AT&T 2004 Long Term Incentive Program
Performance Share Award Agreement
[GRAPHIC OMITTED]
****EMPLOYEE MUST RETURNED SIGNED
AGREEMENT ON OR BEFORE [date] OR THIS AWARD
WILL BECOME NULL AND VOID****
Pursuant to the AT&T 2004 Long Term
Incentive Program (the "Plan") of AT&T Corp.
("AT&T" or the "Company"), and in accordance with the terms and conditions
of
the Plan, a copy of which is available to you*, and your agreement to the
further terms, conditions and restrictions set forth below, you have been
granted, as of the date of grant set forth
below, a number of performance shares
("Performance Shares"), as set forth
below.
The Plan is hereby incorporated by reference and made
a part hereof. The
grant
and this Agreement are subject to all terms
and conditions of the Plan, and the
parties agree to be bound by the terms
thereof. In the event of any conflict
between the provisions of this Agreement and the provisions of the Plan,
the
provisions of the Plan shall control. The
Committee shall have the right, in its
discretion, to alter or amend the Plan and
this Agreement,
from time to time,
consistent with the terms of the Plan.
Capitalized
terms not otherwise
defined
herein shall have the same meanings as in
the Plan.
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Participant
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Social Security Number
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Number of Performance Shares
Granted
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Date of Grant
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Performance Period
January 1, 2005 - December
31, 2007
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Your Performance Share
Award will be distributed only after
the end of the Performance Period, except in certain
circumstances as
indicated in the terms and conditions set
forth in this Agreement.
o The
percentage of the Performance Share Award that will
be distributed to you shall depend on the satisfaction,
at the completion of the Performance Period, of
performance criteria
that have been established by the
AT&T Board
of Directors ("the AT&T Board") or the
Committee.
Distribution
Period and Form
of Payout
o The
determination
of whether, and to what extent,
such criteria
have
been
satisfied,
and the
determination of the
percentage
of the Performance
Share Award
to be distributed to you shall be
conclusively
determined by
the AT&T Board or the
Committee.
o The
Performance
Shares to which you
become entitled
based on
the satisfaction
of such criteria are
called
("Retained Shares").
The number of Retained Shares
will be determined
as soon as
practicable
after the
completion of the
Performance
Period and shall be
distributed in Shares
of AT&T common stock, except in
certain circumstances
as indicated in the
termination
of employment provisions set forth in this Agreement.
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This Performance
Share Award
Agreement (this
"Agreement")
Effectiveness
shall be effective
only if and
when AT&T receives your
of Agreement
signature of
acceptance of the terms of this Agreement as
required below.
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As soon as administratively practicable after the completion
of the
distribution
period described
above
(the
"Distribution Period"), (or to the extent applicable, the
completion of
any elected deferral period for any
Book Entry upon Performance
Share),
and subject to the income tax
Completion of
withholding provisions
described in the Agreement, AT&T
Distribution
will deliver to you or your legal representative a statement
Period
reflecting ownership
of the corresponding
Shares in book
entry form. You
are responsible
for complying with any
securities and
exchange control laws or any other legal
requirements
applicable to
you in connection with the
distribution of such Shares.
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Upon the distribution of any Retained Shares, and in
accordance with ordinary payroll practices, you will receive
Dividend
a cash payment in an amount equal to all dividends payable
Equivalent
on one Share (subject to any appropriate adjustment pursuant
Payments
to Section 4(c) of the
Plan) on all record dates within the
Performance Period
with respect to which
this Performance
Share Award was
outstanding,
multiplied
by the number of
Retained Shares distributed to you upon the distribution.
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You may irrevocably
elect, in accordance with policies
adopted by the Committee, to defer the distribution of all
Deferral
or any portion
of this Performance Share Award that you
Election
otherwise would have
become entitled
to receive
upon the
conclusion of the distribution period pursuant to the terms
of this Agreement.
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* AT&T employees should access the
Corporate Forms Library in the AT&T Workforce
Services web site for these
documents.
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You agree that the
Company is not
responsible for the
tax
consequences to you of
the granting or distribution of this
Performance Share
Award and the
distribution of Shares
in
respect thereof,
and that it is your responsibility to
consult with a
personal tax advisor
regarding all
matters
with respect to the
tax consequences
of the granting and
vesting of the
Performance Shares and
the distribution
of
Income Tax
Shares in respect thereof. At the conclusion of the
Withholding
Distribution Period,
AT&T (or your local employer, as
Requirements
applicable) shall
determine and report to the proper taxing
(Applicable to
authorities the ordinary income recognized by you based on
all Participants) the number of Retained Shares to be issued to you on
such
date multiplied by the
Fair Market Value on such date. AT&T
(and your local
employer, as applicable) shall have the
right to deduct or cause to be deducted from, or collect or
cause to be collected with respect to, any distribution of
Shares or payment of dividend equivalent amounts, any
federal, state,
or local taxes and/or social insurance
contributions required
by law to be
withheld or paid
with
respect to such distribution and or payment, and you or your
legal representative
or beneficiary hereby
consent to such
deductions.
Subject to applicable
securities laws, AT&T (and your local
employer, as
applicable)
is authorized
to automatically
withhold an
appropriate number of Retained Shares to satisfy
such tax and/or social insurance withholding and distribute
only the net number of Shares to you.
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Termination of Your
termination
of employment
from the Company or
one of
Employment and its
Affiliates, will cause
this Performance Share
Award to
this Performance be cancelled effective
upon your termination date, except as
Share Award
described below:
Agreement
normal retirement a) upon termination of
employment after the attainment of
age and AT&T service equal to:
Age
and
AT&T service of
Any age
30 years
50
25 years
55
20 years
65
10 years;
the Performance Shares shall be prorated based on the number
of full months** of employment in the Performance Period and
distributed to you as soon as practicable following the year
of your retirement.
The payout level for this Award will be
determined by the level of performance criteria met from the
beginning of the applicable Performance Period through the
end of the calendar year of your retirement.
under an FMP, b)
upon
termination of
employment,
under the AT&T
Force
sale, divestiture,
Management Program
or the AT&T E-Band and Officer
outsourcing
separation plans;
sale, divestiture or
outsourcing of
your business
unit
or position from AT&T; the
Performance Shares
shall be prorated based on the
number of full months** of employment in the
Performance Period and
distributed
to you as soon as
practicable fo
