AT&T CORP. DIRECTORS'
                        UNIVERSAL LIFE INSURANCE PROGRAM



















                             Effective June 1, 2000
<PAGE>

                                   AT&T CORP.
                   DIRECTORS' UNIVERSAL LIFE INSURANCE PROGRAM

                                Table of Contents

SECTION 1 -  DEFINITIONS ...................................................   1
     1.0      Administrator ................................................   1
     1.1      Assignee .....................................................   1
     1.2      Beneficiary ..................................................   1
     1.3      Benefit Amount ...............................................   1
     1.4      Board ........................................................   1
     1.5      Company ......................................................   1
     1.6      Eligible Director ............................................   2
     1.7      Insurance Policy .............................................   2
     1.8      Insurer ......................................................   2
     1.9      Normal Termination Date ......................................   2
     1.10     Participant ..................................................   2
     1.11     Policyholder .................................................   2
     1.12     Prior Policy .................................................   2
     1.13     Prior Program ................................................   2
     1.14     Program ......................................................   3
     1.15     Transition Benefit Amount ....................................   3

SECTION 2 - ELIGIBILITY AND PARTICIPATION ..................................   4
     2.0      Eligibility Conditions .......................................   4
     2.1      Disability Prior to Normal Termination Date ..................   4
     2.2      Retirement Prior to Normal Termination Date ..................   4
     2.3      Recommencement of Participation ..............................   5

SECTION 3 - PROCUREMENT OF INSURANCE POLICY ................................   6
     3.0      Insurance Application Requirements ...........................   6
     3.1      Cooperation Requirement for Eligible Director ................   6
     3.2      Cooperation Requirement for Policyholder .....................   6
     3.3      Consequences of Failure to Cooperate .........................   6

SECTION 4 - INCIDENTS OF OWNERSHIP .........................................   8
     4.0      Policy Ownership .............................................   8
     4.1      Rights of Policyholder and Company ...........................   8
     4.2      Assignment of Insurance Policy by Policyholder ...............   8
     4.3      Beneficiary Elections and Settlement Options .................   9
     4.4      No Ownership Interest by the Company .........................   9

SECTION 5 -  PAYMENT OF BENEFITS ...........................................  10
     5.0      Source of Benefits ...........................................  10
     5.1      Payment of Insurance Premiums ................................  10
     5.2      Benefit Amount ...............................................  10
     5.3      Tax Adjustment ...............................................  11
     5.4      Beneficiary Designations .....................................  11
     5.5      No Company Obligation ........................................  12
     5.6      No Affect on Other Company Benefits ..........................  12

SECTION 6 - TERMINATION OF PARTICIPATION ...................................  13
     6.0      Events that Cause Termination of Participation ...............  13
     6.1      Death of Participant Prior to Normal Termination Date ........  13
     6.2      Attainment of Normal Termination Date ........................  14
     6.3      Discontinuance of Participation Prior to Normal Termination
              Date .........................................................  14

SECTION 7 - CLAIMS AND APPEALS .............................................  16
     7.0      Claims .......................................................  16
     7.1      Claim Decision ...............................................  16
     7.2      Request for Review ...........................................  16
     7.3      Review of Decision ...........................................  17
<PAGE>
SECTION 8 -  AMENDMENT  AND TERMINATION ....................................  18
     8.0      Continuation of Program ......................................  18
     8.1      Amendment or Termination .....................................  18

SECTION 9 -  GENERAL PROVISIONS ............................................  19
     9.0      Named Fiduciary ..............................................  19
     9.1      Effective Date ...............................................  19
     9.3      Notice Under Program .........................................  19
     9.4      Binding Effect ...............................................  19
     9.5      Plan Document ................................................  19
     9.6      Governing Law ................................................  20
     9.7      Severability .................................................  20
     9.8      Headings .....................................................  20
     9.9      Procedural Rules .............................................  20
     9.10     Construction .................................................  20

<PAGE>

                                   AT&T Corp.
                   Directors' Universal Life Insurance Program

                                     Purpose

The purpose of the AT&T Corp.  Directors' Universal Life Insurance Program is to
provide  life  insurance  benefits  to  non-employee  members  of the  Board  of
Directors of AT&T Corp.

                                     Section
                                       1.
                                   Definitions

The following words and phrases,  as used in this Program  document,  shall have
the meanings set forth below unless a clearly  different  meaning is required by
the context in which the word or phrase is used.

1.0      Administrator.  "Administrator"  means the Executive  Vice  President -
         Human  Resources  of the Company (or any  successor  to such  position)
         having  responsibility for benefit programs for non-employee members of
         the Board, or his or her designee.  The Administrator  shall manage and
         administer the Program in accordance with its terms and conditions.

1.1      Assignee. "Assignee" means the person, trust, entity or organization to
         whom or to which a Policyholder  makes an irrevocable  assignment on or
         after June 1, 2000,  of all his or her  rights,  title,  interest,  and
         incidents  of  ownership,  both  present and future,  to the  Insurance
         Policy  and any  other  assignable  rights  to the  benefits  under the
         Program.

1.2      Beneficiary.   "Beneficiary"   means   the   person,   trust,   entity,
         organization  or the estate of a  Policyholder  designated  pursuant to
         Section  5.4 that is entitled to receive  benefits  from the  Insurance
         Policy upon the death of a Participant.

1.3      Benefit Amount. "Benefit Amount" means the amount of the life insurance
         benefit  under the Insurance  Policy for which  premiums are payable by
         the Company under the Program.  The "Benefit  Amount" for a Participant
         shall be determined in accordance with Section 5.2.

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

1.5      Company.  "Company" means AT&T Corp., a New York  corporation,  and any
         successors to such entity.

1.6      Eligible Director.  "Eligible  Director" means (a) an individual who is
         an active  non-employee  member of the  Board on May 31,  2000;  (b) an
         individual who is a retired non-employee member of the Board on May 31,
         2000,  and who  had not  attained  age 72 as of  that  date;  or (c) an
         individual who becomes an active non-employee member of the Board on or
         after June 1, 2000.

1.7      Insurance Policy.  "Insurance  Policy" means one or more life insurance
         contracts issued by the Insurer on the life of an Eligible Director for
         purposes of this Program.

1.8      Insurer.  "Insurer"  means the  insurance  company to which the Company
         shall apply for  insurance on an Eligible  Director's  life,  and which
         issues an Insurance Policy.
<PAGE>
1.9      Normal Termination Date. "Normal  Termination Date" means the latest of
         (a) the date a  Participant  attains age 70; (b) the date as of which a
         Participant  has been covered for a combined total of at least 15 years
         under the Prior Program and the Program;  or (c) the date the Insurance
         Policy has sufficient  cash value,  as determined by the Company in its
         sole   discretion,   to  provide  life   insurance   coverage  for  the
         Participant's remaining life expectancy.

1.10     Participant. "Participant" means an Eligible Director who has satisfied
         all of the  eligibility  and  enrollment  conditions in Section 2.0 and
         with respect to whom an Insurance Policy has been procured  pursuant to
         Section 3.0 through  Section 3.3.  For  purposes of this Section  1.10,
         "Participant"  shall include a  Participant  who  subsequently  becomes
         disabled and satisfies the requirements of Section 2.1.

1.11     Policyholder.   "Policyholder"  means  the  person,  trust,  entity  or
         organization  determined in accordance with Section 4.0 to be the owner
         of the Insurance Policy on an Eligible Director's life.

1.12     Prior Policy. "Prior Policy" means a life insurance policy that was (a)
         issued prior to June 1, 2000, on the life of an Eligible Director;  and
         (b) subject to a collateral assignment agreement with the Company under
         the terms of the Prior Program on May 31, 2000.

1.13     Prior Program. "Prior Program" means the AT&T Directors Individual Life
         Insurance  Program  as  in  effect  on  May  31,  2000  (including  any
         "Director's Individual Life Insurance Program and Collateral Assignment
         Agreement"  with an Eligible  Director  that is in effect as of May 31,
         2000).

1.14     Program.  "Program"  means the AT&T  Corp.  Directors'  Universal  Life
         Insurance Program,  which shall be evidenced by this plan document,  as
         amended from time to time.

1.15     Transition Benefit Amount. "Transition Benefit Amount" means the amount
         of life insurance death benefit determined as follows:

         (a)      Participant   Who   Participated   In  Prior  Program:   If  a
                  Participant  was covered under a Prior Policy on May 31, 2000,
                  the  Transition  Benefit  Amount  shall be equal to the amount
                  that was the  Participant's  death  benefit  amount  under the
                  Prior  Program on January 1, 2000  (determined  in  accordance
                  with the terms of the Prior Program).

         (b)      Participant  Serving  on Board as of May 31,  2000 Who Did Not
                  Participate  in Prior  Program:  For a Participant  who was an
                  active  non-employee  member of the Board on May 31, 2000, and
                  for whom no Prior Policy was purchased, the Transition Benefit
                  Amount   shall  be  the  amount   that  would  have  been  the
                  Participant's  death benefit amount under the Prior Program on
                  January  1,  2000,  if  (i)  the   Participant  had  begun  to
                  participate  in  the  Prior  Program  when  he  or  she  would
                  otherwise  have first become  eligible to  participate  in the
                  Prior Program,  and (ii) the amount of the death benefit under
                  the Prior Program had  thereafter  annually been  increased by
                  seven percent (7%) as of each successive  January 1 (including
                  January 1, 2000),  in  accordance  with the terms of the Prior
                  Program.
<PAGE>

                                     Section
                                       2.
                          Eligibility and Participation

2.0      Eligibility   Conditions.   Upon  becoming  an  Eligible  Director,  an
         individual may become a Participant by:

         (a)      Completing,  executing,  and returning  all of the  enrollment
                  applications and other documents required under the Program in
                  the form approved by the Administrator;

         (b)      Cooperating with the Company in obtaining the Insurance Policy
                  on his or her life as required by Sections 3.1 and 3.2; and

         (c)      Complying  with such further  conditions as may be established
                  by the Administrator from time to time.

         Subject  to the  provisions  of  Sections  2.1,  2.2,  3.3 and 4.1,  an
         Eligible  Director  shall be eligible to continue to participate in the
         Program until the occurrence of any event described in Section 6.0 that
         causes the termination of his or her participation in the Program.

2.1      Disability  Prior to Normal  Termination  Date. In the event that (a) a
         Participant becomes disabled,  and (b) the Participant  continues to be
         disabled  until his or her Normal  Termination  Date,  the  Participant
         shall be eligible to continue to  participate  in the Program until his
         or her Normal  Termination  Date. If, for any reason,  the  Participant
         ceases to be disabled  prior to reaching his or her Normal  Termination
         Date  and  the  Participant   does  not  resume  active  service  as  a
         non-employee  member of the Board, the  Participant's  participation in
         the  Program  shall  terminate  as of the  date  of  cessation  of such
         disability status.

2.2      Retirement  Prior to  Normal  Termination  Date.  In the  event  that a
         Participant  retires from service as a non-employee member of the Board
         prior to his or her Normal  Termination  Date, the Participant shall be
         eligible  to continue to  participate  in the Program  until his or her
         Normal   Termination   Date.   Notwithstanding   the   foregoing,   the
         Participant's  participation  in the  Program may cease prior to his or
         her  Normal  Termination  Date upon the  occurrence  of  another  event
         described in Section 6.0. For purposes of this  Program,  a Participant
         will be deemed to retire as a  non-employee  member of the Board on the
         effective date of his or her resignation from the Board or the last day
         of a Participant's term as a non-employee  member of the Board if he or
         she is not re-elected for a subsequent term on the Board.

2.3      Recommencement of Participation.  Once a Participant's participation in
         the Program has  terminated  as provided in Section 6.0 (other than due
         to the  occurrence  of an event  described in Sections  6.0(a),  (b) or
         (c)), he or she may  recommence  participation  in the Program if he or
         she is an Eligible Director at the time participation is to recommence.
<PAGE>

                                     Section
                                       3.
                         Procurement of Insurance Policy

3.0      Insurance  Application  Requirements.  The  Company  shall apply to the
         Insurer for an Insurance  Policy on the life of each Eligible  Director
         in an amount  determined by the Company to be sufficient to provide the
         applicable Benefit Amount for the Eligible Director.

3.1      Cooperation  Requirement for Eligible  Director.  An Eligible  Director
         shall reasonably cooperate with the Company in its efforts to apply for
         and obtain the Insurance Policy on his or her life by:

         (a)      Furnishing  such  information  as the  Insurer may require for
                  completion of the insurance  application and related forms and
                  documents;

         (b)      Taking  such  physical   examinations  and  supplying  medical
                  history as may be requested by the Insurer;

         (c)      Signing  the  application  for  the  Insurance  Policy  as the
                  insured; and

         (d)      Doing any other act to comply with the underwriting and policy
                  issuance requirements which may reasonably be requested by the
                  Insurer or the Administrator.

3.2      Cooperation   Requirement  for  Policyholder.   A  Policyholder   shall
         reasonably  cooperate  with the Company in its efforts to apply for and
         obtain the Insurance Policy on the life of an Eligible Director by:

         (a)      Furnishing  such  information  as the  Insurer may require for
                  completion of the insurance  application and related forms and
                  documents;

         (b)      Signing  the  application  for  the  Insurance  Policy  as the
                  proposed policy owner; and

         (c)      Doing any other act to comply with the underwriting and policy
                  issuance requirements which may reasonably be requested by the
                  Insurer or the Administrator.

3.3      Consequences  of  Failure  to  Cooperate.  The  Company  shall  have no
         obligation  to  the  Eligible   Director,   the   Policyholder  or  the
         Policyholder's   Beneficiary   under  the  Program  and  the   Eligible
         Director's  participation in the Program shall become null, void and of
         no force or effect if:

         (a)      The Administrator,  in his or her sole discretion,  determines
                  that  an  Eligible   Director  or  the  Policyholder  has  not
                  adequately   cooperated   in  the  process  of  procuring  the
                  Insurance  Policy on the Eligible  Director's life as required
                  by Section 3.1 and Section 3.2, respectively; or

         (b)      The Company is, for any reason,  unable to obtain insurance in
                  the  specified  amount  on  an  Eligible  Director's  life  at
                  standard rates or rates otherwise acceptable to the Company.

<PAGE>

                                     Section
                                       4.
                             Incidents of Ownership

4.0      Policy  Ownership.  The Insurance  Policy shall, at all times, be owned
         solely and  absolutely by the  Policyholder,  except in the event of an
         assignment  to an Assignee as provided  for in Section 4.2. The person,
         trust,  entity  or  organization  that  will be the  Policyholder  with
         respect to a Participant shall be determined as follows:

         (a)      Eligible  Director Who Was Covered Under A Prior Policy. If an
                  Eligible  Director was a participant  in the Prior Program and
                  was  covered  as an  insured  under a Prior  Policy on May 31,
                  2000,  the policy owner (or  assignee) of such Prior Policy on
                  May 31,  2000 shall be the  Eligible  Director's  Policyholder
                  under the  Program  of the  Insurance  Policy on the  Eligible
                  Director's life to be procured in accordance with Section 3.0.

         (b)      Eligible Director Who Was Not Covered Under A Prior Policy. If
                  an Eligible  Director  was not  covered as an insured  under a
                  Prior  Policy  on  May  31,  2000,  the  Eligible   Director's
                  Policyholder  under the Program shall be the person (including
                  the Eligible Director), trust, entity or organization that the
                  Eligible Director  designates to be his or her Policyholder in
                  the Eligible  Director's  written  enrollment  application for
                  participation in the Program.  If, for any reason, an Eligible
                  Director  who  was not  covered  as an  insured  under a Prior
                  Policy on May 31,  2000,  fails to  designate  a  Policyholder
                  under  the  Program,   the  Eligible  Director  shall  be  the
                  Policyholder  with respect to the  Insurance  Policy on his or
                  her life.

4.1      Rights of Policyholder  and Company.  Prior to a  Participant's  Normal
         Termination Date, the Policyholder or his or her Assignee shall control
         all  incidents  of  ownership  with  respect  to the  Insurance  Policy
         including all policy cash values and death benefits under the Insurance
         Policy  on  the  Participant's   life.   However,   in  the  event  the
         Policyholder  or his or her Assignee  surrenders the Insurance  Policy,
         withdraws  any cash value from the  Insurance  Policy or obtains a loan
         from the  Insurance  Policy,  the  Participant's  participation  in the
         Program shall  immediately  cease and the Company will not be obligated
         to  continue  to make any further  premium  payments  on the  Insurance
         Policy as otherwise provided for by Section 5.1.

4.2      Assignment of Insurance  Policy by Policyholder.  A Policyholder  shall
         have the right, at any time, to absolutely and  irrevocably  assign his
         or her rights,  title,  interest,  and incidents of ownership in and to
         the Insurance Policy and any other assignable  rights to benefits under
         this  Program  to  any  person,  trust,  entity  or  organization.  Any
         assignment  shall be subject to the  consent of the  Insurer.  Any such
         assignment shall be on a form approved by the Insurer. No assignment by
         a Policyholder  shall be effective until acknowledged in writing by the
         Insurer. A copy of the written  acknowledgment shall be returned to the
         Policyholder  and the  Assignee.  Once the  assignment of the Insurance
         Policy has been  acknowledged by the Insurer,  the  Policyholder  shall
         have no further rights, title, interest or incidents of ownership, both
         present and future,  in or under the  Insurance  Policy or to any other
         rights to benefits under the Program covered by the assignment, and the
         Assignee  shall have all such assigned  rights,  title,  interest,  and
         incidents of  ownership,  both present and future,  under the Insurance
         Policy and the Program.
<PAGE>
4.3      Beneficiary  Elections and Settlement Options. A Policyholder or his or
         her Assignee, if any, may exercise (a) the right to designate or change
         the Beneficiary of life insurance  proceeds under the Insurance  Policy
         pursuant to Section 5.4;  and (b) the right to elect any optional  mode
         of  settlement  with  respect  to such life  insurance  proceeds.  Upon
         request  of a  Policyholder  or  his  or  her  Assignee,  if  any,  the
         applicable  form for any  designation  or change of  Beneficiary or any
         election  of  an  optional  mode  of  settlement  shall  be  sent  to a
         Policyholder, an Assignee or a Beneficiary, as appropriate.

4.4      No Ownership Interest by the Company. No provision in the Program shall
         be construed or  interpreted  to permit or provide the Company with any
         present or future rights,  title, interest or incidents of ownership to
         the Insurance Policy.
<PAGE>
                                     Section
                                       5.
                              Payment of Benefits

5.0      Source  of  Benefits.   The  sole  benefits  under  the  Program  to  a
         Participant  shall be (a) the premium  payments  made by the Company to
         the Insurer pursuant to Section 5.1 to maintain the Insurance Policy on
         his or her life; and (b) the tax  adjustments  made pursuant to Section
         5.3. A Beneficiary's sole source of benefits under the Program shall be
         the  Insurance  Policy  under  which  the  Policyholder,  or his or her
         Assignee, designates a Beneficiary to receive benefits payable upon the
         Participant's death.

5.1      Payment of Insurance  Premiums.  The Company shall pay the premiums (if
         any)  determined to be due on the  Insurance  Policy from time to time.
         While  the  Eligible  Director  is a  Participant,  the  amount  of the
         premiums  paid  by  the  Company  on  the  Insurance  Policy  shall  be
         sufficient,  as  determined by the Company in its sole  discretion,  to
         maintain life insurance  coverage on the life of the Participant  equal
         to the  Benefit  Amount.  The  Company's  obligation  to  make  premium
         payments on the  Insurance  Policy  covering the life of a  Participant
         shall cease upon the termination of the Participant's participation, as
         provided for in Section 6.0.

5.2      Benefit Amount.

         (a)      Active  Non-Employee  Directors  Prior to Age 70: The  Benefit
                  Amount  for  a  Participant  who  is  actively  serving  as  a
                  non-employee member of the Board prior to attainment of age 70
                  shall be determined as follows:

                  (i)      Individuals Who Are Active Non-Employee  Directors on
                           June 1, 2000:  The Benefit  Amount for a  Participant
                           who is actively  serving as a non-employee  member of
                           the Board on June 1,  2000,  shall be equal to his or
                           her Transition Benefit Amount,  increased annually by
                           seven percent (7%)  beginning on January 1, 2001, and
                           on  January  1  of  each  successive  year  occurring
                           thereafter  prior  to  the  first  to  occur  of  the
                           Participant's   (A)  Normal   Termination  Date;  (B)
                           attainment of age 70; or (C) death.

                  (ii)     Individuals Who Become Active Non-Employee  Directors
                           After  June  1,  2000:   The  Benefit  Amount  for  a
                           Participant  who first  becomes an Eligible  Director
                           after  June 1,  2000,  shall be  equal  to  $100,000,
                           increased by seven percent (7%)  annually  thereafter
                           on January 1 of each  successive year occurring after
                           he or she first  becomes  an  Eligible  Director  and
                           prior to the first to occur of the  Participant's (A)
                           Normal Termination Date; (B) attainment of age 70; or
                           (C) death.

                  (iii)    Base for Percentage Increases in Benefit Amount: Each
                           annual  percentage  increase  in the  Benefit  Amount
                           under Section 5.2(a)(i) and Section  5.2(a)(ii) shall
                           be based on the  Participant's  Benefit  Amount as of
                           the immediately preceding December 31.
<PAGE>
         (b)      Individuals Who Are Active  Non-Employee  Directors Age 70 and
                  Older:  The  Benefit  Amount  for a  Participant  who  (i)  is
                  actively serving as a non-employee  member of the Board,  (ii)
                  is age 70 or  older,  and (iii)  has not  attained  his or her
                  Normal  Termination Date, shall be equal to his or her Benefit
                  Amount  determined  under  Section  5.2(a)  on the  January  1
                  coinciding  with or  immediately  preceding the  Participant's
                  attainment of age 70.

         (c)      Former  Non-Employee  Directors:  The  Benefit  Amount for any
                  Participant who has ceased to be an active non-employee member
                  of the Board but who is eligible for  continued  participation
                  in the Program  (pursuant to the  provisions of either Section
                  2.1 or Section 2.2 due to retirement  or  disability  prior to
                  attainment  of his or her  Normal  Termination  Date)  will be
                  equal  to his or  her  Benefit  Amount  as of  the  January  1
                  immediately  preceding  his or her  cessation of service as an
                  active non-employee member of the Board.

5.3      Tax Adjustment. The Company shall make a tax adjustment with respect to
         each premium payment made to the Insurer pursuant to Section 5.1 on the
         Insurance  Policy  covering the life of a  Participant.  The amount and
         frequency of each tax  adjustment,  as determined by the Company in its
         sole  discretion,  is intended to be  sufficient to cover the estimated
         amount of federal income taxes that will be incurred by the Participant
         on the sum of the premium payment plus the tax adjustment itself.  Each
         tax adjustment  payment shall be paid in cash to the Participant (or if
         he or she is not then  living,  to his or her  estate).  The  Company's
         obligation  to  make  tax   adjustment   payments  with  respect  to  a
         Participant  shall  cease  upon the  termination  of the  Participant's
         participation in the Program pursuant to the provisions of Section 6.0.

5.4      Beneficiary  Designations.  A Policyholder  or, if the Policyholder has
         assigned the Insurance Policy pursuant to Section 4.2, the Assignee may
         designate a Beneficiary  to receive life  insurance  proceeds under the
         Insurance  Policy upon the death of the  Participant,  or may change an
         existing  designation  of the  Beneficiary  to receive  such  insurance
         proceeds.  Any  designation  of Beneficiary or change in the designated
         Beneficiary  shall be  accomplished  in accordance  with the applicable
         terms of the Insurance Policy using forms approved by the Insurer.  If,
         for any reason,  no valid  Beneficiary  designation is on file with the
         Insurer  at the time of the  Participant's  death,  the life  insurance
         proceeds payable under the Insurance Policy shall be paid in accordance
         with the terms of the Insurance Policy.

5.5      No Company  Obligation.  The Company  shall have no  obligation  of any
         nature  whatsoever  to  a  Policyholder  or  his  or  her  Assignee  or
         Beneficiary   under   this   Program  if  the   circumstances   of  the
         Participant's  death, the terms and conditions of this Program,  or any
         other reason, precludes payment of life insurance proceeds or any other
         benefits under the Insurance Policy or Program.

5.6      No Affect on Other Company Benefits.  No portion of any premium payment
         on any Insurance Policy or any tax adjustment payment made with respect
         to a  Participant  as provided  in this  Section 5 shall be included or
         otherwise taken into  consideration as pay,  compensation or income for
         purposes  of  any  other  compensation  or  benefit  plan,  program  or
         arrangement  of the Company (if any)  covering the  Participant  unless
         expressly provided for in such plan, program or arrangement.
<PAGE>


                                     Section
                                       6.
                          Termination of Participation

6.0      Events  that  Cause  Termination  of  Participation.   A  Participant's
         participation  in the Program shall  terminate when the first of any of
         the following events occurs:

         (a)      The death of the Participant;

         (b)      The Participant attains his or her Normal Termination Date;

         (c)      The Board (or its delegate) terminates the Program pursuant to
                  Section 8.1;

         (d)      The termination of the Participant's  membership on the Board,
                  for any reason  (other than death,  disability as described in
                  Section 2.1 or retirement as described in Section 2.2),  prior
                  to his or her Normal Termination Date (unless otherwise agreed
                  to by the Board (or its delegate) in writing);

         (e)      Cessation of the Participant's  disability prior to his or her
                  Normal  Termination  Date  under  circumstances  described  in
                  Section 2.1, when the Participant does not recommence  service
                  as a non-employee member of the Board;

         (f)      Voluntary  termination of the  Participant's  participation in
                  the Program initiated by the Participant giving written notice
                  to the  Administrator  prior to his or her Normal  Termination
                  Date;

         (g)      The Policyholder or his or her Assignee,  if any, takes any of
                  the  actions   described  in  Section  4.1  (e.g.,   loans  or
                  withdrawals)  that  cause  termination  of  the  Participant's
                  participation in the Program; or

         (h)      The   Participant   is  determined   by  the  Executive   Vice
                  President-Human  Resources of the Company,  in his or her sole
                  discretion,  to have engaged in any competitive  activity that
                  violates the provisions of any  non-competition  commitment of
                  the Participant to the Company.

         Termination of a  Participant's  participation  in the Program upon the
         occurrence  of any of the events  described  in this  Section 6.0 shall
         have the consequences  described in Sections 6.1, 6.2 or 6.3, whichever
         is applicable.

6.1      Death of Participant Prior to Normal Termination Date. If a Participant
         continues to participate in the Program until his or her  participation
         terminates  due to death  (as  provided  in  Section  6.0(a))  prior to
         attainment of his or her Normal  Termination Date, then effective as of
         the date of death:

         (a)      The  Company  shall  have no  further  obligation  to make any
                  premium  payments with respect to the Insurance  Policy on the
                  Participant's life pursuant to Section 5.1.

         (b)      The  Policyholder's  Beneficiary  shall be entitled to receive
                  the life  insurance  benefit  payable by the Insurer under the
                  Insurance Policy,  subject to any binding  settlement  options
                  elected by the Policyholder prior to the Participant's death.
<PAGE>
         (c)      The  restrictions  in  Section  4.1  on  the  Policyholder  or
                  Assignee  pertaining  to the exercise of certain  incidents of
                  ownership of the Insurance  Policy on the  Participant's  life
                  (e.g., loans and withdrawals) shall no longer apply.

6.2      Attainment of Normal  Termination  Date. If a Participant  continues to
         participate in the Program until his or her participation terminates by
         reason of his or her  attainment  of the  Normal  Termination  Date (as
         provided  in  Section  6.0(b)),  then  effective  as  of  the  date  of
         termination of participation:

         (a)      The  Company  shall  have no  further  obligation  to make any
                  premium  payments with respect to the Insurance  Policy on the
                  Participant's life pursuant to Section 5.1.

         (b)      The  Insurance  Policy will have  sufficient  cash  value,  as
                  determined using reasonable  actuarial  assumptions  chosen by
                  the Company in its sole discretion,  to provide life insurance
                  coverage   throughout   the   Participant's   remaining   life
                  expectancy  at a  level  amount  equal  to  the  Participant's
                  Benefit  Amount  as the time of his or her  attainment  of the
                  Normal Termination Date.

         (c)      The  restrictions  in  Section  4.1  on  the  Policyholder  or
                  Assignee  pertaining  to the exercise of certain  incidents of
                  ownership of the Insurance  Policy on the  Participant's  life
                  (e.g., loans and withdrawals) shall no longer apply.

6.3      Discontinuance of Participation  Prior to Normal Termination Date. If a
         Participant's  participation  in  the  Program  terminates  due  to the
         occurrence  of any of the events  described in Section  6.0(c)  through
         Section  6.0(h),  inclusive,  then  effective  as of the  date  of such
         termination of participation:

         (a)      The  Company  shall  have no  further  obligation  to make any
                  premium  payments with respect to the Insurance  Policy on the
                  Participant's life pursuant to Section 5.1.

         (b)      The Participant,  Policyholder, and any Assignee shall have no
                  further rights under the Program and shall only be entitled to
                  retain  the  Insurance  Policy  with the cash value and policy
                  rights  and  options  as  of  the  date  of   termination   of
                  participation  in the  Program.  The  Company  shall  have  no
                  obligation  to pay  additional  premiums or increase  the cash
                  value so as to provide cash values  sufficient to continue any
                  level of coverage  under the Insurance  Policy  throughout the
                  Participant's   remaining  life   expectancy.   The  Insurance
                  Policy's  cash value  (whether  above or below any  estimates,
                  projections or  illustrations)  shall be limited solely to the
                  cash  value  of  the  Insurance  Policy  on  the  date  of the
                  Participant's termination of participation in the Program.

         (c)      The  restrictions  in  Section  4.1  on  the  Policyholder  or
                  Assignee  pertaining  to the exercise of certain  incidents of
                  ownership of the Insurance  Policy on the  Participant's  life
                  (e.g., loans and withdrawals) shall no longer apply.
<PAGE>


                                     Section
                                       7.
                               Claims and Appeals

7.0      Claims.  A person who believes that he or she is being denied a benefit
         to which he or she is entitled under this Program (hereinafter referred
         to as a  "Claimant")  may file a written  request for such benefit with
         the Company's  Executive  Compensation & Benefits  Department,  setting
         forth his or her claim.  The request must be addressed to the Company's
         Executive  Compensation  & Benefits  Department  at its then  principal
         place of business.  Notwithstanding  the foregoing,  any  Beneficiary's
         claim for payment of life insurance  proceeds from an Insurance  Policy
         on a  Participant's  life shall not be  considered a claim for benefits
         under this Program.  Any such claim for life insurance  proceeds should
         be filed with the Insurer in accordance  with the terms and  provisions
         of the applicable Insurance Policy.

7.1      Claim  Decision.  Upon  receipt  of a claim,  the  Company's  Executive
         Compensation  & Benefits  Department  shall advise the Claimant  that a
         reply will be forthcoming  within ninety (90) days and shall,  in fact,
         deliver  such  reply  within  such  period.  The  Company's   Executive
         Compensation  &  Benefits  Department  may,  however,  extend the reply
         period for up to an additional ninety (90) days for reasonable cause.

         If the  claim is  denied  by the  Company's  Executive  Compensation  &
         Benefits  Department,  in  whole or in part,  the  Company's  Executive
         Compensation  & Benefits  Department  shall provide a written  response
         using  language  designed to be  understood by the Claimant and setting
         forth: (a) the specific reason or reasons for such denial; (b) specific
         references to pertinent provisions of this Program on which such denial
         is based;  (c) a description of any additional  material or information
         necessary  for  the  Claimant  to  perfect  his  or  her  claim  and an
         explanation of why such material or such information is necessary;  (d)
         appropriate  information  as to the  steps to be taken if the  Claimant
         wishes to submit  the claim for  review;  and (e) the time  limits  for
         requesting a review under Section 7.2 and for performance of the review
         under Section 7.3.

7.2      Request  for  Review.  Within  sixty (60) days after the receipt by the
         Claimant of the written  opinion  described  above,  the  Claimant  may
         request in writing that the  Administrator  review the determination of
         the  Company's  Executive  Compensation  &  Benefits  Department.  Such
         request  must be  addressed  to the  Administrator  at the  address for
         giving  notice to the  Administrator  designated  in Section  9.3.  The
         Claimant or his or her duly  authorized  representative  may,  but need
         not,  review the pertinent  documents and submit issues and comments in
         writing for  consideration by the  Administrator.  If the Claimant does
         not request a review of the Company's Executive Compensation & Benefits
         Department's  determination by the Administrator within such sixty (60)
         day period,  the Claimant shall be barred and estopped from challenging
         the  determination of the Company's  Executive  Compensation & Benefits
         Department.

7.3      Review of Decision.  Within  sixty (60) days after the  Administrator's
         receipt of a request  for  review,  the  Administrator  will review the
         determination  of  the  Company's  Executive  Compensation  &  Benefits
         Department.  After considering all materials presented by the Claimant,
         the  Administrator  will render a written opinion,  written in a manner
<PAGE>
         designed to be understood  by the Claimant,  setting forth the specific
         reasons for the  decision and  containing  specific  references  to the
         pertinent provisions of this Program on which the decision is based. If
         special  circumstances  require  that the sixty (60) day time period be
         extended, the Administrator will so notify the Claimant and will render
         the decision as soon as possible,  but no later than one hundred twenty
         (120) days after receipt of the request for review.

         The  Administrator  shall serve as the final review committee under the
         Program and shall have sole and  complete  discretionary  authority  to
         determine  conclusively  for all parties,  and in  accordance  with the
         terms of the documents or  instruments  governing the Program,  any and
         all  questions   arising  from   administration   of  the  Program  and
         interpretation  of  all  Program   provisions,   determination  of  all
         questions   relating  to  participation   of  Eligible   Directors  and
         eligibility  for benefits,  determination  of all relevant  facts,  the
         amount and type of  benefits  payable to any  Participant,  Assignee or
         Beneficiary,  and  the  construction  of  all  terms  of  the  Program.
         Decisions by the  Administrator  shall be conclusive and binding on all
         parties and not subject to further review.

         The Program provisions  require that Participants  pursue all claim and
         appeal rights described above before they seek any other legal recourse
         regarding claims for benefits.
<PAGE>
                                     Section
                                       8.
                            Amendment and Termination

8.0      Continuation   of  Program.   The  Company  does  not   guarantee   the
         continuation  of  the  Program  or  any  benefits  during  an  Eligible
         Director's  period of service as a non-employee  member of the Board or
         at or during  retirement,  nor does the Company  guarantee any specific
         level of  benefits.  Benefits  are  provided  under the  Program at the
         Company's  discretion  and do not  create  a  contract  of  employment.
         Neither  the  establishment  nor the  continuance  of the Plan shall be
         construed as conferring any legal rights upon any Eligible  Director or
         any other person, nor shall such establishment or continuance interfere
         with the right to discharge any Eligible Director.  The Company intends
         to continue the Program  indefinitely;  however, the Board reserves the
         right to amend or terminate the Program at any time pursuant to Section
         8.1.

8.1      Amendment or Termination. The Board or pursuant to delegated authority,
         the  Chairman  of the  Board  (or in his  absence  the  Executive  Vice
         President - Human Resources)  ("Delegate"),  may amend, modify, suspend
         or  change  the  Program  from  time to  time,  and the  Board  (or its
         Delegate) may terminate the Program at any time. Program amendments may
         include,  but are not limited to, elimination or reduction in the level
         or type of benefits  provided  to any class or classes of  non-employee
         members of the Board.
<PAGE>

                                     Section
                                       9.
                               General Provisions

9.0      Named Fiduciary.  The  Administrator is hereby designated as the "named
         fiduciary" under this Program. The named fiduciary shall have authority
         to control and manage the operation and administration of this Program.

9.1      Effective  Date.  The  effective  date of this Program shall be June 1,
         2000.

9.2      Calendar  Year  Program.  All Program  records shall be maintained on a
         calendar-year basis, beginning January 1 and ending December 31, except
         that Program  records for the initial year shall be maintained  for the
         period beginning June 1, 2000 and ending December 31, 2000.

9.3      Notice Under  Program.  Any notice to be given under this Program shall
         be in  writing  and  shall be either  delivered  in person or mailed by
         United States Mail,  first-class  postage pre-paid.  If notice is to be
         given to the  Administrator  by mail, such notice shall be addressed as
         indicated  below  and  mailed  to the  Administrator  at the  following
         address:

                             Executive Vice President - Human Resources
                             AT&T Corp.
                             295 North Maple Avenue
                             Basking Ridge, NJ  07920

         If notice is to be given to a Participant,  Policyholder or Assignee by
         United States Mail, such notice shall be addressed to the address shown
         as such  Participant's,  Policyholder's  or Assignee's  address then on
         file with the Company's Executive  Compensation & Benefits  Department.
         Any party may change the  address to which  notices  shall be mailed by
         giving written notice of such change of address.

9.4      Binding  Effect.  This  Program  shall be  binding  upon the  Company's
         successors and assigns,  and upon the Participants,  the Policyholders,
         and   their   Assignees,    Beneficiaries,    heirs,   executors,   and
         administrators.

9.5      Plan  Document.  This Program  document  constitutes  the official plan
         document.  The  information  contained  herein  provides  the final and
         exclusive  statement  of the  terms of the  Program.  Unless  otherwise
         authorized by the Board or its delegate,  no amendment or  modification
         to this Program shall be effective until reduced to writing and adopted
         pursuant to Section 8.1. This document legally governs the operation of
         the Program,  and any claim of right or  entitlement  under the Program
         shall be determined  solely in accordance with its provisions  pursuant
         to the  procedures set forth in Section 7. To the extent that there are
         any  inconsistencies  between the terms of the Insurance  Policy or any
         related  materials  and the terms of this  document,  the terms of this
         document  shall  control and govern the  operation of the  Program.  No
         other evidence, whether written or oral, shall be taken into account in
         determining  the  right  of an  Eligible  Director,  a  Participant,  a
         Policyholder,  a  Beneficiary  or an Assignee,  as  applicable,  to any
         benefit of any type provided under the Program.

9.6      Governing  Law. To the extent not preempted by applicable  federal law,
         the Program  shall be  governed by and  construed  and  interpreted  in
         accordance  with the laws of the State of New Jersey  (irrespective  of
         the choice of laws principles of the State of New Jersey).
<PAGE>
9.7      Severability.  If any  provision  of this  Program  or the  application
         thereof  to any  person  or  circumstance  shall  be held by a court of
         competent  jurisdiction  to  be  invalid  or  unenforceable  under  any
         applicable  law,  such  event  shall not  affect or render  invalid  or
         unenforceable  the  remainder  of the  Program and shall not affect the
         application  of any  provision  of the  Program to any other  person or
         circumstance.

9.8      Headings.  The headings and subheadings  preceding the Sections of this
         Program  have  been  inserted  solely as a matter  of  convenience  and
         reference,  and shall not, in any manner,  define or limit the scope or
         intent of any provision of this Program.

9.9      Procedural  Rules. The Administrator  shall establish rules,  forms and
         procedures for the administration of this Program from time to time.

9.10     Construction.  The use of the  singular  form herein shall be deemed to
         include the plural form, and vice versa, as appropriate. All references
         to Sections contained herein refer to Sections of this Program,  unless
         otherwise stated. The use of the words "hereof," "herein," "hereunder,"
         and words of similar import shall refer to this entire Program, and not
         to any  particular  Section,  subsection,  clause,  paragraph  or other
         subdivision  of this  Program,  unless the  context  clearly  indicates
         otherwise.  The  word  "or"  shall  not  be  exclusive;  "may  not"  is
         prohibitive and not permissive.