1                                                               (10) (iii) (A)3

                            LUCENT TECHNOLOGIES INC.
                       OFFICER LIFE INSURANCE OPTION PLAN

1.      PURPOSE

        The purpose of the Lucent Technologies Inc. Officer Life Insurance
        Option Plan (the "Plan") is to provide Officers of Lucent Technologies
        Inc. (the "Company") insurance coverage pursuant to a split-dollar life
        insurance arrangement.

2.      DEFINITIONS

        For purposes of this Plan, the following terms have the meanings set
forth below:

        2.01    AGREEMENT means the Agreement executed by Participant (or
                Assignee) and Company implementing the terms of this Plan.

        2.02    ALTERNATIVE DEATH BENEFIT AMOUNT means, with respect to a
                Participant, an amount that, after subtracting any Company
                federal, state, and local income tax savings resulting from the
                deductibility of the payment for corporate tax purposes, is
                equal to the Participant's Coverage Amount. The Alternative
                Death Benefit Amount shall be determined at the time the payment
                is to be made, based on Company's federal, state and local
                income tax rate (calculated at the highest marginal tax rate
                then applicable to Company, but net of any federal deduction for
                state and local taxes) at the time of the payment, and shall be
                determined by Company.

        2.03    ASSIGNEE means that person or entity to whom the Participant has
                assigned his/her interest in the Policy by designating said
                Assignee on forms provided by Company. If the Participant's
                Policy is a Survivorship Policy and if the Participant has not
                designated an Assignee, then, after the Participant's death, if
                the Participant's spouse survives, the Assignee shall be that
                person or entity who succeeds to the Participant's interest in
                the Participant's Policy after the death of the Participant.

        2.04    CHANGE IN CONTROL means a Change in Control of Company, as such
                term is defined in the Lucent Technologies Inc. 1996 Long Term
                Incentive Program, as amended from time to time, or any
                successor plan to such Program.

        2.05    COMMITTEE means the Corporate Governance and Compensation
                Committee of the Board of Directors of Company.

        2.06    EFFECTIVE DATE means December 18, 1996.

        2.07    EMPLOYEE means an employee or former employee of Company who is
                eligible to participate in the Plan.

        2.08    COMPANY means Lucent Technologies Inc., a Delaware corporation.

        2.09    COMPANY DEATH BENEFIT means the portion of the Policy's death
                benefit payable to Company as indicated in the Participant's
                Agreement.

        2.10    INSURER means, with respect to a Participant's Policy, the
                insurance company issuing the Policy on the Participant's life
                (or on the lives of the Participant and a Participant's spouse,
                in the case of a Survivorship Policy pursuant to the provisions
                of the Plan).

        2.11    PARTICIPANT means an eligible Employee who elects to participate
                in the Plan.


 <PAGE> 

2                                                               (10) (iii) (A)3

        2.12    PARTICIPANT'S COVERAGE AMOUNT means the portion of the Policy's
                death benefit payable to the beneficiary(ies) of the Participant
                (or Assignee).

        2.13    POLICY means the life insurance coverage acquired on the life of
                the Participant (or on the lives of the Participant and a
                Participant's spouse, in the case of a Survivorship Policy) by
                Company.

        2.14    POLICY OWNER means the Company.

        2.15    POLICY VESTING DATE means the date the Participant completes
                his/her commitment to forego the amount of compensation
                specified in the Participant's Election to Forego Compensation.

        2.16    PREMIUM means, with respect to a Policy on the life of any
                Participant (and/or the lives of any Participant and a
                Participant's spouse, as the case may be), the amount Company is
                obligated, pursuant to the terms of the Agreement, to pay to the
                Insurer with respect to such Policy.

        2.17    SURVIVORSHIP POLICY means a Policy insuring the lives of the
                Participant and a Participant's spouse, with the death benefit
                payable at the death of the last survivor of the Participant and
                his/her spouse.

3.      PARTICIPATION

        3.01    ELIGIBILITY. All Officers of Company deemed eligible by the
                Committee shall be eligible to participate in the Plan.

        3.02    ELECTION TO FOREGO COMPENSATION. As a condition of participating
                in the Plan, each Participant will be required to make an
                election in which the Participant will commit to forego the
                receipt of a specified dollar amount of compensation for a
                period of up to four years beginning on the Policy's effective
                date (as specified in the Agreement), with such election to
                remain in effect until the first to occur of: (a) the completion
                of the commitment to forego compensation; (b) the date on which
                the Participant terminates employment with Company for any
                reason; (c) the date on which the Participant is demoted to a
                position ineligible to participate in the Plan; or (d) the date
                on which the Agreement terminates. The Participant shall make
                such election by execution of an "Election to Forego
                Compensation" prior to the Policy's effective date. Any foregone
                compensation will, depending upon the Participant's election,
                reduce the payout to the Participant under the Lucent
                Technologies Inc. Short Term Incentive Plan or successor to such
                Plan and/or the Participant's salary during that period. A
                Participant's election to forego compensation shall be
                irrevocable, provided, however, that the election may be
                modified at anytime with respect to compensation not yet earned
                by a written document delivered to the Company. The amounts that
                a Participant agrees to forego pursuant to such election, unless
                precluded by tax or other laws to the contrary, shall be
                included in determining a Participant's compensation for
                purposes of any benefit plans maintained by the Company.

4.      AMOUNT AND TYPE OF COVERAGE

        The amount and type of coverage provided under the Policy shall be that
        amount and type specified in the Agreement.

5.      PAYMENT OF PREMIUMS

        5.01    COMPANY PAYMENTS. The amount, timing, and duration of Premiums
                to be paid by Company shall be specified in the Agreement.

 <PAGE> 

3                                                               (10) (iii) (A)3

        5.02    PARTICIPANT PAYMENTS. Unless otherwise provided in an Agreement,
                a Participant (or Assignee) shall not be required to pay any
                portion of the Premium due on the Policy. However, if the
                Participant's Election to Forego Compensation is no longer in
                effect under Section 3.02 because of the Participant's
                termination of employment, then the Participant (or Assignee)
                may, within thirty (30) days of the Participant's termination of
                employment, elect to pay to Company as a premium payment the
                difference (or some portion thereof) between the compensation
                the Participant elected to forego and the premiums paid by
                Company up to such date (hereinafter referred to as the
                "Participant Special Contribution").

        5.03    TERMINATION EVENTS. Except as provided in Section 5.04,
                Company's obligation to pay Premiums with respect to a Policy
                shall terminate:

                a.      Automatically upon the death of the Participant (or upon
                        the death of the survivor of the Participant and the
                        Participant's spouse, if the Policy is a Survivorship
                        Policy).

                b.      Upon the written action of the Committee, if the
                        Participant terminates employment with Company for any
                        reason other than death prior to the Policy Vesting
                        Date.

                c.      Upon the mutual written agreement of Company and
                        Participant (or Assignee).

        5.04    IRREVOCABLE OBLIGATION. Notwithstanding any other provision of
                the Plan, (a) Company's obligation to pay Policy Premiums,
                unless the Participant is demoted to a position ineligible to
                participate in the Plan, shall be irrevocable while such person
                is employed by Company, and shall remain irrevocable thereafter
                unless the Participant terminates employment with Company for
                any reason other than death prior to the Policy Vesting Date and
                (b) Company's obligation to pay Policy Premiums for a
                Participant who obtains an irrevocable right pursuant to the
                provisions of Section 9 hereof relating to Change in Control
                thereafter shall be irrevocable.

6.      POLICY OWNERSHIP

        6.01    OWNERSHIP. Company shall be the owner of any Policy and shall be
                entitled to exercise the rights of ownership, except that the
                following rights shall be exercisable by the Participant (or
                Assignee): (i) the right to designate the beneficiary(ies) to
                receive payment of that portion of the death benefit under such
                Policy equal to the Participant's Coverage Amount unless there
                is an election for Alternative Death Benefit in effect; (ii) the
                right to increase or decrease the face amount of the Policy
                (subject to any conditions or restrictions imposed by the
                Insurer); and (iii) the right to assign any part or all of the
                Participant's rights under the Policy to any person, entity or
                trust by the execution of a written instrument prescribed by
                Company that is delivered to Company. Company shall not borrow
                from, hypothecate, withdraw cash value from, surrender in whole
                or in part, cancel, or in any other manner encumber a Policy
                without the prior written consent of the Participant (or
                Assignee). Company shall not take any other action with respect
                to a Policy that may reduce the Participant's Coverage Amount
                without the prior written consent of the Participant (or
                Assignee). The claim of the Participant, Assignee, or any
                beneficiary to the portion of the death benefit under the
                Policy, up to but not in excess of the amount of the Company
                Death Benefit, which is attributable to the cash values of the
                Policies shall be an unsecured claim against the general assets
                of the Company and no provision contained in the Plan shall be
                construed to give any Participant, Assignee, or beneficiary a
                security interest in such cash values. If the Company becomes
                insolvent, the Company's creditors shall have the right to
                exercise all rights of ownership of the Policy conferred on the
                Company. Company shall be


<PAGE> 

4                                                                (10) (iii) (A)3

                considered "insolvent" for purposes of this Plan if (i) Company
                is unable to pay its debts as they become due, or (ii) Company
                is subject to a pending proceeding as a debtor under the United
                States Bankruptcy Code.

        6.02    POSSESSION OF POLICY. Company shall keep possession of the
                Policy. Company agrees to make the Policy available to the
                Participant (or Assignee) or to the Insurer at such times, and
                on such terms as Company determines for the sole purposes of
                endorsing or filing any change of beneficiary or assignment on
                the Policy.

        6.03    INVESTMENT OF CASH VALUES. If the Policy provides the Policy
                owner with a choice of investment funds for the cash values,
                Company shall invest the cash values in the funds selected by
                and in the proportions specified by the Participant (or
                Assignee). Company agrees to make any investment election within
                30 days of receipt of a written investment request by the
                Participant (or Assignee).

7.      TERMINATION OF EMPLOYMENT

        7.01    IMPACT OF TERMINATION OR DEMOTION. If, prior to the Policy
                Vesting Date, a Participant (i) terminates employment with
                Company or (ii) is demoted to a position ineligible to
                participate in the Plan, then:

                a.      Company's obligation to pay premiums with respect to a
                        Participant's Policy shall terminate as provided in
                        Sections 5.03 and 5.04.

                b.      Participant's obligation to forego compensation pursuant
                        to an election made under Section 3.02 shall terminate.

                c.      The Policy's face amount shall be reduced to an amount
                        determined by multiplying the initial face amount and
                        Company Death Benefit by a fraction, the numerator of
                        which is the amount of premiums paid by Company plus any
                        Participant Special Contribution under Section 5.02, and
                        the denominator of which is the total premium payments
                        Company agreed to pay under the terms of the Agreement.
                        The Participant (or Assignee) and Company agree to
                        execute an amendment to the Agreement and to complete
                        any forms required by the Insurer to implement these
                        changes.

        7.02    NON-COMPETITIVE PROVISION. Notwithstanding any other provisions
                of this Plan or Agreement to the contrary, if a participant
                terminates employment with Company (including a termination
                after the Policy Vesting Date) and without consent of the
                Committee, establishes a relationship with a competitor of
                Company or engages in any competitive activity as provided in
                the Lucent Technologies Inc. Non-Competition Guideline, then:

                a.      The Agreement with the Participant (or Assignee) shall
                        immediately terminate.

                b.      Company shall withdraw from the cash values of the
                        Policy an amount equal to its cumulative premium
                        payments and, following the withdrawal, shall transfer
                        ownership of the Policy to the Participant (or
                        Assignee).

        7.03    ALLOCATION OF DEATH BENEFIT. In the event of a termination due
                to the death of the Participant (or the death of the survivor of
                the Participant and the Participant's spouse, if the Policy is a
                Survivorship Policy), the death benefit under the Policy shall
                be divided as follows:

<PAGE> 

5                                                               (10) (iii) (A)3

                a.      Company shall be entitled to receive an amount equal to
                        the Company Death Benefit. If the Policy provides for a
                        death benefit equal to the sum of the face amount of the
                        Policy and any account or accumulation value, any
                        Company Death Benefit should first be paid from the
                        account or accumulation value portion of the death
                        benefit.

                b.      The beneficiary(ies) of the Participant (or Assignee)
                        shall be entitled to receive the Participant's Coverage
                        Amount, which shall consist of the excess, if any, of
                        the Policy's death benefit over the Company Death
                        Benefit.

                Company agrees to execute an endorsement to the Policy issued to
                it by the Insurer providing for the division of the Policy's
                death benefit in accordance with the provisions of this Section.

                Notwithstanding the provisions of this Section, if the Policy's
                death benefit becomes payable while there is an Alternative
                Death Benefit Election in effect for the Participant (or
                Assignee) pursuant to Section 8, then the entire Policy's death
                benefit shall be paid to Company.

8.      ALTERNATIVE DEATH BENEFIT ELECTION.

        A Participant (or Assignee) may elect to receive an Alternative Death
        Benefit in lieu of the insurance benefit provided under the Plan. The
        Alternative Death Benefit shall be paid by Company from the general
        funds of Company, and shall not constitute an insurance benefit. It
        shall be paid by Company to Participant's (or Assignee's)
        beneficiary(ies) at the time Participant's death benefit would have been
        paid (at Participant's death for single life coverage, or at the death
        of the survivor of the Participant and the Participant's spouse for
        survivorship coverage). The amount of the payment shall be equal to the
        Alternative Death Benefit Amount. As long as an Alternative Death
        Benefit Election is in effect, the beneficiary(ies) of the Participant
        (or Assignee) shall receive only the Alternative Death Benefit, and
        shall not be entitled to receive any portion of any death benefits that
        would become payable under the Participant's Policy, and the Participant
        (or Assignee) shall cooperate with Company in effecting a change of
        beneficiary of the Participant's Policy to achieve such result.

9.      CHANGE IN CONTROL

        If there is a Change in Control:

        a.      the Plan and Company's obligation to pay Policy Premiums
                hereunder shall become irrevocable for all Participants in the
                plan at the time of the Change in Control;

        b.      Company immediately shall transfer the ownership of all
                Participants' Policies to an irrevocable trust to: (i) pay any
                premiums projected to be payable on all Policies after the
                Change in Control and (ii) pay any Alternative Death Benefit
                that becomes payable under Section 8 of this Plan; and

        c.      Company immediately shall fund such irrevocable trust with an
                amount sufficient to pay all necessary projected future premiums
                for all Participants' Policies.

<PAGE> 

6                                                               (10) (iii) (A)3

        Notwithstanding the creation and funding of an irrevocable trust in
        accordance with the provisions of this Section, Company or its successor
        shall continue to be responsible for the Premium costs associated with
        the Participants' Policies and any Alternative Death Benefits payable
        under Section 8 if such amounts are not paid by the trust for any
        reason, or if the trust's assets become insufficient to pay any required
        amounts.

10.     COMPANY DEFAULT

        10.01   COMPANY DEFAULT. A Company Default shall be deemed to have
                occurred with respect to a Policy if Company fails to pay a
                Premium on the Policy as required under the terms of the
                Agreement within 30 days after the due date for such Premium, or
                if Company processes or attempts to process a policy loan, or a
                complete or partial surrender, or a cash value withdrawal
                without prior written approval from Participant (or Assignee).

        10.02   RIGHTS UPON COMPANY DEFAULT. In the event of Company Default as
                described in Section 10.01, the Participant (or Assignee) shall
                have the right to require Company to transfer its interest in
                the Participant's Policy to Participant (or Assignee). The
                Participant (or Assignee) may exercise this right by notifying
                Company, in writing, within sixty (60) days after the Company
                Default occurs. Upon receipt of such notice, Company shall
                immediately transfer its rights in the Policy to the Participant
                (or Assignee) and Company shall thereafter have no rights with
                respect to such Policy. A Participant's (or Assignee's) failure
                to exercise its rights under this Section shall not be deemed to
                release Company from any of its obligations under the Plan, and
                shall not preclude the Participant (or Assignee) from seeking
                other remedies with respect to the Company Default. Also, a
                Participant's (or Assignee's) failure to exercise its rights
                under this Section will not preclude the Participant (or
                Assignee) from exercising such rights upon later Company
                Default.

11.     GOVERNING LAWS & NOTICES

        11.01   GOVERNING LAW.
                This Plan shall be governed by and construed in accordance with
                the substantive law of the State of New Jersey without giving
                effect to the choice of law rules of the State of New Jersey.

        11.02   NOTICES. All notices hereunder shall be in writing and sent by
                first class mail with postage prepaid. Any notice to Company
                shall be addressed to the Attention of Senior Vice President
                Human Resources at Lucent Technologies Inc., 600 Mountain
                Avenue, Murray Hill, NJ 07929. Any notice to the Participant (or
                Assignee) shall be addressed to the Participant (or Assignee) at
                the address following such party's signature on his/her
                Agreement. Any party may change its address by giving written
                notice of such change to the other party pursuant to this
                Section.

12.     MISCELLANEOUS PROVISIONS

        12.01   This Plan and any Agreement executed hereunder shall not be
                deemed to constitute a contract of employment between an
                Employee and Company, or a Participant and Company, nor shall
                any provision restrict the right of Company to discharge an
                Employee or Participant, or to restrict the right of an Employee
                or Participant to terminate employment.

        12.02   The masculine pronoun includes the feminine and the singular
                includes the plural where appropriate for valid construction.

<PAGE> 

7                                                               (10) (iii) (A)3

        12.03   In order to be eligible to participate in this Plan, the
                Participant (and, in the case of a Survivorship Policy, the
                Participant's spouse) shall cooperate with the Insurer by
                furnishing any and all information requested by the Insurer in
                order to facilitate the issuance of the policy, including
                furnishing such medical information and taking such physical
                examinations as the Insurer may deem necessary. In the absence
                of such cooperation, Company shall have no further obligation to
                the Participant to allow him/her to participate in the Plan.

        12.04   If a Participant (or a Participant's spouse, if the Policy is a
                Survivorship Policy) commits suicide within two years of the
                Participant's Policy's issue, or if the Participant (or
                Participant's spouse, if the Policy is a Survivorship Policy)
                makes any material misstatement of information or nondisclosure
                of medical history pertaining to the Policy's issue and dies
                within two years of the Policy's issue, then no benefits will be
                payable to the beneficiary(ies) of such Participant (or
                Assignee, where applicable).

        12.05   In the event of any inconsistency between the terms of this Plan
                as described herein and the terms of any Policy purchased
                hereunder or any related Agreement, the terms of such Policy or
                Agreement shall be controlling as to that Participant, his/her
                Assignee (if any), his successor-in-interest (if any) and
                his/her beneficiary or beneficiaries.

13.     AMENDMENT, TERMINATION, ADMINISTRATION, AND SUCCESSORS

        13.01   AMENDMENT. The Plan may be modified or amended by Company at any
                time, but an amendment which is adverse to a Participant (or
                Assignee) will not apply to such Participant (or Assignee)
                unless such Participant (or Assignee) consents, in writing, to
                the amendment.

        13.02   TERMINATION. Company may terminate the Plan at any time, but any
                such termination will not affect the rights of any Participant
                (or Assignee) unless such Participant (or Assignee) consents, in
                writing, to such termination.

        13.03   ADMINISTRATION. This Plan shall be administered by the
                Committee. The Committee, in its sole discretion, shall have the
                authority to make, amend, interpret, and enforce all rules and
                regulations for the administration of the Plan, and to decide or
                resolve all questions, including interpretation of the Plan, as
                may arise in connection with the Plan. In the administration of
                this Plan, the Committee may employ agents and delegate to them
                or to others (including Employees) such administrative duties as
                it sees fit. The Committee may consult with counsel, who may be
                counsel to Company. The decision or action of the Committee (or
                its designee) with respect to any question arising out of, or in
                connection with, the administration, interpretation and
                application of this Plan shall be final and conclusive and
                binding upon all persons having any interest in the Plan.

        13.04   SUCCESSORS. The terms and conditions of this Plan shall inure to
                the benefit of and bind Company and the Participant and their
                successors, assignees (including any Assignee), and
                representatives. The Employer shall have the right to absolutely
                and irrevocably assign its rights, title and interest in a
                Policy without the consent of the Participant (or Assignee).

<PAGE> 

8                                                               (10) (iii) (A)3

14.     CLAIMS PROCEDURE

        Any controversy or claim arising out of or relating to this Plan shall
        be filed with the Committee which shall make all determinations
        concerning such claim. Any decision by the Committee denying such claim
        shall be in writing and shall be delivered to all parties in interest in
        accordance with the notice provisions of Section 11.02 herein. Such
        decision shall set forth the reasons for denial in plain language.
        Pertinent provisions of the Plan shall be cited and, where appropriate,
        an explanation as to how the claimant can perfect the claim will be
        provided. This notice of denial of benefits will be provided within
        ninety (90) days of the Committee's receipt of the claim for benefits.
        If the Committee fails to notify the claimant of its decision regarding
        the claim, the claim shall be considered denied, and the claimant then
        shall be permitted to proceed with an appeal as provided for in this
        Section.

        A claimant who has been completely or partially denied a benefit shall
        be entitled to appeal this denial of his/her claim by filing a written
        statement of his/her position with the Committee no later than sixty
        (60) days after receipt of the written notification of such denial. The
        Committee shall schedule an opportunity for a full and fair review of
        the issue within thirty (30) days of receipt of the appeal. The decision
        on review shall set forth specific reasons for the decision, and shall
        cite specific references to the pertinent Plan provisions on which the
        decision is based.

        Following the review of any additional information submitted by the
        claimant, either through the hearing process or otherwise, the Committee
        shall render a decision on the review of the denied claim in the
        following manner:

        a.      The Committee shall make its decision regarding the merits of
                the denied claim within sixty (60) days following receipt of the
                request for review (or within 120 days after such receipt, in a
                case where there are special circumstances requiring extension
                of time for reviewing the appealed claim). The Committee shall
                deliver the decision to the claimant in writing. If an extension
                of time for reviewing the appealed claim is required because of
                special circumstances, written notice of the extension shall be
                furnished to the claimant prior to the commencement of the
                extension. If the decision on review is not furnished within the
                prescribed time, the claim shall be deemed denied on review.

        b.      The decision on review shall set forth specific reasons for the
                decision, and shall cite specific references to the pertinent
                Plan provisions on which the decision is based.

<PAGE> 

9                                                                (10) (iii) (A)3

IN WITNESS WHEREOF, the Company has caused this Plan to be effective on December
18, 1996 and to be executed on this day of December, 1996.

For Lucent Technologies Inc.


/S/ Curt R. Artis

By:
   Curt R. Artis
   Senior Vice President, Human Resources

/S/ Pamela F. Craven


Attest:
       Pamela F. Craven
       Vice President - Law
       Assistant Secretary