Exhibit 10(iii)1

             LUCENT TECHNOLOGIES INC. 2004 EQUITY COMPENSATION PLAN
                           FOR NON-EMPLOYEE DIRECTORS

SECTION 1. ESTABLISHMENT AND PURPOSE. Lucent Technologies Inc., a Delaware
corporation (the "Company"), hereby establishes the Lucent Technologies Inc.
2004 Equity Compensation Plan For Non-Employee Directors (the "Plan") effective
as of February 18, 2004, subject to the Plan having been approved by the
shareowners of the Company on or prior to that date.

The purposes of the Plan are to (a) enable the Company to attract and retain
qualified persons to serve as directors; (b) to enhance the equity interest of
directors in the Company; and (c) to solidify the common interests of the
Company's directors and shareowners in enhancing the value of the Company's
common stock. The Plan seeks to encourage the highest level of director
performance by providing directors with a proprietary interest in the Company's
performance and progress.

SECTION 2. EFFECTIVE DATE AND TERM OF THE PLAN. The Plan shall become effective
on February 18, 2004, subject to its approval by the Company's shareowners. The
Plan shall remain in effect until the earlier of: (i) the date that no
additional Shares are available for issuance under the Plan; (ii) the date that
the Plan has been terminated in accordance with Section 11; or (iii) the close
of business on March 31, 2009. Upon the Plan becoming effective, the Plan shall
supersede and replace the Lucent Technologies Inc. 1999 Stock Compensation Plan
for Non-Employee Directors (the "1999 Non-Employee Director Plan") and no
further awards shall be made under the 1999 Non-Employee Director Plan. Upon the
termination or expiration of the Plan as provided in this Section 2, no Award
shall be granted pursuant to the Plan, but any Award theretofore granted may
extend beyond such termination or expiration.

SECTION 3. DEFINITIONS. As used in the Plan, the following terms shall have the
meanings set forth below:

(a) "Affiliate" shall mean (i) any Person that directly, or through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Company or (ii) any entity in which the Company has a significant equity
interest, as determined by the Committee.

(b) "Annual Meeting" shall mean the Company's annual, general meeting of
shareowners.

(c) "Annual Term" shall mean the twelve calendar-month period beginning on the
March 1 following each Annual Meeting.






(d) "Award" shall mean, individually or collectively, any Option, Shares, Stock
Appreciation Right, Restricted Stock, Dividend Equivalent, Stock Unit Award, or
any other right, interest, or option relating to Shares or other securities of
the Company granted pursuant to the provisions of the Plan.

(e) "Award Agreement" shall mean any written or electronic agreement, contract,
or other instrument or document evidencing an Option, Stock Appreciation Right,
Restricted Stock, Stock Unit Award, or any other right, interest, or option
relating to Shares or other securities of the Company, granted pursuant to the
provisions of the Plan and signed or otherwise authenticated by both the Company
and the Participant.

(f) "Board" shall mean the Board of Directors of the Company.

(g) "Business Day" means any day on which the New York Stock Exchange is open
for transaction of business.

(h) "Change in Control" shall mean the happening of any of the following events:

     (i)An acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (an "Entity") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either (A) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (B) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); excluding, however, the following: (1) any acquisition directly
from the Company, other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was itself acquired
directly from the Company, (2) any acquisition by the Company, (3) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (4)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (iii) of this Section 3(h); or

     (ii)A change in the Composition of the Board during any two year period
such that the individuals who, as of the beginning of such two year period,
constitute the Board (such Board shall be hereinafter referred to as the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that for purposes of this definition, any individual
who becomes a member of the Board subsequent to the beginning of the two year
period, whose election, or nomination for election by the Company's shareowners,
was approved by a vote of at least a majority of those individuals who are
members of the Board and who were also members of the Incumbent Board (or deemed
to be






such pursuant to this proviso) shall be considered as though such individual
were a member of the Incumbent Board; and provided further, however, that any
such individual whose initial assumption of office occurs as a result of or in
connection with a solicitation subject to Rule 14a-12(c) of Regulation 14A
promulgated under the Exchange Act or other actual or threatened solicitation of
proxies or consents by or on behalf of an Entity other than the Board shall not
be so considered as a member of the Incumbent Board; or

     (iii)The approval by the shareowners of the Company of a merger,
reorganization or consolidation or sale or other disposition of all or
substantially all of the assets of the Company (each, a "Corporate Transaction")
or, if consummation of such Corporate Transaction is subject, at the time of
such approval by shareowners, to the consent of any government or governmental
agency, the obtaining of such consent (either explicitly or implicitly by
consummation); excluding however, such a Corporate Transaction pursuant to which
(A) all or substantially all of the individuals and entities who are the
beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of the outstanding
shares of common stock, and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors of the
corporation resulting from such Corporate Transaction (including, without
limitation, a corporation or other Person which as a result of such transaction
owns the Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries (a "Parent Company")) in
substantially the same proportions as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, (B) no Entity (other than the Company, any employee
benefit plan (or related trust) of the Company, such corporation resulting from
such Corporate Transaction or, if reference was made to equity ownership of any
Parent Company for purposes of determining whether clause (A) above is satisfied
in connection with the applicable Corporate Transaction, such Parent Company)
will beneficially own, directly or indirectly, 20% or more of, respectively, the
outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the election of
directors unless such ownership resulted solely from ownership of securities of
the Company prior to the Corporate Transaction, and (C) individuals who were
members of the Incumbent Board will immediately after the consummation of the
Corporate Transaction constitute at least a majority of the members of the board
of directors of the corporation resulting from such Corporate Transaction (or,
if reference was made to equity ownership of any Parent Company for purposes of
determining whether clause (A) above is satisfied in connection with the
applicable Corporate Transaction, of the Parent Company); or






     (iv)The approval by the shareowners of the Company of a complete
liquidation or dissolution of the Company.

(m) "Committee" shall mean the Leadership Development and Compensation Committee
of the Board (or any successor committee consisting of two or more members of
the Board), consisting of members who are "independent" directors as defined in
the New York Stock Exchange's Listed Company Manual and who are "non-employee
directors" within the meaning of Rule 16b-3 adopted under the Exchange Act.

(n) "Company" shall mean Lucent Technologies Inc., a Delaware corporation.

(o) "Deferral Plan" shall mean the Company's Deferred Compensation Plan, as
amended, and any successor or replacement plan then in effect with respect to
Participants.

(p) "Dividend Equivalent" shall mean any right granted pursuant to Section 13(l)
hereof.

(q) "Equity Retainer" shall mean that portion of a Participant's Retainer which,
pursuant to Section 6 of this Plan, the Participant is required, or has elected,
to receive in the form of an Award.

(r) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.

(s) "Fair Market Value" shall mean, with respect to Shares, the average of the
highest and lowest reported sales prices, regular way, of Shares in transactions
reported on the New York Stock Exchange on the date of determination of Fair
Market Value, or if no sales of Shares are reported on the New York Stock
Exchange for that date, the comparable average sales price for the last previous
day for which sales were reported on the New York Stock Exchange.

(t) "Grant Date" means the date on which an Award is granted under the Plan.

(u) "Option" shall mean a non-statutory stock option granted under Section 7 of
the Plan.

(v) "Participant" shall mean each member of the Board from time to time who is
not an employee of the Company or any of its Affiliates.

(w) "Person" shall mean any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, limited liability
company, other entity or government or political subdivision thereof.






(x) "Restricted Stock" shall mean Shares granted to a Participant under Section
8 which are issued with the restriction that the holder may not sell, transfer,
pledge, or assign such Share and with such other restrictions as the Committee,
in its sole discretion, may impose (including, without limitation, any
restriction on the right to vote such Share, and the right to receive any cash
dividends), which restrictions may lapse separately or in combination at such
time or times, in installments or otherwise, as the Committee may deem
appropriate.

(y) "Retainer" shall mean the retainer paid to each Participant as compensation
for services as a member of the Board or any committee of the Board with respect
to each Annual Term, but shall not include any reimbursement for expenses.

(z) "Shares" shall mean the shares of common stock, $.01 par value, of the
Company.

(aa) "Stock Appreciation Right" shall mean any right granted to a Participant
pursuant to Section 8 hereof to receive, upon exercise by the Participant, the
excess of (i) the Fair Market Value of one Share on the date of exercise or, if
the Committee shall so determine, at any time during a specified period before
the date of exercise over (ii) the grant price of the right on the Grant Date,
or if granted in connection with an outstanding Option on the Grant Date of the
related Option, as specified by the Committee in its sole discretion, which
shall not be less than the Fair Market Value of one Share on such Grant Date of
the right or the related Option, as the case may be. Any payment by the Company
in respect of such right may be made in cash or Shares, or any combination
thereof, as the Committee, in its sole discretion, shall determine.

(bb) "Stock Unit Award" shall have the meaning prescribed by Section 10.

SECTION 4. ADMINISTRATION. The Plan shall be administered by the Committee. The
Committee shall have full power and authority, subject to such resolutions not
inconsistent with the provisions of the Plan as may from time to time be adopted
by the Board, to (i) interpret and administer the Plan and any instrument or
agreement entered into under the Plan; (ii) establish such rules and regulations
and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (iii) make any other determination and take any
other action that the Committee deems necessary or desirable for administration
of the Plan. Decisions of the Committee shall be final, conclusive and binding
upon all Persons, including the Company, any Participants or any shareowner.

SECTION 5. SHARES SUBJECT TO THE PLAN.

(a) Subject to adjustment as provided in Section 5(b), the total number of
Shares available for Awards granted under the Plan on and after February 18,
2004 and on or prior to March 31, 2009 shall be two million five hundred
thousand






(2,500,000) Shares; provided, that if any Shares are subject to an Award that is
cancelled, forfeited, expires, lapses or otherwise is terminated without
issuance of Shares, the Shares subject to such Award shall again be available
for Awards under the Plan and shall not count against the aggregate number of
shares that may be issued under the Plan in this Section 5(a). If a Participant
pays the option price for an Option by tendering previously owned Shares in
accordance with the provisions of Section 6 herein or satisfies any tax
withholding requirement by having the Company withhold Shares in accordance with
Section 13(b) herein, then such Shares surrendered to pay the option price or
used to satisfy such tax withholding requirements shall not count against the
total number of Shares that may be issued under the Plan set forth in this
Section 5(a). Additionally, the following items shall not count against the
total number of shares that may be issued under the Plan set forth in this
Section 5(a): (i) the payment in cash of dividends or Dividend Equivalents under
any outstanding Award; or (ii) any Award that is settled in cash rather than by
issuance of Shares.

(b) In the event of any merger, reorganization, consolidation, recapitalization,
stock dividend, stock split, reverse stock split, spin-off or similar
transaction or other change in corporate structure affecting the Shares, such
adjustments and other substitutions shall be made to the Plan and to Awards as
the Committee in its sole discretion deems equitable or appropriate, including
without limitation such adjustments in the aggregate number, class and kind of
Shares which may be delivered under the Plan, and in the number, class, kind and
option or exercise price of Shares subject to outstanding Options, Stock
Appreciation Rights or other Awards granted under the Plan, and in the number,
class and kind of Shares subject to Awards granted under the Plan as the
Committee may determine to be appropriate in its sole discretion to prevent
dilution or enlargement of rights; provided that the number of Shares or other
securities subject to any Option shall always be a whole number.

(c) Shares issued under the Plan may be original issue shares, treasury stock or
shares purchased in the open market or otherwise.

SECTION 6. EQUITY RETAINER.

(a) Commencing with the Annual Term beginning March 1, 2004, each Participant
will receive fifty percent (50%) of his or her Retainer for each Annual Term in
the form of an Equity Retainer and may elect to receive all or any portion of
the remaining fifty percent (50%) of such Retainer in the form of either an
Equity Retainer or cash, or combination thereof. Any such election shall be
filed on a form prescribed by the Committee for this purpose, which shall
specify the type of Award or Awards being granted as an Equity Retainer and
available to be elected for the remaining portion of the Retainer. Any such
election (or failure to elect) shall be irrevocable as of the last date by which
such election was due to be filed with the Company.






(b) If any Participant fails to notify the Secretary of the Company in writing
by December 31 of the preceding Annual Term of the desired form of payment of
the Retainer for the next Annual Term, then such Participant shall be deemed to
have elected an Equity Retainer for fifty percent (50%) of the value of such
Retainer, with the remaining 50% in cash.

(c) Any Shares constituting an Equity Retainer shall be determined on March 1 of
each Annual Term (or, if March 1 is not a Business Day, on the next succeeding
Business Day) and shall be payable as soon as practicable thereafter, commencing
March 1, 2004. Payments for the cash portion, if any, of the Retainer shall be
made on the same day. If a Participant's Equity Retainer is payable in Shares,
the number of Shares to be awarded shall be the number of whole Shares equal to
(i) the portion of the Retainer to be paid in Shares, divided by (ii) the Fair
Market Value per Share as of the Grant Date. The Fair Market Value of any
fractional share shall be paid in cash. A Participant may elect to have all or a
portion of the Shares credited to the deferred compensation account of such
Participant under the Deferral Plan.

(d) This Section 6(d) shall apply to any person who becomes a Participant other
than at the beginning of an Annual Term (or the immediately preceding Annual
Meeting) with respect to the Retainer determined by the Committee to be payable
for such portion of such Annual Term which follows his or her appointment to the
Board. Such person shall make the election prescribed by Section 6(a) no later
than the 30th day following the effective date of his or her appointment to the
Board. The payment date for any cash portion of the Retainer and the Grant Date
for any Equity Retainer shall be the first Business Day which occurs at least
fifteen (15) calendar days after receipt by the Company of such election.

(e) For any Option or Stock Appreciation Right constituting an Equity Retainer,
the number of Shares subject to the Option or Stock Appreciation Right shall be
determined based on the Black-Scholes valuation method on the Grant Date of such
Option or Stock Appreciation Right.

SECTION 7. OPTIONS.

(a) Options may be granted hereunder to Participants either alone or in addition
to other Awards granted under the Plan. Options may be granted for no
consideration or for such consideration as the Committee may determine. Any
Option granted under the Plan shall be evidenced by an Award Agreement in such
form as the Committee may from time to time approve. The provisions governing
Options need not be the same with respect to each recipient. Options shall be
subject to the terms and conditions set forth in this Plan and to such
additional terms and conditions, not inconsistent with the provisions of this
Plan, as the Committee shall deem desirable.






(b) The exercise price per Share under an Option shall be the Fair Market Value
of a Share on the Grant Date.

(c) Options shall vest and be fully exercisable as may be determined by the
Committee; provided that in no event shall Options vest and be fully exercisable
at any time earlier than one year from the Grant Date. Notwithstanding anything
in this Section 7(c) to the contrary, Options shall vest and be fully
exercisable in the event: (i) a Change in Control occurs pursuant to Section 12,
(ii) the Participant does not stand for re-election, (iii) the Participant
stands for re-election but is not re-elected, or (iv) the death of the
Participant occurs. If a Participant resigns from the Board prior to the end of
such Participant's term as a Board member, the Participant shall forfeit any
unvested Option.

Subject to the other provisions of the Plan and any applicable Award Agreement,
any Option may be exercised by the Participant in whole or in part at any time
on or after the Option vests and is fully exercisable pursuant to Section 7(c)
and before the expiration of such Option. The Participant shall make payment of
the Option price in cash or in Shares with a Fair Market Value equivalent to the
exercise price for all of the Shares to be purchased upon exercise of the
Option.

SECTION 8. STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be granted
hereunder to Participants either alone or in addition to other Awards granted
under the Plan and may, but need not, relate to a specific Option granted under
Section 7. The provisions governing Stock Appreciation Rights need not be the
same with respect to each recipient. Stock Appreciation Rights granted alone
shall generally be subject to the same terms and conditions that are applicable
to Options pursuant to Section 7. Any Stock Appreciation Right related to an
Option may be granted at the same time the Option is granted or at any time
thereafter, before the exercise or expiration of such Option. In the case of any
Stock Appreciation Right related to any Option, the Stock Appreciation Right or
applicable portion thereof shall terminate and no longer be exercisable upon the
termination or exercise of the related Option, except that a Stock Appreciation
Right granted with respect to less than the full number of Shares covered by a
related Option shall not be reduced until the exercise or termination of the
related Option exceeds the number of Shares not covered by the Stock
Appreciation Right. Any Option related to any Stock Appreciation Right shall no
longer be exercisable to the extent the related Stock Appreciation Right has
been exercised. The Committee may impose such conditions or restrictions on the
exercise of any Stock Appreciation Right as it shall deem appropriate. Stock
Appreciation Rights shall vest and be fully exercisable as may be determined by
the Committee; provided that in no event shall Stock Appreciation Rights vest
and be fully exercisable at any time earlier than one year from the Grant Date.
Notwithstanding anything in this Section 8 to the contrary, Stock Appreciation
Rights shall vest and be fully exercisable in the event: (i) a Change in Control
occurs pursuant to Section 12, (ii) the Participant does not stand for
re-election, (iii) the Participant stands for re-election but is not re-elected,
or (iv) the death of






the Participant occurs. If a Participant resigns from the Board prior to the end
of such Participant's term as a Board member, the Participant shall forfeit any
unvested Stock Appreciation Rights.

SECTION 9. RESTRICTED STOCK. Restricted Stock may be issued hereunder to
Participants, for no cash consideration or for such minimum consideration as may
be required by applicable law, either alone or in addition to other Awards
granted under the Plan. The provisions governing the Restricted Stock need not
be the same with respect to each recipient. Any Restricted Stock issued
hereunder may be evidenced in such manner as the Committee in its sole
discretion shall deem appropriate, including, without limitation, book-entry
registration or issuance of a stock certificate or certificates. In the event
any stock certificate is issued in respect of grant of Restricted Stock, such
certificate shall be registered in the name of the Participant, and shall bear
an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award. Restricted Stock shall vest and be fully exercisable
as may be determined by the Committee; provided that in no event shall
Restricted Stock vest and be fully exercisable at any time earlier than one year
from the Grant Date. Notwithstanding anything in this Section 9 to the contrary,
Restricted Stock shall vest and be fully exercisable in the event: (i) a Change
in Control occurs pursuant to Section 12, (ii) the Participant does not stand
for re-election, (iii) the Participant stands for re-election but is not
re-elected, or (iv) the death of the Participant occurs. If a Participant
resigns from the Board prior to the end of such Participant's term as a Board
member, the Participant shall forfeit any unvested Restricted Stock.

SECTION 10. STOCK UNIT AWARDS. Other Awards of Shares and other Awards that are
valued in whole or in part by reference to, or are otherwise based on, Shares or
other property ("Stock Unit Awards") may be granted hereunder to Participants,
either alone or in addition to other Awards granted under the Plan. Stock Unit
Awards may be paid in Shares, other securities of the Company, or cash as the
Committee shall determine. Shares (including securities convertible into Shares)
granted under this Section 10 may be issued for no cash consideration or for
such minimum consideration as may be required by applicable law. Shares
(including securities convertible into Shares) purchased pursuant to a purchase
right awarded under this Section 10 shall be purchased for such consideration as
the Committee shall in its sole discretion determine, which shall not be less
than the Fair Market Value of such Shares or other securities as of the date
such purchase right is awarded. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the times at which
such Awards shall be made, the number of Shares to be granted pursuant to such
Awards, and all other conditions of the Awards. The provisions of Stock Unit
Awards need not be the same with respect to each recipient.

SECTION 11. AMENDMENTS AND TERMINATION. The Board may amend,






alter or discontinue the Plan, but no amendment, alteration, or discontinuation
shall be made that would impair the rights of an optionee or Participant under
an Award theretofore granted, without the Participant's consent, or that without
the approval of the shareowners would:

(a) except as is provided in Section 5 of the Plan, increase the total number of
shares reserved for the purpose of the Plan;

(b) change the Participants eligible to participate in the Plan; or

(c) reduce the exercise price for Options and Stock Appreciation Rights by
repricing or replacing such Awards.

The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Participant without his consent. Except as provided in Section 5 and Section
13(g), the Committee shall not have the authority to cancel any outstanding
Option and issue a new Option in its place with a lower exercise price.

SECTION 12. CHANGE IN CONTROL PROVISIONS. Notwithstanding any provision of the
Plan to the contrary, unless the Committee shall determine otherwise at the
Grant Date with respect to a particular Award, in the event of a Change in
Control all outstanding Awards shall become fully vested.

SECTION 13. GENERAL PROVISIONS.

(a) Nothing in the Plan shall be deemed to create any obligation on the part of
the Board to nominate any director for re-election by the Company's shareowners
or to limit the rights of the shareowners to remove any director.

(b) The Company shall have the right to require, prior to the issuance or
delivery of any Shares pursuant to the Plan, payment by a Participant to the
Company of any taxes required by law to be withheld with respect to the issuance
or delivery of such Shares. The Committee shall be authorized to establish
procedures for election by Participants to satisfy such withholding taxes by
delivery of, or directing the Company to retain, Shares, and will not issue
Shares or Awards until such tax obligations have been satisfied.

(c) Shares issued or delivered under the Plan shall be in either book entry form
or in certificate form pursuant to instructions given by the Participant to the
Company. All Shares delivered under the Plan shall be subject to such
stop-transfer orders and other restrictions as the Company may deem advisable
under the rules, regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Shares are then listed,
and any applicable Federal or state securities law, and the Company may cause a
legend or legends to be put on any such certificates to make appropriate






reference to such restrictions.

(d) The issuance or delivery of any Shares under this Plan may be postponed by
the Company for such period as may be required to comply with any applicable
requirements under the Federal securities laws, any applicable listing
requirements of any national securities exchange and requirements under any
other law or regulation applicable to the issuance or delivery of such Shares,
and the Company shall not be obligated to issue or deliver any Shares if the
issuance or delivery of such Shares shall constitute a violation of any
provision of any law or of any regulation of any governmental authority or any
national securities exchange.

(e) The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the laws
of the State of Delaware without regard to principles of conflicts of laws and
applicable Federal law.

(f) If any provision of this Plan is or becomes or is deemed invalid, illegal or
unenforceable in any jurisdiction, or would disqualify the Plan or any Award
under any law deemed applicable by the Company, such provision shall be
construed or deemed amended to conform to applicable laws or if it cannot be
construed or deemed amended without, in the determination of the Company,
materially altering the intent of the Plan, it shall be stricken and the
remainder of the Plan shall remain in full force and effect.

(g) The Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable.

(h) Unless the Committee determines otherwise at the time the Award is granted
and except as otherwise provided in this Section 13(h), no Award, and no Shares
subject to Awards described in Sections 9 or 10 which have not been issued or as
to which any applicable restriction or deferral period has not lapsed, may be
sold, assigned, transferred, pledged or otherwise encumbered, except by will or
by the laws of descent and distribution and all Awards shall be exercisable,
during the Participant's lifetime, only by the Participant or, if permissible
under applicable law, by the Participant's guardian or legal representative;
provided that, if so determined by the Committee, a Participant may, in the
manner established by the Committee, designate a beneficiary to exercise the
rights of the Participant with respect to any Award upon the death of the
Participant. The Award may be transferred by the Participant, in accordance with
rules established by the Committee, to one or more members of the Participant's
immediate family, to a partnership of which the only partners are members of
such immediate family or to a trust established by the Participant for the
benefit of one or more members of such immediate family (each such transferee a
"Permitted Transferee"). For purposes of this Section 13(h), "immediate family"






means a Participant's spouse, parents, children, grandchildren and spouses of
children and grandchildren (including adopted children and grandchildren, as the
case may be). A Permitted Transferee may not further transfer the Award. An
Award transferred pursuant to this Section 13(h) shall remain subject to all of
the provisions of the Plan and any Award Agreement with respect to such Award
and may not be exercised by a Permitted Transferee unless and until all legal or
regulatory approvals, listings, registrations, qualifications or other
clearances as determined by the Company to be required or appropriate have been
obtained.

(i) The term of each Award shall be for such period of months or years from the
date of its grant as may be determined by the Committee; provided that in no
event shall the term of any Option or any Stock Appreciation Right exceed a
period of seven (7) years from the date of its grant.

(j) The prospective recipient of any Award under the Plan shall not, with
respect to such Award, be deemed to have become a Participant, or to have any
rights with respect to such Award, until and unless such recipient shall have
executed an agreement or other instrument evidencing the Award and delivered a
fully executed copy thereof to the Company, and otherwise complied with the then
applicable terms and conditions.

(k) Subject to Section 11, the Committee shall have full power and authority to
determine whether, to what extent and under what circumstances any Award shall
be canceled or suspended. In particular, but without limitation, all outstanding
Awards to any Participant shall be canceled if the Participant, without the
consent of the Committee, while serving as a non-employee member of the Board
or, if applicable, before the expiration of such member's non-compete
obligation, engages in any activity which is in competition with the Company, as
determined by the Committee, one or more Officers of the Company or a committee
of Officers of the Company to whom the authority to make such determination is
delegated by the Committee. The Committee shall have the discretion with respect
to any Award granted under this Plan to establish, upon its grant, conditions
under which (i) the Award may be subsequently forfeited, cancelled, rescinded,
suspended, withheld or otherwise limited or restricted; or (ii) the gains that
are realized by the grantee in connection with an Award or the exercise of an
Award may be recovered; provided, however, that such conditions and their
consequences: (a) are clearly set forth in the Award Agreement or other grant
document; and (b) comply with applicable laws. These conditions may include,
without limitation, actions by the Participant which constitute a conflict of
interest with the Company, are prejudicial to the Company's interests, or are in
violation of any non-compete obligation, any confidentiality agreement or
obligation, or the Company's applicable policies.

(l) Subject to the provisions of this Plan and any Award Agreement, the
recipient of an Award (including, without limitation, any deferred Award) may,
if so determined by the Committee, be entitled to receive, currently or on a
deferred






basis, interest or dividends, or interest or Dividend Equivalents, with respect
to the number of Shares covered by the Award, as determined by the Committee, in
its sole discretion, and the Committee may provide that such amounts (if any)
shall be deemed to have been reinvested in additional Shares or otherwise
reinvested.

(m) The Committee may permit the deferral under the Deferral Plan of any Award
by a Participant who then is actively serving on the Board, subject to such
rules and procedures as it may establish.

As adopted by the Board on October 18, 2003.