ALCATEL LUCENT French Limited Liability Company with a capital of 140,705,809 3, avenue Octave Gréard, PARIS PARIS Trade Register

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1 ALCATEL LUCENT French Limited Liability Company with a capital of 140,705,809 3, avenue Octave Gréard, PARIS PARIS Trade Register ADDITIONAL INFORMATION ON THE MAIN CHARACTERISTICS OF THE AUTHORIZATIONS RELATING TO ALLOTMENT OF STOCK OPTIONS AND PERFORMANCE SHARES RESOLUTIONS 20 and 21 PROPOSED TO THE VOTE OF THE SHAREHOLDERS MEETING ON MAY 28, 2014 Resolutions 20 and 21 are submitted for your approval in order to enable Alcatel Lucent to set up longterm incentives. The stake for the Company is to attract and retain the talent needed to carry out the Shift plan in a Telecom industry that continues to be highly competitive with highly aggressive compensation practices in the United States and limited compensation policies implemented by the Company in recent years due to the difficulty of its economic context. The authorizations referred to in resolutions 20 and 21 would have a 38 month validity period and would enable the Board of Directors, if it considers appropriate, to allot each year over a 3 year period, Performance shares and/or stock options. These instruments would be granted to executive directors and employees, who are more directly involved in the implementation of the Shift plan, approximately 5,700 employees, experts and managers. The main characteristics of Performance shares and stock options that may be granted pursuant to resolutions 20 and 21 are presented hereinafter. These characteristics will remain valid for any allotment decision that would be made within the 38 month validity period, i.e. until Resolution 20 Authorization relating to allotment of Performance shares In Resolution 20, it is proposed that the Board of Directors be allowed to allot Performance shares to employees and the executive directors of the Company, under the following conditions: Multi year performance criteria and vesting period Presence and performance conditions The beneficiaries rights would be vested at the end of an overall 4 year vesting period, subject to a presence condition and a performance condition: the satisfaction of the presence condition would be assessed at the end of a first 2 year period (years 1 and 2) for 50% of the initial allotment, and at the end of a second 2 year period (years

2 3 and 4) for the remaining 50%; the satisfaction of the performance condition would be assessed at the end of the first 2 year period, and at the end of the 4 year vesting period; should the performance at the end of the 4 year vesting period be above the performance acknowledged at the end of the first 2 year period, such performance would be retained for the entire allotment; and Should the performance level at the end of the four year vesting period be significantly less than the performance level of the representative panel (negative gap of 40% in comparison with the median as defined below), no performance share would be vested. Performance criterion related to the performance of the Alcatel Lucent share price The evolution of the Alcatel Lucent share price would be measured against the share price of a representative panel of 10 other solutions and service providers in the telecommunication equipment sector (Adtran, Amdocs, Arris, Ciena, Cisco, CommScope, Ericsson, Juniper, Nokia and ZTE). The number of shares finally vested would depend on the performance of the Alcatel Lucent share price in comparison to the performance over the same period of other companies included in the representative panel. In practice, the performance level would be determined as follows: at the time of the allotment, the initial reference share price of Alcatel Lucent and of each of the companies included in the representative panel would be respectively determined and would be equal to the average of the opening prices during the 20 trading sessions preceding the allotment date (the Initial Reference Share Price ); at the end of each relevant period, the reference share price would be determined in accordance with the same terms and conditions for both Alcatel Lucent and each of the companies included in the representative panel, i.e. the average of the opening prices during the 20 trading sessions preceding the end of the relevant period (the Final Reference Share Price ); for Alcatel Lucent, on the one hand, and for each of the companies included in the representative panel, on the other hand, the ratio allowing the assessment of the performance condition at the end of the relevant period would be respectively calculated by dividing the Final Reference Share Price by the Initial Reference Share Price. The performance condition would thus be assessed, at the end of each relevant period, as follows: if the Performance Ratio of Alcatel Lucent share price is higher than or equal to the median of the Performance Ratios of the representative panel companies share price, 100% of the granted shares would be vested, provided that the above mentioned presence condition is met and the performance condition at the end of the 4 year period assessed; if the Performance Ratio of Alcatel Lucent share price is less than 40% of the median of the Performance Ratios of the representative panel companies share price, no share would be vested;

3 between these two limits, the number of vested shares would be calculated on a linear basis. The Board of Directors would determine, on the basis of an analysis validated by an audit firm mandated for this purpose, whether the above mentioned performance condition has been satisfied. Global limit The number of Performance shares allotted to all beneficiaries will not represent more than 2% of the Company s share capital over a 38 month period following the adoption of the resolution, and this limit would not count towards the global limit applicable to share capital increases mentioned in resolution 13. Executive directors The number of Performance shares allotted to the executive directors, together with the stock options granted to them, will not represent more than 6% of the allotments during the period of validity of this delegation. The Board of Directors will report each year to the general meeting, in accordance with Article L of the French Commercial Code, on the transactions carried out pursuant to this authorization. 2. Resolution 21 Authorization relating to allotment of stock options In Resolution 21, it is proposed that the Board of Directors be allowed to grant options conferring the right to subscribe new shares of the Company and options conferring the right to buy existing shares of the Company to employees and executive directors of the Company, under the following conditions: Beneficiaries and performance criteria Beneficiaries would gradually acquire rights on the stock options that would be granted to them over a 3 year period subject to a presence condition at the end of each vesting period specified below. For members of the Leadership team of the Group, which today is 10 members, the vesting of the rights attached to the stock options would also be subject to a performance condition based on the evolution of the Free Cash Flow. The assessment of this performance condition would be based on levels of achievement precisely determined.

4 Vesting period Gradual vesting of the rights The rights of stock options beneficiaries would be vested over an overall 3 year vesting period, which will include: a first 2 year vesting period, at the end of which the beneficiary would acquire 50% of the rights, provided that such beneficiary is present in the company on such date; followed by a second vesting period corresponding to the third year, at the end of which the beneficiary would acquire the remaining 50% of the rights, provided that such beneficiary is present in the company at the end of the 3 rd year. For members of the Leadership team of the Group, the satisfaction of this performance condition, in the context of a 2014 grant, would be half assessed at the end of the first 2 year period based on the Free Cash Flow as at December 31, 2015, and half assessed at the end of the third year of the vesting period based on Free Cash Flow objective as at December 31, 2016, objective to be determined by the Board of Directors in early For the objective assessed at the end of the first 2 year period: - if the Free Cash Flow as at December 2015 is positive, in comparison with a Free Cash Flow amount of ( 636 M) in 2013, 100% of the stock options granted would be exercisable, provided that the above mentioned presence condition is satisfied; - between a triggering threshold of ( 100M) and the above mentioned positive target, the number of exercisable stock options would be calculated on a linear basis. Global limit The number of stock options will not represent more than 2% of the Company s share capital over a 38 month period following the adoption of the resolution, and this limit would not count towards the global limit applicable to share capital increases mentioned in Resolution 13. Exercise price In the case of stock options conferring the right to subscribe shares, this price shall be at least equal to the average of the Alcatel Lucent opening share price on the regulated market of NYSE Euronext Paris during the 20 trading sessions preceding the day the stock options are granted, i.e. without any discount. In the case of options conferring the right to buy shares, this price may not be less than the price specified above nor the average purchase price of the shares held by the Company. Executive Directors The number of stock options granted to the executive directors, together with the Performance shares allotted to them, will not represent more than 6% of the allotments during the period of validity of this

5 delegation. The Board of Directors will report each year to the general meeting, in accordance with Article L of the French Commercial Code, on the transactions carried out pursuant to this authorization. 3. Common characteristics of resolutions 20 and 21 The adoption of resolutions 20 and 21 would entail an unconditional waiver by the shareholders of their preferential subscription rights in respect of the shares so issued. The period of validity of the resolutions 20 and 21 would be set at 38 months from the date of the general meeting taking place on May 28, The Board of Directors will determine specific conditions regarding the holding of shares resulting from the exercise of the stock options and Performance shares allotted to the executive directors, in accordance with the provisions of the French commercial code and the AFEP MEDEF Code. Beyond these common characteristics, the Board of Directors and the Leadership team put great importance to maintaining the long term compensation tool to keep with the best practices implemented in the different sectors of the Group, the specific requirements of each division and the specificities of the market in which we operate.