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                                                           EXHIBIT (10)(iii)(A)1

            LUCENT TECHNOLOGIES INC. 1996 LONG TERM INCENTIVE PROGRAM

                             Adopted April 3, 1996,
                          As Amended September 18, 1996

         SECTION 1. PURPOSE. The purposes of the Lucent Technologies Inc. 1996
Long Term Incentive Program (the "Plan") are to encourage selected key employees
of Lucent Technologies Inc. (the "Company") and its Affiliates to acquire a
proprietary and vested interest in the growth and performance of the Company, to
generate an increased incentive to contribute to the Company's future success
and prosperity, thus enhancing the value of the Company for the benefit of share
owners, and to enhance the ability of the Company and its Affiliates to attract
and retain individuals of exceptional managerial talent upon whom, in large
measure, the sustained progress, growth and profitability of the Company
depends.

         SECTION 2. 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) "Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock Award, Performance Share, Performance Unit, Dividend Equivalent, Other
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.

         (c)) "Award Agreement" shall mean any written agreement, contract, or
other instrument or document evidencing any Award granted by the Committee
hereunder and signed by both the Company and the Participant.

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

         (e) "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
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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, (4) any acquisition by any corporation pursuant to a transaction
which complies with clauses (A), (B) and (C) of subsection (iii) of this Section
2(e), or (5) any acquisition by AT&T Corp. or any of its Affiliates prior to the
Effective Date; or

             (ii) A change in the composition of the Board such that the
individuals who, as of the Effective Date, 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, that any individual who becomes a member of the
Board subsequent to the Effective Date, whose election, or nomination for
election by the Company's stockholders, 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 either an
actual or threatened election contest (as such terms are used in Rule 14a-11 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 stockholders 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 stockholders, 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, respectively, 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,
respectively, 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, as the case may be, 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, as
the case may be, (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

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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 stockholders of the Company of a complete
liquidation or dissolution of the Company.

         (f) "Change in Control Price" means the higher of (A) the highest
reported sales price, regular way, of a Share in any transaction reported on the
New York Stock Exchange Composite Tape or other national exchange on which
Shares are listed or on NASDAQ during the 60-day period prior to and including
the date of a Change in Control or (B) if the Change in Control is the result of
a tender or exchange offer or a Corporate Transaction, the highest price per
Share paid in such tender or exchange offer or Corporate Transaction; provided
however, that in the case of Incentive Stock Options and Stock Appreciation
Rights relating to Incentive Stock Options, the Change in Control Price shall be
in all cases the Fair Market Value of a Share on the date such Incentive Stock
Option or Stock Appreciation Right is exercised or deemed exercised. To the
extent that the consideration paid in any such transaction described above
consists all or in part of securities or other noncash consideration, the value
of such securities or other noncash consideration shall be determined in the
sole discretion of the Board.

         (g) "Closing Date" shall have the meaning given in the Separation and
Distribution Agreement among AT&T Corp., the Company and NCR Corporation dated
as of February 1, 1996, as amended, modified or otherwise supplemented.

         (h) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.

         (i) "Committee" shall mean the Compensation Subcommittee of the
Executive, Corporate Governance and Compensation Committee of the Board,
composed of no fewer than three directors, each of whom is a Non-Employee
Director and an "outside director" within the meaning of Section 162(m) of the
Code.

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

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         (k) "Covered Employee" shall mean a "covered employee" within the
meaning of Section 162(m) (3) of the Code.

         (l) "Dividend Equivalent" shall mean any right granted pursuant to
Section 14(h) hereof.

         (m) "Effective Date" shall mean "Immediately after the Distribution
Date," as that term is defined in the Employee Benefits Agreement between AT&T
Corp. and the Company dated as of February 1, 1996, as amended, modified or
otherwise supplemented.

         (n) "Employee" shall mean any employee of the Company or of any
Affiliate. Unless otherwise determined by the Committee in its sole discretion,
for purposes of the Plan, an Employee shall be considered to have terminated
employment and to have ceased to be an Employee if his or her employer ceases to
be an Affiliate, even if he or she continues to be employed by such employer.

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

         (p) "Fair Market Value" shall mean, with respect to any property, the
fair market value of such property determined by such methods or procedures as
shall be established from time to time by the Committee.

         (q) "Incentive Stock Option" shall mean an Option granted under Section
6 hereof that is intended to meet the requirements of Section 422 of the Code or
any successor provision thereto.

         (r) "Non-Employee Director" means a member of the Board who qualifies
as a Non-Employee Director as defined in Rule 16b-3(b)(3) promulgated by the
Securities and Exchange Commission under the Exchange Act or any successor
definition adopted by the Securities and Exchange Commission.

         (s) "Nonstatutory Stock Option" shall mean an Option granted under
Section 6 hereof that is not intended to be an Incentive Stock Option.

         (t) "Option" shall mean any right granted to a Participant under the
Plan allowing such Participant to purchase Shares at such price or prices and
during such period or periods as the Committee shall determine.

         (u) "Other Stock Unit Award" shall mean any right granted to a
Participant by the Committee pursuant to Section 10 hereof.

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         (v) "Participant" shall mean an Employee who is selected by the
Committee to receive an Award under the Plan.

         (w) "Performance Award" shall mean any Award of Performance Shares or
Performance Units pursuant to Section 9 hereof.

         (x) "Performance Period" shall mean that period established by the
Committee at the time any Performance Award is granted or at any time thereafter
during which any performance goals specified by the Committee with respect to
such Award are to be measured.

         (y) "Performance Share" shall mean any grant pursuant to Section 9
hereof of a unit valued by reference to a designated number of Shares, which
value may be paid to the Participant by delivery of such property as the
Committee shall determine, including, without limitation, cash, Shares, or any
combination thereof, upon achievement of such performance goals during the
Performance Period as the Committee shall establish at the time of such grant or
thereafter.

         (z) "Performance Unit" shall mean any grant pursuant to Section 9
hereof of a unit valued by reference to a designated amount of property other
than Shares, which value may be paid to the Participant by delivery of such
property as the Committee shall determine, including, without limitation, cash,
Shares, or any combination thereof, upon achievement of such performance goals
during the Performance Period as the Committee shall establish at the time of
such grant or thereafter.

         (Aa) "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.

         (Bb) "Restricted Stock" shall mean any Share 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.

         (Cc) "Restricted Stock Award" shall mean an award of Restricted Stock
under Section 8 hereof.

         (Dd) "Senior Manager" shall mean any manager of the Company or any
Affiliate holding a position above E band or any future salary grade that is the
equivalent thereof.

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         (Ee) "Shares" shall mean the shares of common stock, $.01 par value, of
the Company and such other securities of the Company as the Committee may from
time to time determine.

         (Ff) "Stock Appreciation Right" shall mean any right granted to a
Participant pursuant to Section 7 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 in the case of any such right
other than one related to any Incentive Stock Option, at any time during a
specified period before the date of exercise over (ii) the grant price of the
right on the date of grant, or if granted in connection with an outstanding
Option on the date of grant of the related Option, as specified by the Committee
in its sole discretion, which, other than in the case of Substitute Awards,
shall not be less than the Fair Market Value of one Share on such date of grant
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, Shares, other property, or
any combination thereof, as the Committee, in its sole discretion, shall
determine.

         (Gg) "Substitute Award" is defined in Section 4(a).

         SECTION 3. ADMINISTRATION. The Plan shall be administered by the
Committee. The Committee shall have full power and authority, subject to such
orders or resolutions not inconsistent with the provisions of the Plan as may
from time to time be adopted by the Board, to: (i) select the Employees of the
Company and its Affiliates to whom Awards may from time to time be granted
hereunder; (ii) determine the type or types of Award to be granted to each
Participant hereunder; (iii) determine the number of Shares to be covered by
each Award granted hereunder; (iv) determine the terms and conditions, not
inconsistent with the provisions of the Plan, of any Award granted hereunder;
(v) determine whether, to what extent and under what circumstances Awards may be
settled in cash, Shares or other property or canceled or suspended; (vi)
determine whether, to what extent and under what circumstances cash, Shares and
other property and other amounts payable with respect to an Award under this
Plan shall be deferred either automatically or at the election of the
Participant; (vii) interpret and administer the Plan and any instrument or
agreement entered into under the Plan; (viii) establish such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (ix) 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 Participant, any stockholder, and
any employee of the Company or of any Affiliate. A majority of the members of
the Committee may determine its actions and fix the time and place of its
meetings.

         SECTION 4. SHARES SUBJECT TO THE PLAN.

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         (a) Subject to adjustment as provided in Section 4(b), the total number
of Shares available for grant under the Plan in the 1996 calendar year shall be
one and two-tenths percent (1.2%) of the total outstanding Shares immediately
after the Closing Date, and in each calendar year thereafter shall be one and
two-tenths percent (1.2%) of the total outstanding Shares as of the first day of
such year for which the Plan is in effect; provided that such number shall be
increased in any year by the number of Shares available for grant hereunder in
previous years but not covered by Awards granted hereunder in such years; and
provided, further, that if any Shares subject to an Award are forfeited or if
any Award based on Shares otherwise terminated without issuance of such Shares
or other consideration in lieu of such Shares, the Shares subject to such Award
shall to the extent of such forfeiture or termination, again be available for
awards under the Plan if no Participant shall have received any benefits of
ownership in respect thereof; and provided further that no more than fifty
million (50,000,000) Shares shall be cumulatively available for the grant of
Incentive Stock Options under the Plan; and provided further that no Participant
may be granted Awards in any one calendar year with respect to more than one
million (1,000,000) Shares. In addition, Awards granted or Shares issued by the
Company (i) pursuant to the Employee Benefits Agreement, by and between the
Company and AT&T Corp., dated as of February 1, 1996, as amended, supplemented
or otherwise modified from time to time or (ii) through the assumption of, or in
substitution or exchange for, employee benefit awards or the right or obligation
to make future employee benefit awards, in connection with the acquisition of
another corporation or business entity (clauses (i) and (ii) collectively, the
"Substitute Awards") shall not reduce the shares available for grants under the
Plan or to a Participant in any calendar year. Any Shares issued hereunder may
consist, in whole or in part, of authorized and unissued shares or treasury
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, in the aggregate or to any
one Participant, 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 (including, if the Committee deems appropriate,
the substitution of similar options to purchase the shares of, or other awards
denominated in the shares of, another company) as the Committee may determine to
be appropriate in its sole discretion, provided that the number of Shares or
other securities subject to any Award shall always be a whole number.

         SECTION 5. ELIGIBILITY. Any Employee (excluding any member of the
Committee) shall be eligible to be selected as a Participant.

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         SECTION 6. STOCK OPTIONS. Options may be granted hereunder to
Participants either alone or in addition to other Awards granted under the Plan.
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. Any such Option shall
be subject to the following terms and conditions and to such additional terms
and conditions, not inconsistent with the provisions of the Plan, as the
Committee shall deem desirable:

         (a) OPTION PRICE. The purchase price per Share purchasable under an
Option shall be determined by the Committee in its sole discretion; provided
that except in the case of an Option pursuant to a Substitute Award, such
purchase price shall not be less than the Fair Market Value of the Share on the
date of the grant of the Option.

         (b) OPTION PERIOD. The term of each Option shall be fixed by the
Committee in its sole discretion; provided that no Incentive Stock Option shall
be exercisable after the expiration of ten years from the date the Option is
granted.

         (c) EXERCISABILITY. Options shall be exercisable at such time or times
as determined by the Committee at or subsequent to grant. Unless otherwise
determined by the Committee at or subsequent to grant, no Incentive Stock Option
shall be exercisable during the year ending on the day before the first
anniversary date of the granting of the Incentive Stock Option.

         (d) METHOD OF EXERCISE. 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 such time or times, and the Participant may make payment
of the option price in such form or forms, including, without limitation,
payment by delivery of cash, Shares or other consideration (including, where
permitted by law and the Committee, Awards) having a Fair Market Value on the
exercise date equal to the total option price, or by any combination of cash,
Shares and other consideration as the Committee may specify in the applicable
Award Agreement.

         (e) INCENTIVE STOCK OPTIONS. In accordance with rules and procedures
established by the Committee, the aggregate Fair Market Value (determined as of
the time of grant) of the Shares with respect to which Incentive Stock Options
held by any Participant which are exercisable for the first time by such
Participant during any calendar year under the Plan (and under any other benefit
plans of the Company or of any parent or subsidiary corporation of the Company)
shall not exceed $100,000 or, if different, the maximum limitation in effect at
the time of grant under Section 422 of the Code, or any successor provision, and
any regulations promulgated thereunder. The terms of any Incentive Stock Option
granted hereunder shall comply in all respects with the provisions of Section
422 of the Code, or any successor provision, and any regulations promulgated
thereunder.

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         (f) FORM OF SETTLEMENT. In its sole discretion, the Committee may
provide, at the time of grant, that the shares to be issued upon an Option's
exercise shall be in the form of Restricted Stock or other similar securities,
or may reserve the right so to provide after the time of grant.

         SECTION 7. 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 6. The provisions of Stock Appreciation Rights need not be
the same with respect to each recipient. Any Stock Appreciation Right related to
a Nonstatutory Stock Option may be granted at the same time such Option is
granted or at any time thereafter before exercise or expiration of such Option.
Any Stock Appreciation Right related to an Incentive Stock Option must be
granted at the same time such Option is granted. 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.

         SECTION 8. RESTRICTED STOCK.

         (a) ISSUANCE. Restricted Stock Awards 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 of Restricted Stock Awards need not be
the same with respect to each recipient.

         (b) REGISTRATION. 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 shares of Restricted Stock awarded under the Plan, 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.

         (c) FORFEITURE. Except as otherwise determined by the Committee at the
time of grant, upon termination of employment for any reason during the
restriction period, all shares of Restricted Stock still subject to restriction
shall be forfeited by the Participant and reacquired by the Company; provided
that except as provided in

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Section 12, in the event of a Participant's retirement, permanent disability,
other termination of employment or death, or in cases of special circumstances,
the Committee may, in its sole discretion, when it finds that a waiver would be
in the best interest of the Company, waive in whole or in part any or all
remaining restrictions with respect to such Participant's shares of Restricted
Stock. Unrestricted Shares, evidenced in such manner as the Committee shall deem
appropriate, shall be issued to the grantee promptly after the period of
forfeiture, as determined or modified by the Committee, shall expire.

         SECTION 9. PERFORMANCE AWARDS. Performance Awards 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 performance criteria to be achieved
during any Performance Period and the length of the Performance Period shall be
determined by the Committee upon the grant of each Performance Award. Except as
provided in Section 11, Performance Awards will be distributed only after the
end of the relevant Performance Period. Performance Awards may be paid in cash,
Shares, other property or any combination thereof, in the sole discretion of the
Committee at the time of payment. The performance levels to be achieved for each
Performance Period and the amount of the Award to be distributed shall be
conclusively determined by the Committee. Performance Awards may be paid in a
lump sum or in installments following the close of the Performance Period. The
maximum value of the property, including cash, that may be paid or distributed
to any Participant pursuant to a grant of Performance Units made in any one
calendar year shall be $10,000,000.

         SECTION 10. OTHER STOCK UNIT AWARDS.

         (a) STOCK AND ADMINISTRATION. 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 ("Other Stock Unit Awards") may be granted hereunder to
Participants, either alone or in addition to other Awards granted under the
Plan. Other Stock Unit Awards may be paid in Shares, other securities of the
Company, cash or any other form of property as the Committee shall determine.
Subject to the provisions of the Plan, the Committee shall have sole and
complete authority to determine the Employees of the Company and its Affiliates
to whom and the time or times at which such Awards shall be made, the number of
shares of Stock to be granted pursuant to such Awards, and all other conditions
of the Awards. The provisions of Other Stock Unit Awards need not be the same
with respect to each recipient.

         (b) TERMS AND CONDITIONS. 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

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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.

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         SECTION 11. CHANGE IN CONTROL PROVISIONS.

         (a) IMPACT OF EVENT. Notwithstanding any other provision of the Plan to
the contrary, unless the Committee shall determine otherwise at the time of
grant with respect to a particular Award, in the event of a Change in Control:

             (i) Any Options and Stock Appreciation Rights outstanding as of the
date such Change in Control is determined to have occurred, and which are not
then exercisable and vested, shall become fully exercisable and vested to the
full extent of the original grant.

             (ii) The restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become free of all
restrictions and limitations and become fully vested and transferable to the
full extent of the original grant.

             (iii) All Performance Awards shall be considered to be earned and
payable in full, and any deferral or other restriction shall lapse and such
Performance Awards shall be immediately settled or distributed.

             (iv) The restrictions and deferral limitations and other conditions
applicable to any Other Stock Awards or any other Awards shall lapse, and such
Other Stock Awards or such other Awards shall become free of all restrictions,
limitations or conditions and become fully vested and transferable to the full
extent of the original grant.

         (b) CHANGE IN CONTROL CASH-OUT. Notwithstanding any other provision of
the Plan, during the 60-day period from and after a Change in Control (the
"Exercise Period"), if the Committee shall determine at, or at any time after,
the time of grant, a Participant holding an Option shall have the right, whether
or not the Option is fully exercisable and in lieu of the payment of the
purchase price for the Shares being purchased under the Option and by giving
notice to the Company, to elect (within the Exercise Period) to surrender all or
part of the Option to the Company and to receive cash, within 30 days of such
notice, in an amount equal to the amount by which the Change in Control Price
per Share on the date of such election shall exceed the purchase price per Share
under the Option (the "Spread") multiplied by the number of Shares granted under
the Option as to which the right granted under this Section 11(b) shall have
been exercised.

         (c) Notwithstanding any other provision of this Plan, if any right
granted pursuant to this Plan would make a Change in Control transaction
ineligible for pooling-of-interests accounting under APB No. 16 that (after
giving effect to any other actions taken to cause such transaction to be
eligible for such pooling-of-interests accounting

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treatment) but for the nature of such grant would otherwise be eligible for such
accounting treatment, the Committee shall have the ability to substitute for the
cash payable pursuant to such right Shares with a Fair Market Value equal to the
cash that would otherwise be payable pursuant thereto.

         SECTION 12. CODE SECTION 162(M) PROVISIONS.

         (a) Notwithstanding any other provision of this Plan, if the Committee
determines at the time Restricted Stock, a Performance Award or an Other Stock
Unit Award is granted to a Participant that such Participant is, or is likely to
be at the time he or she recognizes income for federal income tax purposes in
connection with such Award, a Covered Employee, then the Committee may provide
that this Section 12 is applicable to such Award.

         (b) If an Award is subject to this Section 12, then the lapsing of
restrictions thereon and the distribution of cash, Shares or other property
pursuant thereto, as applicable, shall be subject to the achievement of one or
more objective performance goals established by the Committee, which shall be
based on the attainment of one or any combination of the following: specified
levels of earnings per share from continuing operations, operating income,
revenues, gross margin, return on operating assets, return on equity, economic
value added, stock price appreciation, total stockholder return (measured in
terms of stock price appreciation and dividend growth), or cost control, of the
Company or the Affiliate or division of the Company for or within which the
Participant is primarily employed. Such Performance Goals also may be based upon
the attaining of specified levels of Company performance under one or more of
the measures described above relative to the performance of other corporations.
Such performance goals shall be set by the Committee within the time period
prescribed by, and shall otherwise comply with the requirements of, Section
162(m) of the Code and the regulations thereunder.

         (c) Notwithstanding any provision of this Plan other than Section 11,
with respect to any Award that is subject to this Section 12, the Committee may
not adjust upwards the amount payable pursuant to such Award, nor may it waive
the achievement of the applicable performance goals except in the case of the
death or disability of the Participant.

         (d) The Committee shall have the power to impose such other
restrictions on Awards subject to this Section 12 as it may deem necessary or
appropriate to ensure that such Awards satisfy all requirements for
"performance-based compensation" within the meaning of Section 162(m) (4) (B) of
the Code or any successor thereto.

         SECTION 13. 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

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<PAGE>   14
theretofore granted, without the optionee's or Participant's consent, or that
without the approval of the Stockholders would:

         (a) except as is provided in Section 4(b) of the Plan, increase the
total number of shares reserved for the purpose of the Plan; or

         (b) change the employees or class of employees eligible to participate
in the Plan.

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. The Committee may also substitute new
Awards for previously granted Awards, including without limitation previously
granted Options having higher option prices.

         SECTION 14. GENERAL PROVISIONS.

         (a) Unless the Committee determines otherwise at the time the Award is
granted, no Award, and no Shares subject to Awards described in Section 10 which
have not been issued or as to which any applicable restriction, performance 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;
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. Each Award 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.

         (b) 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 Incentive Stock Option or any Stock
Appreciation Right related to any Incentive Stock Option exceed a period of ten
(10) years from the date of its grant.

         (c) No Employee or Participant shall have any claim to be granted any
Award under the Plan and there is no obligation for uniformity of treatment of
Employees or Participants under the Plan.

         (d) 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.

                                    Page 14
<PAGE>   15
         (e) Except as provided in Section 12, the Committee shall be authorized
to make adjustments in Performance Award criteria or in the terms and conditions
of other Awards in recognition of unusual or nonrecurring events affecting the
Company or its financial statements or changes in applicable laws, regulations
or accounting principles. 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 to carry it into effect. In the event
the Company shall assume outstanding employee benefit awards or the right or
obligation to make future such awards in connection with the acquisition of
another corporation or business entity, the Committee may, in its discretion,
make such adjustments in the terms of Awards under the Plan as it shall deem
appropriate.

         (f) 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 employed by the Company or after termination of such
employment, becomes associated with, employed by, renders services to, or owns
any interest in (other than any nonsubstantial interest, as determined by the
Committee), any business that is in competition with the Company or with any
business in which the Company has a substantial interest as determined by the
Committee or any one or more Senior Managers or committee of Senior Managers to
whom the authority to make such determination is delegated by the Committee.

         (g) All certificates for Shares delivered under the Plan pursuant to
any Award shall be subject to such stock-transfer orders and other restrictions
as the Committee 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 Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.

         (h) The Committee shall be authorized to establish procedures pursuant
to which the payment of any Award may be deferred. 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.

                                    Page 15
<PAGE>   16
         (i) Except as otherwise required in any applicable Award Agreement or
by the terms of the Plan, recipients of Awards under the Plan shall not be
required to make any payment or provide consideration other than the rendering
of services.

         (j) The Committee may delegate to one or more Senior Managers or a
committee of Senior Managers the right to grant Awards to Employees who are not
officers or directors of the Company and to cancel or suspend Awards to
Employees who are not officers or directors of the Company.

         (k) The Company shall be authorized to withhold from any Award granted
or payment due under the Plan the amount of withholding taxes due in respect of
an Award or payment hereunder and to take such other action as may be necessary
in the opinion of the Company to satisfy all obligations for the payment of such
taxes. 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.

         (l) Nothing contained in this Plan shall prevent the Board of Directors
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is otherwise required; and such
arrangements may be either generally applicable or applicable only in specific
cases.

         (m) 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 and applicable Federal law.

         (n) 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 Committee, 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 Committee,
materially altering the intent of the Plan, it shall be stricken and the
remainder of the Plan shall remain in full force and effect.

         (o) Awards may be granted to Employees who are foreign nationals or
employed outside the United States, or both, on such terms and conditions
different from those specified in the Plan as may, in the judgment of the
Committee, be necessary or desirable in order to recognize differences in local
law or tax policy. The Committee also may impose conditions on the exercise or
vesting of Awards in order to minimize the Company's obligation with respect to
tax equalization for Employees on assignments outside their home country.

         SECTION 15. EFFECTIVE DATE OF PLAN. The Plan shall be effective on the
Effective Date.

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<PAGE>   17
         SECTION 16. TERM OF PLAN. No Award shall be granted pursuant to the
Plan after 10 years from the Effective Date, but any Award theretofore granted
may extend beyond that date.

                                    Page 17