Document:

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                                                                    EXHIBIT 10.5

                  AGERE SYSTEMS INC. SHORT TERM INCENTIVE PLAN

                     As amended effective February 21, 2002

         SECTION 1. PURPOSE. The purpose of the Agere Systems Inc. Short Term
Incentive Plan (the "Plan") is to provide Officers of Agere Systems Inc. (the
"Company") and its affiliates with incentive compensation based upon the level
of achievement of financial and other performance criteria. The Plan will
enhance the ability of the Company and its affiliates to attract 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) "AWARD" means a cash payment.

         (b) "BOARD" means the Board of Directors of the Company.

         (c) "CODE" means the Internal Revenue Code of 1986, as amended from
time to time and any successor thereto.

         (d) "COMMITTEE" means the Corporate Governance and Compensation
Committee of the Board (or any successor committee).

         (e) "COVERED EMPLOYEE" means a "covered employee" within the meaning of
Section 162(m) of the Code.

         (f) "MEASUREMENT PERIOD" means a period of time selected by the
Committee for which Net Income will be measured for purposes of Section 5.

         (g) "NET INCOME" means the net income before taxes of the Company as
determined under generally accepted accounting principles, excluding (a)
extraordinary items; (b) cumulative effects of changes in accounting principles;
(c) securities gains and losses; (d) amortization or write-off of goodwill,
acquired intangibles and purchased in-process research and development; and (e)
nonrecurring items including, but not limited to, gains or losses on asset
dispositions and sales of divisions, business units or subsidiaries,
restructuring and separation charges, and gains and losses from qualified
benefit plan curtailments and settlements.

         (h) "OFFICER" means any employee of the Company or any affiliate
holding a position above the executive ("E Band") level or any salary grade
level that the Committee determines, in its sole discretion, is the equivalent
thereof.
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                  AGERE SYSTEMS INC. SHORT TERM INCENTIVE PLAN

         (i) "OUTSIDE DIRECTORS" means those members of the Board who are
"outside directors" within the meaning of Section 162(m) of the Code.

         (j) "PARTICIPANT" means any person selected by the Committee to
participate in the Plan.

         (k) "PERFORMANCE PERIOD" means a period of time selected by the
Committee to which an Award relates.

         (l) "PERSON" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.

         (m) "TARGET AWARD" means an Award level that may be paid if certain
performance criteria are achieved.

         SECTION 3. ELIGIBILITY. Persons employed by the Company or any of its
affiliates during a Performance Period in active service at an Officer level for
all or any part of the Performance Period are eligible to be Participants under
the Plan for such Performance Period (whether or not so employed or living at
the date an Award is made) and may be considered by the Committee for an Award.
An Officer is not rendered ineligible to be a Participant by reason of being a
member of the Board.

         SECTION 4. AWARDS-GENERAL. The Committee will establish Target Awards
for Participants at the beginning of each Performance Period and the performance
criteria to be applicable to Awards for such Performance Period. The performance
criteria utilized by the Committee may be based on individual performance,
earnings per share, other Company and business unit financial objectives,
customer satisfaction indicators, operational efficiency measures, and other
measurable objectives tied to the Company's success or such other criteria as
the Committee shall determine. Awards will be made by the Committee following
the end of each Performance Period. Awards shall be paid after the end of the
Performance Period, except to the extent that a Participant has made an election
to defer the receipt of such Award pursuant to the Company's deferred
compensation plan. The Award amount with respect to a Participant shall be
determined in the sole discretion of the Committee, or, in the case of an Award
to a Participant who is not a Covered Employee, in the sole discretion of the
Committee or such person or committee empowered by the Committee or Board. The
determination of the Award amount for each Participant shall be made at the end
of each Performance Period and may be less than (including no Award) or, in the
case of a Participant who is not a Covered Employee, greater than the Target
Award.

         SECTION 5. AWARDS TO COVERED EMPLOYEES.

         (a) If the Committee determines at the time a Target Award is
established for a Participant that such Participant is, or may be as of the end
of the tax year for which the Company would claim a tax deduction in connection
with such Award, a Covered Employee, then the Committee may provide that this
Section 5 is applicable to such Award under such terms as the Committee shall
determine.
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                  AGERE SYSTEMS INC. SHORT TERM INCENTIVE PLAN

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         (b) If an Award is subject to this Section 5, then the payment of cash
pursuant thereto shall be subject to the Company having a level of Net Income
for the applicable Measurement Period set by the Committee within the time
prescribed by Section 162(m) of the Code or the regulations thereunder in order
for the level to be considered "pre-established". The Committee may, in its
discretion, reduce the amount of such an Award at any time prior to payment
based on such criteria as it shall determine, including but not limited to
individual merit and the attainment of specified levels of one or any
combination of the following: net cash provided by operating activities or other
cash flow-based measure, 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 shareowner 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.

         (c) Notwithstanding any contrary provision of this Plan, the Committee
may not adjust upwards the amount payable pursuant to any Award subject to this
Section 5, nor may it waive the achievement of the Net Income requirement
contained in Section 5(b), except in the case of the death or disability of the
Participant.

         (d) Prior to the payment of any Award subject to this Section 5, the
Committee shall certify in writing that the Net Income requirement applicable to
such Award was met.

         (e) The Committee shall have the power to impose such other
restrictions on Awards subject to this Section 5 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)(C) of
the Code, the regulations promulgated thereunder, and any successors thereto.

         SECTION 6. OTHER CONDITIONS.

         (a) No person shall have any claim to an Award under the Plan and there
is no obligation for uniformity of treatment of Participants under the Plan.
Awards under the Plan may not be assigned or alienated.

         (b) Neither the Plan nor any action taken hereunder shall be construed
as giving to any Participant the right to be retained in the employ of the
Company or any affiliate.

         (c) The Company or any affiliate shall have the right to deduct from
any Award to be paid under the Plan any federal, state or local taxes required
by law to be withheld with respect to such payment.
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                  AGERE SYSTEMS INC. SHORT TERM INCENTIVE PLAN

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         (d) Awards under the Plan will, to the extent provided therein, be
included in base compensation or covered compensation under the retirement
programs of the company for purposes of determining pensions, retirement and
death related benefits.

         (e) In the event an Award under the Plan is deferred under the
Company's deferred compensation plan, it will be reflected in the calculations
of the above benefit plans as if it had been paid as scheduled and not deferred.

         (f) Notwithstanding any contrary provision of the Plan, the maximum
amount which may be paid to a Participant in any fiscal year is $9 million.

         SECTION 7. DESIGNATION OF BENEFICIARIES. A Participant may, if the
Committee permits, designate a beneficiary or beneficiaries to receive all or
part of the Award which may be made to the Participant, or may be payable, after
such Participant's death. A designation of beneficiary shall be made in
accordance with procedures specified by the Company and may be replaced by a new
designation or may be revoked by the Participant at any time. In case of the
Participant's death, an Award with respect to which a designation of beneficiary
has been made (to the extent it is valid and enforceable under applicable law)
shall be paid to the designated beneficiary or beneficiaries. Any Award granted
or payable to a Participant who is deceased and not subject to such a
designation shall be distributed to the Participant's estate. If there shall be
any question as to the legal right of any beneficiary to receive an Award under
the Plan, the amount in question may be paid to the estate of the Participant,
in which event the Company or its affiliates shall have no further liability to
anyone with respect to such amount.

         SECTION 8. PLAN ADMINISTRATION.

         (a) The Committee shall have full discretionary power to administer and
interpret the Plan and to establish rules for its administration (including the
power to delegate authority to others to act for and on behalf of the Committee)
subject to such resolutions, not inconsistent with the Plan, as may be adopted
by the Board, except that the Committee (or any subcommittee thereof) shall have
the exclusive authority to exercise any such power with respect to Awards to
which Section 5 is applicable. In making any determinations under or referred to
in the Plan, the Committee (and its delegates, if any) shall be entitled to rely
on opinions, reports or statements of employees of the Company and its
affiliates and of counsel, public accountants and other professional or expert
persons.

         (b) The Plan shall be governed by the laws of the State of Delaware and
applicable Federal law.
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                  AGERE SYSTEMS INC. SHORT TERM INCENTIVE PLAN

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         SECTION 9. MODIFICATION OR TERMINATION OF PLAN. The Board may modify or
terminate the Plan at any time, effective at such date as the Board may
determine.<PAGE>
                                                                    EXHIBIT 10.6

                AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

                     As amended effective February 21, 2002

         SECTION 1. PURPOSE. The purposes of the Agere Systems Inc. 2001 Long
Term Incentive Plan (the "Plan") are to encourage selected employees of the
Company and its Subsidiaries 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 its stockholders, and to enhance the
ability of the Company and its Subsidiaries to attract and retain individuals of
exceptional talent upon whom, in large measure, the sustained progress, growth
and profitability of the Company depend.

         SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:

         (a) "Award" means 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.

         (b) "Award Agreement" means any written or electronic agreement,
contract, or other instrument or document evidencing any Award granted by the
Committee hereunder.

         (c) "Board" means the Board of Directors of the Company.

         (d) "Cause" means (i) violation of the Company's code of conduct; (ii)
conviction (including a plea of guilty or nolo contendere) of a felony or any
crime of theft, dishonesty or moral turpitude; or (iii) gross omission or gross
dereliction of any statutory or common law duty of loyalty to the Company.
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AGERE SYSTEMS INC.
2001 LONG TERM INCENTIVE PLAN

        (e) "Change in Control" means the happening of any of the following
events:

                  (1)      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 (3) of this Section
                           2(d); or

                  (2)      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 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 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

                  (3)      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);

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                AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

                           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 50% 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

                  (4)      The approval by the stockholders of the Company of a
                           complete liquidation or dissolution of the Company;
                           or

                  (5)      The occurrence of a "Change in Control" (as such term
                           is defined in the Lucent Technologies Inc. 1996 Long
                           Term Incentive Program) if it shall occur prior to
                           the earlier of the date of a

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                AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

                           Change in Control of the Company as defined herein or
                           the Distribution.

Notwithstanding the foregoing, the disposition of Company common stock by Lucent
to its stockholders (but not the acquisition thereof by any Entity) shall not
constitute a Change in Control.

         (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) "Class A Stock" means the Class A common stock, par value $.01 per
share, of the Company.

         (h) "Class B Stock" means the Class B common stock, par value $.01 per
share, of the Company.

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

         (j) "Committee" means the Corporate Governance and Compensation
Committee of the Board (or any successor committee).

         (k) "Company" means Agere Systems Inc., a Delaware corporation.

         (l) "Company Action" means

                  (1)      a Company or Subsidiary declared force management
                           program,

                  (2)      the sale of a unit or portion of a unit,

                  (3)      a Company or Subsidiary initiated transfer of a
                           Participant to a corporation, partnership, limited
                           liability company or other business entity in which
                           the Company has an equity interest and which does not
                           constitute a Subsidiary, or

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                AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

                  (4)      the placement of the job function of a Participant
                           with an outsourcing contractor.

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

         (b) "Distribution" means the first date on which Lucent does not own at
least 30% of the Company's outstanding common stock.

         (c) "Dividend Equivalent" means any right granted pursuant to Section
14(g) hereof.

         (d) "Effective Date" means the most recent date on which the Plan was
approved by the stockholders of the Company.

         (e) "Employee" means any employee of the Company or of any Subsidiary.
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 a Subsidiary, even if he or she continues to be employed by such employer.

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

         (g) "Fair Market Value" means:

                  (i)      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, and

                  (ii)     with respect to any other 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.

         (h) "Good Reason" means, with respect to a Participant, (i) the
assignment to the Participant by the Board or another representative of the
Company of duties which represent a material decrease in responsibility and are
materially inconsistent with the duties associated with the Participant's
position, any reduction in the Participant's job title, or a material negative
change in the level of employee to whom the Participant reports, or (ii) a
material negative change in the terms and conditions of the Participant's

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                AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

employment, including a reduction by the Company of the Participant's annual
base salary or a material decrease in the Participant's target opportunity for a
short term incentive award.

         (i) "Incentive Stock Option" means 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.

         (j) "Lucent" means Lucent Technologies Inc.

         (k) "Net Income" means the net income before taxes of the Company as
determined under generally accepted accounting principles, excluding (a)
extraordinary items; (b) cumulative effects of changes in accounting principles;
(c) securities gains and losses; (d) amortization or write-off of goodwill,
acquired intangibles, and purchased in-process research and development; and (e)
nonrecurring items including, but not limited to, gains or losses on asset
dispositions and sales of divisions, business units or subsidiaries,
restructuring and separation charges and gains and losses from qualified benefit
plan curtailments and settlements.

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

         (m) "Officer" means any manager of the Company or any Subsidiary
holding a position above the executive level (E band) or any future salary grade
that is the equivalent thereof.

         (n) "Option" means 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.

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

         (p) "Participant" means an Employee who is selected by the Committee to
receive an Award under the Plan.

         (q) "Performance Award" means any Award of Performance Shares or
Performance Units pursuant to Section 9 hereof.

         (r) "Performance Period" means 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.

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                AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

         (s) "Performance Share" means 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.

         (t) "Performance Unit" means 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.

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

         (v) "Restricted Stock" means 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.

         (w) "Restricted Stock Award" means an award of Restricted Stock under
Section 8 hereof.

         (x) "Shares" means shares of Class A Stock, Class B Stock or other
securities of the Company, as the Committee may from time to time determine. For
purposes of provisions of the Plan that contain price determinations, the term
Shares shall be deemed to be the type of securities that are the basis of the
Award for which the price is being determined.

         (y) "Stock Appreciation Right" means 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 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.

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                AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

         (z) "Subsidiary" means a "subsidiary corporation" of the Company as
defined in Section 424(f) of the Code, an entity in which the Company directly
or indirectly owns 50% or more of the voting interests or an entity in which the
Company has a significant equity interest, as determined by the Board or the
Committee.

         SECTION 3. 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) select the Employees of the Company and
its Subsidiaries 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
Subsidiary.

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<PAGE>
                AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

         SECTION 4. SHARES SUBJECT TO THE PLAN.

         (a) Subject to adjustment as provided in Section 4(c), the total number
of Shares available for Awards granted under the Plan after the Effective Date
shall be 180 million Shares plus the number of Shares remaining available for
Awards under the Plan immediately prior to the Effective Date. The number of
Shares subject to Awards that are granted in substitution or replacement of
options or other awards issued by an entity acquired by (or whose assets are
acquired by) the Company shall not reduce the number of Shares available under
the Plan. To the extent that (i) Shares subject to an Award granted hereunder
(including any Award granted prior to the Effective Date) are not issued or
delivered by reason of the (A) expiration, termination, cancellation, settlement
in cash or forfeiture of such Award, (B) tendering of Shares to pay all or part
of the purchase price, if any, or (C) tendering or withholding of Shares to
satisfy all or part of the tax withholding obligations related to the Award, and
(ii) Shares are purchased by the Company with the amount of cash obtained upon
the exercise of Options, including Options granted prior to the Effective Date,
then in each case those Shares shall again be available for Awards under the
Plan. Any Shares issued or delivered hereunder may consist, in whole or in part,
of authorized and unissued Shares, treasury Shares, Shares purchased in the open
market or otherwise or any combination thereof, as the Board or the Treasurer of
the Company may from time to time determine.

         (b) No more than 40 million Shares shall be available for the grant of
Incentive Stock Options under the Plan after the Effective Date and no Incentive
Stock Option may be granted under the Plan more than 10 years after the
Effective Date. No more than 40 million Shares shall be available for the grant
of Awards in the form of Stock Appreciation Rights pursuant to Section 7
(excluding for this purpose any Stock Appreciation Right granted in relation to
an Incentive Stock Option or a Nonstatutory Stock Option), Restricted Stock
pursuant to Section 8, Performance Shares pursuant to Section 9, and Other Stock
Unit Awards pursuant to Section 10 that are valued by reference to Shares after
the Effective Date. No Participant may be granted Awards with respect to more
than 10 million Shares in the aggregate in any three-year period after the
Effective Date.

         (c) 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 (i) in the aggregate number, class
and kind of shares which may be delivered under the Plan, in the aggregate or to
any one Participant, (ii) 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, (iii) 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

                                      -9-
<PAGE>
                AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

the shares of, another company) and (iv) to the limitations in Section 4(b), 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.

         SECTION 6. STOCK OPTIONS. 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.
Options 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 exercise price per Share under an Option shall be
determined by the Committee in its sole discretion; provided that such purchase
price shall not be less than the Fair Market Value of a 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 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 of the date the Incentive Stock Option is granted.

         (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 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

                                      -10-
<PAGE>
                AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

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.

         (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.

         (g) COMPANY ACTION. Unless otherwise provided in the applicable Award
Agreement, if a Participant's employment terminates by reason of a Company
Action, then the Company Action Vesting Portion of any Option held by that
Participant shall not be forfeited and canceled and instead shall become
immediately exercisable upon termination until the earlier of ninety days
following termination of employment and the original expiration date of the
Option. "Company Action Vesting Portion" is determined as of the date of
termination of employment and shall be the portion of the Option computed as
follows (but not less than zero):

         Company Action Vesting Portion  =  N  x  M/D  -  E

         where:

                  N = the number of shares originally subject to the Option,

                  M = the number of complete months elapsed since the grant date
                  of the Option,

                  D = the number of complete months between the grant date of
                  the Option and the date on which the Option was originally
                  scheduled to become completely exercisable, and

                  E = the number of Shares covered by the Option for which the
                  Option has already become exercisable (regardless of whether
                  the Option has been exercised with respect to such Shares).

         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

                                      -11-
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                AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

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. 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. Any Restricted Stock
Award 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 a Restricted Stock
Award, 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. Except as otherwise determined by the
Committee, upon termination of employment for any reason during the restriction
period, any portion of a Restricted Stock Award still subject to restriction
shall be forfeited by the Participant and reacquired by the Company.

         SECTION 9. PERFORMANCE AWARDS. Performance Awards in the form of
Performance Units or Performance Shares 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 or at any time thereafter. 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.

         SECTION 10. OTHER 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 ("Other Stock Unit Awards") may be granted

                                      -12-
<PAGE>
                AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

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. 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 Employees of the Company and its
Subsidiaries to whom and the time or 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 Other Stock Unit Awards need not be
the same with respect to each recipient.

         SECTION 11. CHANGE IN CONTROL PROVISIONS.

         (a) IMPACT OF EVENT. (i) Notwithstanding any other provision of the
Plan to the contrary, but subject to Section 11(a)(ii), 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:

                  (1)      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.

                  (2)      The restrictions and deferral limitations applicable
                           to any Restricted Stock Awards shall lapse, and such
                           Restricted Stock Awards shall become free of all
                           restrictions and limitations and become fully vested
                           and transferable.

                  (3)      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.

                  (4)      The restrictions and deferral limitations and other
                           conditions applicable to any Other Stock Unit Awards
                           or any other Awards shall lapse, and such Other Stock
                           Unit Awards or such other Awards shall become free of
                           all restrictions, limitations or conditions and
                           become fully vested and transferable and, to the
                           extent applicable, be immediately settled or
                           distributed.

                                      -13-
<PAGE>
               AGERE SYSTEMS INC.2001 LONG TERM INCENTIVE PLAN

         (ii)     This Section 11(a)(ii), and not Section 11(a)(i) shall apply
to Awards granted after February 21, 2002.

                  (1)      If the Company is not the surviving Person following
                           a Change in Control, and the surviving Person or the
                           acquiring Person (the surviving or acquiring Person
                           being the "Acquiror") does not assume the outstanding
                           Awards or does not substitute equivalent equity
                           awards relating to the securities of the Acquiror or
                           its Affiliates for outstanding Awards, then all such
                           Awards shall become immediately and fully exercisable
                           (or in the case of Restricted Stock Awards,
                           Performance Awards or Other Stock Unit Awards, fully
                           vested and all restrictions will immediately lapse).
                           In addition, the Committee may in its sole
                           discretion, provide for a cash payment to be made to
                           each Participant upon consummation of the Change in
                           Control for the outstanding Awards held by such
                           Participant, determined on the basis of the value
                           that would be received in such Change in Control by
                           the holders of the Company's securities relating to
                           such Awards. Notwithstanding the foregoing, any
                           Option intended to be an Incentive Stock Option shall
                           be adjusted in a manner to preserve such status.

                  (2)      If the Company is the surviving Person following a
                           Change in Control, or the Acquiror assumes the
                           outstanding Awards or substitutes equivalent equity
                           awards relating to the securities of the Acquiror or
                           its Affiliates for such Awards, then all such Awards
                           or such substitutes therefore shall remain
                           outstanding and be governed by their respective terms
                           and the provisions of the Plan.

                  (3)      If (A) the employment of a Participant with the
                           Company is terminated (1) other than for Cause or (2)
                           by the Participant for Good Reason, in either case
                           within 24 months following a Change in Control, and
                           (B) the Company is the surviving Person following the
                           Change in Control, or the Acquiror assumes the
                           outstanding Awards or substitutes equivalent equity
                           awards relating to the securities of the Acquiror or
                           its Affiliates for such Awards, then all Awards held
                           by such Participant shall become immediately and
                           fully exercisable (or in the case of Restricted Stock
                           Awards, Performance Awards or Other Stock Unit
                           Awards, fully vested and all restrictions will
                           immediately lapse).

         (b)      CHANGE IN CONTROL CASH-OUT. (i) Notwithstanding any other
provision of the Plan (other than Section 11(b)(ii)), during the 60-day period
from and

                                      -14-
<PAGE>
                  AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

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.

         (ii) This Section 11(b)(ii), rather than Section 11(b)(i), shall apply
to Options granted after February 21, 2002. Following a Change in Control, the
Committee may cancel all outstanding Options and in lieu thereof, provide for
the payment to each holder of an outstanding Option, whether or not such Option
was then exercisable, of an amount equal to the amount by which the Change in
Control Price per Share on the date of the Change in Control shall exceed the
purchase price per Share under the Option multiplied by the number of Shares
subject to such Option.

         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
may be as of the end of the tax year for which the Company would claim a tax
deduction in connection with such Award, a Covered Employee, then the Committee
may provide that this Section 12 is applicable to such Award under such terms as
the Committee shall determine.

         (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 Company having a level
of Net Income for such period of time as is determined by the Committee, such
level of Net Income to be set by the Committee within the time prescribed by
Section 162(m) of the Code or the regulations thereunder in order for the level
to be considered "pre-established". The Committee may, in its discretion, reduce
the amount of any Performance Award or Other Stock Unit Award subject to this
Section 12 at any time prior to payment based on such criteria as it shall
determine, including but not limited to individual merit and the attainment of
specified levels of one or any combination of the following: net cash provided
by operating activities, 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 Subsidiary or division of the Company for or
within which the Participant is primarily employed.

                                      -15-
<PAGE>
                  AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

         (c)      Notwithstanding any contrary provision of the Plan other than
Section 11, the Committee may not adjust upwards the amount payable pursuant to
any Award subject to this Section 12, nor may it waive the achievement of the
Net Income requirement contained in Section 12(b), except in the case of the
death or disability of a Participant.

         (d)      Prior to the payment of any Award subject to this Section 12,
the Committee shall certify in writing that the Net Income requirement
applicable to such Award was met.

         (e)      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)(C) of
the Code, the regulations promulgated thereunder, and any successors 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
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(c) 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.

                                      -16-
<PAGE>
                  AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

         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 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.

         (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, unless and until

                  (1)      if required by the Committee, such recipient shall
                           have executed or accepted pursuant to procedures
                           established by the Committee, a written or electronic
                           agreement or other instrument evidencing the Award
                           and delivered a fully executed copy of any written
                           agreement or other instrument to the Company, and

                  (2)      such recipient shall have otherwise complied with the
                           then applicable terms and conditions.

         (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.

                                      -17-
<PAGE>
                  AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

         (f)      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.

         (g)      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.

         (h)      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.

         (i)      To the extent permitted by law, the Committee may delegate to
one or more directors of the Company (who need not be members of the Committee)
the right to grant Awards to Employees who are not officers of the Company for
purposes of Section 16 of the Exchange Act or directors of the Company and may
delegate to any Officer its other authority hereunder, including the authority
to amend, administer, interpret, waive conditions with respect to, cancel or
suspend Awards to Employees who are not such officers.

        (j)      The Committee is authorized to establish procedures pursuant
to which the payment of any Award may be deferred, including any gain upon
exercise of an Option.

         (k)     The maximum value of the property, including cash, that may be
paid or distributed to any Participant pursuant to grants of Performance Units
and/or Other Stock Unit Awards that are valued with reference to property other
than Shares made in any one calendar year is $9 million.

         (l)      The Company is 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.

                                      -18-
<PAGE>
                  AGERE SYSTEMS INC. 2001 LONG TERM INCENTIVE PLAN

         (m)      Nothing contained in this Plan shall prevent the Board of
Directors from adopting other or additional compensation or equity arrangements,
and such arrangements may be either generally applicable or applicable only in
specific cases.

         (n)      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.

         (o)      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.

         (p)      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 AND DURATION OF PLAN. The Plan originally
became effective on March 27, 2001, and shall expire when Shares are no longer
available for the grant, exercise or settlement of Awards, unless the Board
terminates the Plan earlier.

                                      -19-

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