Trust Under Board of Directors Benefit Plan(s)

0015747.02


BELLSOUTH CORPORATION
TRUST UNDER BOARD OF DIRECTORS BENEFIT PLAN(S)


TABLE OF CONTENTS


Section 1. Establishment of Trust 2


Section 2. Payments to Plan Participants and
Their Beneficiaries 6


Section 3. Trustee Responsibility Regarding
Payments to Trust Beneficiary When
Company is Insolvent 10


Section 4. Payments to Company 11


Section 5. Investment Authority 12


Section 5A. Sale of Company Stock by Trustee 17


Section 6. Disposition of Income 21


Section 7. Accounting by Trustee 21


Section 8. Responsibility of Trustee 21


Section 9. Compensation and Expenses of Trustee 23


Section 10. Resignation and Removal of Trustee 23


Section 11. Appointment of Successor 24


Section 12. Amendment or Termination 25


Section 13. Miscellaneous 27


Section 14. Effective Date 32


BELLSOUTH CORPORATION
TRUST UNDER BOARD OF DIRECTORS BENEFIT PLAN(S)


This Agreement made this 28th day of April, 1995, by and between BellSouth Corporation, a Georgia corporation (Company) and Bankers Trust Company, a New York corporation (Trustee);


(a) WHEREAS, Company has adopted the nonqualified deferred compensation Plan(s) as listed in Appendix A for certain members of its Board of Directors;


(b) WHEREAS, Company has incurred or expects to incur liability under the terms of such Plan(s) with respect to the individuals participating in such Plan(s);


(c) WHEREAS, to make certain provisions for the payment of such liability, Company and Trustee on April 25, 1990 executed a trust agreement for the benefit of certain directors of Company and Company's affiliates who participate in the Plan(s) (the "Predecessor Trust");


(d) WHEREAS, Company and Trustee on November 9, 1993 amended and restated the Predecessor Trust insofar as it related to Company's obligations (but not obligations of subsidiary or other affiliated entities) to pay benefits under the Plan(s) (hereinafter, called "Successor Trust") and contributed assets to the Successor Trust, subject to the claims of Company's creditors in the event of Company's Insolvency, as herein defined, until full payment has been made in respect of such obligations of Company to Plan participants and their beneficiaries in such manner and at such times as specified in the Plan(s);


(e) WHEREAS, Company and Trustee now desire to amend and restate the Successor Trust in the form of this Trust Agreement (hereinafter, called "Trust");


(f) WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan(s) as an unfunded plan maintained for the purpose of providing deferred compensation for members of Company's board of directors who are not employees of Company or affiliated entities; and


(g) WHEREAS, it is the intention of Company to make contributions to the Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan(s);


NOW, THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised, held and disposed of as follows:


Section 1. Establishment of Trust.


(a) Company and Trustee hereby amend and restate in all respects the Successor Trust in the form of this Trust Agreement. The principal of the Trust shall be held, administered and disposed of by Trustee as provided in this Trust Agreement.


(b) The Trust hereby established shall be irrevocable.


(c) The Trust is intended to be a grantor trust, of which Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly.


(d) The principal of the Trust, and any earnings thereon shall be held separate and apart from other funds of Company and shall be used exclusively for the uses and purposes of Plan participants and general creditors as herein set forth. Plan participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan(s) and this Trust Agreement shall be mere unsecured contractual rights of Plan participants and their beneficiaries against Company. Any assets held by the Trust will be subject to the claims of Company's general creditors under federal and state law in the event of Insolvency, as defined in Section 3(a) herein.


(e)(1) Company, in its sole discretion, may at any
time, or from time to time, make additional deposits of cash
or other property acceptable to Trustee in trust with
Trustee to augment the principal to be held, administered
and disposed of by Trustee as provided in this Trust
Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel any such
additional deposits under this subsection (1).


(2) If, as of the last day of a fiscal year of the
Trust, the funding level of the Trust shall be less than
eighty percent (80%) of the Trust's funding level as of the
last day of any of the five (5) most recently preceding
fiscal years of the Trust (taking into account contributions
made under this Section 1(e)(2) for each such year),
disregarding for purposes of this Section 1(e)(2) fiscal
years ending prior to January 1, 1994, Company shall notify
Trustee of such situation and Company shall make an
irrevocable contribution to the Trust as soon as possible,
but in no event longer than one hundred twenty (120) days
following the last day of such fiscal year. Such
contribution shall be in an amount sufficient to bring the
Trust's funding level equal to the Trust's funding level as
of the last day of the fiscal year among the five (5) most
recently preceding fiscal years on which the Trust's funding
level was highest. In no event shall such contribution be
required if, as of the last day of such fiscal year, the
fair market value of the Trust's assets is one hundred
percent (100%), or greater, of the aggregate Current
Liability (as defined in subsection (3) of this
Section 1(e)) of Company under the Plan(s). For these
purposes, "funding level" shall mean the ratio (stated as a
percentage) that the fair market value of the assets in the
Trust bears to the aggregate Current Liability of Company
under the Plan(s). The Trust's funding level shall be
determined as of the last day of each fiscal year, except
that in determining the amount of the required contribution,
the fair market value of the Trust's assets shall be
determined as of the valuation date most recently preceding
the date on which such contribution is made. Such funding
level shall be determined by Company; provided, however,
that following the engagement of a Trustee's Contractor,
such determination shall be made by Trustee's Contractor.
The Trustee may rely on the accuracy of all such
determinations.


(3)(A) For purposes of this Trust, "Current Liability"
shall mean the amount required to pay each Plan participant
or beneficiary the benefits to which Plan participants or
their beneficiaries would be entitled pursuant to the terms
of the Plan(s), to the extent such benefits are obligations
of Company (and not obligations of subsidiary or other
affiliated entities). The Current Liability on any date
with respect to a Plan shall be determined as if the Plan
terminated as of such date using an interest rate equal to
the Pension Benefit Guaranty Corporation valuation interest
rate for immediate annuities as in effect on such date, the
1983 Group Annuity Mortality Table published by the Society
of Actuaries, and reasonable actuarial calculation
principles consistently applied. Current Liability shall be
determined, as of the last day of each fiscal year of the
Trust and at such additional times as are necessary to
implement the provisions of this Trust Agreement, by
Company; provided, however, that following the engagement of
a Trustee's Contractor, such determinations shall be made by
Trustee's Contractor. The Trustee may rely on the accuracy
of all such determinations.


(3)(B) In the event that the interest rate assumption
described in subsection (3)(A) above is at any time no
longer available or the mortality assumption described above
is at any time no longer considered a reasonable and
reliable mortality assumption, other interest rate or
mortality assumptions, as the case may be, deemed generally
comparable to the above-specified assumptions, may be used
instead. All determinations regarding substitute
assumptions, including whether such substitution is
reasonably necessary and the selection of the substitute
assumption(s), shall be made by Company; provided, however,
that following the engagement of a Trustee's Contractor,
such determinations shall be made by Trustee's Contractor.


(f) Upon a Change of Control, Company shall promptly notify Trustee thereof and, as soon as possible, but in no event longer than one hundred twenty (120) days following the Change of Control, as defined herein, Company shall make an irrevocable contribution to the Trust in an amount that is sufficient to pay each Plan participant or beneficiary the benefits to which Plan participants or their beneficiaries would be entitled pursuant to the terms of the Plan(s), to the extent such benefits are obligations of Company (and not obligations of subsidiary or other affiliated entities), as of the date on which the Change of Control occurred. Such contribution shall be in an amount equal to the excess, if any, of the aggregate Current Liability as of the date on which the Change of Control occurred over the fair market value of the Trust's assets as of the valuation date most recently preceding the date on which such contribution is made. Thereafter, Company shall make an additional contribution each fiscal year to the Trust, as soon as possible, but in no event longer than one hundred twenty (120) days following the last day of each such fiscal year, in an amount equal to the excess, if any, of the aggregate Current Liability under the Plan(s) as of the last day of the fiscal year over the fair market value of the Trust's assets as determined on the valuation date most recently preceding the date on which such contribution is made. The amount of all such contributions shall be determined by Trustee's Contractor. The Trustee may rely on the accuracy of all such determinations.


(g) If, as of a Distribution Date with respect to outstanding rights to purchase Series A First Preferred Stock, under the terms of and as defined in a Rights Agreement between Company and Chemical Bank, as Rights Agent, under an agreement originally dated November 27, 1989 (a "Distribution Date"), the aggregate Current Liability exceeds the fair market value of the Trust's assets (such fair market value determined as of the valuation date most recently preceding such Distribution Date), Company shall be required to make an additional contribution to the Trust in an amount equal to such excess or, at Company's option, to obtain a letter of credit, or a series of letters of credit, adequate to fund such amount as of such Distribution Date under the Plan(s) and maintain such letter(s) of credit until such time as the aggregate Current Liability no longer exceeds the fair market value of the Trust's assets. The determination of whether the aggregate Current Liability exceeds the fair market value of the Trust's assets upon a Distribution Date and, if so, the amount of such excess, shall be made by Company; provided, however, that following the engagement of a Trustee's Contractor, such determinations shall be made by Trustee's Contractor. The Trustee may rely on the accuracy of all such determinations. Any such letter of credit, or series of letters of credit, shall be part of the general assets of Company and shall not be an asset of this Trust and, unless otherwise agreed to in writing by Trustee, Trustee shall have no responsibility whatsoever with respect to the adequacy of, or selection of the issuer or issuers of, any such letter or letters of credit.


(h) If, in any five (5) consecutive calendar year period, (i) there are five (5) or more final determinations by courts of competent jurisdiction that (A) Company or a subsidiary of Company which both is a member of Company's controlled group of corporations and has adopted a Plan (a "Participating Company") has failed to pay (after reasonable notice and demand for payment) any benefit due under the terms and conditions of a Plan and that (B) there was no material issue of fact or law respecting such company's obligation to make such benefit payment, or (ii) there are two (2) or more final determinations by courts of competent jurisdiction, in lawsuits instituted after reasonable notice and demand with respect thereto, in which the court determines that Company or a Participating Company had acted in bad faith and with a clear and deliberate disregard for such company's obligations under the Plan(s), there shall be deemed to have occurred a Change of Control as defined in this Trust Agreement and Company shall give Trustee prompt written notice of such event. For purposes of this Trust Agreement, (i) the term "controlled group of corporations" has the meaning ascribed to such term in Section 1563(a) of the Internal Revenue Code of 1986, as amended, substituting "more than 50 percent" for the phrase "at least 80 percent" each place it appears in Section 1563(a)(1), and (ii) the term "final determination" means a determination with respect to which all rights of appeal or to request a review, a rehearing or redetermination have been exhausted or have lapsed.


Section 2. Payments to Plan Participants and Their Beneficiaries.


(a) Company, or the Trustee's Contractor if one shall have been engaged, shall deliver to Trustee a schedule (the "Payment Schedule") that indicates the amounts payable in accordance with the terms and conditions of the Plan(s) in respect of each Plan participant (and his or her beneficiaries), that provides a formula or other instructions acceptable to Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plan(s)), and the time of commencement for payment of such amounts. Except as otherwise provided herein, Trustee shall make payments to the Plan participants and their beneficiaries in accordance with such Payment Schedule. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan(s) and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by Company. Payments may be made in cash or, where called for under the terms of the Plan(s), in Company Stock (as such term is defined in Section 5(g) hereof). Notwithstanding the foregoing, if a benefit which is distributable in the form of Company Stock under the terms of a Plan becomes payable at a time when there is no (or insufficient) Company Stock in the Trust with which to satisfy such benefit obligation and if the Company fails or refuses to pay such benefit within a reasonable time after notice from Trustee that it has become so payable, Trustee shall use other assets of the Trust to acquire Company Stock, on the open market or otherwise in its discretion, sufficient to satisfy such benefit obligation.


(b) The entitlement of a Plan participant or his or her beneficiaries to benefits payable by Company under the Plan(s) shall be determined in accordance with the terms of the Plan(s) by Company or such party as it shall designate under the Plan(s), or the Trustee's Contractor if one shall have been engaged, and any claim for such benefits shall be considered and reviewed and paid or not paid under the procedures set out in the Plan(s). Notwithstanding any Plan provision to the contrary, if a Trustee's Contractor shall have been engaged, all such determinations shall be made by the Trustee's Contractor whose determinations shall be final, conclusive and binding on all persons. Neither Trustee nor Trustee's Contractor shall have any obligation for determining whether any Plan participant or beneficiary has died and shall be entitled to rely upon any information in this regard furnished by Company.


(c) Company may make payment of benefits directly to Plan participants or their beneficiaries as they become due under the terms of the Plan(s). In such event, Company shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan(s) and shall pay amounts withheld to the appropriate taxing authorities. Company shall notify Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to participants or their beneficiaries. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits payable by Company in accordance with the terms of the Plan(s), Company shall make the balance of each such payment as it falls due. Trustee shall notify Company where principal and earnings are not sufficient.


(d) Company may engage a third party administrator as a contractor of the Trustee ("Trustee's Contractor"), who shall not be a Plan participant or beneficiary (but who may be the Trustee), to perform functions described in this Section 2(d) and elsewhere in this Trust Agreement which would otherwise be performed by Company.


(1) Upon engagement of a Trustee's Contractor, as soon
as practicable but in no event longer than thirty (30) days
thereafter, Company shall furnish to the Trustee's
Contractor copies of the Plan documents, employment records
of participants, and other information necessary to
determine the benefits which are or may become payable by
Company to or with respect to each participant in each Plan,
including any benefits payable after the participant's
death, and the recipient of same and the procedures which
Company has adopted to calculate such benefit payments.
Company shall regularly, at least annually, and upon each
benefit change under the Plan(s) furnish revised, updated
information to the Trustee's Contractor. In the event
Company refuses or neglects to provide updated participant
information as contemplated herein, the Trustee's Contractor
shall be entitled to rely on the most recent information
furnished to it by Company.


(2) In the event of a Change of Control, Company shall
have the duty to engage, as soon as practicable thereafter,
a Trustee's Contractor reasonably acceptable to the Trustee
if there shall at that time be no Trustee's Contractor then
serving. In addition, if as of a Distribution Date (as such
term is defined in Section 1(g) hereof), there shall be no
Trustee's Contractor then serving, Company shall have the
duty to designate on a stand-by basis a Trustee's Contractor
who shall commence to serve as Trustee's Contractor in the
event such Distribution Date is followed by a Change of
Control. After a Change of Control, Company shall not have
any control or authority with respect to the Trustee's
Contractor so engaged or then serving, or any successor
Trustee's Contractor, including without limitation any
rights with respect to the removal or replacement of any
such Trustee's Contractor or its duties pursuant to this
Trust Agreement.


(3) Unless Trustee agrees to perform the functions of
the Trustee's Contractor described herein, Trustee shall
have no responsibility hereunder for any obligation assigned
to a Trustee's Contractor or (subject to subsection (4)
below) for the performance of a Trustee's Contractor's
duties and responsibilities under this Trust Agreement.


(4) Company may replace or remove any Trustee's
Contractor from time to time serving hereunder, in its sole
discretion, prior to the occurrence of a Change of Control.
Following a Change of Control, Trustee, in its sole
discretion, may remove a Trustee's Contractor engaged by
Company or any successor Trustee's Contractor and shall
remove any such person and engage a successor to such person
if Trustee deems such person's performance as a Trustee's
Contractor unsatisfactory. At all times following a Change
of Control, upon any such removal, or the voluntary
resignation of any such Trustee's Contractor or the
occurrence of any other event which shall result in the
cessation of performance of the Trustee's Contractor's
duties hereunder, Trustee shall use its best efforts to
engage a new Trustee's Contractor (which may be Trustee);
provided, however, Trustee shall perform the duties of the
Trustee's Contractor during any period for which Trustee is
unable to find a new Trustee's Contractor (so that there
will be no default in payments under the Plan(s) as a result
of the absence of a Trustee's Contractor), and any person
engaged as a Trustee's Contractor shall in the judgment of
Trustee be independent of Company. The person who removes
or replaces a Trustee's Contractor shall be responsible for
assuring that there is a timely and complete transfer of
records from such Trustee's Contractor to such person's
successor.


(5) Except for the records dealing solely with the
assets of the Trust and investment of those assets, which
shall be maintained by the Trustee, if a Trustee's
Contractor shall be engaged, the Trustee's Contractor shall
maintain all Plan participant records contemplated by this
Agreement, including the Payment Schedule. All such records
and copies of the Plan(s) documents and employment records
of the participants in the possession of the Trustee's
Contractor shall be made available promptly upon request of
Trustee or Company. The Trustee's Contractor shall also
prepare and distribute participant statements to
participants and beneficiaries and shall perform such other
duties and responsibilities contemplated under the terms of
this Trust Agreement as Company or Trustee, as the case may
be, determines is necessary or advisable to achieve the
objectives of this Trust Agreement.


(6) Company shall indemnify and hold harmless the
Trustee's Contractor for any liability or expenses,
including without limitation advances for or prompt
reimbursement of reasonable fees and expenses of counsel and
other agents retained by it, incurred by the Trustee's
Contractor with respect to keeping the records for
participants' benefits, reporting thereon to participants
and beneficiaries, certifying benefit information to
Trustee, determining the status of benefits hereunder and
otherwise carrying out its obligations under this Trust
Agreement, other than those resulting from Trustee's
Contractor's negligence or willful misconduct or its failure
to reasonably calculate and certify the amount of benefits
based on the applicable terms of the Plan documents and
other information and procedures furnished by Company to the
Trustee's Contractor in accordance with this Trust
Agreement. The Trustee's Contractor shall be entitled to
reasonable compensation for services hereunder, the amount
of which shall be agreed upon from time to time by Company
or, following a Change of Control, the Trustee, and the
Trustee's Contractor in writing, and reimbursement for
reasonable expenses incurred in connection with its
performance of such services. Following a Change of
Control, Trustee's good faith determination of compensation
to be paid to a Trustee's Contractor (including Trustee when
it acts in such capacity) shall be binding on the Company
and each other person having an interest in the Trust. All
such compensation and expenses shall be paid by Trustee from
the assets of the Trust. If not so paid, such compensation
and expenses shall be paid by Company.


(7) Except as may be otherwise agreed by the Trustee's
Contractor and Company, or Trustee following a Change of
Control, the Trustee's Contractor's obligations are limited
solely to those explicitly set forth herein and the
Trustee's Contractor shall have no responsibility, authority
or control, direct or indirect, over the maintenance or
investment of the Trust and shall have no obligation in
respect of Trustee or the Trustee's compliance with the
Trustee's Contractor's certifications to Trustee.
Section 3. Trustee Responsibility Regarding Payments
to Trust Beneficiary When Company Is Insolvent.

(a) Trustee shall cease payment of benefits to Plan
participants and their beneficiaries if the Company is
Insolvent. Company shall be considered "Insolvent" for
purposes of this Trust Agreement if (i) Company is unable to
pay its debts as they become due, or (ii) Company is subject
to a pending proceeding as a debtor under the United States
Bankruptcy Code.

(b) At all times during the continuance of this Trust,
as provided in Section 1(d) hereof, the principal and income
of the Trust shall be subject to claims of general creditors
of Company under federal and state law as set forth below.

(1) The Board of Directors and the Chief Executive
Officer of Company shall have the duty to inform Trustee in
writing of Company's Insolvency. If a person claiming to be
a creditor of Company alleges in writing to Trustee that
Company has become Insolvent, Trustee shall determine
whether Company is Insolvent and, pending such
determination, Trustee shall discontinue payment of benefits
to Plan participants or their beneficiaries.


(2) Unless Trustee has actual knowledge of Company's
Insolvency, or has received notice from Company or a person
claiming to be a creditor alleging that Company is
Insolvent, Trustee shall have no duty to inquire whether
Company is Insolvent. Trustee may in all events rely on
such evidence concerning Company's solvency as may be
furnished to Trustee and that provides Trustee with a
reasonable basis for making a determination concerning
Company's solvency.


(3) If at any time Trustee has determined that Company
is Insolvent, Trustee shall discontinue payments ...