AT&T Cares

 Lori J. Smith

Director, Labor Relations

2047 Irwin Drive, SE

Southport, SC 28461

 September 25, 2006

Mr. R. V. Maly, Jr., Vice President, CWA

Mr. J. U. Klimm, Assistant to Vice President, CWA

Ms. M. J. Pultar, Director of Telecommunications, IBEW

Mr. P.A. Pusateri, Chairman, System Council T-3, IBEW

Re: AT&T Cares

This is to inform you that the AT&T Foundation will be introducing a new corporate wide Annual Special Grants Program beginning January 1, 2007 which will replace the pre-merger AT&T CARES Program. This program continues AT&T's commitment to community service while supporting the company's merger integration goals.

This new program will support local communities through grants that support volunteerism efforts provided by the Pioneers and company recognized employee Business Resource Groups (BRGs) such as The Alliance, HISPA, 4A and LEAGUE.  The AT&T Foundation will provide $175,000 a year in funds to community service projects initiated by these groups, each of which may nominate organizations to whom they provide significant volunteer support for a grant of $5,000.

The pre-merger AT&T CARES Volunteer Matching Grants Program will continue through December 31, 2006 for employees currently enrolled in the program.  Employees will be provided the opportunity to complete any remaining volunteer service hours, and submit applications for individual and team grants under the existing program guidelines until the end of the current calendar year. In addition, employees may participate in the AT&T CARES day until December 31, 2006.

A communication announcing the program will be sent to all employees the week of October 2, 2006.

Regards,

Lori J. Smith

Cc: D. Bradley