Reliant FORM 10-K manual Restricted stock unit plan, Options

The following is a summary of the total number of outstanding stock options and the maximum number of stock options available for grant:

		Weighted-
	Outstanding		average	Available
	options		exercise	for grant
	(thousands)		price	(thousands)
Balance at December 31, 2000	325,380	$	32.06	114,223
Granted options under all stock option plans(a)	55,565	$	29.45	(55,565)
Options exercised	(20,836)	$	6.53	–
Options cancelled(b)	(56,793)	$	35.60	41,372
Options cancelled under the stock option exchange program(c)	(93,416)	$	51.64	93,416
Balance at December 31, 2001	209,900	$	23.86	193,446
Granted options under all stock option plans(c)	120,335	$	7.08	(120,316)
Options exercised	(3,269)	$	1.81	–
Options cancelled(b)	(70,093)	$	26.48	55,036
Balance at December 31, 2002	256,873	$	15.52	128,166
Granted options under all stock option plans	74,924	$	2.40	(74,924)
Options exercised	(1,550)	$	1.99	–
Options cancelled	(41,849)	$	17.94	34,755
Balance at December 31, 2003	288,398	$	12.27	87,997

(a)Included options granted in relation to various acquisitions during the year ended December 31, 2001 of approximately 1,313.

(b)Included adjustments to assumed stock option plans.

(c)Approximately 93,416 stock options were tendered for exchange and cancelled. On January 29, 2002, Nortel Networks granted approximately 52,700 new stock options in connection with the Exchange Program with exercise prices in the range of U.S. $7.16 to U.S. $7.78 or Canadian $11.39 per common share.

The following table summarizes information about stock options outstanding as of December 31, 2003:

			Options outstanding					Options exercisable
				Weighted-
				average
				remaining	Weighted-				Weighted-
			Number	contractual		average		Number		average
			outstanding	life		exercise		exercisable		exercise
Range of exercise prices			(thousands)	(in years)		price		(thousands)		price
$0.0084	-	$2.3900	58,476	9.1	$	2.32	1,148		$	1.49
$2.3901	-	$3.5852	19,088	8.9	$	2.57	1,042		$	2.71
$3.5853	-	$5.3779	11,970	5.9	$	4.80	6,671		$	4.60
$5.3780	-	$8.0670	82,156(a)	6.5	$	6.50	49,888		$	6.67
$8.0671	- $12.1006		43,880(a)	3.8	$	9.50	41,186		$	9.57
$12.1007	- $18.1510		18,220	3.7	$	15.23	16,580		$	15.18
$18.1511	- $27.2267		25,602	5.0	$	23.20	25,026		$	23.28
$27.2268	- $40.8402		9,185	5.3	$	34.74	8,058		$	34.25
$40.8403	- $61.2605		13,455	4.5	$	51.60	12,987		$	51.88
$61.2606	- $91.8900		6,366	4.7	$	72.50	6,337		$	72.49
			288,398	6.30	$	12.27		168,923(b)	$	17.79

(a)Included approximately 41,069 stock options granted under the Exchange Program.

(b)Total number of exercisable options for the years ended December 31, 2002 and 2001 were 156,632 and 132,969, respectively.

Restricted stock unit plan

The Nortel Networks Limited Restricted Stock Unit Plan is a long-term incentive plan that generally provides executive officers and certain senior management with the opportunity to receive RSUs over a specified period of time if assigned performance thresholds are achieved and the joint leadership resources committee of the Boards of the Directors of Nortel Networks and NNL (the “Committee”) determines, in its discretion, to issue and settle all or a portion of the allocated RSUs. Each RSU issued entitles the holder to receive one common share of Nortel Networks Corporation

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