Reset Device: Soft reset. If the device is malfunctioning, press and hold the Power/Lock button on the right side of the device. Tap "Restart". Tap "OK". The device will take a moment to reset. Master reset.
A master reset will erase all information on the device and return it to factory default settings. It will permanently erase all personal data, preferences, settings, and content such as pictures, ringtones, and apps that are saved to the device. It is recommended that you save or back up important data before proceeding. Once you have performed the master reset, all information will be lost. From the home screen, swipe down from the top of the screen.
Tap the Settings icon. Scroll to the Personal section. Tap "Backup & reset". Tap "Factory data reset". Tap "RESET PHONE".
Tap "ERASE EVERYTHING". The device will take a moment to reset. ♪AT&T jingle♪.
Source : AT&T Customer Care