AT&T CORP.
                                SENIOR MANAGEMENT
                        UNIVERSAL LIFE INSURANCE PROGRAM
                              FOR FORMER EXECUTIVES

















                            Effective October 1, 1999
<PAGE>
                                   AT&T CORP.
                           SENIOR MANAGEMENT UNIVERSAL
                  LIFE INSURANCE PROGRAM FOR FORMER EXECUTIVES

                                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 ......................................................   2
     1.6      Eligible Former Executive ....................................   2
     1.7      Employer .....................................................   2
     1.8      ERISA ........................................................   2
     1.9      Insurance Policy .............................................   2
     1.10     Insurer ......................................................   2
     1.11     Normal Termination Date ......................................   2
     1.12     Participant ..................................................   2
     1.13     Policyholder .................................................   2
     1.14     Prior Programs ...............................................   3
     1.15     Program ......................................................   3

SECTION 2 - ELIGIBILITY AND PARTICIPATION ..................................   4
     2.0      Eligibility Conditions .......................................   4

SECTION 3 - PROCUREMENT OF INSURANCE POLICY ................................   5
     3.0      Insurance Application Requirements ...........................   5
     3.1      Cooperation Requirement for Eligible Former Executive ........   5
     3.2      Cooperation Requirement for Policyholder .....................   5
     3.3      Consequences of Failure to Cooperate .........................   6

SECTION 4 - INCIDENTS OF OWNERSHIP .........................................   7
     4.0      Policy Ownership .............................................   7
     4.1      Rights of Policyholder and Company ...........................   7
     4.2      Assignment of Insurance Policy by Policyholder ...............   8
     4.3      Beneficiary Elections and Settlement Options .................   8
     4.4      No Ownership Interest by the Company .........................   8

SECTION 5 -  PAYMENT OF BENEFITS ...........................................   9
     5.0      Source of Benefits ...........................................   9
     5.1      Payment of Insurance Premiums ................................   9
     5.2      Benefit Amount ...............................................   9
     5.3      Tax Adjustment................................................   9
     5.4      Beneficiary Designations ..................................... 10
     5.5      No Company or Employer Obligation ............................ 10
     5.6      No Affect on Other Company Benefits .......................... 10

SECTION 6 - TERMINATION OF PARTICIPATION ................................... 12
     6.0      Events that Cause Termination of Participation ............... 12
     6.1      Death of Participant Prior to Normal Termination Date ........ 12
     6.2      Attainment of Normal Termination Date ........................ 13
     6.3      Discontinuance of Participation Prior to Normal Termination
              Date ........................................................  13

SECTION 7 - CLAIMS AND APPEALS ............................................. 15
     7.0      Claims ....................................................... 15
     7.1      Claim Decision ............................................... 15
     7.2      Request for Review ........................................... 15
     7.3      Review of Decision ........................................... 16
<PAGE>
SECTION 8 -  AMENDMENT  AND TERMINATION .................................... 17
     8.0      Continuation of Program ...................................... 17
     8.1      Amendment or Termination ..................................... 17

SECTION 9 -  GENERAL PROVISIONS ............................................ 18
     9.0      Named Fiduciary .............................................. 18
     9.1      Effective Date ............................................... 18
     9.2      Calendar Year Program ........................................ 18
     9.3      Notice Under Program ......................................... 18
     9.4      Binding Effect ............................................... 18
     9.5      Welfare Plan Under ERISA ..................................... 18
     9.6      Plan Document ................................................ 19
     9.7      Governing Law ................................................ 19
     9.8      Severability ................................................. 19
     9.9      Headings ..................................................... 19
     9.10     Procedural Rules ............................................. 19
     9.11     Construction ................................................. 19
<PAGE>

                                   AT&T Corp.
               Senior Management Universal Life Insurance Program
                              for Former Executives

                                     Purpose

The purpose of the AT&T Corp. Senior Management Universal Life Insurance Program
for Former  Executives is to provide life  insurance  benefits to certain former
executives  who have  contributed  materially  to the growth,  development,  and
business of AT&T Corp.

                                     Section
                                       1.
                                   Definitions

The following words and phrases,  as used in this Plan,  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 personnel  matters,  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 October 1, 1999, 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 an  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  Former  Executive.   "Eligible  Former  Executive"  means  an
         individual who was formerly employed as a senior manager of an Employer
         and who (a) is not actively  employed by an Employer on  September  30,
         1999; (b) is covered as an insured on September 30, 1999,  under one or
         more  life  insurance   policies  that  are  subject  to  a  collateral
         assignment  agreement  with the Company  under one or both of the Prior
         Programs;  and (c) is  determined by the  Administrator,  in his or her
         sole discretion, to be eligible for participation in the Program.

1.7      Employer.  "Employer" means the Company and certain of its subsidiaries
         and affiliates, as determined by the Company in its sole discretion.

1.8      ERISA.  "ERISA" means the Employee  Retirement  Income  Security Act of
         1974, as amended.
<PAGE>
1.9      Insurance Policy.  "Insurance  Policy" means one or more life insurance
         contracts  issued  by the  Insurer  on the life of an  Eligible  Former
         Executive.

1.10     Insurer.  "Insurer"  means the insurance  company or companies to which
         the Company shall apply for insurance on an Eligible Former Executive's
         life, and which issues an Insurance Policy.

1.11     Normal Termination Date. "Normal  Termination Date" means the latest of
         (a) the date a  Participant  attains age 65; (b) the date as of which a
         Participant  has been covered for a combined total of at least 15 years
         under  the Prior  Programs  and the  Program  (for an  Eligible  Former
         Executive  who had  coverage  under  both of the Prior  Programs,  this
         15-year period of coverage  shall be measured  beginning from the later
         of his or her two  coverage  commencement  dates  under the  respective
         Prior  Programs);  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.

1.12     Participant.  "Participant"  means an Eligible Former Executive 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 and Section 3.1.

1.13     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 Former Executive's life.

1.14     Prior Programs. "Prior Programs" means the AT&T Senior Management Basic
         Life Insurance Program and the AT&T Senior  Management  Individual Life
         Insurance  Program  as in  effect  on  September  30,  1999.  The Prior
         Programs  shall be terminated  effective as of September 30, 1999,  and
         replaced by the Program.

1.15     Program.  "Program" means the AT&T Corp.  Senior  Management  Universal
         Life Insurance Program for Former Executives,  which shall be evidenced
         by this plan document, as amended from time to time.
<PAGE>
                                     Section
                                       2.
                          Eligibility and Participation

2.0      Eligibility  Conditions.  An  Eligible  Former  Executive  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 3.0 and 3.1; and

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

         Subject to the  provisions of Sections 3.3 and 4.1, an Eligible  Former
         Executive  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.
<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  Former
         Executive in an amount  determined  by the Company to be  sufficient to
         provide  the  applicable   Benefit  Amount  for  the  Eligible   Former
         Executive.

3.1      Cooperation  Requirement  for Eligible  Former  Executive.  An Eligible
         Former  Executive  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 such 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 Former Executive
         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 Former  Executive,  the  Policyholder or the
         Policyholder's  Beneficiary  under the Program and the Eligible  Former
         Executive'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 Former  Executive or the Policyholder has not
                  adequately   cooperated   in  the  process  of  procuring  the
                  Insurance  Policy on the Eligible Former  Executive'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 Former Executive'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 Former  Executive Who  Participated in Prior Programs
                  with Single  Policy  Owner.  If on  September  30, 1999 (i) an
                  Eligible Former  Executive was covered as an insured under one
                  or  more  life  insurance  policies  that  are  subject  to  a
                  collateral  assignment  with the Company  under one or both of
                  the Prior Programs,  and (ii) all such life insurance policies
                  were owned by a single policy owner (or assignee), such policy
                  owner (or assignee) shall be the Eligible  Former  Executive's
                  Policyholder under the Program.

         (b)      Eligible Former  Executive Who  Participated in Prior Programs
                  with Multiple  Policy Owners.  If on September 30, 1999 (i) an
                  Eligible Former  Executive was covered as an insured under one
                  or  more  life  insurance  policies  that  are  subject  to  a
                  collateral  assignment agreement with the Company under one or
                  both of the Prior  Programs,  and (ii) all such life insurance
                  policies were owned by two or more different policy owners (or
                  assignees), the Eligible Former Executive's Policyholder under
                  the Program shall be the person, trust, entity or organization
                  that all of such policy  owners or  assignees  (excluding  the
                  Eligible  Former  Executive  if he or she is one of the policy
                  owners)  agree upon and  designate  as the  Policyholder  with
                  respect to the Eligible Former Executive.  If, for any reason,
                  an agreement among such policy owners (or assignees) cannot be
                  reached  by  October  1,  1999,   and/or  no   designation  of
                  Policyholder  is received by the  Administrator  by October 1,
                  1999, the Eligible Former  Executive shall be the Policyholder
                  unless  the  Administrator,  in his or  her  sole  discretion,
                  determines that one or more other persons, trusts, entities or
                  organizations  should be the Policyholder  with respect to the
                  Insurance Policy on the Eligible Former Executive's 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 Company will not be obligated to
         continue  to make any further  premium  payments as provided by Section
         5.1 for the Insurance Policy.

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
<PAGE>
         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.

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
         rights,  title,  interest or  incidents of  ownership,  both present or
         future, to the Insurance Policy.
<PAGE>

                                     Section
                                       5.
                              Payment of Benefits

5.0      Source of Benefits. The sole benefit under the Program to a Participant
         shall  be 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 the tax adjustment to be made in accordance  with 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.  When the Company submits an application
         for the Insurance  Policy on the life of an Eligible Former  Executive,
         or as soon thereafter as is required by the Insurer,  the Company shall
         pay  the  initial  premium  on the  Insurance  Policy  to the  Insurer.
         Thereafter,  the Company shall annually (or more frequently as required
         by the  Insurer)  pay  the  premiums  determined  to be due  under  the
         Insurance Policy. While the Eligible Former Executive is a Participant,
         the amount of the premiums paid by the Company 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.  The Benefit Amount under the Program with respect to a
         Participant  shall  be  equal  to  the  Participant's   aggregate  life
         insurance  benefit  amount under the Prior  Programs on  September  30,
         1999.

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 and FICA taxes that will be incurred by
         the  Participant  on the  sum of  the  premium  payment  plus  the  tax
         adjustment itself. Each tax adjustment shall be equal to the sum of two
         amounts that are described below and referred to herein respectively as
         the "tax withholding portion" and the "excess portion":

         (a)      Tax Withholding Portion of Tax Adjustment: The tax withholding
                  portion of each tax adjustment  shall be equal to the combined
                  total amount of federal  income taxes and FICA taxes  required
                  to be withheld  with respect to (i) each premium  payment made
                  by the Company; and (ii) each corresponding tax adjustment.

          (b)     Excess Portion of Tax  Adjustment:  The excess portion of each
                  tax   adjustment   shall  be  equal  to  the   applicable  tax
                  adjustment,  reduced by the related tax withholding portion of
                  such tax  adjustment  determined  under  Section  5.3(a)  with
                  respect to the premium payment and the related tax adjustment.

         The  tax  withholding  portion  of  each  tax  adjustment  payment,  as
         described  in  Section  5.3(a)  (above),  shall be paid by the  Company
<PAGE>
         directly to the applicable federal tax authorities.  The excess portion
         of each tax adjustment payment, as described in Section 5.3(b) (above),
         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 or  Employer  Obligation.  Neither the Company nor any other
         Employer  shall  have any  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  "employee  welfare  benefit  plan"  (within the
         meaning of Section 3(1) of ERISA),  any "employee pension benefit plan"
         (within  the  meaning  of  Section   3(2)  of  ERISA),   or  any  other
         compensation  or benefit plan,  program or  arrangement  of the Company
         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)      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 (unless otherwise agreed to by the Company in writing);

         (e)      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

         (f)      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 the AT&T Non-Competition Guideline,
                  as  amended  from time to time,  or any other  non-competition
                  commitment of the Participant to any Employer.

         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.

         (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 or 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:
<PAGE>
         (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.

         (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 or 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(f),  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
                  the Insurance  Policy cash value 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 or 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 Human Resources  Department,  setting forth his
         or her claim. The request must be addressed to the Company's  Executive
         Human  Resources  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 Human
         Resources  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  Human  Resources
         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  Human  Resources
         Department,  in  whole  or  in  part,  the  Company's  Executive  Human
         Resources  Department  shall provide a written  response using language
         calculated 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 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 Human Resources  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 Human Resources  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 Human Resources 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 Human Resources  Department.
         After  considering  all  materials  presented  by  the  Claimant,   the
         Administrator  will  render  a  written  opinion,  written  in a manner
         designed to be understood  by the Claimant,  setting forth the specific
         reasons for the  decision and  containing  specific  references  to the
<PAGE>
         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 Former  Executives 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.

         In any case, a  Participant  may have further  rights under ERISA.  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,  nor does the  Company
         guarantee any specific  level of benefits.  Benefits are provided under
         the  Program  at the  Company's  discretion.  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 employees.
<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 October 1,
         1999.

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 year 1999 shall be  maintained  for the
         period beginning October 1, 1999 and ending December 31, 1999.

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 Human Resources 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      Welfare  Plan Under  ERISA.  The Program is intended to  constitute  an
         "employee  welfare  benefit plan" within the meaning of Section 3(1) of
         ERISA,  covering a select  group of  management  or highly  compensated
         employees.

9.6      Plan Document.  This Program document is the plan document  required by
         ERISA.  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  provisions  of  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 Former Executive, a Participant, a
         Policyholder,  a  Beneficiary  or an Assignee,  as  applicable,  to any
         benefit of any type provided under the Program.
<PAGE>
9.7      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).

9.8      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.

9.9      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.

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

9.11     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.