the determination of a quorum. 

   
If you wish to give your proxy to someone other than the Proxy Committee, all 
three names appearing on the enclosed proxy card must be crossed out and the 
name of another person or persons (not more than three) inserted. The signed 
card must be presented at the meeting by the person or persons representing 
you. You may revoke your proxy at any time before it is voted at the meeting 
by executing a later dated proxy, by voting by ballot at the meeting, or by 
filing an instrument of revocation with the inspectors of election in care of 
the Vice President - Law and Secretary of the Company at the above address. 
    

Your vote is important. Accordingly, you are urged to sign and return the 
accompanying proxy card whether or not you plan to attend the meeting. If you 
do attend, you may vote by ballot at the meeting, thereby canceling any proxy 
previously given. 

                                      1 


 

As a matter of policy, proxies, ballots, and voting tabulations that identify 
individual shareholders are kept private by the Company. Such documents are 
available for examination only by the inspectors of election and certain 
personnel associated with processing proxy cards and tabulating the vote. The 
vote of any shareholder is not disclosed except as may be necessary to meet 
legal requirements. 

   
If a shareholder is a participant in the AT&T Shareowner Dividend 
Reinvestment and Stock Purchase Plan ("DRISPP"), the proxy card will 
represent the number of full shares in the DRISPP account on the record date, 
as well as shares registered in the participant's name. If a shareholder is a 
participant in the AT&T Employee Stock Ownership Plan ("ESOP"), AT&T Long 
Term Savings Plan for Management Employees, AT&T Long Term Savings and 
Security Plan, AT&T Retirement Savings and Profit Sharing Plan, AT&T of 
Puerto Rico, Inc. Long Term Savings Plan for Management Employees, AT&T of 
Puerto Rico, Inc. Long Term Savings and Security Plan, AT&T Capital 
Corporation Retirement and Savings Plan, AT&T Capital Corporation Excess 
Benefit Plan, AGCS Savings Plan, or AGCS Hourly Savings Plan, the proxy card 
will also serve as a voting instruction for the trustees of those plans where 
all accounts are registered in the same name. Shares in ESOP, AT&T Capital 
Corporation Retirement and Savings Plan, AT&T Capital Corporation Excess 
Benefit Plan, AGCS Savings Plan, and AGCS Hourly Savings Plan cannot be voted 
unless the card is signed and returned. If cards representing shares in the 
remaining plans are not returned, those shares will be voted by the trustees 
of the plans. 
    

   
Shares allocated to the accounts of participants in plans of AT&T Global 
Information Solutions Company (formerly NCR Corporation), a wholly owned 
subsidiary of AT&T, such as the Corporation Payroll Employee Stock Ownership 
Plan, the Savings Plan, and the Employees' Profit Sharing Plan (referred to 
collectively as the "Future Income Plans"), Sandia Savings and Incentive 
Plan, Sandia Savings and Security Plan, or UNIX System Laboratories 
Retirement and 
    


                                      2 


 

   
Savings Plan may be voted through separate participant direction cards that 
will be mailed to participants in these plans. If a participant also owns 
shares outside these plans, the participant must return both the proxy card 
and the participant direction card. The trustees of these plans will vote the 
number of shares allocated to a participant's account or accounts under such 
Plans in accordance with the directions on the participant direction card if 
the card is duly signed and received by April 13, 1994. For participants in 
the Future Income Plans, allocated shares for which the trustee receives no 
instructions and all unallocated shares will be voted by the trustee. Shares 
in the plans of Sandia and UNIX System Laboratories cannot be voted unless 
the participant direction card is signed and returned. 
    

If you are a registered owner and plan to attend the meeting in person, 
please detach and retain the admission ticket which is attached to your proxy 
card and mark the appropriate box on the proxy card. Beneficial owners who 
plan to attend may obtain admission tickets in advance by sending written 
requests, along with proof of ownership, such as a bank or brokerage firm 
account statement, to the Manager, AT&T Shareowner Relations, 32 Avenue of 
the Americas, Room 2415, New York, NY 10013-2412. 

Shareholders who do not present admission tickets at the meeting will be 
admitted upon verification of ownership at the admissions counter. 

Highlights of the meeting will be included in the next quarterly report. 
Information on obtaining a full transcript of the meeting will also be found 
in that quarterly report. 

Securities and Exchange Commission ("SEC") rules require that an annual 
report precede or be included with proxy materials. However, shareholders 
with multiple accounts may be receiving more than one annual report, which is 
costly to AT&T and may be inconvenient to these shareholders. Such 
shareholders may authorize us to discontinue mailing extra reports by marking 
the appropriate box on the proxy card for selected accounts. At least one 
account must continue to receive an annual report. Eliminating these 
duplicate mailings will not affect receipt of future proxy statements and 
proxy cards. To resume the 

                                      3 


 

mailing of an annual report to an account, please call the AT&T shareholder 
services number, 1-800-348-8288. 

   
Comments from shareholders about the proxy material or about other aspects of 
the business are welcome. Space is provided on the proxy card for this 
purpose. Although such notes are not answered on an individual basis, they 
are very helpful in assessing shareholder sentiment and in determining what 
kinds of additional information should be furnished in various Company 
publications. 
    

   
On January 1, 1994, there were 1,352,478,356 common shares outstanding. Each 
common share is entitled to one vote on each matter properly brought before 
the meeting. 
    

BOARD OF DIRECTORS 
The board of directors has the responsibility for establishing broad 
corporate policies and for overseeing the overall performance of the Company. 
However, in accordance with corporate legal principles, it is not involved in 
day-to-day operating details. Members of the board are kept informed of the 
Company's business through discussions with the Chairman and other officers, 
by reviewing analyses and reports sent to them each month, and by 
participating in board and committee meetings. 

The board held 13 meetings in 1993; the committees held 22 meetings. The 
average attendance at the aggregate of the total number of meetings of the 
board and the total number of committee meetings was 93%. 

COMMITTEES OF THE BOARD 
The board has established a number of committees, including the Audit 
Committee, the Compensation Committee, and the Committee on Directors, each 
of which is briefly described below. Other committees of the board are: the 
Corporate Public Policy Committee, the Employee Benefits Committee, the 
Executive Committee, the Finance Committee, and the Proxy Committee 

                                      4 


 

(which votes the shares represented by proxies at the annual meeting of 
shareholders). 

The Audit Committee meets with management to consider the adequacy of the 
internal controls of the Company and the objectivity of financial reporting; 
the committee also meets with the independent auditors and with appropriate 
Company financial personnel and internal auditors about these matters. The 
committee recommends to the board the appointment of the independent 
auditors, subject to ratification by the shareholders at the annual meeting. 
Both the internal auditors and the independent auditors periodically meet 
alone with the committee and always have unrestricted access to the 
committee. The committee, which consists of six non-employee directors, met 
five times in 1993. 

   
The Compensation Committee administers management incentive compensation 
plans, including stock option plans. The committee makes recommendations to 
the board with respect to compensation of directors and of the officers as 
listed on page 48. The committee, which consists of five non-employee 
directors, met four times in 1993. 
    

The Committee on Directors advises and makes recommendations to the board on 
all matters concerning directorship practices and the selection of candidates 
as nominees for election as directors. The committee, which consists of six 
non-employee directors, met two times in 1993. The committee recommended this 
year's candidates at the January 1994 board meeting. 

   
In recommending board candidates, this committee seeks individuals of proven 
judgment and competence who are outstanding in their chosen activity; it 
considers such factors as anticipated participation in board activities, 
education, geographic location, and special talents or personal attributes. 
Shareholders who wish to suggest qualified candidates should write to the 
Vice President - Law and Secretary of the Company at 32 Avenue of the 
Americas, New York, NY 10013-2412, stating in detail the qualifications of 
such persons for consideration by the committee. 
    


                                      5 


 

   
COMPENSATION OF DIRECTORS 
Directors who are not employees receive an annual retainer of $30,000 and a 
fee of $1,500 for each board, committee, and shareholder meeting attended. 
The chairmen of the Audit Committee, Compensation Committee, and Finance 
Committee each receive an additional annual retainer of $7,500. Other 
non-employee directors who chair committees receive additional annual 
retainers of $5,000. Pursuant to the Company's Deferred Compensation Plan for 
Non-Employee Directors, 15% of the annual retainer for each non-employee 
director is deferred and credited to a portion of a deferred compensation 
account, the value of which is measured from time to time by the value of 
Company common shares (the "AT&T shares portion"). Directors may elect to 
defer the receipt of all or part of the remainder of their compensation into 
the AT&T shares portion or the cash portion of the deferred compensation 
account (the "cash portion"). The AT&T shares portion is credited on each 
dividend payment date for AT&T common shares with a number of deferred shares 
of common stock equivalent in market value to the amount of the quarterly 
dividend on the shares then credited in the accounts. The cash portion of the 
deferred compensation account earns interest, compounded quarterly, at an 
annual rate equal to the average interest rate for ten-year United States 
Treasury notes for the previous quarter, plus 5%. Directors who are also 
employees of the Company or a subsidiary of the Company receive no 
compensation for serving as directors. 
    

   
The Company also provides non-employee directors with travel accident 
insurance when on Company business. A non-employee director may purchase life 
insurance sponsored by the Company. The Company will share the premium 
expense with the director; however, all the Company contributions will be 
returned to the Company at the earlier of (a) the director's death or (b) the 
later of age 70 or 10 years from the policy's inception. This benefit will 
continue after the non-employee director's retirement from the board. 
    


                                      6 


 

Non-employee directors with at least five years' service are eligible for an 
annual retirement benefit equal to their annual retainer at retirement. The 
benefit begins at age 70 and is payable for life. 

ELECTION OF DIRECTORS (Item A on Proxy Card) 
The Proxy Committee intends to vote for the election of the 15 nominees 
listed on the following pages unless otherwise instructed on the proxy card. 
These nominees have been selected by the board on the recommendation of the 
Committee on Directors. If you do not wish your shares to be voted for 
particular nominees, please identify the exceptions in the appropriate space 
provided on the proxy card. Directors will be elected by a plurality of the 
votes cast. Any shares not voted (whether by abstention, broker non-vote, or 
otherwise) have no impact on the vote. 

If at the time of the meeting one or more of the nominees have become 
unavailable to serve, shares represented by proxies will be voted for the 
remaining nominees and for any substitute nominee or nominees designated by 
the Committee on Directors or, if none, the size of the board will be 
reduced. The Committee on Directors knows of no reason why any of the 
nominees will be unavailable or unable to serve. 

Directors elected at the meeting will hold office until the next annual 
meeting or until their successors have been elected and qualified. For each 
nominee there follows a brief listing of principal occupation for at least 
the past five years, other major affiliations, and age as of January 1, 1994. 

                                      7 


 

NOMINEES FOR ELECTION AS DIRECTORS 
Robert E. Allen, Chairman and Chief Executive Officer of AT&T since 1988; 
President and Chief Operating Officer of AT&T (1986-1988). Chairman and Chief 
Executive Officer of AT&T Technologies, Inc. (1986-1988); Chairman of AT&T 
International Inc. (1986-1987) and Chairman of AT&T Information Systems Inc. 
(1985-1986) (subsidiaries). Director of Bristol-Myers Squibb Co.; the Federal 
Reserve Bank of New York; and PepsiCo, Inc. Chairman of The Business Council. 
Director of AT&T since 1984; Chairman of the Executive and Proxy Committees. 
Age 58. 

M. Kathryn Eickhoff, President of Eickhoff Economics Inc. (economic 
consultants) since 1987. Associate Director for Economic Policy, U.S. Office 
of Management and Budget (1985-1987). Director of National Westminster 
Bancorp Inc.; Tenneco Inc.; and The Upjohn Company. Director of AT&T since 
1987; member of the Corporate Public Policy Committee and the Committee on 
Employee Benefits. Age 54. 

Walter Y. Elisha, Chairman since 1983 and Chief Executive Officer since 1981 
of Springs Industries, Inc. (textile manufacturing). Director of Springs 
Industries, Inc.; and Cummins Engine Company, Inc. Director of AT&T since 
1987; member of the Compensation and Finance Committees and the Committee on 
Directors. Age 61. 

                                      8 


 

   
Philip M. Hawley, retired Chairman and Chief Executive Officer of Carter 
Hawley Hale Stores, Inc. (department stores) (1983-1993). Director of 
Atlantic Richfield Co.; BankAmerica Corp. and its subsidiary, Bank of 
America, N.T. & S.A.; Johnson & Johnson; and Weyerhaeuser Company. Director 
of AT&T since 1982; Chairman of the Compensation Committee; member of the 
Committee on Directors and the Committee on Employee Benefits. Age 68. 
    

Carla A. Hills, Chairman and Chief Executive Officer of Hills & Company 
(international consultants) since 1993. United States Trade Representative, 
Executive Office of the President (1989-1993). Partner in Weil, Gotshal & 
Manges (law firm) (1986-1989). Director of American International Group; 
Bechtel Group and its subsidiary, Bechtel Enterprises; Chevron Corp.; Time 
Warner Inc.; and UAL Corp. Director of AT&T since 1993; member of the Audit 
and Corporate Public Policy Committees. Age 59. 

Belton K. Johnson, former owner of Chaparrosa Ranch for more than 19 years. 
Chairman of Belton K. Johnson Interests since 1981. Director of Tenneco Inc. 
Director of AT&T since 1974; member of the Executive, Corporate Public 
Policy, and Proxy Committees, and the Committee on Employee Benefits. Age 64. 

   
Drew Lewis, Chairman and Chief Executive Officer of Union Pacific Corp. 
(transportation and environmental services) since 1987. Director of American 
Express Co.; FPL Group, Inc.; Ford Motor Company; and Union Pacific Corp. 
Director of AT&T since 1989; member of the Audit and Corporate Public Policy 
Committees and the Committee on Directors. Age 62. 
    


                                      9 


 

   
Donald F. McHenry, President of IRC Group (international relations 
consultants) since 1981; University Research Professor of Diplomacy and 
International Relations, Georgetown University, since 1981. Director of Bank 
of Boston Corp. and its subsidiary, First National Bank of Boston; Coca-Cola 
Co.; International Paper Co.; and SmithKline Beecham Corp. Director of AT&T 
since 1986; Chairman of the Committee on Employee Benefits; member of the 
Finance Committee. Age 57. 
    

   
Victor A. Pelson, Executive Vice President of AT&T and Chairman of the AT&T 
Global Operations Team since 1993; Group Executive, AT&T Communications 
Services (1989-1993); President, AT&T General Markets Group (1986-1989). 
Director of United Parcel Service of America, Inc. Director of AT&T since 
1993. Age 56. 
    

   
Donald S. Perkins, retired Chairman and Chief Executive Officer of Jewel 
Companies, Inc. (diversified retailer) (1970-1980). Director of Aon Corp.; 
Cummins Engine Company, Inc.; Illinois Power Co.; Inland Steel Industries; 
Kmart Corp.; Springs Industries, Inc.; and Time Warner Inc. Trustee of 
Northwestern University, the Putnam Funds, and LaSalle Street Fund. Director 
of AT&T since 1979; Chairman of the Committee on Directors; member of the 
Audit, Executive, Finance, and Proxy Committees. Age 66. 
    

Henry B. Schacht, Chairman and Chief Executive Officer of Cummins Engine 
Company, Inc. since 1977. Director of CBS Inc.; The Chase Manhattan Corp. and 
its subsidiary, The Chase Manhattan Bank, N.A.; and Cummins Engine Company, 
Inc. Trustee of The Ford Foundation and The Yale Corporation. Director of 
AT&T since 1981; Chairman of the Corporate Public Policy Committee; member of 
the Audit Committee. Age 59. 

                                      10 


 

Michael I. Sovern, President Emeritus and Chancellor Kent Professor of Law at 
Columbia University; President (1980-1993). Director of Chemical Banking 
Corporation and its subsidiary, Chemical Bank; Orion Pictures Corporation; 
and Warner-Lambert Co. Director of AT&T since 1984; Chairman of the Audit 
Committee; member of the Compensation Committee. Age 62. 

Franklin A. Thomas, President of The Ford Foundation since 1979. Director of 
Aluminum Company of America; CBS Inc.; Citicorp and its subsidiary, Citibank, 
N.A.; and Cummins Engine Company, Inc. Director of AT&T since 1988; member of 
the Audit and Corporate Public Policy Committees, and the Committee on 
Directors. Age 59. 

   
Joseph D. Williams, retired Chairman and Chief Executive Officer of 
Warner-Lambert Co. (pharmaceuticals, health care, and consumer products) 
(1985-1991). Director of Exxon Corp.; J.C. Penney Co., Inc.; Rockefeller 
Financial Services, Inc.; Therapeutic Antibodies Inc.; Thrift Drug, Inc.; and 
Warner-Lambert Co. Director of AT&T since 1984; Chairman of the Finance 
Committee; member of the Executive and Compensation Committees. Age 67. 
    

Thomas H. Wyman, Chairman of S.G. Warburg & Co. Inc. since 1992 and Vice 
Chairman of S.G. Warburg Group PLC (U.K.) since 1993 (investment banking). 
Chairman of United Biscuits (Holdings) U.S. Ltd. (food products) (1989-1992). 
William Donaldson Faculty Fellow, Yale University School of Organization and 
Management (1987-1988). Chairman and Chief Executive Officer of CBS Inc. 
(1983-1986). Director of General Motors Corporation; Imperial Chemical 
Industries PLC (U.K.); S.G. Warburg Group PLC (U.K.) and S.G. Warburg & Co. 
Inc.; and United Biscuits (Holdings) PLC (U.K.). Director of AT&T since 1981; 
member of the Compensation and Finance Committees and the Committee on 
Directors. Age 64. 

                                      11 


 

STOCK OWNERSHIP OF MANAGEMENT 
The following table sets forth information concerning the beneficial 
ownership of the Company's common stock as of January 1, 1994, for (a) each 
director and nominee for director; (b) each of the named officers (the "named 
officers" as defined in the Compensation Report, herein) not listed as a 
director; and (c) directors and executive officers as a group. Except as 
otherwise noted, the nominee or family members had sole voting and investment 
power with respect to such securities. 

   


                                        Number of Shares 
                             ----------------------------------------- 
                             Beneficially      Deferral 
          Name                 Owned (1)       Plans (2)      Total 
- ------------------------    ---------------   ----------    --------- 
           (a) 
                                                   
Robert E. Allen                  575,927(3)     37,930        613,857 
M. Kathryn Eickhoff                1,500           153          1,653 
Walter Y. Elisha                   8,447           548          8,995 
Philip M. Hawley                   1,000(4)        191          1,191 
Carla A. Hills                       400           738          1,138 
Belton K. Johnson                  5,016            79          5,095 
Drew Lewis                         5,000            79          4,079 
Donald F. McHenry                    622            79            701 
Victor A. Pelson                 159,900(5)          0        159,900 
Donald S. Perkins                  2,242(6)         79          2,321 
Henry B. Schacht                   1,055           483          1,538 
Michael I. Sovern                  1,200            79          1,279 
Franklin A. Thomas                 1,057         1,153          2,210 
Joseph D. Williams                13,000            79         13,079 
Thomas H. Wyman                    1,000           263          1,263 
           (b) 
Robert M. Kavner                 169,113(7)      2,872        171,985 
Alex J. Mandl                    113,737(8)      2,121        115,858 
William B. Marx, Jr.             152,835(9)      2,121        154,956 
Jerre L. Stead                   100,421(10)     7,557        107,978 
           (c) 
Directors and Executive 
  Officers as a Group          2,911,866(11)    96,116      3,007,982 


    

                                      12 


 

  Footnotes 

   
1. No individual director and nominee for director or named officer 
beneficially owns 1% or more of the Company's outstanding common shares or 
the common shares of AT&T Capital Corporation, a majority-owned subsidiary of 
the Company, nor do the directors and executive officers as a group. 
    

   
2. Share units held in deferred compensation accounts. 
    

   
3. Includes beneficial ownership of 476,951 shares which may be acquired 
within 60 days pursuant to stock options and 36,000 restricted shares awarded 
under employee incentive compensation plans. 
    

   
4. Mr. Hawley disclaims beneficial ownership of 433 common shares held by 
Mrs. Hawley. 
    

   
5. Includes beneficial ownership of 147,136 shares which may be acquired 
within 60 days pursuant to stock options awarded under employee incentive 
compensation plans. Mr. Pelson disclaims beneficial ownership of 725 common 
shares held in a trust of which Mrs. Pelson is a co-trustee and co-remainder 
beneficiary. 
    

   
6. Mr. Perkins as an investment company trustee also has shared voting and 
investment power over 905,850 common shares. 
    

   
7. Includes beneficial ownership of 139,359 shares which may be acquired 
within 60 days pursuant to stock options and 18,543 restricted shares awarded 
under employee incentive compensation plans. 
    

   
8. Includes beneficial ownership of 106,685 shares which may be acquired 
within 60 days pursuant to stock options awarded under employee incentive 
compensation plans. 
    

   
9. Includes beneficial ownership of 144,486 shares which may be acquired 
within 60 days pursuant to stock options awarded under employee incentive 
compensation plans. 
    

   
10. Includes beneficial ownership of 82,910 shares which may be acquired 
within 60 days pursuant to stock options awarded under employee incentive 
compensation plans. 
    

   
11. Includes beneficial ownership of 1,751,878 shares which may be acquired 
within 60 days pursuant to stock options awarded under employee incentive 
compensation plans as well as 905,850 shares over which they have sole or 
shared voting and investment power as trustee. 
    


                                      13 


 

RATIFICATION OF APPOINTMENT OF AUDITORS 

   
(Item B on Proxy Card) 
Subject to shareholder ratification, the board of directors, upon 
recommendation of the Audit Committee, has reappointed the firm of Coopers & 
Lybrand as the independent auditors to examine the Company's financial 
statements for the year 1994. Coopers & Lybrand has audited the Company's 
books for many years. Your directors recommend that shareholders vote FOR 
such ratification. Ratification of the appointment of auditors would require 
a majority of the votes cast thereon. Any shares not voted (whether by 
abstention, broker non-vote, or otherwise) have no impact on the vote. If the 
shareholders do not ratify this appointment, other independent auditors will 
be considered by the board upon recommendation of the Audit Committee. 
    

Representatives of Coopers & Lybrand are expected to attend the annual 
meeting and will have the opportunity to make a statement if they desire and 
to respond to appropriate questions. 

   
For the year 1993, Coopers & Lybrand also examined the financial statements 
of the Company's subsidiaries and provided other audit services to the 
Company and subsidiaries in connection with SEC filings, review of financial 
statements, and audits of pension plans. 
    

   
DIRECTORS' PROPOSAL TO AUTHORIZE CHANGE IN THE CORPORATE NAME 
    

   
(Item C on Proxy Card) 
In January 1994, the board adopted, subject to shareholder approval, an 
amendment of the Company's Restated Certificate of Incorporation to change 
the name of the Company to "AT&T Corp." The current name of the Company is 
"American Telephone and Telegraph Company." 
    


                                      14 


 
   
The Company adopted the name American Telephone and Telegraph more than a 
century ago. While over the years the name achieved a distinctive place in 
the annals of corporate America, it is also associated with old ways and 
outdated technologies. 

Despite some feelings of nostalgia, the board believes it is appropriate at 
this time to adopt as the Company's name the initials AT&T by which the 
Company has increasingly been known in recent years. 

Since the time of the divestiture of the Bell operating companies in 1984, 
the Company has devoted substantial resources to identifying itself in the 
public's mind as AT&T. On this the tenth anniversary of divestiture, the 
Company has been overwhelmingly successful in making AT&T one of the most 
readily recognized brand names in the U.S. Progress is being made to achieve 
a broad brand recognition outside the U.S. as well. 

There will be relatively little cost associated with the change. Virtually no 
advertising will be required, for example, because advertising already 
carries the AT&T logo. The distinctive "T" ticker symbol will be kept, of 
course. 

The new name--AT&T Corp.--will shed the dated imagery associated with the 
past. At the same time, it will further serve to identify the Company as what 
it is today--a forward-looking, high technology enterprise whose range of 
businesses, products, and services puts it on the leading edge of the 
information revolution. 

The adoption of the proposed amendment of the Restated Certificate of 
Incorporation to change the corporate name will require the affirmative vote 
of the holders of a majority of the outstanding shares of common stock. Any 
shares not voted (whether by abstention, broker non-vote, or otherwise) have 
the effect of a negative vote. 

Your directors recommend that shareholders vote FOR the adoption of the 
proposed amendment of the Company's Restated Certificate of Incorporation. 

    
                                      15 


 

DIRECTORS' PROPOSAL TO APPROVE THE 1995 AT&T EMPLOYEE STOCK PURCHASE PLAN 

   
(Item D on Proxy Card) 
In January 1994, the board adopted, subject to shareholder approval, the 1995 
AT&T Employee Stock Purchase Plan (the "Plan"). If approved by shareholders, 
the Plan provides eligible employees (defined below) with an opportunity to 
purchase AT&T common stock (the "Common Stock") through payroll deductions. 
The Plan is intended as an employment incentive and to encourage stock 
ownership in order to participate in the economic progress of the Company 
during the term of the Plan. 
    

   
Shares Reserved for the Plan 
The aggregate number of shares of Common Stock which may be purchased under 
the Plan shall not exceed 25 million, subject to adjustment in the event of 
stock dividends, stock splits, combination of shares, recapitalizations, or 
other changes in the outstanding Common Stock. Any such adjustment will be 
made by the board. Shares issued under the Plan may consist, in whole or in 
part, of authorized and unissued shares or treasury shares. 
    

Eligible Participants 
Employees of the Company or a subsidiary are eligible to participate, on a 
purely voluntary basis, in the Plan if they are employed: 

(a) in the United States and are participants in the AT&T Management Pension 
Plan or 

   
(b) outside the United States and are included in a group of employees 
designated by the Administrator (defined hereinafter) as being eligible for 
participation in the Plan. 
    

Approximately 150,000 employees would have been eligible to participate as of 
January 1, 1994. 

                                      16 


 

   
Material Features of the Plan 
Until the Plan is terminated or the supply of shares reserved is exhausted, 
the Administrator may make such offerings as the Administrator determines 
appropriate. Each offering shall be for a limited period ending on such 
exercise dates as the Administrator determines. Each offering shall be for a 
period of not more than six months. 
    

   
Each eligible employee on an exercise date shall be entitled to purchase 
whole shares of Common Stock at the purchase price equal to 85% of the 
average of the reported highest and lowest sale prices of shares of Common 
Stock on the New York Stock Exchange on each of the ten days immediately 
preceding the applicable exercise date. However, the purchase price shall not 
be less than the par value of the Common Stock. 
    

   
Any eligible employee may participate in an offering by filing a stock 
purchase agreement (the "Stock Purchase Agreement") before an exercise date 
in accordance with rules and procedures established by the Administrator. 
Once an eligible employee has filed a Stock Purchase Agreement he or she will 
participate in the offering unless he or she is permitted to withdraw from 
the offering in accordance with rules and procedures established by the 
Administrator. 
    

   
Payment for shares of Common Stock purchased under the Plan will be made by 
authorized payroll deductions from an eligible employee's Eligible 
Compensation. "Eligible Compensation" means an eligible employee's basic 
salary rate, lump sum merit awards, and incentive compensation payable from 
the Company or a subsidiary of the Company (a "Subsidiary"), but shall not 
include overtime, shift differentials, other premium pay, or awards under 
long- and short-term incentive plans for senior managers. 
    

   
In his or her Stock Purchase Agreement, an eligible employee authorizes a 
deduction from his or her Eligible Compensation payable before the next 
exercise date. The maximum deduction is 10% of the Eligible Compensation and 
the minimum deduction is the amount necessary to purchase ten shares of 
Common Stock. 
    


                                      17 


 

   
On each exercise date, the Company will use amounts deducted from the 
Eligible Compensation of each eligible employee to purchase the largest 
number of whole shares of Common Stock that can be purchased with the amount 
authorized by the eligible employee in his or her Stock Purchase Agreement 
for the purchase of Common Stock. 
    

   
Any amount not used to purchase shares under the Plan shall be refunded to 
the eligible employee. 
    

   
All funds received by the Company from the sale of Common Stock under the 
Plan may be used for any corporate purpose. 
    

   
Tax Treatment 
This Plan is not intended to qualify as an "employee stock purchase plan" 
under Section 423 of the Internal Revenue Code of 1986, as amended. 
Therefore, employees will be deemed to have received taxable compensation 
income on an exercise date equal to the excess of the fair market value of 
the shares on the exercise date over the purchase price. The Administrator 
shall establish procedures for the Company to satisfy any applicable tax 
withholding obligations relating to the taxable compensation income. The 
Company will be entitled to a deduction from income equal to the amount the 
employees are required to report as compensation income. 
    

   
Plan Administration and Termination 
Subject to the general control of, and superseding action by, the board, the 
Senior Vice President-Human Resources of the Company (the "Administrator") 
has full power to administer the Plan. The Administrator may delegate any or 
all of the administrative functions under the Plan to such individuals, 
committees, or entities as the Administrator considers appropriate. The 
Administrator may adopt rules and procedures not inconsistent with the 
provisions of the Plan for its administration. The Administrator may adopt 
the form of Stock Purchase Agreement and all notices required under the Plan. 
The Administrator's interpretation and construction of the Plan is, subject 
as aforesaid, final and conclusive. 
    


                                      18 


 

The board may at any time, or from time to time, alter or amend the Plan in 
any respect, except that, without approval of the shareholders of AT&T, no 
amendment may increase the number of shares reserved for purchase, or reduce 
the purchase price per share, under the Plan other than as described above. 

   
The board shall have the right to terminate the Plan or any offering at any 
time for any reason. Unless terminated earlier, the Plan shall continue in 
effect through December 31, 1999. 
    

   
Adoption of this proposal requires an affirmative vote by the holders of a 
majority of the outstanding Common Stock. Any shares not voted (whether by 
abstention, broker non-vote, or otherwise) have the effect of a negative 
vote. The directors recommend that shareholders vote FOR the approval of the 
1995 AT&T Employee Stock Purchase Plan. 
    

   
DIRECTORS' PROPOSAL TO APPROVE THE 1994 EMPLOYEE STOCK PURCHASE PLAN FOR AT&T 
GLOBAL INFORMATION SOLUTIONS COMPANY 
    

   
(Item E on Proxy Card) 
In January 1994, the board adopted, subject to shareholder approval, the 1994 
Employee Stock Purchase Plan (the "1994 Plan") for AT&T Global Information 
Solutions Company (formerly NCR Corporation, "Global Information Solutions"). 
Global Information Solutions has had a stock purchase plan in place for over 
20 years. The 1994 Plan is similar to its current stock purchase plan, which 
was approved by AT&T's shareholders in 1992. That plan will terminate in July 
1994 and will be replaced, if approved by AT&T shareholders, by the 1994 
Plan. 
    

   
Shares Reserved for the 1994 Plan 
The 1994 Plan provides eligible employees of Global Information Solutions 
with a means to purchase, through payroll deductions, up to ten million 
shares of AT&T common stock (the "Common Stock") at a discount, subject to 
adjustments under certain circumstances such as stock splits, stock 
dividends, recapitalization or other changes in the outstanding Common Stock. 
    


                                      19 


 

   
Eligible Participants 
Full-time employees of Global Information Solutions (or a subsidiary 
designated by the Chief Executive Officer, President, or Secretary of Global 
Information Solutions) who have completed six months of continuous service 
and certain employees of Global Information Solutions who were formerly 
employed by AT&T or its subsidiaries for a continuous period of six months 
are eligible to participate, on a purely voluntary basis, in the 1994 Plan. 
Approximately 41,000 employees would have been eligible to participate as of 
January 1, 1994. 
    

   
Material Features of the 1994 Plan 
Twice a year, on August 1 and February 1 of each Plan year, an offering will 
commence and continue for a period of up to six months (an "Offering"), 
during which eligible employees may elect to purchase Common Stock through 
payroll deductions of up to 10% of compensation, which deductions are made 
commencing with the Offering and ending on the last day of such Offering (the 
"Purchase Period"). The purchase price per share of Common Stock will be 85% 
of the average of the reported highest and lowest sale prices of shares of 
Common Stock on the New York Stock Exchange on the last day of the Purchase 
Period on which sales of Common Stock were made on that exchange. Only whole 
shares may be purchased, and at any Offering, no more than 1,150 shares can 
be purchased by a participant, subject to certain limitations imposed by 
Federal tax laws. 
    

   
A participant may withdraw from the 1994 Plan at any time and the entire 
amount credited to his or her account will be refunded. If a participant 
terminates employment, the entire amount credited to his or her account will 
be used to purchase shares of Common Stock on the last day of the Purchase 
Period unless the participant's termination of employment occurs at least 
three months prior to the end of the Purchase Period, in which event, the 
entire amount in his or her account will be refunded. The revocation of the 
designated subsidiary status of a Global Information Solutions subsidiary by 
which a participant is employed will cause the entire amount credited to the 
participant's account to be refunded to him or her. 
    


                                      20 


 

   
All funds received by the Company from the sale of Common Stock under the 
1994 Plan may be used for any corporate purpose. 
    

   
Tax Treatment 
The 1994 Plan is intended to qualify as an employee stock purchase plan 
within the meaning of Section 423 of the Internal Revenue Code of 1986, as 
amended (the "Code"). Under the Code, an employee who elects to participate 
in an Offering under the 1994 Plan will not realize income at the time the 
Offering commences or when the shares purchased under the 1994 Plan are 
transferred to him or her. If an employee disposes of such shares after two 
years from the date the Offering of such shares commences and after one year 
from the date of the transfer of such shares to him or her, the employee will 
be required to include in income, as compensation for the year in which such 
disposition occurs, an amount equal to the lesser of (i) the excess of the 
fair market value of such shares at the time of disposition over the purchase 
price or (ii) 15% of the fair market value of such shares at the time the 
Offering commenced. The employee's basis in the shares disposed of will be 
increased by an amount equal to the amount so includable in his or her income 
as compensation, and any gain or loss computed with reference to such 
adjusted basis which is recognized at the time of the disposition will be 
long-term capital gain or loss. In such event, Global Information Solutions 
(or the subsidiary by which the employee is employed) will not be entitled to 
any deduction from income. 
    

   
If any employee disposes of the shares purchased under the 1994 Plan within 
such two-year or one-year period, the employee will be required to include in 
income, as compensation for the year in which such disposition occurs, an 
amount equal to the excess of the fair market value of such shares on the 
date of purchase over the purchase price. The employee's basis in such shares 
disposed of will be increased by an amount equal to the amount includable in 
his or her income as compensation, and any gain or loss computed with 
reference to such adjusted basis which is recognized at the time of 
disposition will be capital gain or loss, either short-term or long-term, 
depending on the holding period for such shares. In the event of a 
disposition within such two-year or one-year period, Global Information 
Solutions (or the subsidiary by which the employee is employed) will be 
entitled to a deduction from income equal to the 
    


                                      21 


 

amount the employee is required to include in income as a result of such 
disposition. 

   
An employee who is a nonresident of the United States will generally not be 
subject to a U.S. Federal income tax with respect to the shares of Common 
Stock purchased under the 1994 Plan. 
    

   
Plan Administration and Termination 
The 1994 Plan provides for administration of the Plan by the Secretary of 
Global Information Solutions. The board of directors of Global Information 
Solutions may terminate the 1994 Plan at any time and, with the approval of 
the Senior Vice President - Human Resources of AT&T, amend it in any respect, 
except that the approval of AT&T shareholders is required for any amendment 
to increase the number of shares available for purchase under the 1994 Plan 
or to decrease the purchase price. Unless earlier terminated, the 1994 Plan 
will continue in effect until December 31, 1999, except that if at the end of 
any Purchase Period the aggregate funds available for purchase of Common 
Stock would purchase a greater number of shares than is available for 
purchase, the number of shares that would otherwise be purchased by each 
participant at the end of the Purchase Period will be proportionately reduced 
in order to eliminate the excess. The 1994 Plan would then automatically 
terminate after such Purchase Period. Upon expiration or termination of the 
1994 Plan, any amount not applied toward the purchase of Common Stock will be 
refunded to the participant. 
    

   
Adoption of this proposal requires an affirmative vote by the holders of a 
majority of the outstanding Common Stock. Any shares not voted (whether by 
abstention, broker non-vote, or otherwise) have the effect of a negative 
vote. The directors recommend that shareholders vote FOR the approval of the 
1994 Employee Stock Purchase Plan for AT&T Global Information Solutions 
Company. 
    

   
DIRECTORS' PROPOSAL TO APPROVE THE AT&T SHORT TERM INCENTIVE PLAN 
    

   
(Item F on Proxy Card) 
In January 1994, the board adopted, subject to shareholder approval, an 
amendment to the existing AT&T Short Term Incentive 
    


                                      22 


 
   
Plan (the "Short Term Plan"). This amendment establishes an objective 
performance-based formula that effectively limits the awards to "covered 
employees" (as described herein) by setting the maximum awards payable under 
the Short Term Plan. This amendment is made desirable by the new Section 
162(m) of the Internal Revenue Code of 1986, as amended (the "Code") to 
ensure the Federal tax deductibility of all awards under the Short Term Plan. 
In addition, this amended Short Term Plan is being submitted for shareholder 
approval to comply with Section 162(m). If approved by shareholders, the 
Short Term Plan provides senior managers of the Company and its affiliates 
with incentive compensation based upon the level of achievement of financial 
and other performance criteria. The Short Term Plan will enhance the ability 
of the Company and its affiliates to attract and retain individuals of 
exceptional managerial talent upon whom, in large measure, the sustained 
progress, growth and profitability of the Company depend. 

Material Features of the Short Term Plan 

Eligible Participants 
Senior managers (i.e., managers above "E" level) employed by the Company or 
any of its affiliates and in active service at such position during a 
performance year (i.e., the year in which an award is earned) shall be able 
to participate in the Short Term Plan (whether or not so employed or living 
at the date an award is made); provided that, except in the case of a manager 
promoted to senior manager, the manager has at least three months of active 
service at such level during the performance year (excluding any time the 
manager was absent and receiving disability benefits). A senior manager is 
not rendered ineligible to be a participant by reason of being a member of 
the board. 
    
   
Awards Under the Short Term Plan 
Awards will be made each calendar year with respect to the immediately 
preceding performance year. Awards shall be paid as 
    


                                      23 


 
   
soon as practicable after the performance year, except to the extent deferred 
pursuant to the AT&T Senior Management Incentive Award Deferral Plan. 

The Compensation Committee shall approve target awards for each structure 
rate of management eligible for awards and establish financial and other 
performance criteria applicable to awards for such performance year. 

Awards are based upon level of achievement of such performance criteria in 
addition to individual merit. Target awards serve as a guideline in making 
awards. Target awards shall be prorated for a particular performance year to 
account for: entrance to or exit from the level of senior manager; changes in 
structure rate; and receipt of disability benefits for more than three months 
during such performance year. Depending upon individual performance, an award 
may be more or less (including no award) than such target. Participants who 
are dismissed during or after a performance year are ineligible for an award. 
    

   
In order to maintain a participant's rights in the event of a change in 
control (i.e., (a) a change in composition of the board such that at any time 
a majority of the board shall have been members of the board for less than 
twenty-four months, unless the election of each new director who was not a 
director at the beginning of the period was approved by at least two-thirds 
of the directors then still in office who were directors at the beginning of 
such period or (b) any person acquires 30% or more of the outstanding shares 
of the Company), the Compensation Committee may (i) provide for the 
acceleration of any time periods relating to realization of any award; (ii) 
make such adjustment to any target award to reflect such change in control; 
or (iii) cause the Company's obligation with respect to such target award to 
be assumed, or new obligations substituted therefor, by the acquiring or 
surviving corporation after such change in control. 
    


                                      24 


 
   
Award Limitations to "Covered Employees" 
Notwithstanding any other provision of the Short Term Plan to the contrary, 
the following provisions shall apply to any participant who is a "covered 
employee" within the meaning of Section 162(m) of the Code (i.e., the CEO and 
four most highly compensated officers of the Company, other than the CEO, as 
of the end of a performance year): 

(a) The total of all awards payable to such participants who are "covered 
employees" shall not exceed 0.4% of the "Net Cash Provided by Operating 
Activities," as publicly disclosed in the Company's consolidated financial 
statements for such performance year, and the award to each participant with 
respect to such performance year shall not exceed such amount divided by the 
number of participants who are "covered employees" with respect to such 
performance year. 

(b) The actual award to any participant under this provision will be 
determined by those Compensation Committee members who are "outside 
directors" (within the meaning of Section 162(m) of the Code), in their sole 
discretion, based on individual merit and financial and other performance 
criteria of the Company established by the Compensation Committee along with 
any adjustments (as described herein under "Plan Administration and 
Termination"). The award to any participant may be less than (including no 
award), but never more than, the amount determined under (a) above. 

Other Provisions 
No person shall have any claim to an award and there is no obligation for 
uniformity of treatment of participants. Awards may not be assigned or 
alienated. 

Neither the Short Term Plan nor any action taken hereunder shall be construed 
as giving to any participant the right to be retained in the employ of the 
Company or any affiliate. 
    

   
The Company or any affiliate shall have the right to deduct from any award 
any Federal, state or local taxes required with respect to such payment. 
    


                                      25 


 
   
Awards will be included in the base for determining pensions, retirement and 
death related benefits under the AT&T Non-Qualified Pension Plan, the AT&T 
Mid-Career Pension Plan, and the AT&T Senior Management Long Term Disability 
and Survivor Protection Plan. 

In the event an award is deferred under the AT&T Senior Management Incentive 
Award Deferral Plan, it will be reflected in the calculations of the above 
benefit plans as if paid as scheduled and not deferred. 

A participant may designate a beneficiary or beneficiaries to receive all or 
part of an award made payable after such participant's death. Such 
beneficiary may be replaced or revoked by the participant at any time. 

Plan Administration and Termination 
Except as the Short Term Plan provides those members of the Compensation 
Committee who are "outside directors" with authority to grant awards to 
"covered employees," the Compensation Committee shall have full power to 
administer and interpret the Short Term Plan and to establish rules for its 
administration subject to resolutions, not inconsistent with the Short Term 
Plan, as may be adopted by the board. The Compensation Committee shall also 
have the authority to adjust awards to reflect unanticipated extraordinary 
major business developments, changes in the number of outstanding shares, and 
corporate reorganization during a performance year. In making any 
determinations under or referred to in the Short Term Plan, the Compensation 
Committee shall be entitled to rely on opinions, reports, or statements of 
officers or employees of the Company and its affiliates and of counsel, 
public accountants, and other professional or expert persons. 

The Short Term Plan shall be governed by the laws of the State of New York 
and applicable Federal law. 
    
   
The board may modify or terminate the Short Term Plan at any time, effective 
at such date as the board may determine. The Senior Vice President - Human 
Resources (or any successor) with the concurrence of the General Counsel, or 
the Vice President - Law for 
    


                                      26 


 
   
Corporate Matters, of the Company (or any successor to either of such 
officer's responsibilities), shall be authorized to make minor or 
administrative changes or changes required by or made desirable by government 
regulation. 

Adoption of this proposal requires an affirmative vote by the holders of a 
majority of the votes cast thereon. Any shares not voted (whether by 
abstention, broker non-vote, or otherwise) have no impact on the vote. The 
directors recommend that shareholders vote FOR the approval of the AT&T Short 
Term Incentive Plan, as amended. 
    

   
SHAREHOLDER PROPOSALS 
AT&T receives many suggestions from shareholders, some as formal shareholder 
proposals. All are given careful attention. 
    

   
Proponents of six shareholder proposals have stated that they intend to 
present the following proposals at the annual meeting. Information on the 
shareholdings and addresses of the proponents and co-sponsors (if applicable) 
is available upon request from the Corporate Secretary's Department, 
Shareowner Relations, at 32 Avenue of the Americas, Room 2420E, New York, NY 
10013-2412. The proposals and supporting statements are quoted below. The 
board has concluded it cannot support these proposals for the reasons given. 
    

   
Shareholder Proposal 1: 
    

   
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Ave., N.W., 
Suite 215, Washington, DC 20037, has submitted the following proposal: 
    

   
"RESOLVED: That the shareholders recommend that the Board  take the necessary 
step that AT&T specifically identify by name and corporate title in all 
future proxy statements those executive officers, not otherwise so 
identified, who are contractually entitled to receive in excess of $100,000 
annually as a base salary, together with whatever other additional 
compensation bonuses and other cash payments were due them. 
    


                                      27 


 
   
"REASONS: In support of such proposed Resolution it is clear that  the 
shareholders have a right to comprehensively evaluate the management in the 
manner in which the Corporation is being operated and its resources utilized. 
At present only a few of the most senior executive officers are so 
identified, and not the many other senior executive officers who should 
contribute to the ultimate success of the Corporation. Through such 
additional identification the shareholders will then be provided an 
opportunity to better evaluate the soundness and efficacy of the overall 
management. Last year the owners of 87,283,144 shares, representing 
approximately 10.3% of shares voting, voted FOR this proposal. 

"If you AGREE, please mark your proxy FOR this proposal." 

Your directors recommend a vote against this proposal. Last year this 
proposal was opposed by more than 763 million shares, nearly 90% of the 
shares voted. In a following section of this proxy statement the Compensation 
Committee of the board of directors reports on the Company's executive 
compensation policies and there is detailed information about the 
remuneration of the six most highly compensated executive officers. AT&T 
generally does not have contractual employment arrangements with its 
executive officers; however, in the occasional instance when such an 
arrangement arises, it is disclosed whenever required by Securities and 
Exchange Commission rules. In our view, going beyond the level of detail 
already furnished would not add meaningful information for shareholders 
assessing AT&T's compensation program and its effectiveness in responding to 
the competitive environment in which the Company operates. Therefore, your 
directors again recommend that shareholders vote AGAINST this proposal. 

Shareholder Proposal 2: 

The National Council of the Churches of Christ in the USA, 475 Riverside 
Drive, Fifth Floor, New York, NY 10115-0050, has submitted the following 
proposal: 

"WHEREAS WE BELIEVE: 
    

   
"The responsible implementation of sound environmental policy increases 
long-term shareholder value by increasing efficiency, 
    


                                      28 


 
   
decreasing clean-up costs, reducing litigation, and enhancing public image 
and product attractiveness; 

"Adherence to public standards for environmental performance gives a company 
greater public credibility than is achieved by following standards created by 
industry alone. In order to maximize public credibility and usefulness, such 
standards also need to reflect what investors and other stakeholders want to 
know about the environmental records of their companies; 

"Standardized environmental reports will provide shareholders with useful 
information which allows comparisons of performance against uniform standards 
and comparisons of progress over time. Companies can also attract new capital 
from investors seeking investments that are environmentally responsible, 
responsive, progressive, and which minimize the risk of environmental 
liability. 

"AND WHEREAS: 

"The Coalition for Environmentally Responsible Economies (CERES)--which 
comprises large institutional investors with $150 billion in stockholdings 
(including shareholders of this Company), public interest representatives, 
and environmental experts--consulted with dozens of corporations and produced 
comprehensive public standards for both environmental performance and 
reporting. Over 50 companies have endorsed the CERES Principles--including 
the Sun Company, a Fortune-500 company--to demonstrate their commitment to 
public environmental accountability. 
    
   
"In endorsing the CERES Principles, a company commits to work toward: 
1. Protection of the biosphere 
2. Sustainable use of natural resources 
3. Waste reduction & disposal 
4. Energy conservation 
5. Risk reduction 
6. Safe products and services 
7. Environmental restoration 
8. Informing the public 
9. Management commitment 
10. Audits and reports 
    


                                      29 


 
   
"The full text of the CERES Principles and the accompanying CERES Report Form 
are available from CERES, 711 Atlantic Avenue, Boston MA 02110, tel: 
617/451-0927. 

"Concerned investors are asking the Company to be publicly accountable for 
its environmental impact, including collaboration with this corporate, 
environmental, investor, and community coalition to develop (a) standards for 
environmental performance and disclosure; (b) appropriate goals relative to 
these standards; (c) evaluation methods and tools for measurement of progress 
toward these goals; and (d) a format for public reporting of this progress. 

"We believe this request is consistent with regulation adopted by the 
European Community for companies' voluntary participation in verified and 
publicly-reported eco-management and auditing. 

"RESOLVED: Shareholders request the Company to endorse the CERES Principles 
as a commitment to be publicly accountable for its environmental impact. 

                            "SUPPORTING STATEMENT 

"We invite the Company to endorse the CERES Principles by (1) stating its 
endorsement in a letter signed by a senior officer; (2) committing to 
implement the Principles; and (3) annually completing the CERES Report. 
Endorsing these Principles complements rather than supplants internal 
corporate environmental policies and procedures. 

"We believe that without this public scrutiny, corporate environmental 
policies and reports lack the critical component of adherence to standards 
set not only by management but also by other stakeholders. Shareholders are 
asked to support this resolution, to encourage our Company to demonstrate 
environmental leadership and accountability for its environmental impact." 
    
                                      30 


 
   
Your directors recommend a vote against this proposal. AT&T shares the 
proponent's abiding concern for a healthy planet and is working toward the 
environmental goals the proponent espouses. Indeed, we are committed to be a 
global leader in the way we treat the environment. 

AT&T has historically demonstrated this commitment with aggressive programs 
to prevent pollution, reduce waste, promote recycling, and increase our 
purchases of recycled paper and other materials. These programs have won a 
Presidential citation and have received favorable recognition from 
government, industry, and environmentalists. 

In early 1993, we eliminated virtually all emissions of ozone-depleting 
substances--including CFCs--from consumer and business products 
manufacturing, two and a half years ahead of a worldwide ban. We converted 
leased telephone billing for customers to recycled paper, over 150 million 
bill pages plus envelopes annually. We had already converted our annual 
report and proxy statement, all our direct mail materials, and selected 
business-customer billing to recycled paper. 

Also in 1993, the AT&T Foundation committed up to $1 million to advance 
industrial ecology, an emerging concept that incorporates environmental 
considerations into product-design and manufacturing processes. Fellowships 
at six universities were awarded under this program. 

Your Company is fully committed to sound environmental performance and agrees 
that responsible implementation increases long-term shareholder value. Many 
organizations, including government agencies, trade associations, and 
privately and publicly funded groups advance the same ultimate goal, but each 
with its own focus or set of priorities to which they would ask us to adhere. 
Your directors do not think it is in the Company's interest to endorse this 
set of principles. 

Last year this proposal was opposed by more than 93% of the shares voting. 
Your directors again recommend that shareholders vote AGAINST this proposal. 
    
                                      31 


 
   
Shareholder Proposal 3: 

The Grey Nuns of the Sacred Heart, Quarry Road, Yardley, PA 19067, has 
submitted the following proposal: 

"WHEREAS international trade has a significant impact on the environment and 
on people's ability to meet basic needs; 

"WHEREAS the socially-concerned proponents of this resolution have pursued 
implementation of environmental standards and socially responsible conduct in 
the maquiladora workplace for more than five years and firmly believe there 
is a need for strict, enforceable standards of conduct for corporations 
operating in Canada, Mexico and the United States. 

"WHEREAS in past years, over twenty U.S. corporations have been urged to 
adopt standards of conduct relative to their maquiladora operations in 
Mexico. These standards address: 

* Responsible practices for handling hazardous wastes and protecting the 
environment: Corporations must be guided by the principle that they will 
follow regulations setting forth high standards of environmental protection 
and secure the best possible protection of the environment. 

* Health and safety practices: Corporations must be guided by the principle 
that they will follow regulations setting forth high standards of 
occupational safety and health. 

* Fair employment practices and standard of living: Corporations must respect 
workers' basic rights and human dignity. 

* Community impact: Corporations must recognize social responsibility to 
communities in which they locate facilities and promote community economic 
development and improvements in quality of life. 
    
   
"WHEREAS the United Nations Declaration of Human Rights states everyone has 
the right to 'just and favorable conditions of work,' 'protection against 
unemployment,' 'equal pay for equal work,' 'just and favorable remuneration 
ensuring...an existence worthy of 
    


                                      32 


 
   
human dignity,' and 'join trade unions,' (Article 23) 'rest and leisure, 
including reasonable limitation of working hours,' (Article 24) 'a standard 
of living adequate for health and well being.' (Article 25) 

"WHEREAS debate in the U.S., Canada, and Mexico about the North American Free 
Trade Agreement (NAFTA) exposed major problems with the maquiladora industry. 
These include severe environmental problems resulting from corporate 
irresponsibility, major workplace hazards and wages at such low levels as to 
be inadequate to feed an employee's family. U.S. officials responded by 
drafting side agreements on labor and the environment. We urge official 
corporate policy to correct past problems and chart a new course for the 
future. 

"THEREFORE BE IT RESOLVED the shareholders request the Board of Directors to 
institute as official corporate policy that as our company continues or 
expands its business in Mexico, it will evaluate the environmental and human 
rights context in which we operate. The policy should include: 

1. Prepare a publicly available plan explaining how we will improve work 
conditions, health benefits, vocational training and salaries to economically 
and socially responsible levels. 

2. Disclose policies to prevent environmental harm, repair damaged 
environment where corporate practices may have caused destruction and prevent 
cross border dumping of toxic wastes. 

3. Publish plans and progress in supporting infrastructure needs and 
community economic development. 

4. Support the establishment of a council, with equal representation from 
Canada, Mexico, and the United States, to monitor progress in raising the 
standards of labor, health and environmental to meet goals for sustainable 
economic development." 
    
                                      33 


 
   
Your directors recommend a vote against this proposal. AT&T is committed to a 
set of values applicable worldwide to its operations and the conduct of its 
employees. They include practicing fair employment, providing a safe 
workplace, protecting the environment, and being responsible corporate 
citizens in the communities in all countries where we have facilities. The 
values are reflected in AT&T's international human resource policy. (For a 
copy of the policy, write to AT&T Shareowner Relations, 32 Avenue of the 
Americas, Room 2420E, New York, NY 10013-2412.) 

It is the Company's policy to provide fair, market-based compensation and 
benefit packages, safe and healthy workplaces, and a high quality of work 
life for all our workers and to promote protection of the environment where 
our employees live and work. We support these efforts through Company 
practices and good faith bargaining with certified employee representatives 
over terms and conditions, in accordance with applicable labor laws. 

AT&T's environmental, safety and health programs in Mexico focus on 
compliance with applicable law and on the development and use of practices 
which protect the environment, our employees, and the community. For example, 
AT&T's Matamoros and Monterrey plants have already eliminated all emissions 
of chlorofluorocarbons (CFCs) from their manufacturing operations, well ahead 
of the 1994 corporate goal. Our plants in Guadalajara and Reynosa were 
designed to avoid the use of CFCs in their manufacturing operations. All 
hazardous wastes from our Mexico operations are transported to the U.S., 
where they are recycled or disposed of in a safe manner. AT&T Matamoros is 
currently installing a wastewater treatment facility, conducts a hazardous 
chemical awareness program, and has employee participation in quality 
improvement teams on safety and the environment. 
    
   
Company equipment and processes in Mexico are comparable to those in the 
U.S., including careful chemical handling and storage, good process design 
and operation, and engineering controls where necessary. As required by law 
in Mexico, safety committees comprising union, management, production, and 
medical department representatives have been established at our manufacturing 
plants. The duties of the safety committees include safety inspections and 
monthly meetings. 
    


                                      34 


 
   
In summary, AT&T's programs in Mexico reflect the commitment to our Company's 
worldwide values. In our view, AT&T is already addressing the concerns 
expressed by the proponents. Therefore, your directors recommend that 
shareholders vote AGAINST this proposal. 

Shareholder Proposal 4: 

Murray and Beatrice M. Katz, 11435 Monterrey Drive, Silver Spring, MD 20902, 
have submitted the following proposal: 

"RESOLVED: That the shareholders of AT&T recommend that the Board of 
Directors institute a salary and compensation ceiling such that as to future 
employment contracts, no senior executive or director of the Company receive 
combined salary and other compensation which is more than two times the 
salary provided to the President of the United States," that is, no more than 
$400,000. 

"REASONS: There is no corporation which exceeds the size and complexity of 
the United States government of which the President is the chief executive 
officer. Even most government agencies exceed the size, as measured by 
personnel and budget, of most private corporations. The President of the 
United States receives a salary of $200,000; even agency heads and members of 
Congress are paid only somewhat more than $100,000. The recommended ceiling 
is sufficient to motivate any person to do his best. 

"The duties of the President of the United States are not comparable to those 
of senior executive officers or directors (the President has a much more 
demanding job). While the President has many valuable compensations which may 
exceed those of company executives, we use the salary of the President only 
as a reference point for shareholders to consider as they evaluate this 
resolution. 
    
   
"Officers and directors of public corporations are the employees and not the 
owners, except as they may be shareholders in common with other stockholders. 
Yet, they give the appearance that they run the corporations primarily for 
their benefit and incidentally for the shareholders. The Board of Directors, 
a closed group which perpetuates itself, determines who is to be selected to 
the Board 
    


                                      35 


 
   
and who is to be an officer of the company, as well as the compensation to be 
received. Directors and officers can run the corporation as if it were their 
property. Thus, officers may drain away millions of dollars in salary, stock 
options and other compensation. When the recommended ceiling on salary and 
compensation is exceeded, it demonstrates an expression of greed and abuse of 
power. 

"Usually, there is no direct correlation between the profitability of a 
corporation and the compensation to officers. In many corporations, 
compensation increases even as profits fall. High compensation need not serve 
as an incentive for a better run or more profitable corporation. There is no 
shortage of qualified people who could do as good a job as the incumbent 
officers of the Corporation and would have no hesitation serving within the 
aforementioned pay ceiling. 

"Any officer who believes he can better the corporation should be 
sufficiently motivated to purchase stock on the open market or to receive 
stock options as part of his salary and compensation package. To remain 
competitive in world markets we must cut our costs and not overcompensate 
directors and officers. 

"If you AGREE, please mark your proxy FOR this resolution." 
Your directors recommend a vote against this proposal. AT&T is committed to 
both rigorous cost control and to appropriately compensating its senior 
executive officers and directors. 
    
   
As discussed in the Board Compensation Committee Report on Executive 
Compensation (included in the following section of this proxy statement), the 
Company's compensation programs are designed to link compensation to Company 
performance, to enhance shareowner value, and to retain the valuable talent 
necessary to ensure continued Company success. The board of directors and the 
Compensation Committee of the board must consider compensation within the 
context of the highly competitive market environment that characterizes the 
private corporate sector. The private sector values the services of certain 
people at a level in excess of that allowed by this proposal. Imposition of 
an arbitrary below-market ceiling on the total compensation of senior 
executives and directors, as suggested by this proposal, would, in the 
opinion 
    


                                      36 


 
   
of the board, preclude the Company from attracting and retaining its senior 
management and board of directors and, as a result, would have an adverse 
impact on the quality of leadership, the Company's operations and, 
ultimately, on shareowner value. 

For all these reasons the board of directors is of the opinion that limiting 
the total compensation of Company senior executives and directors to $400,000 
is without merit. Therefore, your directors recommend that shareholders vote 
AGAINST this proposal. 

Shareholder Proposal 5: 

Mark Seidenberg, 66A N. Bedford Street, Arlington, VA 22201, has submitted 
the following proposal: 

"The stockowners hereby recommend that the Board of Directors adopt the 
following policies for all dealings with China and the former Soviet Union: 

"1. Goods or services produced in whole or part by slave or forced labor 
shall not be acceptable for delivery to the corporation, its subsidiaries, 
affiliates, or joint ventures. A suitable certificate of origin shall be 
required. 

"2. Goods provided by the corporation, its subsidiaries, affiliates, or joint 
ventures shall not be sold to or otherwise provided to any facility utilizing 
slave or forced labor. A suitable certificate of use shall be required. 

"3. The right of on-site inspection to determine the existence of slave or 
forced labor shall be vigorously pursued. 

"4. The corporation shall cooperate promptly, energetically, and fully with 
the United States government and any international organization in their laws 
or policies to discourage the use of slave or forced labor. 
    
   
"For purposes of this resolution, the term 'former Soviet Union' shall mean 
the countries of, and any combination thereof, Russia, Ukraine, Kazakhstan, 
Georgia, Armenia, Azerbaijan, Uzbekistan, Belarus (Byelorussia), Kyrgyzstan 
(Kirghizia), Moldova (Moldavia), Tajikistan (Tadzhikistan), and Turkmenistan 
(Turkmenia). 
    


                                      37 


 
   
"SUPPORTING STATEMENT: 

"Slave and forced labor is utterly repugnant to Americans. Our Civil War 
resulted in outlawing this heinous practice. A statute forbids importing any 
goods made in whole or part by forced labor. 

"Nevertheless, slave and forced labor are widespread in China and the former 
Soviet Union. China's laogai camps and factories include about 20,000,000 
slave and forced laborers, and the gulags of the former Soviet Union have 
about 4,000,000. 

"These slave and forced labor facilities produce a wide range of products, 
including sophisticated machinery and electronics, and much of it is intended 
for export. 

"AT&T has multi-billion dollar deals with China and the former Soviet Union. 
In China, numerous telephones and answering machines (including the 'Mickey 
Mouse' phone model) are produced for AT&T sale in the United States. AT&T 
provides telephone switching gear to China and intends to produce optical 
fibers there. For the former Soviet Union, AT&T expects to sell sophisticated 
communications gear to Russia, Ukraine, and Kazakhstan, and contemplates the 
manufacture of goods inside Russia. 

"AT&T should not support the slave and forced labor system in either country. 
It should have explicit policies in place and specific provisions in all 
contracts with those countries to prevent AT&T from being tainted with the 
blood, sweat, and tears of the largest remaining slave and forced labor 
forces in the world. 

"U.S. law does not cover the activities of AT&T overseas for use or sale 
overseas. It only covers imports of slave-made goods into the United States. 
    
   
"If you can imagine any convincing argument against this policy, I can't. 
But, believe me, AT&T's board will think of something. I urge you to read the 
board's position and decide for yourself." 
Your directors recommend a vote against this proposal. The proponent has 
crafted the proposal so that it might lead shareowners to believe that AT&T 
uses prison or slave labor in its operations in China or in the countries of 
the former Soviet Union. AT&T does not, and does not intend to, use prison or 
slave labor in its operations. 
    


                                      38 


 
   
Many of the products AT&T provides to these countries are manufactured 
elsewhere. Where the products are manufactured or assembled in these 
countries, the operations are conducted in facilities that are managed by, or 
have been inspected by, the Company. In our view, the principles cited in the 
proposal are already addressed by current Company practices and policies. In 
addition, U.S. government policies and oversight activities are directed more 
generally to improving the human rights practices of these countries. 

We are convinced that, in the long run, the kinds of products and services 
available from AT&T are important vehicles for opening the doors of 
communication and improving living and working conditions throughout the 
world. 

Based on the information provided above, we believe the proposal has no 
useful bearing on the Company's business. Therefore, your directors recommend 
that shareholders vote AGAINST this proposal. 

Shareholder Proposal 6: 

James E. Irvine, Vice President of CWA Communications and Technologies, 501 
Third Street, N.W., Washington, DC 20001-2797, has submitted the following 
proposal. 

"WHEREAS the crisis in U.S. health care costs had led to a national public 
policy debate, and to legislative proposals, including the American Health 
Security Act (S. 491 and H.R. 1200) and the proposal of the Clinton 
Administration, which may significantly alter the regulatory environment with 
which the Company must deal; and 

"WHEREAS it appears that health care reforms, if implemented, could result in 
significant cost savings which could assist the Company in improving profits, 
maintaining competitiveness, improving labor-management relations, and 
enhancing shareholder value; 

"THEREFORE BE IT RESOLVED: 
    
   
That the shareholders of American Telephone & Telegraph Co. ('Company') 
request that the Board of Directors establish a Committee composed of four 
members of the Board, in order to evaluate the impact of various health care 
proposals on the 
    


                                      39 


 
   
Company, including the American Health Care Security Act and the proposal of 
the Clinton Administration and to prepare a report of its findings, for the 
purposes of: (1) providing advice and information to the Board concerning 
strategic decisions, or other major policy decisions, that may be necessary 
to achieve significant cost savings in a reformed regulatory environment; and 
(2) providing information to shareholders, who may request copies of the 
report, so that they may evaluate the potential impact of health care reform 
on the Company in making decisions to buy, sell or hold the Company's 
securities. 

"STATEMENT OF SUPPORT 

"The Company faces a unique opportunity to accrue significant costs savings, 
maintain competitiveness, improve labor-management relations, and enhance 
shareholder value. 

"For example, in the Clinton Administration's materials concerning the 
economic effects of health care reform, which were reprinted by BNA's Health 
Care Policy Report on October 11, 1993, it is declared: 

'the rising cost of health care is a hidden tax on employers--hurting 
business, depressing wages, limiting job creation and threatening our 
competitiveness. The bottom line is this: health care reform will lower 
business costs, raise wages, and increase opportunities for workers.' 

"According to the Administration materials reprinted by BNA, 'Businesses that 
currently provide insurance pay more than true cost since providers 
overcharge them to make up for care to the uninsured.' In addition the 
materials state that savings would be achieved by eliminating the cost of an 
estimated 20 million '"free riders"' who 'are insured through a spouse's 
policy.' In addition the Washington Post has reported (September 25, 1993) 
that companies could save an estimated $4.5 to $5 billion a year under the 
Clinton health plan, because it calls for government, rather than 
corporations, to pay the health care costs of those who retire before the age 
of 65. 
    
   
"Under these circumstances, the Company will benefit from a thorough review 
of the health care reform options in order to ensure that it avails itself of 
every opportunity to achieve costs savings that could improve the Company's 
profits, maintain 
    


                                      40 


 
   
competitiveness, improve labor-management relations, and enhance shareholder 
value. 

"For the reasons stated above, we urge you to vote YES on this proposal." 

Your directors recommend that shareholders vote against this proposal. The 
Administration and a number of members of Congress have introduced bills that 
seek to address the complex issue of health care reform. Preparing reports on 
such bills--which would likely change even as the reports were being 
done--would, in our view, be an unnecessary and inappropriate use of 
corporate resources. 

At the same time, we recognize our responsibility to our shareowners to 
manage the business prudently, including the provision of health care 
benefits that make the Company an attractive place to work for qualified 
employees committed to the Company's goals. In recognition of the importance 
of having good benefits for employees while controlling costs for 
shareowners, the AT&T board of directors already has in place a Committee on 
Employee Benefits that is charged with keeping informed about all employee 
benefit plans. 

There is as yet no national consensus on how best to achieve the goal of 
health care reform and it is far too early to do a report or predict the 
final outcome of legislation. However, the Administration has made it clear 
that it is interested in constructive dialogue about how best to attain its 
goals. AT&T intends to participate in the national dialogue as various 
provisions of the bills evolve, and to contribute insight about its 
experience in managing the quality and cost of health care coverage for 
employees. 

We believe we are already addressing the matter of pending health care reform 
in a constructive manner that considers both shareowners and employees. 
Therefore, your directors recommend that shareholders vote AGAINST this 
proposal. 
                                          41 



 

   
Approval of the preceding shareholder proposals would require a majority of 
the votes cast thereon. Any shares not voted (whether by abstention, broker 
non-vote, or otherwise) have no impact on the vote. 
    

SUBMISSION OF SHAREHOLDER PROPOSALS 
Proposals intended for inclusion in next year's proxy statement should be 
sent to the Vice President - Law and Secretary of the Company at 32 Avenue of 
the Americas, New York, NY 10013-2412, and must be received by November 1, 
1994. 

OTHER MATTERS TO COME BEFORE THE MEETING 

In addition to the matters described above, there will be an address by the 
Chairman and a general discussion period during which shareholders will have 
an opportunity to ask questions about the business. 

If any matter not described herein should come before the meeting, the Proxy 
Committee will vote the shares represented by it in accordance with its best 
judgment. At the time this proxy statement went to press, the Company knew of 
no other matters which might be presented for shareholder action at the 
meeting. 

   
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION 
The Compensation Committee is composed of five independent non-employee 
directors. The committee is responsible for setting and administering 
executive officer salaries and the annual bonus and long-term incentive plans 
that govern the compensation paid to all senior managers of the Company, 
except that the full board (other than directors who are employees) is 
responsible for setting and administering salaries and the annual bonus for 
the officers listed on page 48 (the "named officers") based upon 
recommendations of the committee. The following report represents the actions 
of the committee and the board regarding compensation paid to the named 
officers during 1993. 
    


                                      42 


 

   
Compensation Philosophy 
The Company's compensation programs are designed to link executives' 
compensation to the performance of the Company. For example, the Chairman's 
annual bonus and long-term awards are performance driven incentives and 
account for 73% of his total compensation structure. The other named officers 
have approximately 60% of their total compensation at risk in performance 
driven incentive plans. We target executive competitive compensation levels 
at the mean of a select group of large, market-focused, progressive companies 
with whom we compete for senior executive talent. The Company's competitors 
for executive talent are not necessarily the same companies that would be 
included in a peer group established to compare shareholder returns.Thus, the 
comparable companies for purposes of executive compensation are not the same 
as the peer group index used in the Five-Year Performance Comparison graph 
included in this proxy statement. 
    

   
The target executive compensation levels determined with reference to the 
comparable market survey sample described above require that the compensation 
paid to the Company's top five officers exceed the qualifying compensation 
limit for deductibility under Section 162(m) of the Internal Revenue Code of 
1986, as amended; therefore the Company has taken steps to mitigate the 
negative impact of this IRS provision on the shareowners. For example, our 
long-term incentive plan already qualifies for exemption as a shareholder 
approved performance driven plan, and we have a salary and incentive deferral 
plan in place. 
    

   
The committee has developed executive compensation governing principles that 
provide guidance to the design and operation of the senior management 
compensation plans. These principles address key areas of AT&T senior 
executive compensation policy such as the identification of the markets to be 
surveyed, and the flexibility of the compensation programs to attract 
strategic executive hires to address global markets. 
    

   
The committee has also developed governing principles for review of officer 
performance. This guideline ensures that a process is in place that links 
executive officer compensation to corporate performance levels. This review 
process identifies the necessary steps to design, approve, and implement the 
AT&T senior executive compensation programs. 
    


                                      43 


 

The Company's executive compensation program consists of two key elements: 
(1) an annual component, i.e., base salary and annual bonus and (2) a 
long-term component, i.e., performance shares, stock options, and restricted 
stock. The policies with respect to each of these elements, as well as the 
basis for determining the compensation of the Chairman of the Board and CEO, 
Mr. Allen, are described below. 

(1) Annual Component: Base Salary and Annual Bonus 

   
Base Salary: Base salaries for executive officers are determined with 
reference to a position rate for each officer. Annually, these position rates 
are determined by evaluating the responsibilities of the position and 
comparing it with other executive officer positions in the marketplace. 
Annual salary adjustments are determined by the Company's performance and the 
individual's contribution to that performance. For those executive officers 
responsible for particular business units, the financial and non-financial 
results (e.g., recognition within respective industries) of their business 
units are also considered. 
    

The committee determines the salary recommendation for the named officers. 
While there are no individual performance matrices or pre-established 
weightings given to each factor, these salary recommendations are based on 
performance criteria such as: 

   
* financial performance with a balance between long- and short-term earnings 
and revenue growth, 
    

* long-term strategic decisions, 

   
* initiatives to globalize the Company, 
    

   
* development of the leadership team, 
    

   
* response to a rapidly changing competitive environment, and 
    

   
* relative position to salary structure. 
    

   
Annual Bonus: The annual bonus for the Chairman and the named officers is 
dependent on the Company's performance relative to pre-set financial, 
employee, customer, and individual performance targets. The financial target 
is based on Economic Value Added ("EVA"), which measures the return on 
investment that enhances shareholder value. Employee satisfaction results are 
measured by an index called People Value Added ("PVA"). Components of this 
    


                                      44 


 

   
measurement are derived from an annual employee survey that measures employee 
perceptions of executive behavior such as: sharing roles and 
responsibilities, leadership, empowerment, and respect for individuals. The 
customer measure is Customer Value Added ("CVA") and it measures the relative 
value that customers perceive when our products are compared with those of 
our competitors. Targets for these measures were reviewed and approved by the 
committee. Payments under the Company's annual incentive plan are tied to the 
Company's level of achievement of the annual EVA, PVA, and CVA targets which 
comprise approximately 80% of the annual bonus. Individual performance awards 
are based on individual achievement considering the same factors as those 
used for base salary and comprise approximately 20% of the annual bonus. 
Award targets are related to survey results of comparable companies and are 
based on a percent of base salary. Actual awards to individuals are reviewed 
by the committee and recommended to the board for approval. 
    

(2) Long-Term Component: Performance Shares, Stock Options, and Restricted 
Stock 

   
To align shareholder and executive officer interests, the long-term component 
of the Company's executive compensation program uses grants whose value is 
related to the value of Company common shares. Grants of performance shares, 
stock options, and restricted stock are made under the AT&T 1987 Long Term 
Incentive Program which was approved by the shareholders. Historically, 
performance shares and stock options have been granted annually based on 
position rate, while restricted stock awards are granted on a selective 
basis. The size of annual performance share and stock option award levels are 
related to survey results of comparable companies in the marketplace. The 
size of previous grants and the number of shares held by an executive are not 
considered in determining annual award levels. Our target is to deliver half 
of this long-term incentive value via performance shares and half via stock 
options. The awards provide rewards to executives upon creation of 
incremental shareowner value and the attainment of long-term goals. 
    

   
Performance Shares: Performance shares, which are awards of units equivalent 
in value to AT&T common shares, are awarded 
    


                                      45 


 

   
annually in numbers based on an executive's position rate. Payout of 0% to 
150% of such performance shares is made in the form of cash and/or AT&T 
common shares at the end of a three-year performance period based on the 
Company's return-to-equity ("RTE") performance compared with a target. 
    

Stock Options: Stock options are granted annually to executive officers also 
in numbers based on their position rate. Like performance shares, the 
magnitude of such awards is determined annually by the committee. Stock 
options are granted with an exercise price equal to or greater than the fair 
market value of AT&T common shares on the day of grant. Stock options are 
exercisable between one and ten years from the date granted. Such stock 
options provide incentive for the creation of shareholder value over the long 
term since the full benefit of the compensation package cannot be realized 
unless an appreciation in the price of Company common shares occurs over a 
specified number of years. 

Restricted Stock: Restricted stock awards are granted occasionally to 
executive officers under the AT&T 1987 Long Term Incentive Program. 
Restricted stock is subject to forfeiture and may not be disposed of by the 
recipient until certain restrictions established by the committee lapse. 
Recipients of restricted stock are not required to provide consideration 
other than the rendering of services or the payment of any minimum amount 
required by law. 

   
CEO Compensation 
During 1993, the Company's most highly compensated officer was Robert E. 
Allen, Chairman of the Board and CEO. Mr. Allen's 1993 performance was 
reviewed by the committee which made recommendations to the board concerning 
the annual component (base salary and annual bonus) and approved the 
long-term component (performance shares, stock options, and restricted stock) 
of his compensation. These actions were predicated on the considerations 
discussed below. 
    

   
A substantial portion of Mr. Allen's short-term incentive compensation is 
based on measurements of success with our three key stakeholders: 
shareholders, customers and employees. 
    


                                      46 


 

   
The shareholder element was measured by success relative to an EVA target for 
the year of $2 billion. Final results for 1993 indicate that this target was 
exceeded. The 1993 employee survey results for PVA measurement targets were 
met: significant improvements were realized in areas of leadership, 
empowerment, and respect for individuals. During 1993, the CVA target of 
making significant progress in implementing a Company-wide customer 
satisfaction measurement program was also met. This work will continue in 
1994. 
    

   
An AT&T performance share payout was made in 1993 based on an aggressive 
average RTE target for the performance period from 1990 to 1992. The actual 
average return achieved was 91.4% of the targeted RTE target and these 
results yielded a payout of 68.7% of the performance shares awarded to Mr. 
Allen at the beginning of 1990. 
    

   
In addition to leading the Company through a financially successful year and 
achieving his employee and customer satisfaction targets, Mr. Allen 
strengthened the Company's global position through new hires from outside 
AT&T, key alliances, and the implementation of a global management model 
incorporating a shared management accountability concept. The merger with 
McCaw now in progress was widely recognized as a bold step in positioning the 
Company in one of the fastest growing areas of the telecommunications 
business. Moreover, the Company together with its unions adopted the 
"Workplace of the Future" program which increases employee participation and 
involvement in the operation of our business units. The program is considered 
a model of labor-management cooperation. In these and other initiatives, Mr. 
Allen continues to strengthen the confidence and dedication of employees and 
to position the Company to share in the future growth of our industry. 
    

The Compensation Committee 

   
Philip M. Hawley, Chairman 
Walter Y. Elisha 
Michael I. Sovern 
Joseph D. Williams 
Thomas H. Wyman 
    


                                      47 


 
   
                          SUMMARY COMPENSATION TABLE 



                                        Annual Compensation (2)                Long-Term Compensation (2)             
                                   ---------------------------------    ----------------------------------------- 
                                                                                  Awards                Payouts 
                                                                       ---------------------------    ----------- 
                                                            Other 
                                                            Annual       Restricted                                   All Other 
                                                           Compen-         Stock                          LTIP         Compen- 
Name and                            Salary      Bonus     sation (3)    Award(s) (4)     Options/     Payouts (5)     sation(6) 
Principal Position (1)     Year       ($)        ($)         ($)            ($)          SARs (#)         ($)            ($) 
- -------------------------     --    --------    -------   ----------    ------------   -----------    -----------    ------------

   
                                                                                               
Robert E. Allen            1993   1,032,000  1,356,700     128,082            0           72,854       1,348,458       118,166 
  Chairman of the Board    1992     983,000  1,155,700     119,785            0           72,854       1,190,226        79,941 
  and CEO                  1991     945,000  1,116,200          --            0          312,526(7)      637,964            -- 

Victor A. Pelson 
  Executive Vice 
  President -- AT&T and    1993     606,334    489,600      60,601            0           34,629         226,726        56,422 
  Chairman of the Global   1992     541,000    441,200      49,008            0           30,220         262,360        34,425 
  Operations Team          1991     454,750    360,600          --            0          200,970(7)      191,902            -- 

Jerre L. Stead (8) 
  Executive Vice 
  President -- AT&T and    1993     578,000    466,000     209,985            0           30,220         294,631        86,795 
  CEO of Global            1992          --         --          --           --               --              --            -- 
  Information Solutions    1991          --         --          --           --               --              --            -- 

Robert M. Kavner 
  Executive Vice 
  President -- AT&T and    1993     550,000    480,800      66,917            0           30,220         192,325        45,359 
  CEO of Multimedia        1992     504,000    388,200      54,713            0           28,654         222,363        27,838 
  Products & Services      1991     426,250    325,900          --            0          199,589(7)      173,236            -- 

Alex J. Mandl (9) 
  Executive Vice                                                                                                        45,347 
  President -- AT&T and    1993     554,167    442,900      43,036            0           30,220         226,726         7,607 
  CEO of Communications    1992     492,000    344,100     148,813            0           23,318         260,043            -- 
  Services                 1991     187,500    337,900          --            0          246,987(7)            0        

William B. Marx, Jr. 
  Executive Vice President
  -- AT&T and CEO of 
  Network 1993 Systems  545,000    452,067      51,043           0       30,220          226,725          51,378
                           1992     507,000    397,100      44,780            0           30,220         262,360        28,141 
                           1991     420,000    350,400          --            0          200,970(7)      107,898            -- 


    

                                      48 


 

Footnotes 

   
1. Includes Chairman of the Board and Chief Executive Officer and the five other most highly compensated 
executive officers as measured by salary and bonus. 
    

   
2. Compensation deferred at the election of named officers is included in the category (e.g., bonus, LTIP 
payouts) and year it would have otherwise been reported had it not been deferred. 
    

   
3. Includes (a) payments of above-market interest on deferred compensation, (b) dividend equivalents paid with 
respect to long-term performance shares prior to end of three-year performance period, or other earnings on 
long- term incentive compensation paid during the year, (c) tax payment reimbursements, and (d) the value of 
personal benefits and perquisites (Mr. Mandl had personal benefits and perquisites in 1992 of $84,043). No 
disclosure is required in this column for fiscal years ended before December 15, 1992. 
    

   
4. On December 31, 1993, the number and value of all outstanding grants of restricted stock held by named 
officers were as follows: Mr. Allen 36,000/$1,890,000 and Mr. Kavner 18,543/$973,508. 
    

   
5. Includes distribution in 1993 to Messrs. Allen, Pelson, Stead, Kavner, Mandl, and Marx of performance shares 
whose three-year performance period ended December 31, 1992. The value of 12,000 AT&T Restricted Shares which
vested in 1993 is also reflected in Mr. Allen's payout for that year. 
    

   
6. In 1993, includes (a) Company contributions to savings plans (Mr. Allen $9,434; Mr. Pelson $9,120; Mr. Stead 
$9,434; Mr. Kavner $9,434; Mr. Mandl $9,434 and Mr. Marx $9,434), (b) dollar value of the benefit of premiums 
paid for split-dollar life insurance policies (unrelated to term life insurance coverage) projected on an 
actuarial basis (Mr. Allen $78,692; Mr. Pelson $34,986; Mr. Stead $43,361; Mr. Kavner $25,066; Mr. Mandl 
$35,913 and Mr. Marx $30,958), (c) payments equal to lost Company savings match caused by IRS limitations (Mr. 
Allen $30,040; Mr. Pelson $12,316; Mr. Kavner $10,859, and Mr. Marx $10,986) and (d) a $34,000 deferred hiring 
bonus for Mr. Stead. No disclosure is required in this column for fiscal years ended before December 15, 1992. 
    

   
7. In 1991, from 61% to 88% of the stock option grants to the named officers reflect special grants. 
Twenty-five percent of the special grants were made with an exercise price equal to the fair market value of a 
share at grant ($38.6875 per share), 25% with an exercise price equal to the fair market value of a share plus 
20% ($46.4250 per share), 25% with an exercise price equal to the fair market value of a share plus 30% 
($50.2938 per share), and the remaining 25% with an exercise price equal to the fair market value of a share 
plus 50% ($58.0313 per share). 
    

   
8. Mr. Stead became an executive officer of the Company in 1993; therefore his compensation for 1991 and 1992 
is not required to be disclosed. 
    

   
9. Mr. Mandl was hired by the Company and became an executive officer of the Company in August 1991. The 
compensation disclosed for 1991 relates only to a partial year. 
    


                                      49 


 
   
                            OPTION GRANTS IN 1993 



                                            Individual Grants 
                        ------------------------------------------------------------ 
                                                                            Grant 
                                      % of Total                             Date 
                         Options        Options    Exercise                Present 
                       Granted (1)    Granted to     Price   Expiration   Value (2) 
Name                       (#)         Employees    ($/Sh)      Date         ($) 
- -------------------    -----------   -----------     ------    --------   --------- 
                                                           
Robert E. Allen          72,854           1.5       50.8125    1-5-03      852,392 
Victor A. Pelson         30,220           0.7       50.8125    1-5-03      353,574 
                          4,409                     63.7500    8-2-03       61,770 
Jerre L. Stead           25,970           0.6       50.8125    1-5-03      303,849 
                          4,250                     56.1250    5-2-03       53,508 
Robert M. Kavner         30,220           0.6       50.8125    1-5-03      353,574 
Alex J. Mandl            25,880                     50.8125    1-5-03      302,796 
                          4,340           0.6       63.7500    8-2-03       60,803 
William B. Marx, 
  Jr.                    30,220           0.6       50.8125    1-5-03      353,574 

    

Footnotes 

1. Options become exercisable one year after the grant date. 

   
2. In accordance with Securities and Exchange Commission rules, the Black-Scholes option pricing model was 
chosen to estimate the grant date present value of the options set forth in this table. The Company's use of 
this model should not be construed as an endorsement of its accuracy at valuing options. All stock option 
valuation models, including the Black-Scholes model, require a prediction about the future movement of the 
stock price. The following assumptions were made for purposes of calculating the Grant Date Present Value: for 
all grants the option term is assumed to be seven years; for options with an exercise price of $50.8125 the 
assumptions were volatility at .1963, dividend yield at 3.41% and interest rate at 6.64%; for options with an 
exercise price of $63.75 the assumptions were volatility at .1921, dividend yield at 3.14% and interest rate at 
5.60%; and for options with an exercise price at $56.125 the assumptions were volatility at .1939, dividend 
yield at 3.26% and interest rate at 5.86%. The real value of the options in this table depends upon the actual 
performance of the Company's stock during the applicable period. 
    



                                      50 


 

                       AGGREGATED OPTION/SAR EXERCISES
                         IN 1993 AND YEAR-END VALUES 
   


                                                                                          Value of 
                                                                     Unexercised        In-the-Money 
                                                                     Options/SARs       Options/SARs 
                                                                   at Year End (#)    at Year End ($) 
                                                                    ---------------   ---------------- 
                           Shares Acquired                           Exercisable/       Exercisable/ 
Name                       on Exercise (#)   Value Realized ($)     Unexercisable      Unexercisable 
- -----------------------    ---------------   ------------------     ---------------   ---------------- 
                                                                          
Robert E. Allen                     0                    0              404,097/          7,760,254/ 
                                                                        260,354             640,516 
Victor A. Pelson               32,280              869,295              116,916/          1,699,086/ 
                                                                        165,879             413,299 
Jerre L. Stead                      0                    0               56,940/            778,368/ 
                                                                         30,220              43,824 
Robert M. Kavner               33,812              987,511              109,391/          1,573,209/ 
                                                                        161,470             413,299 
Alex J. Mandl                       0                    0               80,805/          1,094,675/ 
                                                                        219,720           1,408,155 
William B. Marx, Jr.           36,370              999,076              114,266/          1,653,042/ 
                                                                        161,470             413,299 

    

                  LONG-TERM INCENTIVE PLANS--AWARDS IN 1993 
   


                                                             Estimated Future Payouts 
                                                               of Performance Shares 
                                        Performance            Under Non-Stock Price 
                           Number of    Period Until              Based Plan (1) 
                                                        ----------------------------------- 
                         Performance     Maturation     Threshold     Target      Maximum 
Name                        Shares       or Payout         (#)          (#)         (#) 
- -----------------------    ---------    ------------   ----------    --------     ---------- 
                                                                    
Robert E. Allen             21,114       1993-1995        5,279       21,114       31,671 
Victor A. Pelson            10,047       1993-1995        2,512       10,047       15,071 
Jerre L. Stead               8,783       1993-1995        2,196        8,783       13,175 
Robert M. Kavner             8,783       1993-1995        2,196        8,783       13,175 
Alex J. Mandl                8,783       1993-1995        2,196        8,783       13,175 
William B. Marx, Jr.         8,783       1993-1995        2,196        8,783       13,175 

    

Footnotes 

   
1. Payout of awards is tied to achieving specified levels of return-to-equity ("RTE"). The target amount will 
be earned if 100% of the targeted RTE rate is achieved. The threshold amount will be earned at the achievement 
of 77% of the targeted RTE rate and the maximum award amount will be earned at achieving 113% of the targeted 
RTE rate. If less than 77% of the targeted RTE rate is achieved, an award payout will not be earned. Awards 
will be distributed as common stock of the Company, or as cash in an amount equal to the value of those shares, 
or partly in common stock and partly in cash. 
    


                                      51 


 

                       FIVE-YEAR PERFORMANCE COMPARISON 

The graph below provides an indicator of cumulative total shareholder returns 
for the Company as compared with the S&P 500 Stock Index and a Peer 
Group((1)) 

         (Line Graph)

        AT&T      S&P        Peer Group
1988    100       100        100
1989    163       132        121
1990    112       128        115
1991    151       166        123
1992    203       179        127
1993    214       197        154
         (End Line Graph)

Assumes $100 invested on December 31, 1988 in AT&T Common Stock, the S&P 500 
Index and Peer Group Common Stock 
Total Shareholder Returns Assume Reinvestment of Dividends 

Footnote 

1. The peer group comprises the largest companies worldwide which compete 
against the Company in its two industry segments of information movement and 
management, and financial services and leasing. None of the companies 
competing with AT&T in information movement and management offers a fully 
comparable range of products and services, although each is widely recognized 
as a competitor of AT&T. The returns of each company have been weighted 
according to their respective stock market capitalization for purposes of 
arriving at a peer group average. The members of the peer group are as 
follows: American Express Company; Ameritech Corporation; Apple Computer, 
Inc.; Bell Atlantic Corporation; BellSouth Corporation; Cable & Wireless 
p.l.c.; Digital Equipment Corp.; GTE Corporation; Hewlett-Packard Co.; Intel 
Corp.; International Business Machines Corporation; ITT Corporation; L. M. 
Ericsson Telefonaktiebolaget; MCI Communications Corp.; Motorola, Inc.; NEC 
Corp.; Northern Telecom Limited; NYNEX Corporation; Pacific Telesis Group; 
Southwestern Bell Corporation; Sprint Corporation; Texas Instruments 
Incorporated; U S WEST, Inc.; and Xerox Corporation. 

                                      52 


 

PENSION PLANS 

   
The Company maintains the AT&T Management Pension Plan, a non-contributory 
pension plan which covers all management employees, including Messrs. Allen, 
Pelson, Stead, Kavner, Mandl, and Marx. The normal retirement age under this 
plan is 65; however, retirement before age 65 can be elected under certain 
conditions. 
    

   
Under the AT&T Management Pension Plan, annual pensions are computed on an 
adjusted career average pay basis. The adjusted career average pay formula is 
the sum of (a) 1.5% of the average pay for the three years ending December 
31, 1989, times the number of years of service prior to January 1, 1990, plus 
(b) 1.6% of pay subsequent to December 31, 1989. Only the basic salary is 
taken into account in the formula used to compute pension amounts. As a 
result of an amendment to the plan in 1989, an enhanced pension benefit is 
available to certain eligible employees. The enhanced pension benefit, which 
is calculated as of December 30, 1989, by adding five to the age and number 
of years of service of these employees, remains in effect until the 
employee's actual age, service, and compensation yield a greater pension 
benefit. 
    

   
The Company also maintains the AT&T Non-Qualified Pension Plan. Under the 
plan, annual pensions for Messrs. Allen, Pelson, Stead, Kavner, Mandl, and 
Marx and other senior managers are computed based primarily on actual annual 
bonus awards under the Company's Short Term Incentive Plan. Pension benefits 
under this plan will generally commence at the same time as benefits under 
the AT&T Management Pension Plan. The annual pension amounts payable under 
this plan are equal to the greater of the amounts computed under the Basic or 
Alternate Formula described below. 
    

Basic Formula: 
The sum of (a) 1.5% of the average of the actual annual bonus awards for the 
three-year period ending December 31, 1989, times the number of years of 
service prior to January 1, 1990, plus (b) 1.6% of the actual annual bonus 
awards subsequent to December 31, 1989. 

                                      53 


 

   
Alternate Formula: 
The excess of (a) 1.7% of the adjusted career average pay, over (b) 0.8% of 
the covered compensation base, times years of service to retirement minus the 
AT&T Management Pension Plan amount. For purposes of this formula, adjusted 
career average pay is determined by dividing the sum of the employee's total 
adjusted career income used for purposes of the AT&T Management Pension Plan, 
plus the income figure used for purposes of the basic formula, by the 
employee's actual term of employment at retirement. The covered compensation 
base used in this formula is the average of the maximum wage amount on which 
an employee was liable for social security tax for each year beginning with 
1958 and ending with 1993. In 1993, the covered compensation base was 
$22,800. 
    

   
In 1993, an Alternative Minimum Formula ("AMF"), applicable to active senior 
managers with five years of service who are participants in the AT&T 
Non-Qualified Pension Plan as of December 31, 1993, was established. The 
annual pension amount payable under the AMF is equal to the greater of the 
amounts computed under formulas A and B plus an additional percent increase 
factor as described below: 
    

   
Formula A: 
The sum of (a) 1.5% of the average of the total compensation for the 
three-year period ending December 31, 1992, times the number of years of 
service prior to January 1, 1993, plus (b) 1.6% of the total compensation 
from January 1, 1993, to December 31, 1993. For purposes of this Formula A, 
total compensation shall be basic salary plus actual annual bonus awards. The 
pension amounts resulting from this Formula A will be reduced to reflect 
retirements prior to age 55. 
    

Formula B: 
The excess of (a) 1.7% of the adjusted career average pay, over (b) 0.8% of 
the covered compensation base, times years of service to December 31, 1993. 
For purposes of this Formula B, adjusted career average pay is determined by 
dividing the sum of the employee's total adjusted career income used for 
purposes of Formula A, by the employee's actual term of 

                                      54 


 

   
employment to December 31, 1993. The covered compensation base used in this 
Formula B is the average of the maximum wage amounts on which an employee was 
liable for social security tax for each year beginning with 1958 and ending 
with 1993. In 1993, the covered compensation base was $22,800. The pension 
amounts resulting from this Formula B will be reduced to reflect retirements 
prior to age 60. 
    

An additional percent increase factor based on age and service is applied to 
the pension amount resulting from the higher of Formula A or B. The total AMF 
pension results in a fixed benefit and such amount is reduced by the amount 
payable under the AT&T Management Pension Plan. It is anticipated that after 
1997, a senior manager's normal pension increases resulting from additional 
age and service as well as possible future pension plan amendments could 
cause the regular accrued pension benefit to exceed the fixed AMF benefit. 
Pensions resulting from the AMF will be payable under the AT&T Non-Qualified 
Pension Plan. 

   
As part of their employment agreements, the Company entered into supplemental 
pension arrangements with Messrs. Stead and Mandl. Pursuant to such 
arrangements, if employment is terminated on or after age 55 for any reason 
other than Company-initiated termination for "cause," as defined, these 
executive officers will be entitled to immediate pension benefits based on 
the higher of (1) a pension determined by their actual net credited service 
and calculated under the then-existing Company qualified and non-qualified 
pension formulas, but without reference to age and service eligibility 
requirements, or (2) a fixed minimum monthly pension schedule which, for Mr. 
Stead, ranges from $32,053 at age 55 to $73,893 at age 65 and, for Mr. Mandl, 
ranges from $30,432 at age 55 to $74,459 at age 65. Pension benefits payable 
under these arrangements will be paid out of the Company's operating income, 
and will be offset by all amounts actually received by the executive officers 
under any other Company qualified or non-qualified retirement plan or 
arrangement. In addition, Messrs. Stead and Mandl will be entitled to certain 
other post-retirement benefits that are generally made available to retired 
executive officers and service pension-eligible senior managers from time to 
time. 
    


                                      55 


 

   
In the event Mr. Mandl's employment is terminated by the Company for any 
reason other than for "cause," as defined, prior to age 55, he will be 
eligible for a severance benefit equal to 200% of his then base salary under 
the provisions of his employment agreement. 
    

   
Senior managers (including Messrs. Stead, Kavner, and Mandl) and certain 
other management employees who are hired at age 35 or over are covered by a 
supplemental AT&T Mid Career Pension Plan. For specified managers retiring 
with at least five years in level, the plan provides additional pension 
credits equal to the difference between age 35 and their maximum possible 
years of service attainable at age 65, but not to exceed actual net credited 
service, at approximately one-half the rate in the AT&T Management Pension 
Plan. 
    

   
Pension amounts under either the AT&T Management Pension Plan, the AT&T 
Non-Qualified Pension Plan, or the AT&T Mid Career Pension Plan are not 
subject to reductions for social security benefits or other offset amounts. 
If Messrs. Allen, Pelson, and Marx continue in the positions given above and 
retire at the normal retirement age of 65, the estimated annual pension 
amounts payable under the AT&T Management Pension Plan and the AT&T 
Non-Qualified Pension Plan would be $1,470,995, $560,355, and $481,243, 
respectively. For Messrs. Stead, Kavner, and Mandl, the estimated annual 
pension amounts payable under the above three plans would be $548,423, 
$572,871, and $600,217, respectively. Amounts shown are straight-life annuity 
amounts not reduced by a joint and survivorship provision which is available 
to these officers named. 
    

   
The Company has reserved the right to purchase annuity contracts to satisfy 
its unfunded obligations to any of these officers under the AT&T 
Non-Qualified Pension Plan. In the event the Company purchases an annuity 
contract for any officer, the pension payments for such officer will vary 
from that set forth above. Then there would be a tax gross-up payment to the 
officer and annuity benefits paid by the annuity provider will be reduced to 
offset the tax gross-up payment. The after-tax pension benefit will be the 
same as the after-tax benefit the participant would otherwise have received 
under the AT&T Non-Qualified Pension Plan. 
    


                                      56 


 

OTHER INFORMATION 

A Directors' and Officers' Liability Policy was renewed effective July 1, 
1993, with Lloyds of London and other carriers. The policy insures AT&T for 
certain obligations incurred in the indemnification of its directors and 
officers under New York law or under contract and insures directors and 
officers where such indemnification is not provided by AT&T. The one-year 
policy's cost is $1,780,000. 

The cost of soliciting proxies in the accompanying form will be borne by the 
Company. In addition to solicitations by mail, a number of regular employees 
of the Company and of its subsidiaries may solicit proxies in person or by 
telephone. The Company also has retained Morrow & Co. to aid in the 
solicitation of proxies, at an estimated cost of $18,000 plus reimbursement 
of reasonable out-of-pocket expenses. 

The above notice and proxy statement are sent by order of the board of 
directors. 

   
Robert E. Scannell 
Vice President - Law and 
Secretary 
    

Dated: March 1, 1994 

                                      57 


 

(AT&T LOGO) 

   
(American Telephone and Telegraph Company 
32 Avenue of the Americas 
New York, NY 10013-2412 

(Recycle logo) Recycled Paper 
    

                                      58 





(AT&T LOGO) 

PROXY 

   
                   American Telephone and Telegraph Company 
                32 Avenue of the Americas, New York, NY 10013 
                     This proxy is solicited on behalf of 
       the Board of Directors for the Annual Meeting on April 20, 1994. 

The undersigned hereby appoints R.E. Allen, B.K. Johnson and D.S. Perkins, 
and each of them, proxies, with the powers the undersigned would possess if 
personally present, and with full power of substitution, to vote all common 
shares of the undersigned in American Telephone and Telegraph Company at the 
annual meeting of shareholders to be held at Georgia World Congress Center in 
Atlanta, Georgia, at 9:30 a.m. on April 20, 1994, and at any adjournment 
thereof, upon all subjects that may properly come before the meeting, 
including the matters described in the proxy statement furnished herewith, 
subject to any directions indicated on the other side of this card. If no 
directions are given, the proxies will vote for the election of all listed 
nominees, in accord with the Directors' recommendations on the other subjects 
listed on the other side of this card and, at their discretion, on any other 
matter that may properly come before the meeting. (If you have indicated any 
changes or voting limitations on this side of the card, please mark the 
"comment" box on the other side.) 

This card also provides voting instructions for shares held in the dividend 
reinvestment plan and, if registrations are identical, shares held in the 
various employee stock purchase and savings plans as described in the proxy 
statement. Your vote for the election of Directors may be indicated on the 
other side. Nominees are--R.E. Allen, M.K. Eickhoff, W.Y. Elisha, P.M. 
Hawley, C.A. Hills, B.K. Johnson, D. Lewis, D.F. McHenry, V.A. Pelson, D.S. 
Perkins, H.B. Schacht, M.I. Sovern, F.A. Thomas, J.D. Williams, and T.H. 
Wyman. Please sign on the other side and return promptly to P.O. Box 8872, 
Edison, NJ 08818-9241. If you do not sign and return a proxy, or attend the 
meeting and vote by ballot, your shares cannot be voted. 

Comments: 

(If you have written in the above space, please mark the "comment" box on the 
other side of this card.) 
    




 

Detach proxy card 

(Map of meeting location)
Annual Meeting of Shareholders 
Wednesday, April 20, 1994 
Georgia World Congress Center 
West Concourse 
285 International Blvd., N.W. 
Atlanta, Georgia 
The Omni/Dome/GWCC MARTA 
Station offers convenient 
public transportation 
Public parking is available in the vicinity. 
Hearing-amplification equipment and sign interpretation will be provided. 




Please mark your vote with an X. 

   
Directors recommend a vote "FOR" 

                               FOR ALL                WITHHELD 
                               nominees               FROM ALL 
                                                      nominees
A. Election of 
   Directors 
   (page 7)                      [ ]                     [ ] 

                            FOR ALL EXCEPT the following nominees
                                 FOR       AGAINST     ABSTAIN 
B. Ratification 
   of Auditors 
   (page 14)                     [ ]          [ ]        [ ] 

                                 FOR       AGAINST     ABSTAIN 
C. Change of 
   Corporate Name 
   (page 14)                     [ ]          [ ]        [ ] 

D. 1995 Employee 
   Stock Purchase 
   Plan (page 16)                [ ]          [ ]        [ ] 

E. 1994 AT&T-GIS 
   Employee Stock 
   Purchase Plan 
   (page 19)                     [ ]          [ ]        [ ] 

F. AT&T Short Term 
   Incentive Plan 
   (page 22)                     [ ]          [ ]        [ ] 
    

   
Directors recommend a vote "AGAINST" 
  the shareholder proposals regarding 
                                 FOR        AGAINST    ABSTAIN 
1. Identify Contractual 
   Executive 
   Compensation 
   (page 27)                     [ ]          [ ]        [ ] 

2. Endorse CERES 
   Principles 
   (page 28)                     [ ]          [ ]        [ ] 

3. Maquiladora Operations 
   (page 32)                     [ ]          [ ]        [ ] 

4. Executive and 
   Director 
   Compensation 
   (page 35)                     [ ]          [ ]        [ ] 

5. China and former 
   Soviet Union 
   operations 
   (page 37)                     [ ]          [ ]        [ ] 

6. Health Care 
   Committee 
   (page 39)                     [ ]          [ ]        [ ] 
    

SPECIAL ATTENTION 

Mark here if you have written 
a comment on reverse.                                    [ ] 

   
Mark here to discontinue this 
extra annual report. (page 3)                            [ ] 
    

Mark here if you plan to 
attend the annual meeting.                               [ ] 

SIGNATURE(S)  DATE  , 1994 

Please sign this proxy as name(s) appears above and return it promptly 
whether or not you plan to attend the meeting. If signing for a corporation 
or partnership or as agent, attorney or fiduciary, indicate the capacity in 
which you are signing. If you do attend the meeting and decide to vote by 
ballot, such vote will supersede this proxy. 



                            Detach proxy card

Admission Ticket                     (AT&T LOGO)

                                     Annual Meeting
                                     of Shareholders

                                     Wednesday, April 20, 1994
                                     
                                     Agenda

                                     8:00 am  Doors and Exhibit Areas Open
                                     
                                     9:30     Introduction and Welcome
                                              Chairman's Remarks
                                              Election of Directors
                                              Ratification of Auditors
                                              Director Proposals
                                              Shareholder Proposals
                                              
                                     11:00    Voting
                                              General Discussion
                                              Adjournment (noon)
- --------------------------------------------------------------------------
Please present this ticket for admittance of shareholder(s) named above 
and guest.
See reverse for map of area.

EX-99

1995 AT&T EMPLOYEE STOCK PURCHASE PLAN



1.     Purposes

The 1995 AT&T Employee Stock Purchase Plan (the "Plan") provides Eligible
Employees with an opportunity to purchase AT&T Common Stock through payroll
deductions. The Plan is intended as an employment incentive and to encourage
stock ownership in order to participate in the economic progress of the
American Telephone and Telegraph Company during the term of the Plan. This
Plan is not intended to qualify as an "employee stock purchase plan" under
section 423 of the Internal Revenue Code of 1986, as amended.

2.     Definitions

2.1.   "Administrator" means the Senior Vice President-Human Resources of the
Company. The Senior Vice President-Human Resources may delegate any or all
of the administrative functions under this Plan to such individuals,
committees, or entities as he or she considers appropriate.

2.2.   "AT&T Common Stock" means shares of common stock, par value $1.00, of
the Company.

2.3.   "Board of Directors" means the Board of Directors of the Company.

2.4.   "Company" means American Telephone and Telegraph Company, a New York
corporation.

2.5.   "Eligible Compensation" means an Eligible Employee's basic salary
rate, lump sum merit awards, and incentive compensation payable from the
Company or a Subsidiary, but shall not include overtime, shift
differentials, or other premium pay, or awards under long and short term
incentive plans for senior managers.

2.6.   "Eligible Employees" means all persons who during an Offering are
employees of the Company or a Subsidiary who are employed:

(a)    in the United States and are participants in the AT&T Management
Pension Plan, or

(b)    outside the United States and are included in a group of employees
designated by the Administrator as being eligible for participation in the
Plan.

2.7.   "Exercise Date" means the date or dates in each Plan Year as the
Administrator shall determine.

2.8.   "Offering" means the offering of shares of AT&T Common Stock to
Eligible Employees pursuant to the Plan. Each Offering shall be for a
limited period commencing on such date as the Administrator shall determine
and ending on the next Exercise Date.

2.9.   "Plan Year" means January 1, 1995 through December 31, 1995 and each
subsequent calendar year that the Plan is in effect.

2.10.  "Plan" means this 1995 AT&T Employee Stock Purchase Plan.

2.11.  "Subsidiary" means any corporation in which the Company directly or
indirectly owns stock possessing 50% or more of the  total combined voting
power of all classes of stock.

2.12.  Unless the context otherwise requires, any reference to a Section
means the particular section of this Plan.

3.     Shares

The aggregate number of shares which may be purchased under the Plan shall
not exceed 25,000,000, subject to adjustment in accordance with Section 12.
Shares issued under the Plan may consist, in whole or part, of authorized 
and unissued shares or treasury shares.

4.     Offering; Purchase Price

Each Eligible Employee on an Exercise Date shall be entitled to purchase,
in the manner and on the terms herein provided, shares of AT&T Common Stock
at the purchase price set forth below, with amounts deducted from Eligible
Compensation pursuant to Section 6.

The purchase price per share of AT&T Common Stock sold to Eligible Employees
hereunder for any Offering shall be 85% of the average of the reported
highest and lowest sale prices of shares of AT&T Common Stock on the New
York Stock Exchange on each of the ten days immediately preceding the
applicable Exercise Date. Anything herein to the contrary notwithstanding,
the purchase price shall not be less than the par value of the AT&T Common
Stock.

5.     Stock Purchase Agreements

Any Eligible Employee shall participate in an Offering by filing a Stock
Purchase Agreement before an Exercise Date in accordance with rules and
procedures established by the Administrator. Once an Eligible Employee has
filed a Stock Purchase Agreement he or she shall participate in the Offering
unless he or she is permitted to withdraw from the Offering in accordance
with rules and procedures established by the Administrator.

6.     Payment for Shares

Payment for shares of AT&T Common Stock purchased hereunder shall be made
by authorized payroll deductions from an Eligible Employee's Eligible
Compensation. In his or her Stock Purchase Agreement, an Eligible Employee
shall authorize a deduction of any full dollar amount or of an amount equal
to any full percentage of his or her Eligible Compensation; provided,
however, that the total  deduction in any Plan Year shall not exceed 10% of
the Eligible Employee's Eligible Compensation paid during that Plan Year.

7.     Purchase of Shares

On each Exercise Date, the Company shall use the amounts deducted from the
Eligible Compensation of each Eligible Employee to purchase shares of AT&T
Common Stock based on his or her Stock Purchase Agreement.

8.     Issuance of Shares; Stock Certificates

The shares of AT&T Common Stock purchased by an Eligible Employee on an
Exercise Date shall be deemed, for all purposes, to have been issued and
sold at the close of business on such Exercise Date. Prior to that time none
of the rights or privileges of a stockholder shall exist with respect to
such shares.

At the close of business on the Exercise Date, the Eligible Employee shall 
have all the rights and privileges of a stockholder with respect to the 
number of shares of AT&T Common Stock purchased by the Eligible Employee 
on such date. To the extent required by law, the Company shall cause to 
be issued and delivered, a certificate or its equivalent for the number 
of shares of AT&T Common Stock purchased by an Eligible Employee on 
such Exercise Date, which certificate or equivalent shall be registered
in the manner designated in the Eligible Employee's Stock Purchasese
Agreement.

9.     Procedure if Insufficient Shares Available

If on any Exercise Date the aggregate funds available for the purchase of
shares of AT&T Common Stock pursuant to Section 7 would purchase a number 
of shares in excess of the number of shares then available for purchase 
under the Plan:

(a)    the Administrator shall proportionately reduce the number of shares
which would otherwise be purchased by each Eligible Employee on such
Exercise Date in order to eliminate such excess,

(b)    the Plan shall automatically terminate immediately after such Exercise
Date, and 

(c)    any remaining amount previously deducted from each Eligible Employee's
Eligible Compensation shall be refunded to each such Eligible Employee.

10.    Rights Not Transferable

Rights to purchase shares under the Plan are exercisable only by the
Eligible Employee during his or her lifetime and are not transferable by him
other than by will or the laws of descent and distribution. Any attempt by
an Eligible Employee to transfer his or her rights to purchase shares under
the Plan, other than by will, shall be of no effect.

11.    Administration of the Plan

Subject to the general control of, and superseding action by, the Board of
Directors, the Administrator shall have full power to administer the Plan.
The Administrator shall adopt rules and procedures not inconsistent with the
provisions of the Plan for its administration, including procedures for the
Company to satisfy any applicable tax withholding obligations. The
Administrator shall adopt the form of Stock Purchase Agreement and of all
notices. The Administrator's interpretation and construction of the Plan 
shall be final and conclusive.

12.    Recapitalization; Effect of Certain Transactions

The aggregate number of shares of AT&T Common Stock reserved for purchase,
and the calculation of the purchase price per share, under the Plan shall
be appropriately adjusted to reflect any increase or decrease in the number
of issued shares of AT&T Common Stock resulting from a subdivision or
consolidation of shares or other capital adjustment, or the payment of a
stock dividend, or other increase or decrease in such shares, effected
without receipt of consideration by the Company.

If AT&T shall merge or consolidate, whether or not AT&T is the surviving or
resulting corporation in such merger or consolidation, any Offering
hereunder shall pertain to and apply to shares of stock of AT&T or any
shares issued in connection with such merger or consolidation in exchange
for shares of stock of AT&T, unless prior to such merger or consolidation,
the Board of Directors of the Company shall, in its discretion, terminate
the Plan and/or any Offering hereunder. Notwithstanding the foregoing, a
dissolution or liquidation of AT&T shall cause the Plan and any Offering
hereunder to terminate and the entire amount deducted pursuant to an
Eligible Employee's Stock Purchase Agreement shall be refunded to each such
Eligible Employee.

If the Company shall merge or consolidate with a corporation that is not an
Affiliate of the Company, whether or not the Company is the surviving or
resulting corporation in such merger or consolidation, any Offering
hereunder shall pertain to and apply to shares of stock of the Company or
any shares issued in connection with such merger or consolidation in
exchange for shares of stock of the Company, unless prior to such merger or
consolidation, the Board of Directors of the Company shall, in its
discretion, terminate the Plan and/or any Offering hereunder.
Notwithstanding the foregoing, a dissolution or liquidation of the Company
shall cause the Plan and any Offering hereunder to terminate and the entire
amount deducted pursuant to an Eligible Employee's Stock Purchase Agreement
shall be refunded to each such Eligible Employee.

13.    Application of Funds

All funds received by the Company under the Plan may be used for any
corporate purpose.

14.    Repurchase of Stock

AT&T shall not be required to repurchase from any Eligible Employee shares
of AT&T Common Stock which such Eligible Employee acquires under the Plan.

15.    Notice

Any notice which an Eligible Employee files pursuant to the Plan shall be
in the appropriate form and shall be delivered by hand or mailed, postage
prepaid, in accordance with the Plan's administrative rules and procedures.

16.    Alternate Contribution Methods

Anything herein to the contrary notwithstanding, if authorized payroll
deductions from an Eligible Employee's Eligible Compensation are not
permitted by reason of the provisions of local law applicable to the Company
or a Subsidiary, or are not practicable in the opinion of the Administrator,
the Administrator may designate an appropriate alternative method pursuant to
which affected Eligible Employees may make payment for shares of  AT&T
Common Stock purchased hereunder which would otherwise have been made
pursuant to Section 6. Payments made hereunder shall be deemed to 
have been made pursuant to Section 6.

17.    Amendment of the Plan

The Board of Directors may at any time, or from time to time, alter or amend
the Plan in any respect, except that, without approval of the stockholders
of AT&T, no amendment may increase the number of shares reserved for
purchase, or reduce the purchase price per share, under the Plan other than
as provided in Section  12.

18.    Expiration and Termination of the Plan

The Board of Directors may terminate the Plan or any Offering hereunder at
any time for any reason. Unless terminated earlier hereunder, the Plan shall
continue in effect through December 31, 1999.




1994 EMPLOYEE STOCK PURCHASE PLAN FOR AT&T GLOBAL INFORMATION SOLUTIONS
COMPANY

l.     Purpose

The 1994 Employee Stock Purchase Plan for AT&T Global Information Solutions
Company provides Eligible Employees with an opportunity to purchase AT&T
Common Stock through payroll deductions and is intended as an employment
incentive and to encourage stock ownership in order to participate in the
economic progress of AT&T Global Information Solutions Company and the
American Telephone and Telegraph Company ("AT&T") during the term of the
Plan.

2.     Definitions

       2.1     "Plan" shall mean this 1994 Employee Stock Purchase Plan for
AT&T Global Information Solutions Company.

       2.2     "Company" shall mean AT&T Global Information Solutions Company,
a Maryland corporation and a wholly-owned subsidiary of AT&T.

       2.3     "1992 Plan" shall mean the 1992 NCR Employee Stock Purchase
Plan.

       2.4     "Subsidiary" shall mean any corporation in which the Company,
directly or indirectly, owns stock possessing 50% or more of the total
combined voting power of all classes of stock.

       2.5     "Designated Subsidiary" shall mean a Subsidiary which shall have
been designated by the Chairman, Chief Executive Officer, President or
Secretary of the Company to participate in the Plan and shall include all
Subsidiaries heretofore designated under the 1992 Plan; provided, that any
such designation may be revoked in like manner at any time.

       2.6     "Code" shall mean the Internal Revenue Code of 1986, as amended.

       2.7     "Employees" shall mean all persons employed by the Company or
a Subsidiary, excluding those persons whose customary employment is 20 hours
or less per week and/or whose customary employment is for five months or
less in any calendar year.

       2.8     "Eligible Employees" shall mean only those persons who on an
Offering Date:

       i.      are Employees of the Company or a Designated Subsidiary,
       ii.     have at least six months of Continuous Service, and
       iii.    are not deemed for purposes of Section 423 (b)(3) of the Code
               to own  stock possessing 5% or more of the total combined voting
               power or value of all classes of stock of the Company or a
               Subsidiary or the parent of the Company, if any.

       2.9     "AT&T Common Stock" shall mean shares of common stock, par value
$1.00, of American Telephone and Telegraph Company.

       2.10    "Participant" shall mean an Eligible Employee who elects to
participate in the Plan.

       2.11    "Plan Year" shall mean (i) the fiscal year beginning August l,
1994 and ending July 31, 1995, and (ii) each succeeding fiscal year ending
July 31 during the period  from August 1, 1995 through July 31, 1999, and
(iii) beginning on August 1, 1999, the period from August 1, 1999 through
December 31, 1999.

       2.12    "Offering Date" shall mean August 1 and February 1 of each Plan
Year.

       2.13    "Offering" shall mean the offering of shares of AT&T Common
Stock to Eligible Employees pursuant to the Plan that occurs on each
Offering Date.


       2.14    "Exercise Date" shall mean, with respect to each Plan Year other
than the Plan Year beginning on August 1, 1999, January 31  and July 31 of
that Plan Year, and with respect to the Plan Year beginning on August 1,
1999, shall mean December 31, 1999.

       2.15    "Purchase Period" shall mean the period from an Offering Date
to the next succeeding Exercise Date.

       2.16    "Board of Directors" shall mean the Board of Directors of the
Company.

       2.17    "Compensation" shall mean the total amount received by a
Participant from the Company or a Subsidiary as salary, wages, bonus or
other remuneration including (i) overseas premium pay, (ii) appropriate
commission or other earnings by sales personnel, (iii) overtime pay, (iv)
payments for cost-of-living increases, and (v) sick pay, but excluding
contributions of the Company or a Subsidiary to an employee benefit plan
thereof.

       2.18    "Continuous Service" shall mean the length of time an Employee
has been in the continuous employ of the Company and/or a Subsidiary and/or
an Affiliate as determined by the continuity of service rules of the Company
and/or a Subsidiary or, if no such rules exist, as determined by the
Secretary.

       2.19    "Payroll Department" shall mean the department of the Company
or a Subsidiary from which a Participant's Compensation is disbursed.

       2.20    "Secretary" shall mean the person holding the office of
Secretary of the Company.

       2.21    "Highest Remaining Balance" for any Offering shall mean the
highest unrefunded balance lower than the Purchase Price for such Offering
that remains in any Participant's Stock Purchase Account upon the expiration
of the Purchase Period for such Offering.

       2.22    "Affiliate" means any person that directly, or through one or
more intermediaries, controls, or is controlled by, or under common control
with, the Company.

       2.23    The masculine gender includes the feminine, the singular
includes the plural and the plural includes the singular unless the context
otherwise requires.

3.     Shares

The aggregate number of shares of AT&T Common Stock which may be purchased
under the Plan shall not exceed ten million (10,000,000), subject to
adjustment in accordance with Section 20 hereof.  Shares issued under the
Plan may consist, in whole or part, of authorized and unissued shares or
treasury shares.

4.     Offering

       Each Eligible Employee on an Offering Date shall be entitled to
purchase, in the manner and on the terms herein provided, whole shares of
AT&T Common Stock at the Purchase Price set forth in Section 8 hereof with
amounts withheld or paid pursuant to Sections 6 and 12 hereof during the
Purchase Period commencing on such Offering Date.  Anything  herein to the
contrary notwithstanding, if any person entitled to purchase shares pursuant
to any Offering hereunder would be deemed, for the purposes of Section 423
(b) (3) of the Code, to own stock (including any number of shares which such
person would be entitled to purchase hereunder and under any other similar
plan or stock option plan of the Company, the parent of the Company or any
Subsidiary) possessing 5% or more of the total combined voting power or
value of all classes of stock of the Company, the parent of the Company or
a Subsidiary, the maximum number of shares which such person shall be
entitled to purchase pursuant to the Plan shall be reduced to that number
which, when added to the number of shares of stock of the Company, the
parent of the Company or a Subsidiary which such person is so deemed to own
(excluding any number of shares which such person would be entitled to
purchase hereunder), is one less than such 5% and any balance remaining in
such person's Stock Purchase Account shall be refunded.

5.     Entry Into the Plan; Stock Purchase Agreements

Any Eligible Employee may become a Participant in the Plan by filing a Stock
Purchase Agreement prior to the Offering Date on which an Offering
commences; provided that, an Eligible Employee who is such an employee on
August l, 1994 and who was a Participant in the 1992 Plan on July 31, 1994
shall not be required to file a Stock Purchase Agreement for the Offering
commencing on August l, 1994 or for any succeeding Offering until such
Participant withdraws from the Plan pursuant to Section 13 or Section 14
hereof.  Once an Eligible Employee has filed a Stock Purchase Agreement and
becomes a Participant in the Plan, he shall remain a Participant until he
withdraws from the Plan in accordance with Section 13 hereof, and he shall
not be required to file a Stock Purchase Agreement for any succeeding
Offering until he withdraws from the Plan.  A Participant of any Offering
that is terminated in accordance with Section 20 hereof shall continue to
be a Participant in any subsequent Offering unless he withdraws from the
Plan.

6.     Payment for Shares; Payroll Deductions

Payment for shares of AT&T Common Stock purchased hereunder shall be made
by authorized payroll deductions from a Participant's Compensation pursuant
to this Section or by supplemental payments pursuant to Section 12 hereof.

In his Stock Purchase Agreement, a Participant shall authorize a deduction
from each payment of Compensation during a Purchase Period of any full
dollar amount or of any amount equal to any full percentage of such payment;
provided, however, that the minimum deduction shall be $2 per week or $9 per
month, as appropriate, and the maximum deduction shall be 10% of any payment
of Compensation.  A Participant may not change the amount of such deductions
during a Purchase Period, but may change the amount to be deducted for any
subsequent Offering by filing notice thereof prior to the Offering Date on
which such subsequent Offering commences.

7.     Stock Purchase Accounts

A Stock Purchase Account shall be established and maintained in the name of
each Participant.  Amounts deducted from a Participant's Compensation
pursuant to Section 6 hereof and supplemental payments made pursuant to
Section 12 hereof shall be credited to such Participant's Stock Purchase
Account.  No interest shall accrue or be payable to any Participant with
respect to any amounts credited to such Stock Purchase Account.

8.     Purchase Price

The Purchase Price per share of the shares of AT&T Common Stock sold to
Participants hereunder for any Offering shall be 85% of the average of the
reported highest and lowest sale prices of shares of AT&T Common Stock on
the New York Stock Exchange on the applicable Exercise Date.  Should no sale
of AT&T Common Stock occur on any Exercise Date, then the Purchase Price
shall be determined on the basis of the sales of AT&T Common Stock on the
next preceding day on which such sales were made.  Anything herein to the
contrary notwithstanding, the Purchase Price per share shall not be less
than the par value of a share of AT&T Common Stock.

9.     Purchase of Shares; Limitation on Right to Purchase

If, as of any Exercise Date, there is credited to the Stock Purchase Account
of a Participant an amount at least equal to the Purchase Price per share
of AT&T Common Stock as of the Exercise Date, as determined in Section 8
hereof, the Participant shall buy, and the Company shall sell at such
Purchase Price, in United States dollars, the largest number of whole shares
of AT&T Common Stock which can be purchased with the amount credited to such
Participant's Stock Purchase Account.

Anything herein to the contrary notwithstanding, (i) a Participant may not
purchase more than 1,150 shares of AT&T Common Stock in any Offering
hereunder and (ii) if at any time when any person is entitled to complete
the purchase of any shares pursuant to the Plan, taking into account such
person's rights, if any, to purchase stock under all other employee stock
purchase plans of the Company, its parent and of any Subsidiaries, the
result would be that during the then current calendar year such person would
have first become entitled to purchase under the Plan and all such other
plans a number of shares of stock which would exceed the maximum number of
shares permitted by the provisions of Section 423(b)(8) of the Code, then
the number of shares which such person shall be entitled to purchase
pursuant to the Plan shall be reduced by the number which is one more than
the number of shares which represents the excess, and any balance remaining
in such person s Stock Purchase Account shall be refunded.

10.    Expiration of Offering

       As of each Exercise Date the amount credited to the Stock Purchase
Account of each Participant in the applicable Offering shall be charged with
the aggregate Purchase Price of the shares of AT&T Common Stock purchased
by the Participant on such Exercise Date.  With respect to each Exercise
Date, the remaining balance credited to his Stock Purchase Account on such
Exercise Date shall be refunded to each Participant if he files notice of
his election for refund prior to such Exercise Date.  If no such notice is
filed by a Participant and if he has not withdrawn from the Plan in
accordance with Section l3 hereof, any remaining balance credited to his
Stock Purchase Account shall be credited to his Stock Purchase Account for
the next succeeding Offering hereunder (other than the Offering beginning
on August l, 1994); provided, however, that if the amount of any
Participant's remaining balance should exceed the Highest Remaining Balance
applicable to the Offering for such Exercise Date, any such excess shall be
refunded to such Participant.

 11.   Issuance of Shares; Stock Certificates

The shares of AT&T Common Stock purchased by a Participant on an Exercise
Date shall, for all purposes, be deemed to have been issued and sold at the
close of business on such Exercise Date.  Prior to that time, none of the
rights or privileges of a stockholder shall exist with respect to such
shares.

As soon as practicable after such Exercise Date, the Company shall cause to
be issued and delivered, a certificate for the number of shares of AT&T
Common Stock purchased by a Participant on such Exercise Date, which
certificate shall be registered in the manner designated in the
Participant's Stock Purchase Agreement.  Such designation may be changed at
any time by filing notice thereof.  The Secretary shall have sole discretion
to adopt rules governing the registration of certificates for shares
purchased hereunder, and may restrict the types of designations permitted
under a Participant's Stock Purchase Agreement.

l2.    Supplemental Payments

For any Offering under the Plan (except the Offering beginning on August l,
1994), a Participant may make a supplemental payment to the Stock Purchase
Account in an amount equal to the Highest Remaining Balance applicable to
the next preceding Offering under the Plan, reduced by the amount, if any,
remaining in his Stock Purchase Account upon the expiration of the next
preceding Offering, provided, however, that a Participant in any Offering
may not make a supplemental payment if such Participant elected to have the
remaining balance credited to his Stock Purchase Account for the next
preceding Offering refunded to him in accordance with Section l0 hereof. 
A Participant's supplemental payment for any Offering must be received by
the Company or a Designated Subsidiary within 30 days after the date of the
statement issued by the Company setting forth the amount of the supplemental
payment.

13.    Withdrawal

       A Participant may withdraw from the Plan at any time by filing notice
of withdrawal.  Upon a Participant's withdrawal, the entire amount credited
to his Stock Purchase Account shall be refunded to him.  Any Participant who
withdraws from the Plan may again become a Participant hereunder in
accordance with Section 5 hereof.

14.    Termination of Continuous Service; Other Involuntary Withdrawal

In the event of termination of a Participant's Continuous Service for any
reason, the entire amount credited to his Stock Purchase Account as of the
effective date of any such occurrence shall be used to purchase shares of
AT&T Common Stock pursuant to Section 9 hereof as of the next succeeding
Exercise Date and any remaining balance credited to his Stock Purchase
Account shall be refunded to him; provided, however, that if a Participant's
Continuous Service is terminated for any reason at least three months prior
to the next succeeding Exercise Date or if the Designated Subsidiary status
of the Subsidiary by which he is employed is revoked at any time, the entire
amount credited to his Stock Purchase Account shall be refunded to him.

15.    Procedure if Insufficient Shares Available

In the event that on any Exercise Date the aggregate funds available for the
purchase of shares of AT&T Common Stock pursuant to Section 9 hereof would
purchase a number of shares in excess of the number of shares then available
for purchase under the  Plan, the Secretary shall proportionately reduce the
number of shares which would otherwise be purchased by each Participant on
such Exercise Date in order to eliminate such excess, the Plan shall
automatically terminate immediately after such Exercise Date and any
remaining balance credited to the Stock Purchase Account of each Participant
shall be refunded to each such Participant.

l6.    Rights not Transferable

Rights to purchase shares under the Plan are exercisable only by the
Participant during his lifetime and are not transferable by him other than
by will or the laws of descent and distribution.  If a Participant attempts
to transfer his rights to purchase shares under the Plan other than by will,
he shall be deemed to have requested withdrawal from the Plan and the
provisions of Section 13 hereof shall apply with respect to such
Participant.

17.    Administration of the Plan

       Subject to the general control of, and superseding action by, the
Board of Directors, the Secretary shall have full power to administer the
Plan.  He shall adopt rules not inconsistent with the provisions of the Plan
for its administration.  He shall adopt the form of Stock Purchase
Agreement, all notices required hereunder, and any restrictions on the
registration of certificates for shares purchased hereunder.  His
interpretation and construction of the Plan and Rules shall, subject as
aforesaid, be final and conclusive.

18.    Amendment of the Plan

The Board of Directors, with the approval of the Senior Vice President,
Human Resources of AT&T, may at any time, or from time to time, alter or
amend the Plan in any respect, except that, without approval of the
stockholders of AT&T, no amendment may (i) increase the number of shares
reserved for purchase under the Plan other than as provided in Section l9
hereof or (ii) reduce the Purchase Price per share as defined in Section 8
hereof.

19.    Recapitalization; Effect of Certain Transactions


The aggregate number of shares of AT&T Common Stock reserved for purchase
under the Plan as provided in Section 3 hereof, the maximum number of shares
which a Participant may purchase in any Offering as provided in Section 9
hereof, and the calculation of the Purchase Price per share as provided in
Section 8 hereof shall be appropriately adjusted to reflect any increase or
decrease in the number of issued shares of AT&T Common Stock resulting from
a subdivision or consolidation of shares or other capital adjustment, or the
payment of a stock dividend, or other increase or decrease in such shares,
effected without receipt of consideration by the Company.  If AT&T shall
merge or consolidate, whether or not AT&T is the surviving or resulting
corporation in such merger or consolidation, any Offering hereunder shall
pertain to and apply to shares of stock of AT&T or any shares issued in
connection with such merger or consolidation in exchange for shares of stock
of AT&T, unless prior to such merger or consolidation, the Board of
Directors of the Company shall, in its discretion, terminate the Plan and/or
any Offering hereunder.  Notwithstanding the foregoing, a dissolution or
liquidation of AT&T shall cause the Plan and any Offering hereunder to
terminate and the entire amount credited to the Stock Purchase Account of
each Participant thereunder shall be paid to each such Participant.

       If the Company shall merge or consolidate with a corporation that is
not an Affiliate of the Company, whether or not the Company is the surviving
or resulting corporation in such merger or consolidation, any Offering
hereunder shall pertain to and apply to shares of stock of the Company or
any shares issued in connection with such merger or consolidation in
exchange for shares of stock of the Company, unless prior to such merger or
consolidation, the Board of Directors of the Company shall, in its
discretion, terminate the Plan and/or any Offering hereunder. 
Notwithstanding the foregoing, a dissolution or liquidation of the Company
shall cause the Plan and any Offering hereunder to terminate and the entire
amount credited to the Stock Purchase Account of each Participant thereunder
shall be paid to each such Participant.

20.    Expiration and Termination of the Plan

The Plan shall continue in effect through December 3l, 1999 unless
terminated prior thereto pursuant to Section 15 or 19 hereof, or pursuant
to the next succeeding sentence.  The Board of Directors shall have the
right to terminate the Plan or any Offering hereunder at any time.  In the
event of the expiration of the Plan or its termination or the termination
of any Offering pursuant to the immediately preceding sentence, the entire
amount credited to the Stock Purchase Account of each Participant hereunder
shall be refunded to each such Participant.

21.    Application of Funds

All funds received by the Company under the Plan may be used for any
corporate purpose.

22.    Notice

Any notice which a Participant files pursuant to the Plan shall be in the
appropriate form and shall be delivered by hand or mailed, postage prepaid,
to such Participant's Payroll Department.

23.    Repurchase of Stock

Neither the Company nor AT&T shall be required to repurchase from any
Participant shares of AT&T Common Stock which such Participant acquires
under the Plan.

24.    Alternate Contribution Methods

Anything herein to the contrary notwithstanding, in the event authorized
payroll deductions form a Participant's Compensation are not permitted by
reason of the provisions of local law applicable to the Company or a
Designated Subsidiary, or are not practicable in the opinion of the
Secretary, then consistent with the requirements of Code section 423, 
the appropriate alternative method pursuant to which affected
Participants may make payment for shares of AT&T Common Stock purchased
hereunder which would otherwise have been made pursuant to Section 6 hereof
shall be designated by the Secretary.  Payments made hereunder shall be
deemed to have been made pursuant to Section 6 hereof.




AT&T SHORT TERM INCENTIVE PLAN

       1.  PURPOSE.  The purpose of the AT&T Short Term Incentive Plan (the
"Plan") is to provide Senior Managers of American Telephone and Telegraph
Company (the "Company") and its Affiliates with incentive compensation based
upon the level of achievement of financial and other performance criteria. 
The Plan will enhance the ability of the Company and its Affiliates to
attract individuals of exceptional managerial talent upon whom, in large
measure, the sustained progress, growth and profitability of the Company
depends.

       2.  DEFINITIONS.  As used in the Plan, the following terms shall have
the meanings set forth below:

       (a)  "Affiliate" shall mean (i) any Person that directly, or through
one or more intermediaries, controls, or is controlled by, or is under
common control with, the Company or (ii) any entity in which the Company has
a significant equity interest, as determined by the Committee.

       (b) "Award" shall mean a cash payment.

       (c) "Board" shall mean the Company Board of Directors.

       (d) "Calendar Year" shall mean the year, following the Performance
Year, in which the Award is made.

       (e) "Change in Control" shall be deemed to have occurred if (a) there
shall have been a change in the composition of the Board such that at any
time a majority of the Board shall have been members of the Board for less
than twenty-four months, unless the election of each new director who was
not a director at the beginning of the period was approved by at least
two-thirds of the directors then still in office who were directors at the
beginning of such period (but in no event by fewer than three such direc-
tors); or (b) any Person acquiring 30% or more of the outstanding common
shares of the Company.

       (f) "Committee" shall mean the Compensation Committee of

the Board.

       (g) "Covered Employees" shall mean a Participant who is a "covered
employee" within the meaning of Section 162(m) of the Internal Revenue Code
with respect to any Performance Year.

       (h) "Outside Directors" shall mean those members of the Committee who
are "outside directors" within the meaning of Section 162(m) of the Internal
Revenue Code.

       (i) "Participant" shall mean each and every Senior Manager of the
Company and its Affiliates other than those Senior Managers who are
determined by the Committee, or such person or committee empowered by the
Committee, to be ineligible to participate in the Plan.

       (j) "Performance Year" shall mean the year in which the award was
earned.

       (k) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.

       (l) "Senior Manager" shall mean any manager of the Company or any
Affiliate holding a position above "E" level or any future salary grade
level that is the equivalent thereof.

       (m) "Target Award" shall mean an Award level that will be
paid if certain performance criteria are achieved in the Performance Year.

3.  AWARDS-GENERAL.  Awards will be made in each Calendar Year with respect
to a Performance Year.  Awards shall be paid as soon as practicable after
the Performance Year, except to the extent that a Participant has made an
election to defer the receipt of such Award pursuant to the AT&T Senior
Management Incentive Award Deferral Plan.

       The Committee shall approve a Target Award for each structure rate of
management eligible for Awards under the Plan prior to each Performance Year
for which it intends to make Awards. For each Performance Year the Committee
shall also establish performance criteria as described in A and B below to
be applicable to Awards for such Performance Year (and future Performance
Years, as the case may be).

       Performance criteria are:

       A. Financial performance criteria of the Company and its Affiliates
(in each case, prepared on the same basis as the financial statements
published for financial reporting purposes except as adjusted pursuant to
Section 6 hereof); and

       B. Other performance criteria of the Company and its Affiliates.

       Except as provided in Section 4 (relating to Awards to "Covered
Employees"), Awards for any Performance Year will be determined by the
Committee, or such person or committee empowered by the Committee, based
upon the level of achievement during such Performance Year of the criteria
referred to in A or B above and on individual merit of each Participant. 
The Target Awards shall serve only as a guideline in making Awards under the
Plan.  Depending upon individual performance, in the case of each
Participant, an Award may be more or less (including no Award) than such
Target Award.

       4.  AWARD LIMITATIONS TO "COVERED EMPLOYEES".  Notwithstanding any
other provision of the Plan to the contrary, the following provisions shall
apply to any Participant who is a "covered employee" under Section 2(g) 
(i.e., the CEO and the four most highly compensated officers of the 
Company, other than the CEO), as of the end of a Performance Year:

       (a)  The total of all Awards payable to all such Participants who are
"covered employees" shall not exceed 0.4% of the "Net Cash Provided by
Operating Activities," as publicly disclosed  in the Company's consolidated
financial statements for such Performance Year, and the Award to each
Participant with respect to such Performance Year shall not exceed such
amount divided by the number of Participants who are "covered employees"
with respect to such Performance Year. Prior to the payment at any award
to a "covered employee" with respect to a Performance Year, those Compensation
Committee members who are "outside directors" under Section 2(h) shall 
certify the maximum amounts under this Section 4(a) with respect to such
Performance Year.

       (b)  The actual Award to any Participant under Section 4 will be
determined by those Compensation Committee members who are "outside
directors" (within the meaning of Section 162(m) of the Code), in their sole
discretion, based on individual merit and the attainment of financial and 
other performance criteria of the Company, established by the Compensation 
Committee along with any adjustments as adjusted pursuant to Section 6 
hereof. The award to any Participant may be less than (including no
award), but never more than, the amount determined under Section 4(a) above.

       5.  ELIGIBILITY.  (a)  Persons employed by the Company or any of its
Affiliates during a Performance Year in active service at a Senior Manager
level are eligible to be Participants under the Plan for such Performance
Year (whether or not so employed or living at the date an Award is made);
provided that, except in the case of a manager promoted to Senior Manager,
the manager has at least three months of active service at such level during
the Performance Year with the Company or any Affiliate (excluding any time
the manager was absent on account of disability and receiving any Sickness
or Accident Disability Benefits ("Disability Benefits") under the Company
or any employing Affiliate's Sickness or Accident Disability Benefit Plan). 
A Senior Manager is not rendered ineligible to be a Participant by reason
of being a member of the Board.

       (b)  The Target Award applicable to a Participant under the Plan for
a Performance Year shall be prorated over the Performance Year or the
Participant shall be ineligible for an Award, as follows:


(1)    entrance to or exit from             - prorate from date of
       a level of Senior Manager              entrance or exit to
       after the beginning of the             the nearest half
       Performance Year, including            month
       exit due to death, retirement,
       resignation, or leave of absence


(2)    changes in designated                - prorate according
       structure rate                         to time of active
                                              service at each  
                                              structure rate to the
                                              nearest half month 

(3)    receipt of Disability                - prorate to the day
       Benefits for more than                 based on time of
       three months in a                      service while not
       Performance Year under the             receiving Disability
       plan of the Company or any             Benefits
       Affiliate

(4)    receipt of Disability                - no reduction in
       Benefits for three months              applicable Target 
       or less in a Performance               Award
       Year under the plan of the 
       Company or any Affiliate

(5)    dismissal during or after            - no award
       a Performance Year by the 
       Company or any Affiliate


       6.  ADJUSTMENTS.  (a) In order to assure the incentive features of
the Plan and to avoid distortion in the operation of the Plan, the Committee
may make adjustments in the performance criteria established by it for any
Performance Year under Section 3 whether before or after the end of the
Performance Year to the extent it deems appropriate in its sole discretion,
which shall be conclusive and binding upon all parties concerned, to
compensate for or reflect any extraordinary changes which may have occurred
during the Performance Year which significantly alter the basis upon which
such performance criteria were determined.  Such changes may include without
limitation changes in accounting practices, tax, regulatory or other laws
or regulations, or economic changes not in the ordinary course of business
cycles.  The Company also reserves the right to adjust Target Awards to
insulate them from the effects of unanticipated, extraordinary, major
business developments, e.g., unusual events such as a special asset
writedown, sale of a division, etc.  The determination of financial
performance achieved for any Performance Year may, but need not be, adjusted
by the Committee to reflect such extraordinary, major business developments. 
Any such determination shall not be affected by subsequent adjustments or
restatements.

       (b) In the event of any change in outstanding shares of the Company
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 performance criteria established by it under
Section 3 for any Performance Year not then completed; any and all such
adjustments to be conclusive and binding upon all parties concerned.

       (c) In order to maintain the Participants' rights in the event of any
Change in Control of the Company the Committee as constituted before such
Change in Control may, in its sole discretion, as to any Award, either at
the time a Target Award is determined hereunder or any time thereafter, take
any one of the following actions: (i) provide for the acceleration of any
time periods relating to the realization of any Award so that such Award may
be realized in full on or before a date fixed by the Committee; (ii) make
such adjustment to any Target Award then outstanding as the Committee deems
appropriate to reflect such Change in Control; (iii) cause the Company's
obligation with respect to such Target Award and any other obligations
hereunder to be assumed, or new obligations substituted therefor, by the
acquiring or surviving corporation after such Change in Control.

       7.  OTHER CONDITIONS.  (a)  No person shall have any claim to an Award
under the Plan and there is no obligation for uniformity of treatment of
Participants under the Plan.  Awards under the Plan may not be assigned or
alienated.

       (b)  Neither the Plan nor any action taken hereunder shall be
construed as giving to any Participant the right to be retained in the
employ of the Company or any Affiliate.

       (c)  The Company or any Affiliate shall have the right to deduct from
any Award to be paid under the Plan any federal, state or local taxes
required by law to be withheld with respect to such payment.

       (d)  Awards under the Plan will be included in the base for
determining pensions, retirement and death related benefits under the
following plans:

               - AT&T Non-Qualified Pension Plan
               - AT&T Mid-Career Pension Plan
               - AT&T Senior Management Long Term Disability
                 and Survivor Protection Plan

       (e) In the event an Award under the Plan is deferred under the AT&T
Senior Management Incentive Award Deferral Plan, it will be reflected in the
calculations of the above benefit plans as if it had been paid as scheduled
and not deferred.

       8.  DESIGNATION OF BENEFICIARIES.  A Participant may designate a
beneficiary or beneficiaries to receive all or part of the Award which may
be made to the Participant, or may be payable, after such Participant's
death.  A designation of beneficiary may be replaced by a new designation
or may be revoked by the Participant at any time.  A designation or
revocation shall be on a form to be provided for this purpose and shall be
signed by  the Participant and delivered to the Company or Affiliate
employing the Participant prior to the Participant's death.  In case of the
Participant's death, an Award with respect to which a designation of
beneficiary has been made (to the extent it is valid and enforceable under
applicable law) shall be paid to the designated beneficiary or
beneficiaries.  Any Award granted or payable to a Participant who is
deceased and not subject to such a designation shall be distributed to the
Participant's estate.  If there shall be any question as to the legal right
of any beneficiary to receive an Award under the Plan, the amount in
question may be paid to the estate of the Participant, in which event the
Company or it's employing Affiliate shall have no further liability to
anyone with respect to such amount.

       9.  PLAN ADMINISTRATION.  (a)  The Committee shall have full power to
administer and interpret the Plan and to establish rules for its
administration subject to such resolutions, not inconsistent with the Plan,
as may be adopted by the Board.  In making any determinations under or
referred to in the Plan the Committee shall be entitled to rely on opinions,
reports or statements of officers or employees of the Company and its
Affiliates and of counsel, public accountants and other professional or
expert persons.

       (b) The Plan shall be governed by the laws of the State of New York
and applicable Federal law.

       10.  MODIFICATION OR TERMINATION OF PLAN.  The Board may modify or
terminate the Plan at any time, effective at such date as the Board may
determine.  The Senior Vice President - Human Resources of the Company (or
any successor to that officer's responsibilities) with the concurrence of
the General Counsel, or the Vice President-Law for Corporate Matters, of the
Company (or any successor to either of such officer's responsibilities),
shall be authorized to make minor or administrative changes in the Plan or
changes required by or made desirable by government regulation. A
modification may affect present and future Participants.