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In this description of capital stock, references to ``we,'' ``us,'' ``our,''
and ``Lucent'' are to Lucent Technologies Inc., unless the context otherwise
requires.

                          DESCRIPTION OF CAPITAL STOCK

Section 1 of our Restated Certificate of Incorporation, as amended, which
we refer to as our certificate of incorporation, authorizes us to issue 10,250
million shares of capital stock, of which 10,000 million shares shall be common
stock, $.01 par value, per share, which we refer to as our common stock, and 250
million shares shall be preferred stock, $1.00 par value, per share, which we
refer to as our preferred stock.

Our certificate of incorporation was amended on April 8, 1996, February 17,
1999 and February 16, 2000, by the designation of 7.5 million shares, 7.5
million shares and 10.0 million shares, respectively, of our preferred stock as
Series A Junior Participating Preferred Stock, which we refer to as our junior
preferred stock.

Our certificate of incorporation was amended on August 6, 2001 by the
designation of 1,885,000 shares of our preferred stock as 8.00% Redeemable
Convertible Preferred Stock, which we refer to as our redeemable convertible
preferred stock.

Common Stock

The holders of shares of our common stock are entitled to one vote for each
share held upon all proposals presented to the stockholders on which the holders
of our common stock are entitled to vote. Except as otherwise provided by law or
by the resolution or resolutions adopted by our board of directors designating
the rights, powers and preferences of any series of our preferred stock, the
holders of shares of our common stock have the exclusive right to vote for the
election of directors and for all other purposes. Our certificate of
incorporation does not provide for cumulative voting in the election of our
directors. Subject to any preferential rights of any outstanding series of
preferred stock created by our board of directors from time to time, the holders
of shares of our common stock are entitled to such dividends as may be declared
from time to time by our board of directors from funds available therefor, and
upon liquidation are entitled to receive pro rata all our assets available for
distribution to such holders. See "Dividend Policy."

Preferred Stock

Our certificate of incorporation authorizes our board of directors to
establish one or more series of preferred stock and to determine, with respect
to any series of preferred stock, the terms and rights of such series,
including:

     o    the designation of the series;

     o    the number of shares of the series, which number our board of
          directors may thereafter (except where otherwise provided in the
          applicable certificate of designation) increase or decrease (but not
          below the number of shares thereof then outstanding);

     o    whether dividends, if any, will be cumulative or noncumulative, and,
          in the case of shares of any series having cumulative dividend rights,
          the date or dates or method of determining the date or dates from
          which dividends on the shares of such series shall be cumulative;





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     o    the rate of any dividends (or method of determining such dividends)
          payable to the holders of the shares of such series, any conditions
          upon which such dividends will be paid and the date or dates or the
          method for determining the date or dates upon which such dividends
          will be payable;

     o    the redemption rights and price or prices, if any, for shares of the
          series;

     o    the terms and amounts of any sinking fund provided for the purchase or
          redemption of shares of the series;

     o    the amounts payable on shares of the series in the event of any
          voluntary or involuntary liquidation, dissolution or winding up of the
          affairs of our company;

     o    whether the shares of the series will be convertible or exchangeable
          into shares of any other class or series, or any other security, of
          our company or any other corporation, and, if so, the specification of
          such other class or series or such other security, the conversion or
          exchange price or prices or rate or rates, any adjustments thereof, as
          of which such shares will be convertible or exchangeable and all other
          terms and conditions upon which such conversion or exchange may be
          made;

     o    restrictions on the issuance of shares of the same series or of any
          other class or series;

     o    the voting rights, if any, of the holders of the shares of the series;
          and

     o    any other relative rights, preferences and limitations of such series.

We believe that the ability of our board of directors to issue one or more
series of preferred stock will provide us with flexibility in structuring
possible future financings and acquisitions, and in meeting other corporate
needs which might arise. The authorized shares of our preferred stock, as well
as shares of our common stock, will be available for issuance without further
action by our stockholders, unless such action is required by applicable law or
the rules of any stock exchange or automated quotation system on which our
securities may be listed or traded. For example, the New York Stock Exchange
currently requires stockholder approval as a prerequisite to listing shares in
several instances, including where the present or potential issuance of shares
could result in an increase in the number of shares of common stock, or in the
amount of voting securities, outstanding of at least 20%. If the approval of our
stockholders is not required for the issuance of shares of our preferred stock
or our common stock, our board of directors may determine not to seek
stockholder approval.

Although our board of directors has no intention at the present time of
doing so, it could issue a series of our preferred stock that could, depending
on the terms of such series, impede the completion of a merger, tender offer or
other takeover attempt. Our board of directors will make any determination to
issue such shares based on its judgment as to our and our stockholders' best
interests. Our board of directors, in so acting, could issue preferred stock
having terms that could discourage an acquisition attempt through which an
acquirer may be able to change the composition of our board of directors,
including a tender offer or other transaction that some, or a majority, of our
stockholders might believe to be in their best interests or in which
stockholders might receive a premium for their stock over the then current
market price of our stock.

Junior Preferred Stock

We have designated and reserved 25 million shares of our preferred stock as
our junior preferred stock for issuance upon the exercise of certain rights, see
"-- Share Purchase Rights Plan."

Redeemable Convertible Preferred Stock

On August 6, 2001, we designated and issued 1,885,000 shares of our
preferred stock as our redeemable convertible preferred stock. For a description
of these securities, see "Description of Preferred Stock" in our registration
statement for the redeemable convertible preferred stock filed with the
Securities and Exchange Commission on July 8, 2002.





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Antitakeover Effects of Certain Provisions of Our Certificate of Incorporation
and By-Laws

Board of directors

Our certificate of incorporation provides that, except as otherwise fixed
by or pursuant to the provisions of a certificate of designations setting forth
the rights of the holders of any class or series of our preferred stock, the
number of our directors will be fixed from time to time exclusively pursuant to
a resolution adopted by a majority of the total number of directors which we
would have if there were no vacancies, or the whole of our board of directors,
but shall not be less than three. Our directors, other than those who may be
elected by the holders of our preferred stock, will be classified, with respect
to the time for which they severally hold office, into three classes, as nearly
equal in number as possible, one class which was originally elected for a term
expiring at the annual meeting of stockholders held in 1997, another class which
was originally elected for a term expiring at the annual meeting of stockholders
held in 1998 and another class which was originally elected for a term expiring
at the annual meeting of stockholders held in 1999, with each class to hold
office until its successor is duly elected and qualified. Commencing with the
1997 annual meeting of stockholders, directors elected to succeed directors
whose terms then expire are elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election, with each
director to hold office until such person's successor is duly elected and
qualified.

Our certificate of incorporation provides that, except as otherwise
provided for or fixed by or pursuant to a certificate of designations setting
forth the rights of the holders of any class or series of our preferred stock,
newly created directorships resulting from any increase in the number of our
directors and any vacancies on our board of directors resulting from death,
resignation, disqualification, removal or other cause will be filled by the
affirmative vote of a majority of our remaining directors then in office, even
though less than a quorum of our board of directors, and not by the
stockholders. Any director elected in accordance with the preceding sentence
will hold office for the remainder of the full term of the class of directors in
which the new directorship was created or the vacancy occurred and until such
director's successor shall have been duly elected and qualified. No decrease in
the number of directors constituting our board of directors will shorten the
term of any incumbent director. Subject to the rights of holders of our
preferred stock, any director may be removed from office only for cause by the
affirmative vote of the holders of at least a majority of the voting power of
all voting stock then outstanding, voting together as a single class. These
provisions would preclude a third party from removing incumbent directors and
simultaneously gaining control of our board of directors by filling the
vacancies created by removal with its own nominees. Under the classified board
provisions described above, it would take at least two elections of our
directors for any individual or group to gain control of our board of directors.
Accordingly, these provisions could discourage a third party from initiating a
proxy contest, making a tender offer or otherwise attempting to gain control of
us.

No stockholder action by written consent; special meetings

Our certificate of incorporation and by-laws provide that any action
required or permitted to be taken by our stockholders must be effected at a duly
called annual or special meeting of such holders and may not be effected by any
consent in writing by such holders. Except as otherwise required by law and
subject to the rights of the holders of any of our preferred stock, special
meetings of our stockholders for any purpose or purposes may be called only by
our board of directors pursuant to a resolution stating the purpose or purposes
thereof approved by a majority of our whole board of directors or by the
chairman of our board of directors and any power of stockholders to call a
special meeting is specifically denied. No business other than that stated in
the notice shall be transacted at any special meeting. These provisions may have
the effect of delaying consideration of a stockholder proposal until the next
annual meeting unless a special meeting is called by our board of directors or
the chairman of our board of directors.

Advance notice procedures

Our by-laws establish an advance notice procedure for stockholders to make
nominations of candidates for election as directors or to bring other business
before an annual meeting of our stockholders, which we refer to as our
stockholder notice procedure. The stockholder notice procedure provides that
only persons who are nominated by, or at the direction of, our board of
directors, or by a stockholder who has given timely written notice to our
secretary prior to the meeting at which directors are to be elected, will be





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4

eligible to be elected to our board of directors. The stockholder notice
procedure also provides that at an annual meeting only such business may be
conducted as has been brought before the meeting by, or at the direction of, our
board of directors or our board of directors, or by a stockholder who has given
timely written notice to our secretary of such stockholder's intention to bring
such business before such meeting. Under the stockholder notice procedure, for
notice of stockholder nominations to be made at an annual meeting to be timely,
such notice must be received by us not later than the close of business on the
45th calendar day nor earlier than the close of business on the 75th calendar
day prior to the first anniversary of the record date of stockholders entitled
to vote at the preceding year's annual meeting. However, if the event that the
record date is more than 30 calendar days before or more than 60 calendar days
after such anniversary date, notice by the stockholder to be timely must be
delivered not earlier than the close of business on the 75th calendar day prior
to such record date and not later than the close of business on the later of the
45th calendar day prior to such record meeting or the 10th calendar day
following the day on which public announcement of such record date is first made
by us.

Notwithstanding the foregoing, in the event that the number of directors to
be elected to our board of directors is increased and there is no public
announcement by us naming all of the nominees for director or specifying the
size of the increased board of directors at least 55 calendar days prior to the
first anniversary of the record date for preceding year's annual meeting, a
stockholder's notice also will be considered timely, but only with respect to
nominees for any new positions created by such increase, if it shall be
delivered not later than the close of business on the 10th calendar day
following the day on which such public announcement is first made by us. Under
the stockholder notice procedure, for notice of a stockholder nomination to be
made at a special meeting at which directors are to be elected to be timely,
such notice must be received by us not earlier than the close of business on the
120th calendar day prior to such special meeting and not later than the close of
business on the later of the 90th calendar day prior to such special meeting or
the 10th calendar day following the day on which public announcement is first
made of the date of the special meeting and of the nominees proposed by our
board of directors to be elected at such meeting.

In addition, under the stockholder notice procedure, a stockholder's notice
to us proposing to nominate a person for election as a director or relating to
the conduct of business other than the nomination of directors must contain
certain specified information. If the chairman of a meeting determines that an
individual was not nominated, or other business was not brought before the
meeting, in accordance with the stockholder notice procedure, such individual
will not be eligible for election as a director, or such business will not be
conducted at such meeting, as the case may be.

Amendment

Our certificate of incorporation provides that the affirmative vote of the
holders of at least 80% of our voting stock, voting together as a single class,
is required to amend provisions of our certificate of incorporation relating to:

     o    stockholder action without a meeting;

     o    the calling of special meetings;

     o    the number, election and term of our directors;

     o    the filling of vacancies; and

     o    the removal of directors.

Our certificate of incorporation further provides that our related by-laws
described above (including the Stockholder Notice Procedure) may be amended only
by a majority of the whole of our board of directors or by the affirmative vote
of the holders of at least 80% of the voting power of the outstanding shares of
our voting stock, voting together as a single class.

Share purchase rights plan

Pursuant to our share purchase rights plan, our board of directors has
caused to be issued one preferred share purchase right, which we refer to as a
right, for each outstanding share of our common stock. Each right will entitle
the registered holder to purchase from us one one-hundredth of a share of our
junior preferred stock at a price of $90.00, which we refer to as the purchase
price, subject to adjustment. The





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5

description and terms of the rights are set forth in a Rights Agreement, dated
as of April 4, 1996, between Lucent and The Bank of New York (successor to First
Chicago Trust Company of New York), as rights agent. The description set forth
below is intended as a summary only and is qualified in its entirety by
reference to the rights agreement.

Until the earlier to occur of:

     o    ten days following a public announcement that a person or group of
          affiliated or associated persons , which we refer to as an acquiring
          person, other than us, our subsidiaries, an employee benefit plan of
          ours or any of our subsidiaries or an entity holding our common stock
          for or pursuant to the terms of any such plan, has acquired beneficial
          ownership of 10% or more of the outstanding shares of our common
          stock; and

     o    ten business days (or such later date as may be determined by action
          of our board of directors prior to such time as any person becomes an
          acquiring person) following the commencement of, or announcement of an
          intention to make, a tender offer or exchange offer the consummation
          of which would result in the beneficial ownership by a person or group
          of 10% or more of such outstanding shares of our common stock,

(the earlier of such dates being called the rights distribution date), the
rights will be evidenced by the certificates evidencing ownership of shares of
our common stock.

The rights agreement provides that, until the rights distribution date (or
earlier redemption or expiration of the rights), the rights will be transferred
with and only with our common stock. Until the rights distribution date (or
earlier redemption or expiration of the rights), our common stock certificates
will contain a notation incorporating the rights agreement by reference. As soon
as practicable following the rights distribution date, separate certificates
evidencing the rights which we refer to as the right certificates, will be
mailed to holders of record of our common stock as of the close of business on
the rights distribution date and such separate rights certificates alone will
evidence the rights.

The rights will not be exercisable until the rights distribution date. The
rights will expire on the 10th anniversary of the date of issuance, unless they
are extended or they are earlier redeemed or exchanged by us, in each case, as
summarized below.

In the event that any person or group of affiliated or associated persons
becomes an acquiring person, proper provision shall be made so that each holder
of a right, other than rights beneficially owned by the acquiring person (which
will thereafter be void), will thereafter have the right to receive upon
exercise that number of shares of our common stock having a market value of two
times the exercise price of the right. In the event that we are acquired in a
merger or other business combination transaction or 50% or more of our
consolidated assets or earning power are sold after a person or group of
affiliated or associated persons becomes an acquiring person, proper provision
will be made so that each holder of a right will thereafter have the right to
receive, upon the exercise thereof at the then-current exercise price of the
right, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the exercise
price of the right.

At any time after any person or group becomes an acquiring person and prior
to the acquisition by the acquiring person of 50% or more of our outstanding
common stock, our board of directors may exchange the rights (other than rights
owned by such person or group which have become void), in whole or in part, at
an exchange ratio of one share of our common stock, or one one-hundredth of a
share of our junior preferred stock (or of a share of a class or series of our
preferred stock having equivalent rights, preferences and privileges), per right
(subject to adjustment).

At any time prior to any person becoming an acquiring person, our board of
directors may redeem the rights in whole, but not in part, at a redemption price
of $.01 per right. The redemption of the rights may be made effective at such
time on such basis and with such conditions as our board of directors, in its
sole discretion, may establish. Immediately upon any redemption of the rights,
the right to exercise the rights will terminate and the only right of the
holders of the rights will be eligible to receive the redemption price.

The terms of the rights may be amended by our board of directors without
the consent of the holders of the rights; provided, however, that, from and
after such time as any person or group of affiliated or associated persons
becomes an acquiring person, no such amendment may adversely affect the
interests of





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the holders of the rights. Until a right is exercised, the holder thereof, as
such, will have no rights as a stockholder of our company, including, without
limitation, the right to vote or to receive dividends.

The number of outstanding rights and the number of one one-hundredths of a
share of our junior preferred stock issuable upon exercise of each right also
will be subject to adjustment in the event of a stock split of our common stock
or a stock dividend on our common stock payable in our common stock or
subdivisions, consolidations or combinations of our common stock occurring, in
any such case, prior to the rights distribution date. The purchase price
payable, and the number of shares of our junior preferred stock or other
securities or property issuable, upon exercise of the rights will be subject to
adjustment from time to time to prevent dilution:

     o    in the event of a stock dividend on, or a subdivision, combination or
          reclassification of, our junior preferred stock;

     o    upon the grant to holders of our junior preferred stock of certain
          rights or warrants to subscribe for or purchase our junior preferred
          stock at a price, or securities convertible into our junior preferred
          stock with a conversion price, less than the then-current market price
          of our junior preferred stock; or

     o    upon the distribution to holders of our junior preferred stock of
          evidences of indebtedness or assets (excluding regular periodic cash
          dividends paid out of earnings or retained earnings or dividends
          payable in our junior preferred stock) or of subscription rights or
          warrants (other than those referred to above).

With certain exceptions, no adjustment in the purchase price will be
required until cumulative adjustments require an adjustment of at least one
percent in such purchase price. No fractional shares of our junior preferred
stock will be issued (other than fractions which are integral multiples of one
one-hundredth of a share of our junior preferred stock, which may, at our
election, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of our junior
preferred stock on the last trading day prior to the date of exercise.

Shares of our junior preferred stock purchasable upon exercise of the
rights will not be redeemable. Each share of our junior preferred stock will be
entitled to a minimum preferential quarterly dividend payment of $1.00 per share
but will be entitled to an aggregate dividend of 100 times the most recent prior
cash dividend declared per share of our common stock. In the event of
liquidation, our junior preferred stockholders will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per share of our common stock.
Each share of our junior preferred stock will have 100 votes voting together
with our common stock. Finally, in the event of any merger, consolidation or
other transaction in which shares of our common stock are exchanged, each share
of our junior preferred stock will be entitled to receive 100 times the amount
received per share of our common stock. These rights are protected by customary
anti-dilution provisions.

Due to the nature of our junior preferred stock's dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a share of junior
preferred stock purchasable upon exercise of each right should approximate the
value of one share of our common stock.

The rights have certain antitakeover effects. The rights will cause
substantial dilution to a person or group of persons that attempts to acquire us
on terms not approved by our board of directors. The rights should not interfere
with any merger or other business combination approved by our board of directors
prior to the time that a person or group has acquired beneficial ownership of
10% percent or more of our common stock since the rights may be redeemed by us
at the redemption price until such time.

Delaware business combination statute

Section 203 of the Delaware General Corporation Law, which we refer to as
the DGCL, provides that, subject to certain exceptions specified therein, an
"interested stockholder" of a Delaware corporation shall not engage in any
business combination, including mergers or consolidations or acquisitions of
additional shares of the corporation, with the corporation for a three-year
period following the date that such stockholder becomes an interested
stockholder unless:





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     o    prior to such date, the board of directors of the corporation approved
          either the business combination or the transaction which resulted in
          the stockholder becoming an interested stockholder;

     o    upon consummation of the transaction which resulted in the stockholder
          becoming an "interested stockholder," the interested stockholder owned
          at least 85% of the voting stock of the corporation outstanding at the
          time the transaction commenced (excluding certain shares); or

     o    on or subsequent to such date, the business combination is approved by
          the board of directors of the corporation and authorized at an annual
          or special meeting of stockholders by the affirmative vote of at least
          66 2/3% of the outstanding voting stock which is not owned by the
          interested stockholder.

Except as otherwise specified in Section 203, an interested stockholder is
defined to include:

     o    any person that is the owner of 15% or more of the outstanding voting
          stock of the corporation, or is an affiliate or associate of the
          corporation and was the owner of 15% or more of the outstanding voting
          stock of the corporation at any time within three years immediately
          prior to the date of determination; and

     o    the affiliates and associates of any such person.

Under certain circumstances, Section 203 makes it more difficult for a
person who would be an interested stockholder to effect various business
combinations with a corporation for a three-year period. We have not elected to
be exempt from the restrictions imposed under Section 203. The provisions of
Section 203 may encourage persons interested in acquiring us to negotiate in
advance with our board of directors, since the stockholder approval requirement
would be avoided if a majority of our directors then in office approves either
the business combination or the transaction which results in any such person
becoming an interested shareholder. Such provisions also may have the effect of
preventing changes in our management. It is possible that such provisions could
make it more difficult to accomplish transactions which our stockholders may
otherwise deem to be in their best interests.

Liability of Directors; Indemnification

Our certificate of incorporation provides that a director of our company
will not be personally liable to us or our stockholders for monetary damages for
breach of fiduciary duty as a director, except, if required by the DGCL, as
amended from time to time, for liability:

     o    for any breach of the director's duty of loyalty to us or our
          stockholders;

     o    for acts or omissions not in good faith or which involve intentional
          misconduct or a knowing violation of law;

     o    under Section 174 of the DGCL, which concerns unlawful payments of
          dividends, stock purchases or redemptions; or

     o    for any transaction from which the director derived an improper
          personal benefit.

Neither the amendment nor repeal of such provision will eliminate or
reduce the effect of such provision in respect of any matter occurring, or any
cause of action, suit or claim that, but for such provision, would accrue or
arise prior to such amendment or repeal.

While our certificate of incorporation provides our directors with
protection from awards for monetary damages for breaches of their duty of care,
it does not eliminate such duty. Accordingly, our certificate of incorporation
will have no effect on the availability of equitable remedies such as an
injunction or rescission based on a director's breach of his or her duty of
care.

Our certificate of incorporation provides that each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person, or a person of whom such
person is the legal representative, is or was a director or officer of our
company or is or was serving at the request of our company as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other





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capacity while serving as a director, officer, employee or agent, will be
indemnified and held harmless by us to the fullest extent authorized by the
DGCL, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits us to provide
broader indemnification rights than said law permitted us to provide prior to
such amendment), against all expense, liability and loss reasonably incurred or
suffered by such person in connection therewith. Such right to indemnification
includes the right to have us pay the expenses incurred in defending any such
proceeding in advance of its final disposition, subject to the provisions of the
DGCL. Such rights are not exclusive of any other right which any person may have
or thereafter acquire under any statute, provision of our certificate of
incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise. No repeal or modification of such provision will in any
way diminish or adversely affect the rights of any director, officer, employee
or agent of our company thereunder in respect of any occurrence or matter
arising prior to any such repeal or modification. Our certificate of
incorporation also specifically authorizes us to maintain insurance and to grant
similar indemnification rights to our employees or agents.

Transfer Agent and Registrar

The Bank of New York is the transfer agent and registrar for our common
stock and our redeemable convertible preferred stock.