1
                                                             
EXHIBIT 10(w)
                                                         Form
10-K for 1994 
  
                                                           File
No. 1-11237


                     AT&T CAPITAL CORPORATION 1995 MEMBER
                            ANNUAL INCENTIVE PLAN
                              February 23, 1995


SECTION 1: PURPOSE

     The purpose of the Plan is to provide incentive payments for
certain
eligible employees of the Company and certain of its subsidiaries
and to: 

     i.   support the Company's belief that its success is built
through
sharing ideas, people, and resources;

     ii.  build teamwork and collaboration;

     iii. provide distinctions in rewards based on performance;
and

     iv.  reinforce the importance of the Company's performance.


SECTION 2: DEFINITIONS

     The following terms, as used herein, will have the meaning
specified
below:

     a.   "Adjusted Target Pool" means a Target Pool adjusted
pursuant to
Section 3(b).

     b.   "Award" means a cash payment made pursuant to the Plan
(whether
or not deferred pursuant to any deferred compensation plan of the
Company).

     c.   "Board" means the Board of Directors of the Company.

     d.   "Cause" means (i) a conviction of a Participant of a
felony
(whether or not such conviction is subject to appeal), (ii) a
determination
by the Board or the Committee that the Participant has defrauded
the
Company or any of its subsidiaries, (iii) a determination by the
Board or
the Committee that a Participant has misappropriated any property
or
business of the Company or any of its subsidiaries with a value
in excess
of $100 or intentionally damaged any property or business of the
Company or
any of its subsidiaries, or (iv) a determination by the Board or
the
Committee that a Participant has engaged in willful and serious
misconduct.

     e.   "Change in Control" means any of the following:

          i.  an acquisition (other than in a Non-control
Transaction, as
defined in clause (iii) below) of any shares of capital stock or
other
securities of the Company generally entitled to vote in elections
for
directors ("Voting Securities") by a "Person" or "Group" (as such
terms are
used in Sections 13 and 14 of the Securities Exchange Act of
1934, as
amended (the "Exchange Act")), other than the Company, any
                                  
 
2

subsidiary of the Company or any employee benefit plan (or a
trust forming
a part thereof) maintained by the Company or any subsidiary of
the Company,
as a result of which such person or group becomes the "Beneficial
Owner"
(as such term is used in Section 13 of the Exchange Act) of
Voting
Securities representing fifteen percent (15%) or more of the
combined
voting power of all Voting Securities then outstanding; provided
that no
such acquisition shall be deemed to give rise to a Change in
Control so
long as, after giving effect to such acquisition, AT&T Corp.
("AT&T")
remains the Beneficial Owner of Voting Securities representing a
greater
percentage of the combined voting power of all Voting Securities
then
outstanding than is represented by the Voting Securities
beneficially owned
by such Person or Group; provided, further, that an acquisition
of Voting
Securities directly from the Company or any subsidiary of the
Company shall
not be deemed to give rise to a Change in Control if, immediately
prior to
such acquisition, no Person or Group is directly or indirectly in
"Control"
of the Company (as such term is defined in Rule 405 under the
Securities
Act of 1933, as amended);

          ii.  the individuals who, as of the effective date of
the Plan,
are members of the Board (the "Incumbent Board"), cease for any
reason to
constitute at least two-thirds of the Board; provided, however,
that if the
election, or nomination for election by the Company's
stockholders, of any
new director was approved by a vote of at least two-thirds of the
Incumbent
Board, such new director shall, for the purposes of this
definition, be
considered a member of the Incumbent Board; provided, further,
however,
that no individual shall be considered a member of the Incumbent
Board if
such individual initially assumed office as a result of either an
actual or
threatened "Election Contest" (as described in Rule 14a-11 under
the
Exchange Act) or other actual or threatened solicitation of
proxies or
consents by or on behalf of any person or group other than the
Board (a
"Proxy Contest"), including by reason of any agreement intended
to avoid or
settle any Election Contest or Proxy Contest; or 

          iii.  The approval by the requisite vote of the
Company's
stockholders of:

               A.  a merger, consolidation or reorganization
involving the
Company, unless (1) the stockholders of the Company, immediately
before
such merger, consolidation or reorganization, own, directly or
indirectly
immediately following such merger, consolidation or
reorganization, at
least sixty percent (60%) of the combined voting power of the
outstanding
voting securities of the corporation surviving such merger,
consolidation,
or reorganization (the "Surviving Corporation") in substantially
the same
proportion as their ownership of the Voting Securities of the
Company
immediately prior to such merger, consolidation or
reorganization, (2) the
individuals who were members of the Incumbent Board immediately
prior to
the execution of the agreement providing for such merger,
consolidation or
reorganization constitute at least two-thirds of the members of
the board
of directors of the Surviving Corporation and (3) no Person
(other than the
Company, any subsidiary of the Company, any employee benefit plan
(or any
trust forming a part thereof) maintained by the Company, the
Surviving
Corporation or any subsidiary thereof, or any Person who,
immediately prior
to such merger, consolidation or reorganization had beneficial
ownership of
fifteen percent (15%) or more of the then outstanding Voting
Securities of
the Company) has beneficial ownership of fifteen percent (15%) or
more of
                                  
3


the combined voting power of the Surviving Corporation's then
outstanding
voting securities (a transaction meeting the criteria set forth
in the
foregoing clauses (1) through (3) being sometimes referred to
herein as a
"Non-control Transaction"); 

               B.  a complete liquidation or dissolution of the
Company; or

               C.  an agreement for the sale or other disposition
of all or
substantially all of the assets of the Company to any Person
(other than a
transfer to a subsidiary of the Company).  

               Notwithstanding the foregoing, a Change in Control
shall not
be deemed to have occurred solely because any Person or Group
becomes the
Beneficial Owner of more than the permitted amount of the
outstanding
Voting Securities of the Company as a result of an acquisition of
Voting
Securities by the Company which, by reducing the number of Voting
Securities outstanding, increases the proportional number of
Voting
Securities owned by such Person or Group, provided that if (i) a
Change in
Control would have been deemed to have occurred but for the
operation of
this sentence as a result of such acquisition of Voting
Securities by the
Company and (ii) such Person or Group thereupon or thereafter
becomes the
Beneficial Owner of any additional Voting Securities resulting in
an
increase in the percentage of the then outstanding Voting
Securities
beneficially owned by such Person or Group (and which percentage
is in
excess of fifteen percent (15%)), then a Change in Control shall
be deemed
to have occurred at the time of such acquisition of beneficial
ownership of
such additional Voting Securities by such Person or Group.

     f.   "Committee" means the Compensation Committee of the
Board.

     g.   "Company" means AT&T Capital Corporation, a Delaware
corporation,
and its successors.

     h.   "Corporate Leadership Team" or "CLT" means the
Corporate
Leadership Team of the Company or any successor strategic
committee of the
Company.

     i.   "Corporate Support Leader" or "CSL" means the head,
regardless of
title, of the Corporate Resources, Finance and Risk Management
CSUs (other
than on a designated interim basis) or such other individuals or
positions
designated from time to time by the CLT.

     j.   "Corporate Support Unit" or "CSU" means a unit of the
Company
involved in supporting the Strategic Business Units as designated
by the
CLT from time to time.

     k.   "Disability" means "disability" within the meaning of
the
Company's long-term disability plan, as in effect at the time.

     l.   "IPO Date" means August 4, 1993.

     m.   "Member" means a non-probationary, active regular
full-time or
regular part-time employee of the Company or any subsidiary of
the Company.

                                  

4

     n.   "Net Income" means the consolidated net after-tax
income of the
Company, after adjustment to omit the effects of any
extraordinary items
and the cumulative effects of changes in accounting principles as
shown in
the Company's audited consolidated statement of income.

     o.   "Participant" means a Member who satisfies the
eligibility
requirements in Section 3(a) and who has been selected by the CLT
to
participate in the Plan.

     p.   "Performance Criteria" means the criteria to measure
performance
for a Plan Year from among one or more of the following:

          i.   Net Income;

          ii.  Return to Equity;

          iii. any other criteria related to Company performance,
CSU or
SBU performance, individual performance or any other category of
performance as designated by the CLT from time to time.

     q.   "Performance Goal" means the level of performance as
established
by the CLT with respect to a Performance Criterion.

     r.   "Plan" means the AT&T Capital Corporation 1995 Annual
Incentive
Plan.

     s.   "Plan Year" means the calendar year.

     t.   "Discretionary Fund" means the fund established
pursuant to
Section 3(f).

     u.   "Qualifying Termination" of the employment of a
Participant with
the Company and any of its subsidiaries in connection with a
Change in
Control means any of the following:

          i.   a termination of such employment by the Company
and such
subsidiaries within two (2) years after such Change in Control,
other than
a termination for Cause or in a case of Retirement, death, or
Disability;

          ii.  A termination of such employment by such
Participant within
two (2) years after a Change in Control for one or more of the
following
reasons:

               A.   The assignment to such Participant of any
duties
inconsistent, in a way significantly adverse to such Participant,
with such
Participant's positions, duties, responsibilities and status with
the
Company and such subsidiaries immediately prior to such Change in
Control,
or a significant reduction in the duties and responsibilities
held by such
Participant immediately prior to such Change in Control; a change
in such
Participant's reporting responsibilities, title or offices as in
effect
immediately prior to such Change in Control that is significantly
adverse
to the Participant; or any removal of such Participant from or
any failure
to re-elect such Participant to any position with the Company or
any such
subsidiary that such Participant held immediately prior to such
Change in 

                                   

5

Control except in connection with such Participant's promotion or
a
termination of employment for Cause or in a case of Retirement,
death, or
Disability; or

               B.   a reduction by the Company or such
subsidiaries in such
Participant's base annual salary as in effect immediately prior
to such
Change in Control; the failure by the Company and such
subsidiaries to
continue in effect any employee benefit plan or compensation plan
in which
such Participant was participating immediately prior to such
Change in
Control unless such Participant is permitted to participate in
other plans
providing substantially comparable benefits to such Participant;
or the
taking of any action by the Company or such subsidiaries that
would
adversely affect such Participant's participation in or
materially reduce
such Participant's benefits under any such plan; or

               C.   the Company or such subsidiaries requiring
such
Participant to be based anywhere other than such Participant's
present work
location or a location within twenty-five (25) miles from such
present
location; or the Company requiring such Participant to travel on
company
business to an extent substantially more burdensome than such
Participant's
travel obligations immediately prior to such Change in Control;

               provided that, in the case of any such termination
of
employment by the Participant, such termination shall not be
deemed to be a
Qualifying Termination unless such termination occurs within
ninety (90)
days after the occurrence of the events constituting the reason
for such
termination; or

          iii. a  termination of such employment by the Company
and such
subsidiaries within one (1) year prior to a Change in Control,
other than a
termination for Cause or in a case of Retirement, death, or
Disability, if
the Participant can demonstrate that such termination (A) was at
the
request of a third party with which AT&T or its subsidiaries
(other than
the Company and the subsidiaries of the Company to the extent
that they are
not directly or indirectly controlled by AT&T at the time) had
entered into
negotiations or an agreement with regard to such Change in
Control or (B)
otherwise occurred in connection with, or in anticipation of,
such Change
in Control, provided that, in either such case, such Change in
Control
actually occurs.

     v.   "Retirement" means the voluntary retirement of a Member
pursuant
to a retirement plan of the Company or any subsidiary of the
Company.

     o.   "Return to Equity" means Net Income divided by the
average of the
Company's consolidated shareholder equity, as of the end of each
month in
the twelve-month period ending on December 31 of a Plan Year.

     w.   "Strategic Business Unit" or "SBU" means a strategic
business
unit of the Company as designated by the CLT from time to time.

     x.   "SBU Head" means the head, regardless of title, of an
SBU (other
than on a designated interim basis).

                               

6

     y.   "Target Award" means, with respect to a Participant for
any Plan
Year, the base salary earned by such Participant for such Plan
Year
multiplied by the percentage established for such Participant for
purposes
of calculating his Target Award, provided that such percentage
may not
exceed 43% without the Committee's approval.

     z.   "Target Pool" means a Target Pool established pursuant
to Section
3(b).

     aa.  "Unit Head Fund" means the fund established pursuant to
Section
3(g).


SECTION 3: AWARDS

     a.   Eligibility. All Members, other than Members who are
part of the
Corporate Leadership Team or who participate in an incentive plan
designated by the CLT as a substitute for this Plan, will be
eligible to
participate in the Plan. If the effective date of a Participant's
participation in the Plan is after January 1 but prior to October
1 of a
Plan Year, the Participant will be entitled to receive only that
portion of
the Award that he would have otherwise been entitled to receive
for such
Plan Year determined by multiplying the amount of such Award by a
fraction,
the numerator of which is the number of days of the Participant's
active
service during such Plan Year and the denominator of which is
365. No
Participant whose effective date of participation in the Plan is
after
September 30 of a Plan Year may receive an Award for such Plan
Year.

     b.   Target Pools and Adjusted Target Pools. Each Plan Year,
the CLT 
will establish a Target Pool with respect to the CSUs and each
SBU. Each
such Target Pool will be adjusted by the CLT based on the extent
to which
applicable Performance Goals have been attained (an "Adjusted
Target
Pool"). Except to the extent paid from the Discretionary Fund or
the Unit
Head Fund, Awards paid to Members of a CSU or SBU may not, in the
aggregate, exceed the Adjusted Target Pool for the CSUs or
applicable SBU.

     c.   Performance Criteria and Performance Goals. Each Plan
Year,
Performance Criteria and Performance Goals will be established
by, or in
accordance with guidelines established by, the CLT. The CLT shall
also
determine the extent to which such Performance Criteria shall be
weighted
in determining Awards. Performance Criteria, Performance Goals
and
weightings may vary from Participant to Participant and SBU to
SBU, between
the CSUs and one or more SBUs and from Plan Year to Plan Year.
The CLT may
in its sole discretion, during or after any Plan Year, increase
or decrease
the amount of any Performance Goal and/or the weighting of any
Performance
Criteria for such Plan Year to reflect (i) extraordinary, unusual
or non-recurring items or events or (ii) material differences
between any
significant assumptions used by the CLT in establishing a
Performance Goal
and/or the weighting of a Performance Criteria and actual events
or
conditions experienced during such Plan Year.

     d.   Target Awards. Target Awards will be established for
each 
Participant by, or in accordance with guidelines established by,
the CLT. 

                                   

7

Schedules will also be established by, or in accordance with
guidelines
established by, the CLT setting forth the percentage of the
Target Award
for each group of Participants payable at specified levels of
performance,
based on the Performance Goal for each Performance Criteria and
the
weighting established for such Performance Criteria.

     e.   Determination of Awards. Subject to Section 3(b), (i)
actual  
Awards payable to Participants will be based upon the extent to
which
Performance Goals have been achieved, and (ii) all such
determinations
regarding the achievement of Performance Goals and the
calculation of
Awards will be made and/or approved by the CLT.

     f.   Discretionary Fund. A Discretionary Fund will be
established for
each Plan Year. Such fund will be in addition to, and will be
equal to ten
percent (10%) of, the aggregate of the Adjusted Target Pools for
such Plan
Year. Awards may be made from the Discretionary Fund in the sole
and
absolute discretion of the CLT. Such Awards may be made without
regard to
the extent to which any Performance Goals have been met.

     g.   Unit Head Fund. A Unit Head Fund will be established
with respect
to the CSUs and each SBU for each Plan Year. Such fund will be in
addition
to, and will be equal to ten percent (10%) of, the Adjusted
Target Pool
applicable to the CSUs or such SBU, as the case may be, for such
Plan Year.
Subject to any rules and guidelines established with respect
thereto,
Awards may be made from the Unit Head Fund in the sole and
absolute
discretion of the applicable CSL or SBU Head. Such Awards may be
made
without regard to whether any Performance Criteria have been met.

     h.   Payment of Awards. Awards will be paid in a lump sum
cash payment
as soon as practicable after the close of the Plan Year to which
such
Awards relate but in no event later than March 15 of the Plan
Year
immediately following such Plan Year.

          i.   If a Participant ceases to be employed by the
Company and
its subsidiaries prior to the Company's last regular business day
in any
Plan Year, including without limitation by reason of transferring
to AT&T
or a subsidiary thereof other than the Company and its
subsidiaries (if
such transfer takes place more than three (3) years after the IPO
Date),
then the Participant's participation in the Plan shall terminate
forthwith
and such Participant will not be eligible to receive an Award for
such Plan
Year.

          ii.  Notwithstanding clause (i) above, if prior to
December 31st
of any Plan Year (x) a Participant who has completed during such
Plan Year
at least three (3) months full-time or regular part-time active
service
ceases to be employed by the Company and any of its subsidiaries
by reason
of death, Disability or Retirement or (y) a Participant transfers
to an
employment position with the Company or a subsidiary of the
Company in
which he is no longer eligible to participate in the Plan or (z)
a
Participant transfers to AT&T or a subsidiary thereof other than
the
Company and its subsidiaries within three (3) years after the IPO
Date, the
Participant will receive that portion, and only that portion, of
the Award
that he would otherwise have been entitled to receive for such
Plan Year
determined by multiplying the amount of such Award by a fraction,
the 

                                  

8

numerator of which is the number of days of the Participant's
active
service during such Plan Year through the date of his termination
or
transfer and the denominator of which is 365. In the event a
Participant
ceases to be employed by the Company and its subsidiaries by
reason of
death, the CLT may elect to pay such a pro rata Award based on an
estimate
of performance for such Plan Year.

          iii. In the event a Participant transfers from a CSU or
SBU to
another CSU or SBU during a Plan Year, the Participant's Award,
if any,
with respect to such Plan Year will be determined based on his
relative
participation in each such unit determined by the application of
fractions,
the numerators of which are the numbers of days of the
Participant's active
service in each such unit and the denominators of which are 365;
provided,
however, that such numerators will only include active service in
units
with respect to which the Participant was eligible to participate
in the
Plan.

     i.   Acceleration Upon Change in Control. In the event of a
Qualifying
Termination of the employment of any Member with the Company
prior to the
end of any Plan Year in connection with a Change in Control, such
Member
shall become irrevocably vested with the right to receive an
Award for such
Plan Year equal to the higher of (i) 110% of such Member's Target
Award for
such Plan Year and (ii) such Member's Award for the Plan Year
immediately
preceding such Change in Control. Similarly, in the event of such
a
Qualifying Termination between the end of any Plan Year and March
15 of the
immediately following Plan Year, such Member shall become
irrevocably
vested with the right to receive an Award with respect to such
Plan Year
equal to the highest of (i) the Award for such Plan Year, to the
extent
already determined, (ii) 110% of such Member's Target Award for
such Plan
Year, and (iii) such Member's Award for the Plan Year immediately
preceding
such Change in Control. The Company shall pay the Member such
amount no
later than March 15 of the Plan Year immediately following the
Plan Year to
which such Award relates.


SECTION 4: ADMINISTRATION

     a.   Authority. Except as otherwise provided in the Plan,
the Plan
will be administered by the CLT, who will have full and complete
authority,
in its sole and absolute discretion, (i) to exercise all of the
powers
granted to it under the Plan, (ii) to construe, interpret, and
implement
the Plan and any related document, (iii) to prescribe, amend, and
rescind
rules and guidelines relating to the Plan, (iv) to make all
determinations
necessary or advisable in administering the Plan, and (v) to
correct any
defect, supply any omission and reconcile any inconsistency in
the Plan.

     b.   Determinations. The actions and determinations of the
CLT, the
CSL or an SBU Head, as the case may be, will, within the scope of
their
respective authority on all matters relating to the Plan and any
Awards be
final and conclusive. Such determinations under the Plan need not
be
uniform and may be made by it selectively among persons who
receive, or who
are eligible to receive, Awards, whether or not such persons are
similarly
situated.

                                  

9

     c.   Expenses. The Company will pay all costs and expenses
of
administering the Plan, including but not limited to the payment
of expert
fees.

     d.   Delegation. The CLT may delegate the authority to
execute and
deliver such instruments and documents, to do all such acts and
things, and
to take all such other steps deemed necessary, advisable or
convenient for
the effective administration of the Plan in accordance with its
terms and
purpose.


SECTION 5: MISCELLANEOUS

     a.   Award Confers No Right to Employment. No Member or
other person
shall have any right or claim to any Award under the Plan except
in
accordance with the provisions of the Plan. The Plan shall not be
construed
as creating any contract of employment or otherwise conferring
upon any
Member any legal right to continuation of employment, nor as
limiting or
qualifying the right of the Company and its subsidiaries to
discharge any
Member without regard to the effect that such discharge might
have upon
such Member's rights under the Plan.

     b.   Unfunded Plan. Nothing in this Plan shall be
interpreted as
requiring the Company or any subsidiary of the Company to fund or
otherwise
set aside or earmark any assets for the purposes of satisfying
any
obligations under this Plan. The Company's obligations hereunder
shall
constitute general unsecured obligations, payable out of the
Company's
general assets, and no Member shall have any right to any
specific assets
of the Company or any subsidiary of the Company.

     c.   Withholding Taxes. The Company will deduct any
withholding taxes
applicable to the payment of an Award hereunder (i) from the
amount to be
paid under such Award or (ii) from any other amount then or
thereafter
payable by the Company or any subsidiary of the Company to the
relevant
Member.

     d.   Successors. Awards granted hereunder shall be binding
upon any
successor or successors to the Company or any relevant subsidiary
of the
Company.

     e.   Non-Assignability of Rights. No interest, right or
claim in or to
any Award payable hereunder shall be assignable, transferable or
subject to
sale, mortgage, pledge, hypothecation, commutation, anticipation,
garnishment, attachment, execution, or levy of any kind, and the
Company
will not recognize any attempt to assign, transfer, sell,
mortgage, pledge,
hypothecate, commute or anticipate the same, except to the extent
required
by law.

     f.   Facility of Payments. In the event that the CLT or its
designee
determines that any Member to whom an Award is payable under the
Plan is
unable to care for his affairs because of illness or accident, or
otherwise, the CLT or its designee may direct that any payment
due shall be 
paid to the duly appointed legal representative of such person,
or if there 

                                 

10

be no duly appointed legal representative, to the spouse, a
child, a parent
or other blood relative of the person, or to any person deemed by
the CLT
or its designees to have incurred expense for the benefit of such
person,
and any such payments so made shall be a complete discharge of
the
liabilities of the Company therefor.

     g.   Applicability of Employee Compensation Adjustment Plan.
The
rights of a Participant under any Award granted to such
Participant under
the Plan shall be subject to the provisions of the AT&T Capital
Corporation
Employee Compensation Adjustment Plan, as in effect from time to
time, to
the extent applicable to such Participant.

     h.   Governing Law. This Plan and the Awards granted
hereunder shall
be governed in accordance with the laws of the State of New
Jersey without
regard to the conflicts of law rules thereof.

     i.   Number and Gender. Where from the context it appears
appropriate,
each term used in this Plan in either the singular or plural
shall include
the singular and the plural, and pronouns stated in the
masculine, feminine
or neuter gender shall include the masculine, feminine, and
neuter.

     j.   Captions. Captions of this Plan are inserted for
convenience of
reference only, and the Plan is not to be construed by
interpretation
thereof.

     k.   Amendments. The Plan may be amended or terminated by
the Board or
the Committee in any respect except that (i) no amendment may be
made which
would adversely affect the rights of a Participant under an Award
granted
and outstanding prior to the date such amendment is adopted and
(ii)
following any Change in Control, no such amendment may be made
which would
adversely affect the rights of Participants in the event of a
Qualifying
Termination of their employment (including, without limitation,
the
definition of what constitutes a "Qualifying Termination").

     l.   Effective Date. The Plan shall be effective January 1,
1995.