<PAGE>   1
 
================================================================================
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-K
(MARK ONE)
       [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934 FOR THE
                      FISCAL YEAR ENDED DECEMBER 31, 1996
 
                        COMMISSION FILE NUMBER 001-00395
 
                                NCR CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 

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<S>                                                         <C>
                       MARYLAND                                                   31-0387920
           (STATE OR OTHER JURISDICTION OF                                     (I.R.S. EMPLOYER
            INCORPORATION OR ORGANIZATION)                                   IDENTIFICATION NO.)
              1700 SOUTH PATTERSON BLVD.
                     DAYTON, OHIO                                                   45479
       (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                                   (ZIP CODE)
</TABLE>

 
       Registrant's telephone number, including area code: (937) 445-5000
                            ------------------------
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
 

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<S>                                                         <C>
                 TITLE OF EACH CLASS                              NAME OF EACH EXCHANGE ON WHICH REGISTERED
        COMMON STOCK, PAR VALUE $.01 PER SHARE                             NEW YORK STOCK EXCHANGE
</TABLE>

 
     SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
 
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
 
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X]
 
     The aggregate market value of voting stock held by non-affiliates of the
registrant as of February 28, 1997 was approximately $3.35 billion. At February
28, 1997, there were 101,535,473 shares of common stock outstanding.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     Parts I and II: Portions of the registrant's 1996 Annual Report to
Shareholders.
 

     Part III: Portions of the registrant's Proxy Statement dated March 3, 1997,
issued in connection with the annual meeting of shareholders.
================================================================================

<PAGE>   2
 
                               TABLE OF CONTENTS
 
                                     PART I
 

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ITEM                                      DESCRIPTION                                    PAGE
- ----     ------------------------------------------------------------------------------  ----
<S>      <C>                                                                             <C>
 1.      Business......................................................................    1
 2.      Properties....................................................................    7
 3.      Legal Proceedings.............................................................    7
 4.      Submission of Matters to a Vote of Security-Holders...........................    8
 
                                           PART II
                                         DESCRIPTION
 5.      Market for Registrant's Common Equity and Related Stockholder Matters.........   10
 6.      Selected Financial Data.......................................................   10
 7.      Management's Discussion and Analysis of Financial Condition and Results of       
         Operations....................................................................   10
 8.      Financial Statements and Supplementary Data...................................   10
 9.      Changes in and Disagreements with Accountants on Accounting and Financial        
         Disclosure....................................................................   10
 
                                          PART III
                                         DESCRIPTION
10.      Directors and Executive Officers of the Registrant............................   11
11.      Executive Compensation........................................................   11
12.      Security Ownership of Certain Beneficial Owners and Management................   11
13.      Certain Relationships and Related Transactions................................   11
 

                                           PART IV
                                         DESCRIPTION
14.      Exhibits, Financial Statement Schedules, and Reports on Form 8-K..............   12
</TABLE>

 
     See page 8 for "Executive Officers of the Registrant"
 
     This Report contains trademarks, service marks and registered marks of the
Company and its subsidiaries, and other companies, as indicated.

<PAGE>   3
 

                                     PART I
 

ITEM 1. BUSINESS.
 
GENERAL
 
     NCR Corporation ("NCR" or the "Company") was originally incorporated in
1884. NCR was a publicly traded company on the New York Stock Exchange prior to
its merger with a wholly owned subsidiary of AT&T Corp. ("AT&T") on September
19, 1991. Effective December 31, 1996, AT&T distributed to its shareholders all
of its interest in NCR on the basis of one share of NCR common stock for each 16
shares of AT&T common stock (the "Distribution"). The Distribution resulted in
approximately 101.4 million shares of NCR common stock outstanding as of
December 31, 1996. The NCR common stock is listed on the New York Stock Exchange
and trades under the symbol "NCR".
 
     NCR operates in one industry segment, the information technology industry,
which includes designing, developing, and marketing information technology
products, services, systems, and solutions worldwide. The Company is a global
provider of commercial, open computing systems for high availability transaction
processing and scalable data warehousing solutions to customers in a variety of
industries. NCR also provides specific information technology solutions to
customers in the retail, financial, and communications industries. NCR's systems
and solutions are supported by its customer services and professional services
offerings, and its systemedia business, which develops, produces, and markets a
complete line of consumable and media products.
 
     NCR's offerings cover a broad range of its customers' information
technology needs: from consumers' interaction and data collection, with products
including point of sale workstations, barcode scanning equipment, and
self-service devices such as automatic teller machines ("ATMs"); through data
processing, with NCR's high availability transaction processing solutions; to
data storage, manipulation, and usage, with NCR's Teradata(R) relational
database management system and scalable data warehousing offerings. The
Company's computing platforms and associated products span midrange servers,
massively parallel processing computer systems, computer network servers and
software systems, imaging and payment systems, workstations and peripherals,
business forms, ink ribbons, customized paper rolls, and other consumable
supplies and processing media. NCR also provides worldwide customer services and
professional services that include hardware maintenance, software maintenance,
data warehousing service offerings, end-to-end networking service and design,
and the implementation, integration, and support of complex solutions.
 
     Revenue by similar classes of products or services is included on page 31
of NCR's 1996 Annual Report to Shareholders and is incorporated herein by
reference.
 
     Geographic information is included in Note 9 "Segment Information" in the
Notes to Consolidated Financial Statements on page 46 of NCR's 1996 Annual
Report to Shareholders and is incorporated herein by reference.
 
     NCR addresses the information technology industry through the six business
units described below. Each business unit works closely with the Company's three
regional sales groups -- Americas, Europe/Middle East /Africa, and Asia/Pacific.
 
RETAIL SYSTEMS GROUP
 
  Offerings
 
     The Retail Systems Group (in conjunction with other NCR business units)
designs, develops, and markets a full line of products, services, systems, and
solutions for the retail industry. These offerings include point of sale
terminals, barcode scanners and scanner-scales, networking and computer server
technology to link these terminals and scanners on both a local and wide area
basis, and in-store and enterprise-level decision support systems.
 
     NCR point of sale terminals are found in the merchandise checkout area of
supermarkets, department stores, specialty stores, convenience stores, fast food
counters, and at hotel registration desks and restaurants. NCR barcode scanners
complement the point of sale terminal as part of the merchandise checkout
process,
 
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<PAGE>   4
 
and use low-power lasers to capture product and price information from the
Universal Product Code ("UPC") barcode information printed on product labels.
Scanner-scales combine in one product the ability to weigh produce as well as
scan barcodes. These point of sale terminals and barcode scanners are typically
linked via an in-store network, which provides for an interconnection between
these devices as well as other in-store devices such as personal computers
("PCs"). NCR provides the networking technology to link these products to NCR
servers within the store, and provides the capability for further linking to
enterprise-wide networks outside the individual store. NCR has alliance
relationships with application developers who provide specialized retail store
and enterprise solutions as part of NCR's offerings to the retail industry. The
Retail Systems Group also provides in-store and enterprise-level decision
support solutions (such as scalable data warehousing) based on products and
systems developed by NCR's Computer Systems Group. These solutions allow a
retailer to consolidate and analyze the individual transaction data generated by
the point of sale systems in order to determine trends in buyer preferences and
product sales. Analysis of this detailed data allows the retailer to make better
decisions about inventory, purchases, and distribution, which in turn should
help the retailer more accurately meet the needs of its customers.
 
     The Retail Systems Group uses the professional services organization to
develop solutions to meet the needs of a variety of retail customers.
Professional services provides consulting services to help customers design,
integrate, install and support in-store networks of scanners, point of sale
terminals, network servers, in-store and enterprise-level decision support, and
data warehousing systems. Professional services incorporates third party
products and software as required to create individualized solutions for
specific customer needs.
 
  Target Markets and Distribution Channels
 
     The major segments of the retail industry market served by NCR are general
merchandise, food, and hospitality. The general merchandise segment includes
department stores, specialty retailers, mass merchandisers, and catalog stores;
the food segment includes supermarkets, hypermarkets, grocery, drug,
wholesalers, and convenience stores; and the hospitality segment includes
lodging (hotel/motel), fast food/quick service, and restaurants. NCR believes
that retail industry customers base their buying decisions on a number of
criteria including the quality of the solution or product, total cost of
ownership, industry knowledge of the vendor, and the quality of the vendor's
support and professional services.
 
     NCR's retail products are marketed through a combination of direct and
indirect channels. The majority of the networked solutions and scalable data
warehousing solutions sold into the retail industry are sold through the direct
sales force. In recent years, over 70% of the retail-specific product sales
(primarily barcode scanners and point of sale terminals) are sold by the direct
sales force; the remainder are sold through indirect channels.
 
     In addition to being sold by NCR's direct sales force, NCR retail products
are sold to some 20,000 or more retailers through worldwide alliances with over
300 value-added resellers, distributors and dealers. NCR provides supporting
services, including collateral sales materials, sales leads, porting facilities,
and marketing programs, to this sales channel.
 
  Competition
 
     NCR faces significant competition in the retail industry in all geographic
areas where it operates. The bases of competition can vary by geographic area
but typically include product quality, total cost of ownership, industry
knowledge of the vendor, and quality of the vendor's support and professional
services. Competitors also vary by product line and geographic area.
 
FINANCIAL SYSTEMS GROUP
 
  Offerings
 
     The Financial Systems Group (in conjunction with other NCR business units)
designs, develops, and markets a broad line of products, services, systems and
solutions for the financial industry, with particular focus on retail banking.
These offerings include self-service devices, image and payment systems, retail
bank
 
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branch automation (in "virtual" as well as real bank branches), and relationship
management solutions designed to enable financial institutions to manage better
their interaction with their customers.
 
     NCR's self-service terminals include both traditional ATMs as well as
customer-operated information terminals. NCR believes that the combination of
open systems architecture, strong system management tools, and flexible
application development tools should allow customers to implement proactively
new products and services -- such as check cashing, bill payments, and smart
cards -- quickly and easily. NCR believes that its ATM product line reflects
advanced functionality, reliability, and industry focus.
 
     NCR provides a full line of item/image processing products, services,
systems, and solutions which are designed to allow financial institutions to
provide better service while lowering their costs of processing paper, image,
and electronic transactions. NCR offers a complete set of imaging-based item
processing solutions designed to replace less efficient legacy check processing
systems. These imaging systems electronically capture a "picture" of the item
and, through handwriting recognition software algorithms, captures the amounts
written on the item for use in the settlement process. This offering is intended
to help banks reduce processing costs, while at the same time enhancing the
value of the information captured by the financial institution during the item
processing process.
 
     NCR's relationship management solutions are based on the Company's scalable
data warehousing offerings, combined with the skills and knowledge of NCR's
professional services organization. The relationship management solution
includes capabilities that address issues such as customer retention analysis,
transaction analysis, and campaign management. These solutions help financial
institutions manage their interactions with individual customers, with the goal
of optimizing the level of service provided and increasing the profit
contribution of each customer. The decision support capabilities provided as
part of these solutions are designed to allow banks to transition from having
limited insight into detailed customer data, to being able to use detailed
information to support the management of their business. The benefits of this
transition can include improving risk management processes, implementing
marketing programs tailored for specific customer profiles, or allowing the
pricing of services based on the customer's transaction and balance history.
 
  Target Markets and Distribution Channels
 
     The financial industry includes commercial banks, retail banks, credit
unions and thrifts, security and brokerage firms, credit card issuers, insurance
providers, and capital providers.
 
     NCR serves a number of segments of the financial industry. These segments
include retail banking, which covers both traditional and new providers of
consumer banking services, financial services, such as the insurance and card
payment industries, and also the non-traditional financial services segment,
covering companies that have diversified into the financial services arena to
complement their core business. NCR's financial customers are located throughout
the world in both established and emerging markets. They range from very large
to very small financial service providers, reflecting, in NCR's view, its
ability to develop solutions suited to the broad spectrum of companies that make
up the world's financial services industry.
 
     NCR believes that financial industry customers base their buying decisions
on a number of criteria, including the industry knowledge of the vendor, the
economic justification behind implementing the solution, the vendor's ability to
provide and support a total end-to-end solution, the vendor's ability to
integrate new and existing systems, and the fit of the vendor's strategic vision
with the customer's strategic direction.
 
     NCR has historically distributed most of its financial products, services,
systems, and solutions through a direct sales channel which is targeted at
larger customers, although some revenues are generated through distributors. The
Financial Systems Group expects to increase the level of business transacted
through indirect channels and partners, where appropriate, in current and
emerging markets.
 
  Competition
 
     NCR faces significant competition in the financial industry in all
geographic areas where it operates. The bases of competition can vary but
typically include the industry knowledge of the vendor, the economic
justification behind implementing the solution, the vendor's ability to provide
and support a total end-to-end
 
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<PAGE>   6
 
solution, the vendor's ability to integrate new and existing systems, and the
fit of the vendor's strategic vision with the customer's strategic direction.
Competitors also vary by product line and geographic area.
 
COMPUTER SYSTEMS GROUP
 
  Offerings
 
     The Computer Systems Group (in conjunction with other NCR business units)
designs, develops, and markets computing products, services, systems, and
solutions which integrate hardware, operating software, middleware, professional
services, and support services. These solutions include products and services
from NCR as well as from other leading technology vendors. The Computer Systems
Group is also responsible for coordinating the development of the strategies
behind NCR's offerings to the communications industry.
 
     As a part of these computing solutions, NCR designs, develops, and markets
a line of open scalable computers, under the WorldMark(TM) brand, which range
from midrange computer systems to very large massively parallel enterprise-wide
systems. These open products are based on non-proprietary, industry standard
components such as Intel microprocessors, Microsoft Windows NT(R), and UNIX(R).
The WorldMark servers are the foundation of NCR's scalable data warehousing and
high availability transaction processing solutions. NCR also offers PCs, disk
arrays, and networking products sourced from other vendors in order to provide
fully integrated solutions to NCR's customers.
 
     NCR's scalable data warehousing solutions are intended to offer businesses
the ability to capture information about their customers, markets, and products
from a myriad of operational systems, and to give decision makers the ability to
access and analyze that information. These solutions incorporate NCR WorldMark
servers as well as NCR's Teradata relational database management system, other
commercial databases such as Oracle or Informix, software tools, and services.
The underlying technology provides customers with the ability to scale broadly
these systems -- from entry level 10 gigabyte systems to large data warehouses
containing terabytes of information -- all within the same hardware and software
platform. The scalable data warehousing solutions also serve as the foundation
for a number of NCR's offerings to the communications industry.
 
     NCR's high availability transaction processing solutions are designed to
maximize computer uptime for critical business environments. These solutions are
based on the WorldMark server platform, combined with software and services
designed to ensure high system availability. NCR LifeKeeper(R) software
minimizes downtime by recognizing and recovering hardware component or
application faults before a total system failure occurs. NCR Top End(R)
middleware software reroutes transactions during a system failure, working in
conjunction with LifeKeeper for additional system protection.
 
  Target Markets and Distribution Channels
 
     The customers of NCR's Computer Systems Group are in a number of
industries. While a primary focus is in the retail, financial, and
communications industries, NCR also markets scalable data warehousing and high
availability transaction processing solutions to a number of other industries.
 
     NCR's computer products and solutions are marketed through a combination of
direct and indirect channels. The direct sales force targets major accounts, and
approximately 85% of NCR's revenue for the Computer System Group's offerings has
historically come from the direct sales force. The remaining revenues have been
generated through the indirect channel, through alliances with value-added
resellers, distributors, and OEMs.
 
  Competition
 
     NCR faces significant competition in the computer industry in all
geographic areas where it operates. NCR believes that key competitive factors in
this market are experience, customer referrals, database sophistication, support
and professional service capabilities, quality of the solution or product, total
cost of ownership, industry knowledge of the vendor, and platform scalability.
Also the movement towards common industry standards (such as Intel processors
and UNIX and Microsoft operating systems) has accelerated
 
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product development, but has also made differentiation more difficult.
Commoditization has extended beyond PCs into the server business. In the
transaction processing market, customers require robust software, reliable
hardware, and systems integration skills. Many competitors offer one or two of
these components, but NCR believes it is one of few companies that can provide a
complete, open solution.
 
CUSTOMER AND PROFESSIONAL SERVICES
 
  Offerings
 
     NCR's services organizations deliver a wide range of professional services
and customer support services to customers in over 130 countries. The
professional services business unit delivers technology services intended to
help customers fully realize the benefits of their information technology
solutions, including consulting, integration, and education services. The
customer services business unit provides services required to implement and
maintain a customer's technology environment and provide high system
availability, including implementation services, multivendor services, system
support services, network maintenance and operations, and industry-specific
support services. The data services business focuses on providing a variety of
data processing and outsourcing solutions, primarily to the financial industry.
 
     NCR's services organizations play a key role in the Company's strategy and
provide a core skill set required in order to deliver complete products,
services, systems, and solutions to all of NCR's customers. The value delivered
by NCR's services is a key point of differentiation for many of NCR's offerings.
The solutions offered by each of NCR's business units involve the implementation
of complex technology in divergent customer environments and require an
effective services organization -- both professional and customer services -- to
take this core technology and implement it within the individual customer
situation.
 
  Target Markets
 
     The markets for NCR's worldwide services' offerings are principally in the
industries which are targeted by the other NCR business units. As a result,
worldwide services primary focus is delivering professional and support services
worldwide in the retail, financial, and communications industries. Worldwide
services organizations also support NCR's scalable data warehousing and high
availability transaction processing activities in all industries.
 
  Competition
 
     NCR's services businesses face significant competition in all geographic
areas where it operates. NCR believes a key competitive factor in these
businesses is the ability of the service providers to deliver high quality
services, reflecting strong business and technical knowledge, within an agreed
upon cost and time commitment.
 
SYSTEMEDIA GROUP
 
  Products
 
     The Systemedia Group develops, produces, and markets a complete line of
consumable and media products for information systems, including transaction
processing media, business forms, and a full line of integrated equipment
solutions. Specific products offered include stock and custom paper rolls,
pressure sensitive labels, label/form combinations, thermal transfer ribbons,
impact inking media, high speed laser forms, encoding products, mailers, and ink
jet media.
 
     Many of these products are offered as complementary parts of broader NCR
systems and solutions, including point of sale systems, ATMs, and item
processing systems. Systemedia products are also integral parts of NCR's overall
support service offerings to customers, such as the managed solutions for
self-service to be provided to NCR's ATM customers.
 
     The Systemedia Group works closely with its customers to develop specific
solutions in areas such as inking, printer cassette design and manufacture, thin
film coating for thermal transfer ribbons, and labels and label/form
combinations.
 
                                        5

<PAGE>   8
 
  Target Markets and Distribution Chanels
 
     The major industry segments targeted by the Systemedia Group include
general merchandise, food and drug, hospitality, financial, and consumer goods
manufacturing.
 
     The Systemedia Group has a direct sales force in 19 countries focusing on
providing consumable products to major accounts. In addition, Systemedia Group
products are sold through office products resellers, value added resellers, and
an inbound and outbound telemarketing organization.
 
  Competition
 
     Competition in the consumable products business is significant and varies
by geographic area and by product group. The primary areas of competitive
differentiation are typically product quality, logistics and supply chain
management expertise, and total cost of ownership. While price is always a
factor, the Systemedia Group focuses on total cost of ownership for all its
products and services. Total cost of ownership takes into account not only the
per unit cost of the media, but also service, usage, and support costs over the
life of the system.
 
RESEARCH AND DEVELOPMENT
 
     Research and development expenditures, excluding the effects of
restructuring in 1996 and 1995, were $390 million, $482 million, and $500
million for the years ended December 31, 1996, 1995 and 1994, respectively, or
as a percent of sales, 5.6%, 5.9%, and 5.9%, respectively. Ongoing investment in
research and development is a key requirement for NCR's future success, and the
Company will seek to make investments in research and development in product and
service offerings that will allow the Company to remain competitive. NCR plans
to continue to invest in research and development at levels that are consistent
with its business strategies, taking into account assessments of the levels of
investment in new technologies and markets being made by competitors throughout
the industries in which NCR competes.
 
SEASONALITY
 
     NCR's sales are historically seasonal, with revenue higher in the fourth
quarter of each year. Consequently, during the three quarters ending in March,
June, and September, NCR has historically experienced less favorable results
than in the quarter ending in December. Such seasonality also causes NCR's
working capital cash flow requirements to vary from quarter to quarter depending
on the variability in the volume, timing and mix of product sales. Operating
expenses are relatively fixed in the short term and often cannot be materially
reduced in a particular quarter if revenue falls below anticipated levels for
such quarter.
 
BACKLOG
 
     NCR's operating results and the amount and timing of revenue are affected
by numerous factors, including the volume, mix, and timing of orders received
during a period and conditions in the information technology industry and in the
general economy. The Company believes that backlog is not a meaningful indicator
of future business prospects due to the shortening of product delivery
schedules, and the significant portion of revenue related to its customer
services business, for which order information is not recorded. Therefore, the
Company believes that backlog information is not material to an understanding of
its business.
 
SOURCES AND AVAILABILITY OF RAW MATERIALS
 
     NCR uses many standard parts and components in its products and believes
there are a number of competent vendors for most parts and components. However,
a number of important components are developed by and purchased from single
sources due to price, quality, technology or other considerations. In some
cases, those components are available only from single sources. In order to
secure components for
 
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<PAGE>   9
 
production and introduction of new products, NCR may make advance payments to
certain suppliers and may enter into noncancelable purchase commitments with
vendors with respect to the purchase of components.
 
PATENTS AND TRADEMARKS
 
     NCR owns approximately 1,150 patents in the United States and 1,250 in
foreign countries. These foreign patents are counterparts of NCR's United States
patents. Many of the patents owned by NCR are licensed to others and NCR is
licensed to use certain patents owned by others. In connection with the
Distribution, NCR has entered into an extensive cross-licensing agreement with
AT&T and Lucent Technologies Inc. ("Lucent"), a former subsidiary of AT&T. While
NCR's portfolio of patents and patent applications is of significant value to
NCR, NCR does not believe that any particular individual patent is itself of
material importance to NCR's business as a whole.
 
     NCR has registered certain trademarks in the United States and in a number
of foreign countries. NCR considers the trademark "NCR" and many other of its
trademarks to be valuable assets. NCR is currently involved in a trademark
dispute with Gartner Group, Inc. pursuant to which NCR is seeking a declaratory
judgment that its corporate logo is valid and does not infringe the corporate
logo of Gartner Group, Inc.
 
EMPLOYEES
 
     At December 31, 1996, NCR had approximately 38,600 employees and
contractors.
 
ENVIRONMENTAL MATTERS
 
     Information regarding environmental matters is included in the material
captioned "Environmental Matters" on page 50 of NCR's 1996 Annual Report to
Shareholders and is incorporated herein by reference.
 

I
TEM 2. PROPERTIES
 
     At January 31, 1997, NCR operated 43 research and development and
manufacturing facilities which occupy in excess of 5.1 million square feet
throughout the world. Of such worldwide facilities, on a square footage basis,
approximately 84% are owned and 16% are leased. At January 31, 1997, NCR also
operated approximately 960 facilities, which include warehouse, repair, office,
and other miscellaneous sites, occupying in excess of 14.2 million square feet
throughout the world. Of these facilities, on a square footage basis,
approximately 60% are owned and 40% are leased. NCR maintains facilities in 84
countries.
 
     The Americas Region is headquartered in Dayton, Ohio, the Europe/Middle
East/Africa Region is headquartered in London, United Kingdom, and the
Asia/Pacific Region is headquartered in Tokyo, Japan. The sales regions are
further divided into 17 international areas, including the United States.
 
     The six business units are headquartered in: Dayton, Ohio (Computer Systems
Group, Customer Services, Professional Services and Systemedia Group); London,
United Kingdom (Financial Systems Group); and Atlanta, Georgia (Retail Systems
Group).
 
     In addition, NCR has plans to sell or discontinue the lease of certain
facilities. NCR believes its plants and facilities are suitable and adequate,
and have sufficient productive capacity to meet its current needs.
 

ITEM 3. LEGAL PROCEEDINGS
 
     The information required by this item is included in Note 12
"Contingencies" in the Notes to Consolidated Financial Statements on page 49 of
NCR's 1996 Annual Report to Shareholders and is incorporated herein by
reference.
 
                                        7

<PAGE>   10
 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     Not applicable.
 
                      EXECUTIVE OFFICERS OF THE REGISTRANT
                           (AS OF FEBRUARY 28, 1997)
 

<TABLE>
<CAPTION>
        NAME           AGE                         POSITION AND OFFICES HELD
- ---------------------  ---     -----------------------------------------------------------------
<S>                    <C>     <C>
Lars Nyberg            46      Chairman of the Board, Chief Executive Officer and President
Raymond G. Carlin      41      Senior Vice President, Americas Region
Robert R. Carpenter    41      Former Senior Vice President, Worldwide Customer Support
                               Services*
Gary J. Cotshott       46      Senior Vice President, Worldwide Customer Services
Robert A. Davis        46      Senior Vice President and Chief Quality Officer
William J. Eisenman    50      Senior Vice President, Computer Systems Group
Daniel J. Enneking     49      Senior Vice President, Systemedia Group
Richard H. Evans       50      Senior Vice President, Global Human Resources and Chief Strategy
                               Officer
Anthony Fano           53      Senior Vice President, Retail Systems Group
John L. Giering        52      Senior Vice President and Chief Financial Officer
Jonathan S. Hoak       47      Senior Vice President and General Counsel
Per-Olof Loof          46      Senior Vice President, Financial Systems Group
Alice H. Lusk          48      Senior Vice President, Worldwide Professional Services and
                               Information Systems Operations
Dennis A. Roberson     48      Senior Vice President and Chief Technical Officer
Jose Luis Solla        49      Senior Vice President, Europe/Middle East/Africa Region
Hideaki Takahashi      48      Senior Vice President, Asia/Pacific Region
Michael P. Tarpey      51      Senior Vice President, Public Relations
</TABLE>

 
- ---------------
 
* Effective December 31, 1996, Mr. Carpenter ceased to be an executive officer
  of NCR.
 
     LARS NYBERG. Mr. Nyberg was named Chairman of the Board, Chief Executive
Officer and President of NCR effective June 1, 1995. From June 1995 to December
1995, Mr. Nyberg also served as Executive Vice President, AT&T. From 1993 to
1995, Mr. Nyberg held the position of Chairman and Chief Executive Officer of
the Communication Division of Philips Electronics NV ("Philips"), an electronics
and electrical products company. At that time, Mr. Nyberg was a member of the
Philips Group Management Committee. In 1992, Mr. Nyberg was appointed Managing
Director, Philips Consumer Electronics Division. From 1990 to 1992, he was the
Chairman and Chief Executive Officer of Philips Computer Division. Mr. Nyberg
has served on NCR's Board of Directors since 1995.
 
     RAYMOND G. CARLIN. Mr. Carlin became Senior Vice President of NCR in
January 1995, responsible for all sales and services activities in the Americas
Region. From 1994 to 1995, Mr. Carlin was Vice President, U.S. Area, and from
1993 to 1994, Mr. Carlin was Vice President, NCR Worldwide Industry Marketing.
In 1992, Mr. Carlin was appointed an officer by the Board of Directors of NCR
and served as Vice President, U.S. Retail Systems Division. Prior to that, he
was Vice President of the Northeast Division, NCR U.S. Group.
 
     ROBERT R. CARPENTER. Mr. Carpenter served as Senior Vice President,
Worldwide Customer Support Services for NCR from September 1996 until December
1996. From 1994 to 1996, he was Senior Vice President, Worldwide Services for
NCR. Mr. Carpenter joined AT&T in 1992 as Vice President, Marketing and Sales
Operations for AT&T Network Systems. From 1988 to 1992, Mr. Carpenter held the
position of Corporate Vice President, Support Operations, for Square D
Corporation, a maker of electrical distribution, automation and industrial
control products, systems and services.
 
     GARY J. COTSHOTT. Mr. Cotshott became Senior Vice President, Worldwide
Customer Services as of December 31, 1996. From October 1995 to 1996, he was
Vice President, Support Services for NCR. From
 
                                        8

<PAGE>   11
 
1993 to 1995, Mr. Cotshott was Vice President, Professional Services, and from
1991 to 1992 he was Vice President of NCR's CIMEG (Commercial, Industrial,
Medical, Education, and Government) systems division.
 
     ROBERT A. DAVIS. Mr. Davis became Senior Vice President and Chief Quality
Officer in 1995. From 1994 to 1995, Mr. Davis was with Ideon Group, Inc., a
provider of credit card registry services, as Senior Vice President and Chief
Quality Officer. From 1990 to 1994, Mr. Davis was Vice President and Chief
Quality Officer with AT&T Universal Card Services Corp.
 
     WILLIAM J. EISENMAN. Mr. Eisenman became Senior Vice President, Computer
Systems Group in 1995. In 1994, he was appointed Vice President, NCR Worldwide
Services, Global Remote Services. From 1991 to 1994, he was Vice President, NCR
Large Computer Products Division.
 
     DANIEL J. ENNEKING. Mr. Enneking became Senior Vice President, Systemedia
Group in 1993. Mr. Enneking was appointed an officer by the Board of Directors
of NCR in 1991, and from 1991 to 1993, Mr. Enneking held the position of Vice
President, Finance & Administration, NCR U.S. Group.
 
     RICHARD H. EVANS. Mr. Evans became Senior Vice President, Global Human
Resources and Chief Strategy Officer for NCR in November 1995. Prior to his
appointment with NCR, Mr. Evans was Global Human Resources Vice President for
AT&T. From 1991 to 1993, Mr. Evans was President and Regional Managing Director
for AT&T's International Operations Division Asia/Pacific in Hong Kong.
 
     ANTHONY FANO. Mr. Fano became Senior Vice President, Retail Systems Group
in 1995. From 1994 to 1995, Mr. Fano was Senior Vice President, NCR Europe and
Middle East/Africa, responsible for all NCR sales and services activity in that
geographic region. From 1993 to 1994, he was Senior Vice President, Quality and
Re-engineering. From 1991 to 1993, he was Vice President, NCR Latin
America/Middle East/Africa Group.
 
     JOHN L. GIERING. Mr. Giering has held the position of Senior Vice President
and Chief Financial Officer of NCR since 1990. He was a director of the Company
from January 1994 until December 1996.
 
     JONATHAN S. HOAK. Mr. Hoak became Senior Vice President and General Counsel
in December 1993. He was a director of the Company from September 3, 1996 until
December 1996. From 1990 to 1993, Mr. Hoak was with AT&T Federal Systems as a
General Attorney.
 
     PER-OLOF LOOF. Mr. Loof became Senior Vice President, Financial Systems
Group in November 1995. From 1994 to 1995, Mr. Loof was President and Chief
Executive Officer, AT&T Istel Co. Mr. Loof served as Vice President, Sales and
Marketing for Europe with Digital, a computer and related equipment and software
company, in 1994, and from 1990 to 1993 was Vice President, Financial Industry,
with Digital Europe.
 
     ALICE H. LUSK. Ms. Lusk became Senior Vice President, Worldwide
Professional Services and Information Systems Operations effective September 23,
1996. From 1992 to 1995, she was Corporate Vice President and Group Executive
for Healthcare and Life, Property, Casualty and Workers Compensation Insurance
Business Units at EDS, an information technology services company. Ms. Lusk
served as President, Healthcare Strategic Business Unit at EDS from 1991 to
1992. Ms. Lusk is a director of Access Health, Inc.
 
     DENNIS ROBERSON. Mr. Roberson became Senior Vice President and Chief
Technical Officer in September 1995. Mr. Roberson joined NCR as Vice President,
NCR Computer Products and Systems in May 1994. From 1988 to 1994, Mr. Roberson
was Vice President, Software, with Digital.
 
     JOSE LUIS SOLLA. Mr. Solla became Senior Vice President in November 1995,
responsible for all sales and services activities in the Europe/Middle
East/Africa Region. Mr. Solla joined AT&T Iberia as a Country Leader in 1995.
During 1995, Mr. Solla also held the position of Area Manager, Iberia with
Olivetti, an office and computer equipment company. Mr. Solla joined Olivetti
Spain in 1992 and held the position of Managing Director until 1995. Prior to
1992, Mr. Solla was Area Director, ICL Spain, a computer and telecommunications
systems company.
 
                                        9

<PAGE>   12
 
     HIDEAKI TAKAHASHI. Mr. Takahashi became Senior Vice President in January
1996, responsible for all sales and services activities in the Asia/Pacific
Region. In July 1994, Mr. Takahashi was appointed Vice President Asia/Pacific
Region. From 1992 to 1994, Mr. Takahashi was Vice President, Operations, Japan.
In 1992, he became Director, NCR Japan, Ltd. From 1987 to 1992, he was General
Manager of NCR's engineering and manufacturing facility in Oiso, Japan.
 
     MICHAEL P. TARPEY. Mr. Tarpey was appointed Senior Vice President of Public
Relations in January 1996. From 1994 to 1995, Mr. Tarpey was Public Relations
Vice President for AT&T's Consumer Communications Services business. From 1990
to 1993, he was Vice President, Public Relations for AT&T's Business Long
Distance Unit.
 

                                    PART II
 

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED MATTERS
 
     Effective December 31, 1996, AT&T distributed to its shareholders all of
its interest in NCR on the basis of one share of NCR common stock for each 16
shares of AT&T common stock. The Distribution resulted in approximately 101.4
million shares of NCR common stock outstanding as of December 31, 1996. NCR
common stock is listed on the New York Stock Exchange and trades under the
symbol "NCR". The approximate number of record holders of common stock as of
December 31, 1996 was 2.5 million. Prior to the date of Distribution, NCR stock
traded on a "when issued" basis from December 11, 1996 to December 31, 1996.
 
     NCR does not anticipate the payment of any cash dividends on NCR common
stock in the foreseeable future. Payment of dividends on NCR common stock will
also be subject to such limitations as may be imposed by NCR's credit facilities
from time to time. The declaration of dividends will be subject to the
discretion of the Board of Directors of NCR.
 

ITEM 6. SELECTED FINANCIAL DATA
 
     Selected financial data for the Company is included on page 30 of NCR's
1996 Annual Report to Shareholders and is incorporated herein by reference.
 

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
 
     Management's discussion of NCR's financial condition and results of
operations is included on pages 31-35 of NCR's 1996 Annual Report to
Shareholders and is incorporated herein by reference.
 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     The consolidated financial statements of NCR and the report of independent
accountants are included on pages 36-52 of NCR's 1996 Annual Report to
Shareholders and are incorporated herein by reference.
 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
 
     NCR filed Form 8-K relating to changes in accountants with the Securities
and Exchange Commission ("SEC") on February 26, 1997.
 
     Effective February 21, 1997, upon the recommendation of the Audit and
Finance Committee of the Board of Directors of NCR, the Board appointed Price
Waterhouse L.L.P. as independent accountants for 1997. As of the date of filing
of NCR's report on Form 10-K for the year ended December 31, 1996, Coopers &
Lybrand L.L.P. will no longer serve as independent accountants of NCR.
 
                                       10

<PAGE>   13
 
     The reports by Coopers & Lybrand L.L.P. on the consolidated financial
statements of NCR for each of the two fiscal years in the period ended December
31, 1996 did not contain any adverse opinion or disclaimer of opinion and were
not qualified or modified as to uncertainty, audit scope, or accounting
principles.
 
     During NCR's two most recent fiscal years and through February 25, 1997,
there have been no disagreements with the former independent accountants,
Coopers & Lybrand L.L.P., on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.
 
     A copy of Coopers & Lybrand's letter, dated February 25, 1997, addressed to
the SEC stating that it agrees with the above statements is filed as Exhibit 16
to the Form 8-K.
 

                                    PART III
 

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The information required by this item with respect to directors of NCR is
included on pages 7-8 of NCR's Proxy Statement dated March 3, 1997 and is
incorporated herein by reference.
 
     Information regarding executive officers is furnished in a separate
disclosure in Part I of this report because the Company did not furnish such
information in its definitive proxy statement prepared in accordance with
Schedule 14A.
 

ITEM 11. EXECUTIVE COMPENSATION
 
     The information regarding the Company's compensation of its named executive
officers is included in the material captioned "Executive Compensation" on pages
13-18 of NCR's Proxy Statement dated March 3, 1997 and is incorporated herein by
reference. The information regarding the Company's compensation of its directors
is included in the material captioned "Compensation of Directors" on pages 9-10
of NCR's Proxy Statement dated March 3, 1997 and is incorporated herein by
reference.
 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     Information regarding security ownership of certain beneficial owners and
management is included in the material captioned "Stock Ownership of Management
and Directors" on page 10 of NCR's Proxy Statement dated March 3, 1997 and is
incorporated herein by reference.
 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     Not applicable.
 
                                       11

<PAGE>   14
 

                                    PART IV
 

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
 
     (a) Documents filed as part of the report:
 
        (1) Financial Statements:
 

<TABLE>
<CAPTION>
                                                                                PAGES IN
                                                                             ANNUAL REPORT
                                                                            TO SHAREHOLDERS*
                                                                            ----------------
    <S>                                                                     <C>
    Report of Management..................................................      36
    Report of Independent Accountants.....................................      36
    Consolidated Statements of Operations.................................      37
    Consolidated Balance Sheets...........................................      38
    Consolidated Statements of Cash Flows.................................      39
    Consolidated Statements of Changes in Shareholders' Equity............      40
    Notes to Consolidated Financial Statements............................        41-52
</TABLE>

 
- ---------------
 
* Incorporated by reference from the indicated pages of NCR's 1996 Annual Report
  to Shareholders.
 
        (2) Financial Statement Schedule:
 

<TABLE>
            <S>                                                     <C>
            Report of Independent Accountants.....................         14
            Schedule:
            II -- Valuation and Qualifying Accounts...............         15
</TABLE>

 
        (3) Exhibits:
 
           Exhibits identified in parentheses below, on file with the SEC, are
           incorporated herein by reference as exhibits hereto.
 
     (b) Reports on Form 8-K
 
     No reports on Form 8-K were filed during the last quarter of 1996.
 

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                      DESCRIPTION
        -------   -----------------------------------------------------------------------------
        <C>       <S>
             2    Distribution Agreement, dated as of November 20, 1996, as amended and
                  restated as of December 18, 1996, by and between AT&T Corp. and NCR
                  Corporation
           3.1    Articles of Amendment and Restatement and Articles Supplementary of NCR
                  Corporation
           3.2    Bylaws of NCR Corporation
           4.1    Common Stock Certificate of NCR Corporation
           4.2    Preferred Share Purchase Rights Plan of NCR Corporation, dated as of December
                  31, 1996, by and between NCR Corporation and The First National Bank of
                  Boston
          10.1    Separation and Distribution Agreement, dated as of February 1, 1996 and
                  amended and restated as of March 29, 1996 (incorporated by reference to
                  Exhibit 10.1 to the Lucent Technologies Inc. Registration Statement on Form
                  S-1 (No. 333-00703) dated April 3, 1996 (the "Lucent Registration
                  Statement"))
          10.2    Employee Benefits Agreement, dated as of November 20, 1996, by and between
                  AT&T Corp. and NCR Corporation
          10.3    Volume Purchase Agreement, dated as of November 20, 1996, by and between AT&T
                  Corp. and NCR Corporation
          10.4    Patent License Agreement, effective as of March 29, 1996, by and among AT&T
                  Corp., NCR Corporation and Lucent Technologies Inc. (incorporated by
                  reference to Exhibit 10.7 to the Lucent Registration Statement)
</TABLE>

 
                                       12

<PAGE>   15
 

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                      DESCRIPTION
        -------   -----------------------------------------------------------------------------
        <C>       <S>
          10.5    Amended and Restated Technology License Agreement, effective as of March 29,
                  1996,  by and among AT&T Corp., NCR Corporation and Lucent Technologies Inc.
                  (incorporated by reference to Exhibit 10.8 to the Lucent Registration
                  Statement)
          10.6    Tax Sharing Agreement, dated as of February 1, and amended and restated as of
                  March 29, 1996, by and among AT&T Corp., NCR Corporation and Lucent
                  Technologies Inc. (incorporated by reference to Exhibit 10.6 to the Lucent
                  Registration Statement)
          10.7    Interim Services and Systems Replication Agreement by and among AT&T Corp.,
                  Lucent Technologies Inc. and NCR Corporation, dated as of February 1, 1996
                  (incorporated by reference to Exhibit 10.4 to the Lucent Registration
                  Statement) and as amended by First Amendment to Interim Services and Systems
                  Replication Agreement, dated September 1, 1996
          10.8    NCR Management Stock Plan
          10.9    NCR WorldShares Plan
         10.10    NCR Senior Executive Retirement, Death & Disability Plan (incorporated by
                  reference to Exhibit 10.10 to the NCR Corporation Registration Statement on
                  Form 10 (No. 001-00395), dated November 25, 1996 (the "NCR Corporation
                  Registration Statement"))
         10.11    The Retirement Plan for Officers of NCR (incorporated by reference to Exhibit
                  10.11 to the NCR Corporation Registration Statement)
         10.12    Employment Agreements with Lars Nyberg (incorporated by reference to Exhibit
                  10.12 to the NCR Corporation Registration Statement)
         10.13    Employment Agreement with John L. Giering (incorporated by reference to
                  Exhibit 10.13 to the NCR Corporation Registration Statement)
         10.14    Employment Agreement with Robert R. Carpenter (incorporated by reference to
                  Exhibit 10.14 to the NCR Corporation Registration Statement)
         10.15    Credit Agreement, dated as of November 20, 1996, among NCR Corporation, The
                  Lenders Party thereto, and The Chase Manhattan Bank, as Administrative Agent
                  and Bank of America National Trust & Savings Association, as Documentation
                  Agent (incorporated by reference to Exhibit 10.15 to the NCR Corporation
                  Registration Statement)
         10.16    NCR Change-in-Control Severance Plan for Executive Officers
         10.17    Change-in-Control Agreement by and between NCR and Lars Nyberg
         10.18    NCR Director Compensation Program
         10.19    NCR Long Term Incentive Program and NCR Management Incentive Program
            13    Pages 29-52 of NCR's 1996 Annual Report to Shareholders
            21    Subsidiaries of NCR Corporation
            23    Consent of Independent Accountants
            27    Financial Data Schedule
</TABLE>

 
     NCR will furnish, without charge, to a security holder upon written request
a copy of NCR's 1996 Annual Report to Shareholders and NCR's Proxy Statement,
portions of which are incorporated herein by reference thereto. NCR will furnish
any other exhibit at cost. Literature requests are available upon writing to:
 
NCR -- Investor Relations
1700 South Patterson Boulevard
Dayton, OH 45479
 
                                       13

<PAGE>   16
 

                       REPORT OF INDEPENDENT ACCOUNTANTS
 
     Our report on the consolidated financial statements of NCR Corporation is
included on page 36 of NCR's 1996 Annual Report to Shareholders. In connection
with our audits of such financial statements, we have also audited the related
financial statement schedule in Item 14 on page 12 of this Form 10-K.
 
     In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
 
Coopers & Lybrand L.L.P.
 
Dayton, Ohio
January 21, 1997

 
                                       14

<PAGE>   17
 
                                NCR CORPORATION
 
                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                             (DOLLARS IN MILLIONS)
 

<TABLE>
<CAPTION>
                                                          COLUMN C
                                                   -----------------------
                                       COLUMN B           ADDITIONS                        COLUMN E
                                      ----------   -----------------------                ----------
              COLUMN A                BALANCE AT   CHARGED TO   CHARGED TO    COLUMN D    BALANCE AT
- ------------------------------------  BEGINNING     COSTS &       OTHER      ----------      END
            DESCRIPTION               OF PERIOD     EXPENSES     ACCOUNTS    DEDUCTIONS   OF PERIOD
- ------------------------------------  ----------   ----------   ----------   ----------   ----------
<S>                                   <C>          <C>          <C>          <C>          <C>
Year Ended December 31, 1996
  Allowance for doubtful accounts...     $ 68         $ --         $ --         $ 14         $ 54
  Deferred tax asset valuation
     allowance......................      472          167           --           --          639
  Inventory valuation reserves......      330           23           --          201          152
  Reserves related to business
     restructuring..................      858           --           --          611          247
Year Ended December 31, 1995
  Allowance for doubtful accounts...     $ 41         $ 61         $ --         $ 34         $ 68
  Deferred tax asset valuation
     allowance......................      405           67           --           --          472
  Inventory valuation reserves......       64          514(a)        --          248          330
  Reserves related to business
     restructuring..................       71          963           --          176          858
Year Ended December 31, 1994
  Allowance for doubtful accounts...     $ 31         $ 38         $ --         $ 28         $ 41
  Deferred tax asset valuation
     allowance......................      449           --           --           44          405
  Inventory valuation reserves......       54           59           --           49           64
  Reserves related to business
     restructuring..................      196           --           --          125           71
</TABLE>

 
- ---------------
 
(a) Includes $417 restructuring reserve in the third quarter of 1995.
 
                                       15

<PAGE>   18
 

                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
 
                                          NCR CORPORATION
 
Date: March 12, 1997                      By: /s/ LARS NYBERG
                                            ------------------------------------
                                            Lars Nyberg, Chairman of the Board
                                              and Chief Executive Officer
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
 

<TABLE>
<CAPTION>
                   SIGNATURE                                        TITLE
- -----------------------------------------------  --------------------------------------------
<S>                                              <C>
 
/s/ LARS NYBERG                                  Chairman of the Board and Chief Executive
- -----------------------------------------------  Officer
Lars Nyberg
 
/s/ JOHN L. GIERING                              Senior Vice President and Chief Financial
- -----------------------------------------------  Officer
John L. Giering
 
/s/ DUANE L. BURNHAM                             Director
- -----------------------------------------------
Duane L. Burnham
 
/s/ DAVID R. HOLMES                              Director
- -----------------------------------------------
David R. Holmes

/s/ LINDA FAYNE LEVINSON                         Director
- -----------------------------------------------
Linda Fayne Levinson
 
/s/ RONALD A. MITSCH                             Director
- -----------------------------------------------
Ronald A. Mitsch
 
/s/ C.K. PRAHALAD                                Director
- -----------------------------------------------
C.K. Prahalad
 
/s/ JAMES O. ROBBINS                             Director
- -----------------------------------------------
James O. Robbins
 
/s/ WILLIAM S. STAVROPOULOS                      Director
- -----------------------------------------------
William S. Stavropoulos
</TABLE>

 
Date: March 12, 1997
 
                                       16

<PAGE>   19

                                 EXHIBIT INDEX
 
 

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                      DESCRIPTION
        -------   -----------------------------------------------------------------------------
        <C>       <S>
             2    Distribution Agreement, dated as of November 20, 1996, as amended and
                  restated as of December 18, 1996, by and between AT&T Corp. and NCR
                  Corporation
           3.1    Articles of Amendment and Restatement and Articles Supplementary of NCR
                  Corporation
           3.2    Bylaws of NCR Corporation
           4.1    Common Stock Certificate of NCR Corporation
           4.2    Preferred Share Purchase Rights Plan of NCR Corporation, dated as of December
                  31, 1996, by and between NCR Corporation and The First National Bank of
                  Boston
          10.1    Separation and Distribution Agreement, dated as of February 1, 1996 and
                  amended and restated as of March 29, 1996 (incorporated by reference to
                  Exhibit 10.1 to the Lucent Technologies Inc. Registration Statement on Form
                  S-1 (No. 333-00703) dated April 3, 1996 (the "Lucent Registration
                  Statement"))
          10.2    Employee Benefits Agreement, dated as of November 20, 1996, by and between
                  AT&T Corp. and NCR Corporation
          10.3    Volume Purchase Agreement, dated as of November 20, 1996, by and between AT&T
                  Corp. and NCR Corporation
          10.4    Patent License Agreement, effective as of March 29, 1996, by and among AT&T
                  Corp., NCR Corporation and Lucent Technologies Inc. (incorporated by
                  reference to Exhibit 10.7 to the Lucent Registration Statement)
          10.5    Amended and Restated Technology License Agreement, effective as of March 29,
                  1996, by and among AT&T Corp., NCR Corporation and Lucent Technologies Inc.
                  (incorporated by reference to Exhibit 10.8 to the Lucent Registration
                  Statement)
          10.6    Tax Sharing Agreement, dated as of February 1, and amended and restated as of
                  March 29, 1996, by and among AT&T Corp., NCR Corporation and Lucent
                  Technologies Inc. (incorporated by reference to Exhibit 10.6 to the Lucent
                  Registration Statement)
          10.7    Interim Services and Systems Replication Agreement by and among AT&T Corp.,
                  Lucent Technologies Inc. and NCR Corporation, dated as of February 1, 1996
                  (incorporated by reference to Exhibit 10.4 to the Lucent Registration
                  Statement) and as amended by First Amendment to Interim Services and Systems
                  Replication Agreement, dated September 1, 1996
          10.8    NCR Management Stock Plan
          10.9    NCR WorldShares Plan
         10.10    NCR Senior Executive Retirement, Death & Disability Plan (incorporated by
                  reference to Exhibit 10.10 to the NCR Corporation Registration Statement on
                  Form 10 (No. 001-00395), dated November 25, 1996 (the "NCR Corporation
                  Registration Statement"))
         10.11    The Retirement Plan for Officers of NCR (incorporated by reference to Exhibit
                  10.11 to the NCR Corporation Registration Statement)
         10.12    Employment Agreements with Lars Nyberg (incorporated by reference to Exhibit
                  10.12 to the NCR Corporation Registration Statement)
         10.13    Employment Agreement with John L. Giering (incorporated by reference to
                  Exhibit 10.13 to the NCR Corporation Registration Statement)
         10.14    Employment Agreement with Robert R. Carpenter (incorporated by reference to
                  Exhibit 10.14 to the NCR Corporation Registration Statement)
         10.15    Credit Agreement, dated as of November 20, 1996, among NCR Corporation, The
                  Lenders Party thereto, and The Chase Manhattan Bank, as Administrative Agent
                  and Bank of America National Trust & Savings Association, as Documentation
                  Agent (incorporated by reference to Exhibit 10.15 to the NCR Corporation
                  Registration Statement)
         10.16    NCR Change-in-Control Severance Plan for Executive Officers
         10.17    Change-in-Control Agreement by and between NCR and Lars Nyberg
         10.18    NCR Director Compensation Program
         10.19    NCR Long Term Incentive Program and NCR Management Incentive Program
            13    Pages 29-52 of NCR's 1996 Annual Report to Shareholders
            21    Subsidiaries of NCR Corporation
            23    Consent of Independent Accountants
            27    Financial Data Schedule
</TABLE>
 






<PAGE>   1
                                                                       EXHIBIT 2


                             DISTRIBUTION AGREEMENT

                                 BY AND BETWEEN

                                   AT&T CORP.

                                       AND

                                 NCR CORPORATION

                         DATED AS OF NOVEMBER 20, 1996,
                 AS AMENDED AND RESTATED AS OF DECEMBER 18, 1996

<PAGE>   2
                             DISTRIBUTION AGREEMENT

                  THIS DISTRIBUTION AGREEMENT, dated as of November 20, 1996, as
amended and restated as of December 18, 1996, is by and between AT&T and NCR.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to them in Article I hereof.

                  WHEREAS, the Board of Directors of AT&T has determined that it
is in the best interests of AT&T and its shareholders to separate AT&T's
existing businesses into three independent businesses;

                  WHEREAS, in furtherance of the foregoing, AT&T, NCR and Lucent
have executed and delivered the Separation and Distribution Agreement providing
for, among other things, the initial public offering of shares of Lucent Common
Stock (which was consummated on April 10, 1996) and for the pro rata
distribution by AT&T of all of its shares of Lucent Common Stock to the
shareholders of AT&T;

                  WHEREAS, AT&T, NCR and Lucent have also executed and delivered
the Ancillary Agreements (as such term is defined in the Separation and
Distribution Agreement) governing certain additional matters relating to the
Lucent Distribution;

                  WHEREAS, the Board of Directors of AT&T has also determined
that AT&T will distribute to its shareholders all of the capital stock of NCR
held directly or indirectly by AT&T, subject to the terms and conditions set
forth herein;

                  WHEREAS, the NCR Distribution is intended to qualify as a
tax-free spin-off under Section 355 of the Code;

                  WHEREAS, it is appropriate and desirable to set forth certain
agreements that will govern certain matters relating to the NCR Distribution and
the relationship of AT&T and NCR and their respective Subsidiaries following the
NCR Distribution;

                  WHEREAS, in consideration of the transactions contemplated
hereby and by the Transaction Agreements, AT&T has agreed to make certain
specified capital contributions to NCR;

                  NOW, THEREFORE, the parties, intending to be legally bound,
agree as follows:


                                    ARTICLE I

                                   DEFINITIONS

                  For the purpose of this Agreement the following terms shall
have the following meanings:

                  1.1. ACTION has the meaning set forth in the Separation and
Distribution Agreement.

                  1.2. ADJUSTMENT has the meaning set forth in the Tax Sharing
Agreement.

<PAGE>   3
                  1.3. AFFILIATE has the meaning set forth in the Separation and
Distribution Agreement.

                  1.4. AGENT means the distribution agent to be appointed by
AT&T to distribute, or make book entry credits for, the shares of NCR Common
Stock held by AT&T pursuant to the NCR Distribution.

                  1.5.  AGREEMENT means this Distribution Agreement, including 
all of the Schedules hereto.

                  1.6. AMERICAN RIDGE has the meaning set forth in the
Separation and Distribution Agreement.

                  1.7. ANCILLARY AGREEMENTS has the meaning set forth in the
Separation and Distribution Agreement.

                  1.8. APPLICABLE DEADLINE has the meaning set forth in the
Separation and Distribution Agreement.

                  1.9. ARBITRATION ACT has the meaning set forth in the
Separation and Distribution Agreement.

                  1.10. ARBITRATION DEMAND NOTICE has the meaning set forth in
the Separation and Distribution Agreement.

                  1.11. ASSETS has the meaning set forth in the Separation and
Distribution Agreement.

                  1.12. AT&T means AT&T Corp., a New York corporation.

                  1.13. AT&T COMMON STOCK means the Common Stock, $1.00 par
value per share, of AT&T.

                  1.14. AT&T GROUP has the meaning set forth in the Separation
and Distribution Agreement.

                  1.15. AT&T INDEMNITEES has the meaning set forth in Section
4.2 hereof.

                  1.16. AT&T SERVICES BUSINESS has the meaning set forth in the
Separation and Distribution Agreement.

                  1.17. AT&T SERVICES GROUP means each member of the AT&T Group
other than any member of the NCR Group.

                  1.18. AT&T VOLUME PURCHASE AGREEMENT means the Volume Purchase
Agreement, dated as of the date hereof, as amended, by and between AT&T and NCR.

                  1.19. CLOSING DATE has the meaning set forth in the Separation
and Distribution Agreement.

                  1.20. CODE means the Internal Revenue Code of 1986, as
amended.


                                      -2-

<PAGE>   4
                  1.21. COMMISSION means the Securities and Exchange Commission.

                  1.22. CONSENTS means any consents, waivers or approvals from,
or notification requirements to, any third parties.

                  1.23. DETERMINATION REQUEST has the meaning set forth in the
Separation and Distribution Agreement.

                  1.24. EXCHANGE ACT means the Securities Exchange Act of 1934,
as amended, together with the rules and regulations promulgated thereunder.

                  1.25. GOVERNMENTAL APPROVALS has the meaning set forth in the
Separation and Distribution Agreement.

                  1.26. GOVERNMENTAL AUTHORITY has the meaning set forth in the
Separation and Distribution Agreement.

                  1.27.  GROUP means any of the AT&T Services Group, the Lucent 
Group or the NCR Group, as
the context requires.

                  1.28. INDEMNIFYING PARTY has the meaning set forth in Section
4.4(a) hereof.

                  1.29. INDEMNITEE has the meaning set forth in Section 4.4(a)
hereof.

                  1.30. INDEMNITY PAYMENT has the meaning set forth in Section
4.4(a) hereof.

                  1.31. INSURANCE PROCEEDS has the meaning set forth in the
Separation and Distribution Agreement.

                  1.32. IPO has the meaning set forth in the Separation and
Distribution Agreement.

                  1.33. LIABILITIES has the meaning set forth in the Separation
and Distribution Agreement.

                  1.34. LUCENT means Lucent Technologies Inc., a Delaware
corporation.

                  1.35. LUCENT COMMON STOCK means the Common Stock, $.01 par
value per share, of Lucent.

                  1.36. LUCENT DISTRIBUTION means the distribution by AT&T on a
pro rata basis to holders of AT&T Common Stock of all of the outstanding shares
of Lucent Common Stock owned by AT&T as set forth in Article IV of the
Separation and Distribution Agreement.

                  1.37. LUCENT GROUP has the meaning set forth in the Separation
and Distribution Agreement.

                  1.38. LUCENT INDEMNITEES has the meaning set forth in the
Separation and Distribution Agreement.



                                      -3-

<PAGE>   5
                  1.39. NCR means NCR Corporation, a Maryland corporation.

                  1.40. NCR ANCILLARY AGREEMENTS means the AT&T Volume Purchase
Agreement, the NCR Employee Benefits Agreement, the Procedures Agreement, the
agreements listed on Schedule 1.40 hereto and the agreements related or
supplemental to this Agreement or to any of the foregoing.

                  1.41. NCR BUSINESS means (a) the computer products, computer
systems, data processing and information solutions business and operations as
conducted by NCR and its Subsidiaries; (b) except as otherwise expressly
provided herein or in the Separation and Distribution Agreement, any terminated,
divested or discontinued businesses or operations (i) that at the time of

termination, divestiture or discontinuation primarily related to the NCR
Business as then conducted, or (ii) that were conducted by NCR, by any Person
that at any time was an Affiliate of NCR prior to the acquisition of NCR by
AT&T, or by any Person that at any time was controlled by NCR; (c) the
terminated, divested or discontinued businesses and operations listed or
described on Schedule 1.75 to the Separation and Distribution Agreement; and (d)
any business or operation conducted by NCR or any Affiliate of NCR at any time
on or after the NCR Distribution Date.

                  1.42. NCR COMMON STOCK means the Common Stock, par value $.01
per share, of NCR.

                  1.43. NCR COVERED LIABILITIES has the meaning set forth in the
Separation and Distribution Agreement.

                  1.44. NCR DISTRIBUTION means the distribution by AT&T on a pro
rata basis to holders of AT&T Common Stock of all of the outstanding shares of
NCR Common Stock owned by AT&T on the NCR Distribution Date as set forth in
Article II of this Agreement.

                  1.45. NCR DISTRIBUTION DATE means the date determined pursuant
to Section 2.3 of this Agreement on which the NCR Distribution occurs.

                  1.46. NCR EMPLOYEE BENEFITS AGREEMENT means the Employee
Benefits Agreement, dated as of the date hereof, as amended, by and among AT&T,
NCR and Lucent.

                  1.47. NCR FORM 10 means the Registration Statement on Form 10
to be filed by NCR with the Commission in connection with the NCR Distribution.

                  1.48. NCR GROUP means NCR, each Subsidiary of NCR and each
other Person that is either controlled directly or indirectly by NCR immediately
after the NCR Distribution Date or that is contemplated to be controlled by NCR
pursuant to the Non-U.S. Plan (as supplemented from time to time).

                  1.49. NCR INDEMNITEES has the meaning set forth in Section
4.3(a) hereof.

                  1.50. NCR INFORMATION STATEMENT means the Information
Statement constituting a part of the NCR Form 10, which will be mailed to AT&T
shareholders in connection with the NCR Distribution.


                                      -4-

<PAGE>   6
                  1.51. NCR INSURANCE POLICIES means the insurance policies
written by insurance carriers unaffiliated with AT&T pursuant to which NCR or
one or more of its Subsidiaries (or their respective officers or directors) will
be insured parties after the NCR Distribution Date.

                  1.52. NCR RECORD DATE means the time at which the transfer
agent for the AT&T Common Stock closes its transfer records for AT&T Common
Stock on the date to be determined by the AT&T Board of Directors as the record
date for determining shareholders of AT&T entitled to receive the special
dividend of shares of NCR Common Stock in the NCR Distribution.

                  1.53. NYSE means The New York Stock Exchange, Inc.

                  1.54.  PERSON has the meaning set forth in the Separation and 
Distribution Agreement.

                  1.55. PREFERRED SHARE PURCHASE RIGHTS mean the Rights to be
issued pursuant to a Rights Agreement substantially in the form of the Rights
Agreement attached as an Exhibit to the NCR Form 10.

                  1.56. PROCEDURES AGREEMENT means the Procedures Agreement,
dated as of the date hereof, as amended, by and between AT&T and NCR.

                  1.57. RESTRUCTURING ADJUSTMENT has the meaning set forth in
the Tax Sharing Agreement.

                  1.58. RIDGE NCR POLICIES means any insurance policies written
by American Ridge or any other captive insurance company of AT&T covering the
NCR Business or any member of the NCR Group.

                  1.59. SECURITIES ACT means the Securities Act of 1933, as
amended, together with the rules and regulations promulgated thereunder.

                  1.60. SECURITY INTEREST has the meaning set forth in the
Separation and Distribution Agreement.

                  1.61. SEPARATION has the meaning set forth in the Separation
and Distribution Agreement.

                  1.62. SEPARATION AND DISTRIBUTION AGREEMENT means the
Separation and Distribution Agreement, dated as of February 1, 1996, as amended
and restated as of March 29, 1996, by and among AT&T, Lucent and NCR, including
the Schedules thereto.

                  1.63. SHARED AT&T PERCENTAGE, SHARED NCR PERCENTAGE, SHARED
LUCENT PERCENTAGE, SHARED PERCENTAGE AND SHARED CONTINGENT LIABILITY have the
respective meanings set forth in Section 6.1 of the Separation and Distribution
Agreement.

                  1.64. SUBSIDIARY has the meaning set forth in the Separation
and Distribution Agreement.

                  1.65. TAX SHARING AGREEMENT has the meaning set forth in the
Separation and Distribution Agreement.



                                      -5-

<PAGE>   7
                  1.66. TAXES has the meaning set forth in the Tax Sharing
Agreement.

                  1.67. THIRD PARTY CLAIM has the meaning set forth in Section
4.5(a) hereof.

                  1.68. TRANSACTION AGREEMENTS means, collectively, this
Agreement, the NCR Ancillary Agreements, the Separation and Distribution
Agreement and the Ancillary Agreements.


                                   ARTICLE II

                                THE DISTRIBUTION

                  2.1. THE DISTRIBUTION. (a) Subject to Section 2.3 hereof, on
or prior to the NCR Distribution Date, AT&T will deliver to the Agent for the
benefit of holders of record of AT&T Common Stock on the NCR Record Date, a
single stock certificate representing all of the outstanding shares of NCR
Common Stock then beneficially owned by AT&T or any of its wholly owned
Subsidiaries, and shall cause the transfer agent for the shares of AT&T Common
Stock to instruct the Agent on the NCR Distribution Date either to distribute,
or make book-entry credits for, the appropriate number of such shares of NCR
Common Stock to each such holder of AT&T Common Stock or designated transferee
or transferees of such holder.

                  (b) Subject to Section 2.4, each holder of AT&T Common Stock
on the NCR Record Date (or such holder's designated transferee or transferees)
will be entitled to receive in the NCR Distribution a number of shares of NCR
Common Stock equal to the number of shares of AT&T Common Stock held by such
holder on the NCR Record Date multiplied by a fraction, the numerator of which
is the number of shares of NCR Common Stock beneficially owned by AT&T or any of
its wholly owned Subsidiaries on the NCR Record Date and the denominator of
which is the number of shares of AT&T Common Stock outstanding on the NCR Record
Date.

                  (c) Each of NCR and AT&T, as the case may be, will provide to
the Agent all share certificates and any information required in order to
complete the NCR Distribution on the terms contemplated hereby.

                  2.2. ACTIONS PRIOR TO THE NCR DISTRIBUTION. (a) AT&T and NCR
shall prepare and mail, prior to the NCR Distribution Date, to the holders of
AT&T Common Stock, the NCR Information Statement, which shall set forth
appropriate disclosure concerning NCR, the NCR Distribution and such other
matters as AT&T and NCR may determine. AT&T and NCR shall prepare, and NCR shall
file with the Commission, the NCR Form 10, which shall include or incorporate by
reference the NCR Information Statement. NCR shall use its reasonable best
efforts to cause the NCR Form 10 to be declared effective under the Exchange Act
as soon as practicable following the filing thereof.

                  (b) AT&T and NCR shall take all such action as may be
necessary or appropriate under the securities or blue sky laws of the United
States (and any comparable laws under any foreign jurisdiction) in connection
with the NCR Distribution.

                  (c) NCR shall prepare and file, and shall use its reasonable
best efforts to have approved, an application for the listing of the NCR Common
Stock (and related Preferred Share Purchase Rights) to be distributed in the NCR
Distribution on the NYSE or another mutually agreeable stock exchange or
quotations system.


                                      -6-

<PAGE>   8
                  2.3. CONDITIONS TO THE NCR DISTRIBUTION. The AT&T Board shall
have the sole discretion to determine the NCR Record Date and the NCR
Distribution Date, and all appropriate procedures in connection with the NCR
Distribution, provided that the NCR Distribution shall not occur prior to such
time as each of the following conditions shall have been satisfied or shall have
been waived by the AT&T Board in its sole discretion:

                  (a) a private letter ruling from the Internal Revenue Service
         shall have been obtained, and shall continue in effect, to the effect
         that, among other things, the NCR Distribution will qualify as a
         tax-free distribution for federal income tax purposes under Section 355
         of the Code, and such ruling shall be in form and substance
         satisfactory to AT&T in its sole discretion;

                  (b) any material Governmental Approvals and Consents necessary
         to consummate the NCR Distribution shall have been obtained and be in
         full force and effect;

                  (c) no order, injunction or decree issued by any court or
         agency of competent jurisdiction or other legal restraint or
         prohibition preventing the consummation of the NCR Distribution shall
         be in effect and no other event shall have occurred or failed to occur
         that prevents the consummation of the NCR Distribution;

                  (d) the NCR Form 10 shall have been declared effective by the
         Commission;

                  (e) AT&T shall have received a favorable response from the
         Staff of the Commission to a request for a no-action letter concerning,
         among other matters, whether the NCR Distribution and related
         transactions may be effected without registration of the NCR Common
         Stock (and related Preferred Share Purchase Rights) under the
         Securities Act;

                  (f) the NCR Common Stock (and related Preferred Share Purchase
         Rights) shall have been accepted for listing by the NYSE or another
         mutually agreeable stock exchange or quotations system; and

                  (g) the AT&T Board shall have formally approved the
         Distribution;

provided that the satisfaction of such conditions shall not create any
obligation on the part of AT&T, NCR or any other Person to effect or to seek to
effect the NCR Distribution or in any way limit AT&T's right to terminate this
Agreement as set forth in Section 7.1 or alter the consequences of any such
termination from those specified in Section 7.2.

                  2.4. FRACTIONAL SHARES. No certificates representing
fractional shares of NCR Common Stock will be distributed to holders of AT&T
Common Stock in the NCR Distribution. Holders that receive certificates in the
NCR Distribution and holders that receive less than one whole share of NCR
Common Stock in the NCR Distribution will receive cash in lieu of such
fractional shares as contemplated hereby. As soon as practicable after the NCR
Distribution Date, AT&T shall direct the Agent to determine the number of
fractional shares of NCR Common Stock allocable to each holder of record or
beneficial owner of AT&T Common Stock as of the Record Date that will receive
cash in lieu of such fractional shares, to aggregate all such fractional shares
and sell the whole shares obtained by aggregating such fractional shares either
in open market transactions or otherwise, in each case at then prevailing
trading prices, and to cause to be distributed to each such holder or for the
benefit of each such beneficial owner, in lieu of any fractional share, 


                                      -7-

<PAGE>   9
such holder's or owner's ratable share of the proceeds of such sale, after
making appropriate deductions of the amount required to be withheld for federal
income tax purposes and after deducting an amount equal to all brokerage
charges, commissions and transfer taxes attributed to such sale. AT&T and the
Agent shall use their reasonable best efforts to aggregate the shares of AT&T
Common Stock that may be held by any beneficial owner thereof through more than
one account in determining the fractional share allocable to such beneficial
owner.

                                   ARTICLE III
               CERTAIN AGREEMENTS RELATING TO THE NCR DISTRIBUTION

                  3.1. NCR ANCILLARY AGREEMENTS. Effective as of the date
hereof, each of AT&T and NCR are executing and delivering each of the NCR
Ancillary Agreements.

                  3.2. THE NCR BOARD. NCR and AT&T shall take all actions which
may be required to elect or otherwise appoint as directors of NCR, on or prior
to the NCR Distribution Date, the persons named in the NCR Form 10 to constitute
the Board of Directors of NCR on the NCR Distribution Date.

                  3.3. NCR CHARTER, BYLAWS AND RIGHTS. Prior to the NCR
Distribution Date, (a) AT&T shall cause Articles of Amendment and Restatement of
NCR, substantially in the form filed with the NCR Form 10, to be filed for
record with the Maryland State Department of Assessments and Taxation and to be
in effect on the NCR Distribution Date, and (b) the Board of Directors of NCR
shall amend the Bylaws of NCR so that the NCR Bylaws are substantially in the
form filed with the NCR Form 10. Prior to the NCR Record Date, the Board of
Directors of NCR shall declare a dividend of the Preferred Share Purchase Rights
so that each share of NCR Common Stock issued and outstanding on the NCR
Distribution Date shall initially have one Preferred Share Purchase Right
attached thereto.

                  3.4. TERMINATION OF INTERCOMPANY AGREEMENTS. (a) Except as set
forth in Section 3.4(b) or Section 2.4(b) of the Separation and Distribution
Agreement or Schedule 2.4(b)(ii) thereto, in furtherance of the releases and
other provisions of Section 4.1 hereof, NCR and each member of the NCR Group, on
the one hand, and AT&T and the respective members of the AT&T Services Group, on
the other hand, hereby terminate any and all agreements, arrangements,
commitments or understandings, whether or not in writing, between or among NCR
and/or any member of the NCR Group, on the one hand, and AT&T and/or any member
of the AT&T Services Group, on the other hand, effective as of the NCR
Distribution Date. No such terminated agreement, arrangement, commitment or
understanding (including any provision thereof which purports to survive
termination) shall be of any further force or effect after the NCR Distribution
Date. Each party shall, at the reasonable request of any other party, take, or
cause to be taken, such other actions as may be necessary to effect the
foregoing.

                  (b) The provisions of Section 3.4(a) shall not apply to any of
the following agreements, arrangements, commitments or understandings (or to any
of the provisions thereof): (i) the Transaction Agreements (and each other
agreement or instrument expressly contemplated by any Transaction Agreement to
be entered into by any of the parties hereto or any of the members of their
respective Groups); (ii) any agreements, arrangements, commitments or
understandings listed or described on Schedule 3.4(b)(ii); (iii) any agreements,
arrangements, commitments or understandings to which any Person other than the


                                      -8-

<PAGE>   10
parties hereto and their respective Affiliates is a party; (iv) except as set
forth in Schedule 3.4(b)(iv), any intercompany accounts payable or accounts
receivable accrued as of the NCR Distribution Date that are reflected in the
books and records of the parties or otherwise documented in writing in
accordance with past practices; (v) any agreements, arrangements, commitments or
understandings to which AT&T Capital Corporation, any member of the Lucent
Group, or any other non-wholly owned Subsidiary of AT&T or NCR, as the case may
be, is a party (it being understood that directors' qualifying shares or similar
interests will be disregarded for purposes of determining whether a Subsidiary
is wholly owned); (vi) any written Tax sharing or Tax allocation agreements to
which any member of any Group is a party; and (vii) any other agreements,
arrangements, commitments or understandings that any of the Transaction
Agreements expressly contemplates will survive the NCR Distribution Date.

                  3.5. DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. Each of
AT&T (on behalf of itself and each member of the AT&T Services Group) and NCR
(on behalf of itself and each member of the NCR Group) understands and agrees
that, except as expressly set forth in any Transaction Agreement, no party to
any Transaction Agreement or any other agreement or document contemplated by any
Transaction Agreement either has or is representing or warranting in any way as
to the Assets, businesses or Liabilities retained, transferred or assumed as
contemplated hereby or thereby, as to any consents or approvals required in
connection therewith, as to the value or freedom from any Security Interests of,
or any other matter concerning, any Assets of such party, or as to the absence
of any defenses or right of setoff or freedom from counterclaim with respect to
any claim or other Asset, including any accounts receivable, of any party, or as
to the legal sufficiency of any assignment, document or instrument delivered
hereunder to convey title to any Asset or thing of value upon the execution,
delivery and filing hereof or thereof. Except as may expressly be set forth in
any Transaction Agreement, all such Assets were, or are being, transferred, or
are being retained, on an "as is," "where is" basis (and, in the case of any
real property, by means of a quitclaim or similar form deed or conveyance) and
the respective transferees shall bear the economic and legal risks that any
conveyance shall prove to be insufficient to vest in the transferee good and
marketable title, free and clear of any Security Interest.

                  3.6. NON-U.S. PLAN. As promptly as practicable, NCR and AT&T
shall use their reasonable best efforts to consummate, or to cause to be
consummated, the transactions set forth on Schedule 3.6 hereto.

                  3.7. LETTERS OF CREDIT AND RELATED MATTERS. In the event that
at any time, whether prior to or after the NCR Distribution Date, AT&T
identifies any letters of credit, interest rate or foreign exchange contracts or
other financial or other contracts that relate primarily to the NCR Business but
for which any member of the AT&T Services Group has contingent, secondary,
joint, several or other Liability of any nature whatsoever, NCR will at its
expense take such actions and enter into such agreements and arrangements as
AT&T may request to effect the release or substitution of the member of the AT&T
Services Group.

                                   ARTICLE IV
                        MUTUAL RELEASES; INDEMNIFICATION

                  4.1. RELEASE OF PRE-CLOSING CLAIMS. (a) Except as provided in
Section 4.1(c), effective as of the NCR Distribution Date, NCR does hereby, for
itself and each 


                                      -9-

<PAGE>   11
other member of the NCR Group, their respective Affiliates (other than any
member of the AT&T Services Group or the Lucent Group), successors and assigns,
and all Persons who at any time prior to the NCR Distribution Date have been
shareholders, directors, officers, agents or employees of any member of the NCR
Group (in each case, in their respective capacities as such), remise, release
and forever discharge AT&T, the members of the AT&T Services Group, their
respective Affiliates (other than any member of the NCR Group or the Lucent
Group), successors and assigns, and all Persons who at any time prior to the NCR
Distribution Date have been shareholders, directors, officers, agents or
employees of any member of the AT&T Services Group (in each case, in their
respective capacities as such), and their respective heirs, executors,
administrators, successors and assigns, from any and all Liabilities whatsoever,
whether at law or in equity (including any right of contribution), whether
arising under any contract or agreement, by operation of law or otherwise,
existing or arising from any acts or events occurring or failing to occur or
alleged to have occurred or to have failed to occur or any conditions existing
or alleged to have existed on or before the NCR Distribution Date, including in
connection with the actions or decisions taken or omitted to be taken in
connection with, and the other activities relating to, the structuring or
implementation of any of the Separation, the IPO, the Lucent Distribution or the
NCR Distribution.

                  (b) Except as provided in Section 4.1(c), effective as of the
NCR Distribution Date, AT&T does hereby, for itself and each other member of the
AT&T Services Group, their respective Affiliates (other than AT&T Capital
Corporation or any Subsidiary of AT&T Capital Corporation, any member of the NCR
Group or the Lucent Group), successors and assigns, and all Persons who at any
time prior to the NCR Distribution Date have been shareholders, directors,
officers, agents or employees of any member of the AT&T Services Group other
than AT&T Capital Corporation or any Subsidiary of AT&T Capital Corporation (in
each case, in their respective capacities as such), remise, release and forever
discharge NCR, the respective members of the NCR Group, their respective
Affiliates (other than any member of the AT&T Services Group or the Lucent
Group), successors and assigns, and all Persons who at any time prior to the NCR
Distribution Date have been shareholders, directors, officers, agents or
employees of any member of the NCR Group (in each case, in their respective
capacities as such), and their respective heirs, executors, administrators,
successors and assigns, from any and all Liabilities whatsoever, whether at law
or in equity (including any right of contribution), whether arising under any
contract or agreement, by operation of law or otherwise, existing or arising
from any acts or events occurring or failing to occur or alleged to have
occurred or to have failed to occur or any conditions existing or alleged to
have existed on or before the NCR Distribution Date, including in connection
with the transactions and all other activities to implement any of the
Separation, the IPO, the Lucent Distribution or the NCR Distribution.

                  (c) Nothing contained in Section 4.1(a) or (b) shall impair
any right of any Person to enforce the Transaction Agreements, or any
agreements, arrangements, commitments or understandings that are specified in
the Separation and Distribution Agreement, in Section 3.4(b) or the Schedules
hereto or thereto not to terminate as of the Closing Date or the NCR
Distribution Date, as the case may be, in each case in accordance with its
terms. Nothing contained in Section 4.1(a) or (b) shall release any Person from:

                   (i) any Liability provided in or resulting from any agreement
         among any members of the AT&T Services Group or the NCR Group that is
         specified in the Separation and Distribution Agreement, in Section
         3.4(b) or the applicable Schedules hereto or thereto as not to
         terminate as of the Closing Date or as of the NCR Distribution Date, as
         the case may be, or any other Liability specified in the 


                                      -10-

<PAGE>   12
         Separation and Distribution Agreement, in Section 3.4(b) or the
         applicable Schedules hereto or thereto as not to terminate as of the
         Closing Date or NCR Distribution Date;

                  (ii) any Liability, contingent or otherwise, assumed,
         transferred, assigned or allocated to the Group of which such Person is
         a member in accordance with, or any other Liability of any member of
         any Group under, any Transaction Agreement;

                 (iii) any Liability that the parties may have with respect to
         indemnification or contribution pursuant to this Agreement for claims
         brought against the parties by third Persons, which Liability shall be
         governed by the provisions of this Article IV and by the Separation and
         Distribution Agreement, and, if applicable, by the appropriate
         provisions of the Ancillary Agreements or NCR Ancillary Agreements; or

                  (iv) any Liability the release of which would result in the
         release of any Person other than a Person released pursuant to this
         Section 4.1; provided that the parties agree not to bring suit or
         permit any of their Subsidiaries to bring suit against any such Person
         with respect to any Liability to the extent that such Person would be
         released with respect to such Liability by this Section 4.1 but for the
         provisions of this clause (iv).

                  (d) NCR shall not make, and shall not permit any member of the
NCR Group to make, any claim or demand, or commence any Action asserting any
claim or demand, including any claim of contribution or any indemnification,
against AT&T, any member of the AT&T Services Group, or any other Person
released pursuant to Section 4.1(a), with respect to any Liabilities released
pursuant to Section 4.1(a). AT&T shall not, and shall not permit any member of
the AT&T Services Group, to make any claim or demand, or commence any Action
asserting any claim or demand, including any claim of contribution or any
indemnification, against NCR or any member of the NCR Group, or any other Person
released pursuant to Section 4.1(b), with respect to any Liabilities released
pursuant to Section 4.1(b).

                  (e) It is the intent of each of AT&T and NCR by virtue of the
provisions of this Section 4.1 to provide for a full and complete release and
discharge of all Liabilities existing or arising from all acts and events
occurring or failing to occur or alleged to have occurred or to have failed to
occur and all conditions existing or alleged to have existed on or before the
NCR Distribution Date, between or among NCR or any member of the NCR Group, on
the one hand, and AT&T or any member of the AT&T Services Group, on the other
hand (including any contractual agreements or arrangements existing or alleged
to exist between or among any such members on or before the NCR Distribution
Date), except as expressly set forth in Section 4.1(c). At any time, at the
request of any other party, each party shall cause each member of its respective
Group to execute and deliver releases reflecting the provisions hereof.

                  4.2. INDEMNIFICATION BY NCR. NCR shall indemnify, defend and
hold harmless AT&T, each member of the AT&T Services Group and each of their
respective directors, officers and employees, and each of the heirs, executors,
successors and assigns of any of the foregoing (collectively, the "AT&T
Indemnitees"), from and against any and all Liabilities of the AT&T Indemnitees
relating to, arising out of or resulting from any of the following items
(without duplication), in each case whether arising before, on or after the NCR
Distribution Date:


                                      -11-

<PAGE>   13
                  (a) the failure of NCR or any other member of the NCR Group or
         any other Person to pay, perform or otherwise promptly discharge any
         Liabilities of any member of the NCR Group in accordance with their
         respective terms, whether prior to or after the NCR Distribution Date
         or the date hereof (including any Liabilities assumed or retained by
         any member of the NCR Group pursuant to any Transaction Agreement);

                  (b) the NCR Business (including any claim by, or resulting
         from a claim by, any creditor of AT&T UK Holdings Ltd. to the extent
         relating to the NCR Business conducted by such entity), any Liability
         of any member of the NCR Group or any NCR Covered Liability;

                  (c) any Asset (including contracts, agreements, real property
         and leasehold interests) of any member of the NCR Group at any time
         (other than Assets transferred to any member of the AT&T Services Group
         prior to the NCR Distribution Date), and any contract, agreement,
         letter of credit or other commitment or obligation listed on Schedule
         4.2(c) hereof;

                  (d) the operation of the NCR Business, as conducted at any
         time prior to, on or after the NCR Distribution Date (including any
         Liability relating to, arising out of or resulting from any act or
         failure to act by any director, officer, employee, agent or
         representative (whether or not such act or failure to act is or was
         within such Person's authority));

                  (e) any guarantee, indemnity, representation, warranty or
         other Liability of or made by any member of the AT&T Services Group in
         respect of any Liability or alleged Liability of any member of the NCR
         Group;

                  (f) any breach by NCR or any member of the NCR Group of this
         Agreement, the Separation and Distribution Agreement, any Ancillary
         Agreement, any of the NCR Ancillary Agreements or any other agreement
         or contract that survives the NCR Distribution Date;

                  (g) any Liabilities relating to, arising out of or resulting
         from the NCR Business (including any NCR Covered Liabilities) for which
         AT&T has agreed to indemnify and hold harmless the Lucent Indemnitees
         pursuant to Section 5.3(a) of the Separation and Distribution
         Agreement;

                  (h) actions taken by any member of the AT&T Group on behalf of
         any member of the NCR Group pursuant to the Separation and Distribution
         Agreement or any Ancillary Agreement;

                  (i) any untrue statement or alleged untrue statement of a
         material fact or omission or alleged omission to state a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, with respect to all information contained in
         the NCR Information Statement or NCR Form 10;

                  (j) any Liability relating to, arising out of or resulting
         from any actual or threatened Action or other claim alleging that any
         Liability was improperly allocated to the NCR Group or that any Asset
         was improperly withheld from the NCR Group, in each case pursuant to
         any of the Transaction Agreements;


                                      -12-

<PAGE>   14
                  (k) any Liability relating to, arising out of or resulting
         from any Action or other claim filed on or after March 1, 1996 and on
         or prior to the NCR Distribution Date against any member of the NCR
         Group unless either (i) any member of the AT&T Services Group has also
         been duly served as a party to such Action or other claim prior to the
         date hereof, (ii) NCR establishes that such Action or other claim
         relates exclusively to the AT&T Services Business, or (iii) such matter
         is listed on Schedule 4.2(k) hereto (it being understood that the
         applicability of any of the exceptions set forth in clause (i), (ii) or
         (iii) shall not eliminate any Liability of any member of the NCR Group
         pursuant to any other provision of this Agreement or any other
         Transaction Agreement). For purposes of clarification, the parties
         agree that this paragraph (k) will control the allocation of Liability
         with respect to any Action or other claim to which this paragraph (k)
         by its terms applies and that, to the extent this paragraph (k) does
         not by its terms apply to any Action or other claim, the allocation of
         Liability with respect thereto will be controlled by the Separation and
         Distribution Agreement to the extent it applies by its terms and,
         otherwise, will be controlled by any other applicable terms of this
         Agreement and the other Transaction Agreement.

Nothing in this Agreement shall be deemed to amend or modify Article V
(including Section 5.3(c) thereof) or Article VI of the Separation and
Distribution Agreement and the provisions of the Separation and Distribution
Agreement shall govern matters covered thereby.

                  4.3. INDEMNIFICATION BY AT&T. AT&T shall indemnify, defend and
hold harmless NCR, each member of the NCR Group and each of their respective
directors, officers and employees, and each of the heirs, executors, successors
and assigns of any of the foregoing (collectively, the "NCR Indemnitees"), from
and against any and all Liabilities of the NCR Indemnitees relating to, arising
out of or resulting from any of the following items (without duplication), in
each case whether arising before, on or after the NCR Distribution Date:

                   (a) the failure of AT&T or any other member of the AT&T Group
         or any other Person to pay, perform or otherwise promptly discharge any
         Liabilities of the AT&T Services Group whether prior to or after the
         NCR Distribution Date or the date hereof (including any Liabilities
         assumed or retained by any member of the AT&T Services Group pursuant
         to any Transaction Agreement);

                   (b) the AT&T Services Business (including any claim by, or
         resulting from a claim by, any creditor of AT&T UK Holdings Ltd. to the
         extent relating to the AT&T Services Business conducted by such entity)
         or any Liability of the AT&T Services Group; and

                   (c) any breach by AT&T or any member of the AT&T Services
         Group of this Agreement, the Separation and Distribution Agreement, any
         Ancillary Agreement, any of the NCR Ancillary Agreements or any other
         agreement or contract that survives the NCR Distribution Date;

         provided however that this Section 4.3 shall not apply to any Liability
         relating to the NCR Business.



                                      -13-

<PAGE>   15
                  4.4. INDEMNIFICATION OBLIGATIONS NET OF INSURANCE PROCEEDS AND
OTHER AMOUNTS. (a) The parties intend that any Liability subject to
indemnification or reimbursement pursuant to this Article IV will be net of
Insurance Proceeds that actually reduce the amount of the Liability.
Accordingly, the amount which any party (an "Indemnifying Party") is required to
pay to any Person entitled to indemnification hereunder (an "Indemnitee") will
be reduced by any Insurance Proceeds theretofore actually recovered by or on
behalf of the Indemnitee in reduction of the related Liability. If an Indemnitee
receives a payment (an "Indemnity Payment") required by this Agreement from an
Indemnifying Party in respect of any Liability and subsequently receives
Insurance Proceeds, then the Indemnitee will pay to the Indemnifying Party an
amount equal to the excess of the Indemnity Payment received over the amount of
the Indemnity Payment that would have been due if the Insurance Proceeds
recovery had been received, realized or recovered before the Indemnity Payment
was made.

                  (b) An insurer who would otherwise be obligated to pay any
claim shall not be relieved of the responsibility with respect thereto or,
solely by virtue of the indemnification provisions hereof, have any subrogation
rights with respect thereto, it being expressly understood and agreed that no
insurer or any other third party shall be entitled to a "windfall" (i.e., a
benefit they would not be entitled to receive in the absence of the
indemnification provisions) by virtue of the indemnification provisions hereof.

                  4.5. PROCEDURES FOR INDEMNIFICATION OF THIRD PARTY CLAIMS. (a)
If an Indemnitee shall receive notice or otherwise learn of the assertion by a
Person (including any Governmental Authority) who is not a member of the AT&T
Services Group or the NCR Group of any claim or of the commencement by any such
Person of any Action (collectively, a "Third Party Claim") with respect to which
an Indemnifying Party may be obligated to provide indemnification to such
Indemnitee pursuant to Section 4.2 or 4.3, or any other Section of this
Agreement or any NCR Ancillary Agreement, such Indemnitee shall give such
Indemnifying Party written notice thereof within 20 days after becoming aware of
such Third Party Claim. Any such notice shall describe the Third Party Claim in
reasonable detail. Notwithstanding the foregoing, the failure of any Indemnitee
to give notice as provided in this Section 4.5(a) shall not relieve the related
Indemnifying Party of its obligations under this Article IV, except to the
extent that such Indemnifying Party is actually prejudiced by such failure to
give notice.

                  (b) If the Indemnitee or any other party to this Agreement
believes that the Third Party Claim is or may be a Shared Contingent Liability,
such Indemnitee or other party may make a Determination Request in accordance
with the Separation and Distribution Agreement at any time following any notice
given by the Indemnitee to an Indemnifying Party pursuant to Section 4.5(a).
AT&T may make such a Determination Request at any time. Unless each of AT&T, NCR
and Lucent has acknowledged that the applicable Third Party Claim (including any
Third Party Claim set forth on Schedule 6.6 to the Separation and Distribution
Agreement) is not a Shared Contingent Liability or unless a determination to
such effect has been made in accordance with the Separation and Distribution
Agreement, AT&T shall be entitled (but not obligated) to assume the defense of
such Third Party Claim as if it were the Indemnifying Party hereunder. In any
such event, AT&T shall be entitled to reimbursement of all the costs and
expenses (including allocated costs of in-house counsel and other personnel) of
such defense once a final determination or acknowledgment is made as to the
status of the Third Party Claim from the applicable party or parties that would
have been required to pay such amounts if the status of the Third Party 


                                      -14-

<PAGE>   16
Claim had been determined immediately; provided that, if such Third Party Claim
is determined to be a Shared Contingent Liability, such costs and expenses shall
be shared as provided in Section 5.5(c) of the Separation and Distribution
Agreement.

                  (c) AT&T shall assume the defense of, and may seek to settle
or compromise, any Third Party Claim that is a Shared Contingent Liability, and
the costs and expenses (including allocated costs of in-house counsel and other
personnel) thereof shall be included in the calculation of the amount of the
applicable Shared Contingent Liability in determining the reimbursement
obligations of the other parties with respect thereto pursuant to Section 6.4 of
the Separation and Distribution Agreement. Any Indemnitee in respect of a Shared
Contingent Liability shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise, or settlement thereof,
but all fees and expenses of such counsel shall be the expense of such
Indemnitee.

                  (d) Other than in the case of a Shared Contingent Liability,
an Indemnifying Party may elect to defend (and, unless the Indemnifying Party
has specified any reservations or exceptions, to seek to settle or compromise),
at such Indemnifying Party's own expense and by such Indemnifying Party's own
counsel, any Third Party Claim. Within 30 days after the receipt of notice from
an Indemnitee in accordance with Section 4.5(a) (or sooner, if the nature of
such Third Party Claim so requires), the Indemnifying Party shall notify the
Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnitee shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise, or settlement thereof,
but the fees and expenses of such counsel shall be the expense of such
Indemnitee except as set forth in the next sentence. In the event that (i) the
Third Party Claim is not a Shared Contingent Liability and (ii) the Indemnifying
Party has elected to assume the defense of the Third Party Claim but has
specified, and continues to assert, any reservations or exceptions in such
notice, then, in any such case, the reasonable fees and expenses of one separate
counsel for all Indemnitees shall be borne by the Indemnifying Party.

                  (e) Other than in the case of a Shared Contingent Liability,
if an Indemnifying Party elects not to assume responsibility for defending a
Third Party Claim, or fails to notify an Indemnitee of its election as provided
in Section 4.5(d), such Indemnitee may defend such Third Party Claim at the cost
and expense (including allocated costs of in-house counsel and other personnel)
of the Indemnifying Party.

                  (f) Unless the Indemnifying Party has failed to assume the
defense of the Third Party Claim in accordance with the terms of this Agreement,
no Indemnitee may settle or compromise any Third Party Claim that is not a
Shared Contingent Liability without the consent of the Indemnifying Party. No
Indemnitee may settle or compromise any Third Party Claim that is a Shared
Contingent Liability without the consent of AT&T.

                  (g) In the case of a Third Party Claim that is not a Shared
Contingent Liability, no Indemnifying Party shall consent to entry of any
judgment or enter into any settlement of the Third Party Claim without the
consent of the Indemnitee if the effect thereof is to permit any injunction,
declaratory judgment, other order or other nonmonetary relief to be entered,
directly or indirectly, against any Indemnitee. In the case of a Third Party
Claim that is a Shared Contingent Liability, AT&T shall not consent to entry of
any judgment or enter into any settlement of the Third Party Claim without the
consent of the 


                                      -15-

<PAGE>   17
Indemnitee if the effect thereof is to permit any injunction, declaratory
judgment, other order or other nonmonetary relief to be entered, directly or
indirectly, against any Indemnitee.

                  (h) The provisions of Section 4.5 and Section 4.6 shall not
apply to Taxes (which are covered by the Tax Sharing Agreement).

                  4.6. ADDITIONAL MATTERS. (a) Any claim on account of a
Liability which does not result from a Third Party Claim shall be asserted by
written notice given by the Indemnitee to the related Indemnifying Party. Such
Indemnifying Party shall have a period of 30 days after the receipt of such
notice within which to respond thereto. If such Indemnifying Party does not
respond within such 30-day period, such Indemnifying Party shall be deemed to
have refused to accept responsibility to make payment. If such Indemnifying
Party does not respond within such 30-day period or rejects such claim in whole
or in part, such Indemnitee shall be free to pursue such remedies as may be
available to such party as contemplated by any Transaction Agreement.

                  (b) In the event of payment by or on behalf of any
Indemnifying Party to any Indemnitee in connection with any Third Party Claim,
such Indemnifying Party shall be subrogated to and shall stand in the place of
such Indemnitee as to any events or circumstances in respect of which such
Indemnitee may have any right, defense or claim relating to such Third Party
Claim against any claimant or plaintiff asserting such Third Party Claim or
against any other person. Such Indemnitee shall cooperate with such Indemnifying
Party in a reasonable manner, and at the cost and expense (including allocated
costs of in-house counsel and other personnel) of such Indemnifying Party, in
prosecuting any subrogated right, defense or claim; provided, however, that AT&T
shall be entitled to control the prosecution of any such right, defense or claim
in respect of any Shared Contingent Liability.

                  (c) In the event of an Action in which the Indemnifying Party
is not a named defendant, if either the Indemnified Party or Indemnifying Party
shall so request, the parties shall endeavor to substitute the Indemnifying
Party for the named defendant or, in the case of a Shared Contingent Liability,
add the Indemnifying Party as a named defendant, if at all practicable. If such
substitution or addition cannot be achieved for any reason or is not requested,
the named defendant shall allow the Indemnifying Party to manage the Action as
set forth in this Section and, subject to Section 6.4 of the Separation and
Distribution Agreement with respect to Shared Contingent Liabilities, the
Indemnifying Party shall fully indemnify the named defendant against all costs
of defending the Action (including court costs, sanctions imposed by a court,
attorneys' fees, experts' fees and all other external expenses, and the
allocated costs of in-house counsel and other personnel), the costs of any
judgment or settlement, and the cost of any interest or penalties relating to
any judgment or settlement.

                  4.7. REMEDIES CUMULATIVE. The remedies provided in this
Article IV shall be cumulative and, subject to the provisions of Article IX of
the Separation and Distribution Agreement, shall not preclude assertion by any
Indemnitee of any other rights or the seeking of any and all other remedies
against any Indemnifying Party.

                  4.8. SURVIVAL OF INDEMNITIES. The rights and obligations of
each of AT&T and NCR and their respective Indemnitees under this Article IV
shall survive the sale or other transfer by any party of any Assets or
businesses or the assignment by it of any Liabilities.


                                      -16-

<PAGE>   18
                  4.9. RELATIONSHIP TO SEPARATION AND DISTRIBUTION AGREEMENT
DISPUTE RESOLUTION PROCEDURES. (a) Each of NCR and AT&T agrees that the
procedures for discussion, negotiation and arbitration set forth in Article IX
of the Separation and Distribution Agreement (which are hereby incorporated
herein by reference) shall apply to all disputes, controversies or claims
(whether sounding in contract, tort or otherwise) that may arise out of or
relate to, or arise under or in connection with this Agreement or, except as
otherwise expressly provided therein, any NCR Ancillary Agreement (as if each of
this Agreement and each of the NCR Ancillary Agreements were an Ancillary
Agreement), or the transactions contemplated hereby or thereby (including all
actions taken in furtherance of the transactions contemplated hereby or thereby
on or prior to the date hereof), or the commercial or economic relationship of
the parties relating hereto or thereto, between or among any member of the AT&T
Services Group and the NCR Group.

                  (b) Each party agrees on behalf of itself and each member of
its respective Group that the procedures set forth in such Article IX shall be
the sole and exclusive remedy in connection with any dispute, controversy or
claim relating to any of the foregoing matters and irrevocably waives any right
to commence any Action in or before any Governmental Authority, except as
expressly provided in Sections 9.7(b) and 9.8 of the Separation and Distribution
Agreement and except to the extent provided under the Arbitration Act in the
case of judicial review of arbitration results or awards. Each party on behalf
of itself and each member of its respective Group irrevocably waives any right
to any trial by jury with respect to any claim, controversy or dispute set forth
in the first sentence of Section 9.1 of the Separation and Distribution
Agreement.

                  (c) Without limiting the foregoing, each of the parties agrees
on behalf of itself and each member of its Group that if an Arbitration Demand
Notice with respect to a dispute, controversy or claim is not given prior to the
expiration of the Applicable Deadline, as between or among the parties and the
members of their Groups, such dispute, controversy or claim will be barred.

                  (d) Subject to Sections 9.7(d) and 9.8 of the Separation and
Distribution Agreement, upon delivery of an Arbitration Demand Notice pursuant
to Section 9.3(a) of the Separation and Distribution Agreement prior to the
Applicable Deadline, the dispute, controversy or claim shall be decided by a
sole arbitrator in accordance with the rules set forth in Article IX of the
Separation and Distribution Agreement.

                  (e) The interpretation of the provisions of this Section 4.9
and Article IX of the Separation and Distribution Agreement (to the extent
incorporated herein by reference), only insofar as they relate to the agreement
to arbitrate and any procedures pursuant thereto, shall be governed by the
Arbitration Act and other applicable federal law. In all other respects, the
interpretation of this Agreement shall be governed as set forth in Section 8.2.

                                    ARTICLE V
                  INTERIM OPERATIONS AND CERTAIN OTHER MATTERS

                  5.1. CERTAIN TAX MATTERS. Notwithstanding any other provision
of this Agreement, the Tax Sharing Agreement, or any other Transaction
Agreement, in the case of any Adjustment comprising a Restructuring Adjustment
that relates to the NCR Distribution and arises as a result of the acquisition
of all or a portion of the NCR capital stock of any class or series and/or its
assets by any means whatsoever by any Person other than an Affiliate of NCR
following such NCR Distribution, then the Shared NCR 


                                      -17-

<PAGE>   19
Percentage with respect to such Adjustment shall be 100% and each of the Shared
AT&T Percentage and the Shared Lucent Percentage shall be 0%.

                  5.2. AGREEMENT FOR EXCHANGE OF INFORMATION; ARCHIVES. Each of
AT&T and NCR agrees that the provisions of Article VIII of the Separation and
Distribution Agreement shall continue to apply after the NCR Distribution Date;
provided however, that as between the members of NCR Group, on the one hand, and
the AT&T Services Group, on the other hand, the reference to "the third
anniversary of the date hereof" in Section 8.2 of the Separation and
Distribution Agreement shall be deemed to be the third anniversary of the date
of this Agreement. Without limiting the foregoing, (a) NCR shall maintain in
effect at its own cost and expense adequate systems and controls to the extent
necessary to enable the members of the AT&T Group to satisfy their respective
reporting, accounting, audit and other obligations, and (b) NCR shall provide,
or cause to be provided, to AT&T in such form as AT&T shall request, at no
charge to AT&T, all financial and other data and information as AT&T determines
necessary or advisable in order to prepare AT&T financial statements and reports
or filings with any Governmental Authority.

                  5.3. INSURANCE MATTERS. (a) All rights of the members of the
NCR Group as of the NCR Distribution Date under Ridge NCR Policies that are by
their respective terms occurrence-based policies shall survive the NCR
Distribution Date with respect to events occurring on or prior to the NCR
Distribution Date in accordance with their respective terms as of such date. All
other rights under any Ridge NCR Policies shall terminate as of the NCR
Distribution Date and no member of the NCR Group or any NCR Indemnitee shall
have any claim against AT&T, any member of the AT&T Services Group or any AT&T
Indemnitee in respect thereof. NCR agrees to indemnify and hold each member of
the AT&T Services Group and each AT&T Indemnitee harmless with respect to any
such claims.

                  (b) NCR does hereby, for itself and each other member of the
NCR Group, agree that no member of the AT&T Services Group or any AT&T
Indemnitee shall have any Liability whatsoever as a result of the insurance
policies and practices of AT&T and its Affiliates as in effect at any time prior
to the NCR Distribution Date, including as a result of the level or scope of any
such insurance, the creditworthiness of any insurance carrier (other than
American Ridge), the terms and conditions of any policy, the adequacy or
timeliness of any notice to any insurance carrier with respect to any claim or
potential claim or otherwise. In no event shall AT&T, any other member of the
AT&T Services Group or any AT&T Indemnitee have liability or obligation
whatsoever to any member of the NCR Group in the event that any NCR Insurance
Policy or other contract or policy of insurance shall be terminated or otherwise
cease to be in effect for any reason, shall be unavailable or inadequate to
cover any Liability of any member of the NCR Group for any reason whatsoever or
shall not be renewed or extended beyond the current expiration date.

                                   ARTICLE VI
                   FURTHER ASSURANCES AND ADDITIONAL COVENANTS

                  6.1. FURTHER ASSURANCES. (a) In addition to the actions
specifically provided for elsewhere in this Agreement, each of the parties
hereto shall use its reasonable best efforts, prior to, on and after the NCR
Distribution Date, to take, or cause to be taken, all actions, and to do, or
cause to be done, all things, reasonably necessary, proper or 


                                      -18-

<PAGE>   20
advisable under applicable laws, regulations and agreements to consummate and
make effective the transactions contemplated by this Agreement and the NCR
Ancillary Agreements.

                  (b) Without limiting the foregoing, prior to, on and after the
NCR Distribution Date, each party hereto shall cooperate with the other parties,
and without any further consideration, but at the expense of the requesting
party, to execute and deliver, or use its reasonable best efforts to cause to be
executed and delivered, all instruments, including instruments of conveyance,
assignment and transfer, and to make all filings with, and to obtain all
consents, approvals or authorizations of, any Governmental Authority or any
other Person under any permit, license, agreement, indenture or other instrument
(including any Consents or Governmental Approvals), and to take all such other
actions as such party may reasonably be requested to take by any other party
hereto from time to time, consistent with the terms of this Agreement and the
NCR Ancillary Agreements, in order to effectuate the provisions and purposes of
this Agreement and the NCR Ancillary Agreements and the other transactions
contemplated hereby and thereby. Without limiting the foregoing, each party
will, at the reasonable request, cost and expense of any other party, take such
other actions as may be reasonably necessary to vest in such other party good
and marketable title, free and clear of any Security Interest, if and to the
extent it is practicable to do so.

                  (c) Each of AT&T and NCR, at the request of the other, shall
use its reasonable best efforts to obtain, or to cause to be obtained, any
consent, substitution, approval or amendment required to novate (including with
respect to any federal government contract) or assign all obligations under
agreements, leases, licenses and other obligations or Liabilities of any nature
whatsoever that constitute Liabilities of the NCR Group or Liabilities that
relate to the NCR Group, or to obtain in writing the unconditional release of
all parties to such arrangements other than any member of the NCR Group, so
that, in any such case, NCR and its Subsidiaries will be solely responsible for
such Liabilities; provided, however, that neither AT&T nor NCR shall be
obligated to pay any consideration therefor to any third party from whom such
consents, approvals, substitutions, amendments and releases are requested.

                  (d) If AT&T or NCR is unable to obtain, or to cause to be
obtained, any such required consent, approval, release, substitution or
amendment, the applicable member of the AT&T Services Group shall continue to be
bound by such agreements, leases, licenses and other obligations and, unless not
permitted by law or the terms thereof, NCR shall, as agent or subcontractor for
AT&T or such other Person, as the case may be, pay, perform and discharge fully
all the obligations or other Liabilities of AT&T or such other Person, as the
case may be, thereunder from and after the date hereof. NCR shall indemnify each
AT&T Indemnitee, and hold each of them harmless against any Liabilities arising
in connection therewith.

                  (e) On or prior to the Closing Date, AT&T and NCR shall take
all actions as may be necessary to approve the stock-based employee benefit
plans of NCR in order to satisfy the requirements of Rule 16b-3 under the
Exchange Act and Section 162(m) of the Code.

                  (f) The parties hereto agree to take any reasonable actions
necessary in order for the NCR Distribution to qualify as a tax-free
distribution pursuant to Section 355 of the Code.



                                      -19-

<PAGE>   21
                  6.2. QUALIFICATION AS TAX-FREE DISTRIBUTION. (a) After the NCR
Distribution Date, none of AT&T or NCR shall take, or permit any member of its
respective Group to take, any action which could reasonably be expected to
prevent the NCR Distribution from qualifying as a tax-free distribution within
the meaning of Section 355 of the Code or any other transaction contemplated by
this Agreement or any other Transaction Agreement which is intended by the
parties to be tax-free from failing so to qualify.

                  (b) After the NCR Distribution Date, NCR shall not, nor cause
or permit, any member of the NCR Group to take any action or enter into any
transaction which could reasonably be expected to materially adversely impact
the reasonably expected tax consequences to AT&T which are known to NCR of any
transaction contemplated by this Agreement or any Transaction Agreement;
provided, however, nothing in this Section 6.2(b) shall prohibit NCR from taking
any action, or entering into any transaction (or permitting or causing any
member of the NCR Group so to act or enter) in the ordinary course of business
or in the ordinary course of business dealing, or in connection with the
settlement of any audit issue or in connection with the filing of any tax
return. After the NCR Distribution Date, AT&T shall not, nor cause or permit,
any member of the AT&T Services Group to take any action or enter into any
transaction which could reasonably be expected to materially adversely impact
the expected tax consequences to NCR which are known to AT&T of any transaction
contemplated by this Agreement or any Transaction Agreement; provided, however,
nothing in this Section 6.2(b) shall prohibit AT&T from taking any action, or
entering into any transaction (or permitting or causing any member of the AT&T
Services Group so to act or enter), in the ordinary course of business or in the
ordinary course of business dealing, or in connection with the settlement of any
audit issue or in connection with the filing of any tax return.

                                   ARTICLE VII
                                   TERMINATION

                  7.1. TERMINATION. This Agreement may be terminated at any time
prior to the NCR Distribution Date by AT&T.

                  7.2. EFFECT OF TERMINATION. In the event of any termination of
this Agreement, no party to this Agreement (or any of its directors or officers)
shall have any Liability or further obligation to any other party.

                                  ARTICLE VIII
                                  MISCELLANEOUS

                  8.1. COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER. (a) This
Agreement and each NCR Ancillary Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.

                  (b) This Agreement, the Separation and Distribution Agreement,
the Ancillary Agreements and the NCR Ancillary Agreements and the Exhibits,
Schedules and Appendices hereto and thereto contain the entire agreement between
the parties with respect to the subject matter hereof, supersede all previous
agreements, negotiations, discussions, writings, understandings, commitments and
conversations with respect to such subject 


                                      -20-

<PAGE>   22
matter and there are no agreements or understandings between the parties other
than those set forth or referred to herein or therein.

                  (c) AT&T represents on behalf of itself and each other member
of the AT&T Services Group, and NCR represents on behalf of itself and each
other member of the NCR Group as follows:

                   (i) each such Person has the requisite corporate or other
         power and authority and has taken all corporate or other action
         necessary in order to execute, deliver and perform each of this
         Agreement and each other NCR Ancillary Agreements to which it is a
         party and to consummate the transactions contemplated hereby and
         thereby; and

                  (ii) this Agreement and each NCR Ancillary Agreement to which
         it is a party has been duly executed and delivered by it and
         constitutes a valid and binding agreement of it enforceable in
         accordance with the terms thereof.

                  (d) Notwithstanding any provision of this Agreement or any NCR
Ancillary Agreement, AT&T shall not be required to take or omit to take any act
that would violate its fiduciary duties to any minority stockholders of Lucent,
AT&T Capital Corporation or any other non-wholly owned Subsidiary of AT&T (it
being understood that directors' qualifying shares or similar interests will be
disregarded for purposes of determining whether a Subsidiary is wholly owned).

                  8.2. GOVERNING LAW. This Agreement and, unless expressly
provided therein, each NCR Ancillary Agreement, shall be governed by and
construed and interpreted in accordance with the laws of the State of New York
(other than as to its laws of arbitration which shall be governed under the
Arbitration Act or other applicable federal law pursuant to Section 4.9 hereof
and Section 9.10 of the Separation and Distribution Agreement), irrespective of
the choice of laws principles of the State of New York, as to all matters,
including matters of validity, construction, effect, enforceability, performance
and remedies.

                  8.3. ASSIGNABILITY. (a) Except as set forth in any NCR
Ancillary Agreement, this Agreement and each NCR Ancillary Agreement shall be
binding upon and inure to the benefit of the parties hereto and thereto,
respectively, and their respective successors and assigns; provided, however,
that no party hereto or thereto may assign its respective rights or delegate its
respective obligations under this Agreement or any NCR Ancillary Agreement
without the express prior written consent of the other parties hereto or
thereto.

                  8.4. THIRD PARTY BENEFICIARIES. Except for the indemnification
rights under this Agreement of any AT&T Indemnitee or NCR Indemnitee in their
respective capacities as such, (a) the provisions of this Agreement and each NCR
Ancillary Agreement are solely for the benefit of the parties and are not
intended to confer upon any Person except the parties any rights or remedies
hereunder, and (b) there are no third party beneficiaries of this Agreement or
any NCR Ancillary Agreement (except as expressly set forth in the NCR Employee
Benefits Agreement, but only to the specific extent set forth therein) and
neither this Agreement nor any NCR Ancillary Agreement shall provide any third
person with any remedy, claim, liability, reimbursement, claim of action or
other right in excess of those existing without reference to this Agreement or
any NCR Ancillary Agreement.


                                      -21-

<PAGE>   23
                  8.5. NOTICES. All notices or other communications under this
Agreement or any NCR Ancillary Agreement shall be in writing and shall be deemed
to be duly given when (a) delivered in person or (b) deposited in the United
States mail or private express mail, postage prepaid, addressed as follows:

         If to AT&T, to:   AT&T Corp.
                           131 Morristown Road
                           Basking Ridge, NJ 07920
                           Attn: Vice President-Law and
                             Corporate Secretary

         If to NCR, to:    NCR Corporation
                           1700 S. Patterson Blvd.
                           Dayton, Ohio 45479
                           Attn: Chief Financial Officer

         with a copy to:   NCR Corporation
                           1700 S. Patterson Blvd.
                           Dayton, Ohio 45479
                           Attn: General Counsel

Any party may, by notice to the other party, change the address to which such
notices are to be given.

                  8.6. SEVERABILITY. If any provision of this Agreement or any
NCR Ancillary Agreement or the application thereof to any Person or circumstance
is determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof or thereof, or the application of
such provision to Persons or circumstances or in jurisdictions other than those
as to which it has been held invalid or unenforceable, shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions
contemplated hereby or thereby, as the case may be, is not affected in any
manner adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon such a suitable and equitable
provision to effect the original intent of the parties.

                  8.7. FORCE MAJEURE. No party shall be deemed in default of
this Agreement or any NCR Ancillary Agreement to the extent that any delay or
failure in the performance of its obligations under this Agreement or any NCR
Ancillary Agreement results from any cause beyond its reasonable control and
without its fault or negligence, such as acts of God, acts of civil or military
authority, embargoes, epidemics, war, riots, insurrections, fires, explosions,
earthquakes, floods, unusually severe weather conditions, labor problems or
unavailability of parts, or, in the case of computer systems, any failure in
electrical or air conditioning equipment. In the event of any such excused
delay, the time for performance shall be extended for a period equal to the time
lost by reason of the delay.

                  8.8. PUBLICITY. Prior to the NCR Distribution Date, each of
NCR and AT&T shall consult with each other prior to issuing any press releases
or otherwise making public statements with respect to the IPO, the Lucent
Distribution, the NCR Distribution or any of the other transactions contemplated
hereby and prior to making any filings with any Governmental Authority with
respect thereto.


                                      -22-

<PAGE>   24
                  8.9. EXPENSES. Except as expressly set forth in this Agreement
or in any NCR Ancillary Agreement, whether or not the NCR Distribution is
consummated, all third party fees, costs and expenses paid or incurred prior to
the NCR Distribution Date in connection with the NCR Distribution will be paid
by AT&T; provided however that NCR shall consult with AT&T prior to incurring
any such third party obligations.

                  8.10. HEADINGS. The article, section and paragraph headings
contained in this Agreement and in the NCR Ancillary Agreements are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement or any NCR Ancillary Agreement.

                  8.11. SURVIVAL OF COVENANTS. Except as expressly set forth in
any NCR Ancillary Agreement, the covenants, representations and warranties
contained in this Agreement and each NCR Ancillary Agreement, and liability for
the breach of any obligations contained herein, shall survive the NCR
Distribution and shall remain in full force and effect following the
consummation of the NCR Distribution.

                  8.12. WAIVERS OF DEFAULT. Waiver by any party of any default
by the other party of any provision of this Agreement or any NCR Ancillary
Agreement shall not be deemed a waiver by the waiving party of any subsequent or
other default, nor shall it prejudice the rights of the other party.

                  8.13. AMENDMENTS. No provisions of this Agreement or any NCR
Ancillary Agreement shall be deemed waived, amended, supplemented or modified by
any party, unless such waiver, amendment, supplement or modification is in
writing and signed by the authorized representative of the party against whom it
is sought to enforce such waiver, amendment, supplement or modification.

                  8.14. INTERPRETATION. Words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other genders as the context requires. The terms "hereof," "herein,"
and "herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement (or the applicable NCR Ancillary Agreement)
as a whole (including all of the Schedules, Exhibits and Appendices hereto and
thereto) and not to any particular provision of this Agreement (or such NCR
Ancillary Agreement). Article, Section , Exhibit, Schedule and Appendix
references are to the Articles, Sections , Exhibits, Schedules and Appendices to
this Agreement (or the applicable NCR Ancillary Agreement) unless otherwise
specified. The word "including" and words of similar import when used in this
Agreement (or the applicable NCR Ancillary Agreement) shall mean "including,
without limitation," unless the context otherwise requires or unless otherwise
specified. The word "or" shall not be exclusive. For all purposes of this
Agreement, "allocated costs of in-house counsel and other personnel" shall be
determined in accordance with the principles set forth in Schedule 12.15 to the
Separation and Distribution Agreement. Unless expressly stated to the contrary
in this Agreement, all references to "the date hereof," "the date of this
Agreement," "hereby" and "hereupon" and words of similar import shall all be
references to November 20, 1996, regardless of any amendment or restatement
hereof.



                                      -23-

<PAGE>   25
                  IN WITNESS WHEREOF, the parties have caused this Distribution
Agreement to be executed by their duly authorized representatives.

                                       AT&T CORP.

                                    By: /s/ R.E. Allen
                                       --------------------------------
                                       Name:                     
                                       Title:

                                       NCR CORPORATION

                                    By: /s/ Jon S. Hoak
                                       --------------------------------
                                       Name:
                                       Title:





<PAGE>   1
                                                                     EXHIBIT 3.1


                      ARTICLES OF AMENDMENT AND RESTATEMENT

                                       OF

                                 NCR CORPORATION

                  NCR Corporation, a Maryland corporation having its principal
business office in Dayton, Ohio, and its principal office in the City of
Rockville, State of Maryland, desires to amend and restate its charter as
currently in effect, and hereby certifies to the State Department of Assessment
and Taxation of Maryland that:

                  FIRST: The Charter of the Corporation is hereby amended by:

                           Changing and reclassifying each of the shares of
Common Stock (par value $5.00 per share) of the Corporation which is issued as
of the close of business on the effective date of this amendment into one share
of Common Stock (par value $.01 per share) and by transferring from the account
designated "Common Stock" to the account designated "Capital Surplus" $4.99 for
each share of Common Stock issued immediately after the change and
reclassification, or $359,280,000 in the aggregate.

                           Changing and reclassifying the 72,000,000 shares of
Common Stock (par value $.01 per share) of the Corporation which are issued as
of the close of business on the effective date of this amendment into
101,437,174.688 shares of Common Stock (par value $.01 per share) and by
transferring from the account
 designated "Capital Surplus" to the account
designated "Common Stock" $294,371.74688, such change and reclassification to be
made as a 1.408849648444-for-one split of the issued shares and not as a stock
dividend, and in connection therewith there shall be issued 29,437,174.688
additional shares of Common Stock (par value $.01 per share).

                  SECOND: The following provisions are all of the provisions of
the Charter currently in effect and as hereinafter amended:

                                    ARTICLE I

                                      NAME

                  SECTION 1.1. The name of the Corporation (the "Corporation")
is: NCR Corporation.

<PAGE>   2
                                   ARTICLE II

                 PRINCIPAL OFFICE, REGISTERED OFFICE, AND AGENT

                  SECTION 2.1. The address of the Corporation's principal office
in the State of Maryland is 2 Choke Cherry Road, Rockville, Maryland 20815. The
resident agent of the Corporation in the State of Maryland is Mallon Snyder. The
address of the resident agent is 99 South Washington Street, Rockville, Maryland
20850. Such resident agent is a Maryland resident.


                                   ARTICLE III

                                    PURPOSES

                  SECTION 3.1. The purpose of the Corporation is to engage in
any lawful act, activity or business for which corporations may be organized
under the General Laws of the State of Maryland as now or hereafter in force.
The Corporation shall have all the general powers granted by law to Maryland
corporations and all other powers not inconsistent with law which are
appropriate to promote and attain its purpose.


                                   ARTICLE IV

                                  CAPITAL STOCK

                  SECTION 4.1. The Corporation shall be authorized to issue
600,000,000 shares of capital stock, of which 500,000,000 shares shall be
classified as "Common Stock", $.01 par value per share ("Common Stock") (having
an aggregate par value of $5,000,000.00), and 100,000,000 shares shall be
classified as "Preferred Stock", $.01 par value per share ("Preferred Stock")
(having an aggregate par value of $1,000,000.00). The aggregate par value of all
authorized shares is $6,000,000.00. The Board of Directors may classify and
reclassify any unissued shares of capital stock by setting or changing in any
one or more respects the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications or terms or conditions
of redemption of such shares of stock.

                  SECTION 4.2. The Common Stock shall be subject to the express
terms of the Preferred Stock and any series thereof. The holders of shares of
Common Stock shall be entitled to one vote for each such share upon all
proposals presented to the stockholders on which the holders of Common Stock are
entitled to vote, except for proposals on which only the holders of another
specified class or series of capital stock are entitled to vote. Subject to the
provisions of law and any preference rights with respect to the payment of
dividends attaching to the Preferred Stock or any series thereof, the holders of
Common Stock shall be entitled to receive, as and when declared by the Board of
Directors, dividends and other distributions authorized by the Board of
Directors in accordance with Maryland General Corporation Law, as in effect from
time


                                      -2-

<PAGE>   3
to time (the "MGCL") and to all other rights of a stockholder pursuant
thereto. Except as otherwise provided by law or in the Charter of the
Corporation (including in any Articles Supplementary (as defined below)) (the
"Charter"), the Common Stock shall have the exclusive right to vote for the
election of directors and for all other purposes, and holders of Preferred Stock
shall not be entitled to receive notice of any meeting of stockholders at which
they are not entitled to vote. In the event of a liquidation, dissolution or
winding up of the Corporation or other distribution of the Corporation's assets
among stockholders for the purpose of winding up the Corporation's affairs,
whether voluntary or involuntary, after payment or provision for payment of the
debts and other liabilities of the Corporation and subject to the rights,
privileges, conditions and restrictions attaching to the Preferred Stock or any
series thereof, the Common Stock shall entitle the holders thereof, together
with the holders of any other class of stock hereafter classified or
reclassified not having a preference on distributions in the liquidation,
dissolution or winding up of the Corporation or other distribution of the
Corporation's assets among stockholders for the purpose of winding up the
Corporation's affairs, whether voluntary or involuntary, to share ratably in the
remaining net assets of the Corporation.

                  SECTION 4.3. The Preferred Stock may be issued from time to
time in one or more series as authorized by the Board of Directors. The Board of
Directors shall have the power from time to time to the maximum extent permitted
by the MGCL to classify or reclassify, in one or more series, any unissued
shares of Preferred Stock, and to reclassify any unissued shares of any series
of Preferred Stock, in any such case, by setting or changing the number of
shares constituting such series and the designation, preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption of the stock. In any such
event, the Corporation shall file for record with the State Department of
Assessments and Taxation of Maryland (or other appropriate entity) articles
supplementary in form and substance prescribed by the MGCL (each, an "Articles
Supplementary"). Subject to the express terms of any series of Preferred Stock
outstanding at the time, the Board of Directors may increase or decrease the
number or alter the designation or classify or reclassify any unissued shares of
a particular series of Preferred Stock by fixing or altering in one or more
respects, from time to time before issuing the shares, any terms, rights,
restrictions and qualifications of the shares, including any preference,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications or terms or conditions of redemption of the shares of
the series.

                  SECTION 4.4 Subject to the foregoing, the power of the Board
of Directors to classify and reclassify any of the shares of capital stock shall
include, without limitation, subject to the provisions of the Charter, authority
to classify or reclassify any unissued shares of such stock into a class or
classes of preferred stock, preference stock, special stock or other stock, and
to divide and classify shares of any class into one or more series of such
class, by determining, fixing or altering one or more of the following:

         (a) the designation of such class or series, which may be by
         distinguishing number, letter or title;

                                      -3-

<PAGE>   4
         (b) the number of shares of such class or series, which number the
         Board of Directors may thereafter (except where otherwise provided in
         the Articles Supplementary) increase or decrease (but not below the
         number of shares thereof then outstanding) and any shares of any class
         or series which have been redeemed, purchased, otherwise acquired or
         converted into shares of Common Stock or any other class or series
         shall become part of the authorized capital stock and be subject to
         classification and reclassification as provided in this Section ;

         (c) whether dividends, if any, shall be cumulative or noncumulative,
         and, in the case of shares of any class or series having cumulative
         dividend rights, the date or dates or method of determining the date or
         dates from which dividends on the shares of such class or series shall
         be cumulative;

         (d) the rate of any dividends (or method of determining such dividends)
         payable to the holders of the shares of such class or series, any
         conditions upon which such dividends shall be paid and the date or
         dates or the method for determining the date or dates upon which such
         dividends shall be payable, and whether any such dividends shall rank
         senior or junior to or on a parity with the dividends payable on any
         other class or series of stock;

         (e) the price or prices (or method of determining such price or prices)
         at which, the form of payment of such price or prices (which may be
         cash, property or rights, including securities of the same or another
         corporation or other entity) for which, the period or periods within
         which and the terms and conditions upon which the shares of such class
         or series may be redeemed, in whole or in part, at the option of the
         Corporation or at the option of the holder or holders thereof or upon
         the happening of a specified event or events, if any;

         (f) the obligation, if any, of the Corporation to purchase or redeem
         shares of such class or series pursuant to a sinking fund or otherwise
         and the price or prices at which, the form of payment of such price or
         prices (which may be cash, property or rights, including securities of
         the same or another corporation or other entity) for which, the period
         or periods within which and the terms and conditions upon which the
         shares of such class or series shall be redeemed or purchased, in whole
         or in part, pursuant to such obligation;

         (g) the rights of the holders of shares of such class or series upon
         the liquidation, dissolution or winding up of the affairs of, or upon
         any distribution of the assets of, the Corporation, which rights may
         vary depending upon whether such liquidation, dissolution or winding up
         is voluntary or involuntary and, if voluntary, may vary at different
         dates, and whether such rights shall rank senior or junior to or on a
         parity with such rights of any other class or series of stock;

         (h) provisions, if any, for the conversion or exchange of the shares of
         such class or series, at any time or times at the option of the holder
         or holders thereof or at the option of the Corporation or upon the
         happening of a specified event or events, into shares of


                                      -4-

<PAGE>   5
         any other class or classes or any other series of the same or any other
         class or classes of stock, or any other security, of the Corporation,
         or any other corporation or other entity, and the price or prices or
         rate or rates of conversion or exchange and any adjustments applicable
         thereto, and all other terms and conditions upon which such conversion
         or exchange may be made;

         (i) restrictions on the issuance of shares of the same series or of any
         other class or series, if any;

         (j) the voting rights, if any, of the holders of shares of such class
         or series in addition to any voting rights required by law;

         (k) whether or not there shall be any limitations applicable, while
         shares of such class or series are outstanding, upon the payment of
         dividends or making of distributions on, or the acquisition of, or the
         use of moneys for purchase or redemption of, any stock of the
         Corporation, or upon any other action of the Corporation, including
         action under this Section , and, if so, the terms and conditions
         thereof; and

         (l) any other preferences, rights, restrictions, including restrictions
         on transferability, and qualifications of shares of such class or
         series, not inconsistent with law and the Charter.

                  SECTION 4.5 For the purposes hereof and of any Articles
Supplementary to the Charter providing for the classification or
reclassification of any shares of capital stock or of any other charter document
of the Corporation (unless otherwise provided in any such article or document),
any class or series of stock of the Corporation shall be deemed to rank:

                  (a) prior to another class or series either as to dividends or
         upon liquidation, if the holders of such class or series shall be
         entitled to the receipt of dividends or of amounts distributable on
         liquidation, dissolution or winding up, as the case may be, in
         preference or priority to holders of such other class or series;

                  (b) on a parity with another class or series either as to
         dividends or upon liquidation, whether or not the dividend rates,
         dividend payment dates or redemption or liquidation price per share
         thereof be different from those of such others, if the holders of such
         class or series of stock shall be entitled to receipt of dividends or
         amounts distributable upon liquidation, dissolution or winding up, as
         the case may be, in proportion to their respective dividend rates or
         redemption or liquidation prices, without preference or priority over
         the holders of such other class or series; and

                  (c) junior to another class or series either as to dividends
         or upon liquidation, if the rights of the holders of such class or
         series shall be subject or subordinate to the rights of the holders of
         such other class or series in respect of the receipt of dividends or
         the amounts distributable upon liquidation, dissolution or winding up,
         as the case may be.

                                      -5-

<PAGE>   6
                  SECTION 4.6. (a) In determining whether a distribution (other
than upon voluntary or involuntary liquidation), by dividend, redemption or
other acquisition of shares or otherwise, is permitted under the MGCL, no effect
shall be given to amounts that would be needed, if the Corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of stockholders whose preferential rights upon dissolution are
junior to those receiving the distribution.

                  (b) The Corporation shall be entitled to treat the person in
whose name any share of its stock is registered as the owner thereof for all
purposes and shall not be bound to recognize any equitable or other claim to, or
interest in, such share on the part of any other person, whether or not the
Corporation shall have notice thereof, except as expressly provided by
applicable law.

                  (c) Except as may be set forth in any Articles Supplementary,
the Board of Directors is hereby expressly authorized pursuant to Section
2-309(b)(5) of the MGCL (or any successor similar or comparable provision) to
declare or pay a dividend payable in shares of one class of the Corporation's
stock to the holders of shares of such class of the Corporation's stock or to
the holders of shares of any other class of stock of the Corporation.


                                    ARTICLE V

                               STOCKHOLDER ACTION

                  SECTION 5.1. Except as may be provided in any Articles
Supplementary, any corporate action upon which a vote of stockholders is
required or permitted may be taken without a meeting or vote of stockholders
only with the unanimous written consent of stockholders entitled to vote
thereon.

                  SECTION 5.2. Except as otherwise required by the MGCL or as
provided elsewhere in the Charter or in the Bylaws, special meetings of
stockholders of the Corporation for any purpose or purposes may be called only
by the Board of Directors or by the President of the Corporation. No business
other than that stated in the notice of the special meeting shall be transacted
at such special meeting. Each of the Board of Directors, the President and
Secretary of the Corporation shall have the maximum power and authority
permitted by the MGCL with respect to the establishment of the date of any
special meeting of stockholders, the establishment of the record date for
stockholders entitled to vote thereat, the imposition of conditions on the
conduct of any special meeting of stockholders and all other matters relating to
the call, conduct, adjournment or postponement of any special meeting,
regardless of whether the meeting was convened by the Board of Directors, the
President, the stockholders of the Corporation or otherwise.

                                      -6-

<PAGE>   7
                                   ARTICLE VI

                          PROVISIONS DEFINING, LIMITING
                              AND REGULATING POWERS

                  SECTION 6.1. The following provisions are hereby adopted for
the purposes of defining, limiting and regulating the powers of the Corporation
and the directors and stockholders, subject, however, to any provisions,
conditions and restrictions hereafter authorized pursuant to Article IV hereof:

                  (a) The Board of Directors of the Corporation is empowered to
         authorize the issuance from time to time of shares of its stock of any
         class, whether now or hereafter authorized, and securities convertible
         into shares of its stock of any class, whether now or hereafter
         authorized, for such consideration as the Board of Directors may deem
         advisable, and without any action by the stockholders.

                  (b) No holder of any stock or any other securities of the
         Corporation, whether now or hereafter authorized, shall have any
         preemptive right to subscribe for or purchase any stock or any other
         securities of the Corporation other than such, if any, as the Board of
         Directors, in its sole discretion, may determine and at such price or
         prices and upon such other terms as the Board of Directors, in its sole
         discretion, may fix; and any stock or other securities which the Board
         of Directors may determine to offer for subscription may, as the Board
         of Directors in its sole discretion shall determine, be offered to the
         holders of any class, series or type of stock or other securities at
         the time outstanding to the exclusion of the holders of any or all
         other classes, series or types of stock or other securities at the time
         outstanding.

                  (c) The Board of Directors of the Corporation shall,
         consistent with applicable law, have power in its sole discretion to
         determine from time to time in accordance with sound accounting
         practice or other reasonable valuation methods what constitutes annual
         or other net profits, earnings, surplus, or net assets in excess of
         capital; to fix and vary from time to time the amount to be reserved as
         working capital, or determine that retained earnings or surplus shall
         remain in the hands of the Corporation; to set apart out of any funds
         of the Corporation such reserve or reserves in such amount or amounts
         and for such proper purpose or purposes as it shall determine and to
         abolish any such reserve or any part thereof; to distribute and pay
         distributions or dividends in stock, cash or other securities or
         property, out of surplus or any other funds or amounts legally
         available therefor, at such times and to the stockholders of record on
         such dates as it may, from time to time, determine.

                  SECTION 6.2. Unless provided to the contrary in the MGCL or
other applicable law, the Charter or the Bylaws, the affirmative vote of a
majority of the voting power of the shares present in person or represented by
proxy at the meeting and entitled to vote on the matter shall be the act of the
stockholders.

                                      -7-

<PAGE>   8
                  SECTION 6.3. No directors shall be disqualified from voting or
acting on behalf of the Corporation in contracting with any other corporation in
which he may be a director, officer or stockholder, nor shall any director of
the Corporation be disqualified from voting or acting in its behalf by reason of
any personal interest.

                  SECTION 6.4. The Board of Directors shall have power to
determine from time to time whether and to what extent and at what times and
places and under what conditions and regulations the books, records, accounts
and documents of the Corporation, or any of them, shall be open to inspection by
stockholders, except as otherwise provided by law or by the Bylaws; and except
as so provided no stockholder shall have any right to inspect any book, record,
account or document of the Corporation unless authorized to do so by resolution
of the Board of Directors.

                  SECTION 6.5. The enumeration and definition of particular
powers of the Board of Directors included in the foregoing shall in no way be
limited or restricted by reference to or inference from the terms of any other
clause of this or any other Article of the Charter of the Corporation, or
construed as or deemed by inference or otherwise in any manner to exclude or
limit any powers conferred upon the Board of Directors under the General Laws of
the State of Maryland now or hereafter in force.


                                   ARTICLE VII

                               BOARD OF DIRECTORS

                  SECTION 7.1. (a) The Corporation shall have three directors,
which number may be increased or decreased from time to time in such lawful
manner as the Bylaws of the Corporation shall provide, but shall never be less
than the minimum number permitted by the General Laws of the State of Maryland,
as now or hereafter in force.

                  (b) The directors, other than those who may be elected in
accordance with the terms of any Articles Supplementary, shall be divided into
three classes. Each such class shall consist, as nearly as may be possible, of
one-third of the total number of directors, and any remaining directors shall be
included with such group or groups as the Board of Directors shall designate. At
the annual meeting of the stockholders of the Corporation for 1996, a class of
directors shall be elected for a one-year term, a class of directors shall be
elected for a two-year term, and a class of directors shall be elected for a
three-year term. At each succeeding annual meeting of stockholders, beginning
with 1997, successors to the class of directors whose term expires at that
annual meeting shall be elected for a three-year term. If the number of
directors is changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class as nearly equal
as possible, but in no case shall a decrease in the number of directors shorten
the term of any incumbent director.

                  (c) Except as provided by law with respect to directors
elected by stockholders of a class or series, any director or the entire Board
of Directors may be removed for cause, by the


                                      -8-

<PAGE>   9
affirmative vote of the holders of not less than 80% of the voting power of all
Voting Stock (as defined below) then outstanding, voting together as a single
class. Subject to such removal, or the death, resignation or retirement of a
director, a director shall hold office until the annual meeting of the
stockholders for the year in which such director's term expires and until a
successor shall be elected and qualified, except as provided in Section 7.1(d)
hereof.

                  (d) Except as provided by law with respect to directors
elected by stockholders of a class or series, a vacancy on the Board of
Directors which results from the removal of a director may be filled by the
affirmative vote of the holders of not less than 80% of the voting power of the
then outstanding Voting Stock, voting together as a single class, and a vacancy
which results from any such removal or from any other cause may be filled by a
majority of the remaining directors, whether or not sufficient to constitute a
quorum. Any director so elected by the Board of Directors shall hold office
until the next annual meeting of stockholders and until his successor is elected
and qualifies and any director so elected by the stockholders shall hold office
for the remainder of the term of the removed director. No decrease in the number
of directors constituting the Board of Directors shall shorten the term of any
incumbent director.

                  (e) Except to the extent prohibited by law or limited by the
Charter or the Bylaws, the Board of Directors shall have the power (which, to
the extent exercised, shall be exclusive) to fix the number of directors and to
establish the rules and procedures that govern the internal affairs of the Board
of Directors and nominations for director, including without limitation the vote
required for any action by the Board of Directors, and that from time to time
shall affect the directors' power to manage the business and affairs of the
Corporation and no Bylaw shall be adopted by the stockholders which shall modify
the foregoing.


                  SECTION 7.2. Advance notice of stockholder nominations for the
election of directors and of the proposal of business by stockholders shall be
given in the manner provided in the Bylaws of the Corporation, as amended and in
effect from time to time. Unless and except to the extent that the Bylaws of the
Corporation shall so require, the election of directors of the Corporation need
not be by written ballot.


                                  ARTICLE VIII

                                     BYLAWS

                  SECTION 8.1. The Bylaws may contain any provision for the
regulation and management of the affairs of the Corporation not inconsistent
with law or the provisions of the Charter. Without limiting the foregoing, to
the maximum extent permitted by the MGCL from time to time, the Corporation may
in its Bylaws confer upon the Board of Directors powers and authorities in
addition to those set forth in the Charter and in addition to those expressly
conferred upon the Board of Directors by statute as long as such powers and
authorities are not inconsistent with the provisions of the Charter.

                                      -9-

<PAGE>   10
                  SECTION 8.2. Except as provided in the Charter, the Bylaws may
be altered or repealed and new Bylaws may be adopted (a) subject to Section
7.1(e), at any annual or special meeting of stockholders, by the affirmative
vote of the holders of a majority of the voting power of all shares of the
Corporation entitled to vote generally in the election of directors (the "Voting
Stock") then outstanding, voting together as a single class; provided, however,
that any proposed alteration or repeal of, or the adoption of any Bylaw
inconsistent with, Sections 2, 8 or 11 of Article I of the Bylaws, with Section
1, 2 or 3 of Article II of the Bylaws, or Article X of the Bylaws or this
sentence, by the stockholders shall require the affirmative vote of the holders
of at least 80% of the voting power of all Voting Stock then outstanding, voting
together as a single class; and provided, further, however, that in the case of
any such stockholder action at a special meeting of stockholders, notice of the
proposed alteration, repeal or adoption of the new Bylaw or Bylaws must be
contained in the notice of such special meeting, or (b) by the affirmative vote
of a majority of the total number of directors which the Corporation would have
if there were no vacancies on the Board.

                                   ARTICLE IX

                              AMENDMENT OF CHARTER

                  SECTION 9.1. The Corporation reserves the right to adopt,
repeal, rescind, alter or otherwise amend in any respect any provision contained
in this Charter, including but not limited to, any amendments changing the terms
or contract rights of any class of its stock by classification, reclassification
or otherwise, and all rights now or hereafter conferred on stockholders are
granted subject to this reservation. Any amendment of the Charter shall be valid
and effective if such amendment shall have been authorized by the affirmative
vote at a meeting of the stockholders duly called for such purpose of a majority
of the total number of shares outstanding and entitled to vote thereon, except
that the affirmative vote of the holders of at least 80% of the Voting Stock
then outstanding, voting together as a single class, at a meeting of the
stockholders duly called for such purpose shall be required to alter, amend,
adopt any provision inconsistent with or repeal Article V, Article VII, Section
8.2 of Article VIII, or this Article IX of the Charter.


                                    ARTICLE X

                       LIMITED LIABILITY; INDEMNIFICATION

                  SECTION 10.1. To the fullest extent permitted by Maryland
statutory or decisional law, as amended or interpreted, no director or officer
of the Corporation shall be personally liable to the Corporation or its
stockholders for money damages. No amendment of the Charter of the Corporation
or repeal of any of its provisions shall limit or eliminate the benefits
provided to directors and officers under this provision with respect to any act
or omission which occurred prior to such amendment or repeal or with respect to
any cause of action, suit or claim that, but for this Section 10.1 of this
Article X, would accrue or arise, prior to such amendment or repeal.

                                      -10-

<PAGE>   11
                  SECTION 10.2. The Corporation shall indemnify (a) its
directors and officers, whether serving the Corporation or, at its request, any
other entity, to the fullest extent required or permitted by the General Laws of
the State of Maryland now or hereafter in force, including the advance of
expenses under the procedures and to the fullest extent permitted by law and (b)
other employees and agents to such extent as shall be authorized by the Board of
Directors or the Corporation's Bylaws and be permitted by law. The foregoing
rights of indemnification shall not be exclusive of any other rights to which
those seeking indemnification may be entitled. The Board of Directors may take
such action as is necessary to carry out these indemnification provisions and is
expressly empowered to adopt, approve and amend from time to time such bylaws,
resolutions or contracts implementing such provisions or such further
indemnification arrangements as may be permitted by law. No amendment of the
Charter, or of any such bylaw, resolution or contract, or repeal of any of their
provisions shall limit or eliminate the right to indemnification provided
hereunder or thereunder with respect to acts or omissions occurring prior to
such amendment or repeal.

                                   ARTICLE XI

                                    DURATION

                  SECTION 11.1. The duration of the Corporation shall be
perpetual.

         THIRD: (i) As of immediately before the amendment the total number of
shares of stock of all classes which the Corporation had authority to issue was
285,000,000 shares, par value $5.00 per share, having an aggregate par value of
$1,425,000,000, of which 10,000,000 shares having an aggregate par value of
$50,000,000 are Cumulative Preferred Stock and 275,000,000 shares having an
aggregate par value of $1,375,000,000 are Common Stock.

                  (ii) As amended the total number of shares of stock of all
classes which the Corporation has authority to issue is 600,000,000 shares, of
which 100,000,000 shares are Preferred Stock, with a par value of $.01 per
share, and 500,000,000 shares are Common Stock, with a par value of $.01 share,
for an aggregate par value of $6,000,000.

                  (iii) The shares of stock of the Corporation are divided into
classes, and the description, as amended, of each class, including the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption are contained in Article IV of these Articles of Amendment and
Restatement.

         FOURTH: The amendment to and restatement of the Charter of the
Corporation as hereinabove set forth have been declared advisable by the Board
of Directors of the Corporation and approved by the sole stockholder of the
Corporation as required by law.

         FIFTH: The current address of the principal office of the Corporation
in Maryland and the name and address of the Corporation's current resident agent
are as set forth in Article II of

                                      -11-

<PAGE>   12
the amended and restated Charter of the Corporation. There are three directors
currently in office, whose names are as follows:

                  Lars Nyberg
                  John L. Giering
                  Jonathan S. Hoak


                  IN WITNESS WHEREOF, the Corporation has caused these presents
to be signed in its name and on its behalf by its President and witnessed by its
Secretary on this 20th day of December, 1996.


                                             NCR CORPORATION



                                             By:  /s/ Lars Nyberg
                                                  ------------------------------
                                                  Name:  Lars Nyberg
                                                  Title:  President


ATTEST:


/s/ Laura K. Nyquist
- ------------------------------
Name:  Laura K. Nyquist
Title:  Secretary



         THE UNDERSIGNED, the President of NCR Corporation who executed on
behalf of the Corporation the foregoing Articles of Amendment and Restatement of
which this certificate is made a part, hereby acknowledges in the name and on
behalf of the Corporation the foregoing Articles of Amendment and Restatement to
be the corporate act of the Corporation and hereby certifies to the best of his
knowledge, information and belief the matters and facts set forth therein with
respect to the authorization and approval thereof are true in all material
respects under the penalties of perjury.


                                                  /s/ Lars Nyberg
                                                  ------------------------------
                                                  Name:  Lars Nyberg
                                                  Title: President

                                      -12-

<PAGE>   13
                             ARTICLES SUPPLEMENTARY

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                                 NCR CORPORATION

                        (Pursuant to Section 2-208 of the
                        Maryland General Corporation Law)



                  NCR Corporation, a Maryland corporation having its principal
business office in Dayton, Ohio, and its principal office in the City of
Rockville, State of Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland that
the following resolution was adopted by the Board of Directors of the
Corporation by unanimous written consent on December 20, 1996 and that these
Articles do not increase the authorized capital stock of the Corporation:

                  RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Articles of
Amendment and Restatement of the Charter of the Corporation, the Board of
Directors hereby creates a series of Preferred Stock, par value $.01 per share
(the "Preferred Stock"), of the Corporation and hereby states the designation
and number of shares, and fixes the relative rights, preferences, and
limitations thereof as follows:

                  Series A Junior Participating Preferred Stock:

                  Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be 1,500,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

<PAGE>   14
                  Section 2.  Dividends and Distributions.

                  (A) Subject to the rights of the holders of any shares of any
         series of Preferred Stock (or any similar stock) ranking prior and
         superior to the Series A Preferred Stock with respect to dividends, the
         holders of shares of Series A Preferred Stock, in preference to the
         holders of Common Stock, par value $.01 per share (the "Common Stock"),
         of the Corporation, and of any other junior stock, shall be entitled to
         receive, when, as and if declared by the Board of Directors out of
         funds legally available for the purpose, quarterly dividends payable in
         cash on the first day of March, June, September and December in each
         year (each such date being referred to herein as a "Quarterly Dividend
         Payment Date"), commencing on the first Quarterly Dividend Payment Date
         after the first issuance of a share or fraction of a share of Series A
         Preferred Stock, in an amount per share (rounded to the nearest cent)
         equal to the greater of (a) $1 or (b) subject to the provision for
         adjustment hereinafter set forth, 100 times the aggregate per share
         amount of all cash dividends, and 100 times the aggregate per share
         amount (payable in kind) of all non-cash dividends or other
         distributions, other than a dividend payable in shares of Common Stock
         or a subdivision of the outstanding shares of Common Stock (by
         reclassification or otherwise), declared on the Common Stock since the
         immediately preceding Quarterly Dividend Payment Date or, with respect
         to the first Quarterly Dividend Payment Date, since the first issuance
         of any share or fraction of a share of Series A Preferred Stock. In the
         event the Corporation shall at any time declare or pay any dividend on
         the Common Stock payable in shares of Common Stock, or effect a
         subdivision or combination or consolidation of the outstanding shares
         of Common Stock (by reclassification or otherwise than by payment of a
         dividend in shares of Common Stock) into a greater or lesser number of
         shares of Common Stock, then in each such case the amount to which
         holders of shares of Series A Preferred Stock were entitled immediately
         prior to such event under clause (b) of the preceding sentence shall be
         adjusted by multiplying such amount by a fraction, the numerator of
         which is the number of shares of Common Stock outstanding immediately
         after such event and the denominator of which is the number of shares
         of Common Stock that were outstanding immediately prior to such event.

                  (B) The Corporation shall declare a dividend or distribution
         on the Series A Preferred Stock as provided in paragraph (A) of this
         Section immediately after it declares a dividend or distribution on the
         Common Stock (other than a dividend payable in shares of Common Stock);
         provided that, in the event no dividend or distribution shall have been
         declared on the Common Stock during the

<PAGE>   15
         period between any Quarterly Dividend Payment Date and the next
         subsequent Quarterly Dividend Payment Date, a dividend of $1 per share
         on the Series A Preferred Stock shall nevertheless be payable on such
         subsequent Quarterly Dividend Payment Date.

                  (C) Dividends shall begin to accrue and be cumulative on
         outstanding shares of Series A Preferred Stock from the Quarterly
         Dividend Payment Date next preceding the date of issue of such shares,
         unless the date of issue of such shares is prior to the record date for
         the first Quarterly Dividend Payment Date, in which case dividends on
         such shares shall begin to accrue from the date of issue of such
         shares, or unless the date of issue is a Quarterly Dividend Payment
         Date or is a date after the record date for the determination of
         holders of shares of Series A Preferred Stock entitled to receive a
         quarterly dividend and before such Quarterly Dividend Payment Date, in
         either of which events such dividends shall begin to accrue and be
         cumulative from such Quarterly Dividend Payment Date. Accrued but
         unpaid dividends shall not bear interest. Dividends paid on the shares
         of Series A Preferred Stock in an amount less than the total amount of
         such dividends at the time accrued and payable on such shares shall be
         allocated pro rata on a share-by-share basis among all such shares at
         the time outstanding. The Board of Directors may fix a record date for
         the determination of holders of shares of Series A Preferred Stock
         entitled to receive payment of a dividend or distribution declared
         thereon, which record date shall be not more than 60 days prior to the
         date fixed for the payment thereof.

                  Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:

                  (A) Subject to the provision for adjustment hereinafter set
         forth, each share of Series A Preferred Stock shall entitle the holder
         thereof to 100 votes on all matters submitted to a vote of the
         stockholders of the Corporation. In the event the Corporation shall at
         any time declare or pay any dividend on the Common Stock payable in
         shares of Common Stock, or effect a subdivision or combination or
         consolidation of the outstanding shares of Common Stock (by
         reclassification or otherwise than by payment of a dividend in shares
         of Common Stock) into a greater or lesser number of shares of Common
         Stock, then in each such case the number of votes per share to which
         holders of shares of Series A Preferred Stock were entitled immediately
         prior to such event shall be adjusted by multiplying such number by a
         fraction, the numerator of which is the number of shares of Common
         Stock outstanding immediately after such event and the denominator of
         which

<PAGE>   16
         is the number of shares of Common Stock that were outstanding
         immediately prior to such event.

                  (B) Except as otherwise provided herein, in any other Articles
         Supplementary creating a series of Preferred Stock or any similar
         stock, or by law, the holders of shares of Series A Preferred Stock and
         the holders of shares of Common Stock and any other capital stock of
         the Corporation having general voting rights shall vote together as one
         class on all matters submitted to a vote of stockholders of the
         Corporation.

                  (C) Except as set forth herein, or as otherwise provided by
         law, holders of Series A Preferred Stock shall have no special voting
         rights and their consent shall not be required (except to the extent
         they are entitled to vote with holders of Common Stock as set forth
         herein) for taking any corporate action.

                  Section 4.  Certain Restrictions.

                  (A) Whenever quarterly dividends or other dividends or
         distributions payable on the Series A Preferred Stock as provided in
         Section 2 are in arrears, thereafter and until all accrued and unpaid
         dividends and distributions, whether or not declared, on shares of
         Series A Preferred Stock outstanding shall have been paid in full, the
         Corporation shall not:

                        (i) declare or pay dividends, or make any other
                  distributions, on any shares of stock ranking junior (either
                  as to dividends or upon liquidation, dissolution or winding
                  up) to the Series A Preferred Stock;

                       (ii) declare or pay dividends, or make any other
                  distributions, on any shares of stock ranking on a parity
                  (either as to dividends or upon liquidation, dissolution or
                  winding up) with the Series A Preferred Stock, except
                  dividends paid ratably on the Series A Preferred Stock and all
                  such parity stock on which dividends are payable or in arrears
                  in proportion to the total amounts to which the holders of all
                  such shares are then entitled;

                      (iii) redeem or purchase or otherwise acquire for
                  consideration shares of any stock ranking junior (either as to
                  dividends or upon liquidation, dissolution or winding up) to
                  the Series A Preferred Stock, provided that the Corporation
                  may at any time redeem, purchase or otherwise acquire shares
                  of any such junior stock in exchange for shares of any stock
                  of the Corporation ranking junior (either

<PAGE>   17
                  as to dividends or upon dissolution, liquidation or winding
                  up) to the Series A Preferred Stock; or

                       (iv) redeem or purchase or otherwise acquire for
                  consideration any shares of Series A Preferred Stock, or any
                  shares of stock ranking on a parity with the Series A
                  Preferred Stock, except in accordance with a purchase offer
                  made in writing or by publication (as determined by the Board
                  of Directors) to all holders of such shares upon such terms as
                  the Board of Directors, after consideration of the respective
                  annual dividend rates and other relative rights and
                  preferences of the respective series and classes, shall
                  determine in good faith will result in fair and equitable
                  treatment among the respective series or classes.

                  (B) The Corporation shall not permit any subsidiary of the
         Corporation to purchase or otherwise acquire for consideration any
         shares of stock of the Corporation unless the Corporation could, under
         paragraph (A) of this Section 4, purchase or otherwise acquire such
         shares at such time and in such manner.

                  Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Charter of the Corporation, or in any other Articles
Supplementary creating a series of Preferred Stock or any similar stock or as
otherwise required by law.

                  Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the

<PAGE>   18
Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

                  Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

                  Section 8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable.

                  Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Corporation's Preferred Stock.

<PAGE>   19
                  Section 10. Amendment. The Charter of the Corporation shall
not be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.



                  [Remainder of page intentionally left blank.]
                            [Signature page follows.]

<PAGE>   20
                  IN WITNESS WHEREOF, NCR Corporation has caused these presents
to be signed in its name and on its behalf by its Senior Vice President and
witnessed by its Assistant Secretary this 26th day of December, 1996.


                                                     NCR CORPORATION



                                                  By:  /s/ Jonathan S. Hoak
                                                       -------------------------
                                                       Jonathan S. Hoak
                                                       Senior Vice President



Witness:


/s/ Julie D. Gallagher
- ------------------------------
Name:  Julie D. Gallagher
Title: Assistant Secretary



         THE UNDERSIGNED, Senior Vice President of NCR Corporation, who executed
on behalf of the Corporation Articles Supplementary of which this Certificate is
made a part, hereby acknowledges in the name and on behalf of said Corporation
the foregoing Articles Supplementary to be the corporate act of said Corporation
and hereby certifies that the matters and facts set forth herein with respect to
the authorization and approval thereof are true in all material respects under
the penalties of perjury.



                                                  /s/ Jonathan S. Hoak
                                                  ------------------------------
                                                  Jonathan S. Hoak
                                                  Senior Vice President



<PAGE>   1

                                                                    EXHIBIT 3.2


                                 NCR CORPORATION

                                 ---------------

                                     BYLAWS

                  AS AMENDED AND RESTATED ON DECEMBER 20, 1996


                                   ARTICLE I.

                                  STOCKHOLDERS

                  Section 1. The Corporation shall hold annually a regular
meeting of its stockholders for the election of the Directors and for the
transaction of general business at such place within the United States as the
Board of Directors shall determine and shall cause to be stated in the notice of
such meeting, on any business day during the 31-day period beginning on the
third Wednesday of April of each year. Such annual meetings shall be general
meetings, that is to say, open for the transaction of any business within the
powers of the Corporation without special notice unless otherwise required by
statute, by the Charter (which term, as used in these Bylaws, shall include all
amendments to the Charter and all Articles Supplementary) or by these Bylaws.
Failure to hold an annual meeting at the designated time shall not, however,
invalidate the corporate existence or affect otherwise valid corporate acts.

                  Section 2. At any time in the interval between annual
meetings, special meetings of the stockholders may be called as provided in the
Charter, by the President, by the Board of Directors or by the holders
 of a
majority of the then outstanding shares of common stock of the Corporation. All
such meetings shall be held within the United States. No business other than
that stated in the notice of the special meetings shall be transacted at such
special meeting.

                  Section 3. Written or printed notice of every annual or
special meeting of the stockholders shall be given to each stockholder entitled
to vote at such meeting, by leaving the same with him or at his residence or
usual place of business, or by mailing it, postage prepaid, and addressed to him
at his address, as it appears upon the books of the Corporation, at least ten
days and not more than ninety days before such meeting. Notice of every special
meeting shall state the place, day and hour of such meeting and the business
proposed to be transacted thereat; and no business shall be transacted at such
meeting except that specifically named in the notice. Failure to give notice of
any annual meeting, or any irregularity in such notice, shall not affect the
validity of any annual meeting if held at the time and place fixed by Section 1
of this Article I, or the validity of any proceedings at any such meeting (other
than proceedings of which special notice is required by statute, by the Charter
or by the Bylaws). No notice of an adjourned meeting of stockholders need be
given, except as required by law.

<PAGE>   2
                  Section 4. The Chairman of any special or annual meeting of
stockholders may adjourn or postpone the meeting from time to time, whether or
not a quorum is present. No notice of the time and place of adjourned meetings
need be given except as required by law. The stockholders present at a duly
called meeting at which a quorum is present may continue to transact business
until adjournment or postponement, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum. At any such adjourned or postponed
meeting at which a quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally notified.

                  Section 5. Any stockholder entitled to vote at any meeting of
stockholders may vote either in person or by proxy, but no proxy which is dated
more than eleven months before the meeting at which it is offered shall be
accepted, unless such proxy shall, on its face, name a longer or shorter period
for which it is to remain in force. Every proxy shall be in writing, subscribed
by the stockholder or his duly authorized attorney, and dated, but need not be
sealed, witnessed or acknowledged.

                  Section 6. At any meeting of the stockholders, the polls shall
be opened and closed, the proxies and ballots shall be received, and all
questions touching the qualification of voters and the validity of proxies and
the acceptance or rejection of votes, shall be decided by the Chairman of the
Meeting.

                  Section 7. At each meeting of the stockholders, a full, true
and complete list in alphabetical order, or in alphabetical order by classes or
series of stock, of all stockholders entitled to vote at such meeting,
indicating the number and classes or series of shares held by each, shall be
furnished by the Secretary.

                  Section 8.  (a)  Annual Meetings of Stockholders.
          (1) Nominations of persons for election to the Board of Directors of
         the Corporation and the proposal of business to be considered by the
         stockholders may be made at an annual meeting of stockholders (a)
         pursuant to the Corporation's notice of meeting pursuant to these
         Bylaws, (b) by or at the direction of the Board of Directors, or (c) by
         any stockholder of the Corporation who was a stockholder of record at
         the time of giving of notice provided for in this Bylaw, who is
         entitled to vote at the meeting and who complies with the notice
         procedures set forth in this Bylaw.

         (2) For nominations or other business to be properly brought before an
         annual meeting by a stockholder pursuant to clause (c) of paragraph
         (a)(1) of this Bylaw, the stockholder must have given timely notice
         thereof in writing to the Secretary of the Corporation and such other
         business must otherwise be a proper matter for stockholder action. To
         be timely, a stockholder's notice shall be delivered to the Secretary
         at the principal executive offices of the Corporation not later than
         the close of business on the 90th calendar day nor earlier than the
         close of business on the 120th calendar day prior to the first
         anniversary of the preceding year's annual meeting; provided, however,
         that in the event that the date of the annual meeting is more than
         thirty calendar days before or more than sixty calendar days after such
         anniversary date, notice by the stockholder to be timely must be so


                                      -2-

<PAGE>   3
         delivered not earlier than the close of business on the 120th calendar
         day prior to such annual meeting and not later than the close of
         business on the later of the 90th calendar day prior to such annual
         meeting or the 10th calendar day following the calendar day on which
         public announcement of the date of such meeting is first made by the
         Corporation. For purposes of determining whether a stockholder's notice
         shall have been delivered in a timely manner for the annual meeting of
         stockholders in 1997, the first anniversary of the previous year's
         meeting shall be deemed to be April 16, 1997. In no event shall the
         public announcement of an adjournment of an annual meeting commence a
         new time period for the giving of a stockholder's notice as described
         above. Such stockholder's notice shall set forth (a) as to each person
         whom the stockholder proposes to nominate for election or reelection as
         a Director all information relating to such person that is required to
         be disclosed in solicitations of proxies for election of Directors in
         an election contest, or is otherwise required, in each case pursuant to
         Regulation 14A under the Securities Exchange Act of 1934, as amended
         (the "Exchange Act") and Rule 14a-11 thereunder (including such
         person's written consent to being named in the proxy statement as a
         nominee and to serving as a Director if elected); (b) as to any other
         business that the stockholder proposes to bring before the meeting, a
         brief description of the business desired to be brought before the
         meeting, the reasons for conducting such business at the meeting and
         any material interest in such business of such stockholder and the
         beneficial owner, if any, on whose behalf the proposal is made; and (c)
         as to the stockholder giving the notice and the beneficial owner, if
         any, on whose behalf the nomination or proposal is made (i) the name
         and address of such stockholder, as they appear on the Corporation's
         books, and of such beneficial owner and (ii) the class and number of
         shares of the Corporation which are owned beneficially and of record by
         such stockholder and such beneficial owner.

         (3) Notwithstanding anything in the second sentence of paragraph (a)(2)
         of this Bylaw to the contrary, in the event that the number of
         Directors to be elected to the Board of Directors of the Corporation is
         increased and there is no public announcement by the Corporation naming
         all of the nominees for Director or specifying the size of the
         increased Board of Directors at least 100 calendar days prior to the
         first anniversary of the preceding year's annual meeting, a
         stockholder's notice required by this Bylaw shall also be considered
         timely, but only with respect to nominees for any new positions created
         by such increase, if it shall be delivered to the Secretary at the
         principal executive offices of the Corporation not later than the close
         of business on the 10th calendar day following the day on which such
         public announcement is first made by the Corporation.

         (b) Special Meetings of Stockholders. Only such business shall be
         conducted at a special meeting of stockholders as shall have been
         brought before the meeting pursuant to Section 2 of Article I of these
         Bylaws. Nominations of persons for election to the Board of Directors
         may be made at a special meeting of stockholders at which Directors are
         to be elected pursuant to the Corporation's notice of meeting (a) by or
         at the direction of the Board of Directors, (b) provided that the Board
         of Directors has determined that Directors shall be elected at such
         meeting, by any stockholder of the Corporation who is a stockholder of
         record at the time of giving of notice provided for in this Bylaw, who
         shall


                                      -3-

<PAGE>   4
         be entitled to vote at the meeting and who complies with the notice
         procedures set forth in this Bylaw. In the event the Corporation calls
         a special meeting of stockholders for the purpose of electing one or
         more Directors to the Board of Directors, any stockholder may nominate
         a person or persons (as the case may be), for election to such
         position(s) as specified in the Corporation's notice of meeting
         pursuant to such clause (b), if the stockholder complies with the
         notice procedures set forth in paragraph (a)(2) of this Bylaw and if
         the stockholder's notice required by paragraph (a)(2) of this Bylaw
         shall be delivered to the Secretary at the principal executive offices
         of the Corporation not earlier than the close of business on the 120th
         calendar day prior to such special meeting and not later than the close
         of business on the later of the 90th calendar day prior to such special
         meeting or the 10th calendar day following the day on which public
         announcement is first made of the date of the special meeting and of
         the nominees proposed by the Board of Directors to be elected at such
         meeting. In no event shall the public announcement of an adjournment of
         a special meeting commence a new time period for the giving of a
         stockholder's notice as described above.

         (c)  General.

         (1) Only such persons who are nominated in accordance with the
         procedures set forth in this Bylaw shall be eligible to serve as
         Directors and only such business shall be conducted at a meeting of
         stockholders as shall have been brought before the meeting in
         accordance with the procedures set forth in this Bylaw. Except as
         otherwise provided by law, the Charter or these Bylaws, the Chairman of
         the meeting shall have the power and duty to determine whether a
         nomination or any business proposed to be brought before the meeting
         was made or proposed, as the case may be, in accordance with the
         procedures set forth in this Bylaw and, if any proposed nomination or
         business is not in compliance with this Bylaw, to declare that such
         defective proposal or nomination shall be disregarded.

         (2) For purposes of this Bylaw, "public announcement" shall mean
         disclosure in a press release reported by the Dow Jones News Service,
         Associated Press or comparable national news service or in a document
         publicly filed by the Corporation with the Securities and Exchange
         Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

         (3) Notwithstanding the foregoing provisions of this Bylaw, a
         stockholder shall also comply with all applicable requirements of the
         Exchange Act and the rules and regulations thereunder with respect to
         the matters set forth in this Bylaw. Nothing in this Bylaw shall be
         deemed to affect any rights (a) of stockholders to request inclusion of
         proposals in the Corporation's proxy statement pursuant to Rule 14a-8
         under the Exchange Act or (b) of the holders of any series of Preferred
         Stock to elect Directors under an applicable Articles Supplementary (as
         defined in the Corporation's Charter).

                                      -4-

<PAGE>   5
                  Section 9. No matter shall be considered at any meeting of the
stockholders except upon a motion duly made and seconded. Any motion or second
of a motion shall be made only by a natural person present at the meeting who
either is a stockholder of the Company or is acting on behalf of a stockholder
of the Company, provided, that if the person is acting on behalf of a
stockholder, he or she must present a written statement executed by the
stockholder or the duly authorized attorney of the stockholder on whose behalf
he or she purports to act.

                  Section 10. At each meeting of the stockholders, the order of
business and the procedures to be followed in conducting such business shall be
determined by the presiding officer at the meeting in accordance with the law,
the Charter and these Bylaws. The presiding officer at each meeting shall be
appointed by the Board of Directors prior to the meeting.

                  Section 11. The acquisition of shares of common stock of the
Corporation by any existing or future stockholders or their affiliates or
associates shall be exempt from all of the provisions of Subtitle 7 (entitled
"Voting Rights of Certain Control Shares") of title 3 of the Maryland General
Corporation Law, as amended.


                                   ARTICLE II.

                               BOARD OF DIRECTORS

                  Section 1. Subject to the restrictions contained in the
Charter and these Bylaws, the general management and control of the business and
property of the Corporation shall be vested in its Board of Directors, which may
exercise all the powers of the Corporation except such as by statute, by the
Charter, or by these Bylaws, are conferred upon or reserved to the stockholders.
The Board of Directors shall have the power to fix the compensation of its
members and shall provide for the payment of the expenses of Directors in
attending meetings of the Board of Directors and of any committee of the Board
of Directors.

                  Section 2. Subject to removal, death, resignation or
retirement of a Director, a Director shall hold office until the annual meeting
of the stockholders for the year in which such Director's term expires and until
a successor shall be elected and qualified, except as provided in Section 7.1(d)
of the Charter.

                  Section 3. (a) From time to time, the number of Directors may
be increased to not more than 20, or decreased to not less than 3, upon
resolution approved by a majority of the total number of Directors which the
Corporation would have if there were no vacancies (the "Whole Board"). The
Directors, other than those who may be elected in accordance with the terms of
any Articles Supplementary, shall be divided into three classes. Each such class
shall consist, as nearly as may be possible, of one-third of the total number of
Directors, and any remaining Directors shall be included with such group or
groups as the Board of Directors shall designate. At the annual meeting of the
stockholders of the Corporation for 1996, a class of Directors shall be elected
for a one-year term, a class of Directors shall be elected for a two-year term,
and a class of Directors shall be elected for a three-year term. At each
succeeding annual


                                      -5-

<PAGE>   6
meeting of stockholders, beginning with 1997, successors to the class of
Directors whose term expires at that annual meeting shall be elected for a
three-year term. If the number of Directors is changed, any increase or decrease
shall be apportioned among the classes so as to maintain the number of Directors
in each class as nearly equal as possible, but in no case shall a decrease in
the number of Directors shorten the term of any incumbent Director.

                  (b) Except as provided by law with respect to Directors
elected by stockholders of a class or series, any Director or the entire Board
of Directors may be removed for cause by the affirmative vote of the holders of
not less than 80% of the voting power of all Voting Stock (as defined in the
Charter) then outstanding, voting together as a single class. Subject to such
removal, or the death, resignation or retirement of a Director, a Director shall
hold office until the annual meeting of the stockholders for the year in which
such Director's term expires and until a successor shall be elected and
qualified, except as provided in Section 7.1(d) of the Charter.

                   (c) Except as provided by law with respect to Directors
elected by stockholders of a class or series, a vacancy on the Board of
Directors which results from the removal of a Director may be filled by the
affirmative vote of the holders of not less than 80% of the voting power of the
then outstanding Voting Stock, voting together as a single class, and a vacancy
which results from any such removal or from any other cause may be filled by a
majority of the remaining Directors, whether or not sufficient to constitute a
quorum. Any Director so elected by the Board of Directors shall hold office
until the next annual meeting of stockholders and until his successor is elected
and qualified and any Director so elected by the stockholders shall hold office
for the remainder of the term of the removed Director. No decrease in the number
of Directors constituting the Board of Directors shall shorten the term of any
incumbent Director.

                  Section 4. The Board of Directors shall meet for the election
of officers and for the transaction of any other business as soon as practicable
after the annual meeting of stockholders. Other regular meetings of the Board of
Directors shall be held at such times and from time to time as may be fixed by
the Board of Directors, and on not less than 48 hours' notice, given in such
manner as the Board of Directors any determine. Special meetings of the Board of
Directors shall be held at such times and from time to time pursuant to call of
the Chairman of the Board or of the President, if the President is also a
Director, with notice thereof given in writing or by telephonic or other means
of communication in such manner as the Chairman of the Board or the President,
as the case may be, may determine.

                  Section 5. Regular and special meetings of the Board of
Directors may be held at such place or places within or without the State of
Maryland as the Board of Directors may from time to time determine.

                  Section 6. A majority of the Board of Directors shall
constitute a quorum for the transaction of business, but if, at any meeting of
the Board of Directors, there shall be less than a quorum present, the Directors
present at the meeting, without further notice, may adjourn the same from time
to time, not exceeding ten days at any one time, until a quorum shall attend.
Except as required by statute, or as provided in the Charter or these Bylaws, a
majority of the


                                      -6-

<PAGE>   7
Directors present at any meeting at which a quorum is present shall decide any
questions that may come before the meeting.


                                  ARTICLE III.

                      COMMITTEES OF THE BOARD OF DIRECTORS

EXECUTIVE COMMITTEE

                  Section 1. The Board of Directors may elect an Executive
Committee consisting of three or more Directors. If such a Committee is
established, the Board of Directors shall appoint one of the members of the
Executive Committee to the office of Chairman of the Executive Committee. The
Chairman and other members of the Executive Committee shall hold office until
the first meeting of the Board of Directors following the annual meeting of
stockholders next succeeding their respective elections or until removed by the
Board of Directors or until they shall cease to be Directors. Vacancies in the
Executive Committee or in the office of Chairman of the Executive Committee
shall be filled by the Board of Directors.

                  Section 2. If such a Committee is established, all the powers
of the Board of Directors in the management of the business and affairs of the
Corporation, except as otherwise provided by the Maryland General Corporation
Law, the Charter and the Bylaws, shall vest in the Executive Committee, when the
Board of Directors is not in session.

AUDIT AND FINANCE COMMITTEE

                  Section 3. The Board of Directors may elect an Audit and
Finance Committee consisting of three or more Directors. The Board of Directors
shall appoint one of the members of the Audit and Finance Committee to the
office of Chairman of the Audit and Finance Committee. The Chairman and other
members of the Audit and Finance Committee shall hold office until the first
meeting of the Board of Directors following the annual meeting of stockholders
next succeeding their respective elections or until removed by the Board of
Directors or until they shall cease to be Directors. Vacancies in the Audit and
Finance Committee or in the office of Chairman of the Audit and Finance
Committee shall be filled by the Board of Directors.

COMPENSATION COMMITTEE

                  Section 4. The Board of Directors may elect a Compensation
Committee consisting of three or more Directors. The Board of Directors shall
appoint one of the members of the Compensation Committee to the office of
Chairman of the Compensation Committee. The Chairman and other members of the
Compensation Committee shall hold office until the first meeting of the Board of
Directors following the annual meeting of stockholders next succeeding their
respective elections or until removed by the Board of Directors or until they
shall cease to


                                      -7-

<PAGE>   8
be Directors. Vacancies in the Compensation Committee or in the office of
Chairman of the Compensation Committee shall be filled by the Board of
Directors.

COMMITTEE ON DIRECTORS

                  Section 5. The Board of Directors may elect a Committee on
Directors consisting of three or more Directors. The Board of Directors shall
appoint one of the members of the Committee on Directors to the office of
Chairman of the Committee on Directors. The Chairman and other members of the
Committee on Directors shall hold office until the first meeting of the Board of
Directors following the annual meeting of stockholders next succeeding their
respective elections or until removed by the Board of Directors or until they
shall cease to be Directors. Vacancies in the Committee on Directors or in the
office of Chairman of the Committee on Directors shall be filled by the Board of
Directors.

OTHER COMMITTEES

                  Section 6. The Board of Directors may, by resolution adopted
by a majority of the entire Board, designate one or more additional committees,
each of which shall consist of three or more Directors of the Corporation, and
if it elects such a committee, shall appoint one of the members of the committee
to be Chairman thereof.

MEETINGS OF COMMITTEES

                  Section 7. The Executive Committee and each other committee
shall meet from time to time on call of its Chairman or on call of any one or
more of its members or the Chairman of the Board for the transaction of any
business.

                  Section 8. At any meeting, however called, of the Executive
Committee and each other committee, a majority of its members shall constitute a
quorum for the transaction of business. A majority of such quorum shall decide
any matter that may come before the meeting.

                  Section 9. The Executive Committee and each other committee
shall keep minutes of its proceedings.


                                   ARTICLE IV.

                                    OFFICERS

                  Section 1. The Board of Directors shall appoint one of their
number as Chairman of the Board and may appoint one of their number as Honorary
Chairman of the Board. In addition, the Board of Directors may appoint one of
their number as Acting Chairman of the Board. All of the duties and powers of
the Chairman of the Board shall be vested in the Acting Chairman of the Board in
the event of the absence of the Chairman or in the event that the Chairman
ceases, for any reason, to be a member of the Board and the Board has not yet
elected a


                                      -8-

<PAGE>   9
successor. The Board of Directors shall appoint a President who may also be a
Director. The Board of Directors may also appoint one or more Senior Vice
Presidents and Vice Presidents, who need not be Directors, and such other
officers and agents with such powers and duties as the Board of Directors may
prescribe. The President shall appoint a Treasurer and a Secretary, neither of
whom need be a Director, and may appoint a controller and one or more Assistant
Vice Presidents, Assistant Controllers, Assistant Secretaries and Assistant
Treasurers, none of whom need be a Director. All said officers shall hold office
until the first meeting of the Board of Directors following the annual meeting
of the stockholders next succeeding their respective elections, and until their
successors are appointed and qualify. Any two of said offices, except those of
President and Senior Vice President or Vice President, may, at the discretion of
the Board of Directors, be held by the same person.

                  Section 2. Subject to any supervisory duties that may be given
to the Chairman of the Board by the Board of Directors, the President shall have
direct supervision and authority over the affairs of the Corporation. If the
President is also a Director, and in the absence of the Chairman of the Board,
the President shall preside at all meetings of the Board of Directors at which
he shall be present. He shall make a report of the operation of the Corporation
for the preceding fiscal year to the stockholders at their annual meeting and
shall perform such other duties as are incident to his office, or as from time
to time may be assigned to him by the Board of Directors or the Executive
Committee, or by the Bylaws.

                  Section 3. The Chairman of the Board shall preside at all
meetings of the Board of Directors at which he shall be present and shall have
such other powers and duties as from time to time may be assigned to him by the
Board of Directors or the Executive Committee or by the Bylaws.

                  Section 4. The Chairman of the Executive Committee shall
preside at all meetings of the Executive Committee at which he shall be present
and, in the absence of the Chairman of the Board and the President, if the
President is also a Director, shall preside at all meetings of the Board of
Directors at which he shall be present.

                  Section 5. Except as otherwise provided in the Bylaws, the
Senior Vice Presidents shall perform the duties and exercise all the functions
of the President in his absence or during his inability to act. The Senior Vice
Presidents and Vice Presidents shall have such other powers, and perform such
other duties, as may be assigned to him or them by the Board of Directors, the
Executive Committee, the Chairman of the Executive Committee, the President, or
the Bylaws.

                  Section 6. The Secretary shall issue notices for all meetings,
shall keep the minutes of all meetings, shall have charge of the records of the
Corporation, and shall make such reports and perform such other duties as are
incident to his office or are required of him by the Board of Directors, the
Chairman of the Board, the Executive Committee, the Chairman of the Executive
Committee, the President, or the Bylaws.

                                      -9-

<PAGE>   10
                  Section 7. The Treasurer shall have charge of all monies and
securities of the Corporation and shall cause regular books of account to be
kept. The Treasurer shall perform all duties incident to his office or are
required by him of the Board of Directors, the Chairman of the Board, the
Executive Committee, the Chairman of the Executive Committee, the President or
the Bylaws, and may be required to give bond for the faithful performance of his
duties in such sum and with such surety as may be required by the Board of
Directors or the Executive Committee.


                                   ARTICLE V.

                   ANNUAL STATEMENT OF AFFAIRS AND FISCAL YEAR

                  Section 1. There shall be prepared annually a full and correct
statement of the affairs of the Corporation, to include a balance sheet and a
financial statement of the operations for the preceding fiscal year. The
statement of affairs shall be submitted at the annual meeting of the
stockholders and not more than twenty (20) days after the meeting, placed on
file at the Corporation's principal office. Such statement shall be prepared or
caused to be prepared by such executive officer of the Corporation as may be
designated by the Board of Directors. If no other executive officer is so
designated, it shall be the duty of the President to prepare or cause to be
prepared such statement.

                  Section 2. The fiscal year of the Corporation shall end on the
thirty-first day of December in each year, or on such other day as may be fixed
from time to time by the Board of Directors.


                                   ARTICLE VI.

                                      SEAL

                  The Board of Directors shall provide (with one or more
duplicates) a suitable seal, containing the name of the Corporation, which shall
be in the charge of the Secretary or Assistant Secretaries.


                                  ARTICLE VII.

                                      STOCK

                  Section 1. Shares of capital stock of the Corporation may be
issued as share certificates or may be uncertificated. If issued as share
certificates, such certificates shall be issued in such form as may be approved
by the Board of Directors and shall be signed by the President, the Chairman of
the Board, a Senior Vice President or a Vice President, and also countersigned
by one of the following: the Treasurer, an Assistant Treasurer, the Secretary or
an


                                      -10-

<PAGE>   11
Assistant Secretary; and shall be sealed with the seal of the Corporation
(which may be in the form of a facsimile of the seal of the Corporation).

                  Section 2. The Board of Directors shall have power and
authority to make all such rules and regulations as it may deem expedient
concerning the issue and registration of certificates of stock, provided,
however, that it shall conform to all requirements of any stock exchange upon
which any class of its stock is listed.

                  Section 3. The Board of Directors at any time by resolution
may direct that the stock transfer books be closed for a period not exceeding
twenty days immediately preceding any annual or special meeting of the
stockholders, or the payment of any dividend or any allotment of rights. In lieu
of providing for the closing of the books against transfers of stock as
aforesaid the Board of Directors may fix a date, not less than ten days nor more
than ninety days preceding the date of any meeting of stockholders, and not more
than ninety days preceding any dividend payment date or the date of any
allotment of rights, as a record date for the determination of the stockholders
entitled to notice of and to vote at such meeting, or entitled to receive such
dividends or rights, as the case may be.

                  Section 4. In case any certificate of stock is lost, stolen,
mutilated or destroyed, the Board of Directors shall authorize the issue of a
new certificate in place thereof upon such terms and conditions as it may deem
advisable.



                                  ARTICLE VIII.

                            EXECUTION OF INSTRUMENTS

                  All checks, drafts, bills of exchange, acceptances,
debentures, bonds, coupons, notes or other obligations or evidences of
indebtedness of the Corporation and also all deeds, mortgages, indentures, bills
of sale, assignments, conveyances or other instruments of transfer, contracts
agreements, licenses, endorsements, stock powers, dividend orders, powers of
attorney, proxies, waivers, contents returns, reports, applications,
appearances, complaints, declarations, petitions, stipulations, answers,
denials, certificates, demands, notices or documents, instruments or writings of
any nature shall be signed, executed, verified, acknowledged and delivered by
such officers, agents or employees of the Corporation, or any one of them, and
in such manner, as from time to time may be determined by the Board of Directors
or by the Executive Committee, except as provided by statute, by the Charter or
by the Bylaws.

                                      -11-

<PAGE>   12
                                   ARTICLE IX.

                          WAIVER OF NOTICE OF MEETINGS

                  Section 1. Notice of the time, place and/or purposes of any
meeting of stockholders shall not be required to be given to any stockholder who
shall attend such meeting in person or by proxy; if any stockholder shall, in
writing filed with the records of the meeting either before or after the holding
thereof, waive notice of any stockholders meeting, notice thereof need not be
given to him.

                  Section 2. Notice of any meeting of the Board of Directors
need not be given to any Director if he shall, in writing filed with the records
of the meeting either before or after the holding thereof, waive such notice;
and any meeting of the Board of Directors shall be a legal meeting without
notice thereof having been given, if all the Directors shall be present thereat.


                                   ARTICLE X.

                               AMENDMENT TO BYLAWS

                  Section 1. The Bylaws may be altered or repealed and new
Bylaws may be adopted (a) at any annual or special meeting of stockholders by
the affirmative vote of the holders of a majority of the voting power of the
stock issued and outstanding and entitled to vote thereat, provided, however,
that to the extent set forth in the Charter any proposed alteration or repeal
of, or the adoption of, any Bylaw shall require the affirmative vote of the
holders of at least 80% of the voting power of all Voting Stock (as defined in
the Charter) then outstanding, voting together as a single class, and provided,
further, however, that, in the case of any such stockholder action at a special
meeting of stockholders, notice of the proposed alteration, repeal or adoption
of the new Bylaw or Bylaws must be contained in the notice of such special
meeting, or (b) by the affirmative vote of a majority of the Whole Board.


                                   ARTICLE XI.

                                 INDEMNIFICATION

                  Section 1. The provisions of Section 2-418 of the Maryland
General Corporation Law, as in effect from time to time, and any successor
thereto, are hereby incorporated by reference in these Bylaws.

                  Section 2. Subject to the provisions of Section 4 of this
Article XI, the Corporation (a) shall indemnify its Directors and officers,
whether serving the Corporation or at its request any other entity, to the full
extent required or permitted by the General Laws of the State of Maryland now or
hereafter in force, including the advance of expenses under the procedures set
forth in Section 3 hereof and to the full extent permitted by law and (b) may


                                      -12-

<PAGE>   13
indemnify other employees and agents to such extent, if any, as shall be
authorized by the Board of Directors and be permitted by law, and may advance
expenses to employees and agents under the procedures set forth in Section 5
hereof. For purposes of this Article XI, the "advance of expenses" shall include
the providing by the Corporation to a Director, officer, employee or agent who
has been named a party to a proceeding, of legal representation by, or at the
expense of, the Corporation.

                  Section 3. Any indemnification of an officer or Director or
advance of expenses to an officer or Director in advance of the final
disposition of any proceeding, shall be made promptly, and in any event within
sixty (60) days, upon the written request of the Director or officer entitled to
request indemnification. A request for advance of expenses shall contain the
affirmation and undertaking described in Section 5 hereof and be delivered to
the General Counsel of the Corporation or to the Chairman of the Board. The
right of an officer or Director to indemnification and advance of expenses
hereunder shall be enforceable by the officer or Director entitled to request
indemnification in any court of competent jurisdiction, if (a) the Corporation
denies such request, in whole or in part, or (b) no disposition thereof is made
within sixty (60) days. The costs and expenses incurred by the officer or
Director entitled to request indemnification in connection with successfully
establishing his or her right to indemnification, in whole or in part, in any
such action shall, subject to Section 4 hereof, also be indemnified by the
Corporation. All rights of an officer or Director to indemnification and advance
of expenses hereunder shall be deemed to be a contract between the Corporation
and each Director or officer of the Corporation who serves or served in such
capacity at any time while this Article XI is in effect.

                  Section 4. Anything in this Article XI to the contrary
notwithstanding except in circumstances where indemnification is required under
the General Laws of the State of Maryland now or hereafter in force, no
indemnification of a Director or officer may be made hereunder unless a
determination has been made in accordance with the procedures set forth in
Section 2-418(a) of the Maryland General Corporation Law, as in effect from time
to time and any successor thereto, that the officer or Director requesting
indemnification has met the requisite standard of conduct. An officer or
Director requesting indemnification shall have met the requisite standard of
conduct unless it is established that: (a) the act or omission of the Director
or officer was material to the matter giving rise to the proceeding, and (i) was
committed in bad faith, or (ii) was the result of active and deliberate
dishonesty; or (b) the Director or officer actually received an improper benefit
in money, property or services; or (c) in the case of a criminal proceeding, the
Director or officer had reasonable cause to believe the act or omission was
unlawful.

                  Section 5. The Corporation may advance expenses, prior to the
final disposition of any proceeding, to or on behalf of an employee or agent of
the Corporation who is a party to a proceeding as to action while employed by or
on behalf of the Corporation and who is neither an officer nor Director of the
Corporation upon (a) the submission by the employee or agent to the General
Counsel of the Corporation of a written affirmation that it is such employee's
or agent's good faith belief that such employee or agent has met the standard of
conduct as set forth in Section 4 hereof and an undertaking by such employee or
agent to reimburse the Corporation for


                                      -13-

<PAGE>   14
the advance of expenses by the Corporation to or on behalf of such employee or
agent if it shall ultimately be determined that the standard of conduct has not
been met and (b) the determination by the General Counsel, in his discretion,
that advance of expenses to the employee or agent is appropriate in light of all
of the circumstances, subject to such additional conditions and restrictions not
inconsistent with this Article XI as the General Counsel shall impose.

                  Section 6. The indemnification and advance of expenses
provided by this Article XI (a) shall not be deemed exclusive of any other
rights to which a person requesting indemnification or advance of expenses may
be entitled under any law (common or statutory), or any agreement, vote of
stockholders or disinterested Directors or other provision that is not contrary
to law, both as to action in his or her official capacity and as to action in
another capacity while holding office or while employed by or acting as agent
for the Corporation, (b) shall continue in respect of all events occurring while
a person was a Director, officer, employee or agent of the Corporation, and (c)
shall inure to the benefit of the estate, heirs, executors and administrators of
such person.

                  Section 7. This Article XI shall be effective from and after
the date of its adoption and shall apply to all proceedings arising prior to or
after such date, regardless of whether relating to facts or circumstances
occurring prior to or after such date. Subject to Article X of these Bylaws
nothing herein shall prevent the amendment of this Article XI, provided that no
such amendment shall diminish the rights of any person hereunder with respect to
events occurring or claims made before the adoption of such amendment or as to
claims made after such adoption in respect of events occurring before such
adoption.

                  Section 8. The Board of Directors may take such action as is
necessary to carry out the indemnification provisions of this Article XI and is
expressly empowered to adopt, approve and amend from time to time such
resolutions or contracts implementing such provisions or such further
indemnification arrangements as may be permitted by law.

                                      -14-



<PAGE>   1
                                                                   Exhibit 4.1



NCR CORPORATION                                         COMMON STOCK
A Maryland Corporation                                  Par Value $.01

                                                This Certificate is Transferable
                                                in Boston, MA and New York, NY

          [PHOTO]

John H. Patterson-Founder
                                             CUSIP 628862 10 4
                                             See Reverse for Certain Definitions







          FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF

NCR Corporation, transferable on the books of the Corporation by the owner in
person, or by duly authorized attorney, upon surrender of this certificate
properly endorsed. This certificate and the shares represented hereby are
subject to all the terms, conditions and limitations of the Charter of the
Corporation and all amendments thereto and supplements thereof. This
certificate is not valid until countersigned and registered by the Transfer
Agent and Registrar.

Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.

DATED:

COUNTERSIGNED AND REGISTERED:
THE FIRST NATIONAL BANK OF BOSTON
[BOSTON, MA]

TRANSFER AGENT AND REGISTRAR

BY /s/ Mary Penizic
   -------------------------
   AUTHORIZED SIGNATURE

/s/ Lars Nyberg
- -------------------------------
CHAIRMAN AND CHIEF EXECUTIVE OFFICER

/s/ Laura Nyquist
- -------------------------------
SECRETARY

[seal: NCR CORPORATION, MARYLAND 1926]



<PAGE>   2
                                NCR CORPORATION

        THE CORPORATION WILL FURNISH TO ANY STOCKHOLDER
 ON REQUEST AND WITHOUT
CHARGE A FULL STATEMENT OF THE DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND
OTHER RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS,
QUALIFICATIONS AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH
CLASS WHICH THE CORPORATION IS AUTHORIZED TO ISSUE OR THE DIFFERENCES IN THE
RELATIVE RIGHTS AND PREFERENCES BETWEEN THE SHARES OF EACH SERIES OF A
PREFERRED OR SPECIAL CLASS OF STOCK WHICH THE CORPORATION IS AUTHORIZED TO
ISSUE TO THE EXTENT THEY HAVE BEEN SET AND OF THE AUTHORITY OF THE BOARD OF
DIRECTORS TO SET THE RELATIVE RIGHTS AND PREFERENCES OF SUBSEQUENT SERIES OF A
PREFERRED OR SPECIAL CLASS OF STOCK. SUCH REQUEST MAY BE MADE TO THE SECRETARY
OF THE CORPORATION OR TO ITS TRANSFER AGENT.


        THE FOLLOWING ABBREVIATIONS, WHEN USED IN THE INSCRIPTION ON THE FACE
OF THIS CERTIFICATE, SHALL BE CONSTRUED AS THOUGH THEY WERE WRITTEN OUT IN FULL
ACCORDING TO APPLICABLE LAWS OR REGULATIONS:

TEN COM -- as tenants in common         

TEN ENT -- as tenants by the entireties

IT TEN  -- as joint tenants with right
           of survivorship and not as 
           tenants in common

UNIF GIFT MIN ACT --                   Custodian
                      -----------------           -------------
                         (Cust)                      (Minor)
                      under Uniform Gifts to Minors
                      Act
                         --------------------------------------
                                   (State)

    Additional abbreviations may also be used though not in the above list.

For value received,                    hereby sell, assign and transfer unto
                   -------------------

PLEASE INSERT SOCIAL SECURITY OR OTHER 
  IDENTIFICATION NUMBER OF ASSIGNEE
 -------------------------------------
|                                     |
|                                     |
 ------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
             PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING
                          POSTAL ZIP CODE OF ASSIGNEE

- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------


                                                                        Shares
- -----------------------------------------------------------------------
of the Common Stock represented by the within Certificate and do hereby 
irrevocably constitute and appoint
                                 ----------------------------------------------
                                                                       Attorney
- ----------------------------------------------------------------------
to transfer the said stock on the books of the within-named Corporation with 
full power of substitution in the premises.

Dated:
      ----------------------------------

                                        NOTICE: The signature(s) to this
                                        assignment must correspond with the
                                        name as written upon the face of the
                                        Certificate, in every particular,
                                        without alteration or enlargement
                                        or any change whatever.



                                X
                                 ---------------------------------------------

                                X
                                 ---------------------------------------------
                                THE SIGNATURE(S) MUST BE GUARANTEED BY AN 
                                ELIGIBLE GUARANTOR INSTITUTION (BANKS, 
                                STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
                                AND CREDIT UNIONS WITH MEMBERSHIP IN AN
                                APPROVED SIGNATURE GUARANTEE MEDALLION
                                PROGRAM) PURSUANT TO S.E.C. RULE 17 Ad.15.


This certificate also evidences and entitles the holder hereof to certain rights
as set forth in a Rights Agreement between NCR Corporation and The First
National Bank of Boston, dated as of December 31, 1996 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of NCR Corporation. Under
certain circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by a separate certificate and will no longer be evidenced by this
certificate. NCR Corporation will mail to the holder of this certificate a copy
of the Rights Agreement without charge after receipt of a written request
therefor. Under certain circumstances, as set forth in the Rights Agreement,
Rights issued to any Person who becomes an Acquiring Person (as defined in the
Rights Agreement) may become null and void.
                       



<PAGE>   1
                                                                     EXHIBIT 4.2

- --------------------------------------------------------------------------------


                                 NCR CORPORATION


                                       and


                        THE FIRST NATIONAL BANK OF BOSTON


                                  Rights Agent

                                Rights Agreement

                          Dated as of December 31, 1996


- --------------------------------------------------------------------------------

<PAGE>   2
                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>         <C>                                                            <C>
Section 1.  Certain Definitions .......................................      1

Section 2.  Appointment of Rights Agent ...............................      5

Section 3.  Issue of Right Certificates ...............................      6

Section 4.  Form of Right Certificates ................................      8

Section 5.  Countersignature and Registration .........................      9

Section 6.  Transfer, Split Up, Combination and
            Exchange of Right Certificates;
            Mutilated, Destroyed, Lost or
            Stolen Right Certificates .................................     10

Section 7.  Exercise of Rights; Purchase Price;
            Expiration Date of Rights .................................     11

Section 8.  Cancellation and Destruction of
            Right Certificates ........................................     12

Section 9.  Availability of Common Shares .............................     13

Section 10. Preferred Shares Record Date ..............................     14

Section 11. Adjustment of Purchase Price, Number of
            Shares or Number of Rights ................................     14

Section 12. Certificate of Adjusted Purchase Price
            or Number of Shares .......................................     25

Section 13. Consolidation, Merger or Sale or Transfer
            of Assets or Earning Power ................................     25

Section 14. Fractional Rights and Fractional Shares ...................     26

Section 15. Rights of Action ..........................................     28

Section 16. Agreement of Right Holders ................................     29

Section 17. Right Certificate Holder Not Deemed a
            Stockholder ...............................................     29
</TABLE>



                                      -i-


<PAGE>   3

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>         <C>                                                            <C>
Section
 18. Concerning the Rights Agent ...............................     30

Section 19. Merger or Consolidation or Change of
            Name of Rights Agent ......................................     31

Section 20. Duties of Rights Agent ....................................     32

Section 21. Change of Rights Agent ....................................     34

Section 22. Issuance of New Right Certificates ........................     36

Section 23. Redemption ................................................     36

Section 24. Exchange ..................................................     37

Section 25. Notice of Certain Events ..................................     39

Section 26. Notices ...................................................     40

Section 27. Supplements and Amendments ................................     41

Section 28. Successors ................................................     42

Section 29. Benefits of this Agreement ................................     42

Section 30. Severability ..............................................     42

Section 31. Governing Law .............................................     42

Section 32. Counterparts ..............................................     43

Section 33. Descriptive Headings ......................................     43

Signatures ............................................................     43
</TABLE>



Exhibit A - Form of Articles Supplementary

Exhibit B - Form of Right Certificate

Exhibit C - Summary of Rights to Purchase Preferred Shares


                                      -ii-

<PAGE>   4
                  Agreement, dated as of December 31, 1996, between NCR
Corporation, a Maryland corporation (the "Company"), and The First National Bank
of Boston (the "Rights Agent").

                  The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Company outstanding on December 31,
1996 (immediately after the distribution of all of the outstanding Common Shares
by AT&T Corp. to its shareowners) (the "Record Date"), each Right representing
the right to purchase one one-hundredth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions herein set forth, and has
further authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined).

                  Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:

                  Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:

                  (a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the Common Shares
of the Company then outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of 

<PAGE>   5
any such plan. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the Common Shares of the Company then outstanding; provided, however, that if
a Person shall become the Beneficial Owner of 15% or more of the Common Shares
of the Company then outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the Beneficial Owner of
any additional Common Shares of the Company, then such Person shall be deemed to
be an "Acquiring Person". Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person", as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common Shares so that
such Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement unless such
Person shall thereafter become the beneficial owner of any additional Common
Shares.

                  (b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.

                  (c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:

                  (i) which such Person or any of such Person's Affiliates or
         Associates beneficially owns, directly or indirectly;


                                      -2-

<PAGE>   6
                  (ii) which such Person or any of such Person's Affiliates or
         Associates has (A) the right to acquire (whether such right is
         exercisable immediately or only after the passage of time) pursuant to
         any agreement, arrangement or understanding (other than customary
         agreements with and between underwriters and selling group members with
         respect to a bona fide public offering of securities), or upon the
         exercise of conversion rights, exchange rights, rights (other than
         these Rights), warrants or options, or otherwise; provided, however,
         that a Person shall not be deemed the Beneficial Owner of, or to
         beneficially own, securities tendered pursuant to a tender or exchange
         offer made by or on behalf of such Person or any of such Person's
         Affiliates or Associates until such tendered securities are accepted
         for purchase or exchange; or (B) the right to vote pursuant to any
         agreement, arrangement or understanding; provided, however, that a
         Person shall not be deemed the Beneficial Owner of, or to beneficially
         own, any security if the agreement, arrangement or understanding to
         vote such security (1) arises solely from a revocable proxy or consent
         given to such Person in response to a public proxy or consent
         solicitation made pursuant to, and in accordance with, the applicable
         rules and regulations promulgated under the Exchange Act and (2) is not
         also then reportable on Schedule 13D under the Exchange Act (or any
         comparable or successor report); or

                  (iii) which are beneficially owned, directly or indirectly, by
         any other Person with which such Person or any of such Person's
         Affiliates or Associates has any agreement, arrangement or
         understanding (other than customary agreements with and between
         underwriters and selling group members with respect to a bona fide
         public offering of securities) for the purpose of acquiring, holding,


                                      -3-

<PAGE>   7
         voting (except to the extent contemplated by the proviso to Section
         1(c)(ii)(B)) or disposing of any securities of the Company.

                  Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used with
reference to a Person's Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.

                  (d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in New York are authorized or
obligated by law or executive order to close.

                  (e) "Close of business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.

                  (f) "Common Shares" when used with reference to the Company
shall mean the shares of common stock, par value $.01 per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the greatest voting power
of such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.

                  (g) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.


                                      -4-

<PAGE>   8
                  (h) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.

                  (i) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of such
entity.

                  (j) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company having
the rights and preferences set forth in the Form of Articles Supplementary
attached to this Agreement as Exhibit A.

                  (k) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.

                  (l) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.

                  (m) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.

                  Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable upon ten (10) days'


                                      -5-

<PAGE>   9
prior written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any
such co-Rights Agent.

                  Section 3. Issue of Right Certificates. (a) Until the earlier
of (i) the tenth day after the Shares Acquisition Date or (ii) the tenth
business day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the terms of any such plan)
to commence, a tender or exchange offer the consummation of which would result
in any Person becoming the Beneficial Owner of Common Shares aggregating 15% or
more of the then outstanding Common Shares (including any such date which is
after the date of this Agreement and prior to the issuance of the Rights; the
earlier of such dates being herein referred to as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right Certificates) and
not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer of Common
Shares. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send) by
mail, to each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of 


                                      -6-

<PAGE>   10
such holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto (a "Right Certificate"), evidencing
one Right for each Common Share so held. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.

                  (b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C hereto (the "Summary of Rights")
to each record holder of Common Shares as of the close of business on the Record
Date, at the address of such holder shown on the records of the Company. With
respect to certificates for Common Shares outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof together with a copy of the
Summary of Rights attached thereto. Until the Distribution Date (or the earlier
of the Redemption Date or the Final Expiration Date), the surrender for transfer
of any certificate for Common Shares outstanding on the Record Date, with or
without a copy of the Summary of Rights attached thereto, shall also constitute
the transfer of the Rights associated with the Common Shares represented
thereby.

                  (c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this paragraph (c)) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:

         This certificate also evidences and entitles the holder hereof to
         certain rights as set forth in a Rights Agreement between NCR
         Corporation and The First National Bank of Boston, dated as of December
         31, 1996 (the "Rights Agreement"), the terms of which are hereby
         incorporated herein by reference and a copy of which is on file at the
         principal executive offices of NCR Corporation. Under certain
         circumstances, as set forth in the Rights Agreement, such Rights will
         be 


                                      -7-

<PAGE>   11
         evidenced by a separate certificate and will no longer be evidenced by
         this certificate. NCR Corporation will mail to the holder of this
         certificate a copy of the Rights Agreement without charge after receipt
         of a written request therefor. Under certain circumstances, as set
         forth in the Rights Agreement, Rights issued to any Person who becomes
         an Acquiring Person (as defined in the Rights Agreement) may become
         null and void.


With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common Shares which
are no longer outstanding.

                  Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase Preferred Shares and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 22 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of one 


                                      -8-

<PAGE>   12
one-hundredths of a Preferred Share as shall be set forth therein at the price
per one one-hundredth of a Preferred Share set forth therein (the "Purchase
Price"), but the number of such one one- hundredths of a Preferred Share and the
Purchase Price shall be subject to adjustment as provided herein.

                  Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, any of its Vice Presidents,
or its Treasurer, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless countersigned. In
case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.

                  Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.


                                      -9-

<PAGE>   13
                  Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Section 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of business on
the earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one- hundredths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the
person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.

                  Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to 


                                      -10-

<PAGE>   14
the registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.

                  Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on December 31, 2006 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the "Redemption Date"), or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.

                  (b) The Purchase Price for each one one-hundredth of a
Preferred Share purchasable pursuant to the exercise of a Right shall initially
be $150, and shall be subject to adjustment from time to time as provided in
Section 11 or 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.

                  (c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be purchased and
an amount equal to any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) (A) requisition from any transfer
agent of the Preferred


                                      -11-

<PAGE>   15
Shares certificates for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) requisition from the depositary agent depositary receipts
representing such number of one one- hundredths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof, (iii) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt, deliver such cash to or
upon the order of the registered holder of such Right Certificate.

                  (d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.

                  Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired 


                                      -12-

<PAGE>   16
by the Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.

                  Section 9. Availability of Preferred Shares. The Company
covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7. The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.

                  The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction that no
such tax is due.


                                      -13-

<PAGE>   17
                  Section 10. Preferred Shares Record Date. Each person in whose
name any certificate for Preferred Shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Shares represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Shares transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Shares transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred Shares for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.

                  Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of Preferred Shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.

                  (a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or 


                                      -14-

<PAGE>   18
surviving corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Shares transfer books of the Company were
open, he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right.

              (ii) Subject to Section 24 of this Agreement, in the event any
Person becomes an Acquiring Person, each holder of a Right shall thereafter have
a right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of Common Shares of
the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing that product by (y) 50% of
the then current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the occurrence of
such event. In the event that any Person shall become an Acquiring Person and
the Rights shall then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be afforded by the
Rights.


                                      -15-

<PAGE>   19
                  From and after the occurrence of such event, any Rights that
are or were acquired or beneficially owned by any Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be void and any holder of
such Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 that represents Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence shall be
cancelled.

                  (iii) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(ii), the Company shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exercise of the Rights. In the event
the Company shall, after good faith effort, be unable to take all such action as
may be necessary to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be issuable upon exercise
of a Right, a number of Preferred Shares or fraction thereof such that the
current per share market price of one Preferred Share multiplied by such number
or fraction is equal to the current per share market price of one Common Share
as of the date of issuance of such Preferred Shares or fraction thereof.


                                      -16-

<PAGE>   20
                  (b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
then current per share market price of the Preferred Shares (as defined in
Section 11(d)) on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Preferred Shares outstanding on such record date plus the
number of Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price and the denominator
of which shall be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Preferred Shares owned by or held for the account
of the Company shall not be deemed 


                                      -17-

<PAGE>   21
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.

                  (c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the then current per share market price of the Preferred Shares on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.


                                      -18-

<PAGE>   22
                  (d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the purpose
of this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per share market price of
the Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares,
or (B) any subdivision, combination or reclassification of such Security and
prior to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security is
not listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such other
system then in use, or, if on any such date the Security is not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional 


                                      -19-

<PAGE>   23
market maker making a market in the Security selected by the Board of Directors
of the Company. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange, a Business
Day.

                  (ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share market
price of the Common Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by one hundred. If
neither the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent.

                  (e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one one-millionth
of a Preferred Share or one ten- thousandth of any other share or security as
the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier


                                      -20-

<PAGE>   24
of (i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.

                  (f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon exercise
of any Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13 with respect to the Preferred Shares
shall apply on like terms to any such other shares.

                  (g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one- hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

                  (h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (i) multiplying (x) the number
of one one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.


                                      -21-

<PAGE>   25
                  (i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in


                                      -22-

<PAGE>   26
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.

                  (j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-hundredths
of a Preferred Share which were expressed in the initial Right Certificates
issued hereunder.

                  (k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.

                  (l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.


                                      -23-

<PAGE>   27
                  (m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Shares shall not be taxable to such
stockholders.

                  (n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A) the
number of one one-hundredths of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the number
of one one- hundredths of a Preferred Share so purchasable immediately prior to
such event by a fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event, and (B) each
Common Share outstanding immediately after such event shall have issued with
respect to it that number of Rights which each Common Share outstanding
immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or consolidation
is effected.


                                      -24-

<PAGE>   28
                  Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
25 hereof.

                  Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. In the event, directly or indirectly, at any time after
a Person has become an Acquiring Person, (a) the Company shall consolidate with,
or merge with and into, any other Person, (b) any Person shall consolidate with
the Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed into or exchanged for
stock or other securities of any other Person (or the Company) or cash or any
other property, or (c) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly- owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of such other Person (including the Company as
successor thereto or as the 


                                      -25-

<PAGE>   29
surviving corporation) as shall equal the result obtained by (A) multiplying the
then current Purchase Price by the number of one one- hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product by (B) 50%
of the then current per share market price of the Common Shares of such other
Person (determined pursuant to Section 11(d) hereof) on the date of consummation
of such consolidation, merger, sale or transfer; (ii) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such issuer; and (iv) such issuer shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement so providing. The Company
shall not enter into any transaction of the kind referred to in this Section 13
if at the time of such transaction there are any rights, warrants, instruments
or securities outstanding or any agreements or arrangements which, as a result
of the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. The provisions of
this Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers.

                  Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights 


                                      -26-

<PAGE>   30
would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the Company
shall be used.

                  (b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be 


                                      -27-

<PAGE>   31
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it; provided, that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of one one-hundredth
of a Preferred Share, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one Preferred
Share. For the purposes of this Section 14(b), the current market value of a
Preferred Share shall be the closing price of a Preferred Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.

                  (c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).

                  Section 15. Rights of Action. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided 


                                      -28-

<PAGE>   32
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.

                  Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:

                  (a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;

                  (b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and

                  (c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.

                  Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the 


                                      -29-

<PAGE>   33
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.

                  Section 18. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.

                  The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be 


                                      -30-

<PAGE>   34
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.

                  Section 19. Merger or Consolidation or Change of Name of
Rights Agent. Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the stock transfer or corporate trust powers of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.

                  In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall 


                                      -31-

<PAGE>   35
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.

                  Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:

                  (a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.

                  (b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.

                  (c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or willful
misconduct.


                                      -32-

<PAGE>   36
                  (d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.

                  (e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.

                  (f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.


                                      -33-

<PAGE>   37
                  (g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Secretary or the Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered by it in
good faith in accordance with instructions of any such officer or for any delay
in acting while waiting for those instructions.

                  (h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.

                  (i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.

                  Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail. The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing, 


                                      -34-

<PAGE>   38
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Shares or Preferred Shares by registered or
certified mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of New York (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution in the
State of New York), in good standing, having an office in the State of New York,
which is authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares or Preferred Shares. Failure to
give any notice provided for in this Section 21, however, or any defect 


                                      -35-

<PAGE>   39
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.

            Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.

            Section 23. Redemption. (a) The Board of Directors of the Company
may, at its option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then outstanding Rights
at a redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.

            (b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors ordering
the redemption of the Rights, the Company shall mail a notice of


                                      -36-

<PAGE>   40
redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.

            Section 24. Exchange. (a) The Board of Directors of the Company may,
at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.

            (b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24


                                      -37-

<PAGE>   41
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.

            (c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exchange of a Right, a number
of Preferred Shares or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.


                                      -38-

<PAGE>   42
            (d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (d), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.

            Section 25. Notice of Certain Events. (a) In case the Company shall
propose (i) to pay any dividend payable in stock of any class to the holders of
its Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which


                                      -39-

<PAGE>   43
shall specify the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or (ii)
above at least 10 days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier.

            (b) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.

            Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:

                  NCR Corporation
                  1700 South Patterson Blvd.
                  Dayton, Ohio  45479
                  Attention: Corporate Secretary


                                      -40-

<PAGE>   44
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:

                  The First National Bank of Boston
                  150 Royal Street
                  Canton, Massachusetts 02021
                  Attention: Corporate Secretary


Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

            Section 27. Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which would
adversely affect the interests of the holders of Rights. Without limiting the
foregoing, the Company may at any time prior to such time as any Person becomes
an Acquiring Person amend this Agreement to lower the thresholds set forth in
Sections 1(a) and 3(a) to not less than the greater of (i) the sum of .001% and
the largest percentage of the outstanding Common Shares then known by the


                                      -41-

<PAGE>   45
Company to be beneficially owned by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares for or pursuant
to the terms of any such plan) and (ii) 10%.

            Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

            Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).

            Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

            Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Maryland and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.


                                      -42-

<PAGE>   46
            Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.

            Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.

                                    NCR CORPORATION

Attest:


By /s/ Laura K. Nyquist             By /s/ Jon S. Hoak
   Title: Secretary                 Title: Senior Vice President



Attest:                             THE FIRST NATIONAL BANK OF BOSTON


By /s/ Gordon Stevenson             By /s/ Ken Theva
   Title: Attorney-In-Fact          Title: Attorney-In-Fact


                                      -43-

<PAGE>   47
                                                                       Exhibit A


                                      FORM

                                       of

                             ARTICLES SUPPLEMENTARY

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                                 NCR CORPORATION

                        (Pursuant to Section 2-208 of the
                        Maryland General Corporation Law)




            NCR Corporation, a Maryland corporation having its principal
business office in Dayton, Ohio, and its principal office in the City of
Rockville, State of Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland that
the following resolution was adopted by the Board of Directors of the
Corporation by unanimous written consent on December __, 1996:

            RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Articles of
Amendment and Restatement of the Charter of the Corporation, the Board of
Directors hereby creates a series of Preferred Stock, par value $.01 per share
(the "Preferred Stock"), of the Corporation and hereby states the designation
and number of shares, and fixes the relative rights, preferences, and
limitations thereof as follows:

            Series A Junior Participating Preferred Stock:

            Section 1. Designation and Amount. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 1,500,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.


                                      A-1

<PAGE>   48
            Section 2. Dividends and Distributions.

            (A) Subject to the rights of the holders of any shares of any series
      of Preferred Stock (or any similar stock) ranking prior and superior to
      the Series A Preferred Stock with respect to dividends, the holders of
      shares of Series A Preferred Stock, in preference to the holders of Common
      Stock, par value $.01 per share (the "Common Stock"), of the Corporation,
      and of any other junior stock, shall be entitled to receive, when, as and
      if declared by the Board of Directors out of funds legally available for
      the purpose, quarterly dividends payable in cash on the first day of
      March, June, September and December in each year (each such date being
      referred to herein as a "Quarterly Dividend Payment Date"), commencing on
      the first Quarterly Dividend Payment Date after the first issuance of a
      share or fraction of a share of Series A Preferred Stock, in an amount per
      share (rounded to the nearest cent) equal to the greater of (a) $1 or (b)
      subject to the provision for adjustment hereinafter set forth, 100 times
      the aggregate per share amount of all cash dividends, and 100 times the
      aggregate per share amount (payable in kind) of all non-cash dividends or
      other distributions, other than a dividend payable in shares of Common
      Stock or a subdivision of the outstanding shares of Common Stock (by
      reclassification or otherwise), declared on the Common Stock since the
      immediately preceding Quarterly Dividend Payment Date or, with respect to
      the first Quarterly Dividend Payment Date, since the first issuance of any
      share or fraction of a share of Series A Preferred Stock. In the event the
      Corporation shall at any time declare or pay any dividend on the Common
      Stock payable in shares of Common Stock, or effect a subdivision or
      combination or consolidation of the outstanding shares of Common Stock (by
      reclassification or otherwise than by payment of a dividend in shares of
      Common Stock) into a greater or lesser number of shares of Common Stock,
      then in each such case the amount to which holders of shares of Series A
      Preferred Stock were entitled immediately prior to such event under clause
      (b) of the preceding sentence shall be adjusted by multiplying such amount
      by a fraction, the numerator of which is the number of shares of Common
      Stock outstanding immediately after such event and the denominator of
      which is the number of shares of Common Stock that were outstanding
      immediately prior to such event.

            (B) The Corporation shall declare a dividend or distribution on the
      Series A Preferred Stock as provided in paragraph (A) of this Section
      immediately after it declares a dividend or distribution on the Common
      Stock (other than a dividend payable in shares of Common Stock); provided
      that, in the event no dividend or distribution shall have been declared on
      the Common Stock during the period between any Quarterly Dividend Payment
      Date and the next subsequent Quarterly Dividend Payment Date, a dividend
      of $1 per share on the Series A Preferred Stock shall nevertheless be
      payable on such subsequent Quarterly Dividend Payment Date.

            (C) Dividends shall begin to accrue and be cumulative on outstanding
      shares of Series A Preferred Stock from the Quarterly Dividend Payment
      Date next preceding the date of issue of such shares, unless the date of
      issue of such shares is prior to the record date for the first Quarterly
      Dividend Payment Date, in which case dividends on such shares shall begin
      to accrue from the date of issue of such shares, or unless the date of
      issue is a Quarterly Dividend Payment Date or is a date after the record
      date for the determination of holders of shares of Series A Preferred
      Stock entitled to receive a quarterly dividend and before


                                      A-2

<PAGE>   49
      such Quarterly Dividend Payment Date, in either of which events such
      dividends shall begin to accrue and be cumulative from such Quarterly
      Dividend Payment Date. Accrued but unpaid dividends shall not bear
      interest. Dividends paid on the shares of Series A Preferred Stock in an
      amount less than the total amount of such dividends at the time accrued
      and payable on such shares shall be allocated pro rata on a share-by-share
      basis among all such shares at the time outstanding. The Board of
      Directors may fix a record date for the determination of holders of shares
      of Series A Preferred Stock entitled to receive payment of a dividend or
      distribution declared thereon, which record date shall be not more than 60
      days prior to the date fixed for the payment thereof.

            Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:

            (A) Subject to the provision for adjustment hereinafter set forth,
      each share of Series A Preferred Stock shall entitle the holder thereof to
      100 votes on all matters submitted to a vote of the stockholders of the
      Corporation. In the event the Corporation shall at any time declare or pay
      any dividend on the Common Stock payable in shares of Common Stock, or
      effect a subdivision or combination or consolidation of the outstanding
      shares of Common Stock (by reclassification or otherwise than by payment
      of a dividend in shares of Common Stock) into a greater or lesser number
      of shares of Common Stock, then in each such case the number of votes per
      share to which holders of shares of Series A Preferred Stock were entitled
      immediately prior to such event shall be adjusted by multiplying such
      number by a fraction, the numerator of which is the number of shares of
      Common Stock outstanding immediately after such event and the denominator
      of which is the number of shares of Common Stock that were outstanding
      immediately prior to such event.

            (B) Except as otherwise provided herein, in any other Articles
      Supplementary creating a series of Preferred Stock or any similar stock,
      or by law, the holders of shares of Series A Preferred Stock and the
      holders of shares of Common Stock and any other capital stock of the
      Corporation having general voting rights shall vote together as one class
      on all matters submitted to a vote of stockholders of the Corporation.

            (C) Except as set forth herein, or as otherwise provided by law,
      holders of Series A Preferred Stock shall have no special voting rights
      and their consent shall not be required (except to the extent they are
      entitled to vote with holders of Common Stock as set forth herein) for
      taking any corporate action.

            Section 4. Certain Restrictions.

            (A) Whenever quarterly dividends or other dividends or distributions
      payable on the Series A Preferred Stock as provided in Section 2 are in
      arrears, thereafter and until all accrued and unpaid dividends and
      distributions, whether or not declared, on shares of Series A Preferred
      Stock outstanding shall have been paid in full, the Corporation shall not:

               (i) declare or pay dividends, or make any other distributions, on
            any shares of stock ranking junior (either as to dividends or upon
            liquidation, dissolution or winding up) to the Series A Preferred
            Stock;


                                      A-3

<PAGE>   50
               (ii) declare or pay dividends, or make any other distributions,
            on any shares of stock ranking on a parity (either as to dividends
            or upon liquidation, dissolution or winding up) with the Series A
            Preferred Stock, except dividends paid ratably on the Series A
            Preferred Stock and all such parity stock on which dividends are
            payable or in arrears in proportion to the total amounts to which
            the holders of all such shares are then entitled;

               (iii) redeem or purchase or otherwise acquire for consideration
            shares of any stock ranking junior (either as to dividends or upon
            liquidation, dissolution or winding up) to the Series A Preferred
            Stock, provided that the Corporation may at any time redeem,
            purchase or otherwise acquire shares of any such junior stock in
            exchange for shares of any stock of the Corporation ranking junior
            (either as to dividends or upon dissolution, liquidation or winding
            up) to the Series A Preferred Stock; or

               (iv) redeem or purchase or otherwise acquire for consideration
            any shares of Series A Preferred Stock, or any shares of stock
            ranking on a parity with the Series A Preferred Stock, except in
            accordance with a purchase offer made in writing or by publication
            (as determined by the Board of Directors) to all holders of such
            shares upon such terms as the Board of Directors, after
            consideration of the respective annual dividend rates and other
            relative rights and preferences of the respective series and
            classes, shall determine in good faith will result in fair and
            equitable treatment among the respective series or classes.

            (B) The Corporation shall not permit any subsidiary of the
      Corporation to purchase or otherwise acquire for consideration any shares
      of stock of the Corporation unless the Corporation could, under paragraph
      (A) of this Section 4, purchase or otherwise acquire such shares at such
      time and in such manner.

            Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Charter of the Corporation, or in any other Articles Supplementary creating a
series of Preferred Stock or any similar stock or as otherwise required by law.

            Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts 


                                      A-4

<PAGE>   51
to which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

            Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

            Section 8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.

            Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Corporation's Preferred Stock.

            Section 10. Amendment. The Charter of the Corporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.


                                      A-5

<PAGE>   52
            IN WITNESS WHEREOF, these Articles Supplementary are executed on
behalf of the Corporation by its Chairman of the Board and attested by its
Secretary this day of December, 1996.



                                       _______________________________
                                            Chairman of the Board


Attest:

_______________________________
Secretary


                                      A-6

<PAGE>   53
                                                                       Exhibit B


                            Form of Right Certificate


Certificate No. R-                                            ____Rights



            NOT EXERCISABLE AFTER DECEMBER 31, 2006 OR EARLIER IF
            REDEMPTION OR EXCHANGE OCCURS.  THE RIGHTS ARE SUBJECT TO
            REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS
            SET FORTH IN THE RIGHTS AGREEMENT.


                                Right Certificate

                                 NCR CORPORATION


            This certifies that ______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of December 31, 1996 (the "Rights Agreement"), between NCR
Corporation, a Maryland corporation (the "Company"), and The First National Bank
of Boston (the "Rights Agent"), to purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights Agreement) and
prior to 5:00 P.M., New York City time, on December 31, 2006 at the principal
office of the Rights Agent, or at the office of its successor as Rights Agent,
one one-hundredth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred
Shares"), of the Company, at a purchase price of $150 per one one-hundredth of a
Preferred Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of one one-
hundredths of a Preferred Share which may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the number and Purchase
Price as of ______________, 1996, based on the Preferred Shares as constituted
at such date. As provided in the Rights Agreement, the Purchase Price and the
number of one one-hundredths of a Preferred Share which may be purchased upon
the exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.

            This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.

            This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the


                                      B-1

<PAGE>   54
holder to purchase a like aggregate number of Preferred Shares as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not
exercised.

            Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $.01 per Right or (ii) may be exchanged in whole or in part for
Preferred Shares or shares of the Company's Common Stock, par value $.01 per
share.

            No fractional Preferred Shares will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.

            No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.

            This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.

            WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _______________________, 1996.

ATTEST:                             NCR CORPORATION


______________________________      By_______________________________________


Countersigned:


THE FIRST NATIONAL BANK OF BOSTON


By_______________________________________
           Authorized Signature


                                      B-2

<PAGE>   55
                    Form of Reverse Side of Right Certificate


                               FORM OF ASSIGNMENT


       (To be executed by the registered holder if such holder desires to
                        transfer the Right Certificate.)


            FOR VALUE RECEIVED _________________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
                  (Please print name and address of transferee)
________________________________________________________________________________

this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___ Attorney, to transfer the
within Right Certificate on the books of the within-named Company, with full
power of substitution.


Dated: _______________________, 1996



                                    ____________________________________________
                                    Signature



Signature Guaranteed:

            Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.

________________________________________________________________________________

            The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).



                                    ____________________________________________
                                    Signature
________________________________________________________________________________

                                      B-3

<PAGE>   56
             Form of Reverse Side of Right Certificate -- continued


                          FORM OF ELECTION TO PURCHASE

       (To be executed if holder desires to exercise Rights represented by
                             the Right Certificate.)


To:  NCR CORPORATION

            The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:

Please insert social security
or other identifying number

________________________________________________________________________________
                         (Please print name and address)
________________________________________________________________________________

If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:

Please insert social security
or other identifying number

________________________________________________________________________________
                         (Please print name and address)
________________________________________________________________________________

Dated: ___________________, 1996


                                   _____________________________________________
                                   Signature



Signature Guaranteed:

            Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.


                                      B-4

<PAGE>   57
             Form of Reverse Side of Right Certificate -- continued
________________________________________________________________________________

            The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).



                                   _____________________________________________
                                   Signature
________________________________________________________________________________




                                     NOTICE

            The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.

            In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.


                                      B-5

<PAGE>   58
                                                                       Exhibit C



                          SUMMARY OF RIGHTS TO PURCHASE
                                PREFERRED SHARES


            On December , 1996, the Board of Directors of NCR Corporation (the
"Company") declared a dividend of one preferred share purchase right (a "Right")
for each outstanding share of common stock, par value $.01 per share (the
"Common Shares"), of the Company. The dividend is payable on December 31, 1996
(the "Record Date") to the stockholders of record on that date (immediately
after the distribution of all of the outstanding Common Shares by AT&T Corp. to
its shareowners). Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series A Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Shares"), of the Company at a
price of $150 per one one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and The First
National Bank of Boston, as Rights Agent (the "Rights Agent").

            Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding Common Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate with a copy
of this Summary of Rights attached thereto.

            The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of
the Record Date, even without such notation or a copy of this Summary of Rights
being attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.

<PAGE>   59
            The Rights are not exercisable until the Distribution Date. The
Rights will expire on December 31, 2006 (the "Final Expiration Date"), unless
the Final Expiration Date is extended or unless the Rights are earlier redeemed
or exchanged by the Company, in each case, as described below.

            The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then-current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).

            The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common Shares or
a stock dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.

            Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive 100 times
the amount received per Common Share. These rights are protected by customary
antidilution provisions.

            Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.

            In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a Right will thereafter
have the right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a market value
of two times the exercise price of the Right. In the event that any person or
group of affiliated or associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void), will
thereafter have the right to 


                                      C-2

<PAGE>   60
receive upon exercise that number of Common Shares having a market value of two
times the exercise price of the Right.

            At any time after any person or group becomes an Acquiring Person
and prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one Common Share, or
one one-hundredth of a Preferred Share (or of a share of a class or series of
the Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).

            With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.

            At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more of the
outstanding Common Shares, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at such time on such
basis with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.

            The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including an
amendment to lower certain thresholds described above to not less than the
greater of (i) the sum of .001% and the largest percentage of the outstanding
Common Shares then known to the Company to be beneficially owned by any person
or group of affiliated or associated persons and (ii) 10%, except that from and
after such time as any person or group of affiliated or associated persons
becomes an Acquiring Person no such amendment may adversely affect the interests
of the holders of the Rights.

            Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.

            A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 10
dated September 26, 1996. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.


                                      C-3



<PAGE>   1
                                                                    EXHIBIT 10.2


                           EMPLOYEE BENEFITS AGREEMENT

                                     BETWEEN

                                   AT&T CORP.

                                       AND

                                 NCR CORPORATION









                                   DATED AS OF
                                NOVEMBER 20, 1996

<PAGE>   2

                                TABLE OF CONTENTS

 
ARTICLE I   DEFINITIONS.................................................       1
    1.1        Agreement................................................       1
    1.2        Assigned Split Dollar Policies...........................       1
    1.3        AT&T Controlled Person...................................       2
    1.4        AT&T Executive Benefit Plans.............................       2
    1.5        AT&T Individual..........................................       2
    1.6        AT&T Individual Agreement................................       2
    1.7        AT&T Plan................................................       2
    1.8        AT&T Short Term Incentive Plans..........................       2
    1.9        AT&T Stock Value.........................................       2
    1.10       ATTIMCO..................................................       3
    1.11       Award....................................................       3
    1.12       Close of the NCR Distribution Date.......................       3
    1.13       Code.....................................................       3
    1.14       Distribution Agreement...................................       3
    1.15       ERISA....................................................       3
    1.16       First Transfer...........................................       3
    1.17       Immediately after the NCR Distribution Date..............       3
    1.18       Individual Agreement.....................................       3
    1.19       Long Term Incentive Plan.................................       3
    1.20       LTIT.....................................................       3
    1.21       LTIT Agreement...........................................       3
    1.22       LTIT Redemption..........................................       4
    1.23       Lucent EBA...............................................       4
    1.24       MPT......................................................       4
    1.25       MPT Agreement............................................       4
    1.26       MPT Withdrawal...........................................       4
    1.27       NCR Allocable Share......................................       4
    1.28       NCR Controlled Person....................................       4
    1.29       NCR Employee.............................................       4
    1.30       NCR Executive Benefit Plans..............................       4
    1.31       NCR Individual...........................................       4
    1.32       NCR Individual Agreement.................................       5
    1.33       NCR Pension Plans........................................       5
    1.34       NCR Plan.................................................       5
    1.35       NCR Savings Plan.........................................       5
    1.36       NCR SERPs................................................       5
    1.37       NCR Short Term Incentive Plans...........................       5
    1.38       NCR Stock Value..........................................       5
    1.39       Option...................................................       5
    1.40       Plan.....................................................       5
    1.41       Prior MPT................................................       5
    1.42       QDRO.....................................................       5
    1.43       QMCSO....................................................       6

<PAGE>   3

    1.44       Ratio......................................................     6
    1.45       Second Transfer............................................     6
    1.46       Segregated Assets..........................................     6
    1.47       Separation and Distribution Agreement......................     6
    1.48       Split Dollar Life Insurance................................     6
    1.49       Spread.....................................................     6
    1.50       Supplemental Pension Plan for Transfers....................     6
    1.51       U.S........................................................     6
    1.52       Value......................................................     6

ARTICLE II     GENERAL PRINCIPLES.........................................     6

    2.1        Allocation of Liabilities..................................     6
    2.2        Transferred Executives.....................................     7

ARTICLE III    QUALIFIED PLANS............................................     7

    3.1        NCR Pension Plans..........................................     7
    3.2        NCR Savings Plan...........................................    10

ARTICLE IV     EXECUTIVE BENEFITS.........................................    10

    4.1        General....................................................    10
    4.2        Nonqualified Plans.........................................    10
    4.3        AT&T Long Term Incentive Plans.............................    11
    4.4        AT&T Split Dollar Life Insurance...........................    13
    4.5        Individual Agreements......................................    13

ARTICLE V      MISCELLANEOUS BENEFITS.....................................    14

    5.1        Employee Stock Purchase Plan...............................    14
    5.2        Short Term Incentive Plans.................................    14

ARTICLE VI     FOREIGN PLANS; INTERCHANGE.................................    14

    6.1        Foreign Plans..............................................    14
    6.2        Interchange Agreement......................................    14

ARTICLE VII    MISCELLANEOUS..............................................    14

    7.1        Sharing of Participant Information.........................    14
    7.2        No Change of Control; No Rights Created; No
                 Restrictions.............................................    14
    7.3        Effect If NCR Distribution Does Not Occur..................    15
    7.4        Relationship of Parties....................................    15
    7.5        Affiliates.................................................    15
    7.6        Incorporation of Distribution Agreement
                 Provisions...............................................    15



                                                      -ii-

<PAGE>   4

                                                                               
    7.7        Incorporation of Separation and Distribution
                 Agreement Provisions.....................................    15
    7.8        Governing Law..............................................    15
    7.9        Tax Deductions.............................................    16
    7.10       Agreements with Third Parties..............................    16
    7.11       NCR to Honor Agreements....................................    17

Signatures................................................................    18

Schedule I                    AT&T Executive Benefit Plans

Schedule II                   Individual Agreements

Schedule III                  NCR Executive Benefit Plans

Schedule IV                   Individuals to be Transferred to NCR

Schedule V                    Assets Referred to in Section 3.1(b)

Schedule VI                   Selection of Assets to be Transferred to
                               Trustee(s) of NCR Pension Plans

Schedule VII                  AT&T Awards Not to Be Replaced with NCR Awards

Schedule VIII                 AT&T Liabilities Under Individual Agreements

Schedule IX                   Reimbursement of NCR

Schedule X                    Reimbursement of AT&T

Schedule XI                   Agreements Establishing Phantom Share Accounts

Exhibit A                     Form of Receipt and Release for First Transfer

Exhibit B                     Form of Receipt and Release for Second Transfer

Exhibit C                     Form of Foreign Employee Benefits Agreement

Exhibit D                     Form of Interchange Agreement



                                     -iii-

<PAGE>   5
                           EMPLOYEE BENEFITS AGREEMENT


         This EMPLOYEE BENEFITS AGREEMENT, dated as of November 20, 1996, is by
and between AT&T and NCR. Capitalized terms used herein (other than the formal
names of AT&T Plans and NCR Plans (as defined below) and related trusts) and not
otherwise defined shall have the respective meanings assigned to them in Article
I hereof or as assigned to them in the Distribution Agreement (as defined
below).

         WHEREAS, the Board of Directors of AT&T has determined that it is in
the best interests of AT&T and its shareholders to separate AT&T's existing
businesses into three independent businesses;

         WHEREAS, in furtherance of the foregoing, AT&T, NCR and Lucent have
executed and delivered the Separation and Distribution Agreement providing for,
among other things, the initial public offering of shares of Lucent Common Stock
(which was consummated on April 10, 1996) and for the pro rata distribution by
AT&T of all of its shares of Lucent Common Stock to the shareholders of AT&T
(which was consummated on September 30, 1996);

         WHEREAS, AT&T, NCR and Lucent have also executed and delivered the
Ancillary Agreements (as such term is defined in the Separation and Distribution
Agreement) governing certain additional matters relating to the Lucent
Distribution;

         WHEREAS, the Board of Directors of AT&T has also determined that AT&T
will distribute to its shareholders all of the capital stock of NCR held
directly or indirectly by AT&T, subject to the terms and conditions set forth in
the Distribution Agreement;

         WHEREAS, in furtherance of the foregoing, AT&T and NCR have entered
into a Distribution Agreement, dated as of November 20, 1996 (the "Distribution
Agreement"), and certain other agreements that will govern certain matters
relating to the NCR Distribution and the relationship of AT&T and NCR and their
respective Subsidiaries following the NCR Distribution; and

         WHEREAS, AT&T and NCR wish to enter into this agreement allocating
assets, liabilities and responsibilities with respect to certain employee
compensation and benefit plans and programs between them.

         NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:


                                    ARTICLE I
                                   DEFINITIONS

         For purposes of this Agreement the following terms shall have the
following meanings:

         1.1 AGREEMENT means this Employee Benefits Agreement, including all the
Schedules and Exhibits hereto.

         1.2  ASSIGNED SPLIT DOLLAR POLICIES is defined in Section 4.4.

<PAGE>   6
         1.3 AT&T CONTROLLED PERSON as of a specified time means any Person that
is, at such time, a Subsidiary of AT&T or is otherwise controlled, directly or
indirectly, by AT&T, other than NCR or any Person that is, at such time, an NCR
Controlled Person.

         1.4 AT&T EXECUTIVE BENEFIT PLANS means the executive benefit and
nonqualified plans, programs, and arrangements established, maintained, agreed
upon, or assumed, in each case before the Close of the NCR Distribution Date, by
AT&T or a Person that is, Immediately after the NCR Distribution Date, an AT&T
Controlled Person, for the benefit of AT&T Individuals and/or NCR Individuals
who participated therein, including the plans listed in Schedule I.

         1.5 AT&T INDIVIDUAL means any individual who is not an NCR Individual
and is, as of the Close of the NCR Distribution Date: (a) actively employed by,
or on a leave of absence from, either AT&T or a Person that is, as of the Close
of the NCR Distribution Date, an AT&T Controlled Person; or (b) neither actively
employed by, nor on a leave of absence from, AT&T or a Person that is, as of the
Close of the NCR Distribution Date, an AT&T Controlled Person, but whose most
recent active employment with AT&T or a past or present Affiliate of AT&T
(including NCR and its Affiliates) was with either AT&T or a Person that was, at
the time such active employment ended, an AT&T Controlled Person; provided, that
an individual who is a Transferred Individual as defined in the Lucent EBA shall
not be considered an AT&T Individual under this sentence. An alternate payee
under a QDRO or alternate recipient under a QMCSO with respect to, or a
beneficiary or covered dependent of, an employee or former employee described in
the preceding sentence shall also be an AT&T Individual with respect to that
employee's or former employee's benefit under the applicable Plans. Such an
alternate payee, alternate recipient, beneficiary, or covered dependent shall
not otherwise be considered an AT&T Individual with respect to his or her own
benefits under any applicable Plans unless he or she is an AT&T Individual by
virtue of the first sentence of this definition. In addition, AT&T and NCR may
designate, by mutual agreement, any other individuals, or group of individuals,
as AT&T Individuals. An individual may be an AT&T Individual pursuant to this
definition regardless of whether such individual is, as of the NCR Distribution
Date, alive, actively employed, on a temporary leave of absence from active
employment, on layoff, terminated from employment, retired or on any other type
of employment or post-employment status relative to any Plan, and regardless of
whether, as of the Close of the NCR Distribution Date, such individual is then
receiving any benefits from any AT&T Plan or NCR Plan.

         1.6 AT&T INDIVIDUAL AGREEMENT means an Individual Agreement with an
AT&T Individual.

         1.7 AT&T PLAN means any Plan that is, Immediately after the NCR
Distribution Date, sponsored by AT&T or a Person that is then an AT&T Controlled
Person or, if such Plan is no longer in existence Immediately after the NCR
Distribution Date, was, at the time it ceased to exist, sponsored by AT&T or a
Person that is, Immediately after the NCR Distribution Date, an AT&T Controlled
Person or a direct or indirect predecessor to such a Person.

         1.8 AT&T SHORT TERM INCENTIVE PLANS means the AT&T Short Term Incentive
Plan and the AT&T Management Incentive Compensation Program.

         1.9 AT&T STOCK VALUE means the average of the daily high and low
per-share prices of the AT&T Common Stock as traded regular way on the NYSE
during each of the five trading days immediately preceding the NCR Distribution
Date.



                                      -2-

<PAGE>   7
         1.10 ATTIMCO means AT&T Investment Management Corporation, a Delaware
corporation.

         1.11 AWARD means an award under a Long Term Incentive Plan or a Short
Term Incentive Plan.

         1.12 CLOSE OF THE NCR DISTRIBUTION DATE means 11:59:59 P.M., Eastern
Standard Time or Eastern Daylight Time (whichever shall then be in effect), on
the NCR Distribution Date.

         1.13 CODE means the Internal Revenue Code of 1986, as amended, or any
successor federal income tax law. Reference to a specific Code provision also
includes any proposed, temporary, or final regulation in force under that
provision.

         1.14 DISTRIBUTION AGREEMENT is defined in the sixth paragraph of the
preamble of this Agreement.

         1.15 ERISA means the Employee Retirement Income Security Act of 1974,
as amended. Reference to a specific provision of ERISA also includes any
proposed, temporary, or final regulation in force under that provision.

         1.16 FIRST TRANSFER is defined in Section 3.1(c)(iii).

         1.17 IMMEDIATELY AFTER THE NCR DISTRIBUTION DATE means 12:00 A.M.,
Eastern Standard Time or Eastern Daylight Time (whichever shall then be in
effect), on the day after the NCR Distribution Date.

         1.18 INDIVIDUAL AGREEMENT means an individual contract or agreement
(including the agreements listed on Schedule II) entered into before the Close
of the NCR Distribution Date between AT&T, or any of its past or present
Affiliates (including NCR and its past or present Affiliates) and an NCR
Individual or an AT&T Individual that establishes the right of such individual
to special executive compensation or benefits, including a supplemental pension
benefit, hiring bonus, loan, guaranteed payment, special allowance, tax
equalization or disability benefit, or share units granted (and payable in the
form of cash or otherwise) under an individual phantom share agreement, or that
provides benefits similar to those identified in Schedule I.

         1.19 LONG TERM INCENTIVE PLAN, when immediately preceded by "AT&T,"
means any of the AT&T 1984 Stock Option Plan, the AT&T 1987 Long Term Incentive
Program, and such other stock-based incentive plans assumed by AT&T by reason of
merger, acquisition, or otherwise, including incentive plans of NCR, Teradata
Corporation, AT&T Wireless Services, Inc. (formerly McCaw Cellular
Communications, Inc.), and LIN Broadcasting Corporation, and when immediately
preceded by "NCR," means the long term incentive plan to be established by NCR
pursuant to Section 4.3(a).

         1.20 LTIT means the Long-Term Investment Trust established pursuant to
the LTIT Agreement.

         1.21 LTIT AGREEMENT means the Agreement of Trust Establishing the
Long-Term Investment Trust and Constituting the Amendment and Restatement of the
AT&T Master Pension Trust Agreement and Conversion Thereof, effective as of
October 1, 1996, as amended from time to time.


                                      -3-

<PAGE>   8
         1.22  LTIT REDEMPTION is defined in Section 3.1(c)(ii).

         1.23 LUCENT EBA means the Employee Benefits Agreement between AT&T and
Lucent dated as of February 1, 1996 and amended and restated as of March 29,
1996.

         1.24 MPT means the AT&T Master Pension Trust established pursuant to
the MPT Agreement.

         1.25 MPT AGREEMENT means the AT&T Master Pension Trust Agreement dated
as of October 1, 1996 between AT&T, Citibank, N.A., and certain other banks,
trust companies or individuals identified therein, as amended from time to time.

         1.26  MPT WITHDRAWAL is defined in Section 3.1(c)(iii).

         1.27  NCR ALLOCABLE SHARE is defined in Section 3.1(c)(ii).

         1.28 NCR CONTROLLED PERSON as of a specified time means any Person that
is, at such time, a Subsidiary of NCR or is otherwise controlled, directly or
indirectly, by NCR.

         1.29 NCR EMPLOYEE means an NCR Individual who is described in clause
(a) of the definition of NCR Individual, or, to the extent relevant, an
alternate payee under a QDRO or alternate recipient under a QMCSO with respect
to, or a beneficiary or covered dependent of, such an NCR Individual.

         1.30 NCR EXECUTIVE BENEFIT PLANS means the executive benefit and
nonqualified plans, programs, and arrangements established, maintained, agreed
upon, or assumed, before the Close of the NCR Distribution Date, by NCR or any
Person that is, Immediately after the NCR Distribution Date, an NCR Controlled
Person, for the benefit of AT&T Individuals and/or NCR Individuals who
participated therein, including the plans listed in Schedule III.

         1.31 NCR INDIVIDUAL means any individual who, as of the Close of the
NCR Distribution Date: (a) is actively employed by, or on a leave of absence
from, NCR or a Person that is, as of the Close of the NCR Distribution Date, an
NCR Controlled Person; or (b) is neither actively employed by, nor on a leave of
absence from, NCR or a Person that is, as of the Close of the NCR Distribution
Date, an NCR Controlled Person, but whose most recent active employment with
AT&T or a past or present Affiliate of AT&T (including NCR and its Affiliates)
was with either NCR or a Person that was, at the time such active employment
ended, or is, as of the Close of the Distribution Date, an NCR Controlled
Person. An alternate payee under a QDRO or alternate recipient under a QMCSO
with respect to, or a beneficiary or covered dependent of, an employee or former
employee described in the preceding sentence shall also be an NCR Individual
with respect to that employee's or former employee's benefit under the
applicable Plans. Such an alternate payee, alternate recipient, beneficiary, or
covered dependent shall not otherwise be considered an NCR Individual with
respect to his or her own benefits under any applicable Plans unless he or she
is an NCR Individual by virtue of the first sentence of this definition. In
addition, AT&T and NCR may designate, by mutual agreement, any other
individuals, or group of individuals, as NCR Individuals. An individual may be
an NCR Individual pursuant to this definition regardless of whether such
individual is, as of the NCR Distribution Date, alive, actively employed, on a
temporary leave of absence from active employment, on layoff, terminated from
employment, retired or on any other type of employment or post-employment status
relative to any Plan, and regardless of whether, as of the Close of 



                                      -4-

<PAGE>   9
the NCR Distribution Date, such individual is then receiving any benefits from 
any AT&T Plan or NCR Plan.

         1.32 NCR INDIVIDUAL AGREEMENT means an Individual Agreement with an NCR
Individual.

         1.33 NCR PENSION PLANS means The NCR Pension Plan, The Retirement Plan
for Employees of NCR Corporation at Dayton, Ohio Represented by the Independent
Union of NCR Corporation Guards, and all predecessors to either of such Plans,
including Plans that have been merged into either of such Plans.

         1.34 NCR PLAN means any Plan that is, Immediately after the
Distribution Date, sponsored by NCR or a Person that is then an NCR Controlled
Person or, if such Plan is no longer in existence Immediately after the NCR
Distribution Date, was, at the time it ceased to exist, sponsored by NCR or a
Person that is, Immediately after the NCR Distribution Date, an NCR Controlled
Person or a direct or indirect predecessor to such a Person.

         1.35  NCR SAVINGS PLAN means the NCR Savings Plan.

         1.36 NCR SERPS means all NCR Plans that are or were "employee pension
benefit plans" within the meaning of Section 3(2) of ERISA that are not
qualified under Section 401(a) of the Code, including the NCR Corporation
Nonqualified Excess Plan, the NCR Corporation Executive Retirement, Death and
Disability Plan, the NCR Mid-Career Hire Supplemental Pension Plan, the
Supplemental Plan for Transfers Between AT&T and NCR, and the Retirement Plan
for Officers of NCR.

         1.37 NCR SHORT TERM INCENTIVE PLANS means the NCR Management Incentive
Plan and the NCR Customer Delight Performance Award Program.

         1.38 NCR STOCK VALUE means the average of the daily high and low
per-share prices of the NCR Common Stock as traded on the NYSE, on a when-issued
basis, during each of the five trading days immediately preceding the NCR
Distribution Date.

         1.39 OPTION, when immediately preceded by "AT&T," means an option to
purchase AT&T Common Stock and when immediately preceded by "NCR," Option means
an option to purchase NCR Common Stock, in each case pursuant to a Long Term
Incentive Plan.

         1.40 PLAN means any plan, policy, program, payroll practice, on-going
arrangement, contract, trust, insurance policy or other agreement or funding
vehicle providing benefits to employees or former employees of AT&T and its past
or present Affiliates (including NCR and its Affiliates).

         1.41 PRIOR MPT means the AT&T Master Pension Trust which was the
predecessor to, and was converted into, the LTIT.

         1.42 QDRO means a domestic relations order which qualifies under Code
Section 414(p) and ERISA Section 206(d) and which creates or recognizes an
alternate payee's right to, or assigns to an alternate payee, all or a portion
of the benefits payable to a participant under any AT&T Plan or NCR Plan.


                                      -5-

<PAGE>   10
         1.43 QMCSO means a medical child support order which qualifies under
ERISA Section 609(a) and which creates or recognizes the existence of an
alternate recipient's right to, or assigns to an alternate recipient the right
to, receive benefits for which a participant or beneficiary is eligible under an
AT&T Plan or NCR Plan.

         1.44 RATIO means the amount obtained by dividing the AT&T Stock Value
by the NCR Stock Value.

         1.45  SECOND TRANSFER is defined in Section 3.1(c)(iii).

         1.46  SEGREGATED ASSETS is defined in Section 3.1(c)(iii).

         1.47 SEPARATION AND DISTRIBUTION AGREEMENT is defined in the third
paragraph of the preamble of this Agreement.

         1.48 SPLIT DOLLAR LIFE INSURANCE means the life insurance policies
purchased by AT&T on behalf of certain individuals under the AT&T Senior
Management Individual Life Insurance Program and the AT&T Senior Management
Basic Life Insurance Program, with respect to which such individuals (or their
assignees or delegates) have executed collateral assignments for the benefit of
AT&T.

         1.49  SPREAD is defined in Section 4.3(b)(iv).

         1.50 SUPPLEMENTAL PENSION PLAN FOR TRANSFERS means the NCR Supplemental
Pension Plan for Transfers between AT&T and NCR.

         1.51  U.S. means the 50 United States and the District of Columbia.

         1.52  VALUE is defined in Section 4.3(b)(iv).

                                   ARTICLE II
                               GENERAL PRINCIPLES

         2.1 ALLOCATION OF LIABILITIES. (a) NCR hereby assumes or retains, as
applicable, and agrees to pay, perform, fulfill and discharge, in accordance
with their respective terms, and to indemnify the AT&T Indemnitees from and
against, pursuant to Section 4.2 of the Distribution Agreement, all of the
following (regardless of when or where such Liabilities arose or arise or were
or are incurred), except to the extent otherwise specified in Section 2.1(b)
below and in the agreement entered into pursuant to Section 6.1 with respect to
Foreign Plans: (i) all Liabilities to or relating to NCR Individuals relating
to, arising out of or resulting from employment by AT&T or any Person that was,
at the time of such employment, an AT&T Controlled Person, which employment
occurred before the Close of the NCR Distribution Date; (ii) all Liabilities to
or relating
 to NCR Individuals and other employees or former employees of NCR or
any Person that was, at the time of such employment, an NCR Controlled Person,
and their dependents and beneficiaries, relating to, arising out of or resulting
from employment with NCR or an NCR Controlled Person before, at or after the
Close of the NCR Distribution Date (including Liabilities under NCR Plans);
(iii) all Liabilities relating to, arising out of or resulting from any other
actual or alleged employment relationship with NCR or any Person that was, at
the time of such actual or alleged employment, an NCR Controlled Person; (iv)
all other Liabilities relating to, arising out of or resulting from obligations,
liabilities and responsibilities expressly 



                                      -6-

<PAGE>   11
assumed or retained by NCR, or an NCR Plan pursuant to this Agreement; and (v) 
all Liabilities relating to, arising out of or resulting from NCR Plans.

                  (b) AT&T hereby assumes or retains, as applicable, and agrees
to pay, perform, fulfill and discharge, in accordance with their respective
terms, and to indemnify the NCR Indemnitees from and against, pursuant to
Section 4.3 of the Distribution Agreement, all of the following (regardless of
when or where such Liabilities arose or arise or were or are incurred) except to
the extent otherwise specified in the agreement entered into pursuant to Section
6.1 with respect to Foreign Plans: (i) all Liabilities to or relating to AT&T
Individuals relating to, arising out of or resulting from employment by AT&T,
any Person that was, at the time of such employment, an AT&T Controlled Person,
NCR or any Person that was, at the time of such employment, an NCR Controlled
Person, which employment occurred before the Close of the NCR Distribution Date,
other than Liabilities relating to, arising out of or resulting from NCR Plans;
(ii) all Liabilities relating to, arising out of or resulting from written AT&T
Plans in accordance with their terms, to the extent neither of NCR nor any NCR
Plan is expressly made responsible for such Liabilities pursuant to this
Agreement; and (iii) any other Liabilities relating to, arising out of or
resulting from obligations, liabilities and responsibilities expressly assumed
or retained by AT&T or an AT&T Plan pursuant to this Agreement.

         2.2 TRANSFERRED EXECUTIVES. The individuals listed on Schedule IV shall
become employees of, and shall be transferred to the payroll of, NCR or a Person
that is, at the time of such transfer, an NCR Controlled Person, as soon as
practicable after the date hereof, but in any event no later than the Close of
the NCR Distribution Date, and shall therefore be considered "NCR Individuals"
as of the Close of the NCR Distribution Date.


                                   ARTICLE III
                                 QUALIFIED PLANS

         3.1  NCR PENSION PLANS.

                  (a) NAMED FIDUCIARY FOR NCR PENSION PLANS. NCR hereby
represents and warrants to AT&T that (i) the NCR Pension Plans as defined herein
constitute, as of the date hereof, all of the defined benefit pension plans
sponsored by NCR and the Persons that are, as of the date hereof, NCR Controlled
Persons, all other such plans having been merged into the NCR Pension Plan on or
before November 15, 1996, (ii) each NCR Pension Plan has been amended to provide
that NCR is the named fiduciary of such NCR Pension Plan, and that AT&T is not
the named fiduciary of such NCR Pension Plan, in each case for purposes of
negotiating the terms and conditions of this Section 3.1 and entering into this
Agreement, and (iii) that it has delivered to AT&T true, correct and complete
copies of such amendments and the resolutions of its Board of Directors
authorizing such amendments and providing for the delegation of the authority to
act in such fiduciary capacity by NCR to individual employees of NCR. As soon as
practicable after the Close of the NCR Distribution Date, and in any event
before the Second Transfer, NCR shall seek to have its Board of Directors ratify
such amendments and resolutions.

                  (b) PRE-DISTRIBUTION ACTIONS BY NCR. NCR shall take all
actions necessary or appropriate so that before the Close of the NCR
Distribution Date: (i) one or more individuals or entities are appointed in
place of AT&T as named fiduciary under the NCR Pension Plans; (ii) appropriate
trustees, custodians, investment managers and other fiduciaries with respect to
the NCR Pension Plans have been appointed, so as to permit the LTIT 



                                      -7-

<PAGE>   12
Redemption and the MPT Withdrawal to occur promptly in accordance with this
Section 3.1; (iii) NCR shall have entered into an Investment Advisory Agreement
with ATTIMCO providing for the management of the assets of the NCR Pension Plans
by ATTIMCO during the period from Immediately after the NCR Distribution Date
until the completion of the LTIT Redemption and the MPT Withdrawal in accordance
with this Section 3.1; and (iv) NCR shall have taken all such actions with
respect to the assets identified on Schedule V hereto as ATTIMCO shall
reasonably require.

                 (c)  TRANSFER OF ASSETS OF NCR PENSION PLANS FROM LTIT AND MPT.

                           (i) LTIT REDEMPTION AND MPT WITHDRAWAL. AT&T shall
take all actions necessary or appropriate to accomplish the LTIT Redemption, and
AT&T and NCR shall take all steps necessary or appropriate to accomplish the MPT
Withdrawal, in each case in accordance with this Section 3.1(c) as promptly as
practicable after the later of (A) the Close of the NCR Distribution Date and
(B) the completion of the ratification referred to in the last sentence of
Section 3.1(a) and all actions required to be taken pursuant to Section 3.1(b).

                           (ii) VALUATION OF LTIT ASSETS; LTIT REDEMPTION. Under
the terms of the LTIT Agreement, the Total Asset Value and Net Asset Value (as
those terms are defined in the LTIT Agreement) of the assets of the LTIT will be
determined by ATTIMCO, in its capacity as named fiduciary of the LTIT, as of
December 31, 1996. As part of such determination process, ATTIMCO shall also
determine the portion of such Net Asset Value that represents the share
allocable to the NCR Pension Plans in the LTIT through their interests in the
MPT (the "NCR Allocable Share") in accordance with the terms of the LTIT
Agreement. Such determinations shall be audited by Coopers & Lybrand in
accordance with the normal valuation procedures for the LTIT. AT&T, in its
capacity as Authorized Fiduciary (within the meaning of the LTIT Agreement) for
the MPT, shall then direct ATTIMCO, in its capacity as named fiduciary of the
LTIT, to redeem, pursuant to Section 7.2 of the LTIT Agreement, a portion of the
MPT's allocable share of the assets of the LTIT having a value, as of December
31, 1996, at least equal to the NCR Allocable Share (the "LTIT Redemption").
Such assets shall consist of a mix of assets satisfying the requirements of
Schedule VI hereto (as such Schedule may be amended hereafter by written
agreement between AT&T and NCR). AT&T and NCR acknowledge that the LTIT
Redemption may be subject, in whole or in part, to the consent of Lucent, in its
capacity as Authorized Fiduciary (within the meaning of the LTIT) of certain
plans participating in the LTIT, and agree to use reasonable best efforts to
obtain any such required consent, but failure to obtain such consent shall not
be considered a violation hereof.

                           (iii) WITHDRAWAL FROM MPT. AT&T (in its capacity as
named fiduciary of the MPT) shall cause the assets received by the MPT pursuant
to the LTIT Redemption to be segregated upon such receipt in anticipation of the
MPT Withdrawal. Such assets, together with the proceeds of any sale of such
assets, any other assets in which such proceeds may be reinvested, and any
dividends, interest, distributions and other income realized from such assets,
proceeds and other assets, in each case during the period from their receipt by
the MPT until they are transferred to the trustee(s) of the NCR Pension Plans as
hereinafter provided, are referred to collectively as the "Segregated Assets."
AT&T and NCR shall then direct the withdrawal of the NCR Pension Plans from the
MPT pursuant to Section 5(c) of MPT Agreement (the "MPT Withdrawal") in exchange
for all or a portion of the Segregated Assets, as set forth below. The transfer
of Segregated Assets from the trustee of the MPT to the trustee(s) of the NCR
Pension Plans pursuant to the MPT Withdrawal shall occur in two steps. The first
step (the "First Transfer") shall be a transfer of a portion of the Segregated
Assets selected by ATTIMCO (in its capacity as a fiduciary of the MPT) that it
determines to have a value, as of December 31, 1996, equal to approximately 90
percent of the NCR Allocable Share. The second step (the "Second Transfer")
shall be a 



                                      -8-

<PAGE>   13
transfer of additional Segregated Assets selected by ATTIMCO (in its
capacity as a fiduciary of the MPT), such that the Segregated Assets transferred
to the trustee(s) of the NCR Pension Plans in the First Transfer and the Second
Transfer (I) have a value, as of December 31, 1996, equal to the NCR Allocable
Share, and (II) constitute a mix of assets satisfying the requirements of
Schedule VI hereto. No adjustment shall be made to the assets so transferred as
a result of any diminishment in the value of the Segregated Assets after
December 31, 1996.

                           (iv) ACCEPTANCE OF ASSET TRANSFER. The completion of
the First Transfer and the Second Transfer shall be subject in each case to the
receipt by ATTIMCO, from NCR and each of the recipient trustee(s) of the NCR
Pension Plans, of a Receipt and Release substantially in the forms attached
hereto as Exhibits A and B, respectively (with such modifications as may be
agreed to by ATTIMCO). NCR hereby agrees to give Receipts and Releases
substantially in such forms unless it determines in good faith that either (I)
AT&T or ATTIMCO has failed to comply with the requirements of this Section
3.1(c) or (II) it is required by ERISA to withhold such Receipts and Releases.

                  (d)  RELEASE AND ASSUMPTION OF LIABILITIES.

                           (i) RELEASES. Effective Immediately after the NCR
Distribution Date, NCR does hereby, for itself and each other member of the NCR
Group, their respective Affiliates (other than any member of the AT&T Services
Group (as defined in the Separation and Distribution Agreement) or the Lucent
Group), successors and assigns, and all Persons who at any time prior to the NCR
Distribution Date have been shareholders, directors, officers, agents or
employees of any member of the NCR Group (in each case, in their respective
capacities as such), remise, release and forever discharge AT&T, the members of
the AT&T Services Group, their respective Affiliates (other than any member of
the NCR Group), successors and assigns, and all Persons who at any time prior to
the NCR Distribution Date have been shareholders, directors, officers, agents or
employees of any member of the AT&T Services Group (in each case, in their
respective capacities as such), and their respective heirs, executors,
administrators, successors and assigns, from any and all Liabilities whatsoever
relating to or arising out of the participation by any of the NCR Pension Plans
in the MPT or the Prior MPT or the participation by the MPT in the LTIT;
provided that the foregoing shall not release AT&T from the obligation to carry
out the First Transfer and the Second Transfer in accordance with Section 3.1(c)
above.

                           (ii) ASSUMPTION OF LIABILITIES. Without limiting the
generality of Section 2.1 above, NCR hereby assumes or retains, as applicable,
and agrees to pay, perform, fulfill and discharge, in accordance with their
respective terms: (A) all Liabilities relating to, arising out of or resulting
from the administration, or investment of the assets of, any of the NCR Pension
Plans; (B) all other Liabilities relating to, arising out of or resulting from
any of the NCR Pension Plans; and (C) NCR's allocable share of any amounts which
AT&T or any Affiliate of AT&T pays to any fiduciary of the MPT, the Prior MPT or
the LTIT pursuant to any obligation to indemnify such fiduciary with respect to
actions or omissions occurring while assets of any of the NCR Pension Plans were
held in the MPT, the Prior MPT or the LTIT, as applicable; such allocable share
to equal a percentage of such amounts paid by AT&T or such Affiliate equal to
the average percentage of the total value of the assets of the MPT, the Prior
MPT or the LTIT, as applicable, 



                                      -9-

<PAGE>   14
during the period of time when such actions or omissions occurred, that was 
allocable to the NCR Pension Plans.

         3.2 NCR SAVINGS PLAN. (a) REPLACEMENT FIDUCIARIES. NCR shall take all
steps necessary and appropriate, including the amendment of the plan document
and related trust agreement, so that effective no later than Immediately after
the NCR Distribution Date, one or more individuals or entities appointed by NCR
shall (i) replace AT&T in all of its capacities under the NCR Savings Plan,
including as named fiduciary with respect to investment, reinvestment and
administration of assets and with respect to the power to remove and replace
trustees and investment managers, and (ii) replace or be reappointed as the
trustee, investment managers, custodians and other fiduciaries with respect to
the NCR Savings Plan.

                  (b) RELEASE. Effective Immediately after the NCR Distribution
Date, NCR does hereby, for itself and each other member of the NCR Group, their
respective Affiliates (other than any member of the AT&T Services Group (as
defined in the Separation and Distribution Agreement)), successors and assigns,
and all Persons who at any time prior to the NCR Distribution Date have been
shareholders, directors, officers, agents or employees of any member of the NCR
Group (in each case, in their respective capacities as such), remise, release
and forever discharge AT&T, the members of the AT&T Services Group, their
respective Affiliates (other than any member of the NCR Group), successors and
assigns, and all Persons who at any time prior to the NCR Distribution Date have
been shareholders, directors, officers, agents or employees of any member of the
AT&T Services Group (in each case, in their respective capacities as such), and
their respective heirs, executors, administrators, successors and assigns, from
any and all Liabilities whatsoever relating to or arising out of the NCR Savings
Plan.


                                   ARTICLE IV
                               EXECUTIVE BENEFITS

         4.1 GENERAL. Effective Immediately after the NCR Distribution Date,
except as otherwise specified in this Article IV and in Section 5.2 hereof: (a)
NCR shall be solely responsible for all Liabilities to or with respect to NCR
Individuals under all AT&T Executive Benefit Plans; (b) AT&T shall be solely
responsible for all Liabilities to or with respect to AT&T Individuals under all
NCR Executive Benefit Plans; (c) no NCR Individuals shall continue to
participate in or to accrue benefits under any AT&T Executive Benefit Plans; and
(d) no AT&T Individuals shall continue to participate in or to accrue benefits
under any NCR Executive Benefit Plans.

         4.2  NONQUALIFIED PLANS.

                  (a) NCR SERPS. NCR shall cause the Supplemental Pension Plan
for Transfers to be amended, effective Immediately after the NCR Distribution
Date, to provide that no individual will be eligible to participate therein as a
result of or with respect to transfers of employment from AT&T or a Person that
is, at the time of such transfer, an AT&T Controlled Person to NCR or a Person
that is, at the time of such transfer, an NCR Controlled Person, or vice versa,
occurring after the Close of the NCR Distribution Date. NCR shall remain solely
responsible for all Liabilities to or relating to NCR Individuals under the
Supplemental Pension Plan for Transfers, and for all Liabilities for benefits
accrued by AT&T Individuals through the Close of the Distribution Date under the
NCR SERPs.


                                      -10-

<PAGE>   15
                  (b) AT&T SERPS. AT&T shall remain solely responsible for all
Liabilities for benefits accrued by NCR Individuals through the close of the
Distribution Date under the AT&T Mid-Career Pension Plan and the AT&T
Non-Qualified Pension Plan.

         4.3  AT&T LONG TERM INCENTIVE PLANS.

                  (a) GENERAL. NCR shall use its reasonable best efforts to take
all actions necessary or appropriate (including obtaining consents of affected
individuals) so that each outstanding Award granted under any AT&T Long Term
Incentive Plan held by any NCR Employee shall be replaced to the extent required
by this Section 4.3 with an Award based on NCR Common Stock. Effective
Immediately after the NCR Distribution Date, (i) NCR shall establish a Long Term
Incentive Plan providing for awards to employees of NCR and its Affiliates based
upon NCR Common Stock, (ii) NCR shall be solely responsible for all Liabilities
under the AT&T Long Term Incentive Plan to NCR Employees, and (iii) AT&T shall
remain solely responsible for all Liabilities under the AT&T Long Term Incentive
Plan to NCR Individuals who are not NCR Employees.

                  (b)  NCR EMPLOYEES.

                           (i) STOCK OPTIONS. NCR shall cause each Award
consisting of an AT&T Option that is outstanding and held by an NCR Employee as
the Close of the NCR Distribution Date to be replaced, effective Immediately
after the NCR Distribution Date, with an NCR Option. Such NCR Option shall
provide for the purchase of a number of shares of NCR Common Stock equal to the
number of shares of AT&T Common Stock subject to such AT&T Option as of the
Close of the NCR Distribution Date, multiplied by the Ratio, and then rounded
down to the nearest whole share. NCR shall pay to the holder of such replacement
Award, at the time of such replacement, cash in lieu of any fractional share
equal to the product of (A) the fraction represented by such fractional share
times (B)(1) the excess of the NCR Stock Value over (2) the per-share exercise
price of such AT&T Option as the Close of the NCR Distribution Date divided by
the Ratio. The per-share exercise price of such NCR Option shall equal the
per-share exercise price of such AT&T Option as of the Close of the NCR
Distribution Date divided by the Ratio. Each such NCR Option shall otherwise
have the same terms and conditions as were applicable to the corresponding AT&T
Option as of the Close of the NCR Distribution Date, except that references to
AT&T and its Affiliates shall be amended to refer to NCR and its Affiliates.

                           (ii) PERFORMANCE SHARES AND STOCK UNITS. NCR shall
cause each Award consisting of AT&T performance shares or AT&T stock units that
is outstanding and held by an NCR Employee as of the Close of the NCR
Distribution Date to be replaced, effective Immediately after the NCR
Distribution Date, with a new performance share award or a new stock unit award,
as the case may be, consisting of a number of NCR performance shares or NCR
stock units, as the case may be, equal to the number of AT&T performance shares
or AT&T stock units, as the case may be, constituting such Award as of the Close
of the NCR Distribution Date, multiplied by the Ratio, and then rounded down to
the nearest whole share. NCR shall pay to the holder of such replacement Award,
at the time of such replacement, cash in lieu of any fractional share based on
the NCR Stock Value. Each such replacement Award shall otherwise have the same
terms and conditions as were applicable to the corresponding AT&T Award as of
the Close of the NCR Distribution Date, except that references to AT&T and its
Affiliates shall be amended to refer to NCR and its Affiliates and dividend
equivalent payments, if any, with respect to dividends, the record date for
which is after the Close of the NCR Distribution Date shall be paid with
reference to dividends, if any, on NCR Common Stock.



                                      -11-

<PAGE>   16
                           (iii) RESTRICTED STOCK AND RESTRICTED STOCK UNITS.
NCR shall cause each Award that consists of non-vested restricted shares of AT&T
Common Stock or restricted stock units relating to shares of AT&T Common Stock
that is outstanding and held by an NCR Employee as of the Close of the NCR
Distribution Date, other than the Awards described in Schedule VII, to be
replaced, effective Immediately after the NCR Distribution Date, with either a
replacement Award described below or such other form of compensation not based
on NCR Common Stock as NCR shall determine. Any such replacement Award shall be
a new Award consisting of a number of non-vested restricted shares of NCR Common
Stock and/or restricted stock units relating to shares of NCR Common Stock equal
to the number of non-vested restricted shares or restricted stock units of AT&T
Common Stock constituting such Award as of the Close of the NCR Distribution
Date multiplied by the Ratio, and then rounded down to the nearest whole share.
NCR shall pay to the holder of any such replacement Award, at the time of such
replacement, cash in lieu of any fractional share based on the NCR Stock Value.
Each such replacement Award shall otherwise have the same terms and conditions
as were applicable to the corresponding AT&T Award as of the Close of the NCR
Distribution Date, except that references to AT&T and its Affiliates shall be
amended to refer to NCR and its Affiliates and dividend equivalent payments, if
any, with respect to dividends, the record date for which is after the NCR
Distribution Date shall be paid with reference to dividends, if any, on NCR
Common Stock.

                           (iv) CHARGEBACK. If, at any time after the Close of
the NCR Distribution Date, AT&T is required to deliver shares of AT&T Common
Stock, or shares of AT&T Common Stock vest, pursuant to an Award that NCR fails
to replace pursuant to this Section 4.3 or an Award listed on Schedule VII, NCR
shall pay AT&T the following amounts: (A) with respect to each such Award that
is an AT&T Option, the Spread on such Option; (B) with respect to the vesting or
delivery of shares of AT&T Common Stock pursuant to such an Award (other than an
AT&T Option), the Value of such AT&T Common Stock on the date of such vesting or
delivery and (C) with respect to each such Award, the amount of any withholding
taxes with respect thereto which are not paid or reimbursed to AT&T by the
holder of such Award. In addition, NCR shall pay AT&T the amount of any payments
made by AT&T with respect to fractional shares under any Award that NCR fails to
replace pursuant to this Section 4.3 or an Award listed on Schedule VII. AT&T
shall bill NCR for such amounts from time to time (but only after the exercise,
purchase, vesting, delivery or payment that gives rise to the obligation to make
any such payment), and NCR shall pay such amounts promptly after receipt of such
bills. The "Spread" on an Option means the excess, if any, of the Value of the
purchased shares on the date of exercise of such Option over the price paid for
such shares. The "Value" of a share of AT&T Common Stock on a given date means
the average of the high and the low per-share prices of the AT&T Common Stock as
listed on the NYSE on such date, or if there is no trading on the NYSE on such
date, on the most recent previous date on which such trading takes place.

                           (c) NCR INDIVIDUALS WHO ARE NOT NCR EMPLOYEES. Each
Award that is outstanding and held by an NCR Individual other than an NCR
Employee as of the Close of the NCR Distribution Date shall remain outstanding
Immediately after the NCR Distribution Date in accordance with its terms as
applicable as of the Close of the NCR Distribution Date, subject to such
adjustments as may be applicable to outstanding Awards held by AT&T Individuals.



                                      -12-

<PAGE>   17
         4.4 AT&T SPLIT DOLLAR LIFE INSURANCE. AT&T and NCR shall take all
actions necessary or appropriate to assign to NCR, effective Immediately after
the NCR Distribution Date, AT&T's rights and interests in the Split Dollar Life
Insurance policies under the Senior Management Individual Life Insurance Program
and the Senior Management Basic Life Insurance Program issued by Metropolitan
Life Insurance Company, Hartford Life Insurance Company, and Confederation Life
Insurance Company (or their successors in interest, including Pacific Mutual
Life Insurance Company), and any additional split dollar life insurance program
that may be implemented by AT&T before the Close of the NCR Distribution Date,
with respect to NCR Individuals (such policies, the "Assigned Split Dollar
Policies"). Such actions shall include NCR's acceptance of any collateral
assignments, policy endorsements or such other documentation executed by or on
behalf of NCR Individuals, or any trustee of any trust to which such
individual's policy rights or incidents of ownership under the Assigned Split
Dollar Policies have been assigned, and NCR's entering into such agreements as
may be necessary to fulfill any obligations of AT&T to any insurance company or
insurance agent or broker under the Assigned Split Dollar Policies. From and
after the date of the assignment of any Assigned Split Dollar Policy to NCR, NCR
shall assume and be solely responsible for all Liabilities, and shall be
entitled to all benefits, of AT&T under such policy and under the Senior
Management Life Insurance Program, the Senior Management Basic Life Insurance
Program and any additional split dollar life insurance program that may be
implemented by AT&T before the Close of the NCR Distribution Date, as the case
may be, with respect to such policies, and any related agreements entered into
by NCR Individuals.

         4.5  INDIVIDUAL AGREEMENTS.

                  (a) GENERAL. Except as specifically provided in the next two
sentences, NCR shall assume or retain, as the case may be, and be solely
responsible for all Liabilities relating to, arising out of or resulting from
NCR Individual Agreements, and AT&T shall assume or retain, as the case may be,
and be solely responsible for all Liabilities relating to, arising out of or
resulting from AT&T Individual Agreements. AT&T shall retain the Liabilities
under NCR Individual Agreements specified on Schedule VIII and shall reimburse
NCR for the amounts described on Schedule IX when and as such amounts are paid
by NCR. NCR shall reimburse AT&T for the amounts described on Schedule X as set
forth thereon. For purposes of this Section 4.5, Liabilities relating to,
arising out of or resulting from NCR Plans or AT&T Plans without reference to
any Individual Agreement shall not be considered to relate to, arise out of or
result from any Individual Agreement, even if such Liabilities or Plans are
described in such Individual Agreements.

                  (b) PHANTOM SHARE ACCOUNTS. The phantom AT&T Shares credited
to each of the phantom share accounts established pursuant to the agreements
listed on Schedule XI shall be converted, effective Immediately after the NCR
Distribution Date, to a number of phantom NCR Shares equal to the number of such
phantom AT&T Shares reflected in such account as of the Close of the NCR
Distribution Date multiplied by the Ratio. If AT&T declares any dividend (other
than the dividend that effects the NCR Distribution), the record date for which
is before the NCR Distribution Date and the payment date for which is after the
NCR Distribution Date, each such phantom share account shall be credited with
such dividend in accordance with the terms of the relevant agreement listed on
Schedule XI, except that such dividend shall be converted into NCR Common Stock
rather than AT&T Common Stock. After the Close of the NCR Distribution Date, the
dividends credited to such phantom share accounts shall be determined by
reference to dividends on NCR Common Stock rather than AT&T Common Stock.




                                      -13-

<PAGE>   18
                                    ARTICLE V
                             MISCELLANEOUS BENEFITS

         5.1 EMPLOYEE STOCK PURCHASE PLAN. NCR shall cause the 1994 Employee
Stock Purchase Plan for NCR, and any options that are then outstanding under
such Plan, to be terminated no later than the record date for the NCR
Distribution.

         5.2 SHORT TERM INCENTIVE PLANS. AT&T shall be solely responsible for
all Liabilities to NCR Individuals under the AT&T Short Term Incentive Plans for
the 1996 performance year and (if the NCR Distribution Date occurs after
December 31, 1996) subsequent performance years, to the extent they participated
therein. NCR shall be solely responsible for all Liabilities to AT&T Individuals
under the NCR Short Term Incentive Plans for the 1996 performance year and (if
the NCR Distribution Date occurs after December 31, 1996) subsequent performance
years, to the extent they participated therein.


                                   ARTICLE VI
                           FOREIGN PLANS; INTERCHANGE

         6.1 FOREIGN PLANS. AT&T and NCR shall use reasonable best efforts so
that as soon as practicable after the date of this Agreement, AT&T, Lucent and
NCR shall enter into an agreement regarding the treatment of employee benefit
plans maintained for the benefit of employees outside the U.S. substantially in
the form set forth in Exhibit C hereto.

         6.2 INTERCHANGE AGREEMENT. AT&T and NCR shall use reasonable best
efforts so that as soon as practicable after the date of this Agreement, AT&T,
Lucent and NCR shall enter into an agreement regarding the treatment, for
purposes of their respective Plans, of individuals whose employment is
transferred between them, which agreement shall be substantially in the form set
forth in Exhibit D hereto.


                                   ARTICLE VII
                                  MISCELLANEOUS

         7.1 SHARING OF PARTICIPANT INFORMATION. AT&T and NCR shall share, and
shall cause their respective Affiliates to share, with each other and their
respective agents and vendors (without obtaining releases) all participant, plan
design and other information necessary for the efficient and accurate
administration of, compliance with laws and regulations applicable to, and
response to inquiries by governmental authorities regarding, the AT&T Plans and
the NCR Plans after the Close of the NCR Distribution Date. AT&T and NCR and
their respective authorized agents shall, subject to applicable laws on
confidentiality, be given reasonable and timely access to, and may make copies
of, all information relating to the subjects of this Agreement in the custody of
the other party, to the extent necessary for such administration. All
participant information shall be provided in a manner and medium that is
compatible with the data processing systems of AT&T as in effect as of the Close
of the NCR Distribution Date, unless otherwise agreed to by AT&T and NCR.

         7.2 NO CHANGE OF CONTROL; NO RIGHTS CREATED; NO RESTRICTIONS. The NCR
Distribution shall not be considered to result in a "change of control" of NCR
or any Person that is, as of the Close of the NCR Distribution Date, an NCR
Controlled Person, or any 



                                      -14-

<PAGE>   19
similar event for purposes of any NCR Plan or NCR Individual Agreement, and NCR
shall take all steps necessary or appropriate, including amending any NCR Plan
or NCR Individual Agreement or obtaining any necessary approvals or consents, to
ensure the foregoing result. No provision of this Agreement or of the
Distribution Agreement shall be construed to create any right to any
compensation or benefit whatsoever on the part of any NCR Individual, AT&T
Individual or other future, present or former employee of AT&T, any of its
Affiliates, NCR or any of its Affiliates under any AT&T Plan or NCR Plan or
otherwise. Nothing in this Agreement shall preclude AT&T or NCR, at any time
after the Close of the NCR Distribution Date, from amending, merging, modifying,
terminating, eliminating, reducing, or otherwise altering in any respect any
AT&T Plan or NCR Plan, as applicable, any benefit under any Plan or any trust,
insurance policy or funding vehicle related to any AT&T Plan or NCR Plan, as
applicable.

         7.3 EFFECT IF NCR DISTRIBUTION DOES NOT OCCUR. If the NCR Distribution
does not occur, then all actions and events that are, under this Agreement, to
be taken or occur effective as of the Close of the NCR Distribution Date,
Immediately after the NCR Distribution Date, or otherwise in connection with the
NCR Distribution, shall not be taken or occur except to the extent specifically
agreed by NCR and AT&T.

         7.4 RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be deemed
or construed by the parties or any third party as creating the relationship of
principal and agent, partnership or joint venture between the parties, it being
understood and agreed that no provision contained herein, and no act of the
parties, shall be deemed to create any relationship between the parties other
than the relationship set forth herein.

         7.5 AFFILIATES. Each of AT&T and NCR shall cause to be performed, and
hereby guarantees the performance of, all actions, agreements and obligations
set forth in this Agreement to be performed by a Person that is, at the time of
such performance, an AT&T Controlled Person or an NCR Controlled Person,
respectively.

         7.6 INCORPORATION OF DISTRIBUTION AGREEMENT PROVISIONS. The following
provisions of the Distribution Agreement are hereby incorporated herein by
reference, and unless otherwise expressly specified herein, such provisions
shall apply as if fully set forth herein (references in this Section 7.6 to an
"Article" or "Section " shall mean Articles or Sections of the Distribution
Agreement, and, except as expressly set forth below, references in the material
incorporated herein by reference shall be references to the Distribution
Agreement): Article IV (relating to Mutual Releases and Indemnification);
Section 5.2 (relating to Exchange of Information and Archives); Article VI
(relating to Further Assurances and Additional Covenants); Article VII (relating
to Termination); and Article VIII (relating to Miscellaneous) other than Section
8.2 (relating to Governing Law).

         7.7 INCORPORATION OF SEPARATION AND DISTRIBUTION AGREEMENT PROVISIONS.
Article IX of the Separation and Distribution Agreement (relating to Arbitration
and Dispute Resolution) is hereby incorporated herein by reference, and unless
otherwise expressly specified herein, such provision shall apply as if fully set
forth herein (references in the material incorporated herein by reference shall
be references to the Separation and Distribution Agreement).

         7.8 GOVERNING LAW. To the extent not preempted by applicable federal
law, this Agreement shall be governed by, construed and interpreted in
accordance with the laws of the State of New York, irrespective of the choice of
laws principles of the State of New 



                                      -15-

<PAGE>   20
York, as to all matters, including matters of validity, construction, effect, 
performance and remedies.

         7.9 TAX DEDUCTIONS. It is the intention of AT&T and NCR that the party
that actually bears the cost (whether directly or indirectly) of making a
payment with respect to, or (except as provided below) whose stock is used to
satisfy, a Liability governed by this Agreement shall be entitled to any and all
tax benefits associated therewith, including the benefit of taking a deduction
with respect to such payment or satisfaction for income tax purposes, and shall
be obligated to satisfy all tax withholding obligations with respect thereto,
and AT&T and NCR agree to take no action inconsistent with such intention.
Notwithstanding the foregoing, AT&T and NCR recognize that it is possible that
the Internal Revenue Service or another taxing authority will take a different
position. Therefore, AT&T and NCR agree that: (a) if either of them is notified
by the Internal Revenue Service or another taxing authority that it is taking or
proposes to take a different position, the party receiving such notice shall so
notify the other; (b) if, when and to the extent that AT&T or a Person that is
then an AT&T Controlled Person receives a tax benefit as a result of a payment
made by NCR or a Person that is then an NCR Controlled Person with respect to,
or the use of NCR Common Stock to satisfy, a Liability governed by this
Agreement, AT&T shall pay to NCR, or shall cause such AT&T Controlled Person to
pay to NCR, an amount equal to the net tax benefit realized by AT&T or such AT&T
Controlled Person, as and when realized; and (c) if and to the extent that NCR
or a Person that is then an NCR Controlled Person receives a tax benefit as a
result of a payment made by AT&T or a Person that is then an AT&T Controlled
Person with respect to, or (except as provided below) the use of AT&T stock to
satisfy, a Liability governed by this Agreement, NCR shall pay to AT&T, or shall
cause such NCR Controlled Person to pay to AT&T, an amount equal to the net tax
benefit realized by NCR or such NCR Controlled Person, as and when realized. For
purposes of this Section 7.9, NCR shall be entitled to any and all tax benefits
with respect to Awards as to which NCR makes a payment to AT&T required by
Section 4.3(b)(iv) hereof, and AT&T shall not be entitled to any such tax
benefits, notwithstanding the fact that its stock is used to satisfy, or it pays
cash to satisfy, the Liabilities with respect to such Awards; provided, that
AT&T shall be obligated in the first instance to satisfy all tax withholding
obligations with respect thereto, subject to reimbursement by NCR pursuant to
Section 4.3(b)(iv) hereof. The net tax benefit to either party resulting from
payment or satisfaction of a Liability shall be deemed to equal the excess of
(i) the taxes that would have been paid by such party if such party had not paid
or satisfied such Liability over (ii) the taxes that are actually paid by such
party.

         7.10 AGREEMENTS WITH THIRD PARTIES. The provisions of this Agreement
regarding the allocation of Liabilities are intended only to provide for such
allocation as between AT&T and NCR, and shall have no effect on any agreements
with respect thereto among AT&T, any of its Affiliates and/or one or more third
parties, or among NCR and any of its Affiliates and/or one or more third
parties, including the Lucent EBA. To the extent that (i) any Liability assumed
or retained by NCR hereunder, (ii) any other Liability accrued under any NCR
Plan not specifically assumed by AT&T hereunder, or (iii) any other
employee-related Liability primarily related to, arising out of or resulting
from the operation of the NCR Business (as conducted at any time prior to, on or
after the NCR Distribution Date) not specifically assumed by AT&T hereunder, is
subject to the sharing arrangement for Contingent Liabilities under Section
6.3(b)(ii) of the Separation and Distribution Agreement, NCR shall be solely
responsible for AT&T's share thereof (as determined pursuant to said Section
6.3(b)(ii)), but no provision of this Agreement shall be deemed to relieve or
release Lucent from responsibility for its share thereof (as determined pursuant
to said Section 6.3(b)(ii)).



                                      -16-

<PAGE>   21
         7.11 NCR TO HONOR AGREEMENTS. NCR shall honor, and shall cause Persons
who are, at any time hereafter, NCR Controlled Persons to honor, all obligations
to their respective employees and former employees, except to the extent such
obligations are expressly assumed by AT&T pursuant to this Agreement. To the
extent the obligations referred to in the preceding sentence are obligations
pursuant to agreements referred to in Schedule 6.12 to the Agreement and Plan of
Merger, dated May 6, 1991, as amended as of July 17, 1991, among AT&T,
Subsidiary Corporation and NCR, the individuals who are entitled to third-party
beneficiary rights with respect thereto under said Schedule 6.12 shall be
entitled to third-party beneficiary rights with respect to the preceding
sentence.




                                      -17-

<PAGE>   22
                  IN WITNESS WHEREOF, the parties have caused this Employee
Benefits Agreement to be duly executed as of the day and year first above
written.



                                     AT&T CORP.


                                     By:
                                          -------------------------------
                                     Name:
                                     Title:



                                     NCR CORPORATION


                                     By:
                                          --------------------------------   
                                     Name:
                                     Title:




                                      -18-

<PAGE>   23
                                   Schedule I
                          AT&T Executive Benefit Plans

AT&T Deferral Accounts AT&T Deferred Severance Accounts AT&T Excess Benefit and
Compensation Plan AT&T Financial Counseling Tax Allowance AT&T Long Term
Incentive Plans AT&T Mid-Career Pension Plan AT&T Non-Qualified Pension Plan
AT&T Savings Plan Lost Company Match Reimbursement and Tax
    Allowance
AT&T Senior Management Basic Life Insurance Program AT&T Senior Management
Financial Counseling Program AT&T Senior Management Ground Transportation
Program AT&T Senior Management Incentive Award Deferral Plan AT&T Senior
Management Individual Life Insurance Program AT&T Senior Management Long-Term
Disability and Survivor
    Protection Plan
AT&T Senior Management Telephone Reimbursement Program
AT&T Short Term Incentive Plan
AT&T Special Executive Deferral Accounts
AT&T Tax Allowance for Senior Manager Perquisites

<PAGE>   24
                                   Schedule II
                              Individual Agreements

NCR Individual Agreements:

Letter dated June 7, 1996 to Lars Nyberg from Harold W. Burlingame on behalf of
AT&T Letter dated April 18, 1995 to Lars Nyberg from Harold W. Burlingame on
behalf of AT&T
Employment Agreement dated as of September 23, 1991 by and among AT&T, NCR and
    John L. Giering, as amended as of November 1, 1996
Letter dated February 18, 1994 to Robert Carpenter from Richard F. Brenner on
    behalf of NCR
Phantom Share Arrangement for Anthony Fano dated March 1, 1994, as amended as of
    April 18, 1995
Phantom Share Arrangement for Mark V. Hurd dated August 8, 1994, as amended as 
    of February 13, 1995
Phantom Share Arrangement for Werner Sulzer dated July 4, 1995 Agreement and
Release dated as of December 1, 1995, by and between AT&T, NCR and
    Richard F. Brenner
Letter effective September 3, 1993 to Richard Brenner from Jerre L. Stead on
    behalf of NCR
Letter dated July 31, 1992 to Richard F. Brenner from Harold W. Burlingame on
    behalf of AT&T


AT&T Individual Agreements:

Letter dated July 23, 1996 to Ronald L. Fowinkle from Harold W. Burlingame on
    behalf of AT&T
Employment Agreement dated as of March 2, 1992, by and between AT&T and
    Robert R. Carpenter

<PAGE>   25
                                  Schedule III
                           NCR Executive Benefit Plans

NCR Executive Retirement, Death and Disability Plan
NCR Financial Counseling Program
NCR Individual Agreements
NCR Long Term Incentive Program
NCR Management Incentive Plan
NCR Mid-Career Hire Supplemental Pension Plan
NCR Nonqualified Excess Plan
Retirement Plan for Officers of NCR
NCR Supplemental Pension Plan for Transfers Between AT&T and NCR

<PAGE>   26
                                   Schedule IV
                      Individuals to be Transferred to NCR


                                   John Curran
                                Richard H. Evans

<PAGE>   27
                                   Schedule V
                      Assets Referred to in Section 3.1(b)

The facilities leased to NCR that are located in:

                  Mount Joy, Pa. (owned by NACAR of Pennsylvania, Inc.)

                  Viroqua, Wisc. (owned by NACAR of Viroqua, Inc.)

<PAGE>   28
                                   Schedule VI
                      Selection of Assets to be Transferred
                       to Trustee(s) of NCR Pension Plans

The assets transferred to the trustee(s) of the NCR Pension Plans shall
represent a portfolio consisting of the following:

Specific dollar amounts (in millions) to be transferred:

         U.S. Equities
                  Invesco                                          $350.0
                  State Street Russell 1000 Index                   540.0
                  Kennedy Capital                                    50.0
                  Axe Houghton                                       50.0

         Fixed Income
                  Mellon Bond*                                     $400.0

         STIF                                                      $ 30.0

Entire accounts to be transferred:

         U.S. Equities
                  Columbus Circle Mid Cap
                  Columbus Circle Small Cap
                  Saratoga II
                  Belmont II
                  Oxford Venture Fund

         International Equities
                  J.P. Morgan Japan

         Fixed Income
                  Equitable (Alliance)

         Real Estate
                  NACAR (Viroqua and Mount Joy)

Remainder of assets in the following approximate proportions:

         1/3 BZW Low Cap
         2/3 SSGA Index


- --------
      *Mellon Bond account represents the Salomon Bros. Core +5 Index modified
to hold the same sector weights, i.e., Treasuries, Mortgages and Corporates as
the Salmon BIG Index.

<PAGE>   29
                                  Schedule VII
                 AT&T Awards Not to Be Replaced with NCR Awards


35,000 Restricted Stock Units granted to Lars Nyberg in September of 1995

<PAGE>   30
                                  Schedule VIII
                  AT&T Liabilities Under Individual Agreements

Obligation to Lars Nyberg pursuant to Section (5) of the letter dated June 7,
1996 to Mr. Nyberg from Harold W. Burlingame on behalf of AT&T, relating to the
buyout of his special pension arrangement

<PAGE>   31
                                   Schedule IX
                              Reimbursement of NCR

AT&T shall reimburse NCR for any payments that may become due pursuant to the
gross-up provisions of Section 14 of the Employment Agreement dated as of
September 23, 1991 by and among AT&T, NCR and John L. Giering. [CONFIRM THAT NCR
HAS PAID AND AT&T REIMBURSED NCR FOR, RECORD ACCOUNT PURSUANT TO SECTION 4 AND
TAX EQUALIZATIONS PAYMENT PURSUANT TO SECTION 13 OF SUCH AGREEMENT.]

<PAGE>   32
                                   Schedule X
                              Reimbursement of AT&T


NCR shall reimburse AT&T for the amount of cash paid, plus the fair market value
on the date of delivery of any shares of AT&T Common Stock delivered, to Ronald
L. Fowinkle pursuant to the AT&T Performance Shares referred to in the third
paragraph of the section entitled "Long Term Incentive" of the Letter to Mr.
Fowinkle from Harold W. Burlingame dated July 23, 1996.

<PAGE>   33
                                   Schedule XI
                 Agreements Establishing Phantom Share Accounts


Phantom Share Arrangement for Anthony Fano dated March 1, 1994, as amended as of
April 18, 1995

Phantom Share Arrangement for Mark V. Hurd dated August 8, 1994, as amended as 
of February 13, 1995

Phantom Share Arrangement for Werner Sulzer dated July 4, 1995




<PAGE>   34
                                   Exhibit A

                              RECEIPT AND RELEASE

                           [FORM FOR FIRST TRANSFER]

               WHEREAS, AT&T Investment Management Corporation ("ATTIMCO") is
the named fiduciary of the Long-Term Investment Trust (the "LTIT") established
pursuant to the Agreement of Trust Establishing the Long-Term Investment Trust
and Constituting the Amendment and Restatement of the AT&T Master Pension Trust
Agreement and Conversion Thereof, effective as of October 1, 1996 (the "LTIT
Agreement"); and

               WHEREAS, AT&T Corp. ("AT&T") is the named fiduciary of the AT&T
Master Pension Trust (the "MPT" and, together with the LTIT and any
successors to either of them (other than [NCR TRUSTS] (the "Receiving Trusts")),
the "Distributing Trusts") established pursuant to the AT&T Master Pension Trust
Agreement dated as of October 1, 1996 between AT&T, Citibank, N.A., and certain
other banks, trust companies or individuals identified therein (the "MPT
Agreement"); and

               WHEREAS, The NCR Pension Plan and The Retirement Plan for
Employees of NCR Corporation at Dayton, Ohio Represented by the Independent
Union of NCR Corporation Guards (together, the "NCR Pension Plans") are
Participating Plans (as defined in the MPT Agreement) in the MPT; and

               WHEREAS, pursuant to that certain Employee Benefits Agreement
(the "EBA") dated as of November 20, 1996, by and between AT&T and NCR
Corporation, AT&T and NCR have agreed that the allocable share of the NCR
Pension Plans in the LTIT and the MPT shall be redeemed and withdrawn on
terms and conditions set forth in the EBA (references herein to "NCR" shall
be deemed to refer to NCR Corporation

                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS

<PAGE>   35
and the entities that are, as of the date hereof, NCR Controlled Persons as
defined in the EBA); and

               WHEREAS, in compliance with the above-described provisions of the
EBA, AT&T, in its capacity as Authorized Fiduciary (within the meaning of the
LTIT Agreement) for the MPT, has directed ATTIMCO, in its capacity as named
fiduciary of the LTIT, to cause Citibank, N.A. (hereinafter referred to in its
capacity as trustee of the LTIT as the "Distributing Trustee") to distribute the
property described in Exhibit I hereto (the "Distributive Property") to the MPT,
and AT&T, in its capacity as named fiduciary of the MPT, has caused the
Distributive Property to be distributed to Citibank, N.A. as trustee of the
Receiving Trust (hereinafter referred to in its capacity as trustee of the
Receiving Trust as the "Receiving Trustee").

               NOW, THEREFORE, NCR and the Receiving Trustee do hereby
acknowledge that the Receiving Trustee has received the Distributive Property,
and in consideration of the premises and of the distribution described herein,
they do hereby covenant and agree as follows:

               1.      The Receiving Trustee does hereby acknowledge receipt of,
and NCR does hereby acknowledge that the Receiving Trustee has received, the
Distributive Property, and each of them does hereby agree that the Distributive
Property constitutes all the property to which the Receiving Trustee is entitled
pursuant to the First Transfer, and that such Distributive Property is accepted
as is and in full satisfaction of the obligations of AT&T to effect the First
Transfer pursuant to the EBA.

               2.      The Receiving Trustee does hereby acknowledge and confirm
that the Receiving Trust is a qualified trust under Section 401(a) of the
Internal Revenue Code of

                                      -2-
                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS

<PAGE>   36
1986, as amended, that the Distributive Property is received by it, not
individually, but as trustee pursuant to the agreements creating the Receiving
Trust, and that it will hold and administer the Distributive Property in
accordance with the terms and provisions of the Receiving Trust.

        3.  (a) The Receiving Trustee, individually and as trustee of the
Receiving Trust and on behalf of the NCR Pension Plans, and NCR, individually
and as sponsor of the NCR Pension Plans, do each hereby remise, release and
forever discharge the Released Parties (as defined below) from any and all
Liabilities (as defined below) against, in respect of, relating to, arising out
of or in any other way connected with the Distributive Property (all of which
are hereinafter collectively referred to as the "Released Claims").

            (b) "Released Parties" means: (i) the Distributing Trusts; (ii)
AT&T, individually and as trustee and fiduciary of the MPT and of AT&T's
Participating Plans(s) in the MPT (as defined in the MPT Agreement) (the "AT&T
Plans"); (iii) ATTIMCO, individually and as trustee and fiduciary of the LTIT,
the MPT and the AT&T Plans; (iv) all of their respective past, present and
future affiliates (other than NCR and Persons who are, as of the date hereof,
NCR Controlled Persons), successors and assigns; and (v) all persons who at any
time prior to the date hereof have been shareholders, directors, officers,
agents or employees of any Persons described in clause (ii), (iii) or (iv), in
each case, in their respective capacities as such, and their respective heirs,
executors, administrators, successors and assigns.

             (c) "Liabilities" means any and all losses, claims, charges,
debts, demands, actions, causes of action, suits, damages, obligations,
payments, costs and expenses, sums of money, accounts, reckonings, bonds,
specialties, indemnities and similar obligations, exonerations, covenants,
contracts, controversies, agreements, promises, doings, omissions,

                                      -3-
                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS

<PAGE>   37
variances, guarantees, make whole agreements and similar obligations, and other
liabilities, including all contractual obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and including those arising
under any law, rule, regulation, action, threatened or contemplated
action(including the costs and expenses of demands, assessments, judgments,
settlements and compromises relating thereto and attorneys' fees and any and
all costs and expenses (including allocated costs of in-house counsel and other
personnel), whatsoever reasonably incurred in investigating, preparing or
defending against any such actions or threatened or contemplated actions),
order or consent decree of any governmental authority or any award of any
arbitrator or mediator of any kind, and those arising under any contract,
commitment or undertaking.

        4. The Receiving Trustee, solely in its capacity as trustee of the
Receiving Trust, and not individually, does hereby agree that if any
Distributing Trust shall hereafter be required to pay any claims or obligations
of any kind which shall properly be chargeable in whole or in part against the
Distributive Property, the Receiving Trustee will immediately pay to the
appropriate trustee of such Distributing Trust the amount of such claims or
obligations by such Distributing Trust.

        5.  The Receiving Trustee, solely in its capacity as Trustee of the
Receiving Trust, and not individually, and NCR, do each hereby agree to
indemnify and save and hold the Released Parties harmless from and against any
and all Released Claims which any of them may at any time or from time to time
sustain or incur or become liable for, except as to any Released Party with
respect to any action or inaction on the part of such Released Party
constituting breach of fiduciary duty.
                                      -4-
                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS



<PAGE>   38
              6.  To the best knowledge of the Receiving Trustee and NCR,
there is not, as of the date hereof, any default, claim or other action which
the Receiving Trustee or NCR may claim or make against any Released Party
based upon breach of fiduciary duty.

              7.  The Receiving Trustee and NCR do each represent and warrant
to the Released Parties that it has full power and authority to grant the
rights, releases, indemnifications and other actions set forth in this
Release.

              IN WITNESS WHEREOF, the Receiving Trustee and NCR have each
caused these presents to be executed by its duly authorized officers and its
corporate seal to be hereunto affixed as of the      day of           , 1997.
                                                ----        ----------

                                        [Receiving Trustee]



                                        By:
                                            ---------------------------
                                            Name:
                                            Title:

ATTEST:

BY:  
    --------------------
    Name:
    Title:

                                        NCR CORPORATION

                                        By:
                                            --------------------------
                                            Name:
                                            Title:

ATTEST:

By: 
    --------------------
    Name:
    Title:
                        
                                      -5-
                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS

                                        

<PAGE>   39


                                   Exhibit I

                             Distributive Property
                    Distributed on [DATE OF FIRST TRANSFER]

                                   [DESCRIBE]


















                                      -6-
                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS

<PAGE>   40
                                   EXHIBIT B

                              RECEIPT AND RELEASE
                              -------------------
                           [FORM FOR SECOND TRANSFER]

            WHEREAS, AT&T Investment Management Corporation ("ATTIMCO") IS
the named fiduciary of the Long-Term Investment Trust (the "LTIT") established
pursuant to the Agreement of Trust Establishing the Long-Term Investment Trust
and Constituting the Amendment and Restatement of the AT&T Master Pension 
Trust Agreement and Conversion Thereof, effective as of October 1, l966 (the
"LTIT Agreement"); and 

            WHEREAS, AT&T Corp. ("AT&T") is the named fiduciary of the 
AT&T Master Pension Trust (the "MPT" and, together with the LTIT and any
successors to either of them (other than [NCR TRUSTS] (the "Receiving Trusts")),
the "Distributing Trusts") established pursuant to the AT&T Master Pension
Trust Agreement dated as of October 1, 1996 between AT&T, Citibank, N.A., and
certain other banks, trust companies or individuals identified therein (the
"MPT Agreement"); and 

            WHEREAS, The NCR Pension Plan and The Retirement Plan for
Employees of NCR Corporation at Dayton, Ohio Represented by the Independent
Union of NCR Corporation Guards (together, the "NCR Pension Plans") are
Participating Plans (as defined in the MPT Agreement) in the MPT; and

            WHEREAS, pursuant to that certain Employee Benefits Agreement 
(the "EBA") dated as of November 20, 1996, by and between AT&T and NCR 
Corporation, AT&T and NCR have agreed that the allocable share of the NCR
Pension Plans in the LTIT and the MPT shall be redeemed and withdrawn on terms
and conditions set forth in the EBA (references herein to "NCR" shall be
deemed to refer to NCR Corporation


                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS

<PAGE>   41
and the entities that are, as of the date hereof, NCR Controlled Persons as
defined in the EBA); and

        WHEREAS, in compliance with the above-described provisions of the EBA,
AT&T, in its capacity as Authorized Fiduciary (within the meaning of the LTIT
Agreement) for the MPT, has directed ATTIMCO, in its capacity as named
fiduciary of the LTIT, to cause Citibank, N.A. (hereinafter referred to in its
capacity as trustee of the LTIT as the "Distributing Trustee") to distribute
the property described in Exhibit I and II hereto (the ""Distributive
Property") to the MPT, and AT&T, in its capacity as named fiduciary of the MPT,
has caused the Distributive Property to be distributed to Citibank, N.A. as
trustee of the Receiving Trust (hereinafter referred to in its capacity as
trustee of the Receiving Trust as the "Receiving Trustee").

        NOW, THEREFORE, NCR and the Receiving Trustee do hereby acknowledge
that the Receiving Trustee has received the Distributive Property, and in
consideration of the premises and of the distribution described herein, they do
hereby covenant and agree as follows:

        1. The Receiving Trustee does hereby acknowledge receipt of, and NCR
does hereby acknowledge that the Receiving Trustee has received, the
Distributive Property, and each of them does hereby agree that the Distributive
Property constitutes all the property to which the Receiving Trustee is entitled
pursuant to the withdrawal of the NCR Pension Plans from the MPT, and that such
Distributive Property is accepted as is and in full satisfaction of the
obligations of AT&T to effect such withdrawal pursuant to the EBA.

        2. The Receiving Trustee does hereby acknowledge and confirm that the
Receiving Trust is a qualified trust under Section 401(a) of the Internal
Revenue Code of 

                                      -2-
                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS


<PAGE>   42
1986, as amended, that the Distributive Property is received by it, not
individually, but as trustee pursuant to the agreements creating the Receiving
Trust, and that it will hold and administer the Distributive Property in
accordance with the terms and provisions of the Receiving Trust.

        3.  (a) The Receiving Trustee, individually and as trustee of the
Receiving Trust and on behalf of the NCR Pension Plans, and NCR, individually
and as sponsor of the NCR Pension Plans, do each hereby remise, release and
forever discharge the Released Parties (as defined below) from any and all
Liabilities (as defined below) against, in respect of, relating to, arising out
of or in any other way connected with the Distributive Property (all of which
are hereinafter collectively referred to as the "Released Claims").

            (b) "Released Parties" means: (i) the Distributing Trusts; (ii)
AT&T, individually and as trustee and fiduciary of the MPT and of AT&T's
Participating Plan(s) in the MPT (as defined in the MPT Agreement) (the "AT&T
Plans"); (iii) ATTIMCO, individually and as trustee and fiduciary of the LTIT,
the MPT and the AT&T Plans; (iv) all of their respective past, present and
future affiliates (other than NCR and Persons who are, as of the date hereof,
NCR Controlled Persons), successors and assigns; and (v) all persons who at any
time prior to the date hereof have been shareholders, directors, officers,
agents or employees of any Person described in clause (ii), (iii) or (iv), in
each case, in their respective capacities as such, and their respective heirs,
executors, administrators, successors and assigns.

            (c) "Liabilities" means any and all losses, claims, charges, debts,
demands, actions, causes of action, suits, damages, obligations, payments,
costs and expenses, sums of money, accounts, reckonings, bonds, specialties,
indemnities and similar obligations, exonerations, covenants, contracts,
controversies, agreements, promises, doings, omissions, variances, guarantees,
make whole agreements and similar obligations, and other liabilities,

                                      -3-
                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS


<PAGE>   43
including all contractual obligations, whether absolute or contingent, matured
or unmatured, liquidated or unliquidated, accrued or unaccrued, known or
unknown, whenever arising, and including those arising under any law, rule,
regulation, action, threatened or contemplated action (including the costs and
expenses of demands, assessments, judgments, settlements and compromises
relating thereto and attorneys' fees and any and all costs and expenses
(including allocated costs of in-house counsel and other personnel), whatsoever
reasonably incurred in investigating, preparing or defending against any such
actions or threatened or contemplated actions), order or consent decree of any
governmental authority or any award of any arbitrator or mediator of any kind,
and those arising under any contract, commitment or undertaking.

                4.  The Receiving Trustees, solely in its capacity as trustee
of the Receiving Trust, and not individually, does hereby agree that if any
Distributing Trust shall hereafter be required to pay any claims or obligations
of any kind which shall properly be chargeable in whole or in part against the
Distributive Property, the Receiving Trustee will immediately pay to the
appropriate trustee of such Distributing Trust the amount of such claims or
obligations by such Distributing Trust.

                5.  The Receiving Trustee, solely in its capacity as Trustee of
the Receiving Trust, and not individually, and NCR, do each hereby agree to
indemnify and save and hold the Released Parties harmless from and against any
and all Released Claims which any of them may at any time or from time to time
sustain or incur or become liable for, except as to any Released party with
respect to any action or inaction on the part of such Released Party
constituting breach of fiduciary duty.


                                      -4-
                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS


<PAGE>   44
                6.  To the best of knowledge of the Receiving Trustee and NCR,
there is not, as of the date hereof, any default, claim or other action which
the Receiving Trustee or NCR may claim or make against any Released Party based
upon breach of fiduciary duty.

                7.  The Receiving Trustee and NCR do each represent and warrant
to the Released Parties that it has full power and authority to grant the
rights, releases, indemnifications and other actions set forth in this Release.

                8.  Concurrent with the execution and delivery of this Release,
NCR shall cease to be an Employing Company and the NCR Pension Plans shall
cease to be Participating Plans (as such terms are defined in the MPT) in the
MPT, and NCR and the NCR Pension Plans shall have no further rights, in, to or
with respect to the Distributing Trusts.







                                      -5-
                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS

<PAGE>   45
        IN WITNESS WHEREOF, the Receiving Trustee and NCR have each caused
these presents to be executed by its duly authorized officers and its corporate
seal to be hereunto affixed as of the     day of       , 1997.
                                     -----      -------

                                        [RECEIVING TRUSTEE]


                                        By:
                                           ------------------------
                                           Name:
                                           Title:

ATTEST:

By:
   ------------------------
   Name:
   Title:

                                        NCR CORPORATION

                                        By:
                                           -------------------------
                                           Name:
                                           Title:

ATTEST:

By:
   -------------------------
   Name:
   Title:







                                      -6-
                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS

<PAGE>   46
                                   Exhibit I

                             Distributive Property
                    Distributed on [date of First Transfer]

                                   [describe]










                                      -7-
                         AT&T Proprietary (Restricted)
                 Solely for Those Persons Having a Need to Know
                      Use Pursuant to Company Instructions

<PAGE>   47
                                   Exhibit II

                             Distributive Property
                    Distributed on [date of Second Transfer]

                                   [describe]










                                      -8-
                         AT&T Proprietary (Restricted)
                 Solely for Those Persons Having a Need to Know
                      Use Pursuant to Company Instructions

<PAGE>   48
                                                Attorney Work Product
                                                Advice of Counsel
                                                Privileged and Confidential
                                                Draft of 11/20/96


                                   Exhibit C

                                    Form of:
                                    -------

                      FOREIGN EMPLOYEE BENEFITS AGREEMENT

                                     among

                                  AT&T CORP.,

                            LUCENT TECHNOLOGIES INC.

                                      and

                                NCR CORPORATION



                                  Dated as of
                                          , 1996
                               -----------


                         AT&T Proprietary (Restricted)
                 Solely for Those Persons Having a Need to Know
                      Use Pursuant to Company Instructions

<PAGE>   49
                                                ATTORNEY WORK PRODUCT
                                                ADVICE OF COUNSEL
                                                PRIVILEGED AND CONFIDENTIAL
                                                DRAFT OF 11/20/96


                               TABLE OF CONTENTS


                                                                           Page
                                                                           ----
ARTICLE I  DEFINITIONS.....................................................   2

  1.1   Affiliates.........................................................   2
  1.2   Ancillary Agreements...............................................   2
  1.3   AT&T...............................................................   2
  1.4   AT&T Controlled Person.............................................   2
  1.5   AT&T Individuals...................................................   2
  1.6   AT&T/Lucent EBA....................................................   2
  1.7   AT&T/NCR EBA.......................................................   2
  1.8   AT&T Transferred Employee..........................................   2
  1.9   Close of the Lucent Distribution Date..............................   2
  1.10  Close of the NCR Distribution Date.................................   2
  1.11  Distribution Agreement.............................................   2
  1.12  Foreign Plan.......................................................   2
  1.13  Immediately after the Lucent Distribution Date.....................   2
  1.14  Legally Permitted..................................................   2
  1.15  Lucent.............................................................   3
  1.16  Lucent Individual..................................................   3
  1.17  NCR................................................................   3
  1.18  NCR Controlled Person..............................................   3
  1.19  NCR Individual.....................................................   3
  1.20  Overlapping Plan...................................................   3
  1.21  Overlapping DB Plans...............................................   3
  1.22  Overlapping DC Plans...............................................   3
  1.23  Plan...............................................................   3
  1.24  Separate Plan......................................................   3
  1.25  Separation and Distribution Agreement..............................   3
  1.26  Transferred Individuals............................................   3

ARTICLE II  GENERAL EFFECT OF THIS AGREEMENT...............................   3

ARTICLE III  SEPARATE PLANS................................................   4

  3.1   Effect of Lucent Distribution......................................   4
  3.2   Effect of NCR Distributions........................................   4

ARTICLE IV  OVERLAPPING PLANS..............................................   4

  4.1   Establishment of Separate Plans....................................   4
  4.2   Overlapping Defined Contribution Plans.............................   4
  4.3   Overlapping Defined Benefit Plans..................................   5
  4.4   Other Funded Plans.................................................   6






<PAGE>   50
                                                ATTORNEY WORK PRODUCT
                                                ADVICE OF COUNSEL
                                                PRIVILEGED AND CONFIDENTIAL
                                                DRAFT OF 11/20/96



ARTICLE V  SEVERANCE ISSUES................................................   6

ARTICLE VI  GENERAL........................................................   7

  6.1   Sharing of Participant Information.................................   7
  6.2   Interpretation.....................................................   7

Signatures.................................................................   8

Schedule I      Ireland Pension Asset Split

Schedule II     Philippines Pension Asset Split

                                      -ii-







<PAGE>   51
                                                ATTORNEY WORK PRODUCT
                                                ADVICE OF COUNSEL
                                                PRIVILEGED AND CONFIDENTIAL
                                                DRAFT OF 11/20/96


                      FOREIGN EMPLOYEE BENEFITS AGREEMENT
                                     AMONG
                                  AT&T CORP.,
                            LUCENT TECHNOLOGIES INC.
                                      AND
                                NCR CORPORATION


        This FOREIGN EMPLOYEE BENEFITS AGREEMENT dated as of ____________,
1996, is by and among AT&T Corp. ("AT&T"), Lucent Technologies Inc. ("Lucent")
and NCR Corporation ("NCR").

        WHEREAS, the Board of Directors of AT&T has determined that it is in
the best interests of AT&T and its shareholders to separate AT&T's existing
businesses into three independent businesses;

        WHEREAS, in furtherance of the foregoing, AT&T, NCR and Lucent have
executed and delivered the Separation and Distribution Agreement (the
"Separation and Distribution Agreement") providing for, among other things, the
initial public offering of shares of Lucent Common Stock (which was consummated
on April 10, 1996) and for the pro rata distribution by AT&T of all of its
shares of Lucent Common Stock to the shareholders of AT&T (which was
consummated on September 30, 1996);

        WHEREAS, AT&T, NCR and Lucent have also executed and delivered the
Ancillary Agreements (as defined in the Separation and Distribution Agreement)
governing certain additional matters relating to the Lucent Distribution;

        WHEREAS, the Ancillary Agreements include an Employee Benefits
Agreement between AT&T and Lucent, dated as of February 1, 1996 and amended and
restated as of March 29, 1996 (the "AT&T/Lucent EBA") allocating assets,
liabilities and responsibilities with respect to certain employee compensation
and benefit plans and programs between AT&T and Lucent;

        WHEREAS, the Board of Directors of AT&T has also determined that AT&T
will distribute to its shareholders all of the capital stock of NCR held
directly or indirectly by AT&T, subject to the terms and conditions set forth
herein;

        WHEREAS, in furtherance of the foregoing, AT&T and NCR have entered
into a Distribution Agreement, dated as of November 20, 1996 (the "Distribution
Agreement"), and certain other agreements that will govern certain matters
relating to the NCR Distribution and the relationship of AT&T and NCR and their
respective subsidiaries following the NCR Distribution;

        WHEREAS, such other agreements include an Employee Benefits Agreement
between AT&T and NCR dated as of November 20, 1996 (the "AT&T/NCR EBA")
allocating assets, liabilities and responsibilities with respect to certain
employee compensation and benefit plans and programs between AT&T and NCR and
their respective Affiliates;



                         AT&T PROPRIETARY (RESTRICTED)
                 SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
                      USE PURSUANT TO COMPANY INSTRUCTIONS


<PAGE>   52
                                                    Attorney Work Product
                                                    Advice of Counsel
                                                    Privileged and Confidential
                                                    Draft of 11/20/96


        WHEREAS, the AT&T/Lucent EBA and the AT&T/NCR EBA each contemplate that
the parties thereto will enter into an agreement regarding the treatment of
employee benefit plans maintained for the benefit of employees outside the U.S.

        WHEREAS, AT&T, Lucent and NCR wish to enter into this Agreement for
that purpose.

        NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:


                                   ARTICLE I
                                  DEFINITIONS

        1.1  AFFILIATES is defined in the Distribution Agreement.

        1.2  ANCILLARY AGREEMENTS is defined in the fourth paragraph of the
preamble in this Agreement.

        1.3  AT&T is defined in the first paragraph of the preamble of this
Agreement.

        1.4  AT&T CONTROLLED PERSON is defined in the AT&T/NCR EBA.

        1.5  AT&T INDIVIDUALS is defined in the AT&T/NCR EBA.

        1.6  AT&T/LUCENT EBA is defined in the fifth paragraph of the preamble
of this Agreement.

        1.7  AT&T/NCR EBA is defined in the eighth paragraph of the preamble of
this Agreement.

        1.8  AT&T TRANSFERRED EMPLOYEE is defined in the AT&T/Lucent EBA.

        1.9  CLOSE OF THE LUCENT DISTRIBUTION DATE means the "Close of the
Distribution Date" as defined in the AT&T/Lucent EBA.

        1.10 CLOSE OF THE NCR DISTRIBUTION DATE is defined in the AT&T/NCR EBA.

        1.11 DISTRIBUTION AGREEMENT is defined in the seventh paragraph of the
preamble of this Agreement.

        1.12 FOREIGN PLAN means any Plan for the benefit of employees outside
the 50 United States and the District of Columbia.

        1.13 IMMEDIATELY AFTER THE LUCENT DISTRIBUTION DATE means "Immediately
after the Distribution Date" as defined in the AT&T/Lucent EBA.

        1.14 LEGALLY PERMITTED means permitted under the laws of the country,
the labor union, works council, or collective agreement, including mandated
waiting periods before which working conditions (including benefits) cannot be
changed, and upon receiving required agreement from individual employees and/or
Plan trustees, foundation boards and

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                                                Attorney Work Product
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members, and any other organizations having a recognized right to determine or
affect benefits and/or funding of the Foreign Plan in question.

        1.15 LUCENT is defined in the first paragraph of the preamble of this
Agreement.

        1.16 LUCENT INDIVIDUAL is defined in the AT&T/Lucent EBA.

        1.17 NCR is defined in the first paragraph of the preamble of this
Agreement.

        1.18 NCR CONTROLLED PERSON is defined in the AT&T/NCR EBA.

        1.19 NCR INDIVIDUAL is defined in the AT&T/NCR EBA.

        1.20 OVERLAPPING PLAN means a Foreign Plan in which, as of the relevant
date, the [active] participants include employees of more than one of: (a) AT&T
and Persons who are then AT&T Controlled Persons; (b) Lucent and the Lucent
Entities; and (c) NCR and Persons who are then NCR Controlled Persons.
[SUBSEQUENT PROVISIONS MAY NEED REVISION IF BRACKETED LANGUAGE IS KEPT.]

        1.21 OVERLAPPING DB PLANS is defined in Section 4.3(a).

        1.22 OVERLAPPING DC PLANS is defined in Section 4.2.

        1.23 PLAN means any plan, policy, program, payroll practice, on-going
arrangement, contract, trust, insurance policy or other agreement or funding
vehicle providing benefits to employees or former employees of AT&T or any of
its past or present Affiliates (including Lucent and its Affiliates and NCR and
its Affiliates).

        1.24 SEPARATE PLAN means a Foreign Plan which is not an Overlapping
Plan.

        1.25 SEPARATION AND DISTRIBUTION AGREEMENT is defined in the third
paragraph of the preamble of this Agreement.

        1.26 Transferred Individuals is defined in the AT&T/Lucent EBA.


                                   ARTICLE II
                        GENERAL EFFECT OF THIS AGREEMENT

        The purpose of this Agreement is to specify the manner in which AT&T,
Lucent and NCR will ensure that all Foreign Plans become Separate Plans as soon
as practicable after the date hereof, and in particular to provide for any
asset transfers that are necessary or appropriate in connection therewith.
Except as specifically provided herein, no provision of this Agreement shall be
construed as amending in any respect any provision of the AT&T/Lucent EBA
(other than Exhibit B thereto) or of the AT&T/NCR EBA.


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                                  ARTICLE III
                                 SEPARATE PLANS

        3.1  EFFECT OF LUCENT DISTRIBUTION.  Effective Immediately after the
Lucent Distribution Date or such later date as may be required by applicable
law, union or works council agreement, all Separate Plans and Overlapping Plans
in which no Transferred Individuals participate shall be the sole
responsibility of AT&T and the Persons who are then AT&T Controlled Persons
(including NCR and the Persons who are then NCR Controlled Persons), and
neither Lucent nor any Lucent Entity shall have any Liability with respect
thereto; and all other Separate Plans shall be the sole responsibility of
Lucent and the Lucent Entities, and none of AT&T and the Persons who are then
AT&T Controlled Persons (including NCR and the Persons who are then NCR
Controlled Persons) shall have any Liability with respect thereto.

        3.2  EFFECT OF NCR DISTRIBUTION.  Effective Immediately after the NCR
Distribution Date or such later date as may be required by applicable law,
union or works council agreement, any Separate Plan that covers only AT&T
Individuals shall be the sole responsibility of AT&T and the Persons that are
then AT&T Controlled Persons, and neither NCR nor any Person that is then an
NCR Controlled Person shall have any Liability with respect thereto; and any
Separate Plan that covers only NCR Individuals shall be the sole responsibility
of NCR and the Persons that are then NCR Controlled Persons, and neither AT&T
nor any Person that is then an AT&T Controlled Person shall have any Liability
with respect thereto.

                                   ARTICLE IV
                               OVERLAPPING PLANS

        4.1  ESTABLISHMENT OF SEPARATE PLANS.  Each of AT&T, Lucent and NCR
shall take all steps necessary or appropriate to establish, or cause to be
established, such new Foreign Plans and/or to amend existing Foreign Plans as
may be necessary to ensure that, no later than Immediately after the NCR
Distribution Date, no Foreign Plans are Overlapping Plans. Any new Separate
Plan that is so established shall, to the extent it provides the same type of
benefits to the same individuals as the corresponding Overlapping Plan in which
such individuals participated immediately before such establishment, be
substantially identical in all Material Features to such Overlapping Plan.

        4.2  OVERLAPPING DEFINED CONTRIBUTION PLANS.  In each of the following
jurisdictions, one or more Overlapping Plans that are individual account,
defined contribution plans (the "Overlapping DC Plans") have been maintained:
[LIST IS SUBJECT TO REVISION] China; Costa Rica; Hong Kong; India; New Zealand;
Puerto Rico; Thailand; United Kingdom; and Venezuela. AT&T, Lucent and NCR
shall take all steps necessary or appropriate so that their respective Separate
Plans corresponding to such Overlapping DC Plans (i) assume all Liabilities to
or with respect to AT&T Individuals, Transferred Individuals and NCR
Individuals, respectively, and (ii) receive transfers of corresponding assets
from such Overlapping DC Plans.

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        4.3 OVERLAPPING DEFINED BENEFIT PLAN.

                (a) GENERAL. In each of the following jurisdictions, one or
more Overlapping Plans that are defined benefit plans (the "Overlapping DB
Plans") have been maintained: [LIST IS SUBJECT TO REVISION] Austria; Germany;
Ireland; Japan; the Netherlands; the Philippines; Switzerland; and Taiwan. In
addition, in Hong Kong NCR maintains the NCR Hong Kong Pension Plan, which is 
both an individual account, defined contribution plan and a defined benefit 
plan. AT&T, Lucent and NCR shall take all steps necessary or appropriate so that
their respective Separate Plans corresponding to such Overlapping DB Plans and
the NCR Hong Kong Pension Plan (i) except as specifically provided in Section
4.3(f) below, assume all Liabilities to or with respect to AT&T Individuals,
Transferred Individuals and NCR Individuals, respectively, and (ii) receive
transfers of assets from such Overlapping DB Plans that are funded and from the
NCR Hong Kong Pension Plan, in each case in accordance with the provisions of
this Section 4.3.

                (b) GERMANY.    AT&T and Lucent shall take all steps necessary
or appropriate so that as soon as practicable after the date of this Agreement,
the insurance contracts providing partial funding for the AT&T Deutschland
Pension Plan that insure the lives of Transferred Individuals are transferred
to the corresponding Separate Plan established by Lucent.

                (c) HONG KONG. Lucent and NCR shall take all steps necessary or
appropriate so that, effective no later than Immediately, after the NCR
Distribution Date: (i) all assets funding the benefits of Transferred
Individuals in the defined contribution portion of the NCR Hong Kong Pension
Plan are transferred to the Lucent Hong Kong Provident Fund; and (ii) [ALL
ASSETS FUNDING THE BENEFITS OF TRANSFERRED INDIVIDUALS IN THE DEFINED BENEFIT
PORTION OR THE NCR HONG KONG PENSION PLAN ARE TRANSFERRED TO THE LUCENT HONG
KONG PROVIDENT FUND] [ALL VESTED BENEFITS OF TRANSFERRED INDIVIDUALS UNDER THE
NCR HONG KONG PENSION FUND ARE PAID TO SUCH TRANSFERRED INDIVIDUALS.] [IF
ASSETS ARE TO BE TRANSFERRED, NEED TO SPECIFY BASIS FOR DETERMINING THE AMOUNT
OF ASSETS. IF BENEFITS ARE CASHED OUT, MAKE CLEAR THAT LUCENT ASSUMES ALL
RESIDUAL LIABILITIES].

                (d) IRELAND. Lucent and NCR shall take all steps necessary or
appropriate so that, effective no later than Immediately after the NCR
Distribution Date, there shall be transferred from the NS Ireland Pension Plan
to the NCR Ireland Pension Plan, in accordance with Schedule I hereto, assets
having an aggregate value equal to the accrued benefit obligation to each
participant in the NS Ireland Pension Plan who is an NCR Individual (such value
and obligations determined as of the Close of the Lucent Distribution Date, and
adjusted as appropriate to reflect income, and realized gains and losses and
benefit payments between the Close of the Lucent Distribution Date and the date
of the transfer).

                (e) JAPAN. AT&T and Lucent shall take all steps necessary or
appropriate so that, effective as soon as practicable after the date of this
Agreement, there shall be transferred from the Lucent Japan Pension Plan to the
corresponding Separate Plan established by AT&T, assets having a value equal to
the accrued benefit obligation to each participant in the Lucent Japan Pension
Plan who is not a Transferred Individual, as determined by Nippon Life, subject
to the approval of AT&T (which approval shall not be unreasonably withheld).



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                (f)  THE NETHERLANDS.  Lucent and NCR shall take all steps
necessary or appropriate so that: (i) as soon as practicable after the date
hereof, and effective as of Immediately after the Lucent Distribution Date, all
Transferred Individuals who were active members of the NCR Netherlands Pension
Scheme shall cease to be active members of that scheme and shall become active
members of the corresponding Separate Plan established by Lucent (the "Lucent
Netherlands Plan"); (ii) as soon as practicable after the Close of the NCR
Distribution Date, if any such Transferred Individual consents in accordance
with applicable law, the Lucent Netherlands Plan shall assume all Liabilities to
or with respect to such Transferred Individual relating to, arising out of or
resulting from the NCR Netherlands Pension Scheme, and shall receive a transfer
of assets from the NCR Netherlands Pension Scheme in connection with such
assumption of Liabilities as required by applicable law, as determined by the
administrators and actuaries of the NCR Netherlands Pension Scheme, subject to
the approval of NCR (which approval shall not be unreasonably withheld). Lucent
shall use the reasonable best efforts to obtain the consent of all such
Transferred Individuals to the assumption of liabilities and transfer of assets
described in the preceding sentence. [TREATMENT OF NONACTIVE MEMBERS WHO ARE
TRANSFERRED INDIVIDUALS TO BE DETERMINED.]

               (g)  THE PHILIPPINES.  AT&T and Lucent shall take all steps
necessary or appropriate so that, effective as soon as practicable after the
date of this Agreement, there shall be transferred from the Lucent Philippines
Pension Plan to the corresponding Separate Plan established by AT&T, assets
having a value equal to the projected benefit obligation to each participant in
the Lucent Philippines Pension Plan who is not a Transferred Individual,
determined in accordance with Schedule II hereto, subject to the approval of
AT&T (which approval shall not be unreasonably withheld).

               (h)  SWITZERLAND.  [NOT YET DETERMINED.]

               (i)  TAIWAN.  AT&T and Lucent shall take all steps necessary or
appropriate so that, effective as soon as practicable after the date of this
Agreement, each of them shall have established a Separate Plan corresponding to
the Taiwan retirement indemnity fund administered by Taiwan First Investment
Trust (the "Taiwan Overlapping Plan"), and the assets of the Taiwan
Overlapping Plan shall be divided between and transferred to such Separate
Plans, with 87% of such assets being transferred to Lucent's Separate Plan and
13% of such assets being transferred to AT&T's Separate Plan.

        4.4    OTHER FUNDED PLANS.  [TO COME]


                                   ARTICLE V
                                SEVERANCE ISSUES

        If under applicable law, any Lucent Individual, Transferred Individual,
NCR Individual or AT&T Transferred Employee employed outside the U.S. is deemed
to have incurred a termination of employment as a result of the Lucent
Distribution or the NCR Distribution or any other transaction contemplated by
the Separation and Distribution Agreement, the Distribution Agreement, the
AT&T/Lucent EBA, the AT&T/NCR EBA or any other Ancillary Agreement, which
entitles such individual to receive any payment or benefit


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under any Foreign Plan, governmental plan or arrangement or pursuant to any law
or regulation, including severance benefits, notwithstanding such individual's
continued employment by AT&T, a Person that is then an AT&T Controlled Person,
Lucent, a Lucent Entity, NCR or a Person that is then an NCR Controlled Person,
then notwithstanding any other provision hereof, to the extent Legally
Permitted, appropriate adjustments shall be made to the treatment of such
individual during such continued employment, including not giving such
individual credit for prior service and/or treating such individual as having
been newly hired immediately after such deemed termination, for purposes of all
applicable Foreign Plans. 


                                   ARTICLE VI
                                    GENERAL

        6.1  SHARING OF PARTICIPANT INFORMATION.  AT&T, Lucent and NCR shall
share, and shall cause their respective Affiliates to share, with each other
and their respective agents and vendors (without obtaining releases) all
participant, plan design and other information necessary for the efficient and
accurate administration of, compliance with laws and regulations applicable to,
and response to inquiries by governmental authorities regarding, their
respective Foreign Plans. AT&T, Lucent and NCR and their respective authorized
agents shall, subject to applicable laws on confidentiality, be given
reasonable and timely access to, and may make copies of, all information
relating to the subjects of this Agreement in the custody of the other party,
to the extent necessary for such administration. All participant information
shall be provided in a manner and medium that is compatible with the data
processing systems of AT&T as in effect of the Close of the Lucent Distribution
Date, unless otherwise agreed to by the parties involved.

        6.2  INTERPRETATION.  Words in the singular shall be held to include
the plural and vice versa and words of one gender shall be held to include the
other genders as the context requires. The terms "hereof," "herein," and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole (including all of the Schedules
and Exhibits hereto) and not to any particular provision of this Agreement.
Article, Section, Exhibit, and Schedule references are to the Articles,
Sections, Exhibits, and Schedules to this Agreement unless otherwise specified.
The word "including" and words of similar import when used in this Agreement
shall mean "including, without limitation," unless the context otherwise
requires or unless otherwise specified. The word "or" shall not be exclusive.


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<PAGE>   58

        IN WITNESS WHEREOF, the parties have caused this Foreign Employee
Benefits Agreement to be duly executed as of the day and year first above
written. 

                                        AT&T CORP.


                                        By: _____________________________
                                        Name:
                                        Title:


                                        LUCENT TECHNOLOGIES, INC.


                                        By: _____________________________
                                        Name:
                                        Title:


                                        NCR CORPORATION


                                        By: _____________________________
                                        Name:
                                        Title:









                
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                                   Schedule I
                          Ireland Pension Asset Split









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                                  Schedule II
                        Philippines Pension Asset Split









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                                   EXHIBIT D




                                    FORM OF:

                             INTERCHANGE AGREEMENT

                                     AMONG

                                  AT&T CORP.,

                            LUCENT TECHNOLOGIES INC.

                                      AND

                                NCR CORPORATION



                                  DATED AS OF
                             ________________, 1996




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                               TABLE OF CONTENTS

                                                                        PAGE
                                                                        ----
ARTICLE I DEFINITIONS ..................................................  2

ARTICLE II AT&T/LUCENT EBA .............................................  4

2.1  General ...........................................................  4
2.2  Liabilities Under Plans ...........................................  4
2.3  Asset Transfers ...................................................  4
2.4  Health and Welfare Plans ..........................................  4
2.5  Short Term Incentive Plans ........................................  4

ARTICLE III AT&T/LUCENT MANAGEMENT INTERCHANGE AGREEMENT ...............  4

3.1  General ...........................................................  4
3.2  Rules of Interpretation ...........................................  5

ARTICLE IV AT&T/LUCENT OCCUPATIONAL INTERCHANGE AGREEMENT ..............  7

4.1  General ...........................................................  7
4.2  Rules of Interpretation ...........................................  7

ARTICLE V AT&T/NCR INTERCHANGE AGREEMENT ...............................  9

ARTICLE VI LUCENT/AGCS INTERCHANGE AGREEMENT ...........................  9

ARTICLE VII SHARING OF PARTICIPANT INFORMATION .........................  9

Signatures ............................................................. 10




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                             INTERCHANGE AGREEMENT
                                     AMONG
                                  AT&T CORP.,
                            LUCENT TECHNOLOGIES INC.
                                      AND
                                NCR CORPORATION

        This INTERCHANGE AGREEMENT dated as of _________, 1996, is by and among
AT&T Corp. ("AT&T"), Lucent Technologies Inc. ("Lucent") and NCR Corporation
("NCR").

        WHEREAS, the Board of Directors of AT&T has determined that it is in the
best interests of AT&T and its shareholders to separate AT&T's existing
businesses into three independent businesses;

        WHEREAS, in furtherance of the foregoing, AT&T, NCR and Lucent have
executed and delivered the Separation and Distribution Agreement (the
"Separation and Distribution Agreement") providing for, among other things, the
initial public offering of shares of Lucent Common Stock (which was consummated
on April 10, 1996) and for the pro rata distribution by AT&T of all its shares
of Lucent Common Stock to the shareholders of AT&T (which was consummated on
September 30, 1996);

        WHEREAS, AT&T, NCR and Lucent have also executed and delivered the
Ancillary Agreements (as defined in the Separation and Distribution Agreement)
governing certain additional matters relating to the Lucent Distribution;

        WHEREAS, the Ancillary Agreements include an Employee Benefits Agreement
between AT&T and Lucent, dated as of February 1, 1996 and amended and restated
as of March 29, 1996 (the "AT&T/Lucent EBA") allocating assets, liabilities and
responsibilities with respect to certain employee compensation and benefit plans
and programs between AT&T and Lucent;

        WHEREAS, pursuant to the AT&T/Lucent EBA, AT&T and Lucent have also
executed and delivered a Management Interchange Agreement dated as of April 8,
1996 (the "AT&T/Lucent Management Interchange Agreement") and an Occupational
Interchange Agreement dated as of April 8, 1996 (the "AT&T/Lucent Occupational
Interchange Agreement"), in each case providing for (among other things) the
portability of benefits and mutual recognition of service during a limited
transition period with respect to certain individuals who terminate employment,
or who have terminated employment, with one party or its Affiliates (as defined
in the Separation and Distribution Agreement) and who become employees of the
other party or its Affiliates;

        WHEREAS, the Board of Directors of AT&T has also determined that AT&T
will distribute to its shareholders all of the capital stock of NCR held
directly or indirectly by AT&T, subject to the terms and conditions set forth
herein;

        WHEREAS, in furtherance of the foregoing, AT&T and NCR have entered into
a Distribution Agreement, dated as of November 20, 1996 (the "Distribution
Agreement").


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and certain other agreements that will govern certain matters relating to the
NCR Distribution and the relationship of AT&T and NCR and their respective
subsidiaries following the NCR Distribution;

        WHEREAS, such other agreements include an Employee Benefits Agreement
dated as of November 20, 1996 (the "AT&T/NCR EBA") allocating assets,
liabilities and responsibilities with respect to certain employee compensation
and benefit plans and programs between AT&T and NCR and their respective
Affiliates;

        WHEREAS, AT&T and NCR have previously entered into an Interchange
Agreement dated as of September 20, 1991 (the "AT&T/NCR Interchange Agreement")
providing for (among other things) mutual recognition for certain purposes of
service credit earned and accrued by personnel who are transferred, hired or
rehired between AT&T and NCR;

        WHEREAS, AT&T and AG Communication Systems Corporation, a majority
owned subsidiary of Lucent, have previously entered into a Second Amended and
Restated Interchange Agreement effective as of January 1, 1994 (the "AT&T/AGCS
Interchange Agreement");

        WHEREAS, Lucent and AG Communication Systems Corporation have
previously entered into an Interchange Agreement effective as of October 1,
1996 (the "Lucent/AGCS Interchange Agreement");

        WHEREAS, it is necessary and appropriate to clarify the interaction
between the among certain of the respective provisions of the AT&T/Lucent EBA,
the AT&T/NCR EBA, the AT&T/Lucent Management Interchange Agreement, the
AT&T/Lucent Occupational Interchange Agreement, the AT&T/NCR Interchange
Agreement, the AT&T/AGCS Interchange Agreement and the Lucent/AGCS Interchange
Agreement and the effect thereon of the Lucent Distribution and the NCR 
Distribution;

        WHEREAS, AT&T, Lucent and NCR wish to enter into this Agreement for
that purpose.

        NOW, THEREFORE, the parties, intending to be legally bound, agree as 
follows:

                                   ARTICLE I
                                  DEFINITIONS

        1.1 AFFILIATES is defined in the Separation and Distribution Agreement.

        1.2 AT&T is defined in the first paragraph of the preamble of this
Agreement.

        1.3 AT&T ENTITIES is defined in the AT&T/Lucent EBA.

        1.4 AT&T/AGCS INTERCHANGE AGREEMENT is defined in the eleventh
paragraph of the preamble of this Agreement.


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        1.5 AT&T/LUCENT EBA is defined in the fifth paragraph of the preamble
of this Agreement.

        1.6 AT&T/LUCENT MANAGEMENT INTERCHANGE AGREEMENT is defined in the
sixth paragraph of the preamble of this Agreement.

        1.7 AT&T/LUCENT OCCUPATIONAL INTERCHANGE AGREEMENT is defined in the
sixth paragraph of the preamble of this Agreement.

        1.8 AT&T/NCR EBA is defined in the ninth paragraph of the preamble of
this Agreement.

        1.9 AT&T/NCR INTERCHANGE AGREEMENT is defined in the tenth paragraph of
the preamble of this Agreement.

        1.10 CLOSE OF THE LUCENT DISTRIBUTION DATE means the "Close of the
Distribution Date" as defined in the AT&T/Lucent EBA.

        1.11 CLOSE OF THE NCR DISTRIBUTION DATE is defined in the AT&T/NCR EBA.

        1.12 DISTRIBUTION AGREEMENT is defined in the eight paragraph of the
preamble of this Agreement.

        1.13 LUCENT is defined in the first paragraph of the preamble of this
Agreement. 

        1.14 LUCENT ENTITIES is defined in the AT&T/Lucent EBA.

        1.15 LUCENT/AGCS INTERCHANGE AGREEMENT is defined in the twelfth
paragraph of the preamble of this Agreement.

        1.16 NCR is defined in the first paragraph of the preamble of this
Agreement. 

        1.17 NCR CONTROLLED PERSONS is defined in the AT&T/NCR EBA.

        1.18 NCR EXECUTIVE BENEFIT PLANS is defined in the AT&T/NCR EBA.

        1.19 NCR INDIVIDUALS is defined in the AT&T/NCR EBA.

        1.20 NCR PENSION PLAN means any "NCR Pension Plan" or the "NCR
Successor Pension Plan" as defined in the AT&T/NCR EBA.

        1.21 NCR PLANS is defined in the AT&T/NCR EBA.

        1.22 NCR SAVINGS PLAN is defined in the AT&T/NCR EBA.

        1.23 NCR SERPs is defined in the AT&T/NCR EBA.

        1.24 NCR SHORT TERM INCENTIVE PLANS is defined in the AT&T/NCR EBA.


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        1.25 SEPARATION AND DISTRIBUTION AGREEMENT is defined in the third
paragraph of the preamble of this Agreement.

        1.26 SERP means an "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA that is not qualified under Section 401(a) of the
Code. 

                                   ARTICLE II
                                AT&T/LUCENT EBA

        2.1 GENERAL. The purpose of this Article II is to clarify the
application of certain provisions of the AT&T/Lucent EBA with respect to the
NCR Plans and to former employees of NCR and the NCR Controlled Persons who are
Transferred Individuals within the meaning of the AT&T/Lucent EBA, in a manner
consistent with the provisions of the AT&T/NCR EBA. To the extent the
provisions of this Article II are inconsistent with the AT&T/LUCENT EBA, AT&T
and Lucent hereby agree that the AT&T/Lucent EBA is amended hereby. Capitalized
terms used in this Article II and not defined in this Article II or elsewhere
in this Agreement shall have the meanings assigned to them in the AT&T/Lucent
EBA. 

        2.2 LIABILITIES UNDER PLANS. The Liabilities assumed by Lucent and the
Lucent Entities pursuant to the AT&T/Lucent EBA shall not include (i) any
Liabilities relating to, arising out of or resulting from NCR Plans that are
not NCR Executive Benefit Plans, nor (ii) any Liabilities relating to, arising
out of or resulting from the NCR SERPs.

        2.3 ASSET TRANSFERS. No assets shall be transferred from or to any NCR
Plan pursuant to the AT&T/Lucent EBA. Benefits accrued under NCR Executive
Benefit Plans shall not be taken into account in determining the amount of
assets to be transferred pursuant to Section 6.8 of the AT&T/Lucent EBA.

        2.4 HEALTH AND WELFARE PLANS. The AT&T Health and Welfare Plans shall
not include any NCR Plan. Accordingly, the provisions of Article V of the
AT&T/Lucent EBA shall have no application to any NCR Plan. (NEED TO CONFIRM
WITH SUBJECT MATTER EXPERTS.)

        2.5 SHORT TERM INCENTIVE PLANS. Lucent shall be solely responsible for
all Liabilities to NCR Individuals under the Lucent Short Term Incentive Plan
for the 1996 performance year, to the extent they participated therein. NCR
shall be solely responsible for all Liabilities to Transferred Individuals
under the NCR Short Term Incentive Plans for the 1996 performance year, to the
extent they participated therein. (NEED TO CONFIRM WITH SUBJECT MATTER
EXPERTS.) 

                                  ARTICLE III
                  AT&T/LUCENT MANAGEMENT INTERCHANGE AGREEMENT

        3.1 GENERAL. The purpose of this Article III is to clarify the
application of certain provisions of the AT&T/Lucent Management Interchange
Agreement with respect to NCR, the NCR Controlled Persons, NCR Plans and
certain other AT&T Entities and Lucent Entities. To the extent the provisions
of this Article III are inconsistent with the AT&T/

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Lucent Management Interchange Agreement, AT&T and Lucent hereby agree that the
AT&T/Lucent Management Interchange Agreement is amended hereby. Capitalized
terms used in this Article III and not defined in this Article III or elsewhere
in this Agreement shall have the meanings assigned to them in the AT&T/Lucent
Management Interchange Agreement.

        3.2 RULES OF INTERPRETATION.

                (a) The parties acknowledge that until the Close of the NCR
Distribution Date, NCR and the NCR Controlled Persons will be "AT&T Entities"
within the meaning of the AT&T/Lucent Management Interchange Agreement.
Accordingly, the provisions of Article II of the AT&T/Lucent Management
Interchange Agreement, requiring recognition of service, compensation and other
benefit determining factors with respect to Transition Individuals, apply
with respect to NCR Plans, whether NCR or an NCR Controlled Person is the
Hiring Company or the Prior Company, provided that the transfer of employment
from or to NCR or an NCR Controlled Person occurs on or before the Close of the
NCR Distribution Date.

                (b) For purposes of determining whether an individual is a
Transition Individual within the meaning of the AT&T/Lucent Management
Interchange Agreement by reason of becoming an employee of NCR or an NCR
Controlled Person as described in Section 1.38(a) or 1.38(d), such individual
shall be considered to be a "Management Employee" of NCR or such NCR Controlled
Person if he or she was a "Management Employee" of Lucent. If an individual is
a Transition Individual by reason of becoming a Management Employee of NCR or
an NCR Controlled Person (as described in Section 1.38(a) of 1.38(d) of the
AT&T/Lucent Management Interchange Agreement), then the provisions of the
AT&T/Lucent Management Interchange Agreement referred to below shall apply to
such Transition Individual in a manner consistent with the following:

                         (i)  the AT&T Pension Plans, Savings Plans and ESOPs
                              shall be treated as the Hiring Company's Pension
                              Plans, Savings Plans and ESOPs for purposes of
                              carrying out the transfer of assets and assumption
                              of liabilities from the Prior Company's (i.e.,
                              Lucent's) Pension Plans, Savings Plans and ESOPs
                              pursuant to, and the other provisions of, Articles
                              III and IV;

                         (ii) no transfer of recordkeeping accounts from the
                              Prior Company's (i.e., Lucent's) Stock Purchase
                              Plan shall be made to any Stock Purchase Plan
                              sponsored by AT&T or NCR pursuant to Article V;

                        (iii) the provisions of Section 6.1 shall be
                              inapplicable to such Transferred Individual's
                              participation in any health or welfare plan that
                              is an NCR Plan, nor shall any Liabilities or
                              assets be assumed or transferred pursuant to
                              Section 6.3; [NEED TO CONFIRM WITH SUBJECT MATTER
                              EXPERTS] and

                         (iv) the AT&T SERPs shall be treated as the Hiring
                              Company's SERPs for purposes of the assumption of
                              Liabilities under the Prior Company's (i.e.,
                              Lucent's) Executive Benefit Plans pursuant to
                              Section 7.1 [NEED TO CONFIRM WITH SUBJECT MATTER
                              EXPERTS]    


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                                                Draft of 11/20/96


                        [CHECK THE FOLLOWING WITH SUBJECT MATTER EXPERTS:
                         TREATMENT OF RABBI TRUST ASSETS, COLI AND SPLIT
                         DOLLAR INSURANCE.]

                (c) If an individual is a Transition Individual by reason of
Section  1.38(b) or Section 1.38(c) OF THE AT&T/Lucent Management Interchange
Agreement and was an employee of NCR or an NCR Controlled Person, then the
provisions of the AT&T/Lucent Management Interchange Agreement shall apply to
such Transition Individual in a manner consistent with the following:

                  (i)  neither the NCR Pension Plans nor the NCR Savings Plan 
                       shall be treated as the Prior Company's Pension Plans 
                       or Savings Plan, but the AT&T Pension Plans, Savings 
                       Plans and ESOPs (to the extent the Transition Individual 
                       has accrued any benefits thereunder) shall be treated 
                       as the Prior Company's Pension Plans, Savings Plans and 
                       ESOPs, for purposes of carrying out the transfer of 
                       assets and assumption of liabilities to the Hiring 
                       Company's (i.e., Lucent's) Pension Plans, Savings Plans 
                       and ESOPs pursuant to, and the other provisions of, 
                       Articles III and IV;

                 (ii)  no transfer of recordkeeping accounts from any Stock
                       Purchase Plan sponsored by NCR shall be made to any 
                       Hiring Company Stock Purchase Plan pursuant to Article V:

                (iii)  the provisions of Section 6.1 shall be inapplicable with 
                       respect to any health or welfare plan that is an NCR 
                       Plan in which such Transition Individual may have 
                       participated before becoming a Management Employee of 
                       Lucent or a Lucent Entity, nor shall any Liabilities or 
                       assets be transferred from any funding vehicle relating 
                       to an NCR Plan pursuant to Section 6.3; [NEED TO 
                       CONFIRM WITH SUBJECT MATTER EXPERTS] AND

                 (iv)  the Liabilities under the Prior Company's Executive
                       Benefit Plans referred to in Section 7.1 to be assumed 
                       by the Hiring Company's (i.e., Lucent's) Executive 
                       Benefit Plans shall not include Liabilities under the 
                       NCR SERPs, which shall remain the sole responsibility of 
                       NCR and its Affiliates, but the AT&T SERPs (to the 
                       extent the Transition Individual has accrued any 
                       benefits thereunder) shall be treated as the Prior 
                       Company's SERPs for purposes of the assumption of 
                       Liabilities by the Hiring Company's (i.e., Lucent's) 
                       Executive Benefit Plans pursuant to Section 7.1. [NEED 
                       TO CONFIRM WITH SUBJECT MATTER EXPERTS.]

                 (d)  For purposes of determining whether an individual is a
Transition Individual within the meaning of the AT&T/Lucent management
Interchange Agreement by reason of becoming an employee of a Lucent Entity or
an AT&T Entity (other than NCR or an NCR Controlled Person) that is not a
participating employer in the Lucent Pension Plans or the AT&T Pension Plans,
respectively, the status of such individual as a "Management Employee" shall be
determined as if such individual's employer were a participating employer in
the Lucent Pension Plans or the AT&T Pension Plans, respectively. If an
individual is a Transition Individual by reason of becoming a Management
Employee of an

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AT&T Entity (other than NCR or an NCR Controlled Person) that is not a
participating employer in the applicable AT&T Pension Plans, Savings Plans
and/or ESOPs, the AT&T Pension Plans, Savings Plans and ESOPs shall nonetheless
be treated as the Hiring Company's Pension Plans, Savings Plans and ESOPs for
purposes of carrying out the transfer of assets and assumption of liabilities
from the Prior Company's (i.e., Lucent's) Pension Plans, Savings Plans and ESOPs
pursuant to, and the other provisions of, Articles III and IV. If an individual
is a Transition Individual by reason of becoming a Management Employee of a
Lucent Entity that is not a participating employer in the applicable Lucent
Pension Plans, Savings Plans and ESOPs, the Lucent Pension Plans, Savings Plans
and ESOPs shall nonetheless be treated as the Hiring Company's Pension Plans,
Savings Plans and ESOPs for purposes of carrying out the transfer of assets and
assumption of liabilities from the Prior Company's (i.e., AT&T's) Pension Plans,
Savings Plans and ESOPs pursuant to, and the other provisions of, Articles III
and IV.

                                   ARTICLE IV
                 AT&T/LUCENT OCCUPATIONAL INTERCHANGE AGREEMENT

        4.1 GENERAL. The purpose of this Article IV is to clarify the
application of certain provisions of the AT&T/Lucent Occupational Interchange
Agreement with respect to NCR, the NCR Controlled Persons, NCR Plans and certain
AT&T Entities and Lucent Entities. To the extent the provisions of this Article
IV are inconsistent with the AT&T/Lucent Occupational Interchange Agreement,
AT&T and Lucent hereby agree that the AT&T/Lucent Occupational Interchange
Agreement is amended hereby. Capitalized terms used in this Article IV and not
defined in this Article IV or elsewhere in this Agreement shall have the
meanings assigned to them in the AT&T/Lucent Occupational Interchange Agreement.

        4.2 RULES OF INTERPRETATION.

                (a) The parties acknowledge that until the Close of the NCR 
Distribution Date, NCR and the NCR Controlled Persons will be "AT&T Entities"
within the meaning of the AT&T/Lucent Occupational Interchange Agreement.
Accordingly, the provisions of Article II of the AT&T/Lucent Occupational
Interchange Agreement, requiring recognition of service, compensation and other
benefit determining factors with respect to Transition Individuals, apply with
respect to NCR Plans, whether NCR or an NCR Controlled Person is the Hiring
Company or the Prior Company, provided that the transfer of employment from or
to NCR or an NCR Controlled Person occurs on or before the Close of the NCR
Distribution Date. 

                (b) For purposes of determining whether an individual is a
Transition Individual within the meaning of the AT&T/Lucent Occupational
Interchange Agreement by reason of becoming an employee of NCR or an NCR
Controller Person as described in Section 1.30(a) or 1.30(d), such individual
shall be considered to be an "Occupational Employee" of NCR or such NCR
Controller Person if he or she was an "Occupational Employee" of Lucent. If an
individual is a Transition Individual by reason of becoming a Occupational
Employee of NCR or an NCR Controlled Person (as described in Section 1.30(a) or
1.30(d) of the AT&T/Lucent Occupational Interchange Agreement), then the
provisions of the AT&T/Lucent Occupational Interchange Agreement referred to
below shall apply to such Transition Individual in a manner consistent with the
following: 



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                                                     Attorney Work Product
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                (i)   the AT&T Pension Plans, Savings Plans and ESOPs shall be
                      treated as the Hiring Company's Pension Plans, Savings
                      Plans and ESOPs for purposes of carrying out the transfer
                      of assets and assumption of liabilities from the Prior
                      Company's (i.e., Lucent's) Pension Plans, Savings Plans
                      and ESOPs pursuant to, and the other provisions of,
                      Articles III and IV;

                (ii)  no transfer of recordkeeping accounts from the Prior
                      Company's (i.e., Lucent's) Stock Purchase Plan shall be
                      made to any Stock Purchase Plan sponsored by AT&T or NCR
                      pursuant to Article V; and

                (iii) the provisions of Section 6.1 shall be inapplicable to
                      such Transferred Individual's participation in any health
                      or welfare plan that is an NCR Plan, nor shall any
                      Liabilities or assets be assumed or transferred pursuant
                      to Section 6.3. [NEED TO CONFIRM WITH SUBJECT MATTER
                      EXPERTS.]

                (c) If an individual is a Transition Individual by reason of
Section 1.30(b) or Section 1.30(c) of the AT&T/Lucent Occupational Interchange
Agreement and was an employee or former employee of NCR or an NCR Controlled
Person, then the provisions of the AT&T/Lucent Occupational Interchange
Agreement shall apply to such Transition Individual in a manner consistent with
the following:

                (i)   neither the NCR Pension Plans nor the NCR Savings Plan
                      shall be treated as the Prior Company's Pension Plans and
                      Savings Plan, but the AT&T Pension Plans, Savings Plans
                      and ESOPs (to the extent the Transition Individual has
                      accrued any benefits thereunder) shall be treated as the
                      Prior Company's Pension Plans, Savings Plans and ESOPs,
                      for purposes of carrying out the transfer of assets and
                      assumption of liabilities to the Hiring Company's (i.e.,
                      Lucent's) Pension Plans, Savings Plans and ESOPs pursuant
                      to, and the other provisions of, Articles III and IV;

                (ii)  no transfer of recordkeeping accounts from any Stock
                      Purchase Plan sponsored by NCR shall be made to any Hiring
                      Company Stock Purchase Plan pursuant to Article V; and

                (iii) the provisions of Section 6.1 shall be inapplicable with
                      respect to any health or welfare plan that is an NCR Plan
                      in which such Transition Individual may have participated
                      before becoming a Occupational Employee of Lucent or a
                      Lucent Entity, nor shall any Liabilities or assets be
                      transferred from any funding vehicle relating to an NCR
                      Plan pursuant to Section 6.3. [NEED TO CONFIRM WITH
                      SUBJECT MATTER EXPERTS.]

                (d) For purposes of determining whether an individual is a
Transition Individual within the meaning of the AT&T/Lucent Occupational
Interchange Agreement by reason of becoming an employee of a Lucent Entity or
an AT&T Entity (other than NCR or an NCR Controlled Person) that is not a
participating employer in the Lucent Pension Plans or the AT&T Pension Plans,
respectively, the status of such individual as an "Occupational


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                                                ATTORNEY WORK PRODUCT
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Employee" shall be determined as if such individual's employer were a
participating employer in the Lucent Pension Plans or the AT&T Pension Plans,
respectively. If an individual is a Transition Individual by reason of becoming
an Occupational Employee of an AT&T Entity (other than NCR or an NCR Controlled
Person) that is not a participating employer in the applicable AT&T Pension
Plans, Savings Plans and/or ESOPs, the AT&T Pension Plans, Savings Plans and
ESOPs shall nonetheless be treated as the Hiring Company's Pension Plans,
Savings Plans and ESOPs for purposes of carrying out the transfer of assets and
assumption of liabilities from the Prior Company's (i.e., Lucent's) Pension
Plans, Savings Plans and ESOPs pursuant to, and the other provisions of,
Articles III and IV. If an individual is a Transition Individual by reason of
becoming an Occupational Employee of a Lucent Entity that is not a
participating employer in the applicable Lucent Pension Plans, Savings Plans
and ESOPs, the Lucent Pension Plans, Savings Plans and ESOPs shall nonetheless
be treated as the Hiring Company's Pension Plans, Savings Plans and ESOPs for
purposes of carrying out the transfer of assets and assumption of liabilities
from the Prior Company (i.e., AT&T's) Pension Plans, Savings Plans and ESOPs
pursuant to, and the other provisions of, Articles III and IV.

                                   ARTICLE V
                         AT&T/NCR INTERCHANGE AGREEMENT

        Until the earlier of December 31, 1996 and the date the AT&T/NCR
Interchange Agreement terminates, Lucent and its subsidiaries and affiliates
shall continue to be considered affiliates of AT&T for purposes of the AT&T/NCR
Interchange Agreement designated by AT&T to be covered thereby, with the result
that references therein to AT&T shall be deemed to refer to Lucent and its
subsidiaries and affiliates as applicable, and Lucent and its subsidiaries and
affiliates shall be considered Transferee or Transferor Companies thereunder as
applicable. 

                                   ARTICLE VI
                       LUCENT/AGCS INTERCHANGE AGREEMENT

        Until the earlier of December 31, 1996 and the date the Lucent/AGCS
Interchange Agreement terminates, AT&T and its subsidiaries and affiliates
(including, until the Close of the NCR Distribution Date, NCR and its
subsidiaries and affiliates) shall be considered to be affiliates of Lucent for
purposes of the Lucent/AGCG Interchange Agreement designated by Lucent to be
covered thereby, with the result that references therein to "Lucent
Technologies" shall be deemed to refer to AT&T and its subsidiaries and
affiliates (including, until the Close of the NCR Distribution Date, NCR and
its subsidiaries and affiliates) as applicable.

                                  ARTICLE VII
                       SHARING OF PARTICIPANT INFORMATION

        AT&T, Lucent and NCR shall share, and shall cause their respective
Affiliates to share, with each other and their respective agents and vendors
(without obtaining releases) all participant, plan design and other information
necessary for the efficient and accurate


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administration of, compliance with laws and regulations applicable to, and
response to inquiries by governmental authorities regarding, their respective
employee benefit plans. AT&T, Lucent and NCR and their respective authorized
agents shall, subject to applicable laws on confidentiality, be given
reasonable and timely access to, and may make copies of, all information
relating to the subjects of this Agreement in the custody of the other party,
to the extent necessary for such administration. All participant information
shall be provided in a manner and medium that is compatible with the data
processing systems of AT&T as in effect of the Close of the Lucent Distribution
Date, unless otherwise agreed to by the parties involved.

        IN WITNESS WHEREOF, the parties have caused this Interchange Agreement 
to be duly executed as of the day and year first above written. 


                                        AT&T CORP.


                                        By: _____________________________
                                        Name:
                                        Title:


                                        LUCENT TECHNOLOGIES, INC.


                                        By: _____________________________
                                        Name:
                                        Title:


                                        NCR CORPORATION


                                        By: _____________________________
                                        Name:
                                        Title:









                
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<PAGE>   1
                                                                    Exhibit 10.3

                                                                         GA 3638
                                                            CONTRACT NO. G18173D


                            VOLUME PURCHASE AGREEMENT

         THIS Volume Purchase Agreement ("Agreement") dated November 20, 1996 is
between AT&T Corp., a New York corporation ("AT&T"), and NCR Corporation, a
Maryland corporation ("NCR").

         WHEREAS, the Board of Directors of AT&T has determined that it is in
the best interests of AT&T and its shareholders to separate AT&T's existing
businesses into three independent businesses;

         WHEREAS, in furtherance of the foregoing, AT&T and NCR will, on or
before January 1, 1997, execute and deliver a Distribution Agreement, by and
between AT&T and NCR (the "Distribution Agreement").

         WHEREAS, this Agreement is one of the NCR Ancillary Agreements (as such
term is defined in the Distribution Agreement) contemplated by the Distribution
Agreement; and

         WHEREAS, in anticipation of NCR's spin-off , AT&T and NCR desire to
memorialize and formalize the volume, prices, and other terms and conditions
under which AT&T will buy products and services from NCR in 1997 and thereafter.

         NOW THEREFORE, AT&T and NCR agree as follows:

1. TERM OF AGREEMENT. (a) Except as otherwise expressly provided herein or in a
subsequent agreement between the parties, the terms and conditions of this
Agreement and the General Agreement between the parties of even date herewith
shall govern all of AT&T's purchases of products and services from NCR for the
five-year period beginning as of January 1, 1997 and ending December 31, 2001,
unless this Agreement is terminated sooner as permitted by Section 1(b).

         (b) Upon at least 90 days' prior written notice, either party may
terminate this Agreement for its convenience, without requirement of cause,
provided that the effective date of such termination is after expiration of the
Purchasing Period described in Section 2.


                                       1

<PAGE>   2
                                                                         GA 3638
                                                            CONTRACT NO. G18173D

  2.     COMMITMENT

         (a) Under the terms and conditions of this Agreement, during the period
beginning January 1, 1997 and ending December 31, 1999 ("Purchasing Period")
AT&T contractually commits to purchase not less than $350 million of products
and services from NCR or any present or future subsidiaries or affiliates of NCR
(collectively "NCR Entities") ("Commitment"), unless the Commitment is reduced
or terminated as provided in Section 7. AT&T may satisfy this Commitment by
purchasing the entire Commitment amount of products or services in any of the
three years or cumulatively over the three years. If AT&T fails to satisfy the
Commitment, the adjustment described in Section 9 shall apply. Subject to the
clause in Article VI of the General Agreement entitled SCOPE OF AGREEMENT, any
purchases of Eligible Products, as hereinafter defined, by any present or future
subsidiary or other affiliate of AT&T (collectively, the "AT&T Entities") during
the Purchasing Period shall be included in the calculation of whether the
Commitment has been satisfied.

          (b) Upon written notice to NCR, AT&T may, at its option, extend the
Purchasing Period until December 31, 2000 and/or December 31, 2001, subject to
Sections 9(a) and 9(b).

3. PRODUCTS AND SERVICES. The NCR products and services which the AT&T Entities
may purchase in satisfaction of the Commitment ("Eligible Products") include all
present and future products and services of any NCR Entity except products that
are exclusive to the Personal Computer, Retail, and/or Financial product lines.
Eligible Products include, but are not limited to, the following: Professional
Services; Customer Support Services (including without limitation Large Systems
Support and Software Support; repair and replacement parts and technical
support; and all products and services purchased in support of AT&T's
self-maintenance activities, including any parts purchased in the fourth quarter
of 1996 in contemplation of NCR's spin-off, systems infrastructure and customer
engineer education); Servers; Massively Parallel Processors; Software; and
Networking Products. The AT&T Entities may purchase Eligible Products for their
own internal use or (pursuant to the terms of a separate written agreement) for
resale worldwide (but with the applicable AT&T Entity additionally responsible
for any customs, duties, or local country taxes incurred by NCR by providing
products and services outside the United States), provided that the applicable
AT&T Entity's resale of NCR products and services is part of a sale of AT&T
products or services to a customer ("Solutions Sale"), and provided further that
if the AT&T Entity receives written notice that NCR has




                                       2

<PAGE>   3
                                                                         GA 3638
                                                            CONTRACT NO. G18173D


entered into an exclusive distribution agreement with a third party in a given
foreign country, that AT&T Entity will not be authorized hereunder to resell NCR
products and services in that foreign country without obtaining NCR's prior
written consent, which consent will not be unreasonably withheld or delayed if
the resale can be accomplished without violation of such exclusive distribution
agreement. Subsidiaries acquired by Supplier after the effective date of this
Agreement shall have their products and services added to this Agreement at
mutually agreeable discount rates.

4. INDIRECT PURCHASES. Subject to the clause in Article VI of the General
Agreement entitled SCOPE OF AGREEMENT, if the AT&T Entities purchase Eligible
Products from any of NCR's authorized Value Added Resellers ("VARs") or
Independent Software Vendors ("ISVs") or from a third party NCR exclusive
distributor in a given foreign country, NCR will credit towards AT&T's
Commitment hereunder, the price paid by the AT&T Entities to the VAR, ISV or
third party foreign distributor for components produced by NCR.

5. PRICES. Unless the parties otherwise mutually agree, and except as required
by Section 6, NCR prices to the AT&T Entities for the Purchasing Period shall be
determined as follows:

         (a) For all NCR products and services for which NCR has published a
Manufacturer's Suggested Reference Price ("MSRP"), the price to the AT&T
Entities shall be the MSRP reduced by a Discount calculated in accordance with
Section 5(b). NCR has furnished AT&T with a list of MSRPs for all such products
and services and thereafter shall provide AT&T not less than 30 days' prior
written notice of any changes to the MSRP list. For United States Customer
Support Services, any increase in the MSRP for Customer Support Services (or any
component thereof) shall not exceed the percentage increase in the Consumer
Price Index -- All Urban Wage Earners and Clerical Workers, as issued by the
Bureau of Labor Statistics of the United States Department of Labor ("CPI")
relative to the CPI that was in effect on the later of January 1, 1996 or the
date the previous list price became effective.

         (b) For each category of NCR product or service, the Discount shall be
a percentage equal to the effective discount off MSRP that was available as of
January 1, 1996 under the lowest NCR prices regularly offered to any AT&T
business unit. The formula for calculating the Discount, using MSRP and
discounted price in effect as of January 1, 1996 is as follows:




                                       3

<PAGE>   4
                                                                         GA 3638
                                                            CONTRACT NO. G18173D


         (1/1/96 MSRP  - 1/1/96 discounted price)
         ----------------------------------------      x  100  =  Discount (%)
                       1/1/96 MSRP

Based on this formula, NCR and AT&T will establish the percentage amount of the
Discount for each product or service category by mutual written agreement.

         (c) For all NCR products and services for which NCR has not published
an MSRP, NCR and AT&T shall negotiate prices in good faith. Such prices shall
yield margins to NCR not greater than the margins realized on comparable
products and services priced in accordance with Section 5(a).

                  (d) In order for NCR to comply with all applicable laws and
regulations, NCR's prices for products and services which the AT&T Entities
purchase indirectly through VARs and ISVs will be NCR's standard prices in
effect with such VARs and ISVs, and NCR's prices for products which the AT&T
Entities purchase for Solution Sales in which title to the NCR product passes to
an AT&T customer will be NCR's standard resale prices or such prices as the
parties may separately negotiate ("Indirect and Resale Prices").

                  (e) In the event that NCR redefines its pricing strategy in a
manner that would make the current model pricing obsolete, the AT&T Entities
shall have the option to move to this new pricing paradigm in its entirety
through the remaining term of this Agreement. Should a new pricing paradigm
occur, only new products/service transactions would be impacted through this
change.

         (f) NCR may, from time to time, offer AT&T to substitute upgraded or
later-developed items of equipment, components or parts for the products
purchased herein. In such event, NCR will allow a trade-in credit for the
equipment being traded-in toward the purchase of the upgraded or later-developed
equipment. The trade-in credit shall be in accordance with mutually agreed upon
allowances in effect at the time of such trade-in.

6. MOST FAVORED CUSTOMER STATUS.

         (a) For the Purchasing Period, NCR agrees that all prices, except for
Indirect and Resale Prices and non-United States services prices, charged to the
AT&T Entities under this Agreement shall be as favorable as any prices offered
or charged by NCR during the preceding 12-month period to any other NCR customer
making a comparable purchasing commitment, in each case taking into account the
value of terms and conditions of sale. With respect to non-United States
services pricing, prices charged to the AT&T Entities in any given country




                                        4

<PAGE>   5
                                                                         GA 3638
                                                            CONTRACT NO. G18173D


shall be as favorable as any prices offered or charged by NCR during the
preceding 12-month period to any other NCR customer making a comparable
purchasing commitment for comparable services in that country, in each case
taking into account the value of terms and conditions of sale. For purposes of
this Section 6, the purchasing commitment made to NCR by Lucent Technologies
Inc., and the terms and conditions of sale applicable thereto, shall be deemed
comparable to those of the AT&T Entities under this Agreement and the General
Agreement. If NCR charges a more favorable price (other than an Indirect or
Resale Price) to any such NCR customer, NCR shall immediately reduce the AT&T
Entities price as necessary to comply with this Section 6; provided, however,
that AT&T's and the AT&T's Entities' sole remedy for NCR's unintentional breach
of this requirement shall be to recover from NCR the difference between what the
applicable AT&T Entity was actually charged and what should have been charged
had NCR complied with its obligations hereunder. Notwithstanding the foregoing,
NCR may offer or charge more favorable prices to other NCR customers without
lowering the prices to the AT&T Entities under this Agreement, provided any such
more favorable prices are offered or charged for the limited purpose of
initiating a new customer relationship, reestablishing a customer relationship
that has been discontinued for no less than six (6) months or expanding an
existing customer relationship by selling products or services of a type not
previously sold to that customer during the previous 12 months and provided
further that such more favorable prices are not offered or charged for more than
6 months.

         (b) At AT&T's request, but not more frequently than once each calendar
year, NCR's compliance with its obligations under this Section 6 shall be
subject to an audit of reasonable scope by an independent auditing firm selected
by AT&T and reasonably satisfactory to NCR. AT&T will bear the auditing firm's
charges. The audit will be conducted in a manner that will minimize NCR's
inconvenience and expense in providing information necessary to perform the
audit. Prior to the auditor submitting findings to AT&T, NCR will be afforded a
reasonable opportunity to review and comment on any preliminary finding by the
auditor that NCR has failed to fulfill its obligations under this Section 6.
Prior to the commencement of each audit, the auditor will execute a
non-disclosure agreement reasonably acceptable to NCR which will require the
auditor to hold all information received from NCR in confidence, except such
information contained in the auditor's final report (which shall be disclosed to
AT&T only upon AT&T's entry into a non-disclosure agreement acceptable to NCR.)
Should the auditor determine that NCR has not fulfilled its obligations under
this Section 6, NCR will issue AT&T a credit (without interest) in the




                                       5

<PAGE>   6
                                                                         GA 3638
                                                            CONTRACT NO. G18173D


amount determined to be the difference between what AT&T paid and the price that
AT&T would have paid had NCR complied with its obligations hereunder. Such
credit may be reduced by the amount of any underbillings which may be disclosed
by the audit and substantiated with evidence reasonably satisfactory to AT&T.

7. ADJUSTMENTS TO COMMITMENT. The parties recognize that future events may make
it impractical or inequitable for the AT&T Entities to purchase NCR products and
services in the amounts contemplated by the Commitment. Accordingly, the
Commitment shall be reduced in amount, or terminated and extinguished in its
entirety, under the circumstances described in this Section 7.

         (a) If an AT&T Competitor (as hereinafter defined) enters into a
relationship with NCR that would potentially enable the AT&T Competitor to
obtain AT&T (including its subsidiaries) proprietary or confidential
information, NCR will take all necessary steps to assure that the AT&T
Competitor does not have access to such information through NCR without AT&T's
express prior written consent. In addition, if at any time an AT&T Competitor
owns or controls shares representing a controlling interest in NCR, AT&T may, at
its option, terminate the Commitment at any time by giving written notice to
NCR. Upon any such termination, the Commitment shall be extinguished, AT&T's
obligation thereunder shall be deemed entirely fulfilled, and the Purchasing
Period shall terminate. For purposes of this Agreement, an AT&T Competitor is
any company, person, or other entity which, either directly or through an
affiliate, offers (or has announced future availability of) any product or
service that AT&T reasonably determines to be substantially competitive with a
product or service offered or announced by AT&T (including its subsidiaries);
provided, that a third party will not be deemed an AT&T Competitor unless AT&T
(including its subsidiaries) and such third party each have aggregate actual or
forecasted annual revenues from substantially competitive products and services
exceeding $250 MILLION for at least one year of the Purchasing Period.

         (b) If AT&T or a controlled United States subsidiary purchases any
information technology product or service from a third party ("Alternative IT
Supplier") because the available Eligible Products do not meet its needs (as
defined in this Section 7(b)), the amount of the Commitment shall be reduced by
the amount of each such purchase from the Alternative IT Supplier. For purposes
of this Section 7(b), failure to meet the needs of AT&T or such controlled
United States subsidiary means circumstances substantially similar to the
following:



                                       6

<PAGE>   7
                                                                         GA 3638
                                                            CONTRACT NO. G18173D


         (i) NCR has discontinued an Eligible Product and has not replaced it
         with a comparable, technologically compatible Eligible Product that
         delivers equal or better performance, features, and value.

         (ii) NCR is unable or unwilling to provide the delivery interval or
         response time reasonably required by AT&T or such affected subsidiary
         for an Eligible Product, or imposes unreasonable charges to do so.

         (iii) Multiple units of an Eligible Product do not meet industry
         standards or the reasonable requirements of AT&T or such affected
         subsidiary for quality, performance, or reliability.

         (iv) A substantial number of units of an Eligible Product have had an
         excessive failure rate, or have performed below NCR's specifications.

         (c) If AT&T or a controlled United States subsidiary purchases any
Information Technology product or service from an Alternative IT Supplier
because NCR has unreasonably refused to modify, extend, or adapt an Eligible
Product to offer functionality, features, performance, or interoperability
required by AT&T or such affected subsidiary, the Commitment may be reduced by a
mutually agreed amount (or absent such agreement, by an amount determined
pursuant to Article V DISPUTE RESOLUTION of the General Agreement , not to
exceed the amount of each such purchase from the Alternative IT Supplier). For
purposes of this Section 7(c), the extent to which NCR's refusal was reasonable
will be evaluated by considering such factors as (i) whether NCR possessed the
requisite know-how (and, if applicable, the production capability) to
accommodate AT&T's or such affected subsidiary's request, (ii) whether the new
Eligible Product could have been marketed to other customers in markets that NCR
is addressing now and new markets it may address in the future, (iii) whether
AT&T or such affected subsidiary has offered to pay a reasonable price for the
new Eligible Product, taking into account NCR's anticipated costs and the
potential for sales to other customers, and (iv) whether the development
requested by AT&T or such affected subsidiary is necessary to sustain the
utility, functionality, and value of other Eligible Products purchased by AT&T
or such affected subsidiary.

         (d) Subject to the clause in Article VI of the General Agreement
entitled SCOPE OF AGREEMENT, if AT&T or a controlled United States subsidiary
cancels any order, terminates any service, or receives any refund or credit from
NCR due to delays, lateness (except for delays or lateness due to force majeure
conditions under the General Agreement), breach of warranty, breach of




                                        7

<PAGE>   8
                                                                         GA 3638
                                                            CONTRACT NO. G18173D


contract, or nonperformance by NCR, the amount of the Commitment shall be
reduced by the amount (included any related purchases) that AT&T or such
affected subsidiary would have spent but for such event.

         (e) AT&T's spending forecast in effect as of January 1, 1997 sets forth
AT&T's initial estimate of its aggregate spending for information technology
products and services obtained from all sources during the Purchasing Period
("Initial Forecasted Spending"). If, after the date of this Agreement, AT&T
adopts a smaller aggregate budget for such information technology spending
during the Purchasing Period ("Revised Forecasted Spending"), the Commitment
will be proportionately reduced according to the following formula:


<TABLE>
<S>                                                                       <C>
(Revised Forecasted Spending                )   ( other adjustments )
(--------------------------- X $350 million ) - (   to Commitment   )  =  adjusted Commitment
(Initial forecasted Spending                )   (    per section 7  )
</TABLE>


Notwithstanding the foregoing, if AT&T's actual aggregate spending for
information technology Products and Services during the Purchasing Period
("Actual Spending") is less than Initial Forecasted Spending but exceeds Revised
Forecasted Spending, Actual Spending will be used instead of Revised Forecasted
Spending in the above formula; provided, however, that for purposes of the above
formula, the ratio of Revised Forecasted Spending (or Actual Spending, if
applicable) to Initial Forecasted Spending shall not exceed 1/1, and the
adjustment to Commitment described in this Section 7(e) shall not under any
circumstances be used to increase the amount of the Commitment. For purposes of
this Section 7(e), Revised Forecasted Spending and Actual Spending shall exclude
spending by (or on behalf of) any AT&T business organization that was not
included in the projection of Initial Forecasted Spending.

         (f) NCR acknowledges that AT&T's ability to fulfill the Commitment will
be impaired if companies engaged in equipment financing or leasing ("Financing
Companies") are unwilling to provide financing or leasing for NCR products on
terms as favorable as those offered for comparable non-NCR products ("Standard
Financing Terms"). Accordingly, the Commitment shall be adjusted in accordance
with this Section 7(f) if any of the following events occurs:

         (i) If any Financing Company selected by a customer of AT&T or its
         controlled United States subsidiaries (or by its agent, including
         AT&T's AT&T Solutions business unit) refuses to provide financing or
         leasing to or for that customer for any Eligible Product on Standard
         Financing Terms,




                                        8

<PAGE>   9
                                                                         GA 3638
                                                            CONTRACT NO. G18173D


         and if such refusal persists after NCR has had a reasonable opportunity
         to address the reasons therefor, the Commitment shall be reduced by the
         dollar amount of the purchases AT&T represents would have been made by
         or for such customer from NCR (including related purchases) but for
         such refusal.

         (ii) If any four Major Financing Companies (as defined in Section
         7(f)(iv)) selected by a dealer or distributor or reseller (or by any of
         their respective agents) of AT&T or its controlled United States
         subsidiary refuse to provide financing or leasing to such person for
         any Eligible Product on Standard Financing Terms, and if such refusal
         persists after NCR has had a reasonable opportunity (not to exceed 90
         days) to address the reasons therefor, the Commitment shall be reduced
         by the dollar amount of the purchases AT&T represents would have been
         made by or for such dealer, distributor or reseller from NCR (including
         related purchases) but for such refusal.

         (iii) If any four Major Financing Companies selected by AT&T (including
         its controlled United States subsidiaries) refuse to provide financing
         or leasing to AT&T or such subsidiary for any Eligible Product on
         Standard Financing Terms, and if such refusal persists after NCR has
         had a reasonable opportunity (not to exceed 90 days) to address the
         reasons therefor, AT&T may, at its option, terminate the Commitment at
         any time by giving written notice to NCR. Upon any such termination,
         the Commitment shall be extinguished, AT&T's obligation thereunder
         shall be deemed entirely fulfilled, and the Purchasing Period shall
         terminate.

         (iv) As used in this Section 7(f), the term "Major Financing Companies"
         includes the five Financing Companies having the greatest aggregate
         dollar volume of current financing or leasing transactions with AT&T
         (including its controlled United States subsidiaries), plus all other
         Financing Companies that are among the 20 largest Financing Companies.

8.       MONITORING AND REPORTING.

         (a) At least once each calendar quarter, NCR shall furnish to AT&T a
written report of Commitment fulfilled by AT&T's direct purchases from NCR
during the preceding quarter. Each such report shall include a breakdown of
Eligible Products purchased, by product and service category, and shall
summarize the cumulative status of Commitment fulfillment.




                                        9

<PAGE>   10
                                                                         GA 3638
                                                            CONTRACT NO. G18173D


         (b) At least once each calendar quarter, AT&T shall furnish to NCR a
written report of Eligible Products purchased by AT&T from NCR VARs and ISVs
both domestic and international during the preceding quarter. AT&T's report
shall also identify any adjustments to Commitment claimed by AT&T pursuant to
Section 7 as a result of events that became known to AT&T in that preceding
quarter.

         (c) Within 90 days after the end of each calendar year of the
Purchasing Period, NCR and AT&T shall enter into a written agreement documenting
the amount of Commitment fulfillment achieved during that year and the remaining
balance of unfulfilled Commitment. If the parties are unable to reach agreement
during that 90-day interval, either party may initiate alternative dispute
resolution pursuant to Article V of the General Agreement .

         (d) Each party shall afford the other party such documentation and
limited audit rights as may be reasonably necessary to enable verification of
the information reported pursuant to this Section 8.

9.       NONFULFILLMENT OF COMMITMENT.

         (a) If AT&T has failed to fulfill its Commitment by December 31, 1999,
and elects to extend the Purchasing Period until December 31, 2000 pursuant to
Section 2(b), the remaining unfulfilled balance of the Commitment as of January
1, 2000 shall be increased by 5 percent, according to the following formulas:

                 (  adjustments to  )   (   Commitment     )   ( unfulfilled  )
  $350 million - (   Commitment     ) - (   fulfillment    ) = ( Commitment   )
                 (   per Section 7  )   ( through 12/31/99 )   ( as of 1/1/00 )
                 ( through 12/31/99 )

          ( unfulfilled  )
          (  Commitment  ) X 1.05 = Year 2000 Increased Commitment
          ( as of 1/1/00 )

         (b) If AT&T has failed to fulfill its Increased Commitment by December
31, 2000 and elects to extend the Purchasing Period until December 31, 2001
pursuant to Section 2(b), the remaining unfulfilled balance of the Increased




                                       10

<PAGE>   11
                                                                         GA 3638
                                                            CONTRACT NO. G18173D


Commitment as of January 1, 2001 shall be increased by 10 percent, according to
the following formulas:



<TABLE>
<S>                                                                  <C>
                        ( adjustments to   )
                        (       Year       )   (        Year      )
                        (       2000       )   (        2000      )    ( unfulfilled  )
Year 2000 Commitment -  (   Commitment     ) - (     Commitment   )  = (  Commitment  )
                        (  per Section 7   )   (    fulfillment   )    ( as of 1/1/01 )
                        (  from  1/01/00   )   ( through 12/31/00 )
                        ( through 12/31/00 )

         ( unfulfilled  )
         (  Commitment  )  X 1.10 = Year 2001 increased Commitment
         ( as of 1/1/01 )
</TABLE>



         (c) At the conclusion of the Purchasing Period (as extended, should
AT&T so elect pursuant to Section 2(b)), if AT&T has not fully discharged the
Commitment, NCR shall, in January 2000 (or in January 2001 or 2002, if the
Purchasing Period has been extended), bill AT&T a carrying charge equal to the
shortfall at December 31, 1999, 2000 or 2001, as applicable, multiplied by the
prime rate plus two percent (2%). Thereafter, NCR shall, each month, bill AT&T a
carrying charge equal to the shortfall, if any, at the end of the preceding
month, multiplied by 1/12 multiplied by the prime plus two percent (2%).


         (d) In the event AT&T meets or exceeds the Commitment as defined in
Section 2(a), NCR agrees to extend the prices described in this Agreement and
make them available to the AT&T Entities until December 31, 2000.


         (e) NCR EXPRESSLY AGREES THAT THE REMEDY DESCRIBED IN SECTION 9(c)
SHALL BE NCR's SOLE AND EXCLUSIVE REMEDY FOR AT&T's FAILURE TO FULFILL THE
COMMITMENT. NCR HEREBY WAIVES ANY OTHER REMEDIES THAT ARE OR MAY BECOME
AVAILABLE, AND NCR HEREBY RELEASES AT&T (AND ASSOCIATED ENTITIES , AND THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS) FROM ANY AND ALL CLAIMS
IN EXCESS OF SUCH REMEDY, FOR AT&T's FAILURE TO FULFILL THE COMMITMENT.




                                       11

<PAGE>   12
                                                                         GA 3638
                                                            CONTRACT NO. G18173D


         (f) UNDER NO CIRCUMSTANCES SHALL EITHER PARTY (OR A PARTY's AFFILIATES,
OR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS) BE HEREUNDER
LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR
PUNITIVE DAMAGES (EVEN IF MADE AWARE OF THE POSSIBILITY OF SUCH DAMAGES), OR FOR
LOSS OF PROFITS OR REVENUE.


         (g) THE LIMITATIONS OF REMEDIES AND LIABILITIES SET FORTH IN SECTIONS
9(e) THROUGH 9(f) SHALL APPLY REGARDLESS OF THE FORM OF ACTION, WHETHER IN
CONTRACT, TORT (INCLUDING NEGLIGENCE, WHETHER ACTIVE OR PASSIVE), OR OTHERWISE,
AND SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS AGREEMENT.


10. TERMS AND CONDITIONS GOVERNING PURCHASES. Contemporaneously with the
execution of this Agreement, AT&T and NCR are entering into a General Procedures
Agreement (hereinabove and below referred to as the "General Agreement"), to
establish terms and conditions governing AT&T's purchases of products and
services from NCR. In the event of any conflict between the terms and conditions
of this Agreement and those in the General Agreement, the terms and conditions
of this Agreement shall prevail and control.


11. COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER. (a) This Agreement may be
executed in one or more counterparts, all of which shall be considered
 one and
the same agreement, and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other party.


         (b) This Agreement, including the documents incorporated by reference
herein, together with the General Agreement, contains the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
all previous agreements, negotiations, discussions, writings, understandings,
commitments, and conversations with respect to such subject matter.


         (c) AT&T represents on behalf of itself and each of its subsidiaries,
and NCR represents on behalf of itself and each of its subsidiaries, as follows:


         (i) each such person has the requisite corporate or other power and
         authority and has taken all corporate or other action necessary in
         order to execute, deliver, and perform this Agreement and to consummate
         the transactions contemplated hereby; and




                                       12

<PAGE>   13
                                                                         GA 3638
                                                            CONTRACT NO. G18173D


         (ii) this Agreement has been duly executed and delivered by it and
         constitutes a valid and binding agreement of it enforceable in
         accordance with the terms thereof.


12. SUCCESSOR COMPANIES. The parties recognize that the ownership and
organization of their respective companies may change during the term of this
Agreement. Accordingly, the parties agree as follows:


         (a) If a third party (including without limitation any present or
future NCR parent or affiliate) succeeds to any substantial portion of the
business of NCR with respect to any Eligible Product ("NCR Successor Company"),
NCR shall use reasonable efforts to continue making such Eligible Product
available to AT&T under this Agreement and the General Agreement. These efforts
may include, at NCR's option, arranging for NCR to resell the Eligible Product
to AT&T. Alternatively, NCR may obtain the NCR Successor Company's agreement to
join in the terms and conditions of this Agreement and of the General Agreement,
in which event the parties shall promptly amend the definitions of NCR in this
Agreement and in the General Agreement to include the NCR Successor Company. If
NCR is unable or unwilling to continue making the Eligible Product available to
AT&T under this Agreement and the General Agreement, NCR shall be deemed to have
failed to meet AT&T's needs for the Eligible Product, and any resulting AT&T
purchases from Alternative IT Suppliers shall reduce the Commitment in
accordance with Section 7(b).


         (b) If AT&T notifies NCR that any third party has succeeded or will
succeed to any substantial portion of the business of AT&T ("AT&T Successor
Company"), the parties shall take the following steps:


         (i) If the AT&T Successor Company directly or indirectly controls AT&T,
         or if the AT&T Successor Company and AT&T are under substantial common
         control, and if the AT&T Successor Company's spending for Information
         Technology products and services is included in the aggregate AT&T
         budget for information technology spending described in Section 7(e),
         the parties (subject to the concurrence of the AT&T Successor Company)
         will amend the definitions of AT&T in this Agreement and in the General
         Agreement to include the AT&T Successor Company. Such amendments will
         enable the AT&T Successor Company to purchase from NCR under the
         prices, terms, and conditions of this Agreement and of the General
         Agreement, and all such purchases by the AT&T Successor Company will be
         deemed purchases by AT&T for purposes of Commitment fulfillment.




                                       13

<PAGE>   14
                                                                         GA 3638
                                                            CONTRACT NO. G18173D


         (ii) If the AT&T Successor Company is an affiliate of AT&T but does not
         control and is not under common control with AT&T, or if the AT&T
         Successor Company's spending for information technology products and
         services is not included in the aggregate AT&T budget for information
         technology spending described in Section 7(e), NCR and AT&T (in
         consultation with the AT&T Successor Company) will mutually determine
         whether to amend this Agreement and the General Agreement in the manner
         described in Section 12(b)(i). If NCR and AT&T fail to agree upon such
         amendments within 60 days after AT&T's notice, AT&T may, at its option,
         reduce the Commitment pursuant to Section 7(e) by excluding all future
         purchases by the AT&T Successor Company from AT&T's Revised Forecasted
         Spending and AT&T's Actual Spending.


         (iii) If the AT&T Successor Company is neither a parent nor an
         affiliate of AT&T, AT&T may, at its option, reduce the Commitment
         pursuant to Section 7(e) by excluding all future purchases by the AT&T
         Successor Company from AT&T's Revised Forecasted Spending and AT&T's
         Actual Spending.


         (iv) If AT&T elects to reduce the Commitment as permitted by Sections
         12(b)(ii) or (iii), NCR will have no obligation to make the pricing
         described in this Agreement available to the AT&T Successor Company,
         and future purchases by the AT&T Successor Company will not count
         toward Commitment fulfillment.


13. MISCELLANEOUS. The provisions of Article 8 of the Distribution Agreement are
specifically incorporated herein by reference.



AT&T     Corp.                                 NCR  Corporation


By:                                            By:

Name:    ______________________________        Name:____________________________

Title::  ______________________________        Title:___________________________

Date:    ______________________________        Date:____________________________




                                       14



<PAGE>   1
                                                                  Exhibit 10.7

                           FIRST AMENDMENT TO
           INTERIM SERVICES AND SYSTEMS REPLICATION AGREEMENT
                              BY AND AMONG
        AT&T CORP., LUCENT TECHNOLOGIES INC. AND NCR CORPORATION


      THIS FIRST AMENDMENT TO THE INTERIM SERVICES AND SYSTEMS REPLICATION
AGREEMENT (this "Amendment"), is effective as of September 1, 1996, by and among
AT&T Corp., a New York corporation ("AT&T"), Lucent Technologies Inc., a
Delaware corporation ("Lucent Technologies"), and NCR Corporation, a Maryland
corporation ("NCR").

      WHEREAS AT&T, Lucent Technologies and NCR (collectively, the "Companies")
are parties to the Interim Services and Systems Replication Agreement (the
"Agreement") effective as of February 1, 1996; and

      WHEREAS AT&T, Lucent Technologies and NCR desire to amend the Agreement to
replace or delete certain Exhibits or add new Exhibits and establish procedures
for subsequent de minimus changes as more fully described below.

      NOW, THEREFORE, in consideration of the premises and for other good and
valid consideration, the receipt and adequacy of which are hereby acknowledged,
the parties, intending to be legally bound, agree as follows:

1.    The following changes to the Agreement may be made by mutual agreement of
      persons duly authorized by each of the parties to make such changes
      without regard to the modification and amendment procedures set forth in
      Section 3.7 of the Agreement.

      A. Changes in payment obligations of $25,000.00 (twenty five thousand
      dollars) or less; and

      B. Changes resulting in an extension or reduction of the service period of
      up to 6 months or anytime within the calendar year 1996, whichever is
      longer.

      Changes satisfying the above mentioned conditions require notice to each
      companies' Law and CFO Divisions.

2.    The following Exhibits to the Agreement are hereby amended as set forth
      below:

      C. Exhibit TC-1. Exhibit TC-1 is amended and will bear the title "Exhibit
      TC-1a" and, in the form attached hereto as Appendix C, will replace TC-1
      in its entirety.



                                      - 1 -

<PAGE>   2
      D. Exhibit TC-2. Exhibit TC-2 is amended and will bear the title "Exhibit
      TC-2a" and, in the form attached hereto as Appendix D, will replace TC-2
      in its entirety.

      E. Exhibit TC-4. Exhibit TC-4 is amended and will bear the title "Exhibit
      TC-4a" and, in the form attached hereto as Appendix E, will replace TC-4
      in its entirety.

      F. Exhibit TC-6. Exhibit TC-6 is amended to change the "Expiration" to
      "SERVICES TO TERMINATE ON AGREED UPON CUTOVER DATE, NOT TO EXTEND BEYOND
      DECEMBER 31, 1996". The amended exhibit will bear the title "Exhibit
      TC-6a" and, in the form attached hereto as Appendix F, will replace TC-6
      in its entirety.

      G. Exhibit
 TC-8. Exhibit TC-8 is amended to change the "Expiration" to
      "SERVICES TO TERMINATE ON AGREED UPON CUTOVER DATE, NOT TO EXTEND BEYOND
      DECEMBER 31, 1996". The amended exhibit will bear the title "Exhibit
      TC-8a" and, in the form attached hereto as Appendix G, will replace TC-8
      in its entirety.

      H. Exhibit CS-004 (CFO). Exhibit CS-004(CFO) is amended to change the
      "Name of Service" to "PENSION PAYROLL DEVELOPMENT AND PRODUCTION
      PROCESSING COSTS". Exhibit CS-004(CFO) is amended to change the
      description of "Charge" to "$472,000 FOR 1996" and "SYSTEM DEVELOPMENT
      SUPPORT COST IS $24,465.20 PER MONTH" and "PRODUCTION PROCESSING COST IS
      $18,958.33 PER MONTH. TOTAL OF $43,423.53 PER MONTH, NOT TO EXCEED
      $521,082.36 FOR 1997". Exhibit CS-004(CFO) is amended to add under
      "Charge" the following: "THIS SERVICE AGREEMENT REPRESENTS SERVICES
      PERFORMED BY AT&T ON BEHALF OF LUCENT TECHNOLOGIES FOR THE PERIOD JANUARY
      1, 1997 THROUGH DECEMBER 31, 1997. THE MONTHLY CHARGE FOR SYSTEM
      DEVELOPMENT SUPPORT IS BASED UPON ACTUAL HEADCOUNT PERFORMING THIS
      FUNCTION. PRODUCTION PROCESSING COST IS BASED UPON THE ESTIMATED ANNUAL
      RUN RATE SUPPLIED BY THE C-ITS ORGANIZATION. BOTH CHARGES REPRESENT 70
      PERCENT OF THE TOTAL DEVELOPMENT AND PRODUCTION PROCESSING CHARGES FOR
      PENSION PAYROLL. AS OF AUGUST 13, 1996, 70 PERCENT OF THE 172,556
      PENSIONERS AND ANNUITANTS BELONG TO LUCENT TECHNOLOGIES". Exhibit
      CS-004(CFO) is amended to change the "Expiration" to "DECEMBER 31, 1997".
      Exhibit CS-004(CFO) is amended to add under "Other Special Terms" the
      following: "THIS AGREEMENT CAN BE TERMINATED BY AT&T AND LUCENT
      TECHNOLOGIES AT ANY TIME IN 1997 IF MUTUALLY AGREED UPON BY BOTH COMPANIES
      AND WITH 60 DAYS ADVANCE NOTICE". The amended exhibit will bear the title
      "Exhibit CS-004a(CFO)" and, in the form attached hereto as Appendix H,
      will replace Exhibit CS-004(CFO) in its entirety.

      I. Exhibit CS-005 (CFO). Exhibit CS-005(CFO) is amended to change the
      "Name of Service" to "PENSION PAYROLL OPERATIONS". Exhibit CS-005(CFO) is
      amended to change the description of "Charge" to "$1,650,000 FOR 1996" and
      "PENSION PAYROLL OPERATIONS CHARGE IS $36,989.19 PER MONTH, NOT TO EXCEED


                                      - 2 -

<PAGE>   3
      $443,870.28 FOR 1997". Exhibit CS-005(CFO) is amended to add under
      "Charge" the following: "THIS SERVICE AGREEMENT REPRESENTS SERVICES
      PERFORMED BY LUCENT TECHNOLOGIES ON BEHALF OF AT&T FOR THE PERIOD JANUARY
      1, 1997 THROUGH DECEMBER 31, 1997. THE MONTHLY CHARGE IS BASED UPON ACTUAL
      HEADCOUNT PERFORMING THIS FUNCTION. THE CHARGE REPRESENTS 30 PERCENT OF
      THE TOTAL PENSION PAYROLL OPERATIONS COST. AS OF AUGUST 13, 1996, 30
      PERCENT OF THE 172,556 PENSIONERS AND ANNUITANTS BELONG TO AT&T". Exhibit
      CS- 005(CFO) is amended to change the "Expiration" to "DECEMBER 31, 1997".
      Exhibit CS-005(CFO) is amended to add under "Other Special Terms" the
      following: "THIS AGREEMENT CAN BE TERMINATED BY AT&T AND LUCENT
      TECHNOLOGIES AT ANY TIME IN 1997 IF MUTUALLY AGREED UPON BY BOTH COMPANIES
      AND WITH 60 DAYS ADVANCE NOTICE". The amended exhibit will bear the title
      "Exhibit CS-005a(CFO)" and, in the form attached hereto as Appendix I,
      will replace Exhibit CS-005(CFO) in its entirety.

      J. Exhibit CS-028 (CFO). Exhibit CS-028(CFO) is amended to change the
      amount of "Charge" to "$186,230". The amended exhibit will bear the title
      "Exhibit CS-028a(CFO)" and, in the form attached hereto as Appendix J,
      will replace Exhibit CS-028(CFO) in its entirety.

      K. Exhibit CS-044(CFO). Exhibit CS-044(CFO) is amended to change the
      "Expiration" to "SEPTEMBER 30, 1996". Exhibit CS-044(CFO) is amended to
      change the "Charge" to "ESTIMATED TOTAL CHARGE IS $40,000." The amended
      exhibit will bear the title "Exhibit CS-044a(CFO)" and, in the form
      attached hereto as Appendix K, will replace CS-044(CFO) in its entirety.

      L. Exhibit CS-045(CFO). Exhibit CS-045(CFO) is amended to change the
      "Expiration" to "SEPTEMBER 30, 1996". Exhibit CS-045(CFO) is amended to
      change the "Charge" to "ESTIMATED TOTAL CHARGE IS $133,336." The amended
      exhibit will bear the title "Exhibit CS-045a(CFO)" and, in the form
      attached hereto as Appendix L, will replace CS-045(CFO) in its entirety.

      M. Exhibit CS-046(CFO). Exhibit CS-046(CFO) is amended to change the
      "Description of Service" to "FEBRUARY 1996 -- SEPTEMBER 1996: THIS SERVICE
      OR PORTIONS OF THIS SERVICE ARE PROVIDED FOR CP, GBCS, NETWORK SYSTEMS,
      GRE AND BELL LABS. OCTOBER 1996 - DECEMBER 1996: REMITTANCE PROCESSING
      INCLUDING STANDARD PAYMENT PROCESSING, EXCEPTION PAYMENT PROCESSING, ABP
      APPLICATIONS AND PAYMENTS OPERATIONS SUPPORT; RESOLUTION OF MISDIRECTED
      BILL PAYMENT; APPLICATION OF BILL PAYMENT TO CUSTOMER'S ACCOUNT;
      RECONCILIATION OF PAYMENT DATA TRANSMISSIONS. THIS SERVICE WILL BE
      PROVIDED FOR CP ONLY. NOTE: BANK FEES AND BANK FEE MANAGEMENT IS RESIDENT
      IN LUCENT TREASURY, EFFECTIVE OCTOBER 1, 1996.". Exhibit CS-046(CFO) is
      amended to change the "Charge" to "FEBRUARY 1996 - SEPTEMBER 1996:
      $640,583 PER MONTH. ESTIMATED TOTAL CHARGE IS $5,124,664. OCTOBER 1996 -
      DECEMBER 1996: $188,225 PER MONTH. ESTIMATED TOTAL CHARGE IS $564,675. THE
      CHARGE


                                      - 3 -

<PAGE>   4
      INCLUDES LABOR AND SYSTEM PROCESSING CHARGES." Exhibit CS-046(CFO) is
      amended to change the "Expiration" to "DECEMBER 31, 1996." The amended
      exhibit will bear the title "Exhibit CS-046a(CFO)" and, in the form
      attached hereto as Appendix M, will replace CS-046(CFO) in its entirety.

      N. Exhibit CS-048(CFO). Exhibit CS-048(CFO) is amended to change the
      "Expiration" to "MAY 31, 1996". The amended exhibit will bear the title
      "Exhibit CS-048a(CFO)" and, in the form attached hereto as Appendix N,
      will replace CS-048(CFO) in its entirety.

      O. Exhibit CS-224(HR). Exhibit CS-224(HR) is amended to change the
      "Description of Service" to "PROVIDING COMPANY SHALL PROVIDE STUDENT
      RECORDS, TRANSACTION BILLING AND TRAINING ACTIVITY REPORTS". Exhibit CS-
      224(HR) is amended to change the "Charge" to "$6.00 (PER STUDENT BILL),
      $35.00 (PER MISCELLANEOUS BILL) AND AS NEGOTIATED (TELEMARKETING AND AD
      HOC REPORTS AS REQUESTED). ESTIMATED TOTAL CHARGE IS $500,000 (INCLUDES
      AT&T SCHOOL OF BUSINESS AND TECHNICAL EDUCATION CENTER). COST OF SERVICE
      BILLED TO P24104000". Exhibit CS-224(HR) is amended to change the
      "Expiration" to "JULY 1, 1996 -- DECEMBER 31, 1996". The amended exhibit
      will bear the title "Exhibit CS-224a(HR)" and, in the form attached hereto
      as Appendix O, will replace Exhibit CS-224(HR) in its entirety.

      P. Exhibit CS-256(HR). Exhibit CS-256(HR) is amended to change the "Name
      of Service" to "LEARNING AND PERFORMANCE CENTER TRAINING SERVICES FOR
      ASSOCIATES". Exhibit CS-256(HR) is amended to change the "Description of
      Service" to "PROVIDING COMPANY SHALL PROVIDE EDUCATION AND TRAINING
      SERVICES". Exhibit CS-256(HR) is amended to change the "Charge" to "RATES
      AS PUBLISHED IN THE SECOND HALF 1996 SCHEDULES". Exhibit CS-256(HR) is
      amended to change the "Expiration" to "JULY 1, 1996 -- DECEMBER 31, 1996".
      The amended exhibit will bear the title "Exhibit CS-256a(HR)" and, in the
      form attached hereto as Appendix P, will replace Exhibit CS-256(HR) in its
      entirety.

      Q. Exhibit CS-258(HR). Exhibit CS-258(HR) is amended to change the
      "Expiration" to "DECEMBER 31, 1996". The amended exhibit will bear the
      title "Exhibit CS-258a(HR)" and, in the form attached hereto as Appendix
      Q, will replace Exhibit CS-258(HR) in its entirety.

3.    The Agreement is hereby amended to add the following exhibits, which are
      attached as Appendices hereto:

      R. Exhibit TC-17. Exhibit TC-17, covering VOICE NETWORK SERVICES (U.S.),
      is added in the form attached hereto as Appendix R.



                                      - 4 -

<PAGE>   5
      S. Exhibit CS-057(CFO). Exhibit CS-057(CFO), covering TELECOM, ITALIA
      FRAUD CONSULTANCY PROJECT - PHASE II, is added in the form attached hereto
      as Appendix S.

      T. Exhibit CS-058(CFO). Exhibit CS-058(CFO), covering CORPORATE TAX
      DEVELOPMENT - MAITLAND, FLORIDA, is added in the form attached hereto as
      Appendix T.

      U. Exhibit CS-059(CFO). Exhibit CS-059(CFO), covering PAYROLL AND TIME
      REPORTING DEVELOPMENT SUPPORT, is added in the form attached hereto as
      Appendix U.

      V. Exhibit CS-060(CFO). Exhibit CS-060(CFO), covering INTERNATIONAL RISK
      ASSESSMENT AND TRAVEL, is added in the form attached hereto as Appendix V.

      W. Exhibit CS-061(CFO). Exhibit CS-061(CFO), covering DEVELOPMENT SUPPORT
      OF THE DASHBOARD EIS, is added in the form attached hereto as Appendix W.

      X. Exhibit CS-266(HR). Exhibit CS-266(HR), covering UNIVERSITY PROGRAMS
      SERVICE, is added in the form attached hereto as Appendix X.

      Y. Exhibit CS-267(HR). Exhibit CS-267(HR), covering SHARED DEVELOPMENT OF
      NEW EDUCATION PROGRAMS, is added in the form attached hereto as Appendix
      Y.

      Z. Exhibit CS-268(HR). Exhibit CS-268(HR), covering THE PROJECT MANAGEMENT
      CURRICULUM, is added in the form attached hereto as Appendix Z.

      AA. Exhibit CS-269(HR). Exhibit CS-269(HR), covering MILLION LINE TENDOR
      PROJECT AFRICA, is added in the form attached hereto as Appendix AA.

      BB. Exhibit CS-270(HR). Exhibit CS-270(HR), covering AT&T EDUCATION AND
      TRAINING, is added in the form attached hereto as Appendix BB.

      CC. Exhibit CS-339(GPO). Exhibit CS-339(GPO), covering GLOBAL DATA
      WAREHOUSE, is added in the form attached hereto as Appendix CC.

      DD. Exhibit CS-607(PR). Exhibit CS-607(PR), covering AT&T ADVERTISING
      SERVICES - AT&T TEAM '96 NETWORK SYSTEMS, is added in the form attached
      hereto as Appendix DD.



                                      - 5 -

<PAGE>   6
      EE. Exhibit CS-608(PR). Exhibit CS-608(PR), covering AT&T ADVERTISING
      SERVICES - AT&T TEAM '96 GLOBAL BUSINESS COMMUNICATIONS SYSTEMS, is added
      in the form attached hereto as Appendix EE.

      FF. Exhibit CS-609(PR). Exhibit CS-609(PR), covering AT&T ADVERTISING
      SERVICES - AT&T TEAM '96 CONSUMER PRODUCTS, is added in the form attached
      hereto as Appendix FF.

      GG. Exhibit CS-715(E&S). Exhibit CS-715(E&S), covering INTERNATIONAL
      REGIONAL EH&S SUPPORT - CENTRAL AND LATIN AMERICA, is added in the form
      attached hereto as Appendix GG.

      HH. Exhibit CS-719(E&S). Exhibit CS-719(E&S), covering INTERNATIONAL
      REGIONAL EH&S SUPPORT - AUSTRIA, INDIA AND JAPAN, is added in the form
      attached hereto as Appendix HH.

      II. Exhibit SR-810(BL). Exhibit SR-810(BL), covering SECURITY COMPUTER
      RESOURCE EXCHANGE, is added in the form attached hereto as Appendix II.

      JJ. Exhibit CS-825(BL). Exhibit CS-825(BL), covering INFORMATION SYSTEMS
      REENGINEERING CENTER, is added in the form attached hereto as Appendix JJ.

      KK. Exhibit CS-828(BL). Exhibit CS-828(BL), covering CORE MANAGEMENT
      SERVICES, WHICH INCLUDE: FINANCIAL SERVICES, INTELLECTUAL PROPERTY REVIEW
      BOARD AND MWBE, is added in the form attached hereto as Appendix KK.

      LL. Exhibit CS-829(BL). Exhibit CS-829(BL), covering THEORY OF CONSTRAINTS
      TRAINING, is added in the form attached hereto as Appendix LL.

4.    The Agreement is hereby amended to delete the following exhibit:

      MM. Exhibit CS-014(CFO). Exhibit CS-014(CFO), covering LUCENT TECHNOLOGIES
      INC. CONTROLLERSHIP.


                                      - 6 -

<PAGE>   7
5.    This Amendment may be executed in any number of counterparts, each of
      which shall be an original, but all of which together shall constitute one
      instrument.

      IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.


                                          AT&T CORP.


                                          By:
                                              -------------------------------
                                          Name:
                                                -----------------------------
                                          Title:
                                                 ----------------------------

                                          LUCENT TECHNOLOGIES INC.



                                          By:
                                              -------------------------------
                                          Name:
                                                -----------------------------
                                          Title:
                                                 ----------------------------


                                          NCR CORPORATION



                                          By:
                                              -------------------------------
                                          Name:
                                                -----------------------------
                                          Title:
                                                 ----------------------------


                                      - 7 -




<PAGE>   1
                                                                   EXHIBIT 10.8



                            NCR MANAGEMENT STOCK PLAN
                        ADOPTED EFFECTIVE JANUARY 1, 1997

                                    ARTICLE 1
                                     PURPOSE

         The purposes of the NCR Management Stock Plan (the "Plan") are to
encourage selected key employees of NCR Corporation (the "Company") and its
Affiliates to acquire a proprietary and vested interest in the growth and
performance of the Company, to generate an increased incentive to contribute to
the Company's future success and prosperity, thus enhancing the value of the
Company for the benefit of share owners, and to enhance the ability of the
Company and its Affiliates to attract and retain individuals of exceptional
managerial talent upon whom, in large measure, the sustained progress, growth
and profitability of the Company depends.

                                    ARTICLE 2
                                   DEFINITIONS

As used in the Plan, the following terms shall have the meanings set forth
below:

         2.1 "AFFILIATE" means (i) any Person that directly, or through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Company or (ii) any entity in which the Company has a significant
equity interest, as determined by the Committee. For purposes of this Article
2.1, "Person" means any individual, corporation, partnership, association,
joint-stock company,
 trust, unincorporated organization, limited liability
company, other entity or government or political subdivision thereof.

         2.2 "AWARD" means any Option, Stock Appreciation Right, Restricted
Stock Award, Performance Share, Performance Unit, Dividend Equivalent, Other
Stock Unit Award, or any other right, interest, or option relating to Shares or
other securities of the Company granted pursuant to the provisions of the Plan.

         2.3 "AWARD AGREEMENT" means any written agreement, contract, or other
instrument or document evidencing any Award granted by the Committee hereunder
and signed by both the Company and the Participant.

         2.4 "BOARD" means the Board of Directors of the Company.

         2.5 "CODE" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.




<PAGE>   2




         2.6 "COMMITTEE" means the Compensation Committee of the Board, composed
of no fewer than three directors, each of whom is a Non-Employee Director and an
"outside director" within the meaning of Section 162(m) of the Code.

         2.7 "COMPANY" means NCR Corporation, a Maryland corporation.

         2.8 "DIVIDEND EQUIVALENT" means any right granted pursuant to Article
13.8, Deferrals.

         2.9 "EMPLOYEE" means any employee of the Company or of any Affiliate.
Unless otherwise determined by the Committee in its sole discretion, for
purposes of the Plan, an Employee shall be considered to have terminated
employment and to have ceased to be an Employee if his or her employer ceases to
be an Affiliate, even if he or she continues to be employed by such employer.

         2.10 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.

         2.11 "FAIR MARKET VALUE" means, unless otherwise determined by the
Committee, the average of the high and low sale prices of a share of Common
Stock on the U.S. stock exchange on which the Common Stock is listed on the date
of measurement or on any date as determined by the Committee and if there were
no trades on such date, on the day on which a trade occurred next preceding such
date.

         2.12 "INCENTIVE STOCK OPTION" means an Option granted under Article 6,
Stock Options, that is intended to meet the requirements of Section 422 of the
Code or any successor provision thereto.

         2.13 "NON-EMPLOYEE DIRECTOR" means a member of the Board who qualifies
as a Non-Employee Director as defined in Rule 16b-3(b)(3), as promulgated by the
Commission under the Exchange Act, or any successor definition adopted by the
Commission.

         2.14 "NONSTATUTORY STOCK OPTION" means an Option granted under Article
6, Stock Options, that is not intended to be an Incentive Stock Option.

         2.15 "OPTION" means any right granted to a Participant under the Plan
allowing such Participant to purchase Shares at such price or prices and during
such period or periods as the Committee shall determine.

         2.16 "OTHER STOCK UNIT AWARD" means any right granted to a Participant
by the Committee pursuant to Article 10, Other Stock Unit Awards.


                                     Page 2



<PAGE>   3




         2.17 "PARTICIPANT" means an Employee who is selected by the Committee
to receive an Award under the Plan.

         2.18 "PERFORMANCE AWARD" means any Award of Performance Shares or
Performance Units pursuant to Article 9, Performance Awards.

         2.19 "PERFORMANCE PERIOD" means that period established by the
Committee at the time any Performance Award is granted or at any time thereafter
during which any performance goals specified by the Committee with respect to
such Award are to be measured.

         2.20 "PERFORMANCE SHARE" means any grant pursuant to Article 9,
Performance Awards, of a unit valued by reference to a designated number of
Shares, which value may be paid to the Participant by delivery of such property
as the Committee shall determine, including, without limitation, cash, Shares,
or any combination thereof, upon achievement of such performance goals during
the Performance Period as the Committee shall establish at the time of such
grant or thereafter.

         2.21 "PERFORMANCE UNIT" means any grant pursuant to Article 9,
Performance Awards, of a unit valued by reference to a designated amount of
property other than Shares, which value may be paid to the Participant by
delivery of such property as the Committee shall determine, including, without
limitation, cash, Shares, or any combination thereof, upon achievement of such
performance goals during the Performance Period as the Committee shall establish
at the time of such grant or thereafter.

         2.22 "RESTRICTED STOCK" means any Share issued with the restriction
that the holder may not sell, transfer, pledge, or assign such Share and with
such other restrictions as the Committee, in its sole discretion, may impose
(including, without limitation, any restriction on the right to vote such Share,
and the right to receive any cash dividends), which restrictions may lapse
separately or in combination at such time or times, in installments or
otherwise, as the Committee may deem appropriate.

         2.23 "RESTRICTED STOCK AWARD" means an award of Restricted Stock under
Article 8, Restricted Stock.

         2.24 "SENIOR MANAGER" means any manager of the Company or any Affiliate
holding a position above E band or any future salary grade that is the
equivalent thereof.

         2.25 "SHARES" means the shares of common stock, $.01 par value, of the
Company and such other securities of the Company as the Committee may from time
to time determine.



                                     Page 3



<PAGE>   4



         2.26 "STOCK APPRECIATION RIGHT" means any right granted to a
Participant pursuant to Article 7, Stock Appreciation Rights, to receive, upon
exercise by the Participant, the excess of (i) the Fair Market Value of one
Share on the date of exercise or, if the Committee shall so determine in the
case of any such right other than one related to any Incentive Stock Option, at
any time during a specified period before the date of exercise over (ii) the
grant price of the right on the date of grant, or if granted in connection with
an outstanding Option on the date of grant of the related option, as specified
by the Committee in its sole discretion, which, other than in the case of
Substitute Awards, shall not be less than the Fair Market Value of one Share on
such date of grant of the right or the related Option, as the case may be. Any
payment by the Company in respect of such right may be made in cash, Shares,
other property, or any combination thereof, as the Committee, in its sole
discretion, shall determine.

         2.27 "SUBSTITUTE AWARD" is defined in Article 5.1, Available Shares.

                                    ARTICLE 3
                                  PARTICIPATION

         3.1 PARTICIPATION. Any Employee shall be eligible to be selected as a
Participant.

         3.2 PARTICIPATION BY NON-EMPLOYEES. NCR also may permit non-employee
directors to be eligible to receive either (or both) discretionary or
formula-based Awards under the Plan. The formula may be set forth in a policy or
in the Plan.

                                    ARTICLE 4
                                 ADMINISTRATION

         4.1 ADMINISTRATION. The Plan shall be administered by the Committee. A
majority of the members of the Committee may determine its actions and fix the
time and place of its meetings. Decisions of the Committee shall be final,
conclusive and binding upon all persons, including the Company, any Participant,
any stockholder, and any employee of the Company or of any Affiliate.

         4.2 AUTHORITY OF COMMITTEE. The Committee shall have full power and
authority, subject to such orders or resolutions not inconsistent with the
provisions of the Plan as may from time to time be adopted by the Board, to:

         (a) select the officers appointed by the Board of the Company and its
Affiliates to whom Awards may from time to time be granted hereunder;

         (b) determine the type or types of Award to be granted to each
Participant hereunder;


                                     Page 4



<PAGE>   5




         (c) determine the number of Shares to be covered by each Award granted
to a Board-appointed officer hereunder;

         (d) determine the terms and conditions, not inconsistent with the
provisions of the Plan, of any Award granted hereunder;

         (e) determine whether, to what extent and under what circumstances
Awards may be settled in cash, Shares or other property or canceled or
suspended;

         (f) determine whether, to what extent and under what circumstances
cash, Shares and other property and other amounts payable with respect to an
Award under this Plan shall be deferred either automatically or at the election
of the Participant;

         (g) interpret and administer the Plan and any instrument or agreement
entered into under the Plan;

         (h) establish such rules and regulations and appoint such agents as it
shall deem appropriate for the proper administration of the Plan; and

         (i) make any other determination and take any other action that the
Committee deems necessary or desirable for administration of the Plan.

Notwithstanding the above, the Chairman and Chief Executive Officer shall have
full power and authority to select Employees other than the officers appointed
by the Board of the Company and its Affiliates to whom Awards may from time to
time be granted hereunder, and to determine the number of Shares to be covered
by such Awards.

                                    ARTICLE 5
                           SHARES SUBJECT TO THE PLAN

         5.1 AVAILABLE SHARES. Subject to adjustment as provided in Article 5.3,
Adjustments, the total number of Shares available for grant under the Plan for
each calendar year shall be 5.6% for 1997, and 4% for each calendar year
thereafter, of the total outstanding Shares as of the first day of such year for
which the Plan is in effect; provided that such number shall be increased in any
year by the number of Shares available for grant hereunder in previous years but
not covered by Awards granted hereunder in such years; and provided, further,
that if any Shares subject to an Award are forfeited or if any Award based on
Shares otherwise terminated without issuance of such Shares or other
consideration in lieu of such Shares, the Shares subject to such Award shall to
the extent of such forfeiture or termination, again be available for awards
under the Plan if no Participant shall have received any benefits of ownership
in respect thereof; and provided further that no more than ten million Shares
shall be cumulatively available for the grant of Incentive Stock 



                                     Page 5



<PAGE>   6
Options under the Plan; and provided further that no Participant may be granted
Awards in any one calendar year with respect to more than two million Shares.

         5.2 SUBSTITUTE AWARDS. In addition, Awards granted or Shares issued by
the Company (i) pursuant to the Employee Benefits Agreement between AT&T Corp.
and the Company dated November 20, 1996, as amended, modified or otherwise
supplemented, or (ii) through the assumption of, or in substitution or exchange
for, employee benefit awards or the right or obligation to make future employee
benefit awards, in connection with the acquisition of another corporation or
business entity (clauses (i) and (ii) collectively, the "Substitute Awards")
shall not reduce the shares available for grants under the Plan or to a
Participant in any calendar year. Any Shares issued hereunder may consist, in
whole or in part, of authorized and unissued shares or treasury shares.

         5.3 ADJUSTMENTS. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split, reverse stock
split, spin off or similar transaction or other change in corporate structure
affecting the Shares, such adjustments and other substitutions shall be made to
the Plan and to Awards as the Committee in its sole discretion deems equitable
or appropriate, including without limitation such adjustments in the aggregate
number, class and kind of Shares which may be delivered under the Plan, in the
aggregate or to any one Participant, in the number, class, kind and option or
exercise price of Shares subject to outstanding Options, Stock Appreciation
Rights or other Awards granted under the Plan, and in the number, class and kind
of Shares subject to, Awards granted under the Plan (including, if the Committee
deems appropriate, the substitution of similar options to purchase the shares
of, or other awards denominated in the shares of, another company) as the
Committee may determine to be appropriate in its sole discretion, provided that
the number of Shares or other securities subject to any Award shall always be a
whole number.

                                    ARTICLE 6
                                  STOCK OPTIONS

         6.1 STOCK OPTIONS. Options may be granted hereunder to Participants
either alone or in addition to other Awards granted under the Plan. Any Option
granted under the Plan shall be evidenced by an Award Agreement in such form as
the Committee may from time to time approve. Any such Option shall be subject to
the following terms and conditions and to such additional terms and conditions,
not inconsistent with the provisions of the Plan, as the Committee shall deem
desirable:

         (a) OPTION PRICE. The purchase price per Share purchasable under an
Option shall be determined by the Committee in its sole discretion; provided
that except in the case of an Option pursuant to a Substitute Award, such
purchase price shall not be less than the Fair Market Value of the Share on the
date of the grant of the option.



                                                 Page 6



<PAGE>   7



         (b) OPTION PERIOD. The term of each option shall be fixed by the
Committee in its sole discretion; provided that no Incentive Stock Option shall
be exercisable after the expiration of ten years from the date the Option is
granted.

         (c) EXERCISABILITY. Options shall be exercisable at such time or times
as determined by the Committee at or subsequent to grant. Unless otherwise
determined by the Committee at or subsequent to grant, no Incentive Stock Option
shall be exercisable during the year ending on the day before the first
anniversary date of the granting of the Incentive Stock Option.

         (d) METHOD OF EXERCISE. Subject to the other provisions of the Plan and
any applicable Award Agreement, any Option may be exercised by the Participant
in whole or in part at such time or times, and the Participant may make payment
of the option price in such form or forms, including, without limitation,
payment by delivery of cash, Shares held for more than six months, or other
consideration (including, where permitted by law and the Committee, Awards)
having a Fair Market Value on the exercise date equal to the total option price,
or by any combination of cash, Shares and other consideration as the Committee
may specify in the applicable Award Agreement.

         (e) INCENTIVE STOCK OPTIONS. In accordance with rules and procedures
established by the Committee, the aggregate Fair Market Value (determined as of
the time of grant) of the Shares with respect to which Incentive Stock Options
held by any Participant which are exercisable for the first time by such
Participant during any calendar year under the Plan (and under any other benefit
plans of the Company or of any parent or subsidiary corporation of the Company)
shall not exceed $100,000 or, if different, the maximum limitation in effect at
the time of grant under Article 422 of the Code, or any successor provision, and
any regulations promulgated thereunder. The terms of any Incentive Stock Option
granted hereunder shall comply in all respects with the provisions of Section
422 of the Code, or any successor provision, and any regulations promulgated
thereunder.

         (f) FORM OF SETTLEMENT. In its sole discretion, the Committee may
provide, at the time of grant, that the shares to be issued upon an Option's
exercise shall be in the form of Restricted Stock or other similar securities,
or may reserve the right so to provide after the time of grant.

                                    ARTICLE 7
                            STOCK APPRECIATION RIGHTS

         7.1 STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be granted
hereunder to Participants either alone or in addition to other Awards granted
under the Plan and may, but need not, relate to a specific Option granted under
Article 6. The provisions of Stock Appreciation Rights need not be the same with
respect to each recipient. Any Stock


                                     Page 7



<PAGE>   8



Appreciation Right related to a Nonstatutory Stock Option may be granted at the
same time such Option is granted or at any time thereafter before exercise or
expiration of such Option. Any Stock Appreciation Right related to an Incentive
Stock Option must be granted at the same time such option is granted.

         7.2 TERMINATION OF STOCK APPRECIATION RIGHTS. In the case of any Stock
Appreciation Right related to any Option, the Stock Appreciation Right or
applicable portion thereof shall terminate and no longer be exercisable upon the
termination or exercise of the related Option, except that a Stock Appreciation
Right granted with respect to less than the full number of Shares covered by a
related Option shall not be reduced until the exercise or termination of the
related Option exceeds the number of shares not covered by the Stock
Appreciation Right. Any Option related to any Stock Appreciation Right shall no
longer be exercisable to the extent the related Stock Appreciation Right has
been exercised. The Committee may impose such conditions or restrictions on the
exercise of any Stock Appreciation Right as it shall deem appropriate.

                                    ARTICLE 8
                                RESTRICTED STOCK

         8.1 ISSUANCE. Restricted Stock Awards may be issued hereunder to
Participants, for no cash consideration or for such minimum consideration as may
be required by applicable law, either alone or in addition to other Awards
granted under the Plan. The provisions of Restricted Stock Awards need not be
the same with respect to each recipient.

         8.2 REGISTRATION. Any Restricted Stock issued hereunder may be
evidenced in such manner as the Committee in its sole discretion shall deem
appropriate, including, without limitation, book-entry registration or issuance
of a stock certificate or certificates. In the event any stock certificate is
issued in respect of shares of Restricted Stock awarded under the Plan, such
certificate shall be registered in the name of the Participant, and shall bear
an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award.

         8.3 FORFEITURE. Except as otherwise determined by the Committee at the
time of grant, upon termination of employment for any reason during the
restriction period, all shares of Restricted Stock still subject to restriction
shall be forfeited by the Participant and reacquired by the Company, provided
that, except as provided in Article 14, Change in Control, in the event of a
Participant's retirement, permanent disability, other termination of employment
or death, or in cases of special circumstances, the Committee may, in its sole
discretion, when it finds that a waiver would be in the best interests of the
Company, waive in whole or in part any or all remaining restrictions with
respect to such Participant's shares of Restricted Stock. Unrestricted Shares,
evidenced in such manner as the Committee shall


                                     Page 8



<PAGE>   9



deem appropriate, shall be issued to the grantee promptly after the period of
forfeiture, as determined or modified by the Committee, shall expire.

                                    ARTICLE 9
                               PERFORMANCE AWARDS

         9.1 PERFORMANCE AWARDS. Performance Awards may be issued hereunder to
Participants, for no cash consideration or for such minimum consideration as may
be required by applicable law, either alone or in addition to other Awards
granted under the Plan. The performance criteria to be achieved during any
Performance Period and the length of the Performance Period shall be determined
by the Committee upon the grant of each Performance Award. Except as provided in
Article 14, Change in Control, Performance Awards will be distributed only after
the end of the relevant Performance Period. Performance Awards may be paid in
cash, Shares, other property or any combination thereof, in the sole discretion
of the Committee at the time of payment. The performance levels to be achieved
for each Performance Period and the amount of the Award to be distributed shall
be conclusively determined by the Committee. Performance Awards may be paid in a
lump sum or in installments following the close of the Performance Period. The
maximum value of the property, including cash, that may be paid or distributed
to any Participant pursuant to a grant of Performance Units made in any one
calendar year shall be two million dollars ($2,000,000).

                                   ARTICLE 10
                             OTHER STOCK UNIT AWARDS

         10.1 STOCK AND ADMINISTRATION. Other Awards of Shares and other Awards
that are valued in whole or in part by reference to, or are otherwise based on,
Shares or other property ("Other Stock Unit Awards") may be granted hereunder to
Participants, either alone or in addition to other Awards granted under the
Plan. Other Stock Unit Awards may be paid in Shares, other securities of the
Company, cash or any other form of property as the Committee shall determine.
Subject to the provisions of the Plan, the Committee shall have sole and
complete authority to determine the Employees of the Company and its Affiliates
to whom and the time or times at which such Awards shall be made, the number of
shares of Stock to be granted pursuant to such Awards, and all other conditions
of the Awards. The provisions of Other Stock Unit Awards need not be the same
with respect to each recipients

         10.2 TERMS AND CONDITIONS. Shares (including securities convertible
into Shares) granted under this Article 10 may be issued for no cash
consideration or for such minimum consideration as may be required by applicable
law; Shares (including securities convertible into Shares) purchased pursuant to
a purchase right awarded under this Article 10 shall be purchased for such
consideration as the Committee shall in its sole discretion


                                     Page 9



<PAGE>   10



determine, which shall not be less than the Fair Market Value of such Shares or
other securities as of the date such purchase right is awarded.

                                   ARTICLE 11
                         CODE SECTION 162(m) PROVISIONS

         11.1 APPLICABILITY. Notwithstanding any other provision of this Plan,
if the Committee determines at the time Restricted Stock, a Performance Award or
an Other Stock Unit Award is granted to a Participant that such Participant is,
or is likely to be at the time he or she recognizes income for federal income
tax purposes in connection with such Award, a covered employee within the
meaning of Section 162(m)(3) of the Code, then the Committee may provide that
this Article 11 is applicable to such Award.

         11.2 PERFORMANCE GOALS. If an Award is subject to this Article 11, then
the lapsing of restrictions thereon and the distribution of cash, Shares or
other property pursuant thereto, as applicable, shall be subject to the
achievement of one or more objective performance goals established by the
Committee, which shall be based on the attainment of one or any combination of
the following: specified levels of earnings per share from continuing
operations, operating income, revenues, gross margin, return on operating
assets, return on equity, economic value added, stock price appreciation, total
stockholder return (measured in terms of stock price appreciation and dividend
growth), or cost control, of the Company or the Affiliate or division of the
Company for or within which the Participant is primarily employed. Such
Performance Goals also may be based upon the attaining specified levels of
Company performance under one or more of the measures described above relative
to the performance of other corporations. Such performance goals shall be set by
the Committee within the time period prescribed by, and shall otherwise comply
with the requirements of, Section 162(m) of the Code and the regulations
thereunder.

         11.3 NO UPWARD ADJUSTMENTS. Notwithstanding any provision of this Plan,
other than Article 14, Change in Control, with respect to any Award that is
subject to this Article 11, the Committee may not adjust upwards the amount
payable pursuant to such Award, nor may it waive the achievement of the
applicable performance goals except in the case of the death or disability of
the Participant.

         11.4 OTHER RESTRICTIONS. The Committee shall have the power to impose
such other restrictions on Awards subject to this Article 11 as it may deem
necessary or appropriate to ensure that such Awards satisfy all requirements for
"performance-based compensation" within the meaning of Section 162(m)(4)(B) of
the Code or any successor thereto.

                                     Page 10



<PAGE>   11




                                   ARTICLE 12
                           AMENDMENTS AND TERMINATION

         12.1 AMENDMENT OR TERMINATION OF PLAN. The Board may amend, alter or
discontinue the Plan, but no amendment, alteration, or discontinuation shall be
made that would impair the rights of an optionee or Participant under an Award
heretofore granted, without the optionee's or Participant's consent.

         12.2 AMENDMENT OR SUBSTITUTION OF AWARDS. The Committee may amend the
terms of any Award heretofore granted, prospectively or retroactively, but no
such amendment shall impair the rights of any Participant without his consent.


                                   ARTICLE 13
                               GENERAL PROVISIONS

         13.1 NONTRANSFERABILITY. Unless the Committee determines otherwise at
the time the Award is granted, no Award, and no Shares subject to Awards
described in Article 10, Other Stock Unit Awards, which have not been issued or
as to which any applicable restriction, performance or deferral period has not
lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered,
except by will or by the laws of descent and distribution; provided that, if so
determined by the Committee, a Participant may, in the manner established by the
Committee, designate a beneficiary to exercise the rights of the Participant
with respect to any Award upon the death of the Participant. Each Award shall be
exercisable, during the Participant's lifetime, only by the Participant or, if
permissible under applicable law, by the Participant's guardian or legal
representative.

         13.2 TERM OF AWARDS. The term of each Award shall be for such period of
months or years from the date of its grant as may be determined by the
Committee; provided that in no event shall the term of any Incentive Stock
Option or any Stock Appreciation Right related to any Incentive Stock Option
exceed a period of ten (10) years from the date of its grant.

         13.3 EMPLOYEE CLAIMS. No Employee or Participant shall have any claim
to be granted any Award under the Plan and there is no obligation for uniformity
of treatment of Employees or Participants under the Plan.

         13.4 AGREEMENT REQUIRED. The prospective recipient of any Award under
the Plan shall not, with respect to such Award, be deemed to have become a
Participant, or to have any rights with respect to such Award, until and unless
such recipient shall have executed an agreement or other instrument evidencing
the Award and delivered a fully


                                    Page 11

<PAGE>   12



executed copy thereof to the Company, and otherwise complied with the then
applicable terms and conditions.

         13.5 ADJUSTMENTS. Except as provided in Article 11, Code Section 162(m)
Provisions, the Committee shall be authorized to make adjustments in Performance
Award criteria or in the terms and conditions of other Awards in recognition of
unusual or nonrecurring events affecting the Company or its financial statements
or changes in applicable laws, regulations or accounting principles. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry it into effect. In the event the Company shall assume
outstanding employee benefit awards or the right or obligation to make future
such awards in connection with the acquisition of another corporation or
business entity, the Committee may, in its discretion, make such adjustments in
the terms of Awards under the Plan as it shall deem appropriate.

         13.6 CANCELLATION OR SUSPENSION. The Committee shall have full power
and authority to determine whether, to what extent and under what circumstances
any Award shall be canceled or suspended. In particular, but without limitation,
all outstanding Awards to any Participant shall be canceled if the Participant,
without the consent of the Committee, while employed by the Company or after
termination of such employment, becomes associated with, employed by, renders
services to, or owns any interest in (other than any nonsubstantial interest, as
determined by the Committee), any business that is in competition with the
Company or with any business in which the Company has a substantial interest, as
determined by the Committee or any one or more Senior Managers or committee of
Senior Managers to whom the authority to make such determination is delegated by
the Committee.

         13.7 RESTRICTIONS ON CERTIFICATES. All certificates for Shares
delivered under the Plan pursuant to any Award shall be subject to such stock
transfer orders and other restrictions as the Committee may deem advisable under
the rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Shares are then listed, and any
applicable Federal or state securities law, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate reference to
such restrictions.

         13.8 DEFERRALS. The Committee shall be authorized to establish
procedures pursuant to which the payment of any Award may be deferred. Subject
to the provisions of this Plan and any Award Agreement, the recipient of an
Award (including, without limitation, any deferred Award) may, if so determined
by the Committee, be entitled to receive, currently or on a deferred basis,
interest or dividends, or interest or dividend equivalents, with respect to the
number of shares covered by the Award, as determined by the Committee, in its
sole discretion, and the Committee may provide that such amounts (if any) shall
be deemed to have been reinvested in additional Shares or otherwise reinvested.



                                    Page 12

<PAGE>   13




         13.9 NO PAYMENT REQUIRED. Except as otherwise required in any
applicable Award Agreement, or by the terms of the Plan, recipients of Awards
under the Plan shall not be required to make any payment or provide
consideration other than the rendering of services.

         13.10 DELEGATION OF AUTHORITY. The Committee may delegate to one or
more Senior Managers or a committee of Senior Managers the right to grant Awards
to Employees who are not officers or directors of the Company and to cancel or
suspend Awards to Employees who are not officers or directors of the Company.

         13.11 TAX WITHHOLDING. The Company shall be authorized to withhold from
any Award granted or payment due under the Plan the amount of withholding taxes
due in respect of an Award or payment hereunder and to take such other action as
may be necessary in the opinion of the Company to satisfy all obligations for
the payment of such taxes. The Committee shall be authorized to establish
procedures for election by Participants to satisfy such withholding taxes by
delivery of, or directing the Company to retain, Shares.

         13.12 OTHER ARRANGEMENTS. Nothing contained in this Plan shall prevent
the Board of Directors from adopting other or additional compensation
arrangements, subject to stockholder approval if such approval is otherwise
required; and such arrangements may be either generally applicable or applicable
only in specific cases.

         13.13 APPLICABLE LAW. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Ohio and applicable Federal law.

         13.14 SEVERABILITY. If any provision of this Plan is or becomes or is
deemed invalid, illegal or unenforceable in any jurisdiction, or would
disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws or if it cannot he construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan, it
shall be stricken and the remainder of the Plan shall remain in full force and
effect.

         13.15 AWARDS TO FOREIGN NATIONALS AND EXPATRIATES. Awards may be
granted to Employees who are foreign nationals or employed outside the United
States, or both, on such terms and conditions different from those specified in
the Plan as may, in the judgment of the Committee, be necessary or desirable in
order to recognize differences in local law or tax policy. The Committee also
may impose conditions on the exercise or vesting of Awards in order to minimize
the Company's obligation with respect to tax equalization for Employees on
assignments outside their home country.


                                    Page 13

<PAGE>   14




         13.16 TERM OF THE PLAN. No award shall be granted pursuant to the Plan
after 10 years from the Effective Date, but any Award theretofore granted may
extend beyond that date.

         13.17 EFFECTIVE DATE. The Plan shall be effective on January 1, 1997.




                                    Page 14

<PAGE>   15

                                   ARTICLE 14
                          CHANGE IN CONTROL PROVISIONS

         14.1     DEFINITIONS.

         (a) "CHANGE IN CONTROL" means the happening of any of the following
events:

                  (i) An acquisition by any individual, entity or group (within
the meaning of Article 13(d)(3) or 14(d)(2) of the Exchange Act) (an "Entity")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (A) the then outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock"), or (B) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); excluding, however, the following: (1) any
acquisition, directly from the Company, other than an acquisition by virtue of
the exercise of a conversion privilege unless the security being so converted
was itself acquired directly from the Company, (2) any acquisition by the
Company, (3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, or (4) any acquisition by any corporation pursuant to a transaction
which complies with clauses (A), (B) and (C) of Subsection (iii) below.

                  (ii) A change in the composition of the Board such that the
individuals who, as of the Effective Date, constitute the Board (such Board
shall he hereinafter referred to as the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board; provided, however, that for
purposes of this definition, any individual who becomes a member of the
Board subsequent to the Effective Date, whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least a
majority of those individuals who are members of the Board and who were also
members of the Incumbent Board (or deemed to be such pursuant to this provision)
shall be considered as though such individual were a member of the Incumbent
Board; and provided further, however, that any such individual whose initial
assumption of office occurs as a result of or in connection with either an
actual or threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of an Entity other than the
Board shall not be so considered as a member of the Incumbent Board; or


                                    Page 15

<PAGE>   16


                  (iii) The approval by the stockholders of the Company of a
merger, reorganization or consolidation or sale or other disposition of all or
substantially all of the assets of the Company (each, a "Corporate Transaction")
or, if consummation of such Corporate Transaction is subject, at the time of
such approval by stockholders, to the consent of any government or governmental
agency, the obtaining of such consent (either explicitly or implicitly by
consummation); excluding, however, such a Corporate Transaction pursuant to
which (A) all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock, and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Corporate Transaction (including, without limitation, a corporation or
other Person which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries (a "Parent Company")) in substantially the same proportions as
their ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding Company voting Securities, as
the case may be, (B) no Entity (other than the Company, any employee benefit
plan (or related trust) of the Company, such corporation resulting from such
Corporate Transaction or, if reference was made to equity ownership of any
Parent Company for purposes of determining whether clause (A) above is satisfied
in connection with the applicable Corporate Transaction, such Parent Company)
will beneficially own, directly or indirectly, 20% or more of, respectively, the
outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the election of
directors unless such ownership resulted solely from ownership of securities of
the Company prior to the Corporate Transaction, and (C) individuals who were
members of the incumbent Board will immediately after the consummation of the
Corporate Transaction constitute at least a majority of the members of the board
of directors of the corporation resulting from such Corporate Transaction (or,
if reference was made to equity ownership of any Parent Company for purposes of
determining whether clause (A) above is satisfied in connection with the
applicable Corporate Transaction, of the Parent Company); or

                  (iv) The approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.

         (b) "CHANGE IN CONTROL PRICE" means the higher of (A) the highest
reported sales price, regular way, of a Share in any transaction reported on the
New York Stock Exchange Composite Tape or other national exchange on which
Shares are listed or on NASDAQ during the 60-day period prior to and including
the date of a Change in Control or (B) if the Change in Control is the result of
a tender or exchange offer or a Corporate Transaction, the highest price per
Share paid in such tender or exchange offer or Corporate



                                    Page 16

<PAGE>   17



Transaction; provided however, that in the case of Incentive Stock Options and
Stock Appreciation Rights relating to Incentive Stock Options, the Change in
Control Price shall be in all cases the Fair Market Value of a Share on the date
such Incentive Stock Option or Stock Appreciation Right is exercised or deemed
exercised. To the extent that the consideration paid in any such transaction
described above consists all or in part of securities or other noncash
consideration, the value of such securities or other noncash consideration shall
be determined in the sole discretion of the Board.

         14.2 IMPACT OF EVENT. Notwithstanding any other provision of the Plan
to the contrary, unless the Committee shall determine otherwise at the time of
grant with respect to a particular Award, in the event of a Change in Control:

                           (i) Any Options and Stock Appreciation Rights
outstanding as of the date such Change in Control is determined to have
occurred, and which are not then exercisable and vested, shall become fully
exercisable and vested to the full extent of the original grant.

                           (ii) The restrictions and deferral limitations
applicable to any Restricted Stock shall lapse, and such Restricted Stock shall
become free of all restrictions and limitations and become fully vested and
transferable to the full extent of the original grant.

                           (iii) All Performance Awards shall be considered to
be earned and payable in full, and any deferral or other restriction shall lapse
and such Performance Awards shall be immediately settled or distributed.

                           (iv) The restrictions and deferral limitations and
other conditions applicable to any Other Stock Awards or any other Awards shall
lapse, and such Other Stock Awards or such other Awards shall become free of all
restrictions, limitations or conditions and become fully vested and transferable
to the full extent of the original grant.

         14.3 CHANGE IN CONTROL CASH-OUT. Notwithstanding any other provision of
the Plan, during the 60-day period from and after a Change in Control (the
"Exercise Period"), if the Committee shall determine at, or at any time after,
the time of grant, a Participant holding an option shall have the right, whether
or not the option is fully exercisable and in lieu of the payment of the
purchase price for the Shares being purchased under the Option and by giving
notice to the Company, to elect (within the Exercise Period) to surrender all or
part of the Option to the Company and to receive cash, within 30 days of such
notice, in an amount equal to the amount by which the Change in Control Price
per Share on the date of such election shall exceed the purchase price per Share
under the option (the "Spread") multiplied by the number of Shares granted under
the Option as to which the right granted under this Section 14.3 shall have been
exercised.

                           
                                    Page 17

<PAGE>   18


         14.4 POOLING-OF-INTERESTS. Notwithstanding any other provision of this
Plan, if any right granted pursuant to this Plan would make a Change in Control
transaction ineligible for pooling-of-interests accounting under APB No. 16 that
(after giving effect to any other actions taken to cause such transaction to be
eligible for such pooling-of-interests accounting treatment) but for the nature
of such grant would otherwise be eligible for such accounting treatment, the
Committee shall have the ability to substitute for the cash payable pursuant to
such right Shares with a Fair Market Value equal to the cash that would
otherwise be payable pursuant thereto.

         IN WITNESS WHEREOF, the Company has caused this Plan to be executed on
this 20th day of December, 1996.

                                     FOR NCR CORPORATION



                            By:   /s/ Richard H. Evans
                                  ---------------------------------------------
                                  Richard H. Evans
                                  Senior Vice President, Global Human Resources




                                    Page 18



<PAGE>   1
                                                                   EXHIBIT 10.9


                              NCR WORLDSHARES PLAN


1. PURPOSE: The purpose of the NCR WorldShares Plan (the "Plan") is to advance
the interests of Company, its Subsidiaries and Affiliates by giving
substantially all Employees a stake in the Company's future growth, in the form
of stock options, thereby improving such Employees' long-term incentives and
aligning their interests with those of the Company's shareholders.

2. DEFINITIONS: For purposes of this Plan:

   (a) "Affiliate" shall mean any entity in which the Company has an ownership
interest of more than 50%.

   (b) "Board" shall mean the Board of Directors of the Company.

   (c) "Code" shall mean the Internal Revenue Code of 1986, as amended.

   (d) "Common Stock" shall mean the Company's common stock.

   (e) "Company" shall mean NCR Corporation.

   (f) "Disability" or "Disabled" shall mean qualifying for and receiving
payments under a long-term disability pay plan maintained by the Company or any
Subsidiary or Affiliate or as required by or available under applicable local
law.

   (g) "Employee" shall mean any individual employed by the Company or any
Subsidiary or Affiliate excluding leased employees within the meaning of Section
414(n) of the Code, and excluding "payroll service or agency employees" as
defined in
 the following sentence. "Payroll service or agency employee" means an
individual (i) for whom the direct payor of compensation with respect to the
performance of services for the Company or any Subsidiary or Affiliate is any
outside entity, including but not limited to a payroll service or temporary
employment agency. rather than by the NCR internal corporate payroll system, or
(ii) who is paid directly by the Company or any Subsidiary or Affiliate, but not
through an internal corporate payroll system (e.g., through purchase order
accounts). The determination whether an individual is a "payroll service or
agency employee" shall be made solely according to the method of paying the
individual for services, without regard to whether the individual is considered
a common law employee of the Company for any other purpose, and such
determination will be within the discretionary authority of the plan
administrator.

   (h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

   (i) "Fair Market Value" shall mean the average of the high and low sale
prices of a share of Common Stock on the U.S. stock exchange on which the Common
Stock is listed on the date of measurement or on any date as determined by the
Committee and if there were no trades on such date, on the day on which a trade
occurred next following such date.


                                       -1-



<PAGE>   2




         (j) "Retirement" shall mean termination of the employment of an
Employee with the Company or any Subsidiary or Affiliate on a date on which the
Employee is eligible to immediately begin receiving pension benefits from a
pension plan sponsored by the Company, Subsidiary or Affiliate (excluding
PensionPlus payments from the NCR Pension Plan).

         (k) "'Subsidiary" shall mean any corporation which at the time
qualifies as a subsidiary of the Company under the definition of "subsidiary
corporation" in Section 424 of the Code.

3. SHARES AVAILABLE FOR OPTIONS: The amount of shares of the Company's stock
which may be issued for options granted under the Plan shall not exceed 6.6% of
the total authorized shares, subject to adjustment under Section 9 hereof.

4. ADMINISTRATION: The Plan shall be administered under the supervision of the
Board of Directors of the Company by the Compensation Committee of the Board.

         The Committee, from time to time, may adopt rules and regulations for
carrying out the provisions and purposes of the Plan and make such other
determinations, not inconsistent with the terms of the Plan, as the Committee
shall deem appropriate. The interpretation and construction of any provision of
the Plan by the Committee shall, unless otherwise determined by the Board of
Directors, be final and conclusive.

         Notwithstanding the foregoing, the Committee may designate persons
other than members of the Committee to carry out such responsibilities of the
Committee under the Plan as it may deem appropriate. The delegation of
responsibilities will be effected by written instrument executed by the
Committee.

5. ELIGIBILITY: An option may be granted to an Employee who is actively employed
with the Company or any Subsidiary or Affiliate on the grant date.

         The adoption of this Plan shall not be deemed to give any Employee any
right to be granted an option to purchase Common Stock of the Company, except to
the extent and upon such terms and conditions as may be determined by the
Committee.

6. STOCK OPTIONS: Stock options under the Plan shall consist of nonqualified
stock options.

         Each option shall be subject to the following terms and conditions:

         (a) GRANT OF OPTIONS. The Committee shall (1) determine the date(s) on
which options may be granted, (2) select the Employees to whom options may be
granted or offered subject to collective bargaining where required, (3)
determine the number of shares to be covered by each option so granted, (4)
determine the terms and conditions (not inconsistent with the Plan) of any
option granted hereunder (including but not limited to restrictions upon the
options, conditions of their exercise, or on the shares of Common Stock issuable
upon exercise thereof),


                                       -2-



<PAGE>   3



and (5) prescribe the form of the instruments necessary or advisable in the
administration of options.

          (b) TERMS AND CONDITIONS OF OPTION. Any option granted under the Plan
shall be evidenced by a Stock Option Statement executed by the Company, in such
form as the Committee shall approve, which statement shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions not inconsistent with the Plan.

                  (1) NUMBER OF SHARES SUBJECT TO AN OPTION. The Stock Option
         Statement shall specify the number of shares of Common Stock subject to
         the Statement.

                  (2) OPTION PRICE. The purchase price per share of Common Stock
         purchasable under an option will be determined by the Committee but
         will be not less than the Fair Market Value in U.S. dollars of a share
         of Common Stock on the date of the grant of such option.

                  (3) OPTION PERIOD. The period of each option shall be fixed by
         the Committee, but no option shall be exercisable after the expiration
         of five years from the date the option is granted.

                  (4) CONSIDERATION. Each optionee, as consideration for the
         grant of an option, shall remain in the continuous employ of the
         Company or of one of its Subsidiaries or Affiliates for at least one
         year from the date of the granting of such option, unless an optionee
         terminates employment with the Company due to death, Retirement or
         Disability. No option shall be exercisable until after the completion
         of one year from the date of grant.

                  (5) EXERCISE OF OPTION.

                      (a) An option must be exercised for the full number of
                  optioned shares at one time.

                      (b) An option shall be exercised according to procedures
                  established by the Committee and communicated to participants,
                  which may include any or all of the following methods:

                            (i) Delivery of written notice to the Company or its
                      designee of intention to exercise, including a certified
                      personal check, certified broker's check or bank draft to
                      cover the exercise price and applicable Withholding Tax
                      (as defined in Section 9 below);

                            (ii) Delivery of written notice to the Company or
                      its designee of intention to exercise, including a
                      certified personal check, certified broker's check or bank
                      draft to cover the exercise price and the authorization
                      for the


                                       -3-



<PAGE>   4



                      Company or its designee to withhold the appropriate number
                      of shares being exercised to cover the applicable
                      Withholding Tax;

                            (iii) Delivery of written or verbal notice to the
                      Company or its designee of intention to exercise the
                      option by means of selling the appropriate number of
                      shares to cover the exercise price, broker's commissions
                      and other related expenses, if any, and the authorization
                      for the Company or its designee to withhold the
                      appropriate number of shares being exercised to cover the
                      Withholding Tax. The remainder of the shares exercised
                      will be delivered to the optionee in Common Stock or cash;

                            (iv) Delivery of written or verbal notice to the
                      Company or its designee of intention to exercise the
                      option by means of selling all the shares, and the
                      authorization for the company or its designee to withhold
                      the appropriate amount of cash to cover the exercise
                      price, broker's commissions and other related expenses, if
                      any, and to deliver the remainder of the cash to the
                      optionee.

                      (c) The Company shall have the authority to establish
                  procedures under all methods, including without limitation the
                  designation of the brokerage firm or firms through which
                  exercises shall be effected.

                      (d) All payments under all of the methods indicated in (b)
                  above shall be paid in U.S. dollars.

                      (e) Except as provided in subsections (7), (8), (9), and
                  (10), an optionee must be an Employee at the time of exercise
                  of an option.

                  (6) NONTRANSFERABILITY OF OPTIONS. No option granted under the
         Plan shall be transferable by the optionee otherwise than by will or by
         the laws of descent and distribution, and such option shall be
         exercisable, during the optionee's lifetime, only by the optionee.

                  (7) TERMINATION. An optionee whose employment is terminated by
         the optionee or the Company or any Subsidiary or Affiliate (other than
         by Retirement, Disability or death) subsequent to the first anniversary
         of the grant date may exercise such option until the earlier of 59 days
         from the optionee's termination date or the expiration of the option
         period set forth therein. In the case of an optionee whose employment
         is so terminated (other than by Retirement, Disability or death) prior
         to the first anniversary of the grant date, the option will be
         forfeited, except as provided in Section 11. For purposes of this
         Subsection (7), an optionee employed by a Subsidiary, Affiliate or
         business unit of the Company that is sold or otherwise divested from
         the Company shall be considered to have terminated employment with the
         Company as of the effective date of the divestiture.



                                       -4-



<PAGE>   5



                  (8) RETIREMENT. An optionee whose employment is terminated due
         to Retirement from the Company or any Subsidiary or Affiliate may
         exercise such option on or after the first anniversary of the date the
         option was granted, but in no event after the expiration of the option
         period set forth therein.

                  (9) DISABILITY. An optionee who ceases to be actively employed
         by reason of Disability may exercise such option on or after the first
         anniversary of the date the option was granted, but in no event after
         the expiration of the option period set forth therein.

                  (10) DEATH. In the event of the death of the optionee

                           (a) while in the employ of the Company or of any of
                  its Subsidiaries or Affiliates, the option shall be
                  exercisable after the first anniversary of the grant date by
                  the executors, administrators, legatees or distributees of the
                  optionee's estate, as the case may be, but in no event after
                  the expiration of the option period set forth therein,

                           (b) after Retirement or Disability, the option shall
                  be exercisable after the first anniversary of the grant date
                  by the executors, administrators, legatees or distributees of
                  the optionee's estate, as the case may be, but in no event
                  after the expiration of the option period set forth therein,

                           (c) within 59 days after a termination of employment
                  described in the first sentence of Section 6(b)(7), the option
                  shall be exercisable by the executors, administrators,
                  legatees or distributees of the optionee's estate, as the case
                  may be, until the earlier of one year from the date of death
                  or the expiration of the option period set forth therein.

                  In the event any option is exercised by the executors,
         administrators, legatees or distributees of the estate of a deceased
         optionee, the Company shall be under no obligation to issue stock
         thereunder unless and until the Company is satisfied that the person or
         persons exercising the option are the duly appointed legal
         representatives of the deceased optionee's estate or the proper
         legatees or distributees thereof.

7. DETERMINATION OF BREACH OF CONDITIONS: The determination of the Committee as
to whether an event has occurred resulting in a forfeiture or a termination or
reduction of the Company's obligations in accordance with the provisions of the
Plan shall be conclusive.

8. ADJUSTMENT IN THE EVENT OF CHANGE IN STOCK: In the event of any merger,
reorganization, consolidation, recapitalization, stock dividend, stock split,
reverse stock split, spin off or similar transaction or other change in
corporate structure affecting the Common Stock, such adjustments and other
substitutions shall be made to the Plan and to options granted under the Plan as
the Committee in its sole discretion deems equitable or appropriate, including
without limitation such adjustments in the aggregate number, class and kind of
shares which may be delivered under the Plan, in the aggregate or to any one
Participant, in the number, class, kind and


                                       -5-



<PAGE>   6



option or exercise price of shares subject to outstanding options granted under
the Plan, and in the number, class and kind of shares subject to awards granted
under the Plan (including, if the Committee deems appropriate, the substitution
of similar options to purchase the shares of, or other awards denominated in the
shares of, another company) as the Committee may determine to be appropriate in
its sole discretion, provided that the number of shares or other securities
subject to any award shall always be a whole number.

9. TAXES: In connection with the transfer of shares of Common Stock to an
optionee (or at such earlier date as may be required by local law), the Company
will require the optionee to pay the amount required by any applicable
governmental entity to be withheld or otherwise deducted and paid with respect
to such transfer ("Withholding Tax"), as set forth in Section 5 or otherwise,
subject to Section 10 hereof.

10. EMPLOYEES BASED OUTSIDE OF THE UNITED STATES: Notwithstanding any provision
of the Plan to the contrary, in order to foster and promote achievement of the
purposes of the Plan or to comply with provisions of laws in other countries in
which the Company, its Affiliates and its Subsidiaries operate or have
Employees, the Board or the Committee, in their sole discretion, shall have the
power and authority to (i) determine which Employees employed outside the United
States are eligible to participate in the Plan, (ii) modify the terms and
conditions of any options granted to Employees who are employed outside the
United States (including the grant of stock appreciation rights, as described in
the following paragraph, in lieu of nonqualified stock options), and (iii)
establish sub-plans, modified option exercise procedures and other terms and
procedures to the extent such actions may be necessary or advisable. Any
sub-plans and modifications to Plan terms and procedures established under this
Section 10 by the Board or the Committee shall be attached to this Plan document
as Appendices.

The Board or the Committee in their discretion may grant stock appreciation
rights in lieu of nonqualified stock options to Employees employed outside the
United States. A stock appreciation right shall provide an Employee the right to
receive in cash the difference between the Fair Market Value of a share of
Common Stock on the grant date and the exercise date, and otherwise shall have
the same terms and conditions as a nonqualified stock option granted hereunder.

11. CHANGE IN CONTROL: In the event of a Change in Control (as defined below)
all then outstanding options under this Plan shall become immediately
nonforfeitable and exercisable notwithstanding any provisions of the Plan to the
contrary. For the purpose of this Plan a "Change in Control" shall mean any of
the following events:

                  (i) An acquisition by any individual, entity or group (within
the meaning of Article 13(d)(3) or 14(d)(2) of the Exchange Act) (an "Entity")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (A) the then outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); excluding, however, the following: (1) any
acquisition, directly from the Company,


                                       -6-



<PAGE>   7



other than an acquisition by virtue of the exercise of a conversion privilege
unless the security being so converted was itself acquired directly from the
Company, (2) any acquisition by the Company, (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, (4) any acquisition by any corporation
pursuant to a transaction which complies with clauses (A), (B) and (C) of
subsection (iii) below; or

                  (ii) A change in the composition of the Board such that the
individuals who, as of January 1, 1997, constitute the Board (such Board shall
he hereinafter referred to as the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that for
purposes of this definition, any individual who becomes a member of the
Board subsequent to January 1, 1997, whose election, or nomination for election
by the Company's stockholders, was approved by a vote of at least a majority of
those individuals who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this provision) shall be
considered as though such individual were a member of the Incumbent Board; and
provided further, however, that any such individual whose initial assumption of
office occurs as a result of or in connection with either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of an Entity other than the
Board shall not be so considered as a member of the Incumbent Board; or

                  (iii) The approval by the stockholders of the Company of a
merger, reorganization or consolidation or sale or other disposition of all or
substantially all of the assets of the Company (each, a "Corporate Transaction")
or, if consummation of such Corporate Transaction is subject, at the time of
such approval by stockholders, to the consent of any government or governmental
agency, the obtaining of such consent (either explicitly or implicitly by
consummation); excluding, however, such a Corporate Transaction pursuant to 
which (A) all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock, and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting
from such Corporate Transaction (including, without limitation, a corporation
or other Person (as defined in the following paragraph) which as a result of
such transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries (a "Parent
Company")) in substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction, of the Outstanding Company
Common Stock and Outstanding Company voting Securities, as the case may be, (B)
no Entity (other than the Company, any employee benefit plan (or related trust)
of the Company, such corporation resulting from such Corporate Transaction or,
if reference was made to equity ownership of any Parent Company for purposes of
determining whether clause (A) above is satisfied in connection with the
applicable Corporate Transaction, such Parent Company) will beneficially own,
directly or indirectly, 20% or more of, respectively, the outstanding shares of
common stock of the corporation resulting from such Corporate Transaction or
the combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in


                                       -7-



<PAGE>   8



the election of directors unless such ownership resulted solely from ownership
of securities of the Company prior to the Corporate Transaction, and (C)
individuals who were members of the incumbent Board will immediately after the
consummation of the Corporate Transaction constitute at least a majority of the
members of the board of directors of the corporation resulting from such
Corporate Transaction (or, if reference was made to equity ownership of any
Parent Company for purposes of determining whether clause (A) above is satisfied
in connection with the applicable Corporate Transaction, of the Parent Company);
or

                  (iv) The approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.

As used herein, "Person" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, limited
liability company, other entity or government or political subdivision thereof.

12. AMENDMENT OF THE PLAN: The Board of Directors may amend or suspend the Plan
at any time and from time to time. No such amendment of the Plan may, however,
without the written consent of the optionee, adversely affect or impair any
option.

13. MISCELLANEOUS: By accepting any benefits under the Plan, each optionee and
each person claiming under or through such optionee shall be conclusively deemed
to have indicated acceptance and ratification of, and consent to, any action
taken or made to be taken or made under the Plan by the Company, the Board, or
the Committee. No participant or any person claiming under or through him shall
have any right or interest, whether vested or otherwise, in the Plan or in any
option thereunder, contingent or otherwise, unless and until all of the terms,
conditions and provisions of the Plan and the Agreement that affect such
participant or such other person shall have been complied with. Nothing
contained in the Plan or in any Agreement shall require the Company to segregate
or earmark any cash or other property. Neither the adoption of the Plan nor its
operation shall in any way affect the rights and powers of the Company or any of
its Subsidiaries or Affiliates to dismiss and/or discharge any Employee at any
time.

The Company shall not be required to issue or deliver any certificates for
shares of Common Stock purchased upon the exercise of any option granted under
the Plan prior to (i) the admission of such shares to listing on any stock
exchange on which the stock may then be listed, (ii) the completion of any
registration or other qualification of such shares under any state or federal
law or rulings or regulations of any governmental regulatory body, (iii) the
obtaining of any consent or approval or other clearance from any governmental
agency, which the Company shall, in its sole discretion, determine to be
necessary or advisable, and (iv) the payment to the Company, upon its demand, of
any amount requested by the Company for the purpose of satisfying its liability,
if any, to withhold federal, state or local income or earnings tax or any other
applicable tax or assessment (plus interest or penalties thereon, if any caused
by a delay in making such payment) incurred by reason of the exercise of any
option granted under the Plan or the transfer of shares thereupon.

14. TERM OF THE PLAN: The Plan shall become effective as of January 1, 1997. The
Plan shall terminate on January 1, 2007, or at such earlier date as may be
determined by the Board of


                                       -8-



<PAGE>   9



Directors. Termination of the Plan, however, shall not affect the rights of
optionees under options theretofore granted to them, and all unexpired options
shall continue in force and operation after termination of the Plan except as
they may lapse or be terminated by their own terms and conditions.

15. GOVERNING LAW: This Plan, and the validity and construction of any options
granted hereunder, shall be governed by the laws of the State of Ohio.

         IN WITNESS WHEREOF, the Company has caused this Plan to be executed
effective as of January 1, 1997.

                             FOR NCR CORPORATION



                             By: /s/ Richard H. Evans
                                 _______________________________________________

                                   Richard H. Evans
                                   Senior Vice President, Global Human Resources




                                       -9-



<PAGE>   10


                                   APPENDIX A

                               SUB-PLAN FOR FRANCE


Pursuant to Section 10 of the NCR WorldShares Plan, the following shall
constitute the plan document for a sub-plan that applies to Employees in France.
The plan document for the NCR WorldShares Plan shall be attached as an Appendix
to the following French sub-plan.


                        RULES OF THE NCR WORLDSHARES PLAN
                              FOR FRENCH EMPLOYEES

1. INTRODUCTION.

         The shareholders of NCR Corporation (the "Company") have established
the Company's WorldShares Plan (the "U.S. Plan") for the benefit of certain
employees of the Company, its parent and subsidiary companies, including its
French subsidiary, NCR France, S.A. (the "Subsidiary") of which the Company
holds directly 100% of the capital. Section 10 of the U.S. Plan specifically
authorizes the Board of Directors of the Company (the "Board") to establish
rules applicable to options granted under the U.S. Plan (including those in
France) as the Board deems advisable. The Board has determined that it is
advisable to establish a sub-plan for the purposes of permitting such options to
qualify for favorable local tax and social treatment. The Board, therefore,
intends to establish a sub-plan of the U.S. Plan for the purpose of granting
options which qualify for the favorable tax and social treatment in France
applicable to options granted under the Law n(degree)70-1322 of December 31,
1970, as subsequently amended, to qualifying employees who are resident in
France for French tax purposes. The terms of the U.S. Plan, as adopted effective
January 1, 1997 and as set out in Appendix 1 hereto, shall, subject to the
modifications in the following rules, constitute the NCR WorldShares Plan for
French Employees (the "French Plan").

2. DEFINITIONS.

         Terms used in the French Plan shall have the same meanings as set forth
         in the U.S. Plan.

         In addition, the term "Option" shall have the following meaning:

         a.    Purchase options, that are rights to acquire shares repurchased
               by the Company prior to the grant of said options; or

         b.    Subscription options, that are rights to subscribe newly issued
               shares.



                                      -10-

<PAGE>   11

3. ENTITLEMENT TO PARTICIPATE.

         Any individual who is an employee or corporate executive of the
Subsidiary shall be eligible to receive options under the French Plan provided
that he or she also satisfies the eligibility conditions of Section 5 of the
U.S. Plan. Options may not be issued under the French Plan to employees or
executives owning more than ten percent (10%) of the Company's capital shares or
to individuals other than employees and corporate executives of the Subsidiary.

4. OPTION PRICE.

         The option price per share of common stock payable pursuant to options
issued hereunder shall be fixed by the Compensation Committee of the Board (the
"Committee") on the date the option is granted, but in no event shall the option
price per share be less than the greater of:

        a.     with respect to purchase options over the common stock, the
               higher of either 95% of the average quotation price of such
               common stock during the 20 days of quotation immediately
               preceding the grant date or 95% of the average purchase price
               paid for such common stock by the Company;

        b.     with respect to subscription options over the common stock, 95%
               of the average quotation price of such common stock during the 20
               days of quotation immediately preceding the grant date; and

        c.     the minimum option exercise price permitted under the U.S. Plan.

EXERCISE OF AN OPTION.

         Upon exercise of an option, the full option price will have to be paid
either by check or credit transfer.

         The shares acquired upon exercise of an option will be recorded in an
account in the name of the shareholder.

CHANGES IN CAPITALIZATION.

         In compliance with French law, the option price shall not be modified
during the option's duration. Adjustments to the option exercise price or number
of shares subject to an option issued hereunder shall be made to preclude the
dilution or enlargement of benefits under such option only in the case of one or
more of the following transactions by the Company:

        a.     an increase of corporate capital by cash contribution;

        b.     an issuance of convertible or exchangeable bonds;

        c.     a capitalization of retained earnings, profits, or issuance
               premiums;


        

                                      -11-

<PAGE>   12






        d.     a distribution of retained earnings by payment in cash or shares;
               and

        e.     a reduction of corporate capital by set off against losses.

7. DEATH.

         In the event of the death of a French Optionee, said individual's heirs
may exercise the option within six months following the death, but any option
which remains unexercised shall expire six months following the date of the
Optionee's death.

8. INTERPRETATION.

         It is intended that options granted under the French Plan shall qualify
for the favorable tax and social treatment applicable to stock options granted
under the Law n(degree)70-1322 of December 31, 1970, as subsequently amended,
and in accordance with the relevant provisions set forth by French tax law and
the French tax administration. The terms of the French Plan shall be interpreted
accordingly.

9. AMENDMENTS.

         Subject to the terms of the U.S. Plan, the Board and the Committee
reserves the right to amend or terminate the French Plan at any time.

10. ADOPTION.

         The French Plan was adopted by the Board of Directors of NCR
Corporation effective as of January 1, 1997.

                               FOR NCR CORPORATION



                               By: /s/ Richard H. Evans
                                  ---------------------------------------------
                                  Richard H. Evans
                                  Senior Vice President, Global Human Resources



                                      -12-

<PAGE>   13

                                   APPENDIX B

                           MODIFICATION FOR HONG KONG


         Pursuant to Section 10 of the NCR WorldShares Plan, the following
modification shall apply to employees working in Hong Kong:

Notwithstanding any terms or conditions contained herein, no acceleration of
vesting shall occur upon termination of employment (including, without
limitation, death, Disability, Retirement or Change in Control) with respect to
employees working in Hong Kong at the time of grant or upon termination of
employment. With regard to such employees working in Hong Kong, if the
employee's employment terminates with the Company or its Hong Kong subsidiary,
for any reason after the anniversary of the grant date, an unexercised option
may thereafter be exercised during the period ending 3 months after the date of
such termination of employment, but only to the extent to which the option was
vested at the time of such termination of employment.

                              FOR NCR CORPORATION


                              By: /s/ Richard H. Evans
                                 ---------------------------------------------
                                 Richard H. Evans
                                 Senior Vice President, Global Human Resources


  
                                      -13-

<PAGE>   14

                         APPENDIX C TO WORLDSHARES PLAN

                           SUB-PLAN FOR UNITED KINGDOM


Pursuant to Section 10 of the NCR WorldShares Plan, the following shall
constitute the plan document for a sub-plan that applies to Employees in the
United Kingdom. The plan document for the NCR WorldShares Plan shall be attached
as an Appendix to the following United Kingdom sub-plan.


                     RULES OF UK SUB-PLAN OF NCR WORLDSHARES
                                STOCK OPTION PLAN


1. ADOPTION OF THE UK SUB-PLAN.

         NCR Corporation ("the Company") has established this UK Sub-Plan ("the
UK Sub- Plan") of the NCR Worldshares Stock Option Plan ("the US Plan") for the
purpose of granting rights to acquire shares of common stock of the Company
("Options") to employees of it and its subsidiaries in the United Kingdom. The
UK Sub-Plan is intended to qualify as an approved share option plan under
Schedule 9 to the Income and Corporation Taxes Act 1988. The UK Sub-Plan shall
not permit the grant of stock appreciation rights in lieu of Options or
otherwise.

2. THE US PLAN.

         The US Plan attached as an Appendix to these Rules shall apply to the
UK Sub-Plan subject to the additional restrictions and amendments specified
below. References to Schedule 9 are to Schedule 9 to the Income and Corporation
Taxes Act 1988.

3. SHARES.

         The shares of common stock of the Company in respect of which Options
may be granted under the UK Sub-Plan must satisfy the conditions specified in
paragraphs 10 to 14 inclusive of Schedule 9 both at the time of grant and at the
time of exercise.

4. MARKET VALUE.

         For all purposes of the UK Sub-Plan, the Fair Market Value of shares of
common stock of the Company shall mean:

         a.       on any day when the shares are listed on the New York Stock
                  Exchange, the average of the high and low sale prices of a
                  share on that day or, if there were no trades on that day, on
                  the day on which a trade occurred next preceding that day;



                                      -14-

<PAGE>   15


         b.       on any day when the shares are not listed on the New York
                  Stock Exchange, the market value of a share determined in
                  accordance with the provisions of Part VIII of the Taxation of
                  Chargeable Gains Act 1992 and agreed in advance for the
                  purposes of the UK Sub-Plan with the Inland Revenue Shares
                  Valuation Division.

5. ELIGIBILITY.

5.1 The description of eligible persons in Section 2 (g) of the US Plan shall
not include any person who is precluded by paragraph 8 of Schedule 9 from
participating in a UK Revenue approved share scheme. In addition an eligible
person who is a director must be required to devote to his or her duties at
least 25 hours per week excluding meal breaks.

5.2 The Affiliates and Subsidiaries of the Company referred to in Section 2 (a)
and (k) of the US Plan shall include, for purposes of the UK Sub-Plan, only
those Affiliates and Subsidiaries of which the Company has control within the
meaning of Section 840 of the Income and Corporation Taxes Act 1988.

5.3 The grant of Options under the UK Sub-Plan shall be subject to the
restriction that no Option shall be granted to an individual under the UK
Sub-Plan or any other UK Revenue approved share option plan operated by the
Company (not being a UK Revenue approved savings related share option plan) if
immediately following such grant the individual would hold Options with an
aggregate Market Value in excess of (pound)30,000, determined on the basis of
the Market Value of shares of common stock of the Company at the date(s) of
grant of the relevant Options.

6.  CONDITIONS.

         No conditions may be imposed by the Committee pursuant to the third
sentence in Section 6 (a) of the US Plan to the extent that they affect the UK
Sub-Plan without the approval of the Board of Inland Revenue. If such conditions
involve the satisfaction of performance criteria, those criteria must be of an
objective nature.

7.  CONSIDERATION

         The first sentence of Section 6(b)(4) of the U.S. Plan shall not apply
for purposes of the UK Sub-Plan. The second sentence of Section 6(b)(4) shall be
modified as follows:

         "No option shall be exercisable until after the completion of one
         year's employment with the Company or one of its Subsidiaries or
         Affiliates following the date of grant."

8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

8.1 The provisions of section 8 of the US Plan concerning the adjustment of
Options shall be subject to the requirement that all such adjustments must be
certified in writing by the Company's auditors for the time being as being fair
and reasonable and that no adjustment in respect of


                                      -15-

<PAGE>   16



subsisting Options or of Options to be granted in future under the UK Sub-Plan
shall take effect without the prior approval of the Board of Inland Revenue.

8.2 No adjustment may be made under the UK Sub-Plan pursuant to Section 8 of the
US Plan in relation to a spin-off, stock dividend, merger, liquidation or other
similar changes in capitalization and class of securities.

9. EXCLUSION.

         The provision in Section 10 of the US Plan for the grant of stock
appreciation rights in lieu of Options shall not apply for purposes of the UK
Sub-Plan.

10. EXERCISE OF OPTIONS.

10.1 The provisions of Section 6(5) of the US Plan relating to the exercise of
Options shall be subject to the additional restriction that no Option may be
exercised by an Option holder at any time when he is precluded by paragraph 8 of
Schedule 9 from participating in the UK Sub-Plan.

10.2 Rule 6(b)(5)(iii) of the US Plan shall not apply for purposes of the UK
Sub-Plan.

10.3 For purposes of options granted under the UK Sub-Plan, the provisions of
Section 6(b)(10) of the US Plan relating to the exercise of options after the
death of an optionee shall be subject to the proviso that no option may be
exercised more than 12 months after the death of an optionee.

10.4 Shares must be allotted within 30 days after the date of exercise.

10.5 Shares acquired on the exercise of Options shall, except for any rights
determined by reference to a date preceding the date of allotment, rank pari
passu with other shares of the same class in issue at the date of allotment.

11. AMENDMENTS.

11.1 No amendment to the US Plan or the UK Sub-Plan which is made pursuant to
Section 12 of the US Plan and which affects the UK Sub-Plan shall take effect in
respect of the UK Sub-Plan until it has been approved by the Board of Inland
Revenue.

11.2 No amendment to the Stock Option Statement approved by the Board of Inland
Revenue for use in connection with the UK Sub-Plan shall take effect until it
has been approved by the Board of Inland Revenue.

12. RELEASE OF OPTIONS ON CHANGE OF CONTROL.

12.1 In the event of any company ("the Acquiring Company") obtaining control of
the Company as a result of making a general offer to acquire the whole of the
issued ordinary share


                                      -16-

<PAGE>   17



capital of the Company which is made on a condition such that if it is satisfied
the person making the offer will have control of the Company, or to acquire all
the shares in the Company which are of the same class as the shares subject to a
subsisting Option granted under the UK Sub-Plan ("the Old Option"), the Option
holder (or the Company on behalf of the Option holder) may seek the agreement of
the Acquiring Company and, if such agreement is obtained, the Option holder may
release the Old Option in consideration of the grant of a new option ("the New
Option") which satisfies the following conditions:

12.1.1  a.         it is over shares in the Acquiring Company or in a company   
                   which has control of the Acquiring Company which satisfy the
                   conditions specified in paragraphs 10 to 14 inclusive of    
                   Schedule 9 to the Income and Corporation Taxes Act 1988;     
                    
                    
                    

12.1.2 b.          is a right to acquire such number of such shares as has on   
                   acquisition of the New Option an aggregate Fair Market Value
                   equal to the aggregate Fair Market Value of the shares       
                   subject to the Old Option on its disposal;                   
                    
                    

12.1.3 c.          has an option price per share such that the aggregate price
                   payable on complete exercise equals the aggregate price    
                   which would have been payable on complete exercise of the  
                   Old Option; and                                            
                   
                   

12.1.4 d.          is otherwise identical in terms of the Old Option.

                    

12.2 The New Option shall, for all other purposes of the UK Sub-Plan, be treated
as having been acquired at the same time as the Old Option which is released in
consideration for the grant of the New Option.

12.3 Where any New Option is granted pursuant to this Rule 11, the provisions of
the UK Sub- Plan shall, in relation to the New Option, be construed as if
references to the Company and the shares were references to the Acquiring
Company or, as the case may be, to the other company to whose shares the New
Option relates and to the shares in that other company.

12.4 The release of the Old Option and the grant of a New Option under this Rule
12 will take place within the period of six months beginning with the time when
the person making the offer has obtained control of the Company and any
conditions subject to which the offer is made are satisfied.

                          FOR NCR CORPORATION


                          By:   /s/ Richard H. Evans
                                ---------------------------------------------
                                Richard H. Evans
                                Senior Vice President, Global Human Resources


                                      -17-

<PAGE>   18

                         APPENDIX D TO WORLDSHARES PLAN


                        MODIFICATION FOR THE NETHERLANDS


         Pursuant to Section 10 of the NCR WorldShares Plan, the following
modification shall apply to employees working in The Netherlands:

Notwithstanding any terms or conditions contained herein, options shall be fully
vested and exercisable at grant, however, if exercised during the first year
after grant, the stock received upon exercise cannot be sold until the first
anniversary of the date of grant.

                         FOR NCR CORPORATION


                         By:  /s/ Richard H. Evans
                              ----------------------------------------------
                               Richard H. Evans
                               Senior Vice President, Global Human Resources



                                      -18-

<PAGE>   19
                             FIRST AMENDMENT TO THE
                              NCR WORLDSHARES PLAN

        AMENDMENT TO THE NCR WORLDSHARES PLAN (the "Plan") as adopted effective
January 1, 1997 by NCR Corporation (the "Company").

        WHEREAS, the Company desires to amend the Plan to provide the
Compensation Committee with discretion to determine the fair market value of
common stock of the Company for purpose of grants under the Plan;

        NOW, THEREFORE, the Company does hereby amend the Plan as follows:

                1.      Section 2(i) of the Plan is hereby amended in its
                        entirety to read as follows:

                        "Fair Market Value" shall mean, unless otherwise
                        determined by the Committee, the average of the high and
                        low sale prices of a share of Common Stock on the U.S.
                        stock exchange on which the Common Stock is listed on
                        the date of measurement or on any date as determined by
                        the Committee and if there were no trades on such date,
                        on the day on which a trade occurred next preceding such
                        date.''

        IN WITNESS WHEREOF, the Company has caused this amendment to the Plan
to be executed effective as of January 1, 1997.

                                   FOR NCR CORPORATION


                                   By: /s/ Richard H. Evans
                                   ---------------------------------------------
                                   Richard H. Evans
                                   Senior Vice President, Global Human Resources



<PAGE>   1
                                                              Exhibit 10.16

                      NCR CHANGE-IN-CONTROL SEVERANCE PLAN

                             FOR EXECUTIVE OFFICERS



                        ADOPTED EFFECTIVE JANUARY 1, 1997

<PAGE>   2
                                    PREAMBLE

         The NCR Change-in-Control Severance Plan for Executive Officers
("Plan") is adopted effective January 1, 1997 by NCR Corporation ("Company").

         The purpose of the Plan is to provide severance benefits to executive
officers who become covered under the Plan.

         The Plan is intended to comply with the Employee Retirement Income
Security Act of 1974, as amended, and other applicable law.

         The Plan is a sub-plan of the NCR Workforce Redeployment Plan, which is
a component of the NCR Group Benefits Plan for Active Associates, plan number
502. To the extent the separation pay portion of the Plan is a pension plan, it
qualifies for exemption from Parts II, III and IV of ERISA as a plan maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees under Sections 201(2), 301(a)(3)
and 401(a)(1) of ERISA.

         The purpose of the Plan is to assure that the Company will have the
continued dedication of covered employees, notwithstanding the possibility,
threat or occurrence of a Change-in-Control (as defined below) of the Company.
The Board believes
 it is imperative to diminish the inevitable distraction by
the personal uncertainties and risks created by a pending or threatened
Change-in-Control and to encourage the full attention and dedication of the
covered Employees to the Company currently and in the event of any threatened or
pending Change-in-Control, and to provide them with compensation and benefits
arrangements upon a Change-in-Control which ensure that their compensation and
benefits expectations will be satisfied and are competitive with those of other
corporations. Therefore, to accomplish these objectives, the Board of Directors
has caused the Company to adopt this Plan.

                                       2

<PAGE>   3
                                    ARTICLE 1

                                   DEFINITIONS

The following terms when used herein shall have the following meanings, unless a
different meaning is plainly required by the context. Capitalized terms are used
throughout the Plan text for terms defined by this and other sections.

1.1      Cause is defined in Section 2.4, Definition of Cause.

1.2      Change-in-Control is defined in Section 4.1, Change-in-Control.

1.3      Change-in-Control Benefits means the benefits described in ARTICLE 3,
         which are payable to a Participant who becomes entitled to benefits
         under the Plan as provided in Section 2.3, Entitlement to Benefits.

1.4      Code means the Internal Revenue Code of 1986, as amended.

1.5      Committee means the committee responsible for administration of the
         Plan, as provided in Section 6.1, Plan Committee.

1.6      Company means NCR Corporation, a Maryland corporation, and its U.S.
         subsidiaries.

1.7      ERISA means the Employee Retirement Income Security Act of 1974, as
         amended, and including all regulations thereunder.

1.8      Executive Officer means an individual serving as an officer of the
         Company who has been designated by the Board as a "Section 16 officer."
         "Executive Officer" does not include the Secretary, Treasurer, or any
         Assistant Secretaries or Assistant Treasurers.

1.9      Good Reason is defined in Section 2.5, Definition of Good Reason.

1.10     Participant means an Executive Officer who satisfies the requirements
         to participate in the Plan, as set forth in Section 2.2, Participation.

1.11     Pension Plans means the tax-qualified defined benefit pension plans
         sponsored by the Company.

1.12     Plan means this NCR Change-in-Control Severance Plan for Executive
         Officers, either in its present form or as amended from time to time.

1.13     Salary means the annual base pay of an Executive Officer in effect on
         the date of termination of employment, or the date of the
         Change-in-Control if greater.


                                       3

<PAGE>   4
         "Salary" includes any lump sum merit increase, but does not include any
         overtime, commissions, bonuses, or other special pay.

                                       4

<PAGE>   5
                                    ARTICLE 2

                         ELIGIBILITY AND PARTICIPATION



2.1      Eligibility

         Executive Officers are eligible to participate in the Plan as of the
day of appointment as an Executive Officer.

2.2      Participation

         An individual serving as an Executive Officer at any time during the
three month period immediately preceding the date of a Change-in-Control becomes
a Participant in the Plan on the date of such Change-in-Control.

2.3      Entitlement to Benefits

         A Participant becomes entitled to the Change-in-Control Benefits if his
or her employment with the Company is terminated during the three year period
beginning on the date of a Change-in-Control, either:

         (a) involuntarily, except for Cause, or

         (b) voluntarily due to Good Reason.

         A Participant will also become entitled to the Change-in-Control
Benefits if he or she voluntarily terminates employment with the Company for any
reason during the thirteenth month following the month in which a
Change-in-Control occurs.

         To be entitled to the Change-in-Control Benefits, the Participant must
also execute a release of all employment-related claims against the Company and
its subsidiaries and affiliates existing as of the date of execution, in the
standard form used by the Company without material modification, addition or
deletion.

         Change-in-Control Benefits will not be payable if a Participant's
employment with the Company terminates for reasons other than those listed
above, including but not limited to involuntary termination for Cause, voluntary
termination not supported by Good Reason and not occurring in the thirteenth
month following the Change-in-Control, death or long term disability. For this
purpose, "long term disability" means the Participant is entitled to receive
benefits from the NCR Long Term Disability Plan or another long term disability
plan sponsored by the Company.

                                       5

<PAGE>   6
         The Change-in-Control Benefits are payable in lieu of any benefits the
Participant might be entitled to receive under the NCR Workforce Redeployment
Plan.

2.4      Definition of "Cause"

         For the purpose of this Plan, "Cause" shall mean:

         (a)      the willful and continued failure of the Participant to
                  perform substantially the appropriate duties of the
                  Participant's position with the Company or one of its
                  affiliates (other than any such failure resulting from
                  incapacity due to physical or mental illness), for a period of
                  at least 30 days after a written demand for substantial
                  performance is delivered to the Participant by the Board or
                  the Chief Executive Officer of the Company which specifically
                  identifies the manner in which the Board or the Chief
                  Executive Officer believes that the Participant has not
                  substantially performed the Participant's duties, or

         (b)      the willful engaging by the Participant in illegal conduct or
                  gross misconduct which is materially and demonstrably
                  injurious to the Company.

         For purposes of this provision, no act or failure to act, on the part
of the Participant, shall be considered "willful" unless it is done, or omitted
to be done, by the Participant in bad faith or without reasonable belief that
the Participant's action or omission was in the best interests of the Company.
Any act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer or a senior officer of the Company or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Participant in good faith and in the best interests of the Company.
The termination of employment of the Participant shall not be deemed to be for
Cause unless and until there shall have been delivered to the Participant a copy
of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is provided to the
Participant and the Participant is given an opportunity, together with counsel,
to be heard before the Board), finding that, in the good faith opinion of the
Board, the Participant is guilty of the conduct described in subsection (a) or
(b) above, and specifying the particulars thereof in detail.

2.5      Definition of "Good Reason"

         For the purpose of this Plan, "Good Reason" shall mean:

         (a)      the assignment to the Participant of any duties inconsistent
                  in any respect with the Participant's position (including
                  status, offices, titles and reporting


                                       6

<PAGE>   7
                  requirements), authority, duties or responsibilities, as in
                  effect immediately prior to a Change-in-Control, excluding for
                  this purpose an isolated, insubstantial and inadvertent action
                  not taken in bad faith and which is remedied by the Company
                  promptly after receipt of notice thereof given by the
                  Participant;

         (b)      any reduction in the Participant's annual base salary as in
                  effect immediately before the Change-in-Control,

         (c)      the failure to pay incentive compensation to which the
                  Participant is otherwise entitled under the terms of the
                  Company's Management Incentive Plan for Executive Officers
                  ("MIP") or Long Term Incentive Program ("LTIP"), or any
                  successor incentive compensation plans, at the time at which
                  such awards are usually paid or as soon thereafter as
                  administratively feasible, unless the failure to pay the
                  incentive compensation is because of the failure to meet
                  objectives based on quantitative performance;

         (d)      the provision to the Participant of an opportunity to earn a
                  target annual bonus under the MIP or a target performance
                  award under the LTIP or any successor incentive compensation
                  plans substantially less in amount than the target
                  opportunities for such Participant for the last complete
                  fiscal year of the Company ending prior to the
                  Change-in-Control;

         (e)      the failure by the Company to continue in effect any stock
                  option plan in which the Participant participates immediately
                  prior to the Change-in-Control, unless a substantially
                  equivalent alternative compensation arrangement (embodied in
                  an ongoing substitute or alternative plan) has been provided
                  to the Participant, or the failure by the Company to continue
                  the Participant's participation in any such stock option plan
                  on substantially the same basis, both in terms of the amount
                  of benefits provided and the level of such Participant's
                  participation relative to other participants, as existed
                  immediately prior to the Change-in-Control;

         (f)      Except as required by law, the failure by the Company to
                  continue to provide to the Participant employee benefits
                  substantially equivalent, in the aggregate, to those enjoyed
                  by the Participant under the qualified and nonqualified
                  employee benefit and welfare plans of the Company, including,
                  without limitation, the pension, life insurance, medical,
                  dental, health and accident, disability retirement, and
                  savings plans, in which the Participant was eligible to
                  participate immediately prior to the Change-in-Control, or the
                  failure by the Company to provide the Participant with the
                  number of paid vacation days to which such Participant is
                  entitled under the Company's vacation policy immediately prior
                  to the Change-in-Control;

                                       7

<PAGE>   8
         (g)      the Company's requiring the Participant to be based at any
                  office or location other than the principal place of the
                  Participant's employment in effect immediately prior to the
                  Change-in-Control that is more than 35 miles distant from the
                  location of such principal place of employment, unless the
                  relocation is part of a relocation, for bona fide business
                  reasons, of the business unit in which the Participant was
                  employed prior to the Change-in-Control, or the Company's
                  requiring the Participant to travel on Company business to a
                  substantially greater extent than required immediately prior
                  to the Change-in-Control; or

         (h)      any failure by the Company to comply with Section 8.1
                  Successors.

         Any good faith determination of "Good Reason" made by a Participant
shall be conclusive.

                                       8

<PAGE>   9
                                    ARTICLE 3

                                    BENEFITS



3.1      Benefits

         A Participant who becomes eligible to receive benefits under the Plan
pursuant to Section 2.3, Entitlement to Benefits, shall be entitled to receive
the Change-in-Control Benefits described in the following sections of this
ARTICLE 3.

3.2      Separation Pay

         The Change-in-Control Benefits include separation pay equal to three
times the Participant's Salary. The separation pay shall be paid in a single
lump sum within 60 days after termination of employment. The separation pay will
be considered to include payment for vacation accrued and unused as of the
termination date, and no additional payment will be made for vacation.



3.3      Incentive Pay

         The Change-in-Control Benefits include payment in a single lump sum
within 60 days after termination of employment, of incentive pay, as follows:

         (a)      the incentive pay earned under the Management Incentive Plan,
                  or any successor plan ("MIP") for the calendar year in which
                  termination of employment occurs, at the greater of target for
                  the year of termination of employment or the actual cash
                  payment for the preceding year, pro- rated in 1/12 increments
                  for the portion of the calendar year prior to the last day of
                  the month in which termination of employment occurs.

         (b)      three years of incentive pay under the MIP at the greater of
                  target for the year of termination of employment or the actual
                  cash payment for the preceding year.

         (c)      Cash payment for performance cycles under the Long Term
                  Incentive Program ("LTIP") that commenced prior to the date of
                  termination of employment and have not been paid out. For
                  performance cycles for which the cash value of the award has
                  been determined (either by the issuance of restricted stock
                  units or otherwise), the cash payment will equal the actual
                  cash value of the award. For performance cycles for which the
                  cash value of the award is not yet determinable, the cash
                  payment will be calculated using the target award amount. The
                  cash payment for the performance cycle beginning with the
                  calendar year in which termination of employment


                                       9

<PAGE>   10
                  occurs will be prorated in 1/12 increments for the portion of
                  the performance cycle prior to the last day of the month in
                  which termination of employment occurs.

3.4      Extended Health Care and Insurance Coverage

         The Change-in-Control Benefits include coverage for the Participant and
his or her eligible dependents under the following Company welfare plans at no
cost to the Participant for the three years following the Participant's
termination of employment with the Company:

         (a)      Coverage under the NCR Health Care Plan at the Choice 2 level
                  (20% co-payment).

         (b)      Coverage under the NCR Dental Plan at the Choice 2 level.

         (c)      Life insurance coverage at two times Salary.

         (d)      Accidental death and dismemberment coverage at two times
                  Salary.

         A Participant who is enrolled in Health Care Choice 1 or an HMO
immediately prior to termination of employment may continue this coverage in
lieu of the Health Care Choice 2 by paying the difference in cost between the
current coverage and Health Care Choice 2. A Participant may continue health
care and dental benefits for eligible special dependents (as defined in the
Company's Benefits Handbook) in effect at the time of termination of employment,
by paying the full cost of the coverages.

         The coverages described in this Section 3.4 will not terminate if the
Participant becomes employed by an unrelated company, but will be secondary to
any coverage as an active employee. Extended health care and dental care
coverage runs concurrently with COBRA continuation coverage rights, so no
additional coverage under COBRA is available after the three year severance
period, unless the Participant qualifies for extended COBRA coverage because of
disability.

3.5      Financial Counseling

         The Change-in-Control Benefits include continuation of executive
financial counseling benefits as in effect under the Company's policy on the
date of the Change-in-Control, for three years following termination of
employment.

3.6      Outplacement Assistance

         The Change-in-Control Benefits include the Company's executive
outplacement assistance program, provided by Wright Associates or a similar
organization, as in effect


                                       10

<PAGE>   11
under the Company's policy on the date of the Change-in-Control, for three years
following termination of employment.

3.7      Tax Gross-Up

         (a)      If it is determined that any payment or distribution by the
                  Company to or for the benefit of the Participant (whether paid
                  or payable or distributed or distributable pursuant to the
                  terms of this Plan or otherwise, but determined without regard
                  to any additional payments required under this Section 3.7) (a
                  "Payment") would be subject to the excise tax imposed by
                  Section 4999 of the Code or any interest or penalties are
                  incurred by the Participant with respect to such excise tax
                  (such excise tax, together with any such interest and
                  penalties, hereinafter collectively referred to as the "Excise
                  Tax"), then the Change-in-Control Benefits shall include an
                  additional payment ("Gross-Up Payment") in an amount such that
                  after payment by the Participant of all taxes (including any
                  interest or penalties imposed with respect to such taxes),
                  including, without limitation, any federal and state income
                  taxes (and any interest and penalties imposed with respect
                  thereto), the Medicare portion of FICA, and excise taxes
                  imposed upon the Gross-Up Payment, the Participant retains an
                  amount of the Gross-Up Payment equal to the Excise Tax imposed
                  upon the payments.

         (b)      Subject to the provisions of Subsection (c), all
                  determinations required to be made under this Section 3.7,
                  including whether and when a Gross-Up Payment is required, the
                  amount of such Gross-Up Payment and the assumptions to be
                  utilized in arriving at such determination, shall be made by
                  Price Waterhouse (the "Accounting Firm"), which shall provide
                  detailed supporting calculations both to the Company and the
                  Participant within 15 business days of the receipt of notice
                  from the Participant that there has been a Payment, or such
                  earlier time as is requested by the Company. In the event that
                  the Accounting Firm is serving as accountant or auditor for
                  the individual, entity or group effecting the
                  Change-in-Control, the Participant shall appoint another
                  nationally recognized accounting firm to make the
                  determinations required hereunder (which accounting firm shall
                  then be referred to as the Accounting Firm hereunder). All
                  fees and expenses of the Accounting Firm shall be borne solely
                  by the Company. Any Gross-Up Payment, as determined pursuant
                  to this Section 3.7, shall be paid by the Company to the
                  Participant within five days of the receipt of the Accounting
                  Firm's determination. Any determination by the Accounting Firm
                  shall be binding upon the Company and the Participant. As a
                  result of the uncertainty in the application of Section 4999
                  of the Code at the time of the initial determination by the
                  Accounting Firm hereunder, it is possible that Gross-Up
                  Payments which will not have been made by the Company should
                  have been made ("Underpayment"), consistent with the
                  calculations required to be made


                                       11

<PAGE>   12
                  hereunder. In the event that the Company exhausts its remedies
                  pursuant to Subsection (c) and the Participant thereafter is
                  required to make a payment of any Excise Tax, the Accounting
                  Firm shall determine the amount of the Underpayment that has
                  occurred and any such Underpayment shall be promptly paid by
                  the Company to or for the benefit of the Participant.

         (c)      The Participant shall notify the Company in writing of any
                  claim by the Internal Revenue Service that, if successful,
                  would require the payment by the Company of the Gross-Up
                  Payment. Such notification shall be given as soon as
                  practicable but no later than ten business days after the
                  Participant is informed in writing of such claim and shall
                  apprise the Company of the nature of such claim and the date
                  on which such claim is requested to be paid. The Participant
                  shall not pay such claim prior to the expiration of the 30-day
                  period following the date on which he gives such notice to the
                  Company (or such shorter period ending on the date that any
                  payment of taxes with respect to such claim is due). If the
                  Company notifies the Participant in writing prior to the
                  expiration of such period that it desires to contest such
                  claim, the Participant shall:

                  (i)      give the Company any information reasonably requested
                           by the Company relating to such claim,

                  (ii)     take such action in connection with contesting such
                           claim as the Company shall reasonably request in
                           writing from time to time, including, without
                           limitation, accepting legal representation with
                           respect to such claim by an attorney reasonably
                           selected by the Company,

                  (iii)    cooperate with the Company in good faith in order
                           effectively to contest such claim, and

                  (iv)     permit the Company to participate in any proceedings
                           relating to such claim;

                  provided, however, that the Company shall bear and pay
                  directly all costs and expenses (including additional interest
                  and penalties) incurred in connection with such contest and
                  shall indemnify and hold the Participant harmless, on an
                  after-tax basis, for any Excise Tax or federal or state income
                  tax (including interest and penalties with respect thereto)
                  and Medicare portion of FICA imposed as a result of such
                  representation and payment of costs and expenses. Without
                  limitation on the foregoing provisions of this Subsection (c),
                  the Company shall control all proceedings taken in connection
                  with such contest and, at its sole option, may pursue or forgo
                  any and all administrative appeals, proceedings, hearings and
                  conferences with the taxing authority in respect of such claim
                  and may, at


                                       12

<PAGE>   13
                  its sole option, either direct the Participant to pay the tax
                  claimed and sue for a refund or contest the claim in any
                  permissible manner, and the Participant agrees to prosecute
                  such contest to a determination before any administrative
                  tribunal, in a court of initial jurisdiction and in one or
                  more appellate courts, as the Company shall determine;
                  provided, however, that if the Company directs the Participant
                  to pay such claim and sue for a refund, the Company shall
                  advance the amount of such payment to the Participant, on an
                  interest-free basis and shall indemnify and hold the
                  Participant harmless, on an after-tax basis, from any Excise
                  Tax or income tax (including interest or penalties with
                  respect thereto) imposed with respect to such advance or with
                  respect to any imputed income with respect to such advance;
                  and further provided that any extension of the statute of
                  limitations relating to payment of taxes for the taxable year
                  of the Participant with respect to which such contested amount
                  is claimed to be due is limited solely to such contested
                  amount. Furthermore, the Company's control of the contest
                  shall be limited to issues with respect to which a Gross-Up
                  Payment would be payable hereunder and the Participant shall
                  be entitled to settle or contest, as the case may be, any
                  other issue raised by the Internal Revenue Service or any
                  other taxing authority.

         (d)      If, after the receipt by the Participant of an amount advanced
                  by the Company pursuant to Subsection (c), the Participant
                  becomes entitled to receive any refund with respect to such
                  claim, the Participant shall (subject to the Company's
                  complying with the requirements of Subsection (c)) promptly
                  pay to the Company the amount of such refund (together with
                  any interest paid or credited thereon after taxes applicable
                  thereto). If, after the receipt by the Participant of an
                  amount advanced by the Company pursuant to Subsection (c), a
                  determination is made that the Participant shall not be
                  entitled to any refund with respect to such claim and the
                  Company does not notify the Participant in writing of its
                  intent to contest such denial of refund prior to the
                  expiration of 30 days after such determination, then such
                  advance shall be forgiven and shall not be required to be
                  repaid and the amount of such advance shall offset, to the
                  extent thereof, the amount of Gross-Up Payment required to be
                  paid.

3.8      Death Benefits

         If a Participant dies after becoming entitled to the Change-in-Control
Benefits but before receiving payment, the Change-in-Control benefits will be
paid to the Participant's estate. The Participant's eligible dependents will
continue coverage under the Health Care Plan and Dental Plan for the remainder
of the three year period.

                                       13

<PAGE>   14
3.9      Legal Fees

         The Company will pay as incurred, to the full extent permitted by law,
all legal fees and expenses which a Participant may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the Company, the
Participant or others of the validity or enforceability of, or liability under,
any provision of this Plan or any guarantee of performance thereof (whether such
contest is between the Company and the Participant or between either the Company
or the Participant and any third party), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code, unless, in the case of a legal
action brought by the Participant or in his or her name, a court finally
determines that such action was not brought in good faith.

3.10     Stock Awards

         Stock options and other stock awards under the NCR Management Stock
Plan will vest and become payable upon the occurrence of a Change-in-Control, as
provided in that plan.

                                       14

<PAGE>   15
                                    ARTICLE 4

                                CHANGE-IN-CONTROL

4.1      Change-in-Control

         For the purpose of this Plan a "Change-in-Control" shall mean any of
the following events:

         (a)      An acquisition by any individual, entity or group (within the
                  meaning of Article 13(d)(3) or 14(d)(2) of the Exchange Act)
                  (an "Entity") of beneficial ownership (within the meaning of
                  Rule 13d-3 promulgated under the Exchange Act) of 20% or more
                  of either (i) the then outstanding shares of common stock of
                  the Company (the "Outstanding Company Common Stock") or (ii)
                  the combined voting power of the then outstanding voting
                  securities of the Company entitled to vote generally in the
                  election of directors (the "Outstanding Company Voting
                  Securities"); excluding, however, the following: (1) any
                  acquisition, directly from the Company, other than an
                  acquisition by virtue of the exercise of a conversion
                  privilege unless the security being so converted was itself
                  acquired directly from the Company, (2) any acquisition by the
                  Company, (3) any acquisition by any employee benefit plan (or
                  related trust) sponsored or maintained by the Company or any
                  corporation controlled by the Company, (4) any acquisition by
                  any corporation pursuant to a transaction which complies with
                  clauses (i), (ii) and (iii) of Subsection (c) below; or

         (b)      A change in the composition of the Board such that the
                  individuals who, as of January 1, 1997, constitute the Board
                  (such Board shall be hereinafter referred to as the "Incumbent
                  Board") cease for any reason to constitute at least a majority
                  of the Board; provided, however, that for purposes of this
                  definition, that any individual who becomes a member of the
                  Board subsequent to January 1, 1997, whose election, or
                  nomination for election by the Company's stockholders, was
                  approved by a vote of at least a majority of those individuals
                  who are members of the Board and who were also members of the
                  Incumbent Board (or deemed to be such pursuant to this
                  provision) shall be considered as though such individual were
                  a member of the Incumbent Board; and provided further,
                  however, that any such individual whose initial assumption of
                  office occurs as a result of or in connection with either an
                  actual or threatened election contest (as such terms are used
                  in Rule 14a-11 of Regulation 14A promulgated under the
                  Exchange Act) or other actual or threatened solicitation of
                  proxies or consents by or on behalf of an Entity other than
                  the Board shall not be so considered as a member of the
                  Incumbent Board; or

                                       15

<PAGE>   16
         (c)      The approval by the stockholders of the Company of a merger,
                  reorganization or consolidation or sale or other disposition
                  of all or substantially all of the assets of the Company
                  (each, a "Corporate Transaction") or, if consummation of such
                  Corporate Transaction is subject, at the time of such approval
                  by stockholders, to the consent of any government or
                  governmental agency, the obtaining of such consent (either
                  explicitly or implicitly by consummation); excluding, however,
                  such a Corporate Transaction pursuant to which (i) all or
                  substantially all of the individuals and entities who are the
                  beneficial owners, respectively, of the Outstanding Company
                  Common Stock and Outstanding Company Voting Securities
                  immediately prior to such Corporate Transaction will
                  beneficially own, directly or indirectly, more than 60% of,
                  respectively, the outstanding shares of common stock, and the
                  combined voting power of the then outstanding voting
                  securities entitled to vote generally in the election of
                  directors, as the case may be, of the corporation resulting
                  from such Corporate Transaction (including, without
                  limitation, a corporation or other Person (as defined below)
                  which as a result of such transaction owns the Company or all
                  or substantially all of the Company's assets either directly
                  or through one or more subsidiaries (a "Parent Company")) in
                  substantially the same proportions as their ownership,
                  immediately prior to such Corporate Transaction, of the
                  Outstanding Company Common Stock and Outstanding Company
                  Voting Securities, as the case may be, (ii) no Entity (other
                  than the Company, any employee benefit plan (or related trust)
                  of the Company, such corporation resulting from such Corporate
                  Transaction or, if reference was made to equity ownership of
                  any Parent Company for purposes of determining whether clause
                  (i) above is satisfied in connection with the applicable
                  Corporate Transaction, such Parent Company) will beneficially
                  own, directly or indirectly, 20% or more of, respectively, the
                  outstanding shares of common stock of the corporation
                  resulting from such Corporate Transaction or the combined
                  voting power of the outstanding voting securities of such
                  corporation entitled to vote generally in the election of
                  directors unless such ownership resulted solely from ownership
                  of securities of the Company prior to the Corporate
                  Transaction, and (iii) individuals who were members of the
                  Incumbent Board will immediately after the consummation of the
                  Corporate Transaction constitute at least a majority of the
                  members of the board of directors of the corporation resulting
                  from such Corporate Transaction (or, if reference was made to
                  equity ownership of any Parent Company for purposes of
                  determining whether clause (i) above is satisfied in
                  connection with the applicable Corporate Transaction, of the
                  Parent Company); or

         (d)      The approval by the stockholders of the Company of a complete
                  liquidation or dissolution of the Company.

                                       16

<PAGE>   17
         As used herein, "Person" means any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization, limited liability company, other entity or government or political
subdivision thereof.

                                       17

<PAGE>   18
                                    ARTICLE 5

                                      TRUST

5.1      Establishment of Trust

         The Compensation Committee may establish a trust with a bank trustee,
for the purpose of paying benefits under this Plan, the NCR Change-in-Control
Severance Plan for Key At-Risk Associates, and the Change-in-Control Letter
Agreement with the CEO of the Company (collectively the "CIC Plans"). The trust
may be a grantor trust subject to the claims of the Company's creditors.

                                       18

<PAGE>   19
                                    ARTICLE 6

                                 ADMINISTRATION

6.1      Plan Committee

         This Plan shall be administered by a committee ("Plan Committee" or
"Committee"), which shall have full power and authority to construe, interpret
and administer the Plan and may delegate to one or more officers and/or
employees of the Company such duties in connection with the administration of
the Plan as it may deem necessary, advisable or appropriate. Prior to a
Change-in-Control, the Plan Committee shall consist of the members of the
Compensation Committee. If, at any time following a Change-in-Control, at least
a majority of the Compensation Committee shall not consist of members of the
Incumbent Board (as defined in Section 4.1(b)), then the Plan Committee shall
consist of at least five individuals, a majority of whom are officers of the
Company and who also were such prior to the Change-in-Control, to be designated
by the Compensation Committee.

6.2      Duties of Plan Committee

         The Committee shall administer the Plan in a nondiscriminatory manner
for the exclusive benefit of Participants and their beneficiaries. The Committee
shall perform all such duties as are necessary to supervise the administration
of the Plan and to control its operation in accordance with its terms.

6.3      Authority of Plan Committee

         The Committee shall have all powers necessary or appropriate to carry
out its duties, including the discretionary authority to interpret the
provisions of the Plan and the facts and circumstances of eligibility for Plan
participation and claims for benefits. Any interpretation or construction of or
action by the Committee with respect to the Plan and its administration shall be
binding upon any and all parties and persons affected thereby, subject to the
exclusive appeal procedure set forth in Section 6.4.

6.4      Claim Procedure

         If any person eligible to receive benefits under the Plan, or claiming
to be so eligible, believes he or she is entitled to benefits in an amount
greater than those which he or she has received, he or she may file a claim in
writing with the Company's Global Performance and Remuneration Management
Department ("GPRM"), or its successor. The GPRM shall review the claim and,
within 90 days after the claim is filed, shall give written notice to the
claimant of the decision. If the claim is denied, the notice shall give the
reason for the denial, the pertinent provisions of the Plan on which the denial
is based, a description of any additional material or information necessary for
the claimant to


                                       19

<PAGE>   20
perfect the claim and an explanation of why such material or information is
necessary, and an explanation of the claim review procedure under the Plan.

         Any person who has had a claim for benefits denied GPRM shall have the
right to request review by the Committee. Such request must be in writing, and
must be made within 60 days after such person is advised of the denial of
benefits. If written request for review is not received within such 60 day
period, the claimant shall forfeit his or her right to review.

         The Committee shall review claims that are appealed, and may hold a
hearing if it deems necessary, and shall issue a written notice of the final
decision. Such notice shall include specific reasons for the decision and
specific references to the pertinent Plan provisions on which the decision is
based. The decision shall be final and binding upon the claimant and the
Committee and all other persons involved.

6.5 Arbitration

         Any dispute or controversy arising under or in connection with this
Plan shall be settled exclusively by arbitration in the City of Dayton, Ohio in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.

                                       20

<PAGE>   21
                                    ARTICLE 7

                                TERM OF THE PLAN

7.1      Three-Year Term

         This Plan shall continue in effect through December 31, 2000; provided,
however, that commencing on January 1, 1998, and on each January 1 thereafter,
the term of this Plan shall automatically be extended for one additional year
beyond its original or extended termination date so that, unless notice shall
have been given as provided in Section 7.2, on each January 1, this Plan shall
have an unexpired term of three years.

7.2      Termination

         The Board of Directors of the Company may, not later than November 30
of any year, by resolution duly adopted by a majority of the entire membership
of the Board, determine that the Plan shall not be extended, in which event the
Plan shall expire at the end of the three-year term which began on the January 1
immediately preceding such November 30.

7.3      Termination After A Change-in-Control

         Notwithstanding any resolution of the Board not to extend the term of
the Plan, if a Change-in-Control shall have occurred during the original or any
extended term of the Plan, the Plan shall continue in effect for three years
after the date of the Change-in-Control.

7.4      Accrued Rights Not Affected

         No termination or expiration of this Plan shall affect any rights,
obligations or liabilities of either party that shall have accrued on or prior
to the date of such termination or expiration.

7.5      Amendment of Plan

         The Board of Directors may amend this Plan with respect to an eligible
Executive Officer with the written consent of such Executive Officer.

                                       21

<PAGE>   22
                                    ARTICLE 8

                                   SUCCESSORS

8.1      Successors

         The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
under this Plan in the same manner and to the same extent that the Company or a
subsidiary (as appropriate) is required to perform. Failure of the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall entitle each officer eligible to participate in the Plan who
terminates employment during the period of time the Plan would have been in
effect had the Company complied with the first sentence of this Section 8.1, to
compensation from the Company in the same amount and on the same terms as such
officer would be entitled hereunder if he or she had terminated employment for
Good Reason following a Change-in-Control.

                                       22

<PAGE>   23
                                    ARTICLE 9

                               GENERAL PROVISIONS

9.1      Separation Pay

         Separation pay paid pursuant to this Plan shall be considered severance
pay paid after termination of employment. A Participant receiving separation pay
through the normal payroll cycle shall not thereby be considered an active
employee for any purpose. Accordingly, benefits available to active employees
will cease as of the date of termination, including short term disability
coverage and long term disability coverage. Separation pay will not be eligible
for contribution to the NCR Savings Plan, the NCR Employee Stock Purchase Plan
or to the NCR health care or dependent day care spending accounts.



         Separation pay will be subject to all applicable FICA and tax
withholding.

9.2      No Additional Rights

         No person shall have any rights under the Plan except as, and only to
the extent, expressly provided for in the Plan. Neither the establishment or
amendment of the Plan nor any action of the Company or the Committee shall be
held or construed to confer upon any person any right to be continued as an
employee, or, upon dismissal, any right or interest in any account or fund other
than as herein provided. The Company expressly reserves the right to discharge
any employee at any time, subject to such employment agreements as may be in
effect with particular employees.

9.3      Severability

         If any provision of this Plan is held illegal or invalid for any
reason, such determination shall not affect the remaining provisions of this
Plan, which shall be construed as if the illegal or invalid provision had never
been included.

9.4      Governing Law

         This Plan shall be construed in accordance with applicable federal law
and the laws of the State of Ohio, to the extent not preempted by ERISA.

9.5      Facility of Payment

         In the event any benefit under this Plan shall be payable to a person
who is under legal disability or is in any way incapacitated so as to be unable
to manage his or her financial affairs, the Senior Vice President, Global Human
Resources, may direct payment of such benefit to a duly appointed guardian,
committee or other legal representative of


                                       23

<PAGE>   24
such person, or in the absence of a guardian or legal representative, to any
relative of such person by blood or marriage, for such person's benefit. Any
payment made in good faith pursuant to this provision shall fully discharge the
Company and the Plan of any liability to the extent of such payment.

9.6      Correction of Errors

         In the event an incorrect amount is paid to or on behalf of a
Participant or beneficiary, any remaining payments may be adjusted to correct
the error. The Committee may take such other action as it deems necessary and
equitable to correct any such error.

         IN WITNESS WHEREOF, the NCR Change-in-Control Severance Plan for
Executive Officers is adopted effective January 1, 1997.



                              NCR CORPORATION



                              By:  /s/ Richard H. Evans
                                   _____________________________________________
                                   
                                   Richard H. Evans
                                   Senior Vice President, Global Human Resources

                                       24







<PAGE>   1
                                                                   EXHIBIT 10.17


                                CHANGE-IN-CONTROL
                                    AGREEMENT


         AGREEMENT by and between NCR Corporation, a Maryland corporation (the
"Company") and Lars Nyberg, effective as of January 1, 1997.

         The Board of Directors of the Company (the "Board") has determined that
it is in the best interests of the Company and its shareholders to assure that
the Company will have your continued dedication, notwithstanding the
possibility, threat or occurrence of a Change-in-Control (as defined below) of
the Company. The Board believes it is imperative to diminish your inevitable
distraction by the personal uncertainties and risks created by a pending or
threatened Change-in-Control and to encourage your full attention and dedication
to the Company currently and in the event of any threatened or pending
Change-in-Control, and to provide you with compensation and benefits
arrangements upon a Change-in-Control which ensure that your compensation and
benefits expectations will be satisfied and are competitive with those of other
corporations. Therefore, to accomplish these objectives, the Board has caused
the Company to enter into this Agreement.

         In order to induce you to remain in the employ of the Company, the
Company agrees that you
 shall receive the severance benefits set forth in this
Agreement in the event your employment with the Company is terminated subsequent
to a Change-in-Control in the circumstances hereinafter described.

1.       Entitlement to Benefits

         If your employment with the Company is terminated during the three-year
period beginning on the date of a Change-in-Control, either (a) involuntarily,
except for Cause, or (b) voluntarily, due to Good Reason, you will be entitled
to receive the benefits described in Section 3 ("Change-in-Control Benefits"),
provided you execute a release of all employment-related claims against the
Company and its subsidiaries and affiliates existing as of the date of
execution, in the standard form used by the Company without material
modification, addition or deletion. You will also become entitled to the
Change-in-Control Benefits if you voluntarily terminate employment with the
Company for any reason during the thirteenth month following the month in which
a Change-in-Control occurs, provided a release of claims is executed. You will
not receive such benefits if your employment with the Company terminates due to
any other reason, such as death or your becoming disabled to the extent that you
qualify for benefits from the NCR Long Term Disability Plan. The
Change-in-Control Benefits are payable in lieu of any benefits you might be
entitled to receive under the NCR Workforce Redeployment Plan.


                                       1

<PAGE>   2
         2. Change-in-Control Benefits

         The Change-in-Control Benefits consist of the following:

         (a) Separation Pay. A lump sum payment of three times your annual base
pay in effect on the date of termination of employment, or the date of the
Change-in-Control if higher, paid within 60 days after termination of
employment.

         (b) Incentive Pay. The Change-in-Control Benefits include a lump sum
payment made within 60 days after termination of employment equal to the
following incentive pay:

         (i)      The incentive pay earned under the Management Incentive Plan
                  for Executive Officers, or any successor plan ("MIP") for the
                  calendar year in which termination of employment occurs, at
                  the greater of target for year of termination of employment or
                  the actual cash payment for the preceding year, pro-rated in
                  1/12 increments for the portion of the calendar year prior to
                  the last day of the month in which termination of employment
                  occurs.

         (ii)     Three times the greater of (A) the target MIP award for the
                  calendar year in which termination of employment occurs, or
                  (B) the actual cash MIP award for the preceding calendar year.

         (iii)    Cash payment for performance cycles under the Long Term
                  Incentive Program ("LTIP") that commenced prior to the date of
                  termination of employment and have not been paid out. For
                  performance cycles for which the cash value of the award has
                  been determined (either by the issuance of restricted stock
                  units or otherwise), the cash payment will equal the actual
                  cash value of the award. For performance cycles for which the
                  cash value of the award is not yet determinable, the cash
                  payment will be calculated using the target award amount. The
                  cash payment for the performance cycle beginning with the
                  calendar year in which termination of employment occurs will
                  be prorated in 1/12 increments for the portion of the
                  performance cycle prior to the last day of the month in which
                  termination of employment occurs.

         (iv)     Three times the greater of the following: (A) the target LTIP
                  award for the performance cycle beginning in the calendar year
                  in which termination of employment occurs, or (B) the cash
                  value of the most recent actual LTIP award received by you.

         (c) Health Care and Insurance Coverage. Coverage for you and your
eligible dependents under the following Company welfare plans at no cost to you
for the separation pay period: (i) Coverage under the NCR Health Care Plan at
the Choice 2 level (20% co-payment); (ii) Coverage under the NCR Dental Plan at
the Choice 2 level;


                                       2

<PAGE>   3
(iii) Life insurance coverage at two times base pay; and (iv) Accidental death
and dismemberment coverage at two times base pay.

         If you are enrolled in Health Care Choice 1 or an HMO immediately prior
to termination of employment, you may continue this coverage in lieu of the
Health Care Choice 2 by paying the difference in cost between the current
coverage and Health Care Choice 2.

         The coverages described in this subparagraph (c) will not terminate if
you become employed by an unrelated company, but will be secondary to any
coverage as an active employee. Extended health care and dental care coverage
runs concurrently with COBRA continuation coverage rights, so no additional
coverage under COBRA is available after the three-year severance period.

         (d) Financial Counseling Continuation of executive financial counseling
benefits as in effect under the Company's policy on the date of the
Change-in-Control, for three years following termination of employment.

         (e) Outplacement Assistance The Change-in-Control Benefits include the
Company's executive outplacement assistance program for three years following
termination of employment, provided by Wright Associates or a similar
organization, as in effect under the Company's policy on the date of the
Change-in-Control.

         (f)      Tax Gross-Up

         (i)      If it is determined that any payment or distribution by the
                  Company to you or for your benefit (whether paid or payable or
                  distributed or distributable pursuant to the terms of this
                  Plan or otherwise, but determined without regard to any
                  additional payments required under this subsection (f)) (a
                  "Payment") would be subject to the excise tax imposed by
                  Section 4999 of the Code or any interest or penalties are
                  incurred by you with respect to such excise tax (such excise
                  tax, together with any such interest and penalties,
                  hereinafter collectively referred to as the "Excise Tax"),
                  then the Change-in-Control Benefits shall include an
                  additional payment ("Gross-Up Payment") in an amount such that
                  after payment by you of all taxes (including any interest or
                  penalties imposed with respect to such taxes), including,
                  without limitation, any federal and state income taxes (and
                  any interest and penalties imposed with respect thereto), the
                  Medicare portion of FICA, and excise taxes imposed upon the
                  Gross-Up Payment, you retain an amount of the Gross-Up Payment
                  equal to the Excise Tax imposed upon the payments.

         (ii)     Subject to the provisions of subsection (iii), all
                  determinations required to be made under this subsection (f),
                  including whether and when a Gross-Up Payment is required and
                  the amount of such Gross-Up Payment and the


                                       3

<PAGE>   4
                  assumptions to be utilized in arriving at such determination,
                  shall be made by Price Waterhouse (the "Accounting Firm"),
                  which shall provide detailed supporting calculations both to
                  the Company and you within 15 business days of the receipt of
                  notice from you that there has been a Payment, or such earlier
                  time as is requested by the Company. In the event that the
                  Accounting Firm is serving as accountant or auditor for the
                  individual, entity or group effecting the Change-in-Control,
                  you shall appoint another nationally recognized accounting
                  firm to make the determinations required hereunder (which
                  accounting firm shall then be referred to as the Accounting
                  Firm hereunder). All fees and expenses of the Accounting Firm
                  shall be borne solely by the Company. Any Gross-Up Payment, as
                  determined pursuant to this subsection (f), shall be paid by
                  the Company to you within five days of the receipt of the
                  Accounting Firm's determination. Any determination by the
                  Accounting Firm shall be binding upon the Company and you. As
                  a result of the uncertainty in the application of Section 4999
                  of the Code at the time of the initial determination by the
                  Accounting Firm hereunder, it is possible that Gross-Up
                  Payments which will not have been made by the Company should
                  have been made ("Underpayment"), consistent with the
                  calculations required to be made hereunder. In the event that
                  the Company exhausts its remedies pursuant to subsection (iii)
                  and you thereafter are required to make a payment of any
                  Excise Tax, the Accounting Firm shall determine the amount of
                  the Underpayment that has occurred and any such Underpayment
                  shall be promptly paid by the Company to you or for your
                  benefit.

         (iii)    You shall notify the Company in writing of any claim by the
                  Internal Revenue Service that, if successful, would require
                  the payment by the Company of the Gross-Up Payment. Such
                  notification shall be given as soon as practicable but no
                  later than ten business days after you are informed in writing
                  of such claim and shall apprise the Company of the nature of
                  such claim and the date on which such claim is requested to be
                  paid. You shall not pay such claim prior to the expiration of
                  the 30-day period following the date on which you give such
                  notice to the Company (or such shorter period ending on the
                  date that any payment of taxes with respect to such claim is
                  due). If the Company notifies you in writing prior to the
                  expiration of such period that it desires to contest such
                  claim, you shall:

                  (A)  give the Company any information reasonably requested by
                       the Company relating to such claim,

                  (B)  take such action in connection with contesting such claim
                       as the Company shall reasonably request in writing from
                       time to time, including, without limitation, accepting
                       legal representation with


                                       4

<PAGE>   5
                       respect to such claim by an attorney reasonably selected
                       by the Company,

                  (C)  cooperate with the Company in good faith in order
                       effectively to contest such claim, and

                  (D)  permit the Company to participate in any proceedings
                       relating to such claim;

                  provided, however, that the Company shall bear and pay
                  directly all costs and expenses (including additional interest
                  and penalties) incurred in connection with such contest and
                  shall indemnify and hold you harmless, on an after-tax basis,
                  for any Excise Tax or federal and state income tax (including
                  interest and penalties with respect thereto) and the Medicare
                  portion of FICA imposed as a result of such representation and
                  payment of costs and expenses. Without limitation on the
                  foregoing provisions of this subsection (iii), the Company
                  shall control all proceedings taken in connection with such
                  contest and, at its sole option, may pursue or forgo any and
                  all administrative appeals, proceedings, hearings and
                  conferences with the taxing authority in respect of such claim
                  and may, at its sole option, either direct you to pay the tax
                  claimed and sue for a refund or contest the claim in any
                  permissible manner, and you agree to prosecute such contest to
                  a determination before any administrative tribunal, in a court
                  of initial jurisdiction and in one or more appellate courts,
                  as the Company shall determine; provided, however, that if the
                  Company directs you to pay such claim and sue for a refund,
                  the Company shall advance the amount of such payment to you,
                  on an interest-free basis and shall indemnify and hold you
                  harmless, on an after-tax basis, from any Excise Tax or income
                  tax (including interest or penalties with respect thereto)
                  imposed with respect to such advance or with respect to any
                  imputed income with respect to such advance; and further
                  provided that any extension of the statute of limitations
                  relating to payment of taxes for your taxable year with
                  respect to which such contested amount is claimed to be due is
                  limited solely to such contested amount. Furthermore, the
                  Company's control of the contest shall be limited to issues
                  with respect to which a Gross-Up Payment would be payable
                  hereunder and you shall be entitled to settle or contest, as
                  the case may be, any other issue raised by the Internal
                  Revenue Service or any other taxing authority.

         (iv)     If, after the receipt by the Participant of an amount advanced
                  by the Company pursuant to subsection (f), you become entitled
                  to receive any refund with respect to such claim, you shall
                  (subject to the Company's complying with the requirements of
                  subsection (iii)) promptly pay to the Company the amount of
                  such refund (together with any interest paid or credited
                  thereon after taxes applicable thereto). If, after the receipt
                  by you of an amount advanced by the Company pursuant to
                  subsection (iii), a

                                       5

<PAGE>   6
                  determination is made that you shall not be entitled to any
                  refund with respect to such claim and the Company does not
                  notify you in writing of its intent to contest such denial of
                  refund prior to the expiration of 30 days after such
                  determination, then such advance shall be forgiven and shall
                  not be required to be repaid and the amount of such advance
                  shall offset, to the extent, thereof, the amount of Gross-Up
                  Payment required to be paid.

         3. Death Benefits

         If you die after becoming entitled to the Change-in-Control Benefits
but before receiving payment, the Change-in-Control Benefits will be paid to
your estate. Your eligible dependents will continue coverage under the Health
Care Plan and Dental Plan for the remainder of the three-year coverage period.

         4. Trust

         The Compensation Committee may establish a trust with a bank trustee
(the "Trust") for the purpose of paying benefits under this Agreement, as well
as the NCR Change-in-Control Severance Plan for Executive Officers and the NCR
Change-in-Control Severance Plan for At-Risk Associates. The trust may be a
grantor trust subject to the claims of the Company's creditors.

         5. Term of Agreement

         This Agreement shall commence on December 31, 1996 and shall continue
in effect through December 31, 2000; provided, however, that commencing on
January 1, 1998, and on each January 1 thereafter, the term of this Agreement
shall automatically be extended for one additional year beyond its original or
extended termination date so that, unless notice shall have been given as
provided in the following paragraph, on each January 1, this Plan shall have an
unexpired term of three years.

         The Board of Directors of the Company may, not later than November 30
of any year, by resolution duly adopted by a majority of the entire membership
of the Board, determine that this Agreement shall not be extended, in which
event this Agreement shall expire at the end of the three-year term which began
on the January 1 immediately preceding such November 30.

         Notwithstanding any resolution of the Board not to extend the term of
this Agreement, if a Change-in-Control shall have occurred during the original
or any extended term of the Agreement, the Agreement shall continue in effect
for three years after the date of the Change-in-Control.

                                       6

<PAGE>   7
         6. Successors

         The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
under this Agreement in the same manner and to the same extent that the Company
or a subsidiary (as appropriate) is required to perform. Failure of the Company
to obtain such assumption and agreement prior to the effectiveness of any such
succession shall entitle you, if you terminate employment during the period of
time the Agreement would have been in effect had the Company complied with the
first sentence of this Paragraph 6, to compensation from the Company in the same
amount and on the same terms as you would be entitled hereunder if you had
terminated employment for Good Reason following a Change-in-Control.

         7. Definitions

         (a) "Cause" means:

         (i)      your willful and continued failure to perform substantially
                  the appropriate duties of your position with the Company or
                  one of its affiliates (other than any such failure resulting
                  from incapacity due to physical or mental illness), for a
                  period of at least 30 days after a written demand for
                  substantial performance is delivered to you by the Board which
                  specifically identifies the manner in which the Board believes
                  that you have not substantially performed your duties, or

         (ii)     you willfully engage in illegal conduct or gross misconduct
                  which is materially and demonstrably injurious to the Company.

         For purposes of this provision, no act or failure to act, on your part,
         shall be considered "willful" unless it is done, or omitted to be done,
         in bad faith or without reasonable belief that your action or omission
         was in the best interests of the Company. Any act, or failure to act,
         based upon authority given pursuant to a resolution duly adopted by the
         Board or based upon the advice of counsel for the Company shall be
         conclusively presumed to be done, or omitted to be done in good faith
         and in the best interests of the Company. The termination of your
         employment shall not be deemed to be for Cause unless and until there
         shall have been delivered to you a copy of a resolution duly adopted by
         the affirmative vote of not less than three-quarters of the entire
         membership of the Board at a meeting of the Board called and held for
         such purpose (after reasonable notice is provided to you and you are
         given an opportunity, together with counsel, to be heard before the
         Board), finding that, in the good faith opinion of the Board, you are
         guilty of the conduct described in subsection (i) or (ii) above, and
         specifying the particulars.

                                       7

<PAGE>   8
         (b)      "Change-in-Control" means any of the following events:

         (i)      An acquisition by any individual, entity or group (within the
                  meaning of Article 13(d)(3) or 14(d)(2) of the Exchange Act)
                  (an "Entity") of beneficial ownership (within the meaning of
                  Rule 13d-3 promulgated under the Exchange Act) of 20% or more
                  of either (A) the then outstanding shares of common stock of
                  the Company (the "Outstanding Company Common Stock"), or (B)
                  the combined voting power of the then outstanding voting
                  securities of the Company entitled to vote generally in the
                  election of directors (the "Outstanding Company Voting
                  Securities"); excluding, however, the following: (1) any
                  acquisition, directly from the Company, other than an
                  acquisition by virtue of the exercise of a conversion
                  privilege unless the security being so converted was itself
                  acquired directly from the Company, (2) any acquisition by the
                  Company, (3) any acquisition by any employee benefit plan (or
                  related trust) sponsored or maintained by the Company or any
                  corporation controlled by the Company, (4) any acquisition by
                  any corporation pursuant to a transaction which complies with
                  clauses (A), (B) and (C) of subsection (iii) below; or

         (ii)     A change in the composition of the Board such that the
                  individuals who, as of January 1, 1997, constitute the Board
                  (such Board shall be hereinafter referred to as the "Incumbent
                  Board") cease for any reason to constitute at least a majority
                  of the Board; provided, however, that for purposes of this
                  definition, any individual who becomes a member of the Board
                  subsequent to January 1, 1997, whose election, or nomination
                  for election by the Company's stockholders, was approved by a
                  vote of at least a majority of those individuals who are
                  members of the Board and who were also members of the
                  Incumbent Board (or deemed to be such pursuant to this
                  provision) shall be considered as though such individual were
                  a member of the Incumbent Board; and provided further,
                  however, that any such individual whose initial assumption of
                  office occurs as a result of or in connection with either an
                  actual or threatened election contest (as such terms are used
                  in Rule 14a-11 of Regulation 14A promulgated under the
                  Exchange Act) or other actual or threatened solicitation of
                  proxies or consents by or on behalf of an Entity other than
                  the Board shall not be so considered as a member of the
                  Incumbent Board; or

         (iii)    The approval by the stockholders of the Company of a merger,
                  reorganization or consolidation or sale or other disposition
                  of all or substantially all of the assets of the Company
                  (each, a "Corporate Transaction") or, if consummation of such
                  Corporate Transaction is subject, at the time of such approval
                  by stockholders, to the consent of any government or
                  governmental agency, the obtaining of such consent (either
                  explicitly or implicitly by consummation); excluding, however,
                  such a


                                       8

<PAGE>   9
                  Corporate Transaction pursuant to which (A) all or
                  substantially all of the individuals and entities who are the
                  beneficial owners, respectively, of the Outstanding Company
                  Common Stock and Outstanding Company Voting Securities
                  immediately prior to such Corporate Transaction will
                  beneficially own, directly or indirectly, more than 60% of,
                  respectively, the outstanding shares of common stock, and the
                  combined voting power of the then outstanding voting
                  securities entitled to vote generally in the election of
                  directors, as the case may be, of the corporation resulting
                  from such Corporate Transaction (including, without
                  limitation, a corporation or other Person (as defined below)
                  which as a result of such transaction owns the Company or all
                  or substantially all of the Company's assets either directly
                  or through one or more subsidiaries (a "Parent Company")) in
                  substantially the same proportions as their ownership,
                  immediately prior to such Corporate Transaction, of the
                  Outstanding Company Common Stock and Outstanding Company
                  Voting Securities, as the case may be, (B) no Entity (other
                  than the Company, any employee benefit plan (or related trust)
                  of the Company, such corporation resulting from such Corporate
                  Transaction or, if reference was made to equity ownership of
                  any Parent Company for purposes of determining whether clause
                  (A) above is satisfied in connection with the applicable
                  Corporate Transaction, such Parent Company) will beneficially
                  own, directly or indirectly, 20% or more of, respectively, the
                  outstanding shares of common stock of the corporation
                  resulting from such Corporate Transaction or the combined
                  voting power of the outstanding voting securities of such
                  corporation entitled to vote generally in the election of
                  directors unless such ownership resulted solely from ownership
                  of securities of the Company prior to the Corporate
                  Transaction, and (C) individuals who were members of the
                  Incumbent Board will immediately after the consummation of the
                  Corporate Transaction constitute at least a majority of the
                  members of the board of directors of the corporation resulting
                  from such Corporate Transaction (or, if reference was made to
                  equity ownership of any Parent Company for purposes of
                  determining whether clause (A) above is satisfied in
                  connection with the applicable Corporate Transaction, of the
                  Parent Company); or

         (iv)     The approval by the stockholders of the Company of a complete
                  liquidation or dissolution of the Company.

         As used herein, "Person" means any individual, corporation,
         partnership, association, joint-stock company, trust, unincorporated
         organization, limited liability company, other entity or government or
         political subdivision thereof.

                                       9

<PAGE>   10
         (c)      "Good Reason" means:

         (i)      the assignment to you of any duties inconsistent in any
                  respect with your position (including status, offices, titles
                  and reporting requirements), authority, duties or
                  responsibilities, as in effect immediately prior to a
                  Change-in-Control, excluding for this purpose an isolated,
                  insubstantial and inadvertent action not taken in bad faith
                  and which is remedied by the Company promptly after receipt of
                  notice thereof given by you;

         (ii)     any reduction in your annual base salary as in effect
                  immediately before the Change-in-Control,

         (iii)    the failure to pay incentive compensation to which you are
                  otherwise entitled under the terms of the Company's Management
                  Incentive Plan for Executive Officers ("MIP") or Long Term
                  Incentive Program ("LTIP"), or any successor incentive
                  compensation plans at the time at which such awards are
                  usually paid or as soon thereafter as administratively
                  feasible, unless the failure to pay the incentive compensation
                  is because of the failure to meet objectives based on
                  quantitative performance;

         (iv)     the provision to you of an opportunity to earn a target annual
                  bonus under the MIP or a target performance award under the
                  LTIP or any successor incentive compensation plans
                  substantially less in amount than your target opportunities
                  for the last complete fiscal year of the Company ending prior
                  to the Change-in-Control;

         (v)      the failure by the Company to continue in effect any incentive
                  stock option plan in which you participate immediately prior
                  to the Change-in-Control, unless a substantially equivalent
                  alternative compensation arrangement (embodied in an ongoing
                  substitute or alternative plan) has been provided to you, or
                  the failure by the Company to continue your participation in
                  any such stock option plan on substantially the same basis,
                  both in terms of the amount of benefits provided and the level
                  of your participation relative to other participants, as
                  existed immediately prior to the Change-in-Control;

         (vi)     Except as required by law, the failure by the Company to
                  continue to provide to you employee benefits substantially
                  equivalent, in the aggregate, to those enjoyed by you under
                  the qualified and nonqualified employee benefit and welfare
                  plans of the Company, including, without limitation, the
                  pension, life insurance, medical, dental, health and accident,
                  disability retirement, and savings plans, in which you were
                  eligible to participate immediately prior to the
                  Change-in-Control, or the failure by the Company to provide
                  you with the number of paid vacation days to which you were
                  entitled under the Company's vacation policy immediately prior
                  to the Change-in-Control.

                                       10

<PAGE>   11
         (vii)    the Company's requiring you to be based at any office or
                  location other than the principal place of your employment in
                  effect immediately prior to the Change-in-Control that is more
                  than 35 miles distant from the location of such principal
                  place of employment, unless the relocation is part of a
                  relocation, for bona fide business reasons, of the Company, or
                  the Company's requiring you to travel on Company business to a
                  substantially greater extent than required immediately prior
                  to the Change-in-Control;

         (viii)   any failure by the Company to comply with Paragraph 6,
                  Successors.

         Any good faith determination of "Good Reason" made by you shall be
conclusive.

         8. Legal Fees

         The Company agrees to pay as incurred, to the full extent permitted by
law, all legal fees and expenses which you may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, you or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (whether such contest is
between the Company and you or between either of us and any third party), plus
in each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code, unless, in
the case of a legal action brought by you or in your name, a court finally
determines that such action was not brought in good faith.

         9. Arbitration

         Any dispute or controversy arising under or in connection with this
Plan shall be settled exclusively by arbitration in the City of Dayton, Ohio in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.

         10. Miscellaneous

         No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed
by you and such officer as may be specifically designated by the Board or the
Compensation Committee. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. This Agreement
shall be subject to the laws of the State of Ohio. Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law. The


                                       11

<PAGE>   12
obligations of the Company under Paragraphs 3 and 4 shall survive the expiration
of the term of this Agreement. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.



NCR CORPORATION



By: /s/ Richard H. Evans                         
________________________________                 ______________________________
Richard H. Evans                                  Lars Nyberg
Senior Vice President, Global HR                  Chairman and CEO


Date: 3/7/97                                      Date: ________________________
     ________
                                       12



<PAGE>   1
                                                                   EXHIBIT 10.18


                        NCR DIRECTOR COMPENSATION PROGRAM

                            EFFECTIVE JANUARY 1, 1997


                                    PREAMBLE

         This NCR Director Compensation Program ("Program") is adopted effective
January 1, 1997.

         The Program is approved and adopted by the Compensation Committee of
the Board of Directors of NCR Corporation ("Company") pursuant to its authority
under Section 4.2 of the NCR Management Stock Plan to determine the terms and
conditions of grants and awards to participants in the Management Plan,
including the extent to which cash and shares payable under the Management Plan
may be deferred at the election of a participant.

         The Program is intended to provide competitive remuneration to
individuals serving as non-employee members of the Board of Directors of the
Company, and to align the interests of the Directors with the interests of the
Company's shareholders.


                                    ARTICLE I

                                   Definitions

 1.1     Committee means the Compensation Committee of the Board of Directors of
         NCR Corporation.

 1.2     Common Stock means the common stock of NCR Corporation, par value $.01
         per share.

 1.3     Company means NCR Corporation, a Maryland corporation.

 1.4     Director means a member of the Board of Directors of NCR Corporation
         who is not an employee of the Company.

 1.5
     Fair Market Value of a share of Common Stock as of a specified date
         means the average of the high and low sales prices of a share of Common
         Stock on the New York Stock Exchange on such date, or if there were no
         trades on such date, on the day on which a trade occurred next
         preceding such date.

 1.6     Management Plan means the NCR Management Stock Plan, adopted effective
         as of January 1, 1997.


                                       1


<PAGE>   2




 1.7     Participant means a Director, and any former Director entitled to
         payment of a benefit from the Program.

 1.8     Year of Service means the approximately 12 month period beginning on
         the date of an annual shareholders' meeting of the Company and ending
         on the day before the Company's annual shareholders' meeting of the
         next following year, during which an individual serves as a Director.


                                   ARTICLE II

                                  Compensation

 2.1     Annual Compensation. For each Year of Service as a Director, a Director
         will receive the compensation described in Sections 2.2 through 2.4
         below.

 2.2     Annual Retainer. For each Year of Service, a Director will receive an
         annual retainer set by the Committee, which shall initially be $30,000.
         A Director may elect to receive the retainer in cash, in Common Stock,
         or as a Deferred Stock Award, as described in ARTICLE III. If no
         election is made, the retainer will be paid in cash. If paid in cash or
         Common Stock, payment of 25% of the annual amount will be made on June
         30, September 30, December 31, and March 31, provided the individual is
         serving as a Director on such dates. If the individual is not serving
         as a Director on any such date, the remaining amount of the retainer
         shall be forfeited.

         If paid in Common Stock, the number of shares of Common Stock to be
         paid shall be determined by dividing the cash amount of the retainer
         due to the Director by the Fair Market Value of the Common Stock on the
         date the payment is due, with a cash payment for any fractional share
         amount.

         Notwithstanding the above, the retainer for the partial Plan Year
         beginning January 1, 1997 and ending on April 19, 1997, will be
         $10,000, with payment of $5,000 due on January 19, 1997, and $5,000 on
         March 31, 1997, provided the individual is serving as a Director on
         such dates. If the individual is not serving as a Director on any such
         date, the remaining amount of the retainer shall be forfeited.

2.3      Initial Stock Grant. On the date of first election to the Board, each
         Director will receive an initial grant under the Management Plan of a
         number of whole shares of Common Stock determined by multiplying the
         dollar amount of the annual retainer by two, then dividing the result
         by the Fair Market Value of one share of Common Stock on the date of
         grant, rounded up to the next whole share. A Director may elect to
         receive such Common Stock as a Deferred Stock Grant as provided in
         ARTICLE IV. A Director will receive only one initial stock grant for
         any


                                       2

<PAGE>   3


         continuous period served as a Director. If a Director ceases to serve
         as a Director for a period of at least three years and is later again
         elected as a Director, he or she will receive a second initial stock
         grant for the second period served as a Director.

2.4      Annual Option Grant. At each annual shareholders' meeting of the
         Company, each individual then serving as a Director or newly elected as
         a Director shall receive a grant of nonqualified stock options under
         the Management Plan with a present value equal to the amount of the
         annual retainer. The options shall be for a number of shares of Common
         Stock determined by dividing the dollar amount of the annual retainer
         by an accepted formula, and then dividing the result by the Fair Market
         Value of one share of Common Stock on the date of grant, rounded up to
         the next whole share. The exercise price for each optioned share will
         be the Fair Market Value of one share of Common Stock on the grant
         date. The stock options will be fully vested and exercisable at grant,
         and will have a term of ten years from the date of grant.

                                   ARTICLE III

                          Deferred Cash or Stock Awards

3.1      Election to Defer. For each Plan Year, a Director may elect to defer
         receipt of the retainer described in Section 2.2 and receive it instead
         as a Deferred Stock Award. The election must be made prior to the first
         day of the Year of Service for which the retainer will be paid. The
         election shall be irrevocable for the Plan Year for which it is
         effective. A new election must be made for each Year of Service.

 3.2     Form of Election. The election to defer must be made in writing on a
         form similar to Attachment A hereto.

 3.3     Deferral Periods. A Director may elect to receive the Deferred Stock
         Award at one of the following times:

         (a)      on the date of termination as a Director,

         (b)      on the date either five or ten years from the date of grant,
                  or

         (c)      in one to five equal annual installments, payable on April 30
                  of each year, beginning either on the next following April 30
                  after the retainer is earned, or the April 30 next following
                  the date of termination as a Director.

 3.4     Deferred Stock Awards. If a Director elects to receive the annual
         retainer as a Deferred Stock Award, the Company will maintain a
         deferred stock account credited, as of the date a payment of 25% the
         retainer would have otherwise been paid, with a number of stock units
         equal to the shares of Common Stock (including fractions of a share)
         that could have been purchased with the amount of the


                                       3

<PAGE>   4



         retainer deferred as of such date at the Fair Market Value of the
         Common Stock on such date. As of the date any dividend is paid to
         shareholders of Common Stock, the Director's deferred stock account
         shall also be credited with an additional number of stock units equal
         to the number of shares of Common Stock (including fractions of a
         share) that could have been purchased at the Fair Market Value on such
         date with the dividend paid on the number of shares of Common Stock
         equivalent to the number of share units credited to the Director's
         deferred stock account. In case of dividends paid in property, the
         dividend shall be deemed to be the fair market value of the property at
         the same time of distribution of the dividend, as determined by the
         Committee.

 3.5     Distribution of Deferred Stock Award. Payment of a Director's Deferred
         Stock Award shall be made at the times elected by the Director at the
         time of deferral. Distribution shall be made in cash unless a
         Participant elects in writing delivered to the Company no later than 60
         days prior to the date of distribution (or the date of the first
         distribution, if made in installments) that all or any designated
         portion of the deferred stock account be paid in shares of Common
         Stock. The amount of a cash distribution shall be determined by
         multiplying the number of shares attributable to the payment by the
         Fair Market Value of the Common Stock on the date the payment is to be
         made. If distribution is to be made in shares of Common Stock, the
         Participant shall receive the number of whole shares of Common Stock to
         which the distribution is equivalent plus cash for any fractional
         share.


                                   ARTICLE IV

                              Deferred Stock Grants

4.1      Election to Defer. A Director may elect to defer receipt of the Common
         Stock subject to the initial stock grant described in Section 2.3. The
         election must be made prior to election as a Director. If no deferral
         election is made, the Common Stock subject to the stock grant will be
         issued to the Director within a reasonable time after election to the
         Board.

 4.2     Form of Election. The election to defer must be made in writing on a
         form similar to Attachment B hereto.

 4.3     Deferral Periods. A Director may elect to receive the Common Stock at
         one of the times specified in Section 3.3 above.

 4.4     Deferred Stock Accounts. If a Director elects to defer receipt of the
         Common Stock subject to the initial stock grant, the Company will
         maintain a deferred stock account credited, as of the date of election
         to the Board, with a number of stock units equal to the shares of
         Common Stock the Director was entitled to receive as the initial stock
         grant. As of the date any dividend is paid to shareholders of



                                       4

<PAGE>   5



         Common Stock, the Director's deferred stock account shall also be
         credited with an additional number of stock units equal to the number
         of shares of Common Stock (including fractions of a share) that could
         have been purchased at the Fair Market Value on such date with the
         dividend paid on the number of shares of Common Stock equivalent to the
         number of share units credited to the Director's deferred stock
         account. In case of dividends paid in property, the dividend shall be
         deemed to be the fair market value of the property at the same time of
         distribution of the dividend, as determined by the Committee.

4.5      Distribution of Deferred Stock Grant. Payment of a Director's Deferred
         Stock Award shall be made at the times elected by the Director at the
         time of deferral, in shares of Common Stock. The Participant shall
         receive the number of whole shares of Common Stock to which the amount
         of the distribution is equivalent plus cash for any fractional share.


                                    ARTICLE V

                             Distribution Upon Death

5.1      Distribution Upon Death. In the event of the death of a Participant,
         whether before or after termination of employment, any Deferred Cash
         Award or Deferred Stock Award to which he or she was entitled shall be
         converted to cash and distributed in a lump sum to the Participant's
         designated beneficiary, or if no beneficiary is designated, to the
         Participant's estate.

 5.2     Designation of Beneficiary. A Participant may designate an individual
         or entity as his or her beneficiary to receive payment of any benefits
         due and unpaid on the date of the Participant's death, by delivering a
         written designation to the Company. A Participant may from time to time
         revoke or change any such designation in writing delivered to the
         Company. If there is no unrevoked designation on file with the Company
         at the time of the Participant's death, or if the designated
         beneficiary has predeceased the Participant or otherwise ceased to
         exist, such distribution shall be made in accordance with the
         Participant's will or in the absence of a will, to the administrator of
         the Participant's estate. Distribution shall be made as soon as
         practicable following notification of the Company of the Participant's
         death. A Participant's deferred stock account shall be converted to
         cash by multiplying the number of whole and fractional shares of Common
         Stock to which the Participant's deferred stock account is equivalent
         by the Fair Market Value of the Common Stock on the date of death.


                                       5

<PAGE>   6



                                   ARTICLE VI

                                 Administration

6.1      Withholding Taxes. The Company shall deduct from all distributions
         under the Program any taxes required to be withheld by federal, state
         or local governments. In case distributions are made in shares of
         Common Stock, the Company shall have the right to retain the value of
         sufficient shares equal to the amount of the tax required to be
         withheld with respect to such distributions. In lieu of withholding the
         value of shares, the Company may require a recipient of a distribution
         in Common Stock to reimburse the Company for any such taxes required to
         be withheld upon such terms and conditions as the Company may
         prescribe.

6.2      Unfunded Nature of Program. This Program shall be unfunded. The funds
         used for payment of benefits hereunder shall, until such actual
         payment, continue to be part of the general funds of the Company, and
         no person other than NCR shall, by virtue of this Program, have any
         interest in any such funds. Nothing contained herein shall be deemed to
         create a trust of any kind or create any fiduciary relationship. To the
         extent that any person acquires a right to receive payments from the
         Company under this Program, such right shall be no greater than the
         right of any unsecured general creditor of the Company.

6.3      Non-alienation of Benefits. No benefit under the Plan shall be subject
         in any manner to anticipation, alienation, sale, transfer, assignment,
         pledge, encumbrance, or charge, including assignment pursuant to a
         domestic relations order, and any attempt to do so shall be void. No
         such benefit shall, prior to receipt thereof by the Participant, be in
         any manner liable for or subject to the debts, contracts, liabilities,
         or torts of the Participant.

6.4      Amendment or Termination of the Program. The Compensation Committee at
         any time may amend or terminate the Program, provided that no such
         action shall adversely affect the right of any Participant or
         Beneficiary to a benefit to which he or she has become entitled
         pursuant to the Program.


                                       6

<PAGE>   7


                                  ATTACHMENT A

                             NCR BOARD OF DIRECTORS
                            ANNUAL RETAINER ELECTION


         As provided in the NCR Directors Compensation Program, I hereby elect
to receive my annual retainer for 1997 as follows:

____   In shares of NCR Common Stock, payable at same times as cash retainer

____   As a Deferred Stock Award




If I have elected a Deferred Stock Award, I elect to receive the deferred
amounts at the following time(s):

____   on the date of my termination as a Director

____   April 16, 2002 (five year deferral)

____   April 16, 2007 (ten year deferral)

______ in ____ (1,2,3,4, or 5) annual installments, beginning on April 30, 1998
                   
______ in ____ (1,2,3,4, or 5) annual installments, beginning on the April 30
               following my termination as a Director.




I designate _______________________________as beneficiary of my Deferred Cash
Award and/or Deferred Stock Award, to receive any vested, unpaid amounts at my
death. (Multiple beneficiaries may be listed on an attached sheet.)

 _________________________________                   ____________
           Signature                                     Date


                                       7

<PAGE>   8

                                  ATTACHMENT B

                             NCR BOARD OF DIRECTORS

                          INITIAL STOCK GRANT ELECTION


         As provided in the NCR Directors Compensation Program, I hereby elect
to receive my initial stock grant as a Deferred Stock Award.



         I elect to receive my Deferred Stock Award at the following time(s):

         ____ on the date of my termination as a Director

         ____ April 16, 2002 (five year deferral)

         ____ April 16, 2007 (ten year deferral)

         ____ in ____ (1,2,3,4, or 5) annual installments, beginning on April
         30, 1998

         ____ in ____ (1,2,3,4, or 5) annual installments, beginning on the
         April 30 following my termination as a Director.



         I designate __________________________________as beneficiary of my
Deferred Stock Grant, to receive any vested, unpaid amounts at my death.
(Multiple beneficiaries may be listed below.)




 ___________________________                            ____________
        Signature                                           Date





<PAGE>   1
                                                                Exhibit 10.19


                         NCR LONG TERM INCENTIVE PROGRAM

                            EFFECTIVE JANUARY 1, 1997

                                    PREAMBLE

         This NCR Long Term Incentive Program ("Program") is adopted effective
January 1, 1997.

         The Program is approved and adopted by the Compensation Committee of
the Board of Directors of NCR Corporation ("Company") pursuant to its authority
under Section 4.2 of the NCR Management Stock Plan to determine the terms and
conditions of awards to participants in the Management Plan.


                                    ARTICLE I

                                   Definitions

 1.1     Award means an award of Restricted Stock Units granted under the NCR
         Management Stock Plan, pursuant to the terms of this Program as
         described herein.

 1.2     Committee means the Compensation Committee of the Board of Directors of
         NCR Corporation.

 1.3     Common Stock means the common stock of NCR Corporation, par value $.01
         per share.

 1.4     Company means NCR Corporation, a Maryland corporation.

 1.5     Disability means a total and permanent disability that causes a
         Participant to be eligible to receive long term disability benefits
         from the NCR Long Term Disability Plan, or any similar plan or program
         sponsored by a subsidiary or branch of the Company that covers the
         Participant.

 1.6     Executive Officers means Board-appointed officers of the
 Company who
         are designated by the Board as "Section 16 officers."

 1.7     Fair Market Value has the meaning as defined in the Management Plan.

 1.8     Key Employees means senior managers and other employees of the Company,
         other than Executive Officers, who, in the opinion of the Chief
         Executive Officer,


                                       1

<PAGE>   2
         by virtue of their decision-making and administrative responsibilities
         affect significantly the long-term strategies, performance and
         profitability of the Company.

 1.9     Management Plan means the NCR Management Stock Plan, adopted effective
         as of January 1, 1997.

 1.10    Participant means an Executive Officer or Key Employee who is
         designated to participate in the Program for a particular Performance
         Cycle pursuant to ARTICLE II, and any former Executive Officer or Key
         Employee entitled to payment of an Award from the Program.

 1.11    Performance Cycle means each of the three-year periods beginning on
         January 1, 1996 and each January 1 thereafter.

 1.12    Program means this NCR Long Term Incentive Program.

 1.13    Restricted Stock Units means an award pursuant to Article 10 (Other
         Stock Unit Awards) of the Management Plan of units valued by reference
         to a designated amount of shares of Common Stock, subject to
         restrictions as described in a Restricted Stock Unit Statement, which
         are payable in shares of Common Stock or cash upon expiration of the
         applicable restrictions.

 1.14    Retirement means termination of employment with NCR when a Participant
         is eligible to immediately receive pension benefits (other than
         PensionPlus benefits or any similar pension benefits payable upon any
         termination of employment) from any NCR pension plan.


                                   ARTICLE II

                          Eligibility and Participation

 2.1     Eligibility. Executive Officers and Key Employees of the Company are
         eligible to receive awards under the Program.

 2.2     Participation. During the first quarter of each calendar year, the
         Committee shall designate the Executive Officers, and the Chief
         Executive Officer shall designate the Key Employees, who will
         participate in the Program for the Performance Cycle beginning in that
         calendar year. As provided in Section 4.1 New Participants Mid- Year,
         the Committee or the Chief Executive Officer, as applicable, may also
         designate as a Participant an individual who is newly hired, promoted
         or transferred into a position eligible for participation in the
         Program.


                                       2

<PAGE>   3
                                   ARTICLE III

                                     Awards

 3.1     Awards. Each Award granted under the Program shall be in the form of
         Restricted Stock Units, and shall relate to a specified Performance
         Cycle.

         The amount of award to an Executive Officer shall be determined by the
         Chairman and Chief Executive Officer and the Committee, based on their
         evaluation of each Executive Officer's performance for the first
         calendar year of each Performance Cycle, taking into consideration (1)
         performance objectives for each Executive Officer established by the
         Committee at the beginning of the calendar year, (2) comparative data
         on compensation practices of similar companies, and (3) any other
         factors determined by the Chairman and Chief Executive Officer and the
         Committee to be relevant to assessing the performance of the Executive
         Officers.

         The amount of award to a Key Employee shall be determined by the
         Chairman and Chief Executive Officer, based on his evaluation of each
         Key Employee's performance for the first calendar year of each
         Performance Cycle, taking into consideration (1) performance objectives
         for each Key Employee established by the Chairman and Chief Executive
         Officer at the beginning of the calendar year, (2) comparative data on
         compensation practices of similar companies, and (3) any other factors
         determined by the Chairman and Chief Executive Officer to be relevant
         to assessing the performance of the Key Employees.

 3.2     Maximum Award. The Compensation Committee shall establish the maximum
         amount of Award under the Plan that can be paid to each Executive
         Officer for each calendar year.

 3.3     Award of Restricted Stock Units. Awards earned for the first calendar
         year of each Performance Cycle shall be determined and paid by awarding
         Restricted Stock Units during the first quarter of the next following
         calendar year. The number of Restricted Stock Units awarded with
         respect to each Award shall be determined by dividing the dollar amount
         of the Award by the Fair Market Value of one share of Common Stock on
         the date the Restricted Stock Units are awarded, or if no trading
         occurs on such date, on the preceding trading day, rounded up to the
         nearest whole share.

         Restricted Stock Units awarded pursuant to the Program shall be subject
         to the terms and conditions described in a Restricted Stock Unit
         Statement provided to each Participant who becomes entitled to an
         Award, in the form as attached as Appendix A to this Program, with such
         minor modifications as the Chief Executive Officer or the Senior Vice
         President, Global Human Resources, may approve from time to time, which
         shall set out the terms and conditions of each Award issued under the
         Program.



                                       3

<PAGE>   4
3.5      Rights of Stockholder. A Participant shall not be, or have any of the
         rights and privileges of, a stockholder of the Company with respect 
         to any shares of Common Stock issuable under this Program unless and 
         until the shares have been credited to the Participant by the Company's
         Transfer Agent and Stock Registrar.

3.7      Issuance of Shares. The Restricted Stock Units will vest and become
         payable if the Participant remains employed by the Company until the
         end of the Performance Cycle with respect to which such Restricted
         Stock Units were awarded. At the time the Restricted Stock Units become
         vested, the Company will transfer to the Participant a number of shares
         of Common Stock equal to the number of vested Restricted Stock Units.
         The Company may offer each Participant the opportunity to elect to
         receive all or a portion of the Award in cash.


                                   ARTICLE IV

         Hires, Promotions, Re-Assignments and Terminations During a Performance
         Cycle

4.1      New Participants Mid-Year. If an individual is newly hired, promoted or
         transferred during a calendar year into a position eligible for
         participation in the Program, he or she shall be eligible for an Award
         under the Plan for the calendar year, subject to the maximum Award
         established by the Compensation Committee, prorated for the portion of
         the calendar year following the date of eligibility for the Plan.

 4.2     Re-Assignment of Participant. If an individual currently participating
         in the Program is re-assigned during a calendar year to a
         non-participating position, as determined by the Chief Executive
         Officer, he or she will not be eligible for additional Awards under the
         Program, but shall be entitled to receive an Award for the Performance
         Cycle that began on January 1 of such calendar year, and shall continue
         to vest in any Restricted Stock Units received for other Performance
         Cycles while employment with the Company continues.

4.3      Retirement or Disability. A Participant who terminates employment with
         the Company due to Retirement or Disability shall be eligible to
         receive an Award for the Performance Cycle that began on January 1 of


                                       4

<PAGE>   5
         the calendar year in which termination of employment occurs, subject to
         the maximum Award established by the Compensation Committee, prorated
         for the portion of the calendar year prior to the termination of
         employment, and shall be fully vested in the Restricted Stock Units
         received for the Performance Cycle beginning in such calendar year and
         any previous years.

 4.4     Termination of Employment. If a Participant terminates employment with
         the Company for a reason other than Retirement, Disability or death, no
         Award shall be payable with respect to the calendar year in which such
         termination occurs, and any unvested Restricted Stock Units issued
         pursuant to the Program shall be forfeited.

 4.6     Death. If a Participant dies while employed by the Company, any
         unvested Restricted Stock Units issued pursuant to the Program shall
         become vested and nonforfeitable, and shall be paid in cash to a
         beneficiary designated in writing by the Participant for such purpose,
         or if no such beneficiary is designated, the Participant's estate. The
         Chairman and Chief Executive Officer may in his discretion, subject to
         approval by the Compensation Committee, determine that an Award for the
         calendar year in which death occurs shall be payable to the
         Participant's estate.


                                    ARTICLE V

                                 Administration

5.1      Withholding Taxes. The Company shall deduct from all distributions
         under the Program any taxes required to be withheld by federal, state
         or local governments. When distributions are made in shares of Common
         Stock, the Company shall have the right to retain the value of
         sufficient shares equal to the amount of the tax required to be
         withheld with respect to such distributions. In lieu of withholding the
         value of shares, the Company may require a recipient of a distribution
         in Common Stock to reimburse the Company for any such taxes required to
         be withheld upon such terms and conditions as the Company may
         prescribe.

5.2      Non-alienation of Benefits. No benefit under the Plan shall be subject
         in any manner to anticipation, alienation, sale, transfer, assignment,
         pledge, encumbrance, or charge, including assignment pursuant to a
         domestic relations order, and any attempt to do so shall be void. No
         such benefit shall, prior to receipt thereof by the Participant, be in
         any manner liable for or subject to the debts, contracts, liabilities,
         or torts of the Participant.

5.3      Amendment or Termination of the Program. The Compensation Committee at
         any time may amend or terminate the Program, provided that no such


                                       5

<PAGE>   6
         action shall adversely affect the right of any Participant to a benefit
         to which he or she has become entitled pursuant to the Program.

IN WITNESS WHEREOF, the Company has caused this Plan to be executed on this
_____ day of ________, 1997.


                       NCR CORPORATION


                        By:_____________________________________________________
                             Richard H. Evans
                             Senior Vice President, Global Human Resources



                                       6

<PAGE>   7
                          NCR MANAGEMENT INCENTIVE PLAN

                             FOR EXECUTIVE OFFICERS

                            EFFECTIVE JANUARY 1, 1997


                                    PREAMBLE

         This NCR Management Incentive Plan for Executive Officers ("Plan") is
adopted effective January 1, 1997, by the Compensation Committee of the Board of
Directors of NCR Corporation ("Company").


                                    ARTICLE I

                                   Definitions

1.1      Award means an award of incentive compensation pursuant to the Plan.

1.2      Committee means the Compensation Committee of the Board of Directors of
         NCR Corporation.

1.3      Company means NCR Corporation, a Maryland corporation.

1.4      Disability means a total and permanent disability that causes a
         Participant to be eligible to receive long term disability benefits
         from the NCR Long Term Disability Plan, or any similar plan or program
         sponsored by a subsidiary or branch of the Company.

1.5      Executive Officers means Board-appointed officers of the Company who
         are designated by the Board as "Section 16 officers."

1.6      Participant means an Executive Officer, and any former Executive
         Officer entitled to payment of an Award from the Program.

1.7      Plan means this NCR Management Incentive Plan for Executive Officers.

1.8      Retirement means termination of employment with NCR when a Participant
         is eligible to immediately receive pension benefits (other than
         PensionPlus benefits or any similar pension benefits payable upon any
         termination of employment) from any NCR pension plan.

<PAGE>   8
                                   ARTICLE II

                          Eligibility and Participation

2.1      Eligibility and Participation. Executive Officers of the Company are
         eligible to receive Awards under the Plan.


                                   ARTICLE III

                                 Terms of Awards

3.1      Awards. Each Award under the Plan shall be paid in cash, the amount of
         which shall be determined by the Chairman and Chief Executive Officer
         and the Committee, based on their evaluation of each Participant's
         performance for the calendar year, taking into consideration (1)
         performance objectives for each Executive Officer established by the
         Compensation Committee at the beginning of the calendar year, (2)
         comparative data on compensation practices of similar companies, and
         (3) any other factors determined by the Chairman and Chief Executive
         Officer and the Committee to be relevant to assessing the performance
         of the Executive Officers.

3.2      Maximum Award. The Committee shall establish the maximum amount of
         Award under the Plan that can be paid for each calendar year.


                                   ARTICLE IV

                     New Hires, Promotions and Terminations

4.1      New Participants Mid-Year. If an individual is newly hired or promoted
         during a calendar year into a position eligible for participation in
         the Plan, he or she shall be eligible for an Award under the Plan for
         the calendar year, subject to the maximum Award established by the
         Compensation Committee, prorated for the portion of the calendar year
         following the date of eligibility for the Plan.

4.2      Retirement or Disability. A Participant who terminates employment with
         the Company due to Retirement or Disability shall be eligible to
         receive an Award for the portion of the calendar year prior to
         termination of employment, subject to the maximum Award established by
         the Compensation Committee, prorated for the portion of the calendar
         year prior to termination of employment.

4.3      Termination of Employment. If a Participant terminates employment with
         the Company for a reason other than Retirement, Disability or death, no
         Award shall be payable with respect to the calendar year in which such
         termination occurs.

                                       2

<PAGE>   9
4.4      Death. If a Participant dies while employed by the Company, the
         Chairman and Chief Executive Officer may in his discretion, subject to
         approval by the Compensation Committee, determine that an Award for the
         calendar year in which death occurs shall be payable to the
         Participant's estate.

                                    ARTICLE V

                                 Administration

5.1      Withholding Taxes. The Company shall deduct from all distributions
         under the Program any taxes required to be withheld by federal, state
         or local governments.

5.2      Non-alienation of Benefits. No benefit under the Plan shall be subject
         in any manner to anticipation, alienation, sale, transfer, assignment,
         pledge, encumbrance, or charge, including assignment pursuant to a
         domestic relations order, and any attempt to do so shall be void. No
         such benefit shall, prior to receipt thereof by the Participant, be in
         any manner liable for or subject to the debts, contracts, liabilities,
         or torts of the Participant.

5.3      Administration. The Committee shall administer the Plan, interpret the
         terms of the Plan, amend and rescind rules relating to the Plan, and
         determine the rights and obligations of Participants under the Plan.
         The Committee may delegate any of its authority as it solely
         determines. All decisions of the Committee shall be final and binding
         upon all parties including the Company, its stockholders, and the
         Participants.

5.4      Amendment or Termination of the Program. The Compensation Committee at
         any time may amend or terminate the Plan, provided that no such action
         shall adversely affect the right of any Participant to a benefit to
         which he or she has become entitled pursuant to the Plan.

IN WITNESS WHEREOF, the Company has caused this Plan to be executed on this
_____ day of ________, 1997.

                                   NCR CORPORATION


                                   By:
                                         ---------------------------------------
                                         Richard H. Evans
                                         Senior Vice President,
                                         Global Human Resources

                                       3



<PAGE>   1
                                                               EXHIBIT 13

FINANCIAL CONTENTS

30. Selected Financial Data
31. Management's Discussion and Analysis
36. Report of Management
36. Report of Independent Accountants
37. Consolidated Statements of Operations
38. Consolidated Balance Sheets
39. Consolidated Statements of Cash Flows
40. Consolidated Statements of Changes in Shareholders' Equity
41. Notes to Consolidated Financial Statements

                                       29

<PAGE>   2
SELECTED FINANCIAL DATA
Dollars in millions,
except per share amounts



<TABLE>
<CAPTION>
                                                                                         YEARS ENDED DECEMBER 31
                                                                     -----------------------------------------------------------
                                                                       1996        1995          1994        1993         1992
- --------------------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>         <C>          <C>         <C>         <C>     
RESULTS OF OPERATIONS
Revenues(1)                                                          $  6,963    $  8,162     $  8,461    $  7,265    $  7,139
Operating expenses(2)
  Cost of revenues                                                      4,997       7,316        5,894       4,839       4,378
  Selling, general, and administrative expenses                         1,458       2,632        2,169       2,136       1,938
  Research and development expenses                                       378         585          500         571         568
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations                                             130      (2,371)        (102)       (281)        255
Interest expense                                                           56          90           44          41          77
Other (income), net                                                       (36)        (45)        (130)        (42)        (77)
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes and
  cumulative effects of accounting changes                                110      (2,416)         (16)       (280)        255
Income tax expense (benefit)                                              219        (136)         187         138         157
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) before cumulative effects of accounting changes            (109)     (2,280)        (203)       (418)         98
Cumulative effects of accounting changes(3)                                --          --           --        (869)         --
- --------------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                                    $   (109)   $ (2,280)    $   (203)   $ (1,287)
   $     98
================================================================================================================================
Net loss per common share                                            $  (1.07)   $ (22.49)
================================================================================================================================
FINANCIAL POSITION AND OTHER DATA
Cash and short-term investments                                      $  1,203    $    338     $    661    $    343    $    436
Accounts receivable, net                                                1,457       1,908        1,860       1,288       1,228
Inventories                                                               439         621          952         781         620
Rental equipment and service parts, net                                   277         258          228         227         256
Property, plant, and equipment, net                                       930         957        1,234       1,143       1,026
Total assets                                                            5,280       5,256        5,836       4,664       4,565
Short-term borrowings                                                      28          45           73          40         118
Long-term debt                                                             48         330          642         115         142
Shareholders' equity                                                    1,396         358        1,690       1,032       1,831

Headcount (employees and contractors)                                  38,600      41,100       50,000      52,500      53,800
</TABLE>



(1)  The majority of the decrease in revenues for the year ended December 31,
     1996 is due to NCR's decision in September 1995 to discontinue selling
     personal computers through high-volume indirect channels.

(2)  Operating expenses include restructuring and other charges of $(55),
     $1,649, and $219 in 1996, 1995, and 1993, respectively. (See Note 4 of
     Notes to Consolidated Financial Statements.)

(3)  The cumulative effects of accounting changes in 1993 of $869 were for
     postretirement benefits, postemployment benefits, and income taxes.

The consolidated financial data for each of the years ended 1996, 1995, 1994,
and 1993 are derived from NCR's audited consolidated financial statements.

                                       30

<PAGE>   3
MANAGEMENT'S DISCUSSION AND ANALYSIS

OVERVIEW
Effective December 31, 1996, AT&T Corporation (AT&T) distributed to its
shareholders all of its interest in NCR on the basis of one share of NCR common
stock for each 16 shares of AT&T common stock (the Distribution). The
Distribution resulted in 101.4 million shares of NCR common stock outstanding as
of December 31, 1996. NCR common stock is listed on the NYSE and trades under
the symbol "NCR." From September 19, 1991 to the date of Distribution, NCR was a
wholly owned subsidiary of AT&T; previously NCR was a publicly traded company.

         NCR's consolidated financial statements reflect the results of
operations, financial position, changes in shareholders' equity, and cash flows
of NCR as if NCR was a separate stand-alone entity for all periods presented.
The consolidated financial statements of NCR have been derived from the
financial statements of AT&T using the historical results of operations, assets,
and liabilities of the businesses operated by NCR. Management believes the
assumptions underlying NCR's financial statements are reasonable. There can be
no assurances that the financial information included herein would be the same
if NCR had operated as a separate stand-alone entity during the periods
presented.

RESTRUCTURING 
In September 1995, NCR implemented a restructuring plan based on five key
principles: focus, accountability, expense level reduction, process
improvements, and a sense of urgency. A key component of the recovery strategy
was to focus on NCR's areas of strength. As part of this increased focus, NCR
decided to exit the PC manufacturing business and to no longer sell PC/entry
level server products through high-volume indirect channels. NCR reduced the
number of industries for which detailed industry solutions were offered,
focusing on three industries (retail, financial, and communications) rather than
six. In addition, NCR's plan to reduce expenses resulted in the separation of
8,500 employees and contractors worldwide. This headcount reduction was
substantially completed by December 31, 1996. Operating expenses in 1995
included restructuring and other charges of $1,649 million, and operating
expenses in 1996 included a release of restructuring reserves of $55 million.
(See Note 4 of Notes to Consolidated Financial Statements.)

         The business restructuring and turnaround strategy implemented in 1995
significantly contributed to the increase in operating income in 1996. Gross
margins improved by 6.3 percentage points of revenue and operating expenses
declined by $619 million (both before the effects of restructuring in 1996 and
1995). Cash flows from operations improved by $1,192 million in 1996.

RESULTS OF OPERATIONS
The following table displays NCR's revenues by product line. The Other category
includes businesses sold and other products and services not directly associated
with a product line.



<TABLE>
<CAPTION>
                                            YEARS ENDED DECEMBER 31
                             ----------------------------------------------------------
                                        % INCREASE/               % INCREASE/
DOLLARS IN MILLIONS           1996       (DECREASE)     1995       (DECREASE)      1994
- ---------------------------------------------------------------------------------------
<S>                          <C>         <C>         <C>           <C>           <C>
Retail products              $  428          1         $  424         --         $  422
Financial products            1,007         (2)         1,026         (1)         1,037
Computer products             1,398         30          1,078        (12)         1,219
PC/entry level
  server products               503        (71)         1,724          5          1,649
Systemedia products             551         (5)           577          4            553
Customer support
  services                    2,238          3          2,174          5          2,074
Professional services           616         (3)           638         10            578
Data services                   123        (26)           167        (19)           206
Other                            99        (72)           354        (51)           723
- ---------------------------------------------------------------------------------------
Total                        $6,963        (15)        $8,162         (4)        $8,461
=======================================================================================
</TABLE>



The following table displays selected components of NCR's consolidated
statements of operations, expressed as a percentage of revenue. The years ended
December 31, 1996 and 1995, as adjusted, exclude the effects of restructuring
and other charges:


<TABLE>
<CAPTION>
                                             YEARS ENDED DECEMBER 31
                                  --------------------------------------------
                                   1996     1995     1996    1995     1994
- ------------------------------------------------------------------------------
                                   (AS ADJUSTED)          (AS REPORTED)
<S>                               <C>      <C>      <C>     <C>      <C>   
Sales revenue                      56.7%    63.0%    56.7%   63.0%    65.3%
Services revenue                   43.3     37.0     43.3    37.0     34.7
- ------------------------------------------------------------------------------
Total revenue                     100.0%   100.0%   100.0%  100.0%   100.0%
==============================================================================
Sales gross margin                 30.6%    20.9%    30.3%    8.5%    32.4%
Services gross margin              24.8     23.2     25.6    13.5     26.5
- ------------------------------------------------------------------------------
         Total gross margin        28.1     21.8     28.2    10.4     30.3
Selling, general, and
         administrative expenses   21.4     24.7     20.9    32.2     25.6
Research and development
         expenses                   5.6      5.9      5.4     7.2      5.9
- ------------------------------------------------------------------------------
Operating income (loss)             1.1%    (8.8)%    1.9%  (29.0)%   (1.2)%
==============================================================================
</TABLE>


                                       31

<PAGE>   4
REVENUE
Total revenues decreased 15% from 1995 to 1996, principally due to NCR's
decision to no longer sell PC/entry level server products through high-volume
indirect channels. When PC/entry level server products and businesses sold are
excluded from both years, revenues in NCR's core set of businesses increased by
1% in 1996. When adjusted for the unfavorable impact of year-to-year changes in
foreign currency exchange rates (particularly the Japanese yen) revenues in core
businesses increased by 3%. 

         Total revenues decreased by 4% from 1994 to 1995. In 1994, an
additional month of international revenues was reported in order to align
international organizations with the United States fiscal calendar, and in the
first quarter of 1995 NCR's microelectronics business was sold. When both
periods are adjusted for these factors, 1995 revenues increased by 3%.
Fluctuations in foreign exchange rates did not have a significant impact on the
1995 to 1994 comparison.


                                    [graph]

                        RETAIL PRODUCTS

                        1996...............$428 million
                        1995...............$424 million
                        For legend see p.15

         Revenues from retail products increased 1% in 1996, following flat
revenues in 1995. Gains in revenues from retail scanner products more than
offset a decline in revenue from retail terminals in 1996, driven principally by
softness in the Europe/Middle East/Africa region. In 1995, increased revenues
from retail bar code scanner products to customers in the Europe/Middle
East/Africa and Asia/Pacific geographic regions offset declines in the United
States.


                                    [graph]

                        FINANCIAL PRODUCTS

                        1996...............$1,007 million
                        1995...............$1,026 million
                        For legend see p.15

         Revenues from financial products decreased 2% in 1996, following a
decrease of 1% in 1995. In 1996, very significant increases in ATM demand in the
United States were offset by declines in the Europe/Middle East/Africa and
Asia/Pacific geographic regions. These declines were primarily due to general
softness in the European banking and financial services markets, and a
transition in NCR's product offerings in Japan. In 1995, declines in ATM
revenues, principally in the United States, were offset by increases in sales to
customers in international geographic regions.


                                    [graph]

                        COMPUTER PRODUCTS

                        1996...............$1,398 million
                        1995...............$1,078 million
                        For legend see p.15

         Revenues from computer products increased 30% in 1996 compared to a
decrease of 12% in 1995. This increase in 1996 was driven principally by growth
in sales of NCR's WorldMark(TM) product line. All geographic regions reported
growth in the year-to-year comparisons as NCR continued to focus on high-end
computer systems for scalable data warehousing and high availability transaction
processing, areas in which NCR is a market leader. In 1995, the decrease in
revenues was primarily attributable to a decline in large server revenues in the
United States, resulting from a delay in transitioning customers from the 3600
product line to the new WorldMark products.

         Revenues from PC/entry level server products decreased 71% in 1996,
following an increase of 5% in 1995. The decrease in 1996 was primarily due to
NCR's decision to no longer sell these products through high-volume indirect
channels. NCR continues to offer its customers PC/entry level server products
sourced from third parties as part of overall solution sales.


                                    [graph]

                        SYSTEMEDIA PRODUCTS

                        1996...............$551 million
                        1995...............$577 million
                        For legend see p.15

         Sales of systemedia products decreased 5% in 1996, compared to an
increase of 4% in 1995. In 1996, the decrease was largely attributable to the
unfavorable impact of the strengthening of the U.S. dollar, a decline in paper
prices, and the sale of certain international businesses. The increase in 1995
was primarily attributable to increases in sales of custom paper rolls in
markets outside of the United States and in sales of stock and fax paper
products and thermal transfer ribbons in the United States.


                                    [graph]

                        SERVICES

                        1996...............$2,977 million
                        1995...............$2,979 million
                        For legend see p.15

         Revenues from the services businesses were flat in 1996, following an
increase of 4% in 1995. In 1996, the 3% growth in revenues from customer support
services was primarily due to new service offerings and continued expansion of
multivendor services. This increase was offset by a decline of 26% in data
services revenue due principally to NCR's sale of its 

                                       32

<PAGE>   5
data services business in Switzerland at the beginning of 1996. Revenues from
professional services decreased 3% in 1996, reflecting the continued focus on
scalable data warehousing and high availability transaction processing solutions
and the phaseout of certain general consulting offerings. In 1995, the 4%
increase in total services revenue was driven by a 10% increase in professional
services revenues resulting from new service offerings, including information
technology consulting, networking, scalable data warehousing, and project
management services. Prior to 1995, professional services offerings were focused
more intensively on software implementation and support, while in 1995 the focus
shifted to information technology consulting services. Customer support services
growth of 5% also contributed to the total services revenue increase in 1995.
This growth was primarily due to NCR's increased focus on nontraditional
hardware maintenance services, including multivendor services, implementation
and installation services, software services, and parts and cabling. The decline
in data services revenues in 1995 was principally due to a shrinking customer
base for these offerings.

OPERATING EXPENSES
The effects of restructuring and other charges in 1996 and 1995 have been
excluded from the discussion of operating expenses below. (See As Adjusted
columns in previous table.) The pre-tax total of restructuring reserve releases
of $55 million for 1996 was recorded as a $12 million increase to cost of sales,
with corresponding decreases of $24 million, $31 million, and $12 million to
cost of services, selling, general, and administrative expenses, and research
and development expenses, respectively. The pre-tax total of restructuring and
other charges of $1,649 million for 1995 was recorded as $636 million cost of
sales, $294 million cost of services, $616 million selling, general, and
administrative expenses, and $103 million research and development expenses.

         Gross margin as a percentage of revenue increased 6.3 percentage points
in 1996, compared to a gross margin decline of 8.5 percentage points in 1995.
The gross margin improvement in 1996 consisted of a 9.7 percentage point
improvement in sales gross margin, and a 1.6 percentage point improvement in
services gross margin. The increase in sales gross margins in 1996 reflects
improvements in margins in all NCR products and a change in product mix, as
revenues from lower-margin PC/entry level server products as a percentage of
total sales revenues declined. The increase in services gross margins reflects
improvements in the margins on all NCR services. The gross margin decline of 8.5
percentage points in 1995 was due to lower margins on both sales and services.
Sales gross margins in 1995 declined due to lower margins on certain products
and a higher mix of PC/entry level server products, which carried lower gross
margins than other products offered by NCR. These lower gross margins on
PC/entry level server products were largely due to competitive pricing pressures
and market price erosion in excess of cost reductions. Services gross margins in
1995 were impacted by the utilization of higher-cost external contractors to
assist in the delivery of new service offerings.

         Selling, general, and administrative expenses decreased $527 million or
26% in 1996, compared with a decrease of $153 million or 7% in 1995. As a
percentage of revenue, selling, general, and administrative expenses were 21.4%
in 1996 and 24.7% in 1995. The decrease in 1996 was primarily the result of
NCR's business restructuring. Specifically, the restructuring included a focus
on providing detailed industry solutions to the retail, financial, and
communications industries, general cost reductions, and the decision to no
longer sell PC/entry level servers through high-volume indirect channels. In
addition, the amount of general corporate overhead costs allocated to NCR by
AT&T decreased approximately $88 million in 1996. This decrease was due to the
fact that NCR began to manage certain corporate and administrative functions in
1996 which were previously provided substantially by AT&T, including corporate
public relations activities, certain human resource functions, financial
functions and systems architecture, and brand advertising. The 1995 decrease
reflects reduced selling expenses due to the reduction of expenses from the sale
of the microelectronics components business in 1995, the sale of the Applied
Digital Data Systems terminal business during 1994, and the benefits realized in
the fourth quarter of 1995 from the implementation of restructuring plans.

         Research and development expenses decreased $92 million or 19% in 1996,
compared with a decrease of $18 million or 4% in 1995. As a percentage of
revenue, research and development expenses were 5.6% in 1996 and 5.9% in 1995.
The decrease in 1996 was primarily attributable to NCR's decision to no longer
develop and manufacture PCs. In addition, research and development expenses
decreased due to the consolidation and elimination of redundant engineering
activities and due to a focus of research and development efforts on specific
targeted industries using common platforms and technologies. The 1995 decrease
in spending was primarily attributable to the sale of the microelectronics
components business, which more than offset the increase in research and
development for computer products and services offerings. NCR plans to continue
to invest in research and development at levels that are consistent with its
business strategies, taking into account assessments of the levels of investment
in new technologies and markets being made by competitors throughout the
industries in which NCR competes.

INCOME (LOSS) BEFORE INCOME TAXES
NCR reported operating income of $75 million (excluding a restructuring reserve
release of $55 million) in 1996 compared with operating losses of $722 million
(excluding restructuring and other charges of $1,649 million) in 1995 and $102
million in 1994.

         Interest expense was $56 million in 1996, $90 million in 1995, and $44
million in 1994. Interest expense includes amounts charged by AT&T on
interest-bearing cash advances, which were contributed to NCR by AT&T and
included in shareholder's net investment.

         Other income, net, was $36 million in 1996, $45 million in 1995, and
$130 million in 1994. The 1995 amount includes a gain on sale of NCR's
microelectronics components business of $51 million. In 1994, NCR sold certain
real estate, principally in Hong Kong and Tokyo, which resulted in gains of $110
million.

         NCR reported income before taxes of $55 million (excluding a
restructuring reserve release of $55 million) in 1996 compared with losses
before taxes of $767 million (excluding restructuring and other charges of
$1,649 million) in 1995 and $16 million in 1994.

                                       33

<PAGE>   6
NET INCOME (LOSS)
The provision for income taxes was $219 million in 1996, a benefit of
$136 million in 1995, and a provision of $187 million in 1994. NCR's tax
provision in 1996 and 1994 results from a normal provision for income taxes in
those foreign tax jurisdictions where its subsidiaries are profitable, and an
inability on a stand-alone basis to reflect tax benefits from net operating
losses and tax credits, primarily in the United States. In addition, the 1996
tax provision includes an adjustment of $82 million related to international
restructuring tax benefits that were originally recorded in 1995 and determined
not to be realizable in 1996 as a result of utilization of a larger amount of
the overall restructuring reserve within the United States. The benefit of $136
million in 1995 was primarily attributable to foreign operating losses largely
resulting from the 1995 restructuring charges incurred in those foreign
subsidiaries that have been historically profitable, and an inability on a
stand-alone basis to reflect tax benefits from net operating losses and tax
credits in the United States. 

         Net losses were $109 million in 1996, $2,280 million in 1995, and $203
million in 1994. The net loss in 1996 includes an unfavorable impact from
restructuring of $27 million ($55 million pre-tax benefit). The net loss in 1995
includes restructuring and other charges of $1,415 million ($1,649 million
pre-tax).

FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES 
NCR's cash, cash equivalents, and short-term investments totaled $1,203 million
at December 31, 1996 compared with $338 million at December 31, 1995 and $661
million at December 31, 1994.

         NCR generated cash flows from operations of $368 million in 1996 while
using cash flows in operations of $824 million and $613 million during 1995 and
1994, respectively. This increase of $1,192 million in 1996 was primarily
attributable to improvements in NCR's reported operating results and significant
declines in accounts receivable and inventories, partially offset by cash
payments for restructuring of $518 million. Receivable balances decreased $451
million from December 31, 1995 to December 31, 1996, due largely to NCR's
decision to no longer sell PC/entry level servers through high-volume indirect
channels, a reduction in receivable balances due to the sale of the Switzerland
data services business, and overall improvements in receivables management.
Inventory balances decreased $182 million from year-end 1995 to year-end 1996
resulting from exiting the PC manufacturing business, overall improved supply
line management, and an increased focus on inventory management practices.

         Net cash flows used in investing activities were $395 million, $11
million, and $477 million in 1996, 1995, and 1994, respectively. These net cash
flows represent investments in the business (principally capital expenditures),
offset by proceeds from sales of NCR assets. The $11 million of net investing
activities in 1995 included proceeds of $338 million from the sale of the
microelectronics components business. The $477 million of net investing
activities in 1994 included proceeds of $260 million from real estate sales in
Tokyo and Hong Kong and the sale of various non-core businesses. Capital
expenditures, the largest component of investing activities, were $423 million,
$498 million, and $624 million for the years ended 1996, 1995, and 1994,
respectively. Capital expenditures generally relate to expenditures for
reworkable parts used to service customer equipment, expenditures for equipment
and facilities used in manufacturing and research and development, and
expenditures for facilities to support sales and marketing activities.

         Net cash provided by financing activities was $895 million, $696
million, and $1,330 million for the years ended 1996, 1995, and 1994,
respectively. NCR historically has relied on AT&T to provide financing for its
operations. The cash flows reflected as transfers from AT&T in the consolidated
statements of cash flows represent capital infusions that were used to fund the
ongoing operations and have been recorded in the consolidated financial
statements as an adjustment to shareholder's net investment. Net cash transfers
from AT&T were $1,194 million, $1,034 million, and $770 million in 1996, 1995,
and 1994, respectively. In addition, $537 million of third-party debt was issued
in 1994, of which $312 million was repaid in 1995 and the remainder was repaid
in 1996. Prior to the date of Distribution, AT&T made decisions regarding NCR's
financing activities including cash management and debt structure. 


         In order to meet its working capital needs, NCR entered into a
five-year, unsecured revolving credit facility with a syndicate of commercial
banks and financial institutions. The credit facility provides that NCR may
borrow from time to time on a revolving credit basis an aggregate principal
amount of up to $600 million. NCR expects to be able to use the available funds
at any time for capital expenditure needs, repayment of existing debt
obligations, working capital, and general corporate purposes. The credit
facility will initially mature within five years from the date of closing and
contains certain representations and warranties, conditions, affirmative,
negative and financial covenants, and events of default customary for such a
facility. Interest rates charged on borrowings outstanding under the credit
facility are based on market rates. In addition, a portion of the credit
facility is available for the issuance of letters of credit as required by NCR.
No amounts were outstanding under the facility as of December 31, 1996. 

         NCR believes that cash flows from operations, the credit facility, and
other short- and long-term debt financings, if any, will be sufficient to
satisfy its future working capital, research and development, capital
expenditure, and other financing requirements for the foreseeable future.

FACTORS THAT MAY AFFECT FUTURE RESULTS 

Management's Discussion and Analysis and other parts of this Annual Report
contain information based on management's beliefs and forward-looking statements
that involve a number of risks, uncertainties, and assumptions. There can be no
assurances that actual results will not differ materially from the
forward-looking statements as a result of various factors, including but not
limited to the following:

         The markets for many of NCR's offerings are characterized by rapidly
changing technology, evolving industry standards, and frequent new product
introductions. NCR's operating results will depend to a significant extent on
its ability to design, develop, or otherwise obtain and introduce new products,
services, systems, and solutions and to reduce the costs of these offerings. The
success of these and other new offerings is dependent on many factors, including
proper identification of customer needs, cost, timely completion and
introduction, differentiation from offerings of NCR's competitors, and market
acceptance. The ability to successfully 

                                       34

<PAGE>   7
introduce new products and services could have an impact on future results of
operations.

         Due to NCR's focus on providing complex integrated solutions to
customers, NCR frequently relies on third parties to provide significant
elements of NCR's offerings, which must be integrated with the elements provided
by NCR. NCR has from time to time formed alliances with third parties that have
complementary products, services, and skills. These business practices often
require NCR to rely on the performance and capabilities of third parties which
are beyond NCR's control.

         A number of NCR's products and systems rely primarily on specific
suppliers for microprocessors, operating systems, and other central components.
The failure of any of these technologies to remain competitive, either
individually or as part of a system or solution, or the failure of these
providers to continue such technologies, could impact future operating results.

         NCR also uses many standard parts and components in its products and
believes there are a number of competent vendors for most parts and components.
However, a number of important components are developed by and purchased from
single sources due to price, quality, technology, or other considerations. In
some cases, those components are available only from single sources. The process
of substituting a new producer of such parts could impact NCR's results of
operations.

         NCR faces significant competition in all geographic areas where it
operates. Its markets are characterized by continuous, rapid technological
change, the need to introduce products in a timely manner in order to take
advantage of market opportunities, short product life cycles, frequent product
performance improvements, and price reductions. The significant competition in
the information technology industry has decreased gross margins for many
companies in recent years and could continue to do so in the future. Future
operating results will depend in part on NCR's ability to mitigate such margin
pressure by maintaining a favorable mix of systems, solutions, services, and
other revenues and by achieving component cost reductions and operating
efficiencies.

         NCR's sales are historically seasonal, with revenue higher in the
fourth quarter of each year. Consequently, during the three quarters ending in
March, June, and September, NCR has historically experienced less favorable
results than in the quarter ending in December. Such seasonality also causes
NCR's working capital cash flow requirements to vary from quarter to quarter
depending on the variability in the volume, timing, and mix of product sales. In
addition, in many quarters, a large portion of NCR's revenue is realized in the
third month of the quarter. Operating expenses are relatively fixed in the short
term and often cannot be materially reduced in a particular quarter if revenue
falls below anticipated levels for such quarter.

         NCR's foreign operations are subject to a number of risks inherent in
operating abroad. Such operations may be adversely affected by a variety of
factors, many of which cannot be readily foreseen and over which NCR has no
control. A significant change in the value of the dollar or another functional
currency against the currency of one or more countries where NCR recognizes
revenues or earnings or maintains net asset investments may impact future
operating results. NCR attempts to mitigate a portion of such changes through
the use of foreign currency contracts. (See Notes 2 and 10 of Notes to
Consolidated Financial Statements.)

         In the normal course of business, NCR is subject to regulations,
proceedings, lawsuits, claims, and other matters, including actions under laws
and regulations related to the environment and health and safety, among others.
Such matters are subject to the resolution of many uncertainties, and
accordingly, outcomes are not predictable with assurance. Although NCR believes
that amounts provided in its financial statements are currently adequate in
light of the probable and estimable liabilities, there can be no assurances that
the amounts required to discharge alleged liabilities from lawsuits, claims, and
other legal proceedings and environmental matters, and to comply with applicable
environmental laws, will not impact future operating results. (See Note 12 of
Notes to Consolidated Financial Statements.) 

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENT 
In October 1996, the American Institute of Certified Public Accountants issued
Statement of Position (SOP) 96-1, "Environmental Remediation Liabilities." This
statement provides guidance on the recognition and disclosure of environmental
remediation liabilities. The provisions of this SOP are effective for fiscal
years beginning after December 15, 1996. The adoption of this statement is not
expected to have a material impact on NCR's consolidated results of operations,
financial position, or cash flows.


                                       35


<PAGE>   8
REPORT OF MANAGEMENT


NCR management is responsible for the preparation, integrity, and objectivity of
NCR Corporation's consolidated financial statements and other financial
information presented in this Annual Report. The accompanying consolidated
financial statements were prepared in accordance with generally accepted
accounting principles and include certain amounts based on currently available
information and management's judgment of current conditions and circumstances.

         NCR maintains an internal control structure designed to provide
reasonable assurance, at reasonable cost, that NCR's assets are safeguarded, and
that transactions are properly authorized, executed, recorded, and reported.
This structure is supported by the selection and training of qualified
personnel, by the proper delegation of authority and division of responsibility,
and through dissemination of written policies and procedures. An ongoing program
of internal audits and operational reviews assists management in monitoring the
effectiveness of these controls, policies, and procedures. The system of
accounting and other controls is modified and improved in response to changes in
business conditions and operations, and recommendations made by NCR's
independent accountants and internal auditors.

         Coopers & Lybrand L.L.P., independent accountants, are engaged to
perform audits of NCR's consolidated financial statements. These audits are
performed in accordance with generally accepted auditing standards, which
include the consideration of NCR's internal control structure.

         The Audit and Finance Committee of the Board of Directors, consisting
entirely of independent directors who are not employees of NCR, monitors the
accounting, reporting, and internal control structure of NCR. The independent
accountants, internal auditors, and management have complete and free access to
the Audit and Finance Committee, which periodically meets directly with each
group to ensure that their respective duties are being properly discharged. 


/s/ Lars Nyberg

LARS NYBERG 
Chairman of the Board and 
Chief Executive Officer 


/s/ John L. Giering

JOHN L. GIERING 
Senior Vice President and 
Chief Financial Officer





REPORT OF INDEPENDENT ACCOUNTANTS

TO
THE SHAREHOLDERS AND BOARD OF DIRECTORS OF NCR CORPORATION


We have audited the accompanying consolidated balance sheets of NCR Corporation
and subsidiaries (NCR) at December 31, 1996 and 1995, and the related
consolidated statements of operations, changes in shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1996. These
financial statements are the responsibility of management. Our responsibility is
to express an opinion on these financial statements based on our audits. 

         We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion. 

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of NCR at
December 31, 1996 and 1995, and the consolidated results of its operations,
changes in shareholders' equity, and cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles. 



/s/ Coopers & Lybrand L.L.P.

COOPERS & LYBRAND L.L.P. 
Dayton, Ohio 
January 21, 1997



                                       36



<PAGE>   9
CONSOLIDATED STATEMENTS OF OPERATIONS

Dollars in millions,
except per share amounts



<TABLE>
<CAPTION>
                                                                         YEARS ENDED DECEMBER 31
                                                                -----------------------------------------
                                                                  1996             1995            1994
- ---------------------------------------------------------------------------------------------------------
<S>                                                             <C>             <C>              <C>    
Revenues
Sales                                                           $ 3,946         $  5,138         $ 5,524
Services                                                          3,017            3,024           2,937
- ---------------------------------------------------------------------------------------------------------
Total Revenues                                                    6,963            8,162           8,461
Operating Expenses
Cost of sales                                                     2,751            4,699           3,736
Cost of services                                                  2,246            2,617           2,158
Selling, general, and administrative expenses                     1,458            2,632           2,169
Research and development expenses                                   378              585             500
- ---------------------------------------------------------------------------------------------------------
Total Operating Expenses                                          6,833           10,533           8,563
- ---------------------------------------------------------------------------------------------------------
Income (Loss) from Operations                                       130           (2,371)           (102)
Interest expense                                                     56               90              44
Other (income), net                                                 (36)             (45)           (130)
- ---------------------------------------------------------------------------------------------------------
Income (Loss) Before Income Taxes                                   110           (2,416)            (16)
Income tax expense (benefit)                                        219             (136)            187
- ---------------------------------------------------------------------------------------------------------
Net Loss                                                        $  (109)        $ (2,280)        $  (203)
- ---------------------------------------------------------------------------------------------------------
Net Loss per Common Share                                       $ (1.07)        $ (22.49)
- ---------------------------------------------------------------------------------------------------------
Weighted Average Common Shares Outstanding (in millions)          101.4            101.4
- ---------------------------------------------------------------------------------------------------------
</TABLE>



The notes on pages 41 through 52 are an integral part of the consolidated
financial statements.


                                       37


<PAGE>   10
CONSOLIDATED BALANCE SHEETS

Dollars in millions,
except per share amounts


<TABLE>
<CAPTION>
                                                                                            At December 31
                                                                                       -----------------------
                                                                                        1996          1995
- --------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>           <C>   
Assets
Current assets
         Cash and cash equivalents                                                     $1,163        $  314
         Short-term investments                                                            40            24
         Accounts receivable, net                                                       1,457         1,908
         Inventories                                                                      439           621
         Deferred income taxes                                                            122           320
         Other current assets                                                              97           131
- --------------------------------------------------------------------------------------------------------------
Total Current Assets                                                                    3,318         3,318
- --------------------------------------------------------------------------------------------------------------
Rental equipment and service parts, net                                                   277           258
Property, plant, and equipment, net                                                       930           957
Other assets                                                                              755           723
- --------------------------------------------------------------------------------------------------------------
Total Assets                                                                           $5,280        $5,256
- --------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities
         Short-term borrowings                                                         $   28        $   45
         Accounts payable                                                                 352           478
         Taxes payable                                                                     18           118
         Payroll and benefits liabilities                                                 383           367
         Customers' deposits and deferred service revenue                                 348           381
         Other current liabilities                                                        838         1,532
- --------------------------------------------------------------------------------------------------------------
Total Current Liabilities                                                               1,967         2,921
- --------------------------------------------------------------------------------------------------------------
Long-term debt                                                                             48           330
Pension and indemnity liabilities                                                         300           329
Postretirement and postemployment benefit liabilities                                     777           718
Other liabilities                                                                         503           276
Minority interests                                                                        289           324
- --------------------------------------------------------------------------------------------------------------
Total Liabilities                                                                       3,884         4,898
- --------------------------------------------------------------------------------------------------------------
Commitments and contingencies
Shareholders' Equity
         Common stock: par value $.01 per share, 500 million shares authorized,
           101.4 million shares issued and outstanding
                                                                                            1            --
         Paid-in capital                                                                1,394            --
         Shareholder's net investment                                                      --           310
         Other                                                                              1            48
- --------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity                                                              1,396           358
- --------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity                                             $5,280        $5,256
- --------------------------------------------------------------------------------------------------------------
</TABLE>



The notes on pages 41 through 52 are an integral part of the consolidated
financial statements.


                                       38


<PAGE>   11
CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars in millions

<TABLE>
<CAPTION>
                                                                                YEARS ENDED DECEMBER 31
                                                                    -------------------------------------------
                                                                       1996           1995            1994
- ---------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>             <C>             <C>    
OPERATING ACTIVITIES
Net loss                                                            $  (109)        $(2,280)        $  (203)
Adjustments to reconcile net loss to net cash provided by
  (used in) operating activities
         Restructuring and other charges                                (55)          1,649              --
         Depreciation and amortization                                  385             350             415
         Deferred income taxes                                          241            (236)             73
         Net (gain) loss on sale of assets                               13              (1)           (110)
Changes in operating assets and liabilities
         Receivables                                                    451            (102)           (572)
         Inventories                                                    182             (72)           (171)
         Payables and other current liabilities                        (882)             31            (202)
         Other operating assets and liabilities                         142            (163)            157
- ---------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                     368            (824)           (613)
Investing Activities
Purchases of short-term investments                                    (284)           (493)           (875)
Sales of short-term investments                                         268             667             820
Expenditures for service parts                                         (207)           (172)           (253)
Expenditures for property, plant, and equipment                        (216)           (326)           (371)
Proceeds from sale of assets                                             98             415             260
Other investing activities                                              (54)           (102)            (58)
- ---------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES                                  (395)            (11)           (477)
Financing Activities
Short-term borrowings, net                                              (17)            (35)             33
Proceeds from issuance of long-term debt                                 30               9             537
Repayments of long-term debt                                           (312)           (312)            (10)
Transfers from AT&T, net                                              1,194           1,034             770
- ---------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                               895             696           1,330
Effect of exchange rate changes on cash and cash equivalents            (19)            (10)             23
- ---------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                        849            (149)            263
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                          314             463             200
- ---------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                            $ 1,163         $   314         $   463
- ---------------------------------------------------------------------------------------------------------------
</TABLE>



The notes on pages 41 through 52 are an integral part of the consolidated
financial statements.


                                       39


<PAGE>   12
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY

Dollars and shares
in millions



<TABLE>
<CAPTION>
                                                                                   SHAREHOLDER'S
                                                             COMMON STOCK         PAID-IN      NET
                                                       ------------------------   
                                                       SHARES            AMOUNT   CAPITAL   INVESTMENT      OTHER      TOTAL
- -------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>     <C>      <C>                 <C>             <C>        <C>
JANUARY 1, 1994                                                                             $   989         $ 43       $ 1,032
         Net loss                                                                              (203)          --          (203)
         Foreign currency translation                                                            --           86            86
         Other, principally additional
                  minimum pension liability                                                      --            5             5
         Transfers from AT&T, net                                                               770           --           770
- -------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1994                                                                             1,556          134         1,690
         Net loss                                                                            (2,280)          --        (2,280)
         Foreign currency translation                                                            --          (64)          (64)
         Other, principally additional
                  minimum pension liability                                                      --          (22)          (22)
         Transfers from AT&T, net                                                             1,034           --         1,034
- -------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1995                                                                               310           48           358
         Net loss                                                                              (109)          --          (109)
         Foreign currency translation                                                            --          (58)          (58)
         Other, principally additional
                  minimum pension liability                                                      --           11            11
         Transfers from AT&T, net                                                             1,194           --         1,194
         Distribution of NCR common stock by AT&T      101     $  1     $1,394               (1,395)          --            --
- -------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1996                                      101     $  1     $1,394              $    --         $  1       $ 1,396
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
                                                    


NCR has 100 million authorized shares of preferred stock at $.01 par value per
share. No preferred stock is issued or outstanding as of December 31, 1996.

The notes on pages 41 through 52 are an integral part of the consolidated
financial statements.


                                       40




<PAGE>   13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1.
COMPANY OPERATIONS AND BASIS OF PRESENTATION

COMPANY OPERATIONS
NCR Corporation and subsidiaries (NCR) design, develop, and market information
technology products, services, systems, and solutions worldwide. NCR is a
global provider of commercial, open computing systems for scalable data
warehousing and high availability transaction processing solutions to customers
in a variety of industries. NCR also provides specific information technology
solutions to customers in the retail, financial, and communications industries.
NCR's systems and solutions are supported by its customer support services and
professional services offerings, and its systemedia business, which develops,
produces, and markets a complete line of consumable and media products.

         Effective December 31, 1996, AT&T Corporation (AT&T) distributed to its
shareholders all of its interest in NCR on the basis of one share of NCR common
stock for each 16 shares of AT&T common stock (the Distribution). The
Distribution resulted in 101.4 million shares of NCR common stock outstanding as
of December 31, 1996. NCR common stock is listed on the New York Stock Exchange
and trades under the symbol "NCR." From September 19, 1991 to the Distribution
date, NCR was a wholly owned subsidiary of AT&T; previously NCR was a publicly
traded company.

BASIS OF PRESENTATION
NCR's consolidated financial statements reflect the results of operations,
financial position, changes in shareholders' equity, and cash flows of NCR as
if NCR were a separate stand-alone entity for all periods presented. The
consolidated financial statements of NCR have been derived from the
consolidated financial statements of AT&T using historical results of
operations and the historical bases in the assets and liabilities of the
business operated by NCR.

         Prior to the Distribution, changes in shareholder's net investment
represented capital contributions and interest-bearing cash advances made by
AT&T to NCR, and the net income (loss) of NCR including cost allocations from
AT&T. NCR's financing requirements during AT&T's ownership were primarily
provided through capital contributions and interest-bearing cash advances from
AT&T. NCR's historical consolidated statements of operations include interest
expense relating to such interest-bearing cash advances, which were contributed
to NCR by AT&T and included in shareholder's net investment. NCR will begin
accumulating its retained earnings effective January 1, 1997.

         General corporate overhead related to AT&T's corporate headquarters and
common support functions has been allocated to NCR, to the extent such amounts
are applicable to NCR, based on the ratio of NCR's external costs and expenses
to AT&T's external costs and expenses. Management believes these allocations are
reasonable. However, the costs of these services charged to NCR are not
necessarily indicative of the costs that would have been incurred if NCR had
performed these functions as a stand-alone entity. As a result of the
Distribution, NCR will be required to perform these functions using its own
resources or purchased services and will be responsible for the costs and
expenses associated with the management of a public corporation.

         The financial information included herein may not necessarily reflect
the consolidated results of operations, financial position, changes in
shareholders' equity, and cash flows of NCR had NCR been a separate, stand-alone
entity during the periods presented.


- --------------------------------------------------------------------------------
NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATION
The consolidated financial statements include the accounts of NCR and its
branches and majority-owned subsidiaries. Long-term investments in affiliated
companies representing ownership interests of 20% to 50% are accounted for
under the equity method. All significant intercompany transactions and accounts
have been eliminated. Investments in which NCR has less than a 20% ownership
interest are accounted for under the cost method. NCR changed the fiscal
year-end for operations located outside of the U.S. from November to December
in 1994 to align the reporting of all operations. This change added $223
million in revenue to 1994; the effect on the reported loss from operations was
not material.

USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and
revenues and expenses during the period reported. Actual results could differ
from those estimates. Estimates are used when accounting for uncollectible
accounts receivable, inventory obsolescence, product warranty, depreciation and
amortization, employee benefit plans, taxes, restructuring charges, and
environmental and other contingencies, among others.

FOREIGN CURRENCY TRANSLATION
For most international operations, assets and liabilities are translated into
U.S. dollars at year-end exchange rates, and revenues and expenses are
translated at average exchange rates prevailing during the year. Translation
adjustments, resulting from fluctuations in exchange rates, are recorded as a
separate component of shareholders' equity.

DERIVATIVE FINANCIAL INSTRUMENTS
In the normal course of business, NCR enters into various financial
instruments, including derivative financial instruments, for purposes other
than trading. Derivative financial instruments are not entered into for
speculative purposes. Derivatives, used as part of NCR's risk management
strategy, must be designated at inception as a hedge, and measured for
effectiveness both at inception and on an ongoing basis. For qualifying foreign
currency hedges, the gains and losses are deferred and recognized as
adjustments of carrying amounts when the underlying hedged transaction is
recorded. Gains and losses that do not qualify as hedges are recognized in
other income or expense.


                                       41


<PAGE>   14
REVENUE RECOGNITION
Revenue from product sales is generally recognized upon performance of
contractual obligations, such as shipment, installation, or customer
acceptance. To the extent that significant obligations remain or significant
uncertainties exist about customer acceptance of products at the time of sale,
product sales revenue is not recognized until the obligations are satisfied or
the uncertainties are resolved. Services revenue is recognized proportionately
over the contract period or as services are performed.

RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses are charged to operations as incurred. Costs
incurred for the development of computer software that will be sold, leased, or
otherwise marketed are capitalized when technological feasibility has been
established. These costs are recorded as capitalized software and amortized
over no more than three years. Capitalized software is subject to an ongoing
assessment of recoverability based upon anticipated future revenues and changes
in hardware and software technologies. Costs capitalized include direct labor
and related overhead costs. Amortization of software development costs was $66
million, $57 million, and $34 million in 1996, 1995, and 1994, respectively.

INCOME TAXES
NCR's operations have been included in the income tax returns filed by AT&T
from September 19, 1991 through the Distribution date. However, income tax
expense (benefit) in NCR's consolidated financial statements has been
calculated as if NCR had filed separate income tax returns for all periods
presented.

CASH AND CASH EQUIVALENTS
All short-term, highly liquid investments purchased with an original maturity
of three months or less are considered to be cash equivalents.

INVENTORIES
Inventories are stated at the lower of average cost or market.

PROPERTY, PLANT, AND EQUIPMENT, AND SERVICE PARTS
Property, plant, and equipment, rental equipment, and service parts are stated
at cost less accumulated depreciation. Reworkable service parts are those
service parts that can be reconditioned and rental equipment represents
equipment rented to customers under operating leases. Depreciation is computed
over the estimated useful lives of the related assets primarily on the
straight-line basis. Buildings are depreciated over 25 to 45 years, machinery
and equipment over three to ten years, and reworkable service parts and rental
equipment over three to five years.

LOSS PER COMMON SHARE
In connection with the Distribution, AT&T distributed all of its interest in
NCR, on the basis of one share of NCR common stock for each 16 shares of AT&T
common stock. This resulted in 101.4 million shares of NCR common stock
outstanding as of December 31, 1996. The net loss per common share, as
presented in the consolidated statements of operations, was calculated by
dividing the net loss for the years ended December 31, 1996 and 1995 by the
101.4 million shares of common stock, as if such shares were outstanding for
both periods. Replacement stock options and awards have not been considered in
calculating the net loss per common share since their effect would be
antidilutive.



NOTE 3.
SUPPLEMENTARY BALANCE SHEET INFORMATION



<TABLE>
<CAPTION>
                                                      AT DECEMBER 31
- --------------------------------------------------------------------------
 In millions                                       1996           1995
- --------------------------------------------------------------------------
<S>                                              <C>             <C>    
 ACCOUNTS RECEIVABLE
 Trade                                           $ 1,403         $ 1,592
 Other                                               108             384
- --------------------------------------------------------------------------
                                                   1,511           1,976
 Allowance for doubtful accounts                     (54)            (68)
- --------------------------------------------------------------------------
 Total accounts receivable                       $ 1,457         $ 1,908
==========================================================================

 INVENTORIES
 Finished goods                                  $   297         $   401
 Work in process and raw materials                   142             220
- --------------------------------------------------------------------------
 Total inventories                               $   439         $   621
==========================================================================

 RENTAL EQUIPMENT AND SERVICE PARTS
 Rental equipment and service parts              $   652         $   737
 Less: accumulated depreciation                     (375)           (479)
- --------------------------------------------------------------------------
 Total rental equipment and service parts        $   277         $   258
==========================================================================

 PROPERTY, PLANT, AND EQUIPMENT
 Land and improvements                           $   106         $    80
 Buildings and improvements                          819             822
 Machinery and other equipment                     1,494           1,573
- --------------------------------------------------------------------------
                                                   2,419           2,475
 Less: accumulated depreciation                   (1,489)         (1,518)
- --------------------------------------------------------------------------
 Total property, plant, and equipment            $   930         $   957
==========================================================================

 OTHER ASSETS
 Prepaid pension cost                            $   503         $   400
 Other                                               252             323
- --------------------------------------------------------------------------
 Total other assets                              $   755         $   723
==========================================================================

 OTHER CURRENT LIABILITIES
 Business restructuring                          $   179         $   820
 Other                                               659             712
- --------------------------------------------------------------------------
 Total other current liabilities                 $   838         $ 1,532
==========================================================================
</TABLE>



                                       42


<PAGE>   15
NOTE 4.
BUSINESS RESTRUCTURINGS

In 1995, a pre-tax charge of $1,649 million was recorded to provide for
restructuring and other charges. NCR's restructuring plans included
discontinuing the manufacture of personal computers, consolidating facilities
globally, and reducing industry markets served, as well as separating
approximately 8,500 employees and contractors, including 3,500 in foreign
locations. As of December 31, 1996, substantially all of the headcount
reductions had been completed. The restructuring charges also included costs
associated with early termination of building leases and asset write-downs.

   The pre-tax total of $1,649 million for 1995 was recorded as $636 million
cost of sales, $294 million cost of services, $616 million selling, general,
and administrative expenses, and $103 million research and development
expenses. The charges include $676 million for employee separations and related
charges; $549 million for asset write-downs; $147 million for closing, selling,
and consolidating facilities; $146 million for settling contractual commitments
with customers and related charges associated primarily with NCR's decision to
discontinue certain software products in non-targeted industries; $81 million
for contract settlements and related charges associated with NCR's decision to
discontinue selling personal computers through high-volume indirect channels;
and $50 million for other items.

   The following table presents a rollforward of the liabilities (in millions)
incurred in connection with the 1995 business restructurings. These liabilities
were reflected as other current and non-current liabilities in NCR's
consolidated balance sheets as of December 31, 1996 and 1995.


<TABLE>
<CAPTION>
                         BALANCE                                        BALANCE
                          JAN. 1,                                       DEC. 31,
 TYPE OF COST                1995   ADDITIONS   OTHER     PAYMENTS        1995
- -------------------------------------------------------------------------------
<S>                      <C>        <C>         <C>       <C>           <C>
 Employee separations           -       $ 589       -        $ (98)       $491
 Facility closings              -         147       -           (7)        140
 Other                          -         227       -          (38)        189
- -------------------------------------------------------------------------------
 Total                          -       $ 963       -        $(143)       $820
===============================================================================
</TABLE>




<TABLE>
<CAPTION>
                        BALANCE                                         BALANCE
                         JAN. 1,                                        DEC. 31,
 TYPE OF COST               1996    ADDITIONS    OTHER      PAYMENTS       1996
- --------------------------------------------------------------------------------
<S>                     <C>         <C>          <C>        <C>         <C>
 Employee separations       $491            -     $(114)       $(286)      $ 91
 Facility closings           140            -        (3)         (28)       109
 Other                       189            -        62         (204)        47
- --------------------------------------------------------------------------------
 Total                      $820            -     $ (55)       $(518)      $247
================================================================================
</TABLE>



In 1995, in addition to restructuring liabilities of $963 million, $549 million
of asset impairments (which reduced related asset balances), $87 million of
benefit plan losses, and $50 million of other charges were included in the
total restructuring and other charges of $1,649 million. Benefit plan losses
relate to pension and other employee benefit plans and primarily represent
losses in 1995 for actuarial changes that otherwise would have been amortized
over future periods.

         In the fourth quarter of 1996, NCR released $55 million of 1995
restructuring reserves. The pre-tax total of $55 million for 1996 was recorded
as a $12 million increase to cost of sales, with corresponding decreases of $24
million, $31 million, and $12 million to cost of services, selling, general, and
administrative expenses, and research and development expenses, respectively.



NOTE 5.
INCOME TAXES

The following table presents the principal components (in millions) of the
difference between the effective tax rate and the U.S. federal statutory income
tax rate for the years ended December 31:


<TABLE>
<CAPTION>
                                             1996         1995         1994
- ------------------------------------------------------------------------------
<S>                                        <C>         <C>           <C> 
 Federal income tax expense                                      
    (benefit) at the U.S. statutory                              
    tax rate of 35%                        $ 39        $(846)        $ (6)
 Foreign income tax differential            (24)          62           10
 Net domestic tax losses                                         
    and credits                             194          664          181
 Other, net                                  10          (16)           2
- ------------------------------------------------------------------------------
 Total income tax expense (benefit)        $219        $(136)        $187
==============================================================================
</TABLE>



NCR's tax provisions include a provision for income taxes in those foreign tax
jurisdictions where its subsidiaries are profitable, but reflects no tax
benefits related to net domestic tax losses and credits (as well as those of
certain foreign subsidiaries) due to an inability to use such amounts on a
stand-alone basis. NCR received payments of $183 million, $438 million, and $417
million under its tax allocation agreement with AT&T for the net domestic tax
losses and credits it generated during the years ended December 31, 1996, 1995,
and 1994, respectively. These payments were recorded in shareholder's net
investment.

         NCR paid income taxes of $88 million, $73 million, and $92 million for
the years ended 1996, 1995, and 1994, respectively.

         The following table presents the U.S. and foreign components (in
millions) of income before income taxes and income tax expense (benefit) for the
years ended December 31:



<TABLE>
<CAPTION>
                                                1996           1995           1994
- --------------------------------------------------------------------------------------
<S>                                            <C>           <C>             <C>  
 INCOME (LOSS) BEFORE
    INCOME TAXES
 United States                                 $(555)        $(1,727)        $(353)
 Foreign                                         665            (689)          337
- --------------------------------------------------------------------------------------
 Total income (loss) before income taxes       $ 110         $(2,416)        $ (16)
======================================================================================

 INCOME TAX EXPENSE (BENEFIT)
 CURRENT
 Federal                                       $  --         $    --         $  --
 State and local                                  11              18            (4)
 Foreign                                         (33)             82           118
 DEFERRED
 Federal                                          --              13           (11)
 State and local                                  --              --            (2)
 Foreign                                         241            (249)           86
- --------------------------------------------------------------------------------------
 Total income tax expense (benefit)            $ 219         $  (136)        $ 187
======================================================================================
</TABLE>


                                       43

<PAGE>   16
         Deferred income tax liabilities are taxes that NCR expects to pay in
future periods. Conversely, deferred income tax assets are tax benefits
recognized for expected reductions in future taxes payable. Deferred income
taxes arise because of differences in the financial reporting and tax bases of
certain assets and liabilities. Deferred income tax assets and liabilities (in
millions) included in the balance sheet at December 31 were as follows:



<TABLE>
<CAPTION>
                                                  1996      1995
- --------------------------------------------------------------------
<S>                                             <C>       <C>   
 DEFERRED INCOME TAX ASSETS
 Employee pensions and other benefits           $  337    $  326
 Business restructurings                           110       372
 Balance sheet reserves and allowances             434       470
 Net operating losses/credit carryforwards          98       199
 Other                                             161       109
- --------------------------------------------------------------------
 Total deferred income tax assets                1,140     1,476
 Valuation allowance                              (639)     (472)
- --------------------------------------------------------------------
 Net deferred income tax assets                    501     1,004
- --------------------------------------------------------------------

 DEFERRED INCOME TAX LIABILITIES
 Property, plant, and equipment                     64        53
 Employee pensions and other benefits              157       124
 Taxes on undistributed earnings
    of foreign subsidiaries                         51       244
 Other                                             175       282
- --------------------------------------------------------------------
 Total deferred income tax liabilities             447       703
 Total net deferred income tax assets           $   54    $  301
- --------------------------------------------------------------------
</TABLE>



NCR has recorded a valuation allowance related to its deferred income tax
assets due to the uncertainty of the ultimate realization of future benefits
from such assets. NCR has foreign net operating loss carryforwards of
approximately $261 million. The net operating loss carryforwards subject to
expiration expire in years 1997 through 2006. NCR has not provided for federal
income taxes or foreign withholding taxes on approximately $509 million and
$540 million of undistributed earnings of a foreign subsidiary as of December
31, 1996 and 1995, respectively, because such earnings are intended to be
reinvested indefinitely. It is not practicable to determine the amount of
applicable taxes that would be due were such earnings distributed.

         NCR entered into agreements with AT&T, Lucent Technologies Inc.
(Lucent), and AT&T's other domestic subsidiaries that apply to income taxes
attributable to the periods before the Distribution date. The agreements set
forth principles to be applied in allocating tax liabilities among those
entities filing income tax returns on a consolidated or combined basis.

         NCR also entered into an agreement with AT&T and Lucent that governs
contingent tax liabilities and benefits, tax contests, and other tax matters
with respect to tax periods ending or deemed to have ended on the Distribution
date. Under this agreement, adjustments to taxes that are clearly attributable
to the business of one party will be borne solely by that party. Adjustments to
all other tax liabilities generally will be borne 75% by AT&T, 22% by Lucent,
and 3% by NCR.



NOTE 6.
DEBT OBLIGATIONS

NCR has foreign bank debt with scheduled maturities within one year of $28
million and $45 million as of December 31, 1996 and 1995, respectively. The
weighted average interest rate for such debt was 12.74% in 1996 and 12.11% in
1995.

Long-term debt (in millions) consisted of the following at December 31:



<TABLE>
<CAPTION>
                                                SCHEDULED
                                                 MATURITY
                                                     DATE     1996      1995 
- -------------------------------------------------------------------------------
<S>                                             <C>           <C>       <C>
Long-term bank debt
   8.50%-LIBOR + 2%                             1998-2000      $11      $246
Medium-term notes 8.95-9.49%                    2004-2020        7        80
Notes payable 7.64%                                  2001       25         -
Other                                                            5        12
- -------------------------------------------------------------------------------
                                                                48       338
Less current portion of long-term debt                           -        (8)
- -------------------------------------------------------------------------------
Total long-term debt                                           $48      $330
- -------------------------------------------------------------------------------
</TABLE>



The scheduled maturities of outstanding long-term debt during the next five
years are $4 million in 1998, $2 million in 1999, $8 million in 2000, $25
million in 2001, and the remainder thereafter. Interest paid was approximately
$66 million, $94 million, and $75 million in 1996, 1995, and 1994,
respectively.

         As part of the NCR Distribution Agreement, AT&T agreed to contribute
cash in an amount sufficient to retire or defease a total of $68 million of NCR
debt (including payment of related expenses). Such cash proceeds from AT&T, less
amounts that were provided directly by AT&T to holders of NCR debt instruments,
were used to acquire certain investment securities that were contributed to a
defeasance trust, resulting in an in-substance defeasance of $39 million of debt
under an arrangement consistent with the provisions of Statement of Financial
Accounting Standards (SFAS) No. 76, "Extinguishment of Debt." Accordingly, such
debt and the associated assets held in trust have been excluded from the
consolidated balance sheet at December 31, 1996. NCR believes that the
investments placed in the defeasance trust will be sufficient to satisfy all
future debt service requirements for the defeased debt instruments.

         In the fourth quarter of 1996, NCR entered into a five-year, unsecured
revolving credit facility with a syndicate of commercial banks and financial
institutions. The credit facility provides that NCR may borrow from time to time
on a revolving credit basis an aggregate principal amount of up to $600 million.
NCR expects to be able to use the available funds at any time for capital
expenditure needs, repayment of existing debt obligations, working capital, and
general corporate purposes. The credit facility matures five years from the date
of closing and contains certain representations and warranties, conditions,
affirmative, negative and financial covenants, and events of default customary
for such facilities. Interest rates charged on borrowings outstanding under the
credit facility are based on market rates. In addition, a portion of the credit
facility is available for the issuance of letters of credit as required. No
amounts were outstanding under the facility as of December 31, 1996.


                                       44

<PAGE>   17
NOTE 7.
EMPLOYEE BENEFIT PLANS


NCR sponsors both defined benefit and defined contribution plans for
substantially all U.S. employees and the majority of international employees.
For salaried employees, the defined benefit plans are based primarily upon
compensation and years of service. For certain hourly employees in the U.S.,
the benefits are based on a fixed dollar amount per year of service. At
December 31, 1996 and 1995, the assets of the defined benefit plans were
included with those of AT&T and Lucent and held as part of a master trust
managed by AT&T. Assets of the master trust are primarily invested in publicly
traded common stocks (of which less than 1% of the plan assets are invested in
AT&T and Lucent stock), corporate and government debt securities, real estate
investments, and cash or cash equivalents. NCR's funding policy is generally to
contribute annually not less than the minimum required by applicable laws and
regulations. The funded status for the defined benefit plans (in millions) at
December 31 was as follows:



<TABLE>
<CAPTION>
PLANS WITH ASSETS IN EXCESS OF THE ACCUMULATED BENEFIT OBLIGATION                    U.S. PLANS              INTERNATIONAL PLANS
                                                                                -------------------        -----------------------
                                                                                1996           1995        1996          1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>            <C>         <C>          <C>     
Actuarial present value of plan obligations
   Vested benefit obligation                                                  $(1,614)       $(1,637)    $ (520)      $  (555)
- ----------------------------------------------------------------------------------------------------------------------------------
   Accumulated benefit obligation                                             $(1,639)       $(1,668)    $ (568)      $  (597)
- ----------------------------------------------------------------------------------------------------------------------------------
   Projected benefit obligation                                               $(1,697)       $(1,760)    $ (617)      $  (655)
Plan assets at fair value                                                       2,199          1,993      1,107         1,059
- ----------------------------------------------------------------------------------------------------------------------------------
Plan assets greater than projected benefit obligation                             502            233        490           404
Unrecognized net gain                                                            (360)          (128)       (80)          (89)
Unrecognized net prior service cost                                                62             78          6            37
Unrecognized net asset at transition                                              (66)           (78)       (51)          (57)
- ----------------------------------------------------------------------------------------------------------------------------------
Prepaid pension cost                                                          $   138        $   105     $  365       $   295
- ----------------------------------------------------------------------------------------------------------------------------------


PLANS WITH ASSETS LESS THAN THE ACCUMULATED BENEFIT OBLIGATION                    U.S. PLANS            INTERNATIONAL PLANS
                                                                                -------------------        -----------------------
                                                                                1996           1995        1996          1995
- ----------------------------------------------------------------------------------------------------------------------------------
Actuarial present value of plan obligations
   Vested benefit obligation                                                  $  (73)        $  (80)     $ (330)      $  (358)
- ----------------------------------------------------------------------------------------------------------------------------------
   Accumulated benefit obligation                                             $  (77)        $  (81)     $ (353)      $  (384)
- ----------------------------------------------------------------------------------------------------------------------------------
   Projected benefit obligation                                               $  (83)        $  (85)     $ (464)      $  (498)
Plan assets at fair value                                                          -              -         144           160
- ----------------------------------------------------------------------------------------------------------------------------------
Plan assets less than projected benefit obligation                               (83)           (85)       (320)         (338)
Unrecognized net loss                                                             13             17          91           101
Unrecognized net prior service cost                                                -              -           9            10
Unrecognized net transition liability                                              -              -           7             9
Additional minimum liability                                                      (7)           (13)        (26)          (35)
- ----------------------------------------------------------------------------------------------------------------------------------
Accrued pension liability                                                     $  (77)        $  (81)     $ (239)      $  (253)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>



The pension cost (credit) for the defined benefit plans (in millions) for the
years ended December 31 included the following components:



<TABLE>
<CAPTION>
                                                                              1996           1995          1994
- --------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>            <C>            <C>  
Service costs-benefits earned during the period                             $   71         $   67         $  86
Interest cost on the projected benefit obligation                              205            209           194
Net amortizations and deferrals                                                115            165          (120)
Actual return on assets                                                       (392)          (430)         (137)
Charges for special programs                                                     -             80             -
- --------------------------------------------------------------------------------------------------------------------
Net pension cost (credit)                                                   $   (1)        $   91         $  23
- --------------------------------------------------------------------------------------------------------------------
</TABLE>



The weighted average rates and assumptions utilized in the calculation of
pension cost for these plans for the years ended December 31 were as follows:



<TABLE>
<CAPTION>
                                                             U.S. PLANS                  INTERNATIONAL PLANS
                                                     --------------------------      ---------------------------
                                                     1996       1995       1994       1996       1995       1994
- ----------------------------------------------------------------------------------------------------------------
<S>                                                  <C>         <C>       <C>        <C>        <C>        <C>
Discount rate                                        7.5%       7.0%       8.7%       7.2%       7.3%       7.5%
Rate of increase in future compensation levels       4.5%       4.5%       4.5%       4.0%       4.0%       4.2%
Long-term rate of return on plan assets              9.0%       9.0%       9.0%       9.5%       9.5%       9.5%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>


                                       45

<PAGE>   18
         NCR entered into an agreement with the Pension Benefit Guaranty
Corporation (PBGC) concerning the provision by NCR of additional support for its
domestic defined benefit pension plans. Under this agreement, among other terms
and conditions, NCR agreed to provide security interests in support of such
plans in collateral with an aggregate value (calculated by applying specified
discounts to market value) of $84 million. This collateral is comprised of
certain domestic real estate. NCR does not believe that its agreement with the
PBGC will have a material effect on its financial condition, results of
operations, or cash flows.

SAVINGS PLANS
All U.S. employees and many international employees participate in defined
contribution savings plans. These plans generally provide either a specified
percent of pay or a matching contribution on participating employees' voluntary
elections. NCR's matching contributions typically are subject to a maximum
percentage or level of compensation. Employee contributions can be pre-tax,
post-tax, or a combination thereof. The expense under these plans was $31
million, $36 million, and $33 million for 1996, 1995, and 1994, respectively.



NOTE 8.
POSTRETIREMENT BENEFITS

Substantially all U.S. employees who reach retirement age while working for NCR
are eligible to participate in a postretirement benefit plan. The plan provides
medical care and life insurance benefits to retirees and their eligible
dependents. Non-U.S. employees are typically covered under government sponsored
programs, and NCR does not provide postretirement benefits other than pensions
to non-U.S. retirees. NCR generally funds these benefits on a pay-as-you-go
basis from operations. The funded status of the postretirement benefit plans
and the accrued liability (in millions) at December 31 were as follows:


<TABLE>
<CAPTION>
                                                       1996      1995    
- -------------------------------------------------------------------------
<S>                                                   <C>       <C>       
 Accumulated postretirement benefit obligation      
    Retirees                                          $(286)    $(358)
    Fully eligible active participants                  (21)      (18)
    Other active participants                           (70)      (62)
- -------------------------------------------------------------------------
 Unfunded accumulated                               
    postretirement benefit obligation                  (377)     (438)
 Unrecognized prior service costs                        32        35
 Unrecognized net gain                                  (93)      (36)
- -------------------------------------------------------------------------
 Accrued postretirement benefit obligation            $(438)    $(439)
- -------------------------------------------------------------------------
</TABLE>




The postretirement benefit cost (in millions) for the years ended December 31
included the following components:


<TABLE>
<CAPTION>
                                        1996      1995      1994
- ------------------------------------------------------------------
<S>                                      <C>       <C>      <C> 
 Service costs-benefits
    earned during the period             $ 5       $ 4      $  6
 Interest cost on the
    projected benefit obligation          27        32        31
 Net amortizations and deferrals          (1)        -         3
 Charges for special programs              -         7         -
- ------------------------------------------------------------------
 Net postretirement benefit cost         $31       $43      $ 40
- ------------------------------------------------------------------
</TABLE>



 The discount rate utilized in determining the expenses and liabilities of the
 postretirement benefit plans was 7.5%, 7.0%, and 8.7% for the years ended
 December 31, 1996, 1995, and 1994, respectively. For purposes of determining
 estimated postretirement benefit costs, NCR assumes that the growth in the per
 capita cost of covered health care benefits (the health care cost trend rate)
 would gradually decline from 8.5% in 1997 to 5.5% by the year 2005 and then
 remain level. Increasing the assumed trend rate by 1% in each year would raise
 NCR's accumulated postretirement benefit obligation at December 31, 1996 by
 approximately $34 million and NCR's 1996 postretirement benefit costs by
 approximately $3 million.



NOTE 9.
SEGMENT INFORMATION

INDUSTRY SEGMENT
NCR operates in one industry segment, the information technology industry,
which includes designing, developing, and marketing information technology
products, services, systems, and solutions worldwide.

CONCENTRATIONS
No single customer accounts for more than 10% of NCR's consolidated revenue. As
of December 31, 1996, NCR is not aware of any significant concentration of
business transacted with a particular customer that could, if suddenly
eliminated, have a material adverse impact on NCR's operations. NCR also does
not have a concentration of available sources of labor, services, licenses, or
other rights that could, if suddenly eliminated, have a material adverse impact
on its operations.

         A number of NCR's products, systems, and solutions rely primarily on
specific suppliers for microprocessors, operating systems, commercial databases,
and other central components. There can be no assurances that any sudden impact
to the availability or cost of these technologies would not have a material
adverse impact on NCR's operations.

GEOGRAPHIC SEGMENTS
Transfers between geographic areas are principally made at market-based prices.
The methods followed in developing the geographic area data require the use of
estimation techniques and do not take into account the extent to which NCR's
product development, manufacturing, and marketing depend upon each other. Thus,
the information may not be indicative of results if the geographic areas were
independent organizations.


                                       46

<PAGE>   19
   There are various differences between income before income taxes for the
U.S. and foreign operations as shown in Note 5 and as shown in the table below.
In the following geographic information, interest income, interest expense, and
nonallocable general corporate expenses are not included in operating income,
while certain corporate operating expenses incurred for the benefit of the
geographic areas are included on an allocated basis.



<TABLE>
<CAPTION>
 In millions                                1996             1995             1994
- -------------------------------------------------------------------------------------
<S>                                        <C>             <C>             <C>     
 REVENUE FOR THE
    YEARS ENDED DECEMBER 31
 United States
    Customer                               $ 2,944         $ 3,577         $ 4,214
    Intercompany                               393             697             821
- -------------------------------------------------------------------------------------
                                             3,337           4,274           5,035
 Europe/Middle East/Africa
    Customer                                 2,131           2,551           2,375
    Intercompany                               586             239             222
- -------------------------------------------------------------------------------------
                                             2,717           2,790           2,597
 Japan
    Customer                                   865           1,008             905
    Intercompany                               155              66              75
- -------------------------------------------------------------------------------------
                                             1,020           1,074             980
 Asia/Pacific (excluding Japan)
    Customer                                   535             533             478
    Intercompany                                64             109              82
- -------------------------------------------------------------------------------------
                                               599             642             560
 Americas (excluding United States)
    Customer                                   488             493             489
    Intercompany                               141               6               6
- -------------------------------------------------------------------------------------
                                               629             499             495

 Intercompany eliminations                  (1,339)         (1,117)         (1,206)
- -------------------------------------------------------------------------------------

 Consolidated revenue                      $ 6,963         $ 8,162         $ 8,461
- -------------------------------------------------------------------------------------

 INCOME (LOSS) BEFORE TAXES FOR THE
    YEARS ENDED DECEMBER 31

 United States                             $  (271)        $(1,502)        $  (232)
 Europe/Middle East/Africa                     237            (397)            208
 Japan                                         149            (189)             63
 Asia/Pacific (excluding Japan)                 62              12              24
 Americas (excluding United States)             13             (64)            (10)
- -------------------------------------------------------------------------------------
 Operating income (loss) before
    nonallocable expenses                      190          (2,140)             53
 General corporate expenses,
    interest, and other income                 (80)           (276)            (69)
- -------------------------------------------------------------------------------------
 Consolidated income (loss)
    before income taxes                    $   110         $(2,416)        $   (16)
- -------------------------------------------------------------------------------------
</TABLE>





<TABLE>
<CAPTION>
 IN MILLIONS                            1996      1995      1994
- -------------------------------------------------------------------
<S>                                    <C>      <C>       <C>   
 IDENTIFIABLE ASSETS AT DECEMBER 31
 United States                          $1,515    $1,596    $2,447
 Europe/Middle East/Africa               2,168     2,246     1,698
 Japan                                   1,005       849     1,100
 Asia/Pacific (excluding Japan)            378       344       319
 Americas (excluding United States)        214       221       272
- -------------------------------------------------------------------
 Consolidated total assets              $5,280    $5,256    $5,836
- -------------------------------------------------------------------
</TABLE>



Excluding the release of restructuring reserves in 1996, operating income
(loss) before nonallocable expenses for the year ended December 31, 1996 was
$(218) million, $204 million, and $74 million for the United States,
Europe/Middle East/Africa, and Japan, respectively. Excluding restructuring and
other charges, operating income (loss) before nonallocable expenses for the
year ended December 31, 1995 was $(747) million, $161 million, $43 million, $53
million, and $(1) million for the United States, Europe/Middle East/Africa,
Japan, Asia/Pacific (excluding Japan), and Americas (excluding United States),
respectively.



NOTE 10.
FINANCIAL INSTRUMENTS


In the normal course of business, NCR enters into various financial
instruments, including derivative financial instruments, for purposes other
than trading. Derivative financial instruments are not entered into for
speculative purposes. These instruments primarily include letters of credit and
foreign currency exchange contracts.

CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject NCR to concentrations of credit
risk consist primarily of cash and cash equivalents, investments, trade
receivables, and certain off balance sheet instruments. By their nature, all
such financial instruments involve risk, including the credit risk of
nonperformance by counterparties, and the maximum potential loss may exceed the
amount recognized in the balance sheet. At December 31, 1996 and 1995, in
management's opinion, there was no significant risk of loss in the event of
nonperformance of the counterparties to these financial instruments. Exposure
to credit risk is controlled through credit approvals, credit limits, and
monitoring procedures, and management believes that the reserves for losses are
adequate. NCR had no significant exposure to any individual customer or
counterparty at December 31, 1996 or 1995, nor does NCR have any major
concentration of credit risk related to any financial instruments.

LETTERS OF CREDIT
Letters of credit are purchased guarantees that ensure NCR's performance or
payment to third parties in accordance with specified terms and conditions.
Letters of credit may expire without being drawn upon. Therefore, the total
notional or contract amounts do not necessarily represent future cash flows.

                                       47

<PAGE>   20
FOREIGN CURRENCY EXCHANGE CONTRACTS
Foreign currency exchange contracts are used to manage exposure to changes in
currency exchange rates. The use of foreign currency exchange contracts allows
NCR to reduce its exposure to the risk that the eventual dollar net cash
inflows and outflows resulting from the sale of products to foreign customers
and purchases from foreign suppliers will be adversely affected by changes in
exchange rates. The foreign currency exchange contracts are designated for
firmly committed or forecasted purchases and sales. These transactions are
generally expected to occur in less than one year. For firmly committed sales
and purchases, gains and losses are deferred in other current assets and
liabilities. These deferred gains and losses are recognized as adjustments to
the underlying hedged transactions when the future sales or purchases are
recognized, or immediately if the commitment is canceled. Gains or losses on
foreign currency exchange contracts that are designated for forecasted
transactions are recognized in other income as the exchange rates change.

FAIR VALUE OF FINANCIAL INSTRUMENTS
The tables below present (in millions) the valuation methods and the carrying
or notional amounts and estimated fair values of material financial
instruments. The notional amounts represent agreed-upon amounts on which
calculations of dollars to be exchanged are based, and are an indication of the
extent of NCR's involvement in such instruments. They do not represent amounts
exchanged by the parties and, therefore, are not a measure of the instruments.



<TABLE>
<CAPTION>
 FINANCIAL INSTRUMENT                        VALUATION METHOD
- -----------------------------------------------------------------------------------
<S>                                          <C>
 Cash and cash equivalents                   The carrying amount is a
                                             reasonable estimate of fair value
- -----------------------------------------------------------------------------------
 Investments                                 Market quotes of similar
                                             investment instruments
- -----------------------------------------------------------------------------------
 Short-term debt                             The carrying amount is a
                                             reasonable estimate of fair value
- -----------------------------------------------------------------------------------
 Long-term debt                              Market quotes of similar
                                             debt instruments
- -----------------------------------------------------------------------------------
 Letters of credit                           Fees paid to obtain the obligations
- -----------------------------------------------------------------------------------
 Foreign currency exchange contracts         Market quotes
- -----------------------------------------------------------------------------------
</TABLE>




<TABLE>
<CAPTION>
                                                   1996                    1995
- --------------------------------------------------------------------------------------
                                           CARRYING     FAIR       CARRYING    FAIR
 ON BALANCE SHEET                           AMOUNT      VALUE       AMOUNT    VALUE
- --------------------------------------------------------------------------------------
<S>                                        <C>          <C>        <C>        <C> 
 Assets
    Cash and cash equivalents               $1,163      $1,163        $314      $314
    Short-term investments                      40          40          24       24
    Long-term investments                       35          35          42       42
 Liabilities
    Debt                                        76          78         375      389
- --------------------------------------------------------------------------------------
</TABLE>




<TABLE>
<CAPTION>
DERIVATIVE AND                 CONTRACT       CARRYING AMOUNT           FAIR VALUE
OFF BALANCE                    NOTIONAL      ------------------    -------------------
SHEET INSTRUMENTS                AMOUNT      ASSET    LIABILITY    ASSET     LIABILITY
- --------------------------------------------------------------------------------------
<S>                            <C>           <C>      <C>          <C>       <C>
1996
Foreign exchange
  forward contracts              $1,342       $ 16        $26        $17        $12
Foreign exchange
  swap contracts                    190         --         23         --         23
Letters of credit                    76         --         --         --         --
- --------------------------------------------------------------------------------------

1995
Foreign exchange
  forward contracts              $  890        $ 8        $ 5        $ 7        $ 6
Foreign exchange
  swap contracts                    491          1          8         --         58
Letters of credit                    82         --         --         --         --
- --------------------------------------------------------------------------------------
</TABLE>




<TABLE>
<CAPTION>
                                                 1996         1995
                                            CONTRACT/    CONTRACT/
ADDITIONAL                                   NOTIONAL     NOTIONAL
CONTRACT INFORMATION                           AMOUNT       AMOUNT
- ------------------------------------------------------------------
<S>                                         <C>          <C> 
Forward contracts                                       
   British pounds                              $  515         $285
   German marks                                   285          118
   Canadian dollars                               217          109
   Swiss francs                                    25           92
   Spanish pesetas                                 53           75
   French francs                                   64           47
   Dutch guilders                                  32           36
   Other                                          151          128
- -------------------------------------------------------------------
Total forward contracts                        $1,342         $890
- -------------------------------------------------------------------
</TABLE>
                                             



NOTE 11.
TRANSACTIONS WITH AT&T AND AFFILIATES


For the years ended 1996, 1995, and 1994, NCR had the following revenues (in
millions) from sales and services to AT&T and its current and former
affiliates:



<TABLE>
<CAPTION>
                                         YEARS ENDED DECEMBER 31
                                        -------------------------
                                        1996      1995      1994
- -----------------------------------------------------------------
<S>                                     <C>       <C>       <C> 
 Sales                                  $258      $415      $404
 Services                                218       215       118
- -----------------------------------------------------------------
 Total                                  $476      $630      $522
- -----------------------------------------------------------------
</TABLE>



 At December 31, 1996 and 1995, related receivables amounted to $71 million and
$30 million, respectively.



                                       48

<PAGE>   21
         AT&T allocated general corporate overhead expenses to NCR of $8
million, $96 million, and $66 million in 1996, 1995, and 1994, respectively. The
amount of general corporate costs allocated to NCR by AT&T decreased in 1996 as
NCR began to manage certain additional corporate and administrative functions in
1996 which were previously provided substantially by AT&T, including corporate
functions and public relations activities, certain human resource functions,
financial functions and systems architecture, and brand advertising. Interest
expense charged by AT&T on certain cash advances was $27 million, $29 million,
and $20 million for the years ended 1996, 1995, and 1994, respectively. The
historical financial statements reflect these interest-bearing cash advances
from AT&T in shareholder's net investment. 

         Additionally, NCR purchased products and services from AT&T and
affiliates, primarily for long distance service, Bell Labs services, PBX
systems, and miscellaneous inventory of $103 million, $157 million, and $166
million for the years ended December 31, 1996, 1995, and 1994, respectively.
Amounts payable to AT&T were $11 million at December 31, 1996 and 1995.

         AT&T's former finance subsidiary, AT&T Capital Corporation (AT&T
Capital), provides certain NCR customers with financing and ancillary services
arising from the sale of NCR products. Sales to AT&T Capital were $220 million,
$182 million, and $290 million for the years ended 1996, 1995, and 1994,
respectively.

         In connection with the Distribution, NCR, AT&T, and Lucent entered into
certain related agreements, which are summarized below.

NCR DISTRIBUTION AGREEMENT
Pursuant to the NCR Distribution Agreement, AT&T made contributions of capital
to NCR prior to the Distribution date and contributed certain intercompany
advances outstanding from AT&T to NCR. The consolidated financial statements
reflect these contributions in shareholders' equity as of December 31, 1996. The
capital contributions consisted of $419 million in cash and the contribution of
additional cash in an amount sufficient to retire or defease a total of $68
million of NCR debt (including payment of related expenses).

SEPARATION AND DISTRIBUTION AGREEMENT
The Separation and Distribution Agreement provides that NCR will indemnify AT&T
and Lucent for all contingent liabilities relating to NCR's present and former
business and operations or otherwise assigned to NCR. In addition, the
agreement provides for the sharing of contingent liabilities not allocated to
one of the parties, in the following proportions: AT&T, 75%; Lucent, 22%; and
NCR, 3%. The agreement also provides that each party will share specified
portions of contingent liabilities related to the business of any of the other
parties that exceed specified levels.

PURCHASE AGREEMENTS
NCR and AT&T entered into a Volume Purchase Agreement pursuant to which NCR is
to provide products and services to AT&T and certain affiliates of AT&T (other
than Lucent). The agreement provides that payments through the three-year
period ending December 31, 1999 made to NCR for purchases of products and
services by AT&T and certain of its affiliates will total at least $350 million
cumulatively, subject to certain conditions. Certain related agreements set
forth the material terms, conditions, and procedures with respect to
transactions between NCR and AT&T. NCR and AT&T also entered into an agreement
setting forth the specific terms and conditions applicable to the provision by
NCR to AT&T of certain product support and maintenance services. NCR and Lucent
entered into a Volume Purchase Agreement under which Lucent committed to
purchase at least $150 million of products and services from NCR during the
three-year period ending December 31, 1998. A portion of this agreement was
satisfied as of December 31, 1996.

OTHER AGREEMENTS
NCR, AT&T, and Lucent have entered into certain other agreements including a
technology access and development agreement, which relates to work performed by
Bell Labs on NCR's behalf, a patent license agreement, technology license
agreements, and certain defensive protection agreements.



NOTE 12.
CONTINGENCIES

In the normal course of business, NCR is subject to various regulations,
proceedings, lawsuits, claims, and other matters, including actions under laws
and regulations related to the environment and health and safety, among others.
Such matters are subject to the resolution of many uncertainties, and
accordingly, outcomes are not predictable with assurance. Although NCR believes
that amounts provided in its financial statements are adequate in light of the
probable and estimable liabilities, there can be no assurances that the amounts
required to discharge alleged liabilities from various lawsuits, claims, legal
proceedings, and other matters, and to comply with applicable laws and
regulations, will not exceed the amounts reflected in NCR's consolidated
financial statements or will not have a material adverse effect on its
consolidated financial condition, results of operations, or cash flows. Any
amounts of costs that may be incurred in excess of those amounts provided as of
December 31, 1996, cannot be determined.

LEGAL PROCEEDINGS
As of December 31, 1996, there were a number of individual product liability
claims pending against NCR alleging that its products, including personal
computers, supermarket bar code scanners, cash registers, and check encoders,
caused so-called "repetitive strain injuries" or "cumulative trauma disorders,"
such as carpal tunnel syndrome. As of December 31, 1996, approximately 80 such
claims were pending against NCR. In such 


                                       49

<PAGE>   22
lawsuits, the plaintiff typically alleges that the injury was caused by the
design of the product at issue or a failure to warn of alleged hazards. These
plaintiffs generally seek compensatory damages and, in many cases, punitive
damages. Most other manufacturers of these products have also been sued by
plaintiffs on similar theories. Ultimate resolution of the litigation against
NCR may substantially depend on the outcome of similar matters of this type
pending in various courts. NCR has denied the merits and basis for the pending
claims against it and intends to continue to contest these cases vigorously.

         NCR was named as one of the defendants in a purported class-action suit
filed in November 1996 in Florida. The complaint seeks, among other things,
damages from the defendants in the aggregate amount of $200 million, trebled,
plus attorneys' fees, based on State antitrust and common-law claims of unlawful
restraints of trade, monopolization, and unfair business practices. The portions
of the complaint pertinent to NCR, among other things, assert a purported
agreement between Siemens-Nixdorf entities (Siemens) and NCR regarding the
servicing of certain "ultra-high speed printers" manufactured by Siemens and the
agreement's impact upon independent service organizations, brokers, and
end-users of such printers. The amount of any liabilities or other costs that
may be incurred in connection with this matter cannot currently be determined.

ENVIRONMENTAL MATTERS
NCR's facilities and operations are subject to a wide range of environmental
protection laws in the U.S. and other countries related to solid and hazardous
waste disposal, the control of air emissions and water discharges, and the
mitigation of impacts to the environment from past operations and practices.
NCR has investigatory and remedial activities underway at a number of currently
and formerly owned or operated facilities to comply, or to determine
compliance, with applicable environmental protection laws. NCR has been
identified, either by a government agency or by a private party seeking
contribution to site cleanup costs, as a potentially responsible party (PRP) at
a number of sites pursuant to a variety of statutory schemes, both State and
Federal, including the Federal Water Pollution Control Act (FWPCA) and
comparable State statutes, and the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (CERCLA), and comparable
State statutes.

         In February 1996, NCR received notice from the U.S. Department of the
Interior, Fish & Wildlife Service (USF&WS) that USF&WS considers NCR a PRP under
the FWPCA and CERCLA with respect to alleged natural resource restoration and
damages to the Fox River and related Green Bay environment (Fox River System)
due to, among other things, sediment contamination in the Fox River System
allegedly resulting from liability arising out of NCR's former carbonless paper
manufacturing operations at Appleton and Combined Locks, Wisconsin. USF&WS has
also notified a number of other manufacturing companies of their status as PRPs
under the FWPCA and CERCLA for natural resource restoration and damages in the
Fox River System resulting from their ongoing or former paper manufacturing
operations in the Fox River Valley. In addition, NCR has been identified, along
with a number of other companies, by the Wisconsin Department of Natural
Resources (State Trustee) with respect to alleged liability arising out of
alleged past discharges that have contaminated sediments in the Fox River
System. In December 1996, USF&WS, two Native American tribes, and other federal
agencies (Federal Trustees) invited NCR, the other PRP companies, and the State
Trustee to enter into settlement negotiations over these environmental claims.
In January 1997, NCR and the other PRP companies reached agreement on an interim
settlement with the State Trustee. The Federal Trustees are not party to that
agreement, and they have collateral disputes with the State Trustee. In January
1997, the Federal Trustees notified NCR and the other PRPs of the Federal
Trustees' intent to commence a natural resource damages lawsuit under CERCLA and
the FWCPA within 60 days of the notice, unless a negotiated resolution of their
claims is reached. An estimate of NCR's ultimate share, if any, of such cleanup
costs or natural resource restoration and damages liability cannot be made with
certainty at this time due to (i) the unknown magnitude, scope, and source of
any alleged contamination, (ii) the absence of identified remedial objectives
and methods, and (iii) the uncertainty of the amount and scope of any alleged
natural resource restoration and damages. NCR believes that there are additional
PRPs who may be liable for such natural resource damages and remediation costs.
Further, in 1978, NCR sold the business to which the claims apply and believes
the claims described above are the responsibility of the buyer and its former
parent company pursuant to the terms of the sales agreement. In this connection,
NCR has commenced litigation against the buyer to enforce its position.

         It is difficult to estimate the future financial impact of
environmental laws, including potential liabilities. NCR accrues environmental
provisions when it is probable that a liability has been incurred and the amount
of the liability is reasonably estimable. Management expects that the amounts
provided as of December 31, 1996 will be paid out over the period of
investigation, negotiation, remediation, and restoration for the applicable
sites, which may be 30 years or more. Provisions for estimated losses from
environmental remediation are, depending on the site, based primarily on
internal and third-party environmental studies, estimates as to the number and
participation level of any other PRPs, the extent of the contamination, and the
nature of required remedial and restoration actions. Accruals are adjusted as
further information develops or circumstances change. The amounts provided for
environmental matters in NCR's consolidated financial statements are the
estimated gross undiscounted amount of such liabilities, without deductions for
insurance or third-party indemnity claims. In those cases where insurance
carriers or third-party indemnitors have agreed to pay any amounts and
management believes that collectibility of such amounts is probable, the amounts
are reflected as receivables in the consolidated financial statements.



                                       50

<PAGE>   23
NOTE 13.
LEASES

NCR conducts certain of its sales and manufacturing operations using leased
facilities, the initial lease terms of which vary in length. Many of the leases
contain renewal options and escalation clauses. Future minimum lease payments
(in millions) under noncancelable leases as of December 31, 1996 follow:



<TABLE>
<CAPTION>
                                                              Later
                       1997    1998    1999    2000   2001    Years    Total
- ----------------------------------------------------------------------------
<S>                     <C>     <C>     <C>     <C>    <C>      <C>     <C> 
 Operating leases       $49     $42     $39     $34    $24      $60     $248
</TABLE>



Total rental expense for all operating leases amounted to $85 million, $96
million, and $81 million in 1996, 1995, and 1994, respectively.



NOTE 14.
STOCK COMPENSATION PLANS

Prior to the Distribution, certain employees of NCR and its subsidiaries
participated in AT&T equity-based plans, under which they received stock
options and other equity-based awards. On the Distribution date, with certain
exceptions, these awards were converted into comparable awards based on NCR
common stock under NCR equity-based plans (the substitute stock options). In
addition, as of the Distribution date, NCR adopted the NCR Management Stock
Plan (NCR Stock Plan).

         The NCR Stock Plan provides for the grant of incentive stock options,
nonstatutory stock options, stock appreciation rights, restricted stock awards,
performance awards, other stock unit awards and other rights, interests, and
options relating to shares of NCR common stock and other securities of NCR. The
total number of shares of NCR common stock available for grant under the NCR
Stock Plan is 5.6% of the outstanding shares of NCR common stock in the 1997
calendar year and 4% of the outstanding shares of NCR common stock in each
calendar year thereafter, with certain exceptions and subject to certain
adjustments. Shares issuable pursuant to the substitute awards are not included
in the foregoing limits.

         The substitute stock options and other awards have the same vesting
provisions, option periods, and other terms and conditions as the AT&T options
which were replaced. The substitute stock options have the same ratio of
exercise price per share to market value per share, and the same aggregate
difference between market value and exercise price as the AT&T options. Stock
options generally have a ten-year term and vest within four years of the grant
date.



   NCR has elected to continue to account for its stock-based compensation
plans under the guidelines of Accounting Principles Board Opinion No. 25;
however, additional disclosure as required under the guidelines of SFAS No.
123, "Accounting for Stock-Based Compensation," is included below. Actual
compensation cost charged against income for NCR's stock-based plans was not
material in 1996 and 1995. If NCR had elected to recognize stock-based
compensation expense based on the fair value of granted options at the grant
date (as determined under SFAS No. 123), net loss (in millions) and loss per
share for the years ended December 31 would have been as follows:


<TABLE>
<CAPTION>
                                             1996           1995
- --------------------------------------------------------------------
<S>                                         <C>           <C>       
 Net loss           As reported             $   (109)     $  (2,280)
                    Pro forma                   (144)        (2,284)

 Loss per share     As reported             $  (1.07)     $  (22.49)
                    Pro forma                  (1.42)        (22.52)
</TABLE>



The pro forma amounts in 1996 contain expenses representing the incremental
costs of substituting NCR options for AT&T options, computed as the difference
between the value of newly granted NCR options and the value of the AT&T
options for which they were substituted for all options which were vested as of
December 31, 1996. For the year ended December 31, 1996, this cost represents a
charge of $26 million to pro forma net loss and an increase in pro forma loss
per share of $0.26. The incremental fair value of non-vested NCR options will
be used in future calculations of pro forma net income and earnings per share,
prorated over the remaining years of their respective vesting schedules. The
pro forma amounts shown above are not necessarily indicative of the effects on
net income and earnings per share in future years.

         The above pro forma net loss and loss per share were computed using the
fair value of granted AT&T options at the date of grant as calculated by the
Black-Scholes option-pricing method. In order to perform this calculation, the
following weighted average assumptions were made for 1996 and 1995: dividend
yield of 2.4%; risk-free interest rate of 6.59%; expected volatility of 19.4%;
and an expected holding period of 6 years. The incremental fair value of AT&T
post-Lucent options substituted for the AT&T options on September 30, 1996 was
also used in computing the pro forma figures; this calculation was made using
the Black-Scholes model. The weighted average assumptions used in calculating
the value of these options at September 30, 1996 were as follows: dividend yield
of 2.8%; risk-free interest rate of 6.05%; expected volatility of 21%; and an
expected holding period of 4.5 years, adjusted to reflect the remaining period
to maturity of the substituted options. The incremental fair value of NCR
options substituted for the AT&T post-Lucent options on December 31, 1996 was
used in computing the pro forma amounts; this calculation was also made using
the Black-Scholes model. The weighted average assumptions used in performing
this calculation at December 31, 1996 were as follows: dividend yield of 0.0%;
risk-free interest rate of 6.28%; expected volatility of 35%; 



                                       51

<PAGE>   24
and an expected holding period of 4.5 years, adjusted to reflect the remaining
period to maturity of the substituted options. The weighted average fair value
of NCR stock options calculated using the Black-Scholes option-pricing model for
options granted during the years ended December 31, 1996 and 1995 was $18.79 and
$16.44 per share, respectively.

         The status of all NCR options (shares in thousands), substituted for
AT&T options outstanding and exercisable at December 31, 1996, is summarized in
the following chart:



<TABLE>
<CAPTION>
                           STOCK OPTIONS OUTSTANDING         STOCK OPTIONS EXERCISABLE
                           -------------------------    ------------------------------------
                                           WEIGHTED 
                                            AVERAGE     WEIGHTED                   WEIGHTED
                                          REMAINING      AVERAGE                    AVERAGE
 RANGE OF                               CONTRACTUAL     EXERCISE                   EXERCISE
 EXERCISE PRICES           SHARES              LIFE        PRICE       SHARES         PRICE
- -------------------------------------------------------------------------------------------
<S>                        <C>          <C>             <C>            <C>         <C>
 $3.95 to $14.51              401        3.14 years       $12.67          401        $12.67
 $15.28 to $29.10           1,293        4.46 years        22.92        1,293         22.92
 $30.60 to $43.15           5,177        8.04 years        36.21        1,234         32.46
- -------------------------------------------------------------------------------------------
 Total                      6,871                                       2,928
- -------------------------------------------------------------------------------------------
</TABLE>
                                                                       


Options to purchase common stock may be granted to certain members of senior
management only by the Board of Directors. Option terms as determined by the
Board will not exceed ten years as defined in the Internal Revenue Code. The
authority to grant options to all other employees has been delegated to the
Chief Executive Officer.

         NCR adopted the WorldShares Plan effective as of the Distribution date.
The plan provides for the grant of nonstatutory stock options to substantially
all NCR employees in the United States and abroad. NCR provided each participant
with an option to purchase a number of shares of NCR common stock with an
aggregate market value as of the Distribution date of $3,000. Such options have
an exercise price of $33.44, equal to the market value of the NCR common stock
on January 2, 1997, and have a five-year expiration period. Subject to certain
conditions, participants will be fully vested and able to exercise their options
one year after the date of grant. The aggregate number of shares of NCR common
stock granted under the WorldShares Plan was approximately 3.2 million.

         Additional stock option grants were made under the NCR Management Stock
Plan subsequent to year-end. Approximately 3 million shares of NCR common stock
were granted under these plans. Such options have an exercise price equal to the
market value of the NCR common stock on January 2, 1997 and have an expiration
period of either five or ten years.



NOTE 15.
QUARTERLY INFORMATION (UNAUDITED)



<TABLE>
<CAPTION>
 IN MILLIONS EXCEPT
 PER SHARE AMOUNTS                   FIRST       SECOND       THIRD        FOURTH         TOTAL
- --------------------------------------------------------------------------------------------------
<S>                                 <C>          <C>          <C>          <C>          <C>    
1996
 Total revenues                     $ 1,586      $ 1,679      $ 1,658      $ 2,040      $ 6,963
 Gross margin                           405          464          482          615        1,966
 Net income (loss)                      (65)         (18)         (33)           7         (109)
 Net income (loss) per share        $  (.64)     $  (.18)     $  (.32)     $   .07      $ (1.07)

1995
 Total revenues                     $ 1,818      $ 2,042      $ 2,033      $ 2,269      $ 8,162
 Gross margin                           420          416         (509)         519          846
 Net income (loss)                     (146)        (243)      (1,586)        (305)      (2,280)
 Net income (loss) per share        $ (1.44)     $ (2.40)     $(15.64)     $ (3.01)     $(22.49)
</TABLE>



Net income (loss) per share was calculated by dividing the net income (loss) for
each of the quarterly periods in the years ended December 31, 1996 and 1995 by
101.4 million shares of common stock, as if such shares were outstanding for all
periods.

1 The fourth quarter of 1996 includes a pre-tax benefit of $55 million for the
release of 1995 restructuring reserves. (See Note 4 of Notes to Consolidated
Financial Statements.)

2 The first quarter of 1995 includes a pre-tax gain on the sale of the
Microelectronics components business of $51 million.

3 The third quarter of 1995 includes a pre-tax charge of $1,597 million to cover
restructuring and other costs. (See Note 4 of Notes to Consolidated Financial
Statements.)

4 The fourth quarter of 1995 includes a pre-tax charge of $52 million to cover
restructuring and other costs. (See Note 4 of Notes to Consolidated Financial
Statements.)



                                       52





<PAGE>   1
                                                                      EXHIBIT 21
                        SUBSIDIARIES OF NCR CORPORATION


                                                             Organized under the
                                                                   Laws of

Domestic subsidiaries:
Data Pathing Incorporated                                         Delaware
International Investments Inc.                                    Delaware
The National Cash Register Company                                Maryland
NCR Autotec Inc.                                                  Delaware
NCR European Logistics, Inc.                                      Delaware
The NCR Foundation                                                  Ohio
NCR Government Systems Corporation                                Delaware
NCR International, Inc.                                           Delaware
NCR Ivory Coast, Inc.                                             Delaware
NCR Overseas Trade Corporation                                    Delaware
NCR Personnel Services Inc.                                       Delaware
NCR Scholarship Foundation                                          Ohio
North American Research Corporation                               Delaware
Old River Software Inc.                                           Delaware
Quantor Corporation                                               Delaware
Sparks, Inc.                                                        Ohio
Teradata Corporation                                              Delaware
Teradata International Corporation                                Delaware
The Microcard Corporation                                         Delaware



Foreign subsidiaries:
NCR Argentina S.A.                                                Argentina
NCR Australia Pty. Limited                                        Australia
Century Data Processing Centre Pty. Limited                       Australia
NCR Superannuation Nominees, Ltd.                                 Australia
NCR Productivity Savings Plan Pty. Ltd.                            Australia
NCR Oesterreich Ges.m.b.H.                                         Austria
NCR (Bahrain) W.L.L.                                               Bahrain
NCR Belgium & Co.                                                  Belgium
Global Assurance Limited                                           Bermuda
NCR Brasil Ltda                                                    Brazil
NCR Monydata Ltda.                                                 Brazil
Monydata da Amazona Industria
 e Comercio Ltda                      Brazil
NCR Bulgaria Ltd.                                                 Bulgaria
AT&T Global Information Solutions Cameroon, S.A.                  Cameroon
NCR Canada Ltd.                                                    Canada  
NCR de Chile, S.A.                                                 Chile
NCR Colombia S.A.                                                 Colombia


<PAGE>   2
NCR Croatia d.o.o.                                                 Croatia
NCR (Cyprus) Limited                                               Cyprus
NCR (Middle East) Limited                                          Cyprus
NCR (North Africa) Limited                                         Cyprus
NCR (IRI) Ltd.                                                     Cyprus
NCR DanmarkA/S                                                     Denmark
AT&T Danmark A/S                                                   Denmark
NCR Istel Nordic A/S                                               Denmark
NCR Norden A/S                                                     Denmark
NCR Dominicana C. por A.                                      Dominican Republic
NCR Finland Oy                                                     Finland
AT&T Finland Oy                                                    Finland  
NCR France S.A.                                                    France
AT&T Global Information Solutions Antilles S.A.R.L.                France
AT&T Global Information Solutions Gabon S.A.R.L.                   Gabon
NCR Holding GmbH                                                  Germany
NCR GmbH                                                          Germany
NCR OEM Europe GmbH                                               Germany
NCR Central and Eastern Europe GmbH                               Germany
NCR Czeska republika spol. s.r.o.                               Czech Repubic
NCR Ghana Limited                                                  Ghana
NCR (Hellas) S.A.                                                  Greece
NCR Foreign Sales Corporation                                       Guam
NCR (Hong Kong) Limited                                           Hong Kong
NCR (China) Limited                                               Hong Kong
NCR (Asia) Limited                                                Hong Kong
NCR Parts Depot (Hong Kong) Limited                               Hong Kong
NCR Magyarorszag Kft.                                              Hungary
NCR Corporation India Private Limited                               India
NCR Italia S.p.A.                                                   Italy
NCR Japan, Ltd.                                                     Japan
NCR Japan Sales Co., Ltd.                                           Japan
NCR (Kenya) Limited                                                 Kenya
Afrique Investments Ltd.                                            Kenya
Data Processing Printing and Supplies Limited                       Kenya
NCR Korea Co., Ltd.                                                 Korea
NCR (Macau) Limited                                                 Macau
NCR (Malaysia) Sdn. Bhd.                                           Malaysia
Compu Search Sdn Bhd                                               Malaysia
NCR de Mexico, S.A. de C.V.                                         Mexico
NCR (Maroc)                                                        Morocco
NCR Nederland N.V.                                               Netherlands
NCR European Logistics Center BV                                 Netherlands
NCR (NZ) Limited                                                 New Zealand
NCR (Nigeria) PLC                                                  Nigeria

<PAGE>   3
NCR Norge A/S                                                 Norway
AT&T Global Information Solutions de Centro-America, S.A.     Panama
NCR Corporation de Panama, S.A.                               Panama
NCR del Peru S.A.                                             Peru
NCR Corporation (Philippines)                                 Philippines
NCR Software Corporation (Philippines)                        Philippines
NCR Polska Sp.z.o.o.                                          Poland
NCR Portugal-Informatica, Lda                                 Portugal
NCR Corporation of Puerto Rico                                Puerto Rico  
NCR A/O                                                       Russia 
AT&T Global Information Solutions Senegal S.A.R.L.            Senegal
NCR Singapore Pte Ltd                                         Singapore
NCR Slovensko spol. s.r.o.                                    Slovakia
Global Information Solutions Servis d.o.o.                    Slovenia
NCR Espana, S.A.                                              Spain
Sinat Iberia, S.A.                                            Spain
AT&T Global Information Solutions (Lanka) Ltd.                Sri Lanka
NCR (Switzerland)                                             Switzerland
National Registrierkassen AG                                  Switzerland
Axeed Informatik AG                                           Switzerland
AT&T Global Information Solutions Taiwan Limited              Taiwan
NCR Taiwan Software Ltd                                       Taiwan
NCR (Thailand) Limited                                        Thailand
NCR Tunisia, Societe Anonyme                                  Tunisia
NCR Bilisim Sistemleri, A.S.                                  Turkey
NCR Europe, Ltd.                                              United Kingdom
NCR UK Group Limited                                          United Kingdom
NCR Limited                                                   United Kingdom
NCR (Holdings) Ltd                                            United Kingdom
NCR Properties Limited                                        United Kingdom
Express Boyd Limited                                          United Kingdom
NCR Capita Limited                                            United Kingdom
NCR Financial Systems Limited                                 United Kingdom
NCR Treasury Services Limited                                 United Kingdom
Regis Court Management Limited                                United Kingdom
NCR Capita (May) Limited                                      United Kingdom
Melcombe Court Management (Marylebone) Limited                United Kingdom
AT&T Global Information Solutions del Uruguay S.A.            Uruguay
NCR (Zambia) Ltd.                                             Zambia
NCR Zimbabwe (Private) Limited                                Zimbabwe
N Timms & Co. (Private) Limited                               Zimbabwe
AT&T WINS, Inc.                                               Japan
NCR (Bermuda) Limited                                         Bermuda
NCR Services Limited                                          Bermuda

<PAGE>   4

Teradata Australia Pty Limited                                      Australia
TDA Rechner GmbH I. L.                                               Germany
Teradata Europe Ltd                                               United Kingdom
Sharebase Europe Ltd                                              United Kingdom
Teradata UK Ltd                                                   United Kingdom






<PAGE>   1
                                                                    Exhibit 23


CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the Registration Statements of
NCR Corporation on Form S-8 (File Nos. 333-18797, 333-18799, 333-18801, and
333-18803), of our reports dated January 21, 1997, on our audits of the
consolidated financial statements and consolidated financial statement schedule
of NCR Corporation at December 31, 1996 and 1995 and for the three years ended
December 31, 1996, which reports are included in NCR's Annual Report to
Shareholders and in this Annual Report on Form 10-K.


Coopers & Lybrand L.L.P.
Dayton, Ohio
March 10, 1997






<TABLE> <S> <C>


<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS OF NCR CORPORATION AT DECEMBER 31, 1996 AND 1995 
AND THE CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
DECEMBER 31, 1996 AND 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO 
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<CURRENCY> US DOLLARS
       
<S>                             <C>                     <C>
<PERIOD-TYPE>                   YEAR                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1996             DEC-31-1995
<PERIOD-START>                             JAN-01-1996             JAN-01-1995
<PERIOD-END>                               DEC-31-1996             DEC-31-1995
<EXCHANGE-RATE>                                      1                       1
<CASH>                                           1,163                     314
<SECURITIES>                                        40                      24
<RECEIVABLES>                                    1,457                   1,908
<ALLOWANCES>                                         0                       0
<INVENTORY>                                        439                     621
<CURRENT-ASSETS>                                 3,318                   3,318
<PP&E>                                           2,419                   2,475
<DEPRECIATION>                                   1,489                   1,518
<TOTAL-ASSETS>                                   5,280                   5,256
<CURRENT-LIABILITIES>                            1,967                   2,921
<BONDS>                                             48                     330
<PREFERRED-MANDATORY>                                0                       0
<PREFERRED>                                          0                       0
<COMMON>                                             1                       0
<OTHER-SE>                                       1,395                     358
<TOTAL-LIABILITY-AND-EQUITY>                     5,280                   5,256
<SALES>                                          3,946                   5,138
<TOTAL-REVENUES>                                 6,963                   8,162
<CGS>                                            2,751                   4,699
<TOTAL-COSTS>                                    4,997                   7,316
<OTHER-EXPENSES>                                 1,836                   3,217
<LOSS-PROVISION>                                     0                       0
<INTEREST-EXPENSE>                                  56                      90
<INCOME-PRETAX>                                    110                 (2,416)
<INCOME-TAX>                                       219                   (136)
<INCOME-CONTINUING>                              (109)                 (2,280)
<DISCONTINUED>                                       0                       0
<EXTRAORDINARY>                                      0                       0
<CHANGES>                                            0                       0
<NET-INCOME>                                     (109)                 (2,280)
<EPS-PRIMARY>                                   (1.07)                 (22.49)
<EPS-DILUTED>                                        0                       0
        

</TABLE>