Alcatel: Notice of General Shareholders' Meeting published in the BALO

Paris, July 12, 2006 - In connection with its proposed merger transaction with Lucent Technologies, Alcatel is calling its shareholders to a combined Shareholders'Meeting to be held September 7 at which shareholders will vote on the proposed transaction.

The current version of the agenda and resolutions to be submitted to the Shareholders'Meeting were published today in the official French journal of mandatory legal notices (BALO).

During this Shareholders'Meeting, the shareholders will be, in particular, invited to approve the merger transaction at the same time as the accounts for the 2005 fiscal year.

With this aim in view, in accordance with the agreement with Lucent Technologies, Inc.,

• The Shareholders'Meeting will be asked to delegate its authority to the board of directors for the issue of ordinary shares for the purposes of the merger transaction.The transaction provides for the issue of new Alcatel shares to Lucent shareholders for their Lucent shares. The Lucent shareholders will receive new Alcatel shares in the form of American Depositary Shares (ADS) based on an exchange ratio of 0.1952 Alcatel share for 1 Lucent share..

• The legal name for the combined company will be: « Alcatel Lucent »
  This legal name will be effective immediately upon consummation of the merger. Potential new names for the combined company are still under consideration.

• The Shareholders'Meeting will be invited to approve certain amendments to the bylaws that have been agreed with Lucent Technologies, such as the alignment of the age limit of the "non-executive" Chairman with the regime applicable to all directors, or the temporary institution of a qualified majority of the board of directors to coopt a new director, or appoint or remove the Chairman of the board of directors and CEO.
  These bylaws amendments are notably aimed at ensuring the stability of the management team during the transition period which will follow the merger, in order to permit the integration of the two companies.
  
• The extension of the Chairman and CEO's mandate until the date of the board of directors'meeting acknowledging the completion of the merger (or the impossibility of completing it), will also be submitted to approval.
  This provision is aimed at ensuring the continuity of Alcatel's management during the period between the shareholders'meeting and the effective date of the merger.
  
• Finally, the appointment of 14 directors for a term of four years will be proposed for the combined entity. The board of directors would be comprised of Serge Tchuruk, Chairman of the board, Patricia Russo, CEO of the new entity, five directors designated by Alcatel and five directors designated by Lucent Technologies, two new independent directors (one French and one European), who would be chosen by joint agreement. It is also proposed that two board observers (censeurs) be chosen, representing the employee shareholders of Alcatel's Employee Investment Fund. The identity of the directors and board observers comprising this new board will be communicated at a later date.
  The purpose here is to ensure a balanced representation on the board of directors and to maintain representation of the employee shareholders as observers.