

<PAGE>
                       Southwestern Bell Corporation
                             Senior Management
                       Deferred Compensation Program
                                  of 1988

      Consisting of the following (attached hereto):

      (1)   Southwestern Bell Corporation Senior Management
            Deferred Compensation Plan of 1988

      (2)   Southwestern Bell Corporation Senior Management
            Deferred Compensation Plan of 1988 (Early Payment
            Option)

                   EFFECTIVE FOR UNITS OF PARTICIPATION
                        HAVING A UNIT START DATE OF
                         JANUARY 1, 1988 OR LATER
                                    AND
                         Prior to January 1, 1991

                       Effective:   January 1, 1988

                          Revised: July 30, 1993

<PAGE>
                       Southwestern Bell Corporation

                             Senior Management

                        Deferred Compensation Plan

                                  of 1988

                   EFFECTIVE FOR UNITS OF PARTICIPATION

                        HAVING A UNIT START DATE OF

                         JANUARY 1, 1988 OR LATER

                                    AND

                         PRIOR TO JANUARY 1, 1991

                        Effective: January 1, 1988

                  Revised and Restated:   July 30, 1993

<PAGE>
                                   INDEX

Section                  Subject                                  Page
- -------                  -------                                  ----
    1           Statement of Purpose                                 1


    2           Definitions                                          1

    3           Administration of the Plan                           5

    4           Participation                                        6
                  4.1  Election to Commence a Unit
                        of Participation                              
                  4.2   Termination of Election                       

    5           Deferred Compensation                                6
                  5.1   Deferred Compensation Account                 
                  5.2   Participant Deferrals                         
                  5.3   Employer Contribution                         
                  5.4   Vesting of Deferred
                        Compensation Account                          
                  5.5   Valuation of Account                          
                  5.6   Statement of Accounts                         

    6           Retirement Benefits                                  9
                  6.1   Normal Retirement                             
                  6.2   Early Retirement                              
                  6.3   Provisions Relating to
                        Manner and Time of Payments                   
                  6.4   Termination Benefit                           
                  6.5   Disability                                    
                  6.6   Survivor Benefits                             

    7           INTENTIONALLY OMITTED                               17
                  
    8           Payment of Benefits                                 17
                  8.1   INTENTIONALLY OMITTED                         
                  8.2   Small Benefit                                 
                  8.3   Emergency Benefit                             
                  8.4   Commencement of Payments                      
                  8.5   Withholding; Unemployment Taxes               
                  8.6   Change in Status                              
                  8.7   Transfer to Bellcore                          
                  8.8   Leave of Absence                              
                  8.9   Ineligible Participant                        

    9           Beneficiary Designation                             20

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                                    2

   10           Discontinuation, Termination, Amendment             20
                  10.1  Employer's Right to Discontinue  
                        Offering Units                                
                  10.2  Employer's Right to Terminate
                        Plan                                          
                  10.3  Amendment                                     

   11           Miscellaneous                                       22

                  11.1   Unsecured General Creditor                   
                  11.2   Trust Fund                                   
                  11.3   Obligations to Employer                      
                  11.4   Non-Assignability                            
                  11.5   Employment Not Guaranteed                    
                  11.6   Protective Provision                         
                  11.7   Gender, Singular and Plural                  
                  11.8   Waiver of Benefits                           
                  11.9   Captions                                     
                  11.10 Applicable Law                                
                  11.11 Validity                                      
                  11.12 Notice                                        
                  11.13 Successors and Assigns

                 AGREEMENT                                          25

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                                    1

                             Senior Management

                    Deferred Compensation Plan of 1988

Section 1 - Statement of Purpose

            The purpose of the Senior Management Deferred    
      Compensation Plan of 1988 is to provide retirement,    
      death, or termination-of-employment benefits to a select
      group of management employees consisting of Eligible
      Employees of Southwestern Bell Corporation (the "Company")
      and its subsidiaries ("Participating Companies").

Section 2 - Definitions

            For the purposes of this Plan, the following words and
      phrases shall have the meanings indicated, unless the context
      clearly indicates otherwise:

      1.    Administrative Committee.  "Administrative       
            Committee" means a committee of three or more   
            members, at least one of whom is a Senior Manager, who
            shall be designated by the Vice President- Human
            Resources to administer the Plan pursuant to Section 3.

      2.    Agreement.  "Agreement" means the written agreement
            entitled "Senior Management Deferred Compensation Plan
            of 1988 Agreement" (substantially in the form attached
            to this Plan) that shall be entered into by the
            Employer and a Participant with respect to each Unit of
            Participation to carry out the Plan with respect to
            such Participant.

      3.    Annualized Total Unit Deferral Amount.  The "Annualized
            Total Unit Deferral Amount" means the Total Unit

            Deferral Amount divided by four.

      4.    Base Salary.  "Base Salary" means the Participant's
            annual base salary before reduction pursuant to this
            Plan or any plan of the Employer whereby compensation
            is deferred, including but not limited to a plan
            whereby compensation is deferred in accordance with
            Section 401(k) of the Internal Revenue Code.

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                                     2

Section 2 - Definitions (cont'd)

      5.    Beneficiary.  "Beneficiary" means the person or persons
            designated as such in accordance with Section 9.

      6.    Board.  "Board" means the Board of Directors of
            Southwestern Bell Corporation.

      7.    Compensation.  "Compensation" means the  Participant's
            monthly Base Salary plus any other compensation that is
            normally matched in the Southwestern Bell Corporation
            Savings Plan for Salaried Employees before reduction
            for compensation deferred pursuant to this Plan or any
            plan of the Employer whereby compensation is deferred,
            including but not limited to a plan whereby
            compensation is deferred in accordance with
            Section 401(k) of the Internal Revenue Code.

      8.    Declared Rate.  "Declared Rate" means with respect to
            any Plan Year the interest rate which will be credited
            during such Plan Year on a Participant's Deferred
            Compensation Accounts for Units of Participation which
            have not yet commenced benefit payments.  The Declared
            Rate for each Plan Year will be determined by the
            Administrative Committee, in its complete and sole
            discretion, and will be announced on or before January
            1 of the applicable Plan Year; provided that in no
            event will the Declared Rate for any Plan Year be less
            than the Moody's Corporate Bond Yield Average-Monthly
            Average Corporates as published by Moody's Investor's
            Service, Inc. (or any successor thereto) for the month
            of September before the Plan Year in question, or, if
            such yield is no longer published, a substantially
            similar average  selected by the Administrative
            Committee.

      9.    Deferral Amount.  "Deferral Amount" means an amount of
            Base Salary deferred with respect to a Unit of
            Participation under this Plan.

      10.   Deferred Compensation Account.  "Deferred  Compensation
            Account" means the account maintained on the books of

            account of the Employer for each Participant for each
            Unit of Participation pursuant to Section 5.1.

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                                     3

Section 2 - Definitions (cont'd)

      11.   Disability.  "Disability" means a disability as  
            defined in the Southwestern Bell Corporation Sickness
            and Accident Disability Benefit Plan or the
            Southwestern Bell Corporation Senior Management Long
            Term Disability Plan covering the  Participant, as
            applicable.

      12.   INTENTIONALLY OMITTED.

      13.   INTENTIONALLY OMITTED

      14.   INTENTIONALLY OMITTED

      15.   Early Retirement.  "Early Retirement" means the
            termination of a Participant's employment with Employer
            for reasons other than death prior to Normal Retirement
            and on or after the date Participant attains age 55.

      16.   Election Form.  The "Election Form" means an Eligible
            Employee's written election to participate in the Plan
            with respect to each Unit of Participation in
            accordance with Section 4.

      17.   Eligible Employee.  "Eligible Employee" means an
            Employee of the Employer who (a) is in active service,
            (b) is a Senior Manager or has an employment status
            which has been approved by the Board or its Chairman to
            be eligible to participate in this Plan, and (c) who
            continuously maintains the employment status upon which
            eligibility to participate in this Plan was based.

      18.   Employee.  "Employee" means any person employed by the
            Employer on a regular full-time salaried basis.

      19.   Employer.  "Employer" means Southwestern Bell
            Corporation or any of its subsidiaries.

      20.   Normal Retirement.  "Normal Retirement" means
            attainment of age 65 during a Participant's employment
            with Employer irrespective of whether there is a
            termination of Participant's employment with Employer.

      21.   Participant.  "Participant" means an Employee
            participating in the Plan in accordance with the
            provisions of Section 4.


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                                     4

Section 2 - Definitions (cont'd)

      22.   Plan Year.  "Plan Year" means the calendar year.

      23.   "Rotational Work Assignment Company. ("RWAC")" shall
            mean Bell Communications Research, Inc.  ("BellCore"),
            formerly the Central Services Organization, Inc.,
            and/or any other entity with which Southwestern Bell
            Corporation or any of its subsidiaries may enter into
            an agreement to provide an employee for a rotational
            work assignment.

      24.   Projected Employer Contribution.  "Projected Employer
            Contribution" means for purposes of computing the
            Pre-Retirement Survivor Benefit with respect to a Unit
            of Participation pursuant to Section 6.6(a), the
            product of (i) the Company Match Rate Expressed as a
            Percent*, as in effect at the time of the Unit Start
            Date, times the Participant's annual Base Salary at the
            Unit Start Date minus (a) any Employer matching
            contribution determined as of the Unit Start Date
            associated with said Base Salary at the Unit Start Date
            which is then being contributed or is to be contributed
            to the Salaried Savings Plan and minus (b) any Employer
            matching contribution which has previously been
            allocated to a Unit of Participation under this or any
            other Employer deferred compensation plan and (ii) the
            number of years in the Unit Deferral  Period for the
            Unit of Participation.

      25.   Retirement Benefit Option.  "Retirement Benefit Option"
            means with respect to any Unit of Participation the
            Retirement Benefit payment option described in
            Section 6.

      26.   Senior Manager.  "Senior Manager" means an individual
            employed by Employer in a position having a Salary
            Grade of 29 or above or equivalent.

      27.   Southwestern Bell Corporation Savings Plan for Salaried
            Employees.  "Southwestern Bell Corporation Savings Plan
            for Salaried Employees" or "Salaried Savings Plan"
            means the Southwestern Bell Corporation Savings Plan
            for Salaried Employees or any successor plan to such
            plan adopted by the Employer.  Participants from any
            subsidiary, permitted to participate in this Plan,
            shall be treated as participating in the Southwestern
            Bell Corporation Savings Plan for Salaried Employees
            for purposes of calculating any matching Employer
            contributions.


*     The Company Match Rate Expressed as a Percent means the
      maximum percent of salary that can be received as Employer
      matching contribution under the Southwestern Bell Corporation
      Savings Plan for Salaried Employees, e.g., a match of 66 2/3%
      of the amount of basic allotment (up to 6%) of salary results
      in a Company Match Rate Expressed as a Percent of .667 x 6% =
      4%.

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                                     5

Section 2 - Definitions (cont'd)

      28.   Subsidiary.  A "Subsidiary" of the Company is any
            corporation, partnership, venture or other entity in
            which the Company has at least a 50% ownership
            interest.

      29.   Total Unit Deferral Amount.  "Total Unit Deferral
            Amount" means the sum of all amounts of Base Salary
            deferred during the Unit Deferral Period with respect
            to a Unit of Participation, as shown in Exhibit A of
            Participant's Agreement for that Unit of Participation.

      30.   Unit Deferral Period.  "Unit Deferral Period" means the
            number of months the Participant elects to reduce his
            Base Salary with respect to a Unit of Participation, as
            shown in Exhibit A of Participant's Agreement for that
            Unit of Participation.  The Unit Deferral Period for a
            Unit of Participation will commence on the Unit Start
            Date and end upon the earliest to occur of the
            following:  (i) the last day of the forty-eight (48)
            month period which commenced with the Unit Start Date,
            or (ii) when the Participant terminates employment,
            terminates the Unit of Participation or ceases to be an
            Eligible Employee as described in Section 6.4 of the
            Plan.  In no event shall the Unit Deferral Period for a
            Unit of Participation end later than forty-eight (48)
            months after the Unit Start Date.

      31.   Unit of Participation.  "Unit of Participation" means a
            stated Total Unit Deferral Amount and associated
            Employer contributions which provide stated benefits
            pursuant to Section 6 in accordance with the
            Participant's Agreement for that Unit of Participation.

      32.   Unit Start Date.  "Unit Start Date" means the date for
            commencement of deferrals shown in Exhibit A of a
            Participant's Agreement for a given Unit of
            Participation.  The Unit Start Date will be January 1,
            unless the Administrative Committee, in its sole
            discretion permits a new Participant to elect a Unit
            Start Date within 30 days after such Participant first
            becomes an Eligible Employee.


Section 3 - Administration of the Plan

            The Administrative Committee shall be the sole
      administrator of the Plan and will administer the Plan,
      interpret, construe and apply its provisions in accordance
      with its terms.  The Administrative Committee shall further
      establish, adopt or revise such rules and regulations as it
      may deem necessary or advisable for the administration of the
      Plan.  All decisions of the Administrative Committee shall be
      final and binding.

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                                     6

Section 4 - Participation

      4.1   Election to Commence a Unit of Participation.  Any
      Eligible Employee may elect to commence deferral of Base
      Salary with respect to a Unit of Participation under the Plan
      by filing a completed Election Form with the Administrative
      Committee prior to the beginning of the Unit Start Date. 
      Pursuant to said Election Form, the Eligible Employee shall
      elect a Total Unit Deferral Amount and a Unit Deferral Period
      to be specified in Exhibit A of Participant's Agreement with
      respect to such Unit of Participation.

            The combination of deferrals from all of the
      Participant's Units of Participation including the Unit of
      Participation with respect to which the Participant is
      electing to commence deferrals and from Units of
      Participation under the Southwestern Bell Corporation Senior
      Management Deferred Compensation Plan ("SBC DCP"), must be at
      least six percent (6%) of Participant's Base Salary at the
      Unit Start Date for the Unit of Participation with respect to
      which the Participant is electing to commence deferrals.  A
      Unit of Participation shall require a minimum Annualized
      Total Unit Deferral Amount of $1,000.  The sum of the
      Participant's contributions, if any, to the Southwestern Bell
      Corporation Savings Plan for Salaried Employees plus the
      Annualized Total Unit Deferral Amounts for all Units of
      Participation under this Plan and under the SBC DCP in a
      given Plan Year may not exceed thirty percent (30%) of a
      Participant's Compensation for that Plan Year.

      4.2   Termination of Election.  A Participant's election to
      defer Base Salary is irrevocable upon the filing of his
      Election Form with the Administrative Committee, provided,
      however, that the election may be terminated with respect to
      Base Salary not yet paid by mutual agreement in writing
      between the Participant and the Administrative Committee. 
      Such termination if approved shall be effective beginning the
      first day of the month following the execution of such mutual
      agreement.


Section 5 - Deferred Compensation

      5.1   Deferred Compensation Account.  The Administrative
      Committee shall establish and maintain a separate Deferred
      Compensation Account for each Participant for each Unit of
      Participation.  The amount by which a Participant's Base
      Salary is reduced each month pursuant to Section 4.1 and the

<PAGE>
                                     7

      amount of Employer contribution allocated to the
      Participant's Units of Participation pursuant to Section 5.3
      with respect to any Unit of Participation shall be credited
      by the Employer to the Participant's Deferred Compensation
      Account for such Unit of Participation no later than the
      first day of the following month, and such Deferred
      Compensation Account shall be debited by the amount of any
      payments made by the Employer to the Participant or the
      Participant's Beneficiary with respect to such Unit of
      Participation pursuant to this Plan.

            With respect to each Unit of Participation, the
      Deferred Compensation Account of a Participant shall be
      deemed to bear interest from the date such Deferred
      Compensation Account was established through the date of
      commencement of benefit payments at a rate equal to the
      applicable Declared Rate for the particular Plan Year on the
      balance from month-to-month in such Deferred Compensation
      Account.  Interest will be credited monthly to the Deferred
      Compensation Account  at one-twelfth of the annual Declared
      Rate, compounded annually.  Following the commencement of
      benefit payments with respect to a Unit of Participation, a
      Participant's Deferred Compensation Account shall be deemed
      to bear interest on the balance in such Deferred Compensation
      Account from month-to-month at a rate equal to one-twelfth of
      the average of the annual Declared Rates for the five (5)
      Plan Years ending prior to commencement of benefit payments
      (or, if the Plan has been in operation for less than five (5)
      Plan Years, the average of the Declared Rates for all Plan
      Years ending prior to commencement of benefit payments).

      5.2   Participant Deferrals.  The Participant's Total Unit
      Deferral Amount is deferred in equal amounts on a monthly
      basis over the Unit Deferral Period or as otherwise may be
      permitted by the Administrative Committee.  The amount
      deferred each month with respect to a given Unit of
      Participation shall be credited by the Employer to the
      Participant's Deferred Compensation Account for that Unit of
      Participation no later than the first day of the following
      month.

            The Participant will be permitted to defer an

      additional amount equal to all or a portion of his Short Term
      Incentive Award. A Participant shall not be permitted to
      "defer" into the Plan any monies that are not compensation
      paid by Employer.  Any additional deferrals by a Participant
      with respect to a given Unit of Participation shall not
      affect Total Unit Deferral Amount and shall not result in any
      change in the maximum Employer contribution

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                                     8

Section 5 - Deferred Compensation (cont'd)

      pursuant to Section 5.3 for the Plan Year during which the
      additional deferral is made.  In no event shall any such
      additional deferral by a Participant result in any reduction
      in the amounts by which the Participant's Base Salary is
      reduced pursuant to Exhibit A to the Participant's Agreement
      with respect to such Unit of Participation prior to
      completion of deferral of the Total Unit Deferral Amount for
      such Unit of Participation. Participant's election to defer
      all or a portion of his Short Term Incentive Award shall be
      filed with the Administrative Committee (on a form to be
      provided by said Committee for such purpose) prior to the
      beginning of the fiscal year during which such Award is
      earned.

            Such additional deferral amount shall be considered a
      separate part of Participant's Deferred Compensation Account,
      shall be subject to the terms thereof except survivor
      benefits, and shall be paid out in the same manner as the
      rest of such Deferred Compensation Account.

      5.3   Employer Contribution.  Participation in this Plan does
      not preclude participation in the Southwestern Bell
      Corporation Savings Plan for Salaried Employees.  For a given
      Plan Year, the aggregate Employer contribution to both the
      Southwestern Bell Corporation Savings Plan for Salaried
      Employees and this Plan on behalf of a Participant will be an
      amount equal to the Company Match Rate Expressed as a Percent
      as in effect during all or portions of that Plan year times
      the Participant's Compensation as in effect during all or
      portions of that Plan Year which is contributed or deferred
      for that Plan Year by the Participant in accordance with each
      plan, respectively.  Any such amount of Employer contribution
      not allocated to the Southwestern Bell Corporation Savings
      Plan for Salaried Employees will be credited to the
      Participant's Deferred Compensation Accounts, as applicable. 
      The amount or percent of a Participant's Base Salary to be
      allocated to Basic Allotments in the Southwestern Bell
      Corporation Savings Plan for Salaried Employees shall be
      specified in Paragraph 3 of a Participant's Agreement.

<PAGE>

                                     9

Section 5 - Deferred Compensation (cont'd)

      5.4   Vesting of Deferred Compensation Account.  A
      Participant's interest in his Deferred Compensation Account
      shall vest at the same rate and in the same manner as it
      would under the Southwestern Bell Corporation Savings Plan
      for Salaried Employees, as in effect from time to time, had
      both the Deferral Amount and the Employer contribution to
      this Plan with respect to that Deferral Amount for any given
      Unit of Participation been contributed instead to the
      Southwestern Bell Corporation Savings Plan for Salaried
      Employees.  For this purpose all years of service recognized
      under the Southwestern Bell Corporation Savings Plan for
      Salaried Employees, for purposes of determining a
      Participant's vested interest under that plan, shall be taken
      into account in determining the Participant's vested interest
      under this Plan.

      5.5   Valuation of Accounts.  The value of a Deferred 
      Compensation Account as of any date shall equal the amounts
      theretofore credited to such account plus the interest on
      such account credited in accordance with Section 5.1 through
      the day preceding such date.

      5.6   Statement of Accounts.  Each Participant will receive
      annual statements in such form as the Administrative
      Committee deems desirable setting forth the balance standing
      to the credit of each of the Participant's Deferred
      Compensation Accounts.

Section 6 - Retirement Benefits

            Section 6 shall apply to all Units of Participation
      under this Plan.  The benefits specified in this Section 6
      shall be provided under the Retirement Benefit Option.

      6.1   Normal Retirement.  Upon Normal Retirement, with
      respect to a Unit of Participation, the Employer shall pay to
      the Participant an equal amount each month for one hundred
      eighty (180) months, beginning on the first day of the month
      next following the date of Normal Retirement, which will
      amortize over such one hundred eighty (180) equal monthly
      payments the sum of (a) the value of the Deferred
      Compensation Account for such Unit of Participation as of the
      date of commencement of benefit payments, plus (b) the
      interest that will accrue on the unpaid balance in such
      Deferred Compensation Account during such one hundred eighty
      (180) month period pursuant to Section 5.1 ("Standard
      Retirement Benefit").  Alternatively, a Participant may elect
      in the Agreement for any Unit of Participation to receive an
      alternative retirement benefit in lieu of the Standard
      Retirement Benefit ("Alternative


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                                    10

Section 6 - Retirement Benefits (cont'd)

      Retirement Benefit") for such Unit of Participation either in
      a lump sum payment or in sixty (60) or one hundred twenty
      (120) equal monthly payments, with the amount of each monthly
      payment to be calculated in accordance with the principle
      stated in the preceding sentence.

      6.2   Early Retirement.  Upon Early Retirement, with    
      respect to a Unit of Participation, the Employer shall pay to
      the Participant an equal amount each month for one hundred
      eighty (180) months, beginning on the first day of the month
      next following the date of Early Retirement, which will
      amortize over such one hundred eighty (180) equal monthly
      payments the sum of (a) the value of the Deferred
      Compensation Account for such Unit of Participation as of the
      date of commencement of benefit payments, plus (b) the
      interest that will accrue on the unpaid balance in such
      Deferred Compensation Account during such one hundred eighty
      (180) month period pursuant to Section 5.1 ("Standard
      Retirement Benefit").  Alternatively, a Participant may elect
      in the Agreement for any Unit of Participation to receive an
      alternative retirement benefit in lieu of the Standard
      Retirement Benefit ("Alternative Retirement Benefit") for
      such Unit of Participation either in a lump sum payment or in
      sixty (60) or one hundred twenty (120) equal monthly
      payments, with the amount of each monthly payment to be
      calculated in accordance with the principle stated in the
      preceding sentence.  A Participant may further elect in the
      Agreement for any Unit of Participation to have the Early
      Retirement Benefit for such Unit of Participation commence
      when he attains age 65.

      6.3   Provisions Relating to Manner and Time of Payments.  If
      a Participant's Agreement fails to show an election of a
      manner of payment of a Normal or Early Retirement Benefit
      such Participant will receive the Standard Normal or Early
      Retirement Benefit in accordance with Section 6.1 or
      Section 6.2, respectively.

            In the event that a final determination shall be made
      by the Internal Revenue Service or any court of competent
      jurisdiction that by reason of Normal or Early Retirement a
      Participant has recognized gross income for Federal income
      tax purposes in excess of the Standard or Alternative
      Retirement Benefit actually paid by the Employer to which
      such gross income is attributable, the Employer shall make a
      lump sum payment to the Participant of the remaining balance
      of his Deferred Compensation Accounts for any affected


<PAGE>
                                    11

Section 6 - Retirement Benefits (cont'd)

      Units of Participation.  If a benefit is payable to a
      Participant pursuant to this paragraph for any Unit of
      Participation, no other benefits shall thereafter be payable
      under this Plan with respect to such Unit of Participation.

            Notwithstanding any election made by the Participant,
      the Administrative Committee will pay the Participant's
      Standard or Alternative Retirement Benefit in the form of a
      lump sum payment if the value of his Deferred Compensation 
      Account for a Unit of Participation is less than $10,000 when
      payment of a Normal or Early Retirement Benefit with respect
      to the Unit of Participation would otherwise commence.

      6.4   Termination Benefit.

            6.4(a)    Termination of Employment Before Attaining Age
                      55.  Upon any termination of employment of the
                      Participant for reasons other than death or
                      Disability before the Participant attains age
                      fifty-five (55), the Company shall pay to the
                      Participant, with respect to a Unit of
                      Participation, as compensation earned for
                      services rendered prior to his termination of
                      service, a lump sum equal to the vested
                      portion of the amounts standing credited to
                      his Deferred Compensation Account for such
                      Unit of Participation as of the date of such
                      termination of service ("Termination
                      Benefit").

            6.4(b)    Termination of a Unit of Participation.   A
                      Participant may discontinue a Unit of
                      Participation while continuing in the service
                      of the Employer.  Notwithstanding any other
                      provision of the Plan, upon such
                      discontinuance, the Participant shall
                      immediately cease to be eligible for any
                      benefits other than his Termination Benefit
                      with respect to that Unit of Participation
                      except as provided under Section 8.1.

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                                    12

Section 6 - Retirement Benefits (cont'd)

                      No other benefit shall be payable with regard
                      to such Unit of Participation to either the
                      Participant or any  Beneficiary of such

                      Participant.  The Participant shall continue
                      to be credited with interest on the amounts
                      standing credited to his Deferred Compensation
                      Accounts as provided under Section 5.1 and to
                      vest in such amounts as provided under
                      Section 5.4 while he remains in employment
                      with the Employer until payment of his
                      Termination Benefit.  However, no further
                      Participant deferrals or Employer
                      contributions to this Plan shall be made
                      pursuant to Sections 5.2 or 5.3 with respect
                      to a Unit of Participation after a Participant
                      discontinues or terminates such Unit of
                      Participation.

                      A Participant shall terminate a Unit of
                      Participation if he terminates his election to
                      defer Base Salary with the approval of the
                      Administrative Committee pursuant to
                      Section 4.2.

            6.4(c)    Loss of Eligibility.  In the event that the
                      Participant ceases to be an Eligible Employee
                      by reason of a change to an employment status
                      which is not eligible to participate in this
                      Plan, except as provided under Section 8.1,
                      the Participant shall immediately cease to be
                      eligible for any benefits other than a
                      modified Termination Benefit which shall
                      consist of a lump sum equal to the vested
                      amounts standing credited to his Deferred
                      Compensation Accounts as of the date of such
                      loss of eligibility, provided the Participant
                      shall continue to be credited with interest on
                      such amounts as provided under Section 5.1 and
                      to vest in such amounts as provided under
                      Section 5.4 while he remains in employment
                      with the Employer.  However, no further
                      Participant deferrals or Employer
                      contributions shall be made to this Plan
                      pursuant to Sections 5.2 or 5.3 subsequent to
                      the date of such loss of eligibility.  Each
                      such lump sum Termination Benefit shall be
                      payable upon the Participant's termination of
                      employment by the Employer,

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                                    13

Section 6 - Retirement Benefits (cont'd)

                      whether by death, Normal Retirement, Early
                      Retirement or any other means.  The provisions
                      18 of this subparagraph 6.4(c) shall not apply

                      if the Participant in his new employment
                      status is an eligible employee under another
                      similar deferred compensation plan of the
                      Employer.  In such event the provisions of
                      Section 8.6 of this Plan shall apply.

            6.4(d)    No Other Benefits Payable.  When a Participant
                      terminates employment, terminates a Unit of
                      Participation or ceases to be an Eligible
                      Employee under circumstances in which
                      Section 6.4(a), (b) or (c) applies, no
                      Survivor Benefit or other benefit shall
                      thereafter be payable under this Plan to
                      either the Participant or any Beneficiary of
                      the Participant with respect to such Unit of
                      Participation except as provided under
                      Section 8.1.

      6.5   Disability.  In the event that a Participant           
      suffers a Disability, Participant deferrals and Employer
      contributions that otherwise would have been credited to the
      Deferred Compensation Accounts of the Participant in
      accordance with Sections 5.2 and 5.3 will continue to be
      credited to such Deferred Compensation Accounts at the same
      time and in the same amounts as they would have been credited
      if the Participant had not suffered a Disability for as long
      as he is eligible to receive monthly disability benefits
      equal to 100 percent of his monthly base salary at the time
      of his Disability.  At such time as the Participant is not
      eligible to receive monthly disability benefits equal to 100
      percent of his monthly base salary at the time of his
      Disability, Participant deferrals and Employer contributions
      that otherwise would have been credited to the Deferred
      Compensation Accounts of the Participant in accordance with
      Section 5.2 and 5.3 shall cease.

            If the Participant recovers from his Disability and
      returns within sixty (60) days thereafter to employment with
      the Employer in an employment status which would make him
      eligible to participate in this Plan and prior to the end of
      the original Unit Deferral Period, the Participant shall
      continue or resume making deferrals, as the case may be, in
      accordance with Section 5.2 and the Employer shall continue
      or resume making contributions, as the case may be, in
      accordance with Section 5.3 until the end of the original
      Unit Deferral Period.

<PAGE>
                                    14

Section 6 - Retirement Benefits (cont'd)

            If the Participant recovers from his Disability, the
      Participant shall be treated as terminating service with the

      Employer on the date of his recovery, unless within sixty
      (60) days thereafter he returns to employment with the
      Employer in an employment status which makes him eligible to
      participate in this Plan.

            If a Participant's Disability terminates by reason of
      his death, the rights of his Beneficiary shall be determined
      pursuant to Section 6.6 as if the Participant had not been
      disabled but rather had been in service on the date of his
      death and either died or retired on such date, whichever
      would be most advantageous to such Beneficiary.  If a
      Participant's Disability terminates by reason of attainment
      of age 65, the Participant shall upon the attainment of age
      65 be entitled to a Normal Retirement Benefit determined
      pursuant to Section 6.1.  If a Participant's Disability
      terminates by reason of the Participant's election to take
      Early Retirement under the Plan, the Participant shall be
      treated as having an Early Retirement on the date elected by
      the Participant and shall be entitled to an Early Retirement
      Benefit determined pursuant to Section 6.2. 

      6.6   Survivor Benefits.

            6.6(a)    If a Participant dies while in service with
                      the Employer (or while suffering from a
                      Disability prior to attaining age 55) prior to
                      eligibility for Early Retirement with respect
                      to a Unit of Participation, upon the
                      Participant's death the Employer will pay to
                      the Participant's Beneficiary with respect to
                      each Unit of Participation an amount per
                      month, as specified in paragraph 6 of his
                      Agreement, equal to the greater of (i) [(50%
                      of the sum of the Total Unit Deferral Amount
                      plus the Projected Employer Contribution for
                      such Unit of Participation) divided by 12] or
                      (ii) the balance in the Deferred Compensation
                      Account (excluding any Short Term Incentive
                      Award deferred pursuant to Section 5.2 and
                      excluding any interest earned on the Short
                      Term Incentive Award) divided by the number of
                      months payments are to be made as stated
                      below, plus interest in accordance with the
                      interest methodology of Section 6.2.  Payments
                      are to be made for the greater of one hundred
                      twenty (120) months or the number of months
                      from the date of Participant's death until he
                      would have been age 65. ("Pre-Retirement
                      Survivor Benefit")

<PAGE>
                                    15

Section 6 -  Retirement Benefits (cont'd)


                      In addition, the Participant's Beneficiary
                      will receive any Short Term Incentive Award
                      associated with such Unit of Participation,
                      deferred pursuant to Section 5.2, plus
                      corresponding interest earned on the Short
                      Term Incentive Award, paid out over the same
                      period as the Pre- Retirement Survivor Benefit
                      and in accordance with the interest
                      methodology of Section 6.2.

            6.6(b)    If a Participant dies while in service after
                      eligibility for Early Retirement with respect
                      to a Unit of Participation, but prior to
                      commencement of payment of an Early or Normal
                      Retirement Benefit with respect to such Unit
                      of Participation, the Employer will pay to the
                      Participant's Beneficiary the greater of (i)
                      the benefit that such Participant's
                      Beneficiary would have received with respect
                      to such Unit of Participation had the
                      Participant retired and commenced to receive
                      an Early Retirement Benefit on the day prior
                      to such Participant's death or (ii) a benefit
                      equal to the Pre-Retirement Survivor Benefit. 
                      The Administrative Committee shall determine
                      which benefit is greater on a present value
                      basis using such interest rate as the
                      Administrative Committee may determine in its 
                      sole discretion.  Payments will commence upon
                      the Participant's death, irrespective of when
                      Early Retirement Benefit payments would have
                      commenced if the Participant had survived. 
                      Such payments shall be made in accordance with
                      the method of payment which the Participant
                      had elected for payment of his Normal or Early
                      Retirement Benefit.

            6.6(c)    If a Participant dies after Early or Normal
                      Retirement but before commencement of payment
                      of an Early or Normal Retirement Benefit with
                      respect to a Unit of Participation, the
                      Employer will pay to the Participant's
                      Beneficiary the installments of any such
                      benefit that such Participant's Beneficiary
                      would have received with respect to such Unit
                      of Participation had the

<PAGE>
                                    16

Section 6 - Retirement Benefits (cont'd)

                      Participant commenced to receive an Early or

                      Normal Retirement Benefit on the day prior to
                      such Participant's death.  Payments will
                      commence upon the Participant's death,
                      irrespective of when Early or Normal
                      Retirement Benefit payments would have
                      commenced if the Participant had survived. 
                      Such payments shall be made in accordance with
                      the method of payment which the Participant
                      had elected for payment of his Normal or Early
                      Retirement Benefit.

            6.6(d)    If a Participant dies after the commencement
                      of payment of an Early or Normal Retirement
                      Benefit with respect to a Unit of
                      Participation, the Employer will pay to the
                      Participant's Beneficiary the remaining
                      installments of any such benefit that would
                      have been paid to the Participant had the
                      Participant survived.

            6.6(e)    As an additional benefit, if a  Participant
                      dies subsequent to eligibility to commence
                      payment of a Standard or Alternative
                      Retirement Benefit, and has a surviving
                      spouse, the Employer shall pay to the spouse
                      commencing on the later of (a) the sixteenth
                      (16th) year after commencement of payment of
                      any Standard or Alternative Retirement Benefit
                      or (b) the first of the month following the
                      Participant's death, an amount per month for
                      the life of the spouse equal to sixty-six and
                      two-thirds percent (66-2/3%) of the Standard
                      Retirement Benefit.  If the spouse is more
                      than three (3) years younger or older than the
                      Participant on the date of Participant's
                      death, the amount of such benefit shall be
                      actuarially adjusted based on standard
                      mortality tables.

<PAGE>
                                    17

Section 7 - INTENTIONALLY OMITTED

Section 8 - Payment of Benefits 

      8.1   INTENTIONALLY OMITTED

      8.2   Small Benefit.  Notwithstanding any election made by
      the Participant, the Administrative Committee will pay any
      benefit in the form of a lump sum payment if the lump sum
      equivalent amount is less than $10,000 when payment of such
      benefit would otherwise commence.


      8.3   Emergency Benefit.  In the event that the
      Administrative Committee, upon written petition of the
      Participant, determines in its sole discretion, that the
      Participant has suffered an unforeseeable financial
      emergency, the Employer shall pay to the Participant, as soon
      as practicable following such determination, the balance of
      his Deferred Compensation Accounts for one or more Units of
      Participation as necessary to meet the emergency (the
      "Emergency Benefit").  For purposes of this Plan, an
      unforeseeable financial emergency is an unexpected need for
      cash arising from an illness, casualty loss, sudden financial
      reversal, or other such unforeseeable occurrence.  Cash needs
      arising from foreseeable events such as the purchase of a
      house or education expenses for children shall not be
      considered to be the result of an unforeseeable financial
      emergency.  Upon payment of an Emergency Benefit with respect
      to any Unit of Participation, the Unit of Participation shall
      thereupon terminate, and no other benefits shall be payable
      under the Plan to either the Participant or any Beneficiary
      of the Participant with respect to the Unit of Participation.

      8.4   Commencement of Payments.  Except as otherwise provided
      in this Plan, commencement of payments under this Plan shall
      begin sixty (60) days following the event which entitles a
      Participant (or a Beneficiary) to payments under the Plan, or
      at such earlier date as may be determined by the
      Administrative Committee.

      8.5   Withholding; Unemployment Taxes.  To the extent
      required by the law in effect at the time payments are made,
      the Employer shall withhold from payments made hereunder the
      minimum taxes required to be withheld by the federal or any
      state or local government.

<PAGE>
                                    18

Section 8 - Payment of Benefits (cont'd)

      8.6   Change in Status.  In the event of a change in the
      employment status of a Participant to a status in which he is
      no longer an Eligible Employee under this Plan, but is an
      eligible employee under the Management Deferred Compensation
      Plan of 1988 or another similar deferred compensation plan of
      the Employer, the Participant and all of his Units of
      Participation under this Plan shall automatically be
      transferred to such other deferred compensation plan for
      which he is then an eligible employee, unless otherwise
      determined by the Administrative Committee.  In the event of
      any such transfer, the provisions of the other deferred
      compensation plan to which the Participant transfers shall
      thereafter determine the rights and benefits of the
      Participant with respect to all of his Units of
      Participation, unless otherwise determined by the

      Administrative Committee.  The Employer may, but shall not be
      required to, enter into revised Agreements with the
      Participant to carry out the provisions of this Section.

      8.7   Transfer to RWAC.  Effective August 1, 1990, if a
      Participant transfers to a RWAC prior to completion of a Unit
      of Participation, deferrals which would otherwise have been
      made by the Participant in accordance with Section 5.2 shall
      continue to be made by the Employer until the Participant
      resumes employment with the Employer but for a maximum period
      not to exceed 5 years.  Contributions which would have been
      made by the Employer in accordance with Section 5.3 shall
      also continue to be made by the Employer during such period
      as Participant contributions are continued in accordance with
      the preceding sentence.  Benefits applicable during the
      period of employment at a RWAC (not to exceed 5 years) and
      the methods used for crediting the Deferred Compensation
      Account and repaying amounts contributed by the Employer and
      reducing the Normal Retirement or Early Retirement Benefit
      paid to the Participant or his Beneficiary shall be the same
      as those applicable pursuant to Section 6.7 in the case of
      Disability, i.e., employment at a RWAC shall be deemed a
      Disability for the purpose of making determinations pursuant
      to Section 6.7.  If the Participant has not resumed
      employment with the Employer in an employment status which
      makes him eligible to participate in this Plan within 5 years
      from date of transfer, a Termination Benefit based on the
      amounts credited to the Participant's Deferred Compensation
      Account at the date of transfer shall be paid upon
      termination of employment with a RWAC or the Expiration of
      such 5 year period, whichever is earlier.

<PAGE>
                                    19

Section 8 - Payment of Benefits (cont'd)

      8.8   Leave of Absence.  If a Participant absents himself
      from employment on a formally granted leave of absence (i.e.,
      the absence is with formal permission in order to prevent a
      break in the continuity of the Employee's term of employment
      which permission is granted in conformity with the rules of
      the Employer which employs the individual, as adopted from
      time to time), all of the Participant's Units of
      Participation shall automatically be frozen upon such leave
      of absence, unless otherwise determined by the   
      Administrative Committee.  No Participant deferrals or
      Employer contributions shall be made during the leave of
      absence.  However, during the leave of absence (for a period
      not to exceed six (6) months), the Participant shall continue
      to be credited with interest on his Deferred Compensation
      Accounts as provided under Section 5.1 and to vest in such
      amounts as provided under Section 5.4, and all benefits shall
      continue to be payable to the Participant and his

      Beneficiaries in accordance with Section 6 hereof, except in
      the case of a political leave (i.e., to campaign for or serve
      when elected to a political office, to serve if appointed to
      public office or for non-candidate employees to participate
      in campaigns of candidates for political office).  In the
      case of such a political leave, except as provided under
      Section 8.1, the only benefit payable if the Participant dies
      during such leave shall be a Termination Benefit based on the
      amounts credited to the Participant's Deferred Compensation
      Accounts, which shall be payable to the Participant's
      Beneficiary.  If the Participant returns to employment with
      the Employer in an employment status which makes him eligible
      to participate in this Plan within six (6) months from
      commencement of the leave of absence, Participant deferrals
      and Employer contributions will resume until the end of the
      original Unit Deferral Period.  If the Participant has not
      resumed employment with the Employer in an employment status
      which makes him eligible to participate in this Plan within
      six (6) months from the commencement of the leave of absence,
      a Termination Benefit based on the amounts credited to the
      Participant's Deferred Compensation Accounts shall be paid to
      the Participant.

            This Section 8.8 shall not apply with respect to any
      period during which a Participant is suffering from a
      Disability, and such period of Disability shall not be
      included under this Section 8.8 as a portion of a period of
      leave of absence.

<PAGE>
                                    20

Section 8 - Payment of Benefits (cont'd)

      8.9   Ineligible Participant.  Notwithstanding any other
      provisions of this Plan to the contrary, if any Participant
      is determined not to be a "management or highly compensated
      employee" within the meaning of the Employee Retirement
      Income Security Act of 1974, as amended (ERISA) or
      Regulations thereunder, such Participant will not be eligible
      to participate in this Plan and shall receive an immediate
      lump sum payment equal to the vested portion of the amounts
      standing credited to his Deferred Compensation Accounts. 
      Upon such payment no Survivor Benefit or other benefit shall
      thereafter be payable under this Plan either to the
      Participant or any Beneficiary of the Participant, except as
      provided under Section 8.1.

Section 9 - Beneficiary Designation

            Each Participant shall have the right, at any time, to
      designate any person or persons as his Beneficiary or
      Beneficiaries (both primary as well as contingent) to whom
      payment under this Plan shall be made in the event of his

      death prior to complete distribution to Participant of the
      benefits due him under the Plan.  Each Beneficiary
      designation shall become effective only when filed in writing
      with the Administrative Committee during the Participant's
      lifetime on a form prescribed by the Administrative Committee
      with written acknowledgment of receipt.

            The filing of a new Beneficiary designation form will
      cancel all Beneficiary designations previously filed.  The
      spouse of a married Participant domiciled in a community
      property jurisdiction shall join in any designation of
      Beneficiary or Beneficiaries other than the spouse.

            If a Participant fails to designate a Beneficiary  as
      provided above, or if all designated Beneficiaries predecease
      the Participant or die prior to complete distribution of the
      Participant's benefits, then the Administrative Committee
      shall direct the distribution of such benefits to the
      Participant's estate.

Section 10 - Discontinuation, Termination, Amendment

      10.1  Employer's Right to Discontinue Offering Units.  The
      Chairman of the Board may at any time discontinue offerings
      of additional Units of Participation with respect to any or
      all future Plan Years.  Any such discontinuance shall have no
      affect upon the deferrals or benefits or the terms or
      provisions of this Plan as applicable to any then previously
      existing Units of Participation.

<PAGE>
                                    21

Section 10 - Discontinuation, Termination, Amendment
             (cont'd)

      10.2  Employer's Right to Terminate Plan.  The Board may at
      any time terminate the Plan.  Termination of the Plan shall
      mean that (1) there shall be no further offerings of
      additional Units of Participation with respect to any future
      Plan Year; (2) Base Salary shall prospectively cease to be
      deferred with respect to all Units of Participation for the
      then Plan Year and thereafter; and (3) all then currently
      existing Units of Participation shall be treated as follows:  
        
            The Participant's Deferred Compensation Accounts shall
            be 100% vested.  The Participant shall receive or
            continue to receive all benefits under this Plan at
            such time as provided in and pursuant to the terms and
            conditions of his Agreement(s)  and as described in
            this Plan, provided however, any benefits payable under
            a Unit of Participation that is not completed due to a
            termination of the Plan under this Section 10.2 shall
            be prorated based upon the number of months Participant

            made deferrals with respect to such Unit of
            Participation divided by the Unit Deferral Period for
            that Unit of Participation.

      10.3  Amendment.  The Board may at any time amend the Plan in
      whole or in part, provided however, that no amendment,
      including an amendment to this Section 10, shall be
      effective, without the written consent of a Participant, to
      alter, to the detriment of such Participant, the benefits
      described in this Plan as applicable to a Unit of
      Participation of the Participant or to decrease amounts
      standing credited to such Participant's Deferred Compensation
      Accounts under the Plan.  For purposes of this Section 10.3,
      an alteration to the detriment of a Participant shall mean a
      reduction in the period of time over which benefits are
      payable under a Participant's Agreement, subject however to
      the proration provisions of Section 10.2 hereof, or any
      change in the form of benefits payable to a Participant under
      the Participant's Agreement.  Written notice of any amendment
      shall be given to each Participant.

<PAGE>
                                    22

Section 11 - Miscellaneous

      11.1  Unsecured General Creditor.  Participants and their
      Beneficiaries, heirs, successors, and assigns shall have no
      legal or equitable rights,interest, or claims in any property
      or assets of Employer, nor shall they be Beneficiaries of, or
      have any rights, claims, or interests in any life insurance
      policies, annuity contracts, or the proceeds therefrom owned
      or which may be acquired by Employer ("Policies").  Any such
      Policies or other assets of Employer shall not be held under
      any trust for the benefit of Participants, their
      Beneficiaries, heirs, successors, or assigns, or held in any
      way as collateral security for the fulfilling of the
      obligations of Employer under this Plan.  Any and all of the
      Employer's assets and Policies shall be, and remain, the
      general, unpledged, unrestricted assets of Employer. 
      Employer's obligation under the Plan shall be merely that of
      an unfunded and unsecured promise of Employer to pay money in
      the future.

      11.2  Trust Fund.  The Employer shall be responsible for the
      payment of all benefits provided under the Plan.  At its
      discretion, the Company may establish one or more trusts, for
      the purpose of providing for the payment of such benefits. 
      Such trust or trusts may be irrevocable, but the assets
      thereof shall be subject to the claims of the Employer's
      creditors.  To the extent any benefits provided under the
      Plan are actually paid from any such trust, the Employer
      shall have no further obligation with respect thereto, but to
      the extent not so paid, such benefits shall remain the

      obligation of, and shall be paid by, the Employer.

      11.3  Obligations to Employer.  If a Participant becomes
      entitled to a distribution of benefits under the Plan, the
      Employer may offset against the amount of benefits otherwise
      distributable any claim to reimbursement for intentional
      wrongdoing by the Participant against the Employer or an
      affiliate.  Such determination shall be made by the
      Administrative Committee.

<PAGE>
                                    23

Section 11 - Miscellaneous (cont'd)

      11.4  Non-Assignability.  Neither a Participant nor any other
      person shall have any right to commute, sell, assign,
      transfer, pledge, anticipate, mortgage, or otherwise
      encumber, transfer, hypothecate or convey in advance of
      actual receipt the amounts, if any, payable hereunder, or any
      part thereof, which are, and all rights to which are,
      expressly declared to be unassignable and non-transferable. 
      No part of the amounts payable shall, prior to actual
      payment, be subject to seizure or sequestration for the
      payment of any debts, judgments, alimony or separate
      maintenance owed by a Participant or any other person, nor be
      transferable by operation of law in the event of a
      Participant's or any other person's bankruptcy or insolvency.

      11.5  Employment Not Guaranteed.  Nothing contained in this
      Plan nor any action taken hereunder shall be construed as a
      contract of employment or as giving any Employee any right to
      be retained in the employ of the Employer or to serve as a
      director.

      11.6  Protective Provisions.  A Participant will cooperate
      with the Employer by furnishing any and all information
      requested by the Employer, in order to facilitate the payment
      of benefits hereunder, taking such physical examinations as
      the Employer may deem necessary and taking such other
      relevant action as may be requested by the Employer.  If a
      Participant refuses so to cooperate, the Employer shall have
      no further obligation to the Participant under the Plan.  If
      a Participant commits suicide during the two-year period
      beginning on the Unit Start Date for a given Unit of
      Participation or if the Participant makes any material
      misstatement of information or non-disclosure of medical
      history, then no benefits will be payable with respect to
      that Unit of Participation to such Participant or his
      Beneficiary, or in the Employer's sole discretion, benefits
      may be payable in a reduced amount.

      11.7  Gender, Singular and Plural.  All pronouns and any
      variations thereof shall be deemed to refer to the masculine

      or feminine, as the identity of the person or persons may
      require.  As the context may require, the singular may be
      read as the plural and the plural as the singular.

<PAGE>
                                    24

Section 11 - Miscellaneous (cont'd)

      11.8  Waiver of Benefits.  No benefit shall be payable under
      the provisions of this Plan with respect to any Participant
      who is or was a member of a group of employees designated by
      an Employer as eligible to waive such benefit if such
      Participant has waived such benefit under this Plan unless
      the Employer by which such Participant is or was last
      employed has authorized the revocation of such waiver and
      such Participant has revoked such waiver.

      11.9  Captions.  The captions of the articles, sections, and
      paragraphs of this Plan are for convenience only and shall
      not control nor affect the meaning of construction of any of
      its provisions.

      11.10  Applicable Law.  This Plan shall be governed and
      construed in accordance with the laws of the State
      of Missouri.

      11.11  Validity.  In the event any provision of this Plan is
      held invalid, void, or unenforceable, the same shall not
      affect, in any respect whatsoever, the validity of any other
      provision of this Plan.

      11.12  Notice.  Any notice or filing required or permitted to
      be given to the Administrative Committee under the Plan shall
      be sufficient if in writing and hand delivered, or sent by
      registered or certified mail, to the principal office of the
      Employer, directed to the attention of the Vice
      President-Human Resources of the Employer.  Such notice shall
      be deemed given as of the date of delivery or, if delivery is
      made by mail, as of the date shown on the postmark on the
      receipt for registration or certification.

      11.13  Successors and Assigns.  This Plan shall be binding
      upon the Company and its successors and assigns.

<PAGE>
                                    25

                       SOUTHWESTERN BELL CORPORATION

                             SENIOR MANAGEMENT

               DEFERRED COMPENSATION PLAN OF 1988 AGREEMENT


                        19__  UNIT OF PARTICIPATION

                  THIS AGREEMENT is made and entered into at
      St. Louis, Missouri as of the _____ day of ________, 19__, by
      and between SOUTHWESTERN BELL CORPORATION ("Company"), and
      __________________________ ("Senior Manager").

                  WHEREAS, the Company has adopted a Senior
      Management Deferred Compensation Plan of 1988 (the "Plan");
      and

                  WHEREAS, The Senior Manager has been determined to
      be eligible to participate in the Plan; and

                  WHEREAS, the Plan requires that an agreement be
      entered into between the Company and the Senior Manager
      setting out certain terms and benefits of the Plan as they
      apply to the Senior Manager;

                  NOW, THEREFORE, the Company and the Senior Manager
      hereby agree as follows:

            1.    The Plan is hereby incorporated into and made a
      part of this Agreement, as though set forth in full herein. 
      The parties shall be bound by, and have the benefit of, each
      and every provision of the Plan, including without limitation
      the restrictions on assignability set forth in the Plan.

            2.    The Senior Manager was born on _____________.

            3.    The Senior Manager's basic allotment percentage in
      the Southwestern Bell Corporation Savings Plan for Salaried
      Employees ("Savings Plan") is ____ percent (__%).  Any
      subsequent change in this level of participation by the
      Senior Manager before this Unit of Participation is completed
      will void this Agreement and require that a new Agreement be
      entered into between the Employer and the Senior Manager.

            4.    The Senior Manager's Base Salary during a calendar
      year shall be reduced in accordance with Exhibit A attached
      to this Agreement.

<PAGE>
                                    26

            5.    The Senior Manager's Projected Employer
      Contribution associated with this Unit of Participation is
      set forth in Exhibit A attached to this Agreement.  There
      shall be no duplication of Employer matching contributions,
      i.e., it is understood that any Employer matching
      contributions corresponding to Senior Manager deferrals under
      this Unit of Participation that are contributed to the Plan
      will preclude Employer matching contributions to the Savings
      Plan with respect to such Senior Manager deferrals, and vice

      versa.

            6.    The amount per month of Pre-Retirement Survivor
      Benefit in accordance with Section 6.6(a) of the Plan is the
      greater of (i) $__________, or (ii) the balance in the
      Deferred Compensation Account (excluding Short Term Incentive
      Awards deferred and interest earned on such awards) divided
      by the number of months payments are to be made, plus
      interest; such amounts shall be payable for the greater of
      ten (10) years or the number of years from the date of
      Participant's death until he would have been age 65.

            7.    The payment option for Participant's 19__ Unit of
      Participation shall be the Retirement Benefit Option in
      accordance with Section 6.

                  This payment option will also apply to payout of
      any Short Term Incentive Awards deferred and interest earned
      on such awards.  Such payout is not considered part of the
      Standard Retirement Benefit.

                         RETIREMENT BENEFIT OPTION

            (Paragraphs 8 and 9 apply to benefits paid pursuant to
      the Retirement Benefit Option.)

            8.    Upon Normal or Early Retirement, the Participant
      hereby elects: (please initial (a) or (b))

            (a)  ____To receive a Standard Retirement Benefit,
payable for a period of one hundred eighty (180) months.

            (b)  ____To receive an Alternative Retirement Benefit
to be paid in accordance with one of the following payment modes: 
(please initial one of the following)

                      (i) ______     In a lump sum payment.

                    (ii) ______      In equal monthly installments for
                                     a period of sixty (60) months.

                   (iii) ______      In equal monthly installments for
                                     a period of one hundred twenty
                                     (120) months.

<PAGE>
                                    27

            9.    The Participant hereby elects to receive any Early
      Retirement Benefit as follows (please initial [a] or [b]):

                  (a) ________ Commencing at age 65.

                  (b) ________ Commencing at Early Retirement.


            10.   INTENTIONALLY OMITTED

            11.   INTENTIONALLY OMITTED

            12.   This Agreement shall inure to the benefit of, and
      be binding upon, the Company, its successors and assigns, and
      the Senior Manager and his Beneficiaries.

                  IN WITNESS WHEREOF, the parties hereto have signed
      and entered into this Agreement on and as of the date first
      above written.

      THE COMPANY:
                         By _______________________________
                            Its Senior Vice President-
                            Human Resources

      SENIOR MANAGER:      ___________________  ____________
                                Signature          Date


<PAGE>
                                    28

                                                   _____________________________
                                                       Senior Manager's Name

                       SOUTHWESTERN BELL CORPORATION

                             SENIOR MANAGEMENT

                   DEFERRED COMPENSATION PLAN AGREEMENT

                                 Exhibit A

                        19__ Unit of Participation

Unit Start Date: _________, 19__  

Unit Deferral Period: 48 Months

                                            Annual Amount
                    Year                      Deferred
                    ----                    -------------
1.    Unit Start Date:

      19__     (commencing the first day
               of the month of January)     $___________  (1)

2.    19__                                   ___________  (1)

3.    19__                                   ___________  (1)

4.    19__     (ending the last day of       ___________  (1)
               the month of December)

                                Total Unit
                           Deferral Amount  $____________

    Projected Employer Contribution         $____________
    associated with this Unit of
    Participation

    Monthly Pre-Retirement Survivor         $____________
    Benefit associated with this Unit
    of Participation

- ----------------------------------------------------------------
(1)   This amount will be deferred in equal amounts on a monthly
      basis.

<PAGE>
                       Southwestern Bell Corporation

                             Senior Management

                        Deferred Compensation Plan

                                  of 1988

                          (Early Payment Option)

                   EFFECTIVE FOR UNITS OF PARTICIPATION

                        HAVING A UNIT START DATE OF

                         JANUARY 1, 1988 OR LATER

                                    AND

                         PRIOR TO JANUARY 1, 1991

                        Effective: January 1, 1988

            Revised and Restated:   July 30, 1993

<PAGE>
                         INDEX

Section                  Subject                                  Page
- -------                  -------                                  ----
    1           Statement of Purpose                                 1

    2           Definitions                                          2

    3           Administration of the Plan                           6

    4           Participation                                        6
                  4.1  Election to Commence a Unit
                        of Participation                                 
                  4.2     Termination of Election                       

    5           Deferred Compensation                                7
                  5.1   Deferred Compensation Account                 
                  5.2   Participant Deferrals                         
                  5.3   Employer Contribution                         
                  5.4   Vesting of Deferred
                        Compensation Account                          
                  5.5   Valuation of Account                          
                  5.6   Statement of Accounts                         

    6           INTENTIONALLY OMITTED                               10
                  
    7           Early Payment Option                                10
                  7.1   Early Payment Benefit                            

                  7.2   Termination Benefit                           
                  7.3   Disabilty                                     
                  7.4   Survivor Benefits                             

    8           Payment of Benefits                                 17
                  8.1   INTENTIONALLY OMITTED                         
                  8.2   Small Benefit                                 
                  8.3   Emergency Benefit                             
                  8.4   Commencement of Payments                      
                  8.5   Withholding; Unemployment Taxes               
                  8.6   Change in Status                              
                  8.7   Transfer to Bellcore                          
                  8.8   Leave of Absence                              
                  8.9   Ineligible Participant                        

    9           Beneficiary Designation                             21

<PAGE>
                                    2

   10           Discontinuation, Termination, Amendment             21
                  10.1  Employer's Right to Discontinue  
                        Offering Units                                
                  10.2  Employer's Right to Terminate
                        Plan                                          
                  10.3 Amendment                                      

     11         Miscellaneous                                       22
                  11.1  Unsecured General Creditor                    
                  11.2  Trust Fund                                    
                  11.3  Obligations to Employer                       
                  11.4  Non-Assignability                             
                  11.5  Employment Not Guaranteed                     
                  11.6  Protective Provisions                         
                  11.7  Gender, Singular and Plural                   
                  11.8  Waiver of Benefits                            
                  11.9  Captions                                      
                  11.10 Applicable Law                                
                  11.11 Validity                                      
                  11.12 Notice                                        
                  11.13 Successors and Assigns                        

           AGREEMENT                                                25

<PAGE>
                                    1

                             Senior Management

                    Deferred Compensation Plan of 1988

                          (Early Payment Option)

Section 1 - Statement of Purpose


            The purpose of the Senior Management Deferred
      Compensation Plan of 1988 (Early Payment Option) is to
      provide retirement, short-term savings, death, or
      termination-of-employment benefits to a select group of
      management employees consisting of Eligible Employees of
      Southwestern Bell Corporation (the "Company") and its
      subsidiaries ("Participating Companies").

            For purposes of this document, the Southwestern Bell
      Corporation Senior Management Deferred Compensation Plan of
      1988 (Early Payment Option) is referred to as the "EPO
      Portion of the Plan" and the Southwestern Bell Corporation
      Senior Management Deferred Compensation Program of 1988 of
      which the EPO Portion of the Plan is a part is referred to as
      the "Plan."

Section 2 - Definitions

            For the purposes of this EPO Portion of the Plan, the
      following words and phrases shall have the meanings
      indicated, unless the context clearly indicates otherwise:

      1.    Administrative Committee.  "Administrative Committee"
            means a committee of three or more members, at least
            one of whom is a Senior Manager, who shall be
            designated by the Vice President-Human Resources to
            administer the Plan pursuant to Section 3.

      2.    Agreement.  "Agreement" means the written agreement
            entitled "Senior Management Deferred Compensation Plan
            of 1988 Agreement (Early Payment Option)"
            (substantially in the form attached to this EPO Portion
            of the Plan) that shall be entered into by the Employer
            and a Participant with respect to each Unit of
            Participation to carry out the EPO Portion of the Plan
            with respect to such Participant.

      3.    Annualized Total Unit Deferral Amount.  The "Annualized
            Total Unit Deferral Amount" means the Total Unit
            Deferral Amount divided by four.

<PAGE>
                                     2

Section 2 - Definitions (cont'd)

      4.    Base Salary.  "Base Salary" means the Participant's
            annual base salary before reduction pursuant to this
            Plan or any plan of the Employer whereby compensation
            is deferred, including but not limited to a plan
            whereby compensation is deferred in accordance with
            Section 401(k) of the Internal Revenue Code.


      5.    Beneficiary.  "Beneficiary" means the person or persons
            designated as such in accordance with Section 9.

      6.    Board.  "Board" means the Board of Directors of
            Southwestern Bell Corporation.

      7.    Compensation.  "Compensation" means the Participant's
            monthly Base Salary plus any other compensation that is
            normally matched in the Southwestern Bell Corporation
            Savings Plan for Salaried Employees before reduction
            for compensation deferred pursuant to this Plan or any
            plan of the Employer whereby compensation is deferred,
            including but not limited to a plan whereby
            compensation is deferred in accordance with Section
            401(k) of the Internal Revenue Code.

      8.    Declared Rate.  "Declared Rate" means with respect to
            any Plan Year the interest rate which will be credited
            during such Plan Year on a Participant's Deferred
            Compensation Accounts for Units of Participation which
            have not yet commenced benefit payments.  The Declared
            Rate for each Plan Year will be determined by the
            Administrative Committee, in its complete and sole
            discretion, and will be announced on or before January
            1 of the applicable Plan Year; provided that in no
            event will the Declared Rate for any Plan Year be less
            than the Moody's Corporate Bond Yield Average-Monthly
            Average Corporates as published by Moody's Investor's
            Service, Inc. (or any successor thereto) for the month
            of September before the Plan Year in question, or, if
            such yield is no longer published, a substantially
            similar average selected by the Administrative
            Committee.

      9.    Deferral Amount.  "Deferral Amount" means an amount of
            Base Salary deferred with respect to a Unit of
            Participation under this Plan.

      10.   Deferred Compensation Account.  "Deferred Compensation
            Account" means the account maintained on the books of
            account of the Employer for each Participant for each
            Unit of Participation pursuant to Section 5.1.

<PAGE>
                                     3

Section 2 - Definitions (cont'd)

      11.   Disability.  "Disability" means a disability as defined
            in the Southwestern Bell Corporation Sickness and
            Accident Disability Benefit Plan or the Southwestern
            Bell Corporation Senior Management Long Term Disability
            Plan covering the Participant, as applicable.


      12.   Early Payment Benefit.  "Early Payment Benefit" means
            the benefit described in Section 7.1.

      13.   Early Payment Date.  "Early Payment Date" means, with
            respect to any Unit of Participation for which the
            Participant elects the Early Payment Option, the fixed
            date prior to Normal Retirement specified in the
            Agreement on which the Early  Payment Benefit will
            commence.  Such date may be the first day of any month
            at least four (4) years after the commencement of
            deferrals with respect to the Unit of Participation,
            but not later than the first day of the month after the
            Participant attains age 65.  An Employee may not elect
            the Early Payment Option for a Unit of Participation if
            he is age 61 or older on the Unit Start Date for the
            Unit of Participation.

      14.   Early Payment Option.  "Early Payment Option" means
            with respect to any Unit of Participation the Early
            Payment Benefit payment option described in Section 7.

      15.   Early Retirement.  "Early Retirement" means the
            termination of a Participant's employment with Employer
            for reasons other than death prior to Normal Retirement
            and on or after the date Participant attains age 55.

      16.   Election Form.  The "Election Form" means an Eligible
            Employee's written election to participate in the Plan
            with respect to each Unit of Participation in
            accordance with Section 4.

      17.   Eligible Employee.  "Eligible Employee" means an
            Employee of the Employer who (a) is in active service,
            (b) is a Senior Manager or has an employment status
            which has been approved by the Board or its Chairman to
            be eligible to participate in this Plan, and (c) who
            continuously maintains the employment status upon which
            eligibility to participate in this Plan was based.

<PAGE>
                                     4

Section 2 - Definitions (cont'd)

      18.   Employee.  "Employee" means any person employed by the
            Employer on a regular full-time salaried basis.

      19.   Employer.  "Employer" means Southwestern Bell
            Corporation or any of its subsidiaries.

      20.   Normal Retirement.  "Normal Retirement" means
            attainment of age 65 during a Participant's employment
            with Employer irrespective of whether there is a
            termination of Participant's employment with Employer.


      21.   Participant.  "Participant" means an Employee
            participating in the Plan in accordance with the
            provisions of Section 4.

      22.   Plan Year.  "Plan Year" means the calendar year.

      23.   Projected Employer Contribution.  "Projected Employer
            Contribution" means for purposes of computing the
            Pre-Retirement Survivor Benefit with respect to a Unit
            of Participation pursuant to Section 6.6(a) of the Plan
            or 7.4(a) hereof, the product of (i) the Company Match
            Rate Expressed as a Percent*, as in effect at the time
            of the unit Start Date, times the Participant's annual
            Base Salary at the Unit Start Date minus (a) any
            Employer matching contribution determined as of the
            Unit Start Date associated with said Base Salary at the
            Unit Start Date which is then being contributed or is
            to be contributed to the Salaried Savings Plan and
            minus (b) any Employer matching contribution which has
            previously been allocated to a Unit of Participation
            under this or any other Employer deferred compensation
            plan and (ii) the number of years in the Unit Deferral
            Period for the Unit of Participation.

      24.   Retirement Benefit Option.  "Retirement Benefit Option"
            means with respect to any Unit of Participation the
            Retirement Benefit payment option described in Section
            6 of the Plan.

      25.   "Rotational Work Assignment Company ("RWAC")". shall
            mean Bell Communications Research, Inc. ("Bellcore"),
            formerly the Central Services Organization, Inc.,
            and/or any other entity with which Southwestern Bell
            Corporation or any of its subsidiaries may enter into
            an agreement to provide an employee for a rotational
            work assignment.

      26.   Senior Manager.  "Senior Manager" means an individual
            employed by Employer in a position having a Salary
            Grade of 29 or above or equivalent.

*     The Company Match Rate Expressed as a Percent means the
      maximum percent of salary that can be received as Employer
      matching contribution under the Southwestern Bell Corporation
      Savings Plan for Salaried Employees, e.g., a match of 66 2/3%
      of the amount of basic allotment (up to a Percent of .667 x
      6% = 4%.

<PAGE>
                                     5

Section 2 - Definitions (cont'd)


      27.   Southwestern Bell Corporation Savings Plan for Salaried
            Employees.  "Southwestern Bell Corporation Savings Plan
            for Salaried Employees" or "Salaried Savings Plan"
            means the Southwestern Bell Corporation Savings Plan
            for Salaried Employees or any successor plan to such
            plan adopted by the Employer.  Participants from any
            subsidiary, permitted to participate in this Plan,
            shall be treated as participating in the Southwestern
            Bell Corporation Savings Plan for Salaried Employees
            for purposes of calculating any matching Employer
            contributions.

      28.   Subsidiary.  A "Subsidiary" of the Company is any
            corporation, partnership, venture or other entity in
            which the Company has at least a 50% ownership
            interest.

      29.   Total Unit Deferral Amount.  "Total Unit Deferral
            Amount" means the sum of all amounts of Base Salary
            deferred during the Unit Deferral Period with respect
            to a Unit of Participation, as shown in Exhibit A of
            Participant's Agreement for that Unit of Participation.

      30.   Unit Deferral Period.  "Unit Deferral Period"  means
            the number of months the Participant elects to reduce
            his Base Salary with respect to a Unit of
            Participation, as shown in Exhibit A of Participant's
            Agreement for that Unit of Participation.  The Unit
            Deferral Period for a Unit of Participation will
            commence on the Unit Start Date and end upon the
            earliest to occur of the following:  (i) the last day
            of the forty-eight (48) month period which commenced
            with the Unit Start Date, or (ii) when the Participant
            terminates employment, terminates the Unit of
            Participation or ceases to be an Eligible Employee as
            described in Sections 6.4 of the Plan or 7.2 hereof. 
            In no event shall the Unit Deferral Period for a Unit
            of Participation end later than forty-eight (48) months
            after the Unit Start Date.

      31.   Unit of Participation.  "Unit of Participation"  means
            a stated Total Unit Deferral Amount and associated
            Employer contributions which provide stated benefits
            pursuant to Section 6 of the Plan or Section 7 hereof
            in accordance with the Participant's Agreement for that
            Unit of Participation.

<PAGE>
                                     6

Section 2 - Definitions (cont'd)

      32.   Unit Start Date.  "Unit Start Date" means the date for
            commencement of deferrals shown in Exhibit A of a

            Participant's Agreement for a given Unit of
            Participation.  The Unit Start Date will be January 1,
            unless the Administrative Committee, in its sole
            discretion permits a new Participant to elect a Unit
            Start Date within 30 days after such Participant first
            becomes an Eligible Employee.

Section 3 - Administration of the Plan

            The Administrative Committee shall be the sole
      administrator of the Plan and will administer the Plan,
      interpret, construe and apply its provisions in accordance
      with its terms.  The Administrative Committee shall further
      establish, adopt or revise such rules and regulations as it
      may deem necessary or advisable for the administration of the
      Plan.  All decisions of the Administrative Committee shall be
      final and binding.

Section 4 - Participation

      4.1   Election to Commence a Unit of Participation.   Any
      Eligible Employee may elect to commence deferral of Base
      Salary with respect to a Unit of Participation under the Plan
      by filing a completed Election Form with the Administrative
      Committee prior to the beginning of the Unit Start Date. 
      Pursuant to said Election Form, the Eligible Employee shall
      elect a Total Unit Deferral Amount and a Unit Deferral Period
      to be specified in Exhibit A of Participant's Agreement with
      respect to such Unit of Participation.  In the Election Form
      for each Unit of Participation, the Participant shall also
      elect either the "Retirement Benefit Option" providing the
      benefits described in Section 6 of the Plan or the "Early
      Payment Option" providing the benefits described in Section 7
      hereof.  A Participant shall be permitted to commence only
      one Unit of Participation pursuant to the Plan in any one
      Plan Year.

            The combination of deferrals from all of the
      Participant's Units of Participation including the Unit of
      Participation with respect to which the Participant is
      electing to commence deferrals and from Units of
      Participation under the Southwestern Bell Corporation Senior
      Management Deferred Compensation Plan ("SBC DCP"), must be at
      least six percent (6%) of Participant's Base Salary at the
      Unit Start Date for

<PAGE>
                                     7

Section 4 - Participation (cont'd)

      the Unit of Participation with respect to which the
      Participant is electing to commence deferrals.  A Unit of
      Participation shall require a minimum Annualized Total Unit

      Deferral Amount of $1,000.  The sum of the Participant's
      contributions, if any, to the Southwestern Bell Corporation
      Savings Plan for Salaried Employees plus the Annualized Total
      Unit Deferral Amounts for all Units of Participation under
      this Plan and under the SBC DCP in a given Plan Year may not
      exceed thirty percent (30%) of a Participant's Compensation
      for that Plan Year.

      4.2   Termination of Election.  A Participant's election to
      defer Base Salary is irrevocable upon the filing of his
      Election Form with the Administrative Committee, provided,
      however, that the election may be terminated with respect to
      Base Salary not yet paid by mutual agreement in writing
      between the Participant and the Administrative Committee. 
      Such termination if approved shall be effective beginning the
      first day of the month following the execution of such mutual
      agreement.

Section 5 - Deferred Compensation

      5.1   Deferred Compensation Account.  The Administrative
      Committee shall establish and maintain a separate Deferred
      Compensation Account for each Participant for each Unit of
      Participation.  The amount by which a Participant's Base
      Salary is reduced each month pursuant to Section 4.1 and the
      amount of Employer contribution allocated to the
      Participant's Units of Participation pursuant to Section 5.3
      with respect to any Unit of Participation shall be credited
      by the Employer to the Participant's Deferred Compensation
      Account for such Unit of Participation no later than the
      first day of the following month, and such Deferred
      Compensation Account shall be debited by the amount of any
      payments made by the Employer to the Participant or the
      Participant's Beneficiary with respect to such Unit of
      Participation pursuant to this Plan.

            With respect to each Unit of Participation, the
      Deferred Compensation Account of a Participant shall be
      deemed to bear interest from the date such Deferred
      Compensation Account was established through the date of
      commencement of benefit payments at a rate equal to the
      applicable Declared Rate for the particular Plan Year on the
      balance from month-to-month in such Deferred Compensation
      Account.  Interest will be credited monthly to the Deferred
      Compensation Account at one-twelfth of the annual Declared
      Rate, compounded

<PAGE>
                                     8

Section 5 - Deferred Compensation (cont'd)

      annually.  Following the commencement of benefit payments
      with respect to a Unit of Participation, a Participant's

      Deferred Compensation Account shall be deemed to bear
      interest on the balance in such Deferred Compensation Account
      from month-to-month at a rate equal to one-twelfth of the
      average of the annual Declared Rates for the five (5) Plan
      Years ending prior to commencement of benefit payments (or,
      if the Plan has been in operation for less than five (5) Plan
      Years, the average of the Declared Rates for all Plan Years
      ending prior to commencement of benefit payments).

      5.2   Participant Deferrals.  The Participant's Total Unit
      Deferral Amount is deferred in equal amounts on a monthly
      basis over the Unit Deferral Period or as otherwise may be
      permitted by the Administrative Committee.  The amount
      deferred each month with respect to a given Unit of
      Participation shall be credited by the Employer to the
      Participant's Deferred Compensation Account for that Unit of
      Participation no later than the first day of the following
      month.

            The Participant will be permitted to defer an
      additional amount equal to all or a portion of his Short Term
      Incentive Award. A Participant shall not be permitted to
      "defer" into the Plan any monies that are not compensation
      paid by Employer.  Any additional deferrals by a Participant
      with respect to a given Unit of Participation shall not
      affect Total Unit Deferral Amount and shall not result in any
      change in the maximum Employer contribution pursuant to
      Section 5.3 for the Plan Year during which the additional
      deferral is made.  In no event shall any such additional
      deferral by a Participant result in any reduction in the
      amounts by which the Participant's Base Salary is reduced
      pursuant to Exhibit A to the Participant's Agreement with
      respect to such Unit of Participation prior to completion of
      deferral of the Total Unit Deferral Amount for such Unit of
      Participation. Participant's election to defer all or a
      portion of his Short Term Incentive Award shall be filed with
      the Administrative Committee (on a form to be provided by
      said Committee for such purpose) prior to the beginning of
      the fiscal year during which such Award is earned.

<PAGE>
                                     9

Section 5 - Deferred Compensation (cont'd)

            Such additional deferral amount shall be considered a
      separate part of Participant's Deferred Compensation Account,
      shall be subject to the terms thereof except survivor
      benefits, and shall be paid out in the same manner as the
      rest of such Deferred Compensation Account.

      5.3   Employer Contribution.  Participation in this Plan does
      not preclude participation in the Southwestern Bell
      Corporation Savings Plan for Salaried Employees.  For a given

      Plan Year, the aggregate Employer contribution to both the
      Southwestern Bell Corporation Savings Plan for Salaried
      Employees and this Plan on behalf of a Participant will be an
      amount equal to the Company Match Rate Expressed as a Percent
      as in effect during all or portions of that Plan year times
      the Participant's Compensation as in effect during all or
      portions of that Plan Year which is contributed or deferred
      for that Plan Year by the Participant in accordance with each
      plan, respectively.  Any such amount of Employer contribution
      not allocated to the Southwestern Bell Corporation Savings
      Plan for Salaried Employees will be credited to the
      Participant's Deferred Compensation Accounts, as applicable. 
      The amount or percent of a Participant's Base Salary to be
      allocated to Basic Allotments in the Southwestern Bell
      Corporation Savings Plan for Salaried Employees shall be
      specified in Paragraph 3 of a Participant's Agreement.

      5.4   Vesting of Deferred Compensation Account.  A
      Participant's interest in his Deferred Compensation Account
      shall vest at the same rate and in the same manner as it
      would under the Southwestern Bell Corporation Savings Plan
      for Salaried Employees, as in effect from time to time, had
      both the Deferral Amount and the Employer contribution to
      this Plan with respect to that Deferral Amount for any given
      Unit of Participation been contributed instead to the
      Southwestern Bell Corporation Savings Plan for Salaried
      Employees.  For this purpose all years of service recognized
      under the Southwestern Bell Corporation Savings Plan for
      Salaried Employees, for purposes of determining a
      Participant's vested interest under that plan, shall be taken
      into account in determining the Participant's vested interest
      under this Plan.

      5.5   Valuation of Accounts.  The value of a Deferred
      Compensation Account as of any date shall equal the amounts
      theretofore credited to such account plus the interest on
      such account credited in accordance with Section 5.1 through
      the day preceding such date.

<PAGE>
                                    10

Section 5 - Deferred Compensation (cont'd)

      5.6   Statement of Accounts.  Each Participant will receive
      annual statements in such form as the Administrative
      Committee deems desirable setting forth the balance standing
      to the credit of each of the Participant's Deferred
      Compensation Accounts.

Section 6 - INTENTIONALLY OMITTED HEREIN

Section 7 - Early Payment Option


            Section 7 shall apply to all Units of Participation for
      which the Early Payment Option is elected pursuant to the EPO
      Portion of the Plan.  (Section 6 shall have no application to
      such Units of Participation.)  The benefits specified in this
      Section 7 shall be provided under the Early Payment Option. 
      An Employee may not elect the Early Payment Option for a Unit
      of Participation if he is age 61 or older on the Unit Start
      Date for the Unit of Participation.

      7.1   Early Payment Benefit.  If a Participant elects the
      Early Payment Option with respect to a Unit of Participation,
      the Employer shall pay to the Participant an equal amount
      each month for forty-eight (48) months, beginning on the
      Early Payment Date elected by the Participant, which will
      amortize over such forty-eight (48) equal monthly payments,
      the sum of (a) the value of the Deferred Compensation Account
      for such Unit of Participation as of the date of commencement
      of benefit payments, plus (b) the interest that will accrue
      on the unpaid balance in such Deferred Compensation Account
      during such forty-eight (48) month period pursuant to Section
      5.1 ("Standard Early Payment Benefit").  Alternatively, a
      Participant may elect in the Agreement for any Unit of
      Participation to receive on the Early Payment Date a lump sum
      payment equal to the vested portion of the amounts standing
      credited to his Deferred Compensation Account ("Alternative
      Early Payment Benefit"). A Participant may elect, as the Early
      Payment Date for a Unit of Participation, the first day of any
      month at least four (4) years after the commencement of deferrals
      with respect to the Unit of Participation, but not later than the
      first day of the month after the Participant attains age 65. 
      If a Participant's Agreement fails to show an election as to
      the method of payment of an Early Payment Benefit, the
      Participant shall receive the Standard Early Payment Benefit
      commencing on the Early Payment Date.

<PAGE>
                                    11

Section 7 - Early Payment Option (cont'd)

            Notwithstanding any election made by the Participant,
      the Administrative Committee will pay the Participant's Early
      Payment Benefit in the form of a lump sum payment if the
      value of his Deferred Compensation Account for a Unit of
      Participation is less than $10,000 when payment of an Early
      Payment Benefit with respect to the Unit of Participation
      would otherwise commence.

      7.2   Termination Benefit.

            7.2(a)      Termination of Employment Prior to Early
                        Payment Date.  

                        (i)   Termination of Employment Before

                              Attaining Age 55.  Upon any
                              termination of employment of the
                              Participant for reasons other than
                              death or Disability before the
                              Participant attains age fifty-five
                              (55) and prior to the Early Payment
                              Date, with respect to a Unit of
                              Participation, the Company shall pay
                              to the Participant, as compensation
                              earned for services rendered prior to
                              his termination of service, a lump sum
                              equal to the vested portion of the
                              amounts standing credited to his
                              Deferred Compensation Account for such
                              Unit of Participation as of the date
                              of such termination of service
                              ("Termination Benefit").

                        (ii)  Termination of Employment After
                              Attaining Age 55.  Upon any
                              termination of employment of the
                              Participant for reasons other than
                              death or Disability after the
                              Participant attains age fifty-five
                              (55) but prior to the Early Payment
                              Date, with respect to a Unit of
                              Participation, the Company shall pay
                              to the Participant one of the
                              following alternative forms of benefit
                              as elected by the Participant in his
                              Agreement for the Unit of
                              Participation:

<PAGE>
                                    12

Section 7 - Early Payment Option (cont'd)

                              (A)  Standard Early Payment Benefit,
                                   payable for a period of
                                   forty-eight (48) months,
                                   commencing on the Early Payment
                                   Date.

                              (B)  Alternative Early Payment Benefit,
                                   payable in a lump sum payment on
                                   the Early Payment Date.

                              (C)  Termination Benefit pursuant to
                                   Section 7.2(a) upon termination of
                                   employment.

                        If a Participant's Agreement fails to show
                        an election as to the method of payment, the

                        Participant shall receive the Standard Early
                        Payment Benefit commencing on the Early
                        Payment Date.

            7.2(b)      Termination of a Unit of Participation.  A
                        Participant may discontinue a Unit of
                        Participation while continuing in the
                        service of the Employer.  Notwithstanding
                        any other provision of the Plan, upon such
                        discontinuance, the Participant shall
                        immediately cease to be eligible for any
                        benefits other than his Termination Benefit
                        with respect to that Unit of Participation
                        except as provided under Section 8.1.  No
                        other benefit shall be payable with regard
                        to such Unit of Participation to either the
                        Participant or any Beneficiary of such
                        Participant.  The Participant shall continue
                        to be credited with interest on the amounts
                        standing credited to his Deferred
                        Compensation Accounts as provided under
                        Section 5.1 and to vest in such amounts as
                        provided under Section 5.4 while he remains
                        in employment with the Employer until
                        payment of his Termination Benefit. 
                        However, no further Participant deferrals or
                        Employer contributions to this Plan shall be
                        made pursuant to Sections 5.2 or 5.3 with
                        respect to a Unit of Participation after a
                        Participant discontinues or terminates such
                        Unit of Participation. 

<PAGE>
                                    13

Section 7 - Early Payment Option (cont'd)

                  Payment of the Termination Benefit with respect to
                  a terminated Unit of Participation shall be made
                  on the Early Payment Date for such Unit of
                  Participation or the Participant's termination of
                  service, whichever is earlier.  A Participant
                  shall terminate a Unit of Participation if he
                  terminates his election to defer Base Salary with
                  the approval of the Administrative Committee
                  pursuant to Section 4.2.

      7.2(c)      Loss of Eligibility.  In the event that the
                  Participant ceases to be an Eligible Employee by
                  reason of a change to an employment status which
                  is not eligible to participate in this Plan,
                  except as provided under Section 8.1, the
                  Participant shall immediately cease to be eligible
                  for any benefits other than a modified Termination

                  Benefit which shall consist of a lump sum equal to
                  the vested amounts standing credited to his
                  Deferred Compensation Accounts as of the date of
                  such loss of eligibility, provided the Participant
                  shall continue to be credited with interest on
                  such amounts as provided under Section 5.1 and to
                  vest in such amounts as provided under Section 5.4
                  while he remains in employment with the Employer. 
                  However, no further Participant deferrals or
                  Employer contributions shall be made to this Plan
                  pursuant to Section 5.2 or 5.3 subsequent to the
                  date of such loss of eligibility.  Such lump sum
                  Termination Benefit shall be payable upon the
                  Participant's termination of service or Early
                  Payment Date, whichever is earlier.  The
                  provisions of this subparagraph 7.2(c) shall not
                  apply if the Participant in his new employment
                  status is an eligible employee under another
                  similar deferred compensation plan of the
                  Employer.  In such event the provisions of Section
                  8.6 of this Plan shall apply.

<PAGE>
                                    14

Section 7 - Early Payment Option (cont'd)
                  
            7.2(d)      No Other Benefits Payable.  When a
                        Participant terminates employment,
                        terminates a Unit of Participation or ceases
                        to be an Eligible Employee under
                        circumstances in which Section 7.2(a), (b)
                        or (c) applies, no Survivor Benefit or other
                        benefit shall thereafter be payable under
                        this Plan to either the Participant or any
                        Beneficiary of the Participant with respect
                        to a Unit of Participation except as
                        provided under Section 8.1.

      7.3   Disability.  In the event that a Participant suffers a
      Disability, Participant deferrals and Employer contributions
      that otherwise would have been credited to the Deferred
      Compensation Accounts of the Participant in accordance with
      Sections 5.2 and 5.3 will continue to be credited to such
      Deferred Compensation Accounts at the same times and in the
      same amounts as they would have been credited if the
      Participant had not suffered a Disability for as long as he
      is eligible to receive monthly disability benefits equal to
      100 percent of his monthly base salary at the time of his
      Disability.  At such time as the Participant is not eligible
      to receive monthly disability benefits equal to 100 percent
      of his monthly base salary at the time of his Disability,
      Participant deferrals and Employer contributions that would
      otherwise have been credited to the Deferred Compensation

      Accounts of the Participant in accordance with Sections 5.2
      and 5.3 shall cease.

            If the Participant recovers from his Disability and
      returns within sixty (60) days thereafter to employment with
      the Employer in an employment status which would make him
      eligible to participate in this Plan and prior to the end of
      the original Unit Deferral Period, the Participant shall
      continue or resume making deferrals, as the case may be, in
      accordance with Section 5.2 and the Employer shall continue
      or resume making contributions, as the case may be, in
      accordance with Section 5.3 until the end of the original
      Unit Deferral Period.

<PAGE>
                                    15

Section 7 - Early Payment Option (cont'd)

            If a Participant recovers from his Disability, the
      Participant shall be treated as terminating service with the
      Employer on the date of his recovery, unless within sixty
      (60) days thereafter he returns to employment with the
      Employer in an employment status which makes him eligible to
      participate in this Plan.

            If a Participant's Disability terminates by reason of
      his death prior to the Early Payment Date, the rights of his
      Beneficiary shall be determined pursuant to Section 7.4 as if
      the Participant had not been disabled but rather had been in
      service on the date of his death and either died or retired
      on such date, whichever would be most advantageous to such
      Beneficiary.

            If a Participant suffering from a Disability attains
      the Early Payment Date for a Unit of Participation, the
      Participant shall be entitled to the Early Payment Benefit
      determined pursuant to Section 7.1.  

      7.4   Survivor Benefits.

            7.4(a)      If a Participant dies while in service with
                        the Employer (or while suffering from a
                        Disability prior to attaining age 55) prior
                        to the Early Payment Date with respect to a
                        Unit of Participation and before attaining
                        age 55, upon the Participant's death the
                        Employer will pay to the Participant's
                        Beneficiary with respect to each Unit of
                        Participation an amount per month, as
                        specified in paragraph 6 of his Agreement,
                        equal to the greater of (i) [(50% of the sum
                        of the Total Unit Deferral Amount plus the
                        Projected Employer Contribution for such

                        Unit of Participation) divided by 12] or
                        (ii) the balance in the Deferred
                        Compensation Account (excluding any Short
                        Term Incentive Award deferred pursuant to
                        Section 5.2 and excluding any interest
                        earned on the Short Term Incentive Award)
                        divided by the number of months payments are
                        to be made as stated below, plus interest in
                        accordance with the interest methodology of
                        Section 6.2.  Payments are to be made for
                        the greater of one hundred twenty (120)
                        months or the number of months from the date
                        of Participant's death until he would have
                        been age 65. ("Pre-Retirement Survivor
                        Benefit")

<PAGE>
                                    16

Section 7 - Early Payment Option (cont'd)

                        In addition, the Participant's Beneficiary
                        will receive any Short Term Incentive Award
                        associated with such Unit of Participation,
                        deferred pursuant to Section 5.2, plus
                        corresponding interest earned on the Short
                        Term Incentive Award, paid out over the same
                        period as the Pre-Retirement Survivor
                        Benefit and in accordance with the interest
                        methodology of Section 6.2.


            7.4(b)      If a Participant dies after attaining age 55
                        while in service with the Employer, prior to
                        the Early Payment Date with respect to a
                        Unit of Participation, the Employer will pay
                        to the Participant's Beneficiary the greater
                        of (i) the benefit that such Participant's
                        Beneficiary would have received with respect
                        to such Unit of Participation had the
                        Participant commenced to receive the Early
                        Payment Benefit on the day prior to such
                        Participant's death or (ii) a benefit equal
                        to the Pre-Retirement Survivor Benefit.  The
                        Administrative Committee shall determine
                        which benefit is greater on a present-value
                        basis using such interest rate as the
                        Administrative Committee may determine in
                        its sole discretion.  Such payments shall be
                        made in accordance with the method of
                        payment which the Participant had elected
                        for payment of his Early Payment Benefit. 
                        Payments will commence upon the
                        Participant's death, irrespective of when

                        the Early Payment Benefit would have
                        commenced if the Participant had survived.

<PAGE>
                                    17

Section 7 - Early Payment Option (cont'd)

            7.4(c)      If a Participant terminates employment with
                        the Employer after the Participant attains
                        age 55 but prior to the Early Payment Date
                        with respect to a Unit of Participation and
                        dies prior to that Early Payment Date, and
                        had elected to receive a delayed Early
                        Payment Benefit commencing on the Early
                        Payment Date, the Employer will pay to the
                        Participant's Beneficiary the installments
                        of the Early Payment Benefit that would have
                        been paid to the Participant had the
                        Participant commenced to receive the Early
                        Payment Benefit on the day prior to such
                        Participant's death.  Such payments shall be
                        made in accordance with the method of
                        payment which the Participant had elected
                        for payment of his Early Payment Benefit. 
                        Payments will commence upon the
                        Participant's death, irrespective of when
                        the Early Payment Benefit would have
                        commenced if the Participant had survived.

            7.4(d)      If a Participant dies after the commencement
                        of payment of an Early Payment Benefit with
                        respect to a Unit of Participation, the
                        Employer will pay to the Participant's
                        Beneficiary the remaining installments of
                        any such benefit that would have been paid
                        to the Participant had the Participant
                        survived.

Section 8 - Payment of Benefits

      8.1   INTENTIONALLY OMITTED 

      8.2   Small Benefit.  Notwithstanding any election made by
      the Participant, the Administrative Committee will pay any
      benefit in the form of a lump sum payment if the lump sum
      equivalent amount is less than $10,000 when payment of such
      benefit would otherwise commence.

<PAGE>
                                    18

Section 8 - Payment of Benefits 


      8.3   Emergency Benefit.  In the event that the
      Administrative Committee, upon written petition of the
      Participant, determines in its sole discretion, that the
      Participant has suffered an unforeseeable financial
      emergency, the Employer shall pay to the Participant, as soon
      as practicable following such determination, the balance of
      his Deferred Compensation Accounts for one or more Units of
      Participation as necessary to meet the emergency (the
      "Emergency Benefit").  For purposes of this Plan, an
      unforeseeable financial emergency is an unexpected need for
      cash arising from an illness, casualty loss, sudden financial
      reversal, or other such unforeseeable occurrence.  Cash needs
      arising from foreseeable events such as the purchase of a
      house or education expenses for children shall not be
      considered to be the result of an unforeseeable financial
      emergency.  Upon payment of an Emergency Benefit with respect
      to any Unit of Participation, the Unit of Participation shall
      thereupon terminate, and no other benefits shall be payable
      under the Plan to either the Participant or any Beneficiary
      of the Participant with respect to the Unit of Participation.

      8.4   Commencement of Payments.  Except as otherwise provided
      in this Plan, commencement of payments under this Plan shall
      begin sixty (60) days following the event which entitles a
      Participant (or a Beneficiary) to payments under the Plan, or
      at such earlier date as may be determined by the
      Administrative Committee.

      8.5   Withholding; Unemployment Taxes.  To the extent
      required by the law in effect at the time payments are made,
      the Employer shall withhold from payments made hereunder the
      minimum taxes required to be withheld by the federal or any
      state or local government.

      8.6   Change in Status.  In the event of a change in the
      employment status of a Participant to a status in which he is
      no longer an Eligible Employee under this Plan, but is an
      eligible employee under the Management Deferred Compensation
      Plan of 1988 or another similar deferred compensation plan of
      the Employer, the Participant and all of his Units of
      Participation under this Plan shall automatically be
      transferred to such other deferred compensation plan for
      which he is then an eligible employee, unless otherwise
      determined by the Administrative Committee.  In the event of
      any such transfer, the provisions of the other deferred
      compensation plan to which the Participant transfers shall
      thereafter determine the rights and benefits of the
      Participant with respect to all of his Units of

<PAGE>
                                    19

Section 8 - Payment of Benefits (cont'd)


      Participation, unless otherwise determined by the
      Administrative Committee.  The Employer may, but shall not be
      required to, enter into revised Agreements with the
      Participant to carry out the provisions of this Section.

      8.7   Transfer to a RWAC.  If a Participant transfers to a
      RWAC, all of the Participant's Units of Participation shall
      automatically be frozen upon such transfer, unless otherwise
      determined by the Administrative Committee.  No further
      Participant deferrals or Employer contributions shall be made
      subsequent to the transfer, unless the Participant returns to
      employment with the Employer in an employment status which
      makes him eligible to participate in this Plan within five
      (5) years from the date of transfer (in which event
      Participant deferrals and Employer contributions will resume
      until the end of the original Unit Deferral Period). However,
      during the period of employment at a RWAC (for a period not
      to exceed five (5) years), the Participant shall continue to
      be credited with interest on his Deferred Compensation
      Accounts as provided under Section 5.1 and to vest in such
      amounts as provided under Section 5.4, and all benefits shall
      continue to be payable to the Participant and his
      Beneficiaries in accordance with Section 6 of the Plan or
      Section 7 hereof.  If the Participant has not resumed
      employment with the Employer in an employment status which
      makes him eligible to participate in this Plan within five
      (5) years from date of transfer, a Termination Benefit based
      on the amounts credited to the Participant's Deferred
      Compensation Accounts shall be paid upon termination of
      employment with a RWAC or the expiration of such five (5)
      year period, whichever is earlier.

      8.8   Leave of Absence.  If a Participant absents himself
      from employment on a formally granted leave of absence (i.e.,
      the absence is with formal permission in order to prevent a
      break in the continuity of the Employee's term of employment
      which permission is granted in conformity with the rules of
      the Employer which employs the individual, as adopted from
      time to time), all of the Participant's Units of
      Participation shall automatically be frozen upon such leave
      of absence, unless otherwise determined by the Administrative
      Committee.  No Participant deferrals or Employer
      contributions shall be made during the leave of absence. 
      However, during the leave of absence (for a period not to
      exceed six (6) months), the Participant shall continue to be
      credited with interest on his

<PAGE>
                                    20

Section 8 - Payment of Benefits (cont'd)

      Deferred Compensation Accounts as provided under Section 5.1
      and to vest in such amounts as provided under Section 5.4,

      and all benefits shall continue to be payable to the
      Participant and his Beneficiaries in accordance with Section
      6 of the Plan or Section 7 hereof, except in the case of a
      political leave (i.e., to campaign for or serve when elected
      to a political office, to serve if appointed to public office
      or for non-candidate employees to participate in campaigns of
      candidates for political office).  In the case of such a
      political leave, except as provided under Section 8.1, the
      only benefit payable if the Participant dies during such
      leave shall be a Termination Benefit based on the amounts
      credited to the Participant's Deferred Compensation Accounts,
      which shall be payable to the Participant's Beneficiary.  If
      the Participant returns to employment with the Employer in an
      employment status which makes him eligible to participate in
      this Plan within six (6) months from commencement of the
      leave of absence, Participant deferrals and Employer
      contributions will resume until the end of the original Unit
      Deferral Period.  If the Participant has not resumed
      employment with the Employer in an employment status which
      makes him eligible to participate in this Plan within six (6)
      months from the commencement of the leave of absence, a
      Termination Benefit based on the amounts credited to the
      Participant's Deferred Compensation Accounts shall be paid to
      the Participant.

            This Section 8.8 shall not apply with respect to any
      period during which a Participant is suffering from a
      Disability, and such period of Disability shall not be
      included under this Section 8.8 as a portion of a period of
      leave of absence.

      8.9   Ineligible Participant.  Notwithstanding any other
      provisions of this Plan to the contrary, if any Participant
      is determined not to be a "management or highly compensated
      employee" within the meaning of the Employee Retirement
      Income Security Act of 1974, as amended (ERISA) or
      Regulations thereunder, such Participant will not be eligible
      to participate in this Plan and shall receive an immediate
      lump sum payment equal to the vested portion of the amounts
      standing credited to his Deferred Compensation Accounts. 
      Upon such payment no Survivor Benefit or other benefit shall
      thereafter be payable under this Plan either to the
      Participant or any Beneficiary of the Participant, except as
      provided under Section 8.1.

<PAGE>
                                    21

Section 9 - Beneficiary Designation

            Each Participant shall have the right, at any time, to
      designate any person or persons as his Beneficiary or
      Beneficiaries (both primary as well as contingent) to whom
      payment under this Plan shall be made in the event of his

      death prior to complete distribution to Participant of the
      benefits due him under the Plan.  Each Beneficiary
      designation shall become effective only when filed in writing
      with the Administrative Committee during the Participant's
      lifetime on a form prescribed by the Administrative Committee
      with written acknowledgment of receipt.

            The filing of a new Beneficiary designation form will
      cancel all Beneficiary designations previously filed. The
      spouse of a married Participant domiciled in a community
      property jurisdiction shall join in any designation of
      Beneficiary or Beneficiaries other than the spouse.

            If a Participant fails to designate a Beneficiary as
      provided above, or if all designated Beneficiaries predecease
      the Participant or die prior to complete distribution of the
      Participant's benefits, then the Administrative Committee
      shall direct the distribution of such benefits to the
      Participant's estate.

Section 10 - Discontinuation, Termination, Amendment

      10.1  Employer's Right to Discontinue Offering Units.  The
      Chairman of the Board may at any time discontinue offerings
      of additional Units of Participation with respect to any or
      all future Plan Years.  Any such discontinuance shall have no
      affect upon the deferrals or benefits or the terms or
      provisions of this Plan as applicable to any then previously
      existing Units of Participation.

      10.2  Employer's Right to Terminate Plan.  The Board may at
      any time terminate the Plan.  Termination of the Plan shall
      mean that (1) there shall be no further offerings of
      additional Units of Participation with respect to any future
      Plan Year; (2) Base Salary shall prospectively cease to be
      deferred with respect to all Units of Participation for the
      then Plan Year and thereafter; and (3) all then currently
      existing Units of Participate shall be treated as follows:

<PAGE>
                                    22

Section 10 - Discontinuation, Termination, Amendment (cont'd)

            The Participant's Deferred Compensation Accounts shall
            be 100% vested.  The Participant shall receive or
            continue to receive all benefits under this Plan at
            such time as provided in and pursuant to the terms and
            conditions of his Agreement(s) and as described in this
            Plan, provided however, any benefits payable under a
            Unit of Participation that is not completed due to a
            termination of the Plan under this Section 10.2 shall
            be prorated based upon the number of months Participant
            made deferrals with respect to such Unit of

            Participation divided by the Unit Deferral Period for
            the Unit of Participation.

      10.3  Amendment.  The Board may at any time amend the Plan in
      whole or in part, provided however, that no amendment,
      including an amendment to this Section 10, shall be
      effective, without the written consent of a Participant, to
      alter, to the detriment of such Participant, the benefits
      described in this Plan as applicable to a Unit of Participate
      of the Participant or to decrease amounts standing credited
      to such Participant's Deferred Compensation Accounts under
      the Plan.  For purposes of this Section 10.3, an alteration
      to the detriment of a Participant shall mean a reduction in
      the period of time over which benefits are payable under a
      Participant's Agreement, subject however to the proration
      provisions of Section 10.2 hereof, or any change in the form
      of benefits payable to a Participant under the Participant's
      Agreement.  Written notice of any amendment shall be given to
      each Participant.

Section 11 - Miscellaneous

      11.1  Unsecured General Creditor.  Participants and their
      Beneficiaries, heirs, successors, and assigns shall have no
      legal or equitable rights, interest, or claims in any
      property or assets of Employer, nor shall they be
      Beneficiaries of, or have any rights, claims, or interests in
      any life insurance policies, annuity contracts, or the
      proceeds therefrom owned or which may be acquired by Employer
      ("Policies").  Any such Policies or other assets of Employer
      shall not be held under any trust for the benefit of
      Participants, their Beneficiaries, heirs, successors, or
      assigns, or held in any way as collateral security for the
      fulfilling of the obligations of Employer under this Plan. 
      Any and all of the Employer's assets and Policies shall be,
      and remain, the general, unpledged, unrestricted assets of
      Employer.  Employer's obligation under the Plan shall be
      merely that of an unfunded and unsecured promise of Employer
      to pay money in the future.

<PAGE>
                                    23

Section 11 - Miscellaneous (cont'd)

      11.2  Trust Fund.  The Employer shall be responsible for the
      payment of all benefits provided under the Plan.  At its
      discretion, the Company may establish one or more trusts, for
      the purpose of providing for the payment of such benefits. 
      Such trust or trusts may be irrevocable, but the assets
      thereof shall be subject to the claims of the Employer's
      creditors.  To the extent any benefits provided under the
      Plan are actually paid from any such trust, the Employer
      shall have no further obligation with respect thereto, but to

      the extent not so paid, such benefits shall remain the
      obligation of, and shall be paid by, the Employer.

      11.3  Obligations to Employer.  If a Participant becomes
      entitled to a distribution of benefits under the Plan, the
      Employer may offset against the amount of benefits otherwise
      distributable, any claim to reimbursement for intentional
      wrongdoing by the Participant against the Employer or an
      affiliate.  Such determination shall be made by the
      Administrative Committee.

      11.4  Non-Assignability.  Neither a Participant nor any other
      person shall have any right to commute, sell, assign,
      transfer, pledge, anticipate, mortgage, or otherwise
      encumber,m transfer, hypothecate or convey in advance of
      actual receipt the amounts, if any, payable hereunder, or any
      part thereof, which are, and all rights to which are,
      expressly declared to be unassignable and non-transferable. 
      No part of the amounts payable shall, prior to actual
      payment, be subject to seizure or sequestration for the
      payment of any debts, judgments, alimony or separate
      maintenance owed by a Participant or any other person, nor be
      transferable by operation of law in the event of a
      Participant's or any other person's bankruptcy or insolvency.

      11.5  Employment Not Guaranteed.  Nothing contained in this
      Plan nor any action taken hereunder shall be construed as a
      contract of employment or as giving any Employee any right to
      be retained in the employ of the Employer or to serve as a
      director.

      11.6  Protective Provisions.  A Participant will cooperate
      with the Employer by furnishing any and all information
      requested by the Employer, in order to facilitate the payment
      of benefits hereunder, taking such physical examinations as
      the Employer may deem necessary and taking such other
      relevant action as may be requested by the Employer.  If a
      Participant refuses

<PAGE>
                                    24

Section 11 - Miscellaneous (cont'd)

      so to cooperate, the Employer shall have no further
      obligation to the Participant under the Plan.  If a
      Participant commits suicide during the two-year period
      beginning on the Unit Start Date for a given Unit of
      Participation or if the Participant makes any material
      misstatement of information or non-disclosure of medical
      history, then no benefits will be payable with respect to the
      Unit of Participation to such Participant or his Beneficiary,
      or in the Employer's sole discretion, benefits may be payable
      in a reduced amount.


      11.7  Gender, Singular and Plural.  All pronouns and any
      variations thereof shall be deemed to refer to the masculine
      or feminine, as the identity of the person or persons may
      require.  As the context may require, the singular may be
      read as the plural and the plural as the singular.

      11.8  Waiver of Benefits.  No benefit shall be payable under
      the provisions of this Plan with respect to any Participant
      who is or was a member of a group of employees designated by
      an Employer as eligible to waive such benefit if such
      Participant has waived such benefit under this Plan unless
      the Employer by which such Participant is or was last
      employed has authorized the revocation of such waiver and
      such Participant has revoked such waiver.

      11.9  Captions.  The captions of the articles, sections, and
      paragraphs of this Plan are for convenience only and shall
      not control nor affect the meaning or construction of any of
      its provisions.

      11.10  Applicable Law.  This Plan shall be governed and
      construed in accordance with the laws of the State of
      Missouri.

      11.11  Validity.  In the event any provision of this Plan is
      held invalid, void, or unenforceable, the same shall not
      affect, in any respect whatsoever, the validity of any other
      provision of this Plan.

      11.12  Notice.  Any notice or filing required or permitted to
      be given to the Administrative Committee under the Plan shall
      be sufficient if in writing and hand delivered, or sent by
      registered or certified mail, to the principal office of the
      Employer, directed to the attention of the Vice President-
      Human Resources of the Employer.  Such notice shall be deemed
      given as of the date of delivery or, if postmark on the
      receipt for registration or certification.

      11.13  Successors and Assigns.  This Plan shall be binding
      upon the Company and its successors and assigns.

<PAGE>
                                    25

                       SOUTHWESTERN BELL CORPORATION

                            SENIOR MANAGEMENT 

               DEFERRED COMPENSATION PLAN OF 1988 AGREEMENT 

                          (EARLY PAYMENT OPTION)

                        19__ UNIT OF PARTICIPATION


            THIS AGREEMENT is made and entered into at 
St. Louis, Missouri as of the ____ day of _______, 19__, by and
between SOUTHWESTERN BELL CORPORATION ("Company"), and 
________________________ ("Senior Manager").

            WHEREAS, the Company has adopted a Senior Management
Deferred Compensation Program of 1988 (the "Plan") of which the
Early Payment Option ("EPO Portion of the Plan") is a part; and

            WHEREAS, the Senior Manager has been determined to be
eligible to participate in the Plan; and

            WHEREAS, the Plan requires that an agreement be entered
into between the Company and the Senior Manager setting out
certain terms and benefits of the Plan as they apply to the Senior
Manager;

            NOW, THEREFORE, the Company and the Senior Manager
hereby agree as follows:

      1.    The Plan is hereby incorporated into and made a part of
this Agreement, as though set forth in full herein.  The parties
shall be bound by, and have the benefit of, each and every
provision of the Plan, including without limitation the
restrictions on assignability set forth in the Plan.

      2.    The Senior Manager was born on ____________.

      3.    The Senior Manager's basic allotment percentage in the
Southwestern Bell Corporation Savings Plan for Salaried Employees
("Savings Plan") is ___ percent (___%).  Any subsequent change in
this level of participation by the Senior Manager before this Unit
of Participation is completed will void this Agreement and require
that a new Agreement be entered into between the Employer and the
Senior Manager.

      4.    The Senior Manager's Base Salary during a calendar year
shall be reduced in accordance with Exhibit A attached to this
Agreement.

<PAGE>
                                    26

      5.    The Senior Manager's Projected Employer Contribution
associated with this Unit of Participation is set forth in Exhibit
A attached to this Agreement.  There shall be no duplication of
Employer matching contributions, i.e., it is understood that any
Employer matching contributions corresponding to Senior Manager
deferrals under this Unit of Participation that are contributed to
the Plan will preclude Employer matching contributions to the
Savings Plan with respect to such Senior Manager deferrals, and
vice versa.


      6.    The amount per month of Pre-Retirement Survivor Benefit
in accordance with Section 7.4(a) of the Plan is the greater of
(i) $_______, or (ii) the balance in the Deferred Compensation
Account (excluding Short Term Incentive Awards deferred and
interest earned on such awards) divided by the number of months
payments are to be made, plus interest; such amounts shall be
payable for the greater of ten (10) years or the number of years
from the date of Participant's death until be would have been age
65.

      7.    The payment option for Participant's 19__ Unit of
Participation shall be the Early Payment Option in accordance with
Section 7.

            This payment option will also apply to payout of any
Short Term Incentive Awards deferred during 19__ or thereafter and
interest earned on such awards.  Such payout is not considered
part of the Standard Retirement Benefit.

      8.    INTENTIONALLY OMITTED

      9.    INTENTIONALLY OMITTED

<PAGE>
                                   27

                           EARLY PAYMENT OPTION

      (Paragraphs 10 and 11 apply to benefits paid pursuant to the
Early Payment Option of the EPO Portion of the Plan.)

      10.   The Participant hereby elects to receive an Early
Payment Benefit beginning _____________ ("Early Payment Date") to
be paid in accordance with one of the following payment modes
(please initial (a) or (b)):

            (a) ________      A Standard Early Payment Benefit in
                              equal monthly installments for a
                              period of forty-eight (48) months.

            (b) ________      An Alternative Early Payment Benefit
                              in a lump sum payment.

      11.   The Participant hereby elects to receive benefits under
the Early Payment Option in the event of termination of employment
with Employer after the Participant's 55th birthday but prior to
the Early Payment Date, as follows (please initial (a), (b) or
(c)):

      (a)  _______      To receive a Standard Early Payment Benefit,
                        payable for a period of forty-eight (48)
                        months, commencing on the Early Payment
                        Date.


      (b)  _______      To receive an Alternative Early Payment
                        Benefit, payable in a lump sum payment on
                        the Early Payment Date.

      (c)  _______      To receive a lump sum Termination Benefit
                        upon termination of employment.

      12.   This Agreement shall inure to the benefit of, and be
binding upon, the Company, its successors and assigns, and the
Senior Manager and his Beneficiaries.

            IN WITNESS WHEREOF, the parties hereto have signed and
entered into this Agreement on and as of the date first above
written.

THE COMPANY:
                        By  ______________________________
                            Its Senior Vice President-
                            Human Resources

SENIOR MANAGER:       ________________________  __________
                      Signature                     Date

<PAGE>
                                   28

                                                  ______________________________
                                                      Senior Manager's Name

                       SOUTHWESTERN BELL CORPORATION

                             SENIOR MANAGEMENT

                   DEFERRED COMPENSATION PLAN AGREEMENT

                                 Exhibit A

                        19__ Unit of Participation
      Unit Start Date: _______, 19__ Unit Deferral Period: 48 Months     

                                                          Annual Amount
                  Year                                      Deferred
                  ----                                    -------------
1.    Unit Start Date:

      19__   (commencing the first day
              of the month of January)                    $___________(1)

2.    19__                                                 ___________(1)

3.    19__                                                 ___________(1)

4.    19__   (ending the last day of
              the month of December)                       ___________(1)

                        Total Unit
                        Deferral Amount                      $___________

      Projected Employer Contribution                        $___________
      associated with this Unit of
      Participation

      Monthly Pre-Retirement Survivor                        $___________
      Benefit associated with this Unit
      of Participation

- ----------------------------------------------------------------
(1)   This amount will be deferred in equal amounts on a monthly
      basis.

