AT&T CORP, DEF 14A, 1995-02-27

AT&T CORP
DEF 14A, 1995-02-27
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(LOGO AT&T)

1995
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT

WEDNESDAY, APRIL 19, 1995
AT 9:30 A.M. LOCAL TIME
WASHINGTON STATE CONVENTION
AND TRADE CENTER
800 CONVENTION PLACE
SEATTLE, WASHINGTON

<PAGE>
(Logo--AT&T)

32 Avenue of the Americas
New York, NY 10013-2412

Robert E. Allen
Chairman of the Board
February 28, 1995

Dear Shareholder:
It is a pleasure to invite you to your Company's 1995 Annual Meeting in
Seattle, Washington, on Wednesday, April 19, beginning at 9:30 A.M. local
time, at the Washington State Convention and Trade Center. This will be
AT&T's 110th Annual Meeting of Shareholders and I hope that those who find it
convenient will attend. If you plan to attend the meeting, please keep the
admission ticket and map that is attached to the proxy card.

The Washington State Convention and Trade 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 of Robert E. Allen)

<PAGE>
NOTICE OF MEETING
The 110th Annual Meeting of Shareholders of AT&T Corp. (the "Company") will
be held at the Washington State Convention and Trade Center, 800 Convention
Place, Seattle, Washington, on Wednesday, April 19, 1995, at 9:30 A.M. local
time, 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 1995 (page 14);

* To approve the McCaw Cellular Communications, Inc. Employee Stock Purchase
Plan (page 14);

* To act upon such other matters, including shareholder proposals (beginning
on page 19 of the accompanying proxy statement), as may properly come before
the meeting.

Holders of common shares of record at the close of business on February 28,
1995, will be entitled to vote with respect to this solicitation.

Marilyn J. Wasser
Vice President - Law and Secretary

February 28, 1995

<PAGE>
AT&T Corp.
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 February 28, 1995, to holders of
common shares in connection with the solicitation of proxies by the board of
directors for the 1995 Annual Meeting of Shareholders in Seattle, Washington.
Proxies are solicited to give all shareholders of record at the close of
business on February 28, 1995, 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.

<PAGE>

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 cancelling any
proxy previously given.

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 Long
Term Savings and Security Employee Stock Ownership Trust, 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. If cards representing the shares in
the above-named plans are not returned, those shares will not be voted with
the exception that if cards representing shares in the AT&T Long Term Savings
and Security Plan and the AT&T Long Term Savings and Security Employee Stock
Ownership Trust are not returned, those shares will be voted by the trustees
of those plans.

Shares allocated to the accounts of participants in plans of AT&T Global
Information Solutions Company, 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") may be voted

<PAGE>
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 12, 1995. 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.

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 the meeting in person 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: Manager - Shareowner Relations, AT&T
Corp., 32 Avenue of the Americas, Room 2420E, 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. 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 AT&T 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 mailing of an annual report to an account, please
call the AT&T shareholder services number, 1-800-348-8288.

<PAGE>
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 analyzed and used to determine what kinds of additional information
should be furnished in various Company publications.

On January 1, 1995, there were 1,569,005,972 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 10 meetings in 1994; the committees held 26 meetings. The
average attendance at the aggregate of the total number of meetings of the
board and the total number of committee meetings was 95%.

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

<PAGE>
The Audit Committee meets with management to consider the adequacy of the
internal controls 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 six times in
1994.

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 32. The committee, which consists of five non-employee
directors, met seven times in 1994.

The Committee on Directors advises and makes recommendations to the board on
all matters concerning directorship and corporate governance practices and
the selection of candidates as nominees for election as directors. The
committee, which consists of seven non-employee directors, met two times in
1994. The committee recommended this year's candidates at the January 1995
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: Vice
President-Law and Secretary, AT&T Corp., 32 Avenue of the Americas, Room
2420E, New York, NY 10013-2412, stating in detail the qualifications of such
persons for consideration by the committee.

<PAGE>
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 chairpersons 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.

<PAGE>
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 designated 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, 1995.

<PAGE>
NOMINEES FOR ELECTION AS DIRECTORS

Robert E. Allen, Chairman and Chief Executive Officer of AT&T since 1988.
Director of Bristol-Myers Squibb Co.; Chrysler Corporation; and PepsiCo, Inc.
Chairman of The Business Council. Director of AT&T since 1984; Chairman of
the Executive and Proxy Committees. Age 59.

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 Audit and Corporate Public Policy Committees. Age 55.

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 62.

<PAGE>

Philip M. Hawley, retired Chairman and Chief Executive Officer of Broadway
Stores, Inc. (formerly 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 69.

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.; and
Time Warner Inc. Director of AT&T since 1993; member of the Audit and
Corporate Public Policy Committees and the Committee on Directors. Age 60.

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 65.

Drew Lewis, Chairman and Chief Executive Officer of Union Pacific Corporation
(rail transportation, natural resources, and trucking) since 1987. Director
of American Express Co.; FPL Group, Inc.; Ford Motor Company; and Union
Pacific Corporation. Director of AT&T since 1989; member of the Audit and
Corporate Public Policy Committees and the Committee on Directors. Age 63.

<PAGE>

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 58.

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 Eaton Corp.; and United Parcel Service of America, Inc. Director
of AT&T since 1993; member of the Corporate Public Policy Committee. Age 57.

Donald S. Perkins, Chairman of Kmart Corp. (mass merchandise retailer) since
January, 1995. Retired Chairman and Chief Executive Officer of Jewel
Companies, Inc. (diversified retailer) (1970-1980). Director of Aon Corp.;
Cummins Engine Company, Inc.; Illinova Corporation; Inland Steel Industries;
Kmart Corp.; 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 Executive, Finance, and Proxy
Committees and the Committee on Employee Benefits. Age 67.

Henry B. Schacht, Chairman since 1977 and former Chief Executive Officer
(1973-1994) of Cummins Engine Company, Inc. Director of Aluminum Company of
America; 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 60.

<PAGE>

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 Company. Director of AT&T since 1984; Chairman of the
Audit Committee; member of the Compensation Committee. Age 63.

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.; Cummins Engine Company, Inc.; and PepsiCo, Inc. Director of AT&T since
1988; member of the Audit and Corporate Public Policy Committees and the
Committee on Directors. Age 60.

Joseph D. Williams, retired Chairman and Chief Executive Officer of
Warner-Lambert Company (pharmaceuticals, health care, and consumer products)
(1985-1991). Director of Exxon Corp.; J.C. Penney Co., Inc.; Rockefeller
Financial Services, Inc.; Rockefeller & Co.; Therapeutic Antibodies Inc.;
Thrift Drug, Inc.; Warner-Lambert Company; and The Wyatt Company. Director of
AT&T since 1984; Chairman of the Finance Committee; member of the Executive
and Compensation Committees. Age 68.

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; S.G. Warburg Group PLC
(U.K.) and S.G. Warburg & Co. Inc.; United Biscuits (Holdings) PLC (U.K.);
and Zeneca Group PLC (U.K.). Director of AT&T since 1981; member of the
Compensation and Finance Committees and the Committee on Directors. Age 65.

<PAGE>
STOCK OWNERSHIP OF MANAGEMENT AND DIRECTORS

The following table sets forth information concerning the beneficial
ownership of the Company's common stock as of January 1, 1995, 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)
<S> <C> <C> <C>
Robert E. Allen 641,400(3) 50,158 691,558
M. Kathryn Eickhoff 3,000 318 3,318
Walter Y. Elisha 8,531 1,199 9,730
Philip M. Hawley 1,000(4) 804 1,804
Carla A. Hills 400 1,858 2,258
Belton K. Johnson 5,016 166 5,182
Drew Lewis 4,000 166 4,166
Donald F. McHenry 637 166 803
Victor A. Pelson 198,938(5) 4,699 203,637
Donald S. Perkins 2,248(6) 166 2,414
Henry B. Schacht 1,055 1,006 2,061
Michael I. Sovern 1,200 166 1,366
Franklin A. Thomas 1,083 2,369 3,452
Joseph D. Williams 15,500 166 15,666
Thomas H. Wyman 1,000 552 1,552
(b)
Alex J. Mandl 228,850(7) 2,173 231,023
William B. Marx, Jr. 177,863(8) 6,872 184,735
Jerre L. Stead 94,652(9) 12,442 107,094
(c)
Directors and Executive
Officers as a Group 5,095,810(10) 123,207 5,219,017
</TABLE>

<PAGE>
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 549,805 shares which may be acquired
within 60 days pursuant to stock options and 24,000 restricted shares awarded
under employee incentive compensation plans.

4. Mr. Hawley disclaims beneficial ownership of 444 common shares held by
Mrs. Hawley.

5. Includes beneficial ownership of 186,174 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 2,979,150 common shares.

7. Includes beneficial ownership of 218,245 shares which may be acquired
within 60 days pursuant to stock options awarded under employee incentive
compensation plans.

8. Includes beneficial ownership of 174,706 shares which may be acquired
within 60 days pursuant to stock options awarded under employee incentive
compensation plans.

9. Includes beneficial ownership of 34,470 shares which may be acquired
within 60 days pursuant to stock options and 23,000 restricted shares awarded
under employee incentive compensation plans.

10. Includes beneficial ownership of 1,834,749 shares which may be acquired
within 60 days pursuant to stock options awarded under employee incentive
compensation plans as well as 2,979,150 shares over which they have sole or
shared voting and investment power as trustee.

As required by Securities and Exchange Commission rules under Section 16 of
the Securities Exchange Act of 1934, the Company notes that during 1994 two
directors filed untimely reports on transactions in the Company's common
stock as follows: M. Kathryn Eickhoff, one report regarding two transactions
and Joseph D. Williams, one report regarding one transaction.

<PAGE>
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 L.L.P. ("Coopers & Lybrand") as the independent auditors to examine
the Company's financial statements for the year 1995. 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 1994, 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 APPROVE THE
McCAW CELLULAR COMMUNICATIONS, INC.
EMPLOYEE STOCK PURCHASE PLAN

(Item C on Proxy Card)

In connection with the September 1994 merger whereby McCaw Cellular
Communications, Inc. ("McCaw") became an AT&T wholly owned subsidiary (the
"McCaw Merger"), AT&T assumed the McCaw Cellular Communications, Inc.
Employee Stock Purchase Plan (the "Plan"). In December 1994, the board
adopted the Plan and approved a two-year extension of the Plan through
December 31, 1999, subject to AT&T shareholder approval. McCaw has had a
stock purchase plan in place for over seven years.

<PAGE>
Shares Reserved for the Plan

The Plan provides eligible employees of McCaw with a means to purchase,
through payroll deductions, 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. The total number of shares that may be purchased
under the Plan is 3,000,000, an increase of 2,000,000 over the number of
shares authorized when AT&T assumed the Plan as part of the merger with
McCaw.

Eligible Participants
Full-time employees of McCaw or any of its subsidiaries are eligible to
participate, on a purely voluntary basis, in the Plan if they meet certain
conditions. To be eligible, an employee's customary employment must be
greater than both 20 hours per week and five months per calendar year. The
employee must also have completed six months of employment and be scheduled
to work at least 1,000 hours during the option period. In addition, no
employee will be permitted to purchase Common Stock under the Plan at a rate
which exceeds $25,000 of fair market value of such stock (determined at the
time the option is granted) for each calendar year in which such option is
outstanding. Approximately 8,500 employees would have been eligible to
participate as of January 1, 1995.

Material Features of the Plan
Eligible employees participate in the Plan through exercising options to
purchase Common Stock. Options may be granted each month to eligible
employees and will expire on the last trading day of each such month unless
they are exercised on that date. Common Stock will be purchased through a
participant's payroll deductions at a stated whole percentage from 2% to 10%
of compensation, determined by the participant, at a price that shall be an
amount equal to 85% of the fair market value of the Common Stock as of the
last trading day of each month that the option is outstanding. The fair
market value of the Common Stock is determined in relation to market price in
accordance with certain procedures set forth in the Plan.

Each eligible employee who elects to participate in the Plan automatically
and without any act on his or her part will be deemed to

<PAGE>
have exercised his or her option on the last trading day of each month if he
or she is then employed, to the extent that the amount withheld from his or
her compensation under the Plan is sufficient to purchase, at the option
price, one or more whole shares of Common Stock. Any balance remaining in an
employee's account after payment of the purchase price of those whole shares
will be refunded or carried over to the next month at the direction of the
employee. All funds received or held by the Company under the Plan are
general assets of the Company, free of any trust or other restriction, and
may be used for any corporate purpose. No interest on such funds will be
credited to or paid to any participant under the Plan.

An option granted under the Plan shall not be transferable other than by will
or by the laws of descent and distribution and is exercisable during his or
her lifetime only by the employee.

A participant may withdraw from the 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 McCaw 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.

New Plan Benefits
It is not possible to determine how many eligible employees will participate
in the Plan in the future. The following table presents the aggregate fair
market value and the number of shares purchased under the Plan during the
four-month period (September 1994 through December 1994) following the McCaw
Merger in September 1994.
McCaw Cellular Communications, Inc.
Employee Stock Purchase Plan
(September 1994 - December 1994)

<TABLE>
<CAPTION>
<S> <C> <C>
Name and Position Dollar Value ($) Number of Shares
Non-Executive Officer
Employee Group $3,353,800 64,200
</TABLE>

<PAGE>

Tax Treatment
The 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 Plan will not realize income at the time the offering commences or
when the shares purchased under the 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 and (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, McCaw (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 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

<PAGE>
disposition within such two-year or one-year period, McCaw (or the subsidiary
by which the employee is employed) will be entitled to a deduction from
income equal to the 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 the U.S. federal income tax with respect to the shares of Common
Stock purchased under the Plan.

Plan Administration and Termination
The Plan provides for administration of the Plan by a committee of the board
of directors of McCaw. The board of directors of McCaw may terminate or
suspend the 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 Plan or to decrease the
purchase price. Unless earlier terminated, the 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 Plan would then automatically terminate after such purchase
period. Upon expiration or termination of the 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
McCaw Cellular Communications, Inc. Employee Stock Purchase Plan.

<PAGE>

SHAREHOLDER PROPOSALS
AT&T receives many suggestions from shareholders, some as formal shareholder
proposals. All are given careful attention. Formal proposals are sometimes
withdrawn by proponents after discussions with the Company. For example, The
Domestic and Foreign Missionary Society of the Protestant Episcopal Church
submitted a proposal requesting AT&T to endorse the CERES Principles and the
Grey Nuns of the Sacred Heart submitted a proposal requesting the Company to
initiate a review of its maquiladora operations and issue a report to
shareholders. Both proposals have been withdrawn based on mutual agreements
to engage in dialogue to seek to find common ground on these issues.

Proponents of two shareholder proposals have stated that they intend to
present the following proposals at the annual meeting. Information on the
shareholdings of the proponents is available by writing to: Manager -
Shareowner Relations, AT&T Corp., 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 direct management
that within five days after approval by the shareholders of this proposal,
the management shall publish in newspapers of general circulation in the
cities of New York, Washington, D.C., Detroit, Chicago, San Francisco, Los
Angeles, Dallas, Houston and Miami, and in the Wall Street Journal and U.S.A.
Today, a detailed statement of each contribution made by the Company, either
directly or indirectly, within the immediately preceding fiscal year, in
respect of a political campaign, political party, referendum or citizens'
initiative, or attempts to influence legislation, specifying the date and
amount of each such contribution, and the person or organization to whom the

<PAGE>
contribution was made. Subsequent to this initial disclosure, the management
shall cause like data to be included in each succeeding report to
shareholders. And if no such disbursements were made, to have that fact
publicized in the same manner.

"REASONS: This proposal, if adopted, would require the management to advise
the shareholders how many corporate dollars are being spent for political
purposes and to specify what political causes the management seeks to promote
with those funds. It is therefore no more than a requirement that the
shareholders be given a more detailed accounting of these special purpose
expenditures than they now receive. These political contributions are made
with dollars that belong to the shareholders as a group and they are entitled
to know how they are being spent.

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

Your directors recommend a vote against the above proposal. In 1984 94% and
in 1985 92% of the voted shares opposed this proposal.

Under numerous laws, corporate contributions to political candidates are
illegal. Therefore, AT&T does not contribute directly to candidates.
Employees may contribute to candidates through political action committees
(PACs) which the Company has established for eligible management employees
who wish to participate in the political process. Participation is voluntary
and the PACs operate under the strict regulations of federal and state
election laws. Information about PAC contributions is publicly available.
Therefore, there is no need for AT&T to also provide such information.

AT&T expenditures in support of federal and state government affairs
activities on legislative and regulatory matters are a legitimate business
expense and properly accounted for in the Company's books. These activities
assure that public officials are made aware of AT&T's position on matters
that are significant to the future of the Company. AT&T does not disclose
specific sub-segments of its

<PAGE>
business expenses and believes no useful shareholder purpose would be served
by such disclosures.

In addition, this proposal would have the Company place advertisements in
newspapers even if "no such disbursements" were made. Your directors believe
this would serve no useful purpose and would clearly be a waste of Company
resources. Therefore, your directors again recommend that shareholders vote
AGAINST this proposal.

Shareholder Proposal 2:

Richard A. Dee, 115 East 89th Street, New York, NY 10128, has submitted the
following proposal:
"Stockholders of publicly-owned corporations do not 'elect' directors.
Directors are selected by incumbent directors and managements - stockholders
merely 'ratify' or approve those selections much as they ratify selections of
auditors.

"The term 'Election of Directors' has been misused in corporate proxy
materials for many years to refer to the process by which directors are
empowered. The term is not only inappropriate - it is misleading. With no
choice of candidates, there is no election.

"Understandably, incumbent directors are anxious to protect their absolute
power over corporate activities. The root of that power is control of
Corporate Governance - which is assured by control of board composition.
Unfortunately, the 'Elective process rights' of stockholders are being
ignored.

"Approval of this Corporate Governance proposal will provide AT&T
stockholders with a choice of director candidates each year - and an
opportunity to vote for those whose qualifications and stated intentions they
favor. Its approval will provide stockholders with 'duly' elected
representatives.

"Public officials are duly elected - and are held accountable. Continuing in
office depends upon satisfying constituents, not simply nominators. Corporate
directors take office unopposed and answer only to fellow directors. Far too
many directors divide their

<PAGE>
time between many masters. Perhaps the 'pool' from which directors are
selected should be expanded to include many younger highly-qualified business
executives and more individuals with other backgrounds that well-qualify them
to represent stockholders.

"As long as incumbents are allowed to select and to propose only the number
of so-called candidates as there are directorships to be filled, and as long
as it is impossible, realistically, for stockholders to utilize successfully
what is supposed to be their right to nominate and elect directors, no
practical means will exist for stockholders to bring about director turnover
- - until this or a similar proposal is approved. Turnover is desirable because
it reduces the possibility of inbreeding and provides sources for new ideas
and new approaches to problems.

"It is hereby proposed that the Board of Directors, at its next regular
meeting, adopt a resolution requiring the Committee on Directors to nominate
two candidates for each directorship to be filled by the voting of
stockholders at annual meetings. In addition to customary personal background
information, Proxy Statements shall include a statement by each candidate as
to why he or she believes they should be elected.

"Although all nominees would continue to be selected by incumbents, approval
of this proposal would enable stockholders to replace any or all directors if
they become dissatisfied with them or with the results of corporate policies
and/or performance. Not a happy prospect even for those able to nominate
their possible successors.

"Any burden that a company may claim would be imposed upon it by having to
provide a choice of able director candidates is far outweighed by the
benefits that would accrue to its stockholders from a democratically-elected
board - a board composed of representatives willing to have their respective
qualifications reviewed and weighed carefully by those whose interests they
are to serve.

"Please vote FOR this proposal."

<PAGE>
Your directors recommend a vote against this proposal. Selection of directors
for a company's board is different from political elections that involve two
or more parties with dissimilar local or national agendas. AT&T shareowners
have similar interests stemming from their investment objectives. Investors
expect a board comprised of members who have outstanding qualifications,
proven ability to work effectively together and the commitment to further the
common interests of the owners. It is the obligation of the Committee on
Directors to identify director candidates who fulfill that expectation.

Each year the committee reviews the performance and qualifications of
existing board members and other possible candidates, including those
suggested by shareowners. The committee considers the evolving needs of the
business as it confronts global competition, identifies the best-qualified
people and recommends their selection. Such candidates also frequently are
approached by other companies seeking proven director talent; the candidates
often must decline such invitations because of time demands or conflicts of
interest resulting from their commitment to AT&T. In our view, it is
counterproductive to ask such potential candidates to set aside other
directorships without assurance that they have in fact been identified as the
existing directors' best recommendations for the AT&T board.

We find the proposal misleading in suggesting that there is little or no
turnover in AT&T board membership. In fact, approximately one third of the
directors elected in 1990 are no longer on the board. This turnover provides
a mix of benefits from directors with seasoned experience in the unique
problems and opportunities of AT&T, as well as the fresh perspective of new
member directors.

We believe that the present director selection procedure appropriately
addresses the interests of AT&T shareholders. Therefore, your directors
recommend that shareholders vote AGAINST this proposal.

<PAGE>
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: Vice President-Law and Secretary, AT&T Corp., 32 Avenue of the
Americas, New York, NY 10013-2412, and must be received by October 31, 1995.

OTHER MATTERS TO COME BEFORE THE MEETING

In addition to the matters described above, there will be an address by the
Chairman of the Board 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 32 (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 1994.

<PAGE>
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 77% of his total compensation structure. The other named officers
have approximately 70% of their total compensation at risk in
performance-driven incentive plans. AT&T targets executive competitive
compensation levels at the mean of a select group of large, market-focused,
progressive companies with whom it competes 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 because the Company requires skills and perspectives from
a broader range of backgrounds. 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
to each of the Company's top five officers exceeds the annual limit for
deductibility under Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). The Company, however, has taken steps to mitigate the
negative impact of this tax provision on the shareholders. For example,
elements of compensation under our annual bonus and long-term incentive plans
qualify for exemption from the limit on tax deductibility as
shareholder-approved performance-driven plans. In addition, we have a salary
and incentive deferral plan which permits compensation deferred under the
plan to be exempt from the limit on tax deductibility.

The committee has developed executive compensation governing principles that
provide guidance in 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 degree of flexibility of the compensation programs to
facilitate strategic executive hires in global markets.

<PAGE>
The committee also has developed governing principles for review of officer
performance. Among other things, these principles ensure that executive
officer compensation is linked to corporate performance levels. These
principles are used to design, approve, and implement AT&T senior executive
compensation programs.

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. These position rates are
determined annually 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 presents the salary recommendations to the board 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.

<PAGE>
Annual Bonus: The annual bonus for the Chairman and for the rest of the named
officers is (i) .4% of the Company's "Net Cash Provided by Operating
Activities", for the annual performance period as adjusted, divided by the
total number of named officers with respect to such period, or (ii) a lesser
amount based on factors including the Company's performance relative to
pre-set financial, employee, customer, and individual performance targets.

The pre-set financial target is based on Economic Value Added ("EVA"), which
measures the return on investment that enhances shareholder value. Employee
attitudes are measured by an index called People Value Added ("PVA"). There
are two components of the measurement: leadership of people and diversity.
Components of this 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 tied to the Company's
level of achievement of annual EVA, PVA, and CVA targets comprise
approximately 92% of the annual bonus. Payments under the Company's annual
incentive plan tied to individual achievement, considering the same factors
as those used for base salary, comprise approximately 8% 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
determined by the committee and presented to the board for approval.

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

To align shareholder and executive officer interests, the longterm
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

<PAGE>
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 award levels 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
approximately 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 shareholder 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 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. However, if an executive's annual
compensation is subject to the limit on tax deductibility, under Section
162(m) of the Code, in the last year of a performance period, then the
executive shall receive an Other Stock Unit Award payout, in lieu of the
performance share payout, and the value of the payout to each such executive
for the performance period shall be (i) 0.13% of the Company's "Net Cash
Provided by Operating Activities," as adjusted, for each year in the
performance period, divided by the total number of executives receiving such
payouts, or (ii) a lesser amount, based on factors, including targets for the
Company's RTE established for performance shares for such performance period.

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

<PAGE>
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 1994, the Company's most highly compensated officer was Robert E.
Allen, Chairman of the Board and CEO. Mr. Allen's 1994 performance was
reviewed by the committee and discussed with the non-employee directors and
Mr. Allen. The committee also 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 annual bonus is based on measurements of
success with our three key stakeholders: shareholders, customers, and
employees.

The shareholder element was measured by success relative to an EVA target for
the year of $2.4 billion. Final results for 1994 indicate that this target
was exceeded. The 1994 employee survey results for PVA measurement targets
were met as was the CVA target of exceeding 1993 results and of making
further progress in implementing a Company-wide customer satisfaction
measurement program. (EVA, PVA and CVA are defined on page 27.) This work
will continue in 1995.

<PAGE>

An AT&T performance share payout was made in 1994 based on an aggressive
average RTE target for the performance period from 1991 to 1993. The actual
average return achieved was 96.2% of the RTE target and these results yielded
a payout of 86.7% of the performance shares awarded to Mr. Allen at the
beginning of 1991.

In addition to leading the Company through its most financially successful
year since divestiture and achieving his employee and customer satisfaction
targets, Mr. Allen strengthened the Company's global position by entering
into a number of alliances that complement our technology and extend the
reach of our services.

The completion of our acquisition of McCaw places AT&T in one of the most
rapidly growing segments of our industry. In addition, the Company has
regained customers in the intensely competitive consumer communications
services market. Our position in the equipment business also improved with
the award of major contracts in the United States and abroad.

Moreover, during 1994 AT&T was awarded the coveted Deming Prize and its third
Malcolm Baldrige National Quality Award. In these and other accomplishments,
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

<PAGE>

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))

(Plot points for line graph)

Peer S&P 500
AT&T Group Comp LTD
1989 100 100 100
1990 69 94 97
1991 93 101 125
1992 124 105 138
1993 131 127 150
1994 128 134 152

Assumes $100 invested on December 31, 1989 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;
SBC Communications Inc.; Sprint Corporation; Texas Instruments Incorporated;
U S WEST, Inc.; and Xerox Corporation.

<PAGE>
SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Annual Compensation(2) Long-Term Compensation(2)
----------------------------------------- ---------------------------------
Awards Payouts
-----------------------------------
Other
Annual Restricted All Other
Compen- Stock LTIP Compen-
Name and sation(3) Award(s)(4) Options/ Payouts(5) sation(6)
Principal Position (1) Year Salary ($) Bonus ($) ($) ($) SARs (#) ($) ($)
- ------------------------------ ----- ----------- ---------- -------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert E. Allen 1994 1,109,000 2,253,600 136,898 0 72,854 1,885,567 104,422
Chairman of the Board and CEO 1993 1,032,000 1,356,700 128,082 0 72,854 1,348,458 118,166
1992 983,000 1,155,700 119,785 0 72,854 1,190,226 79,941

Victor A. Pelson 1994 685,000 972,600 66,979 0 34,629 502,640 57,278
Executive Vice President -- 1993 606,334 489,600 60,601 0 34,629 226,726 56,422
AT&T and Chairman of the 1992 541,000 441,200 49,008 0 30,220 262,360 34,425
Global Operations Team

Jerre L. Stead (7) 1994 634,000 807,700 81,724 2,605,563 30,220 502,640 64,383
Executive Vice President -- 1993 578,000 466,000 209,985 0 30,220 294,631 86,795
AT&T and CEO of 1992 -- -- -- -- -- -- --
Global Information Solutions

Alex J. Mandl 1994 629,000 853,100 102,640 0 30,220 387,137 58,010
Executive Vice President -- 1993 554,167 442,900 43,036 0 30,220 226,726 45,347
AT&T and CEO of 1992 492,000 344,100 148,813 0 23,318 260,043 7,607
Communications Services Group

William B. Marx, Jr. 1994 598,000 830,400 55,926 0 30,220 502,640 51,408
Executive Vice President -- 1993 545,000 452,067 51,043 0 30,220 226,725 51,378
AT&T and CEO of 1992 507,000 397,100 44,780 0 30,220 262,360 28,141
Multimedia Products Group ---- ---------- --------- -------- ---------- ------ -------- ------

</TABLE>

<PAGE>
Footnotes

1. Includes Chairman of the Board and Chief Executive Officer and the four
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 1994 of $41,801).

4. On December 31, 1994, Messrs. Allen and Stead held outstanding grants of
restricted stock. Mr. Allen held 24,000 shares with a value of $1,221,000. On
January 19, 1994, an award of 70,000 restricted shares was made to Mr. Stead.
47,000 shares were to vest based solely on continued employment with 35,250
vested on December 31, 1994, and 11,750 shares were cancelled upon Mr.
Stead's resignation. The value at grant of the 47,000 shares is reflected in
the table above. The remaining 23,000 restricted shares were to vest based on
both continued employment and performance as reflected on pages 34 and 35.

5. Includes distribution in 1994 to Messrs. Allen, Pelson, Stead, Mandl, and
Marx of performance shares whose three-year performance period ended December
31, 1993. The value of 12,000 AT&T Restricted Shares which vested in 1994 is
also reflected in the payout for that year for Mr. Allen.

6. In 1994, includes (a) Company contributions to savings plans (Mr. Allen
$6,000; Mr. Pelson $6,000; Mr. Stead $6,000; Mr. Mandl $6,000; and Mr. Marx
$6,000), (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 $66,737; Mr. Pelson $36,424; Mr. Stead
$44,789; Mr. Mandl $39,550; and Mr. Marx $33,168), and (c) payments equal to
lost Company savings match caused by IRS limitations (Mr. Allen $31,685; Mr.
Pelson $14,854; Mr. Stead $13,594; Mr. Mandl $12,460, and Mr. Marx $12,240).

7. Mr. Stead resigned from the Company effective January 1, 1995. He became
an executive officer of the Company in 1993; therefore his compensation for
1992 is not required to be disclosed.

<PAGE>
AGGREGATED OPTION/STOCK APPRECIATION RIGHTS
("SAR") EXERCISES IN 1994 AND YEAR-END VALUES

<TABLE>
<CAPTION>
Value of
Unexercised In-the-Money
Options/SARs Options/SARs
at Year End (#) at Year End ($)
--------------- -----------------
Shares Acquired Exercisable/ Exercisable/
Name (1) on Exercise (#) Value Realized ($) Unexercisable Unexercisable
-------------- --------------- ------------------ --------------- -----------------
<S> <C> <C> <C> <C>
Robert E.
Allen 0 0 476,951/ 7,108,150/
260,354 314,450
Victor A.
Pelson 0 0 151,545/ 1,510,986/
165,879 220,115
Jerre L. Stead 82,910 1,019,104 4,250/ 0/
30,220 0
Alex J. Mandl 0 0 188,025/ 1,893,797/
142,720 188,670
William B.
Marx, Jr. 0 0 144,486/ 1,469,249/
161,470 220,115
</TABLE>

LONG-TERM INCENTIVE PLANS--AWARDS IN 1994

<TABLE>
<CAPTION>
Estimated Future Payouts
of Performance Shares
Under Non-Stock Price
Performance Based Plan (2)
Number of Period Until ------------------------------------
Performance Maturation Threshold Target Maximum
Name (1) Shares or Payout (#) (#) (#)
- ---------------------- ------------ -------------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C>
Robert E. Allen 21,114 1994-1996 5,279 21,114 31,671
Victor A. Pelson 10,047 1994-1996 2,512 10,047 15,071
Jerre L. Stead 8,783 1994-1996 2,196 8,783 13,175
23,000(3) 1994 2,875 23,000 23,000
Alex J. Mandl 8,783 1994-1996 2,196 8,783 13,175
William B. Marx, Jr. 8,783 1994-1996 2,196 8,783 13,175
</TABLE>

<PAGE>
Footnotes

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

2. 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 83% of
the targeted RTE rate and the maximum award amount will be earned at
achieving 109% of the targeted RTE rate. If less than 83% 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.
However, if an executive's annual compensation is subject to the limit on tax
deductibility, under Section 162(m) of the Code, in the last year of a
performance period, then the executive shall receive an Other Stock Unit
Award payout, in lieu of the performance share payout, and the value of the
payout to each such executive for the performance period shall be (i) 0.13%
of the Company's "Net Cash Provided by Operating Activities," as adjusted,
for each year in the performance period, divided by the total number of
executives receiving such payouts, or (ii) a lesser amount, based on factors,
including targets for the Company's RTE established for performance shares
for such performance period.

3. 12,179 of the 23,000 restricted shares vested in January, 1995 based on
continued employment through 1994 and on the achievement of certain financial
and other performance targets of AT&T Global Information Solutions in 1994.
The remaining 10,821 of the 23,000 restricted shares were cancelled upon Mr.
Stead's resignation.

<PAGE>
OPTION GRANTS IN 1994

Individual Grants
-----------------------------------------------------------------------
Number of
Shares Grant
Underlying % of Total Date
Options Options Exercise Present
Granted (2) Granted to Price Expiration Value (3)
Name (1) # Employees ($/Sh) Date ($)
-------------------- ------------ ----------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Robert E. Allen 72,854 1.33 52.8125 1-4-04 850,935
Victor A. Pelson 34,629 .63 52.8125 1-4-04 404,467
Jerre L. Stead 30,220 .55 52.8125 1-4-04 352,970
Alex J. Mandl 30,220 .55 52.8125 1-4-04 352,970
William B. Marx, Jr. 30,220 .55 52.8125 1-4-04 352,970
</TABLE>

Footnotes

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

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

3. 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: An option term of seven years, volatility at
.1817, dividend yield at 2.98%, and interest rate at 5.61%. The real value of
the options in this table depends upon the actual performance of the
Company's stock during the applicable period.

<PAGE>
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, 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) 1.6% of the average annual pay for the six years ending
December 31, 1992, times the number of years of service prior to January 1,
1993, plus (b) 1.6% of pay subsequent to December 31, 1992. 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 31, 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.

Federal laws place limitations on pensions that may be paid from the pension
trust related to the AT&T Management Pension Plan. Pension amounts based on
the AT&T Management Pension Plan formula which exceed the applicable
limitations will be paid as an operating expense.

The Company also maintains the AT&T Non-Qualified Pension Plan. Under the
plan, annual pensions for Messrs. Allen, Pelson, Mandl, 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,

<PAGE>
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.

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 benefit calculated under the AT&T Management Pension Plan formula
(without regard to limitations imposed by the Internal Revenue Code). For
purposes of this formula, adjusted career average pay is determined by
dividing the sum of the employee's total adjusted career income by the
employee's actual term of employment at retirement. Total adjusted career
income is the sum of (A) and (B), where (A) is the employee's years of
service prior to January 1, 1993, multiplied by the sum of (i) the employee's
average annual compensation (within the meaning of the AT&T Management
Pension Plan) for the three-year period ending December 31, 1992, without
regard to the limitations imposed by the Internal Revenue Code, and (ii) the
average of the employee's actual annual bonus awards for the three-year
period ending December 31, 1992, and (B) is the sum of the employee's actual
compensation (within the meaning of the AT&T Management Pension Plan) after
December 31, 1992, without regard to the limitations imposed by the Internal
Revenue Code, and actual annual bonus awards subsequent to December 31, 1992.
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 1960 and ending with 1994. In 1994, the covered
compensation base was $24,600.

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:

<PAGE>
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 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 1959 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 his employment agreement, the Company entered into a supplemental
pension arrangement with Mr. Mandl. Pursuant to such

<PAGE>
arrangement, if employment is terminated on or after age 55 for any reason
other than Company-initiated termination for "cause," as defined, Mr. Mandl
will be entitled to immediate pension benefits based on the higher of (1) a
pension determined by his 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 ranges from $30,432 at age 55 to
$74,459 at age 65. Pension benefits payable under this arrangement will be
paid out of the Company's operating income, and will be offset by all amounts
actually received by Mr. Mandl under any other Company qualified or non-
qualified retirement plan or arrangement. In addition, Mr. 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.

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 Mr. 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 formula, 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 formula and the AT&T
Non-Qualified Pension Plan would be $1,647,300, $759,900, and $717,700,
respectively. For Mr. Mandl, the estimated annual pension amounts payable
under the AT&T Management Pension

<PAGE>
Plan formula, the AT&T Non-Qualified Pension Plan, and the AT&T Mid-Career
Pension Plan would be $754,200. 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.

OTHER INFORMATION

A Directors' and Officers' Liability Policy was renewed effective July 1,
1994, 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 when such indemnification is not provided by AT&T. The one-year
policy's cost is $1,600,000.

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.

Marilyn J. Wasser
Vice President-Law and
Secretary

Dated: February 28, 1995

<PAGE>
(Logo--AT&T)
32 Avenue of the Americas
New York, NY 10013-2412

Recycled
Paper

<PAGE>

P R O X Y AT&T LOGO
AT&T Corp.
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 19, 1995.

- -------------------------------------------------------------------------------

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 AT&T Corp. at the annual meeting of shareholders to
be held at the Washington State Convention and Trade Center in Seattle,
Washington, at 9:30 a.m. on April 19, 1995, 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 "Special Attention" 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 "Special Attention" box
on the other side of this card.)

<PAGE>

Detach here from proxy voting card

(THIS PAGE CONTAINS A MAP AND DIRECTIONS TO THE SHAREHOLDER MEETING)

<PAGE>

[X] Please mark your 8777
vote with an X.

Directors recommend a vote "FOR"
- --------------------------------
WITHHELD
FOR ALL FROM ALL
nominees nominees
A. Election of [ ] [ ]
Directors
(page 7)

FOR ALL EXCEPT the following nominee(s):

_______________________________________

FOR AGAINST ABSTAIN
B. Ratification [ ] [ ] [ ]
of Auditors
(page 14)

C. McCaw Employee [ ] [ ] [ ]
Stock Purchase
Plan (page 14)

Directors recommend a vote "AGAINST" the
shareholder proposals regarding
- ----------------------------------------

FOR AGAINST ABSTAIN
1. Political Contributions [ ] [ ] [ ]
(page 19)

2. Provide Choice of [ ] [ ] [ ]
Director Nominees
(page 21)

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

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

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

SIGNATURE(S)_______________________________ DATE ______________ , 1995

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.

<PAGE>

Detach here from proxy voting card

AT&T LOGO

Admission Ticket
- ------------------

Please present this ticket for admittance of shareholder(s) named above
and a guest. See reverse for map of area.

Annual Meeting
of Shareholders

Wednesday, April 19, 1995

Washington State Convention
and Trade Center
Exhibit Hall 4B
800 Convention Place
Seattle, Washington
- -----------------------
Agenda
8:00 a.m. Doors and Exhibit Areas Open
9:30 Introduction and Welcome
Chairman's Remarks
Election of Directors
Ratification of Auditors
Director Proposal
Shareholder Proposals
11:00 Voting
General Discussion
Adjournment (noon)

Hearing-amplification equipment and sign
interpretation will be provided.

AMENDED AND RESTATED

McCAW CELLULAR COMMUNICATIONS, INC.

EMPLOYEE STOCK PURCHASE PLAN1

McCAW CELLULAR COMMUNICATIONS, INC., a corporation organized under the
laws of the State of Delaware, hereby adopts this Amended and Restated McCaw
Cellular Communications, Inc. Employee Stock Purchase Plan (the "Plan") as of
January 1, 1995. The purposes of this plan are as follows:

(1) To assist employees of McCaw Cellular Communications, Inc. and its
subsidiary corporations in acquiring a stock ownership interest in AT&T Corp.,
parent of the Company pursuant to a plan which is intended to qualify as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code of
1986, as amended.

(2) To help employees provide for their future security and to
encourage them to remain in the employment of the Company and its subsidiary
corporations.

1. Definitions

Whenever any of the following terms are used in the Plan with the first
letter or letters capitalized, it shall have the following meaning unless the
context clearly indicates to the contrary (such definitions to be equally
applicable to both the singular and plural forms of the terms defined):

(a) "Code" means the Internal Revenue Code of 1986, as amended.

(b) "Committee" shall mean the committee appointed to administer
the Plan pursuant to paragraph 12.

(d) "Date of Exercise" means with respect to any Option the last
trading day of each month during the Option Period in which that Option was
granted.

- --------

* This document sets forth the Amended and Restated McCaw Cellular
Communications, Inc. Employee Stock Purchase Plan and incorporates all
amendments to the original Employee Stock Purchase Plan adopted on
August 14, 1987. The amendments contained herein were adopted May 11,
1988, February 13, 1989, March 5, 1991, May 7, 1991, March 4, 1992,
September 8, 1994, and February __, 1995.

<PAGE>

(e) "Date of Grant" means the date upon which an Option is
granted, as set forth in paragraph 3(a).

(f) "Eligible Compensation" means regular rate of pay, overtime pay,
and commissions on the Date of Grant.

(g) "Eligible Employee" means any employee who meets the following
criteria: (1) the employee does not, immediately after the option is granted,
own stock (as defined by Sections 423(b)(3) and 424(d) of the Code) possessing
five percent or more of the total combined voting power or value of all classes
of stock of the Company or of a Parent or Subsidiary of the Company; (2) the
employee's customary employment is not 20 hours or less per week; (3) the
employee's customary employment is for more than five months in any calendar
year; and (4) the employee is either (a) employed by the Company or a Subsidiary
of the Company on September 8, 1994 or (b) has completed six months of
employment for the Company or any present or future Subsidiary of the Company.

(h) "Option" means an option granted under the Plan to an
Eligible Employee to purchase shares of Stock.

(i) "Option Period" means with respect to any Option the period
beginning upon the Date of Grant and ending on the June 30 or December 31
immediately following the Date of Grant.

(j) "Option Price" has the meaning set forth in paragraph 4(b).

(k) "Parent of the Company" means any corporation, other than the
Company, in an unbroken chain of corporations ending with the Company if, at the
time of the granting of the Option, each of the corporations, other than the
Company, owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.

(l) "Participant" means an Eligible Employee who has complied
with the provisions of paragraph 3(b).

(m) "Plan" means this Amended and Restated McCaw Cellular
Communications, Inc. Employee Stock Purchase Plan.

(n) "Plan Year" means the fiscal year beginning on January 1
and ending on December 31.

(o) "Stock" shall mean shares of common stock, par value $1.00
per share, of AT&T Corp.
<PAGE>

(p) "Subsidiary of the Company" means any corporation, other than the
Company, in an unbroken chain of corporations beginning with the Company, if at
the time of the granting of the Option, each of the corporations, other than the
last corporation, in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

2. Stock Subject to Plan

Subject to the provisions of paragraph 10 (relating to adjustment upon
changes in the Stock), the Stock which may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate 3,000,000 shares, and may be
newly issued shares or reacquired shares or shares bought on the market for
purposes of the Plan; provided, however, the additional 500,000 shares
authorized by the board of directors of the Company on September 8, 1994 subject
to shareholder approval shall only be sold pursuant to grants made on or after
September 8, 1994, and the additional 2,000,000 shares authorized by the board
of directors of AT&T Corp. on December 21, 1994 (subject to shareholder
approval) shall only be sold pursuant to grants made on or after July 1, 1995.

3. Grant of Options

(a) General Statement

The Company may grant Options under the Plan to all Eligible Employees
on September 8, 1994. Thereafter, Options may be granted on January 1 and/or
July 1 of each Plan Year commencing July 1, 1995. The term of each Option shall
end on the last trading day of the earlier of June or December immediately after
the Option is granted. As of any Date of Exercise, the number of shares of Stock
subject to each Option shall be the quotient of the payroll deductions
authorized by each Participant during the Option Period in accordance with
subparagraph (b) for the month ended on such Date of Exercise, divided by the
Option Price of the Stock.

(b) Election to Participate: Payroll Deduction Authorization

Except as provided in subparagraph (e), an Eligible Employee may
participate in the Plan only by means of payroll deduction. Each Eligible
Employee who elects to participate in the Plan shall deliver to the Company
during the calendar month next preceding a Date of Grant a written payroll
deduction authorization in a form prepared by the Company whereby the Eligible
Employee gives notice of his or her election to participate in the Plan as of
the next following Date of Grant, and whereby the Eligible Employee designates a
stated whole percentage (or amount) equaling from 2% to 10% of his or her
Eligible Compensation to be withheld on each payday. The stated amount may not
be less than a sum which will result in the payment into the Plan of at least
$5.00 each payday and may not exceed the limitation stated in subparagraph (d).

<PAGE>

The payroll deduction authorization referred to in subparagraph (b) may
be changed effective on January 1 or July 1 of each Plan Year or at such other
time as may be designated by the Committee.

(d) $25,000 Limitation

No Eligible Employee shall be permitted to purchase the Stock under the
Plan or under any other employee stock purchase plan of the Company or of any
Parent or Subsidiary of the Company which is intended to qualify under Section
423 of the Code, at a rate which exceeds $25,000 in fair market value of Stock
(determined at the time the option is granted) for each calendar year in which
any such Option granted to such Participant is outstanding at any time.

(e) Leaves of Absence

During leaves of absence approved by the Company and meeting the
requirements of Treasury Regulation Section 1.421-7(h)(2) a Participant may
continue participation in the Plan by making cash payments to the Company on his
or her normal paydays equal to the amount of his or her payroll deductions under
the Plan had the Participant not taken a leave of absence.

4. Exercise of Options

(a) General Statement

Each Participant automatically and without any act on his or her part
will be deemed to have exercised his or her Option on each Date of Exercise to
the extent that the balance then in the Participant's account under the Plan is
sufficient to purchase at the Option Price whole and/or fractional shares of
Stock subject to the Option.

(b) Option Price Defined

The option price per share of the Stock (the "Option Price") to be paid
by each Participant on each exercise of his or her Option shall be an amount
equal to 85% of the fair market value of a share of Stock as of the applicable
Date of Exercise. The fair market value of a share of Stock as of a given date
shall be the closing price of a share of Stock on the principal exchange on
which the Stock is then trading, if any, on such date, or, if the Stock was not
traded on such date, then on the next preceding trading day during which a sale
occurred.

<PAGE>

As soon as practicable after each Date of Exercise, the Company will
cause to be delivered to each Participant a certificate, or its equivalent,
issued in his or her name for the number of shares of the Stock with respect to
which his or her Option was exercised and for which the Participant has paid the
Option Price. In the event the Company is required to obtain from any commission
or agency authority to issue any such certificate, or its equivalent, the
Company will seek to obtain such authority. The inability of the Company to
obtain from any such commission or agency authority which counsel for the
Company deems necessary for the lawful issuance of any such certificate, or its
equivalent, shall relieve the Company from liability to any Participant except
to return to him or her the amount of the balance in his or her account.

5. Withdrawal From the Plan

(a) General Statement

Any Participant may withdraw from the Plan at any time. A Participant
who wishes to withdraw from the Plan must deliver to the Company a notice of
withdrawal in a form prepared by the Company. The Company, as soon as
practicable following receipt of a Participant's notice of withdrawal, will
refund to the Participant the amount of the balance in his or her account under
the Plan. Upon receipt of a Participant's notice of withdrawal from the Plan,
automatically and without any further act on the part of the Participant, his or
her payroll deduction authorization, his or her interest in the Plan, and his or
her Option under the Plan shall terminate.

(b) Eligibility Following Withdrawal

A Participant who withdraws from the Plan shall be eligible to
participate again in the Plan upon expiration of the Option Period during which
he or she withdrew.

6. Termination of Employment

(a) Termination of Employment Other Than by Retirement or Death

If the employment of a Participant terminates other than by retirement
or death, his or her participation in the Plan automatically and without any act
on the Participant's part shall terminate as of the date of the termination of
his or her employment. As soon as practicable after such Participant's
termination of employment, the Company will refund to the Participant the amount
of the balance in his or her account under the Plan. Upon a participant's
termination of employment, his or her interest in the Plan and his or her Option
under the Plan shall terminate.

(b) Termination by Retirement

A Participant who retires may, by written notice to the Company,
request payment of the balance in his or her account under the Plan, in which
event the Company shall make such payment as soon as practicable after receiving
such notice; upon receipt of such notice, the Participant's interest in the Plan
and his or her Option under the Plan shall terminate. If the Company does not
receive such notice prior to the next Date of Exercise, such Participant's
Option will be deemed to have been exercised on such Date of Exercise.

If the employment of a Participant is terminated by his or her death,
the executor of the Participant's will or the administrator of the Participant's
estate, by written notice to the Company, may request payment of the balance in
the Participant's account under the Plan, in which event the Company shall make
such payment as soon as practicable after receiving such notice; upon receipt of
such notice, the Participant's interest in the Plan and his or her Option under
the Plan shall terminate. If the Company does not receive such notice prior to
the Date of Exercise, such Participant's Option will be deemed to have been
exercised on such Date of Exercise.

7. Restriction Upon Assignment

An Option granted under the Plan shall not be transferable otherwise
than by will or the laws of descent and distribution, and is exercisable during
the Participant's lifetime only by the Participant. Except as provided in
Section 6(c), an Option may not be exercised to any extent except by the
Participant. The Company will not recognize and shall be under no duty to
recognize any assignment or purported assignment by a Participant, other than by
will or the laws of descent and distribution, of the Participant's interest in
the Plan or of his or her Option or of any rights under his or her Option.

<PAGE>

8. No Rights of Stockholder Until Certificate Issued

With respect to shares of Stock subject to an Option, a Participant
shall not be deemed to be a stockholder of the Company, and he or she shall not
have any of the rights or privileges of a stockholder. A Participant shall have
the rights and privileges of a stockholder of the Company when, but not until, a
certificate, or its equivalent, for shares has been issued to the Participant
following exercise of his or her Option.

9. Changes in the Stock; Adjustments of an Option

Whenever any change is made in the number of shares of Stock or to the
number of Options outstanding under the Plan, by reason of stock dividend or by
reason of subdivision, combinations, or reclassification of shares, appropriate
action will be taken by the board of directors of the Company and of AT&T Corp.
to adjust accordingly the number of shares of Stock subject to the Plan and the
number and the Option Price of shares of Stock subject to the Options
outstanding under the Plan.

10. Use of Funds; No Interest Paid

All funds received or held by the Company under the Plan will be
included in the general funds of the Company free of any trust or other
restriction and may be used for any corporate purpose. No interest will be paid
to any Participant or credited to his or her account under the Plan with respect
to such funds.

<PAGE>

11. Amendment of the Plan

The board of directors of the Company may amend, suspend, or terminate
the Plan at any time and from time to time; provided that approval by the vote
of the holders of more than 50% of the outstanding shares of the Stock entitled
to vote shall be required to amend the Plan (i) to change the number of shares
of Stock reserved for the Options under the Plan, (ii) to decrease the Option
Price below a price computed in the manner stated in paragraph 4(b), or (iii) to
alter the requirements for eligibility to participate in the Plan.

12. Administration by Committee; Rules and Regulations

(a) Appointment of Committee

The Plan shall be administered by the Committee, which shall be
composed of one or more members of the board of directors of the Company. Each
member of the Committee shall serve for a term commencing on the date specified
by the board of directors of the Company and continuing until he or she dies or
resigns or is removed from office by such board of directors.

(b) Duties and Powers of Committee

It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its provisions. The Committee
shall have the power to interpret the Plan and the Options and to adopt such
rules for the administration, interpretation, and application of the Plan as are
consistent therewith and to interpret, amend, or revoke any such rules. In its
absolute discretion, the Board may at any time and from time to time exercise
any and all rights and duties of the Committee under the Plan.

The Committee shall act by a majority of its members in office. The
Committee may act either by vote at a meeting or by a memorandum or other
written instrument signed by a majority of the Committee.

(d) Compensation; Professional Assistance; Good Faith Actions

Members of the Committee shall receive such compensation for their
services as members as may be determined by the board. All expenses and
liabilities incurred by members of the Committee in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company and its
officers and directors shall be entitled to rely upon the advice, opinions, or
valuations of any such persons. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon all Participants, the Company and all other interested persons. No member
of the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Options, and
all members of the Committee shall be fully protected by the Company in respect
to any such action, determination or interpretation.

<PAGE>

13. No Rights as an Employee

Nothing in the Plan shall be construed to give any person (including
any Eligible Employee or Participant) the right to remain in the employ of the
Company or a Parent or Subsidiary of the Company or to affect the right of the
Company and Parents and Subsidiaries of the Company to terminate the employment
of any person (including any Eligible Employee or Participant) at any time with
or without cause.

14. Merger, Acquisition or Liquidation of the Company

In the event of the merger or consolidation of the Company into another
corporation, the acquisition by another corporation of all or substantially all
of the Company's assets or 80% or more of the Company's then outstanding voting
stock or the liquidation or dissolution of the Company, the Date of Exercise
with respect to outstanding Options shall be the business day immediately
preceding the effective date of such merger, consolidation, acquisition,
liquidation or dissolution unless the Committee shall, in its sole discretion,
provide for the assumption or substitution of such Options in a manner complying
with Section 424(a) of the Code.

In the event of the merger or consolidation of AT&T Corp. into another
corporation, the acquisition by another corporation of all or substantially all
of AT&T Corp.'s assets or 80% or more of AT&T Corp.'s then outstanding voting
stock or the liquidation or dissolution of AT&T Corp., the Date of Exercise with
respect to outstanding Options shall be the business day immediately preceding
the effective date of such merger, consolidation, acquisition, liquidation or
dissolution unless the Committee shall, with the consent of the board of
directors of AT&T Corp. (or its delegate), provide for the assumption or
substitution of such Options in a manner complying with Section 424(a) of the
Code.

15. Term; Approval by Stockholders

No Option may be granted during any period of suspension or after
termination of the Plan, and in no event may any Option be granted under the
Plan after December 31, 1999. The Plan will be submitted for the approval of
AT&T Corp.'s stockholders within 12 months after December 21, 1994. Options may
be granted prior to such stockholder approval, provided, however, that such
Options shall not be exercisable prior to the time when the Plan is approved by
the stockholders; provided, further, that if such approval has not been obtained
by the end of said 12-month period, all Options previously granted under the
Plan shall thereupon be canceled and become null and void.

<PAGE>

16. Effect Upon Other Plans

The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Parent or Subsidiary of the
Company. Nothing in this Plan shall be construed to limit the right of the
Company or any Parent or Subsidiary of the Company (a) to establish any other
forms of incentives or compensation for employees of the Company or any Parent
or Subsidiary of the Company or (b) to grant or assume options otherwise than
under this Plan in connection with any proper corporate purpose, including, but
not by way of limitation, the grant or assumption of options in connection with
the acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.

17. Notices

Any notice to be given under the terms of the Plan to the Company shall
be addressed to the Company in care of its Secretary and any notice to be given
to the Employee shall be addressed to the Employee at his or her last address as
reflected in the Company's records. By a notice given pursuant to this Section,
either party may hereafter designate a different address for notices to be given
to it or the Employee. Any notice which is required to be given to the Employee
shall, if the Employee is then deceased, be given to the Employee's personal
representative if such representative has previously informed the Company of his
or her status and address by written notice under this Section. Any notice shall
have been deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the Untied States Postal
Services.

18. Titles

Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of the Plan.