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FOUNDERS GRANT STOCK OPTION PLAN

FOR AGERE EMPLOYEES

Effective as of June 1, 2002

ARTICLE 1.
BACKGROUND AND PURPOSE

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     The purpose of the Founders Grant Stock Option Plan For Agere Employees is
to afford Employees of Agere Systems Inc. (“Agere”) who held options under the
Lucent Technologies Inc. Founders Grant Stock Option Plan (the “Lucent Plan”) at
the time of the Spin-off of Agere from Lucent Technologies Inc. (“Lucent”),
substantially the same rights and benefits of equity ownership in their employer
as they had prior to the Spin-off by providing those Employees with the
opportunity to acquire shares of Agere Common Stock upon exercise of those
options.

ARTICLE 2.
DEFINITIONS

     For the purposes of this Plan, the following words shall have the meanings
ascribed to them below:

    (a)   Board

       The Board of Directors of Agere.

    (b)   Code

       The Internal Revenue Code of 1986, as amended.

    (c)   Committee

       The Corporate Governance and Compensation Committee (or any successor
committee) of the Board.

    (d)   Common Stock or Stock

       The Class A common stock of Agere, par value $0.01 per share.

    (e)   Company Action

       An Agere or Subsidiary declared force management program, sale of a unit
or portion of a unit, Agere or Subsidiary initiated transfer of a Participant to
a corporation, partnership, limited liability company or other business entity
in which Agere has an equity interest and which does not constitute a Subsidiary
or placement of the job function of a Participant with an outsourcing
contractor.

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    (f)   Delegate

       The Employee Benefits Committee of Agere or any other person or committee
authorized to exercise specified authority under the Plan.

    (g)   Disability or Disabled

       Qualifying for and receiving payments under a long-term disability pay
plan maintained by Agere or any Subsidiary or as required by or available under
applicable local law.

    (h)   Employee

       Any individual employed by Agere or any Subsidiary excluding leased
employees within the meaning of Section 414(n) of the Code.

    (i)   Exchange Act

       The Securities Exchange Act of 1934, as amended.

    (j)   Expiration Date

       The date specified in the Stock Option Statement relating to the
corresponding option under the Lucent Plan after which the right to exercise an
Option expires.

    (k)   Grant Date

       The Grant Date shall be the original grant date of the corresponding
option under the Lucent Plan.

    (l)   Option or Stock Option

       An option issued pursuant to the Plan in substitution for an option under
the Lucent Plan.

    (m)   Option Price

       The purchase price for the Stock under an Option as set forth in Article
6(c) below.

    (n)   Participant

       An Employee of Agere to whom an Option is issued under the Plan.

    (o)   Plan

       The Founders Grant Stock Option Plan For Agere Employees.

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    (p)   Retirement

       Termination of the employment of an Employee with Agere or any Subsidiary
under circumstances where: (i) the Employee is entitled to a retirement benefit
under a pension plan or arrangement with Agere; or (ii) the sum of the
Employee’s years of service with Agere and attained age at termination equals or
exceeds seventy five (75). In addition to a Participant’s service with Agere,
the Committee will recognize service with Lucent (including service with other
entities that would have been recognized under the Lucent Plan) for purposes of
determining eligibility to receive pension benefits and years of service. Any
determination with respect to these matters shall be made by the Committee in
its sole discretion.

    (q)   Spin-off

       The Spin-off of Agere from Lucent, effective June 1, 2002.

    (r)   Stock Appreciation Right

       A right to receive in cash the difference between the fair market value
of a share of Common Stock on the exercise date and the Grant Date. A Stock
Appreciation Right shall otherwise have the same terms and conditions as a Stock
Option hereunder.

    (s)   Stock Option Statement

       The statement provided to the Participant by Lucent which evidenced the
grant of an option under the Lucent Plan and specifies the terms and conditions
under which such Option was granted, including the Grant Date, number of shares,
and Expiration Date.

    (t)   Subsidiary

       A “subsidiary corporation” of Agere as defined in Section 424(f) of the
Code, an entity in which Agere directly or indirectly owns 50% or more of the
voting interests or any entity in which Agere has a significant equity interest,
as determined by the Board, the Committee or the Delegate.

    (u)   Substitute Award

       An award granted in lieu of an Option or Stock Appreciation Right
pursuant to Article 16.

    (v)   Vesting Date

       The vesting date for all or any portion of an Option shall be October 1,
1999, or such earlier date as is set forth in the corresponding Stock Option
Statement.

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ARTICLE 3.
SHARES AVAILABLE FOR OPTION

     There shall be available for purchase under Options such number of shares
of Common Stock as are subject to Options. These shares may be authorized and
unissued shares, shares purchased in the open market or otherwise, treasury
shares, or any combination thereof, as the Board or the Delegate may from time
to time determine. This limitation shall be subject to adjustment as provided in
Article 12 hereof. No new options may be granted under the Plan and shares
subject to Options which are forfeited, canceled, expired, or otherwise
terminated without the issuance of shares shall not be available for the grant
of Options.

ARTICLE 4.
ADMINISTRATION

     The Plan shall be administered by the Committee. The Delegate may make
grants of Options, administer the Plan, discharge the duties of the Committee
under Articles 5, 6, 7 and 16 with respect to Employees other than officers and
directors of Agere, and adopt rules and regulations under the Plan and make
interpretations of the Plan with respect to such Employees. If the Committee
does not appoint a Delegate, the Plan shall be administered by the Committee.

     The Committee shall be responsible to the Board for the operation of the
Plan, except for matters delegated to the Delegate, and shall make
recommendations to the Board with respect to participation in the Plan by
Employees of Agere and its Subsidiaries with respect to the extent of that
participation. The interpretations and construction of any provision of the Plan
by the Committee and the Delegate, as the case may be, shall be final, unless
otherwise determined by the Board. No member of the Board, the Committee or the
Delegate shall be liable for any action or determination made by him or her in
good faith.

     The Committee or the Delegate may designate employees of Agere to assist in
the performance of ministerial functions under this Plan and may delegate
authority to such persons to execute such documents on its behalf.

ARTICLE 5.
ELIGIBILITY

     Employees who, at the time of the Spin-off, held outstanding options
originally granted under the Lucent Plan as of the Spin-off, received substitute
Options to purchase shares of Common Stock under the Plan. Except as set forth
in Article 16 hereof, no other awards will be granted under the Plan.

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     The adoption of this Plan shall not be deemed to give any Employee any
right to be granted an Option to purchase Common Stock of Agere, except and to
the extent and upon such terms and conditions as may be determined by the
Committee.

ARTICLE 6.
TERMS AND CONDITIONS OF OPTION

     Options under the Plan are nonqualified stock options. Each Option shall be
subject to the following terms and conditions:

    (a)   Grant of Option

       Each Option shall be governed by the corresponding Stock Option
Statement, with references to Lucent being deemed references to Agere and
references to the number of shares and exercise price being deemed to be such
amounts as reflect the conversion of the option at the time of the Spin-off.

    (b)   Number of Shares

       Each Stock Option Statement states the total number of shares of Lucent
common stock to which it pertains. That number was adjusted as a result of the
Spin-off to reflect the fact that the Option is now exercisable for Agere Common
Stock.

    (c)   Option Price

       The exercise price per share of Agere Common Stock shall be equal to the
exercise price per share of Lucent stock under the Lucent Plan as adjusted as a
result of the Spin-off.

    (d)   Option Period and Limitations on Exercise of Options

       Unless earlier canceled, or as otherwise provided in Article 7, Options
may be exercised until September 30, 2006. No portion of any Option shall be
exercisable prior to the applicable Vesting Date, except as provided in Article
7 or Article 9 below.

    (e)   Exercise of Option

       An Option shall be exercised according to procedures established by the
Committee and communicated to Participants.

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ARTICLE 7.
TERMINATION OF EMPLOYMENT

     A Participant who terminates employment with Agere or any Subsidiary (other
than by reason of Retirement, Disability or death) after the Vesting Date for
any portion of an Option may exercise any such portion which is outstanding
until the earlier of ninety (90) days from the Participant’s termination date or
the Expiration Date set forth in the Stock Option Statement.

     In the case of a Participant who terminates employment with Agere or a
Subsidiary prior to the Vesting Date for any portion of an Option, any such
portion of such Option will be canceled immediately in full; provided, however,
that any such portion of such Option of a Participant who terminates employment
with Agere or a Subsidiary pursuant to a Company Action (other than any
Participant for whom such termination also constitutes Retirement, whose Option
shall be governed by Article 8), shall not be canceled, shall become
nonforfeitable upon such termination and shall be exercisable for a period of 90
days from the date of such termination.

     In the case of a Participant whose employment with Agere or any Subsidiary
is terminated for cause, any outstanding Option under this Plan shall be
forfeited immediately.

ARTICLE 8.
RETIREMENT AND DISABILITY

     A Participant who terminates employment with Agere or any Subsidiary
because of Retirement or Disability shall not forfeit any outstanding Option.
Each portion of any such outstanding Option may be exercised no earlier than the
Vesting Date for such portion and no later than the Expiration Date specified in
the Stock Option Statement.

ARTICLE 9.
RIGHTS IN THE EVENT OF DEATH

     The following provisions shall apply in the event of the death of a
Participant.

    (a)   Active Employment, Retirement or Disability

       In the event the Participant dies after attaining Retirement, becoming
Disabled or while actively employed by Agere or any of its Subsidiaries, any
outstanding Options shall be immediately vested and exercisable. Any outstanding
Options shall be exercisable immediately by the executors, administrators,
legatees or distributees of the Participant’s estate, as the case may be, and
shall remain exercisable until the Expiration Date specified in the Stock Option
Statement.

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    (b)   Termination

       In the event the Participant dies within ninety (90) days after
termination of employment, any outstanding Option held by such Participant
shall, to the extent vested on the date of termination, be exercisable
immediately by the executors, administrators, legatees or distributees of the
Participant’s estate, as the case may be, and shall remain exercisable until the
Expiration Date specified in the Stock Option Statement.

ARTICLE 10.
RIGHTS TO CONTINUED EMPLOYMENT

     Neither this Plan nor any Option shall be construed as giving any person
the right to be retained in the employ of Agere or any Subsidiary. No Employee
or Participant shall have any claim to be granted any Option under the Plan, and
there is no obligation of uniformity of treatment of Employees or Participants
under the Plan. This Plan is of limited duration and creates no ongoing
obligation of Agere to provide any future benefit of similar value.

ARTICLE 11.
NONASSIGNABILITY

     No Option granted under the Plan shall be assigned or transferred by the
Participant otherwise than by will or by the laws of descent and distribution,
and such Option shall be exercisable, during the Participant’s lifetime, only by
the Participant.

ARTICLE 12.
EFFECT OF CHANGE IN STOCK SUBJECT TO PLAN

     In the event of changes in the outstanding Common Stock of Agere by reason
of any stock dividend, recapitalization, merger, consolidation, split-up,
combination or exchange, stock split, reclassification or other like change, the
aggregate number and class of shares available under the Plan, the number, class
and price of shares subject to outstanding Options and the minimum number of
shares for which the Option may be exercised shall be adjusted by the Committee
as appropriate. The determination of the Committee shall be conclusive.

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ARTICLE 13.
CHANGE IN CONTROL

     In the event of a change in control of Agere prior to the complete exercise
of all Options granted under the Plan, all outstanding Options shall become
immediately fully vested and exercisable notwithstanding any provisions of the
Plan to the contrary. “Change in Control” shall mean the happening of any of the
following events:

       (a) 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 (1) the then outstanding shares of common stock of
Agere (the “Outstanding Company Common Stock”) or (2) the combined voting power
of the then outstanding voting securities of Agere entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
excluding, however, the following: (i) any acquisition directly from Agere,
other than an acquisition by virtue of the exercise of a conversion privilege
unless the security being so converted was itself acquired directly from Agere,
(ii) any acquisition by Agere, (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by Agere or any corporation
controlled by Agere, or (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (1), (2) and (3) of subsection (c) of
this Article 13; or

       (b) 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 Agere’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

       (c) The approval by the stockholders of Agere of a merger, reorganization
or consolidation or sale or other disposition of all or substantially all of the
assets of Agere (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 (1) 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 Agere or all or substantially all of Agere’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, (2) no entity (other than Agere, any employee
benefit plan (or related trust) of Agere, 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 (1) 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
Agere prior to the Corporate Transaction, and (3) 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 (1) above is satisfied in connection with the
applicable Corporate Transaction, of the Parent Company); or

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       (d) The approval of the stockholders of Agere of a complete liquidation
of Agere.

ARTICLE 14.
RESERVATION OF SHARES OF STOCK

     Agere during the term of this Plan, will at all times reserve and keep
available, and will seek or obtain from any regulatory body having jurisdiction
any requisite authority necessary to issue and to sell, the number of shares of
Common Stock that shall be sufficient to satisfy the requirements of this Plan.
The inability of Agere to obtain from any regulatory body having jurisdiction
the authority deemed necessary by counsel for Agere for the lawful issuance and
sale of Common Stock hereunder shall relieve Agere of any liability in respect
of the failure to issue or sell Common Stock as to which the requisite authority
has not been obtained.

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ARTICLE 15.
TAXES

     In connection with the transfer of shares of Common Stock to a Participant
(or his legal representative) (or at such earlier date as may be required by
local law), Agere will require the Participant (or his legal representative) to
pay the amount required by any applicable governmental entity to be withheld or
otherwise deducted and paid with respect to such transfer (“Withholding Tax”).
Such obligation to pay Withholding Tax shall be satisfied by providing Agere
with funds (in U.S. dollars) sufficient to enable Agere to pay such Withholding
Tax.

ARTICLE 16.
EMPLOYEES BASED OUTSIDE OF THE UNITED STATES

     Notwithstanding any provision of the Plan to the contrary, in order to
foster and promote achievement of the purposes of the Plan or to comply with the
provisions of laws in other countries in which Agere and its Subsidiaries
operate or have Employees, the Committee, in its sole discretion, shall have the
power and authority to (1) determine which Employees employed outside the United
States are eligible to participate in the Plan, (2) modify the terms and
conditions of any Options granted to Employees who are employed outside the
United States (including the grant of Stock Appreciation Rights or some other
comparable form of award (“Substitute Award”)) in lieu of Options, and (3)
establish subplans, modified Option exercise procedures and other terms and
procedures to the extent such actions may be necessary or advisable. Any
subplans established under this Article 16 by the Committee shall be attached to
this Plan as Appendices. The terms of this Plan applicable to Options shall
apply with like effect to Stock Appreciation Rights and Substitute Awards to the
extent legally permissible.

ARTICLE 17.
AMENDMENT OF PLAN

     The Board may amend the Plan at any time and from time to time. The Board
may, at any time or from time to time, suspend or terminate this Plan in whole
or in part.

     No such amendment, suspension or termination of the Plan may, however,
alter or impair any Option granted prior to such amendment, suspension or
termination, without the written consent of the Optionee.

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ARTICLE 18.
TERM OF PLAN

     The Plan shall become effective as of June 1, 2002. The Plan shall
terminate when no Options or Substitute Awards shall remain outstanding.

ARTICLE 19.
GOVERNING LAW

     The Plan, and the validity and construction of any Options granted
hereunder shall be governed by the laws of the State of Delaware.

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