|Agere
Officer Severance Policy(Last revised October 2002)



Eligibility
|------------------------------------------------------------------------

| |  |  | Agere
Officer status
| | - |  | --------------------

| |  |  | Triggered
by (a) Company initiated termination, other than for Cause as defined on page
2, or (b) as described under Change in Control Provisions on page 2
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Contingent
upon signing the standard, Agere Release Agreement (including non-compete,
non-solicitation provisions)
| | - |  | ------------------------------------------------------------------------------------------------------------------

| |  |  | All
payments and benefits listed below will be offset by any individually negotiated or
legally required arrangement
| | - |  | --------------------------------------------------------------------------------------------------------------------

|Leave of Absence Payment
|------------------------

| |  |  | 24
months of base salary and target bonus
| | - |  | -----------------------------------------

| |  |  | Base
salary will be paid monthly. Target bonus will be paid annually in December. Both
payments are benefits bearing.
| | - |  | ---------------------------------------------------------------------------------------------------------------------

|Equity
|------

| | Stock
Options
| | -------------

| |  |  | Options
continue vesting as scheduled during the 24 month period.
| | - |  | -----------------------------------------------------------------

| |  |  | At
end of the 24 month period, your employment will end and options will follow normal
termination provisions:
| | - |  | --------------------------------------------------------------------------------------------------------------

| |  |  |  | - |  | Pension
eligible - Keep vested remainder of term; unvested options cancel
| |  |  |  | - |  | -------------------------------------------------------------------------

| |  |  |  | - |  | Not
Pension eligible - 90 days to exercise vested; unvested options cancel
| |  |  |  | - |  | --------------------------------------------------------------------------

| | Restricted
Stock
| | ----------------

| |  |  | Restricted
stock continues vesting as scheduled during the 24 month period.
| | - |  | ---------------------------------------------------------------------------

| | ESPP
| | ----

| |  |  | Your
participation will continue through payroll deductions.
| | - |  | ------------------------------------------------------------

|Retirement Benefits
|-------------------

| | Service Pension
| | ---------------

| | Retirement
eligible: Your severance pay will count towards your pension. Pension payments begin
after termination of this arrangement.
| | --------------------------------------------------------------------------------------------------------------------------------------

| | Not
retirement eligible:Deferred vested employees can elect to begin payment at the
termination of this arrangement. The severance period can be used to accrue service/age
toward achieving pension eligibility.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Cash
Balance Pension
| | --------------------

| |  |  | Severance
pay will count towards the cash balance plan. The cash balance is payable at the end of
the 24 month period or later at employee election.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

| | 401(k)
| | ------

| |  |  | Payroll
deductions continue
| | - |  | ---------------------------

|Health and Welfare Benefits
|---------------------------

| |  |  | Medical,
Dental, Disability, Life Insurance, Car Allowance, Financial Counseling benefits continue
the same as actively employed Officers.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Company
credit cards, home office equipment, voice mail and e-mail will be cancelled at the
beginning of the 24 month period.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------

|Termination Provisions
|----------------------

| |  |  | In
the event you need to terminate this arrangement during the 24 month leave period for
any reason (including conflict with another employer), the Company may approve the
payment of the remaining amount of base salary and target bonus in a lump sum. The normal
voluntary termination provisions for the stock and benefit plans will apply.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Page 2


Officer
Severance Policy


Change in Control Provisions
|----------------------------------------------------------------

| |  |  | If
a Change in Control (as defined in the 2001 Long Term Incentive Plan or its successor
plan as in effect immediately before the Change in Control) shall occur, this policy will
remain in effect and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (a) |  | you will also
      be entitled to the benefits of this policy if you terminate your employment
      within three months of an event constituting Good Reason. Good Reason is
      defined as follows:
| |  | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | (i) |  | the
assignment to you by the Board of Directors or another representative of the Company of
duties which represent a material decrease in responsibility and are materially
inconsistent with the duties associated with your position, any reduction in your job
title, or a material negative change in the level of Officer to whom you report, or
| |  |  |  | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | (ii) |  | a
material negative change in the terms and conditions of your employment, including a
reduction by the Company of your annual base salary or a material decrease in your target
opportunity for a Short Term Incentive Award.
| |  |  |  | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ; and
| | -----

| |  | (b) |  | Notwithstanding
anything to the contrary in this policy, in the event that you
become subject to the tax (the Excise Tax) imposed by Section 4999
of the Internal Revenue Code of 1986 (or any similar tax that may hereafter be
imposed), the Company will pay you, at each time you become subject to an Excise
Tax or additional Excise Tax, an amount in addition to any amount or benefit you
receive or are deemed to have received that results in Excise Tax, such that the
net amount retained or deemed received by you, after deduction of any Excise Tax
on such amount or benefit and any federal, state and local income tax and Excise
Tax upon the payment of any additional amount provided for by this paragraph,
shall be equal to the amount of such payment or benefit. This paragraph applies
to any payment or benefit you may receive or be deemed to have received from the
Company that subjects you to Excise Tax, even if that payment or benefit is not
provided for by this policy.
| |  | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Cause is defined as:
|----------------------

|(i) |  | violation
of Ageres code of conduct;
|--- |  | -------------------------------------

|(ii) |  | conviction
of (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 Agere.
|----- |  | --------------------------------------------------------------------------------------------