SPECIAL NEWSLETTER December 18, 2006 ATTENTION: PACIFIC BELL YELLOW PAGE ADVERTISING RETIREES ……IF YOU ARE A MEMBER OF THE TELCO RETIREES ASSOCIATION, INC., OR KNOW OF A RETIRED PACIFIC BELL YELLOW PAGE ADVERTISING RETIREE…PLEASE FORWARD THIS MESSAGE TO THEM!! This message from the TelCo Retirees Association, Inc. is being directed to all Yellow Page Directory retirees who received a "Special Supplementary Life Insurance Enrollment Opportunity" letter from AT&T announcing that "Effective January 1, 2007 your employer paid retiree basic life insurance will change from one times rounded annual basic pay to $15,000!!" The TelCo Retirees Association, Inc., in conjunction with Director Lee Brown (current IBEW Yellow Page Union Official) have challenged AT&T’s corporate decision on the basis of the current union contract…and Pacific Telesis Group Benefits 90’s Summary Plan Descriptions (July 1996) for non-salaried and salaried retired before 1987." On November 10, 2006 I sent the following email message to the Vice President, AT&T Benefits: " Sue, I have attempted for some time to ascertain information relative to reductions in retired Directory advertising salesmen's basic Death Benefits. The issue stems from information contained in their Health Benefit documents stating their "Basic Death Benefits have been reduced to $15,000." For many retirees, their previous "Basic Death Benefit" amounted to substantially greater amounts. In some referrals to my office, their previous Basic Death Benefits were in excess of $30,000. A Union representative of IBEW Directory (a member of the TelCo Board of Directors) informed me that his office has been inundated with calls from Directory Sales retirees about this issue. My question...HAS AT&T ARBITRARILY LIMITED BASIC DEATH BENEFITS FOR RETIRED DIRECTORY SALESMEN TO THE $15,000 AMOUNT? Hopefully, this was an aberration by AT&T and not a decision brought about by an intentional effort to reduce Death Benefit costs. Because of the angst being evidenced by numbers of our Directory Sales retirees, an immediate response from your office would be appreciated. S.K. On November 13, 2006 I received the following terse message from Ms. Colburn: "S.K. "This issue resulted from recent Directory bargaining for future retirees. Following that contract, YP management elected to apply this same change to current retirees (formerly-bargained for employees) as well. This decision was not an arbitrary one, but was a deliberate and strategic decision made by YP management consistent with their business goals and direction." SMC On November 16, 2006 our TelCo Retirees Association sent the following formal letter to the Vice President, Benefits by overnight mail, confirmed: November 16, 2006 Susan M. Colburn Vice President, Benefits 105 Auditorium Circle Room 12-F-7 San Antonio, TX 78205 Dear Sue, Your response to my November 10th letter challenging AT&T’s corporate decision to reduce all Pacific Bell Yellow Page Advertising retirees’ death benefits to $15,000 gives the impression that AT&T acted with scienter in their ruling. Our Pacific Telesis Group Benefits 90’s Summary Plan Descriptions (July 1996) for Non-salaried and salaried retired before 1987 states on page 108 the following: (See attachment) "The amount of your basic life insurance coverage before age 66 is equal to the basic life insurance coverage you had when you retired. Your coverage is reduced starting at age 66 as described on page 111. See attachment) "The amount of your basic coverage at retirement is determined by your basic annual pay, which includes: your base pay, incentive compensation if you are a Directory or Marketing management employee), area differentials, Team Awards, commission and bonuses and residuals which are identified as a permanent part of your compensation." Further, the IBEW contract referenced in your November 13, 2006 email specifically exempts any former Yellow Page Advertising retiree "who retired prior to 1987" from a reduction in his basic life insurance coverage. (See attachment) Based upon the aforementioned Benefit 90’s Summary Plan Descriptions and the IBEW contract documents, the TelCo Retirees Association, Inc. respectfully requests a modification to AT&T’s ruling exempting Pacific Bell’s Yellow Page Advertising retirees (who retired prior to the current contract).from reductions in their basic life insurance. In addition, we suggest that a letter of apology be forwarded to all Yellow Page Advertising retirees who were adversely affected by this improper decision. Sincerely, Sumner K. Emery, President Having received no answer to the above letter, a second letter was mailed to Ms. Colburn on November 30, 2006 (overnight mail, confirmed): November 30, 2006 Susan M. Colburn Vice President, Benefits 105 Auditorium Circle Room 12-F-7 San Antonio, TX 78205 Dear Sue, The ongoing issue of AT&T’s arbitrary reduction in the Death Benefit for retired Pacific Bell Yellow Page sales people (maximum $15,000) has created a minatory firestorm of resentment throughout the entire Pacific Bell/Nevada Bell retiree community. To then compound this postulated corporate decision by mailing AT&T’s "Special Supplementary Life Insurance Enrollment Opportunity" (November 29, 2006 through December 29, 2006) to the same retired Pacific Bell Yellow Page sales people, calls into serious question AT&T’s violation of the present IBEW contract. It also abrogates the July 1996 Benefit 90’s Pacific Telesis Group Benefit Plan. As the elected President of Pacific Bell’s TelCo Retirees Association, Inc., I call upon your office to respond to my original letter on this issue dated November 16, 2006. The urgency of your response to this critical retiree benefit issue cannot be understated. Sincerely, Sumner K. Emery, President December 12, 2006 Susan M. Colburn, Vice President, Benefits 105 Auditorium Circle Room 12-F-7 San Antonio, TX 78205 Dear Ms. Colburn: It’s unlike you and the Benefit Department to ignore correspondence from the TelCo Retirees Association, Inc. concerning a matter of major importance to hundreds of former Pacific Bell Yellow Page Advertising Sales employees. AT&T’s arrogated corporate decision to arbitrarily reduce the promised death benefit for Yellow Page Advertising retirees to $15,000 is unconscionable and in violation of the existing IBEW Union contract, as well as the July 1996 Benefit 90’s Pacific Telesis Group Benefit Plan publication. Further, your November 12, 2006 email message to me explicitly stated, "The issue resulted from Directory bargaining for future retirees and following that contract, YP management elected to apply this same change to current retirees," challenges the legality of this corporate decision. The TelCo Retirees Association, Inc. Bylaws, as well as our Mission Statement, places an obligatory responsibility upon our organization to "protect, enhance and assure the continuation of retirees’ pensions and other benefits granted by the company at the time of their retirement." Because AT&T’s published announcement of this reduction in "employer paid retiree basic life insurance under the AT&T medical and group life insurance-group life insurance" is to become effective January 1, 2007, I therefore call upon AT&T’s Benefit Department to provide a corporate explanation for this arbitrary and apparent unlawful reduction in Yellow Page Advertising retirees’ promised death benefits. Sincerely, Sumner K. Emery, President cc: Edward E. Whitacare, Jr., Chairman, CEO Michael A. Rodriguez, Sr. V.P. Because this "take-away" of Yellow Page Advertising retirees’ death benefits might well be a precursor to planned future AT&T reductions in benefits and to prepare for possible future litigation, the TelCo Retirees Association, Inc. makes the following request to all Yellow Page Advertising retirees who have been adversely affected by this AT&T death benefit decision. (Whether or not you are a member of the TelCo Retirees Association, Inc.) PLEASE SEND THE FOLLOWING INFORMATION TO OUR ASSOCIATION’S POST OFFICE BOX (TelCo Retirees Association, Inc., P.O. Box 600067, San Diego, CA 92160-0067) A. Your full name B. Job title at the time of retirement C. Current address (and email address if available) D. Date of retirement E. Amount of your death benefit (average annual salary at the time of retirement) Lastly, if you are one of the affected Yellow Page retirees and would like to know more about the TELCO RETIREES ASSOCIATION, INC., please visit our website www.telcoretirees.org . You may also download a membership application if so inclined. Sumner K. Emery, President