I. Committee Members
The Compensation and Employee Benefits Committee shall consist of at least three members. Members of the committee are appointed by the Board of Directors from time to time and may be removed by the Board of Directors at any time. Each member of the Committee shall be an "independent director" as determined by the Board of Directors in accordance with the applicable rules of the New York Stock Exchange ("NYSE") and the Securities and Exchange Commission ("SEC"). Committee members shall be chosen based on their competence and ability to add substance to the deliberations of the Committee.
Compensation Committee members shall devote sufficient attention to their duties to enable them to fully understand the environment in which the Company's compensation program operates as well as to understand and apply principles of competitive compensation practice. The Chairperson shall be responsible for making regular reports to the Board of Directors.
The role of the Committee is to establish and oversee the compensation policies and practices of AT&T Corp. on behalf of the Board of Directors. The Committee will discharge the duties of the Board of Directors, to the extent delegated to the Committee, and approve or make recommendations to the Board of Directors, with respect to compensation of the Company's executives. The Committee will produce an annual report on executive compensation for inclusion in the Company's proxy statement, in accordance with applicable rules and regulations of the NYSE and the SEC. At the request of the Governance and Nominating Committee, the Committee may provide input to the Governance and Nominating Committee concerning compensation arrangements for non-employee members of the board of Directors. The Committee, however, does not have any authority with regard to the compensation arrangements for members of the Board of Directors who are not employees, which arrangements must be authorized by the Board of Directors.
III. Duties and Responsibilities
The Committee shall have the following duties and responsibilities:
i. the Employees' Benefits Committee.
ii. the Savings Plan Committee and the AT&T Savings and Security Plan Committee.
iii. the Employee Stock Purchase Plan Committee, and
iv. the Theodore N. Vail National Committee of Awards.
The Committee may delegate its duties and responsibilities to a subcommittee consisting of one or more members of the Committee, or to senior officers of the Company. Any delegation may be made only to the extent permitted by the NYSE rules, SEC rules and applicable law. The Committee may not, however, delegate any of its duties and responsibilities with regard to (i) compensation arrangements, including salary and short term and long term incentive awards, with respect to the Chief Executive Officer and any Section 16 Officer, or (ii) the Company's annual proxy statement.
V. Compensation Consultants
The Committee may obtain advice and assistance, as needed, from internal or external legal, accounting, search firms, compensation specialists or other advisors, including the retention, termination and negotiation of terms and conditions of the assignment.
VI. Annual Performance Evaluation
The Committee shall Conduct an annual review of the Committee's performance, periodically assess the adequacy of its charter and recommend changes to the Board as needed.
The Committee shall continue to have those duties given to the former Directors' Committee on Employee Benefits in connection with Divestiture matters by resolutions adopted by this Board at its meeting held October 19, 1983.
The meetings of the Committee shall be held upon call by the Chairman of the Board or the Chairman of the Committee.
April 1, 2003