Attendees: Ameritech (AASBCR) - Bruce Beckman, President, Chet Przybyslawski, Vice President; Southern New England Telephone (SRA) - JoAnn Alix Gagain, President; AT&T (ACER) - Jane Banfield; Pacific Bell/Nevada Bell - (TelCo Retirees Association, Inc.) - S.K. Emery, President, Muriel Wick, Secretary.

AT&T Corporate Attendees: Sue Colburn, Vice President - Benefits; Debbie Trammell, Executive Director - Health Benefits; Forrest Parrott, Executive Director - AT&T Employee Communications; Martin Webb, Assistant Vice President - Health Plan Operations; John Brockman, Executive Director - Retirement Plan Design; Jeff Mains, Executive Director - Health Plan Design; Pam Madina, Associate Director - Human Resources.

Review of individual retiree association issues and programs, Selection and appointment of a Coalition facilitator (evaluate, design and implement a cohesive organizational structure that will encompass all existing retiree organizations as well as the future development of retiree associations in Bell South and Southwestern Bell), Benefit issues (mandatory portability amendment, retiree Death Benefits, Medicare Part D coverage - 2007, deferred vested pensions - spousal eligibility, AT&T retiree communication plan),

Coalition Facilitator

It was agreed by all attendees the selection and appointment of a retiree facilitator with extensive organizational skills and capabilities is needed to review, analyze and develop a long term plan for the future growth and development of an all-encompassing AT&T retiree Coalition. The project will include the following: Type of corporate organization, legal structure, administrative and leadership needs, financial arrangements, website, communication requirements and membership growth plans.

Mandatory Portability

This issue involves former AT&T employees who have been merged into the "new" AT&T company and who qualify under the MPA rules. Are their pensions to be recalculated on the premise they had been an SBC/AT&T employee from the beginning? (Employees who have a "break in service" can apply for MPA and their service will be bridged after 5 years.)

Another issue not yet resolved involves employees who do not qualify under the MPA rules. How will their service, pensions and health benefits be impacted?

Retiree Death Benefits

In December 1992 Pacific Telesis issued a Benefits document entitled "Assignment For Value and Accelerated Death Benefits." These new provisions were added to the Pacific Telesis Group Basic and Supplementary Death Benefit Plan for both active and retired employees. The provisions allow eligible retirees to receive a cash benefit through their Basic and/or Supplementary Group Term Life Insurance coverage prior to their death. This is accomplished by either an Assignment For Value or by requesting Accelerated Death Benefits.

…..Definition and features: "A terminally ill retiree names a third party, known as a Living Benefits Company, as the owner of his or her Basic and/or Supplementary coverage. In exchange, the retiree receives a cash payment from the Living Benefits Company. The assignee must be a Living Benefits Company approved and licensed by the state of California. The retiree may assign all of their Basic and/or all of their Supplementary coverage. Partial assignments may not be made. The Assignment For Value is irrevocable."

…..Eligibility and conditions: Any retiree participating in the Pacific Telesis Group Basic and Supplementary Death Benefit Plan, who is medically certified by a licensed physician as terminally ill with a life expectancy of 12 months or less may apply for this benefit subject to the following conditions: A company appointed life insurance company must concur that the retiree is terminally ill and must accept the retiree’s election. The retiree spouse may be required to consent in writing for either election. Retirees may elect one option or the other but not both. Retirees who have made a prior irrevocable gift assignment of their insurance coverage may not elect either option.

…..Effective dates: Assignment For Value - immediately. Accelerated Death Benefits - January 1, 1993.

AT&T Benefit Plan Administration has confirmed the "Assignment For Value" and "Accelerated Death Benefit" for Pacific Telesis Group retirees remain in effect at this writing.

(This issue has not been publicized by SBC or AT&T. We requested AT&T Benefits include this information in a future Summary of Material Modifications.)

Medicare Part D (2007): Considerable discussion emanated by Coalition conferees relative to AT&T’s future plans for continuation of the current (federally subsidized) pharmaceutical program for 2007. Sue Colburn, Vice President - Benefits, indicated AT&T has no plans for altering the present retiree pharmaceutical program for the year 2007.

Deferred Vested Pension: SBC Annual Financial Reports (5500) for 2002, 2003 and 2004 contained a "Summary of Plan Provisions - PTG Pension Plan" entitled "Deferred Vested Pension."

The terms of this benefit are as follows:

(At least 5 years of vesting service - eligibility: termination of employment after completing at least 5 years of vesting service and before reaching eligibility for service pension.)

Benefit: The monthly benefit, payable as a straight life annuity starting on the Participant’s Normal Retirement Age (the latter of age 65 or the fifth anniversary of plan participation), equals the Participant’s Accrued Benefit on the date of termination. The benefit is actuarially reduced if commenced prior to Normal Retirement Age.

Surviving Spouse’s Benefit: Eligibility: Surviving spouse of an active vested or deferred vested Participant in the event of the Participant’s death.

Benefit: The eligible spouse of an active Participant who dies prior to Normal Retirement Age and before benefit payments commence is entitled to one of the following benefits:

If the Participant dies with 5 or more years of Vesting Service, has less than 15 years of Pension Eligibility Service, and is not eligible for a Service Pension, the eligible spouse receives a deferred monthly survivor benefit for life beginning on the date the Participant would have reached earliest eligibility.

If the Participant dies eligible for a Service Pension or with 15 years of Pension Eligibility Service, a surviving spouse receives a monthly survivor pension payable for life equal to 45% of the Accrued Benefit.

This Vested Retirement Benefit has not (to my knowledge) appeared in an SBC/AT&T Summary of Material Modifications. We have requested AT&T Health Benefits Group provide such a document.

AT&T Retiree Communication Plans

With termination of the "SBC Update for Retirees" in January of this year, retirees were "excommunicated" from any corporate communications. A few weeks ago, in response to correspondence with Karen Jennings, Executive Vice President, I received a letter from Mr. Forrest Parrott, Executive Director, AT&T Employee Communications stating, "Plans are in progress for the development of an entirely new e-mail concept in AT&T retiree communications." Following a telephone conversation, Mr. Parrott was invited to attend the Coalition meeting in San Antonio.)

During the conference, Coalition representatives recommended communications be all-encompassing, including issues germane to retirees and their benefits, inclusion of the "In Memoriam" publication, news of company plans and programs where retirees could provide public affairs support on issues of vital importance to AT&T (regulatory, legislative, community, etc.).

Emphasized was the fact that approximately one-third of retirees lacked access to the internet and would require another form of communication. This issue was unresolved during the conference and was identified as an area of concern.

Mr. Parrott acknowledged our concerns and indicated his organization would give careful consideration to our recommendations. He also emphasized his personal commitment for an immediate improvement in retiree communications and announced plans were under way for the mailing of a post card to all AT&T retirees requesting their personal email addresses.

Non-Agenda Item - Class Action Complaint for Violations of the Employee Retirement Security Act.

Copies of Plaintiff’s Motion for Class Certification and the Second Amended Class Action Complaint was delivered to me during the conference by the Washington, D.C. law firm (Cohen, Milstein, Hausfeld & Toll, P.L.L.C.).

This is a civil enforcement Class Action of the Employment Retirement Income Security Act of 1975 (ERISA) concerning a benefit for certain of SBC’s retirees who live outside the SBC service area (and received telephone service from an independent telephone company) variously described as the "telephone concession," "retiree concession" and the "employee discount" promising that benefit to employees who met the requirements for a service or disability pension.

While this Class Action Complaint is months from a final judgment, it does portend an eventual resolution of this company promised benefit for retirees living outside of an AT&T service area.

AT&T Stockholders’ Meeting

On April 28, 2006 the Coalition of AT&T Retirees adjourned its formal meeting and attended the AT&T stockholders’ meeting held at the Shriners building in San Antonio Texas. Total attendance at this year’s meeting was good but there was an abundance of vacant seats throughout the auditorium.

Mr. Whitacre’s leadership was impressive and his leadership of the agenda was absolute. There was a minimum of questions from the audience impacted by a failure to have stockholders’ questions passed to the center aisle for consideration. The entire stockholders’ meeting lasted approximately 2 _ hours.

Your President had a brief conversation with Mr. Whitacre in the reception area prior to the formal meeting but time constraints and interruptions by other stockholders for attention prevented any meaningful dialogue critical to retirees’ interests.

Legal Representation

Your Association recently engaged the services of a legal firm specializing in Securities & Exchange law to provide us with information relative to "corporate rights" in voting members’ future AT&T stockholder proxies. We hope to have this information available for you within the coming weeks.

Sumner K. Emery, President