The AT&T Long Term Savings and Security Plan (Plan) is a defined contribution plan established by AT&T Corp. (ATTC) to provide a convenient way for eligible non-management employees of participating ATTC companies to save on a regular and long-term basis. The following description of the Plan provides only general information. The Plan has detailed provisions covering participant eligibility, participant allotments from pay, participant withdrawals, participant loans, employer contributions and related vesting of contributions and Plan expenses. The Plan documents include complete descriptions of these and other Plan provisions. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).

On November 18, 2005, ATTC was acquired by AT&T Inc. (AT&T, Ticker: T). As a result of the acquisition, the AT&T Corp. common stock held in the AT&T Stock Fund was converted to AT&T common stock based on a conversion ratio. Interplan transfers represent participant transfers between company-sponsored employee benefits plans due to changes in the participant's employment status.

The Plan participates in the AT&T Savings Master Trust (Master Trust) for the investment of the pooled assets of various funds. In October 2007, AT&T established the AT&T Group Investment Trust (Group Trust) to manage assets of pooled investment options between the Plan and other AT&T sponsored employee benefit plans. The Master Trust began participating in the Group Trust on October 1, 2007. The trustee of the Master Trust and the Group Trust is the Bank of New York Mellon (BNY Mellon). (See Note 6)

During 2008, participants could invest their contributions in one or more funds in 1% increments:

· AT&T Total Return Bond Fund*
· T Rowe Price Mid Cap Growth**
· AT&T U.S. Stock Fund*
· Capital World Growth and Income**
· AT&T International Stock Fund*
· Morgan Stanley International Equity**
· AT&T Stable Value Fund*
· Legg Mason Value Trust Inst**
· Vanguard Windsor II Admin**
· Asset All Strategy Growth**
· Vanguard US Growth Admin**
· Asset All Strategy Balanced**
· T Rowe Price Small Cap Stock**
· Asset All Strategy Income**
· US Bond Market Index**
· Total US Stock Market Index**
· S&P 500 Index Fund**
· Extended US Stock Market**
· Fidelity Magellan**
· International Stock Market Index**
· Fidelity Equity Income**
· Fidelity Dividend Growth**
· Fidelity Low Price Stock**
· Fidelity High Income**
· Fidelity Diversified International**
· AT&T Shares Fund**