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Lucent Technologies Inc. Securities Litigation (the "Common Stock Purchaser Class")
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The initial distribution of the Lucent Technologies Securities Litigation Net Settlement Fund has begun. The Settlement Fund currently includes both cash and warrants to purchase Lucent common stock at an exercise price of $2.75 per share (the "Warrants"). Under the terms of the Settlement a further and final settlement installment worth $215 million is still to be paid and is expected to be received in January 2005. Lucent has the right to pay this remaining component of the settlement consideration in cash and/or in Lucent common stock.

On December 10, 2004, Lucent commenced the distribution of the Warrants component of the Net Settlement Fund to Authorized Claimants. We expect to begin distribution of the currently available cash component of the Net Settlement Fund to Authorized Claimants in late December 2004, and we expect to receive the final settlement installment and begin distribution of the final settlement installment to Authorized Claimants in January 2005.

In order to avoid the costs and drawbacks of the distribution of small amounts of securities, pursuant to the Plan of Allocation, and as approved by the Court, Authorized Claimants with Recognized Claims of $3,000 or less are to receive only distributions in cash. Only Authorized Claimants who provided sufficient brokerage account information, and whose Claims resulted in a Recognized Claim of greater than $3,000, will be receiving Warrants in the distribution. Where adequate brokerage account information has been provided, and when the Claimant's brokerage firm cooperates, the Warrants will be electronically distributed to those Claimants through direct transfers into their designated brokerage accounts. For Authorized Claimants who did not provide sufficient brokerage account information in their Proof of claim form, and for Authorized Claimants whose Claims resulted in a Recognized Claim of $3,000 or less, the Warrants to which those Claims would otherwise be entitled, are being sold and those Claimants will receive their pro rata share of the net proceeds of that sale in cash.

Pursuant to the Plan of Allocation approved by the Court and set forth in the Notice of Settlement, Claimants whose distribution amount would be $5.00 or less will receive $5.00 in cash and will not receive Warrants or common stock.

If you are entitled to receive Warrants in the settlement, and you wish to know the number of Warrants that have been or will be transferred into your account, please contact the brokerage institution that you identified on your Proof of Claim form.

Special notice to claimants who have requested the Court's review of the rejection of all or part of their claim: Please note that final determinations have not been made with respect to the disputed portions of these claimants' claims. To the extent that parts of these claimants' claims are otherwise acceptable, payments are being made in accordance with the procedures described above. No payments are being made with respect to the disputed portions of these claimants' claims at this time. Resolution of the disputed portions of these claimants' claims will be the subject of further proceedings on notice to such claimants.