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Lucent Techologies Inc. issued the following Senior Leadership Update to its
employees on April 2, 2006:
LUCENT TECHNOLOGIES
SENIOR LEADERSHIP UPDATE
April 2, 2006
IN THIS ISSUE: Alcatel And Lucent to Merge and Form World's Leading
Communications Solutions Provider
News Release
Talking Points
Q&A
Today, Lucent announced with Alcatel that we have entered into a definitive
merger agreement to create the first truly global communications solutions
provider with the broadest wireless, wireline and services portfolio in the
industry. The primary driver of the combination is to generate significant
growth in revenues and earnings based on the market opportunities for
next-generation networks, services and applications, while yielding significant
synergies. The combined company's increased scale, scope and global capabilities
will enhance its long-term value for shareowners, customers and employees.
The combined company, which will be named at a later date, will have an
aggregate market capitalization of approximately Euro 30 billion (US$36 billion)
based upon the closing price on Friday, March 31. Based on calendar 2005 sales,
the combined company will have revenues of approximately Euro 21 billion (US$25
billion), divided almost evenly among North America, Europe and the rest of the
world. As of Dec. 31, 2005, the combined companies had about 88,000 employees.
The combined company will be incorporated in France with executive offices
located in Paris. Serge Tchuruk will serve as non-executive chairman and Pat
Russo will be CEO. The North American operations will be based in New Jersey,
USA, where global Bell Labs will remain headquartered. The transaction is
expected to be completed in six to 12 months. Until the merger is completed,
both companies will continue to operate their businesses independently.
While this is exciting news for the company, it will generate a lot of questions
and raise some concerns among our employees so communications will be critical.
This morning, Pat Russo sent a letter out to all employees. Frank D'Amelio will
hold a senior leader call at 11:30 a.m. on Monday. Please listen by calling
1-800-881-5262 in the U.S. or +1- 706-645-9731 outside the U.S. Please dial in
at least 10 minutes early to allow time to be added to the call.
Frank also will host a Web cast for all employees from the Murray Hill Oak Rook
at 1:30 p.m. Monday. Pat will have an all-employee broadcast at 11:30 a.m. on
Tuesday from the Murray Hill auditorium. Watch LTtoday for more details for the
all-employee Web cast and broadcast. In addition, we are sending out a SalesEdge
alert to the sales teams.
To help you hold discussions with the members of your team, please refer to the
press release, and the talking points and Q&As below. Clearly, there are many
issues that need to be worked out, but we will strive to keep everyone updated
as appropriate throughout this entire process. We have set up Web site off of
myLucent to be our central communications point.
There is an extraordinary amount of external interest in this merger, and you
need to remind your teams that all calls from reporters, industry and financial
analysts or others should be referred to the appropriate people within the
company. It is important to remember our corporate policy on "Promoting Lucent's
Interests" and making public comments about such situations. Please be sure that
you and all members of your team are familiar with the policy, which can be
found in our Business Guideposts. (To view the policy, click here, highlight
View Only and select Promoting Lucent's Interests, then select Speaking Publicly
on Lucent's Behalf.)
In addition, be sure you and your teams consult with Legal and Public Relations
before releasing any information either internally or externally about the
merger.
News Release
To read today's joint news release on the Alcatel and Lucent merger, click here.
Talking Points
Today, we announced the combination of Alcatel and Lucent to create the world's
leading communications solutions provider.
This combination is about a strategic fit between two experienced and
well-respected global communications leaders who together will become the global
leader in convergence.
0 It will preserve the key strengths and common culture of technical
excellence and innovation in each company, while enabling the combined company
to be uniquely positioned for success, growth and value creation from
next-generation networking, solutions and services.
0 The combined people, capabilities and customer relationships will enhance
our competitive standing in the high-growth areas of next-gen networks,
including 3G wireless, IMS, broadband access, optical, applications and
services.
0 The combination will make us the premier leader in a communications
networks, applications and services industry that is growing more than 6% a year
in aggregate -- and faster in key technologies.
What these companies can accomplish together far exceeds what we could do alone.
A combined Alcatel and Lucent will:
0 Be global in scale.
0 Have clear leadership in next-gen networks as the global leader in
convergence.
0 Boast one of the largest R&D capabilities focused on communications.
0 Employ the largest and most experienced global services team in the
industry.
0 Create long-term shareholder value with ownership in the most
dynamic, global player in communications networking.
With this combination, we will have No. 1 leadership in communications
solutions with the broadest wireless and wireline portfolio. Together we
will be:
0 No. 1 in wireline
0 No. 2 in wireless
0 No. 2 in services
And we will have:
0 The most extensive globally deployed services and support
organization with more than 24,000 people.
0 Leading positions in IPTV, IMS next-gen networks and spread-spectrum
wireless technology.
0 One of the largest R&D capabilities in the industry with innovations that
span from the service provider to the enterprise and a total R&D spend of Euro
2.4 billion (US $2.9 billion).
0 2005 revenues in excess of Euro 20 billion (US$25 billion).
0 Deep relationships with the world's largest service providers.
0 Annual pre-tax cost synergies of approximately Euro 1.4 billion (US$1.7
billion) to be achieved within three years, a substantial majority of which is
expected to be achieved in the first two years.
This combination gives us a distinct time-to-market advantage and the most
comprehensive portfolio in the industry to address the growth segments for
network transformation.
This merger matches the way our industry is evolving in terms of:
0 Greater geographic balance and diversification
0 A portfolio with the breadth and innovations to deliver convergence
0 Strong services component to design and manage next-gen networks
0 And a large R&D investment to foster innovations
An experienced international management team will be combining the best of both
companies. Two highly regarded business leaders who share a common vision will
lead this combined company.
0 Serge Tchuruk will be the non-executive Chairman, and Pat Russo will be the
CEO.
0 Mike Quigley, COO;
0 Frank D'Amelio, Senior EVP, who will oversee the integration and the
operations;
0 Jean-Pascal Beaufret, CFO;
0 Etienne Fouques, EVP, who will supervise the emerging countries
strategy;
0 Claire Pedini, Senior VP, Human Resources
Additional organization and management team announcements will be made at a
future date.
Q&A
Why are we merging with Alcatel?
The primary driver of this combination is to generate significant growth in
revenues and earnings based on the market opportunities for next-generation
networks, services and applications while yielding significant synergies. The
combined company's increased scale, scope and global capabilities will enhance
its sustainable shareowner value from year one.
This combination is about a strategic fit between two experienced and
well-respected global communications leaders, who together will become the
global leader in convergence. What these companies can accomplish together far
exceeds what we could do alone. The combined people, capabilities and customer
relationships will enhance our competitive standing in the high-growth areas of
next-gen networks, including 3G wireless, IMS, broadband access, optical,
applications and services.
A combined Alcatel and Lucent will:
0 Be global in scale.
0 Have clear leadership in next-generation networks as the global
leader in convergence.
0 Boast one of the largest R&D capabilities focused on communications.
0 Employ the largest and most experienced global services team in the
industry.
0 Create sustainable shareowner value with ownership in the most dynamic,
global player in end-to-end communications solutions.
Why are we doing this now?
Now is the optimal time because this combination gives both companies a distinct
time-to-market advantage in a market that is changing significantly. This is the
first Tier 1 combination in equipment suppliers, which gives us a great start.
Scale and speed to market have become even more critical as the communications
landscape changes rapidly due to competition, consolidation and complexity -
three industry forces that now make this combination a logical and prudent
course for both Alcatel and Lucent.
0 Customers' competitive landscape continues to be under tremendous change
as the boundaries between the telecom, media and Internet worlds converge.
0 The telecom industry continues to consolidate.
0 A new cycle of network transformation is taking place, as the lines
between enterprise, wireless and wireline networks continue to blur, which
introduces even greater complexity to our customers' networks.
The winners in this type of marketplace will be defined by having partners who
respond most quickly and with the most agility to the changing market dynamics.
New opportunities have developed that make this combination more logical and
potent than ever. This combination gives us that advantage in terms of our
global footprint and investment euros for R&D. It also gives us the largest
services and support team in the industry.
The IP transformation will be at the heart of next-generation networks,
wireline, wireless and converged networks and solutions. It necessitates a
comprehensive solution and view of the network. Alcatel and Lucent combined will
have the most robust portfolio of wireless, wireline NGN/IMS, converged products
and applications and integration capabilities.
What will be the name and what will the logo look like?
A joint working group will be created to work on these topics so that name and
logo of the new company can be revealed at closing date.
Where will the new company be located? Who will lead it?
The combined company will be incorporated in France with executive offices
located in Paris. The North American operations will be based in New Jersey,
USA, where global Bell Labs will remain headquartered.
Two highly regarded business leaders who share a common vision will lead this
new company. Serge Tchuruk will be the non-executive Chairman, and Pat Russo
will be the CEO. In addition, an experienced international management team will
be combining the best of both companies.
The combined company will be managed by a team that reflects a balance between
the two organizations, taking into account the best talents of each company and
the multicultural nature of its workforce. Beginning immediately after closing,
there will be a Management Committee that will work towards this end, while
ensuring continuity in the management of the two companies. This Management
Committee of the combined company will be headed by Pat Russo, CEO, and will
also consist of Mike Quigley, COO; Frank D'Amelio, Senior EVP, who will oversee
the integration and the operations; Jean-
Pascal Beaufret, CFO; Etienne Fouques, EVP, who will supervise the emerging
countries strategy; and Claire Pedini, Senior VP, Human Resources. Additional
organization and management team announcements will be made at a future date.
Between signing and closing, Tchuruk and Russo will supervise an integration
team to be nominated shortly, which will seek to ensure that synergies will
start to be realized as soon as closing takes place.
The board of directors will have equal representation from each company,
including Tchuruk and Russo, five of Alcatel's current directors and five of
Lucent's current directors. The board will also include two new independent
European directors to be mutually agreed upon.
Why Alcatel and Lucent?
Alcatel and Lucent represent a unique business combination of two companies that
share the same vision and that will benefit from an excellent geographic,
product portfolio and customer fit. This combination will create the world's
leading global communications solutions provider.
The combined company will have a balanced global presence with about:
0 34% of revenues coming from North America
0 35% coming from Europe
0 31% from Asia-Pacific and the rest of the world.
Alcatel and Lucent's products and customer base are complementary and will
create:
0 A leader - No. 1 in wireline, No. 2 in wireless (No. 1 in CDMA) and
No. 2 in services.
0 A well-diversified, global customer base and a strong position for
expansion into emerging regions with a presence in more than 130 countries.
These two companies have a shared vision of where networks are going, a shared
understanding of customer needs and a shared culture of technical excellence and
innovation. We will have the largest and most experienced global services and
support team in the industry. We will have leadership in next-generation
communications solutions technologies.
The combination of Alcatel and Lucent R&D organizations will result in the
premier R&D institution for communications and we will be able to increase the
scale of our global R&D.
As a result, the combined companies will have an enhanced global footprint, the
most comprehensive telecom product portfolio and one of the largest and most
innovative R&D capabilities.
The strategic combination will create sustainable shareowner value for both
companies who will benefit from owning the leading global player in the
communications industry.
The right time, the right solutions, the right companies.
Why are we calling this a merger of equals when Alcatel is getting approximately
60% and Lucent is getting approximately 40%?
We believe that this is the best unparalleled combination taking into account
the unique and complimentary strengths brought by each company.
Also, it's important to remember that there are other factors that make this a
merger of equals besides share distribution, such as governance, management team
and structure:
0 The new combined company will be incorporated in France, with executive
offices in Paris. The North American operations will be based in New Jersey,
U.S.A., where global Bell Labs will remain headquartered.
0 Two highly regarded business leaders who share common values, vision, and
business philosophy will lead this new company. Serge Tchuruk will be the
non-executive Chairman, and Pat Russo will be the CEO. In addition, an
experienced international management team will be combining equally the best of
both companies.
0 The board of directors will have equal representation from each company,
including Tchuruk and Russo, five of Alcatel's current directors and five of
Lucent's current directors. The board will also include two new independent
European directors to be mutually agreed upon.
0 Mike Quigley, COO; Frank D'Amelio, Senior EVP - will oversee the
integration and the operations; Jean-Pascal Beaufret, CFO; Etienne Fouques, EVP
- will supervise the emerging countries strategy; and Claire Pedini, Senior VP,
Human Resources. Additionalorganization and management team announcements will
be made at a future date.
How will our customers react to this development?
Early reaction from our customers has been positive. Our customers will benefit
from a partner with the scale and scope to design, build and manage increasingly
complex networks that deliver the most advanced communications experience to the
end-user. That is what this combination will deliver with an unparalleled focus
on execution, innovation and service for our customers.
The combined company will offer strong benefits to customers, including:
0 A broad innovative vision for next-generation networks backed by Alcatel
and Lucent's excellence and ingenuity.
0 A one-stop shop for the solutions, applications and services that will
help us deliver converged services in the IP world. 0 A leader across all areas
defining next-gen networks.
0 The leading end-to-end network integration and services players for an
increasingly converged world.
0 A local partner with global reach.
0 A sustainable competitive advantage and staying power.
We tried this once before in 2001. What makes us think it could succeed now?
In May 2001, both Lucent and Alcatel determined that it was not the optimal time
to complete a merger. Over the last five years, the communications industry and
these companies have continued to change.
Competition, consolidation among customers, and complexity have intensified.
And, both Lucent and Alcatel have each adapted on their own with more
streamlined operations, stronger financials and the introduction of innovative
solutions for converged services.
We each come to this decision today from a stronger position looking at how to
grow this new company - not from more challenging positions in 2001 when
survival was a major driver of our exploration.
The simple truths remain five years later; these companies:
0 Have a perfect match of geography, products and people.
0 Can produce the scale and scope to competitive advantage, even more
effectively.
0 Share a vision of the future of networking transformation.
0 Can enhance sustainable shareowner value as a combined entity.
I understand that the prime motivator behind this deal is to grow the business,
but there are bound to be some duplication between the two companies. What are
the expected synergies (cost reductions, leveraging Alcatel, leveraging Lucent)?
We've mutually identified annual pre-tax cost synergies of approximately
EUR1.4 billion / $1.7 billion to be achieved within three years, a substantial
majority of which is expected to be achieved in the first two years. The net
present value (NPV) of cost synergies are approximately EUR10 / $12 billion.
The synergies are expected to come from several areas, including:
0 Consolidating support functions.
0 Optimizing the supply chain and procurement structure.
0 Leveraging R&D and services cross a larger base.
What will happen to our jobs? How will they decided who keeps their jobs?
We expect approximately 10 percent reduction in the global work force across the
businesses and regions. We will take a fair and balanced approach, conducting a
thorough analysis of our global workforce. We will take into account the needs
of each business and of each marketplace, to ensure we are best positioned to
serve our customers' needs, while achieving a competitive cost structure. We
intend to maintain the appropriate workforce level to do that.
After these initial job reductions, this combination should create a growing,
global and more stable workplace for our people by building the world's leading
communications solutions provider. We would expect that these combined
businesses would enable us to do more for our customers, our investors and our
people.
What happens to our compensation and benefits?
The Merger Agreement provides that the benefit programs for each company will
remain, in aggregate, the same for one year after the merger closing. During
this year, analysis will be done to determine the best strategy going forward.
Local compensation and benefit market practices will influence any consolidation
of plans. It is the intention to have over time consistent plans and policies
for each market.
What type of severance packages will be available?
The Merger Agreement provides that the existing severance benefits for both
companies will remain in effect for two years following the close of the merger.
What happens to the Lucent stock we hold in our 401(k) plans?
The stock will be treated the same as all other shares of Lucent stock in that
they will be converted to stock of the combined company at the agreed upon
exchange ratio.
There is bound to be some overlap in our product lines. How will we manage that?
We will undertake a rigorous technology-by-technology, product-by-product review
of both portfolios. We will look at several things, such as the impact on our
customers if we make any changes, which product or technology has the most
promise going forward, what areas are likely to have the most growth, the
investments required, etc.
What happens to Bell Labs? Will it keep its name?
The combined company will retain Bell Labs and its name. The combined
company intends to form a separate, independent U.S. subsidiary holding
certain contracts with U.S. government agencies. This
subsidiary would be separately managed by a board, to be composed of three
independent U.S. citizens acceptable to the U.S. government. This type of
structure is routinely used to protect certain government programs in the course
of mergers involving non-U.S. parties.
Who approached whom?
Like everyone else in the industry, Alcatel and Lucent continuously had informal
discussions and exchanged views on the future of telecom. More strategic
discussions earlier this year ultimately resulted in today's announcement.
Is this a merger or an acquisition of one company by the other?
It is a merger of equals. There will be a stock-for-stock merger with a fixed
exchange ratio of 0.1952. Upon completion of the merger, Alcatel shareholders
will own approximately 60 percent of the combined company and Lucent
shareholders will own approximately 40 percent of the combined company.
In legal terms, the deal is structured as a reverse triangular merger, after
which Lucent will become a subsidiary of Alcatel, and Lucent shareowners will
receive a tax-free exchange of Alcatel American Depositary Shares (ADRs) for
Lucent shares. These structures are common in mergers of this type and most
mergers involving U.S. public companies are done this way.
What happens to Alcatel and Lucent if, after announcing their intention to
merge, the deal falls through?
We will work closely with the regulatory bodies in both the U.S. and Europe to
obtain the necessary clearances.
Both companies will operate independently until the merger is completed. If the
merger is not completed, both companies are prepared to continue with their
separate strategies for success.
How long will the whole process take?
While we cannot speak for the regulatory authorities, we currently expect this
merger to close in the next six to twelve months.
What do we do in the meantime?
Clearly the key thing we all have to do is make sure we keep our focus where it
needs to be - on meeting the needs of our customers. We cannot afford to and
miss any opportunity or any commitment. Until the merger is finalized, we will
continue to operate as the independent company we are so that if the merger is
not completed, both companies are prepared to continue with their separate
strategies for success.
A separate transition team will be established with people from Lucent and
Alcatel so that the rest of us can stay focused on the things we need to do now
to ensure our success this quarter and for the rest of this year.
How can we make a merger this large work? Won't we have an incredible problem
integrating the cultures of two companies?
Telecommunications is a global industry and it is beneficial to be close to the
end-user to understand its needs - it is easier to serve a global customer base
with global presence. Service providers will
benefit from a supplier with the scale, R&D resources and global experience to
build large, increasingly complex and advanced networks. The combined company
will be that company - a local partner with global reach.
An experienced transition team will be established with members from both
companies who will focus on ensuring a smooth transition.
Both companies are experienced in working with people from all cultures and
operate in more than 130 countries. Alcatel has more than 70% non-French
employees. Lucent has more than 41 percent non-US employees. At our core, we
both have the same mission, the same strategy, and the same obsession with
delivering next-generation networks for service providers around the world.
Alcatel was built over the years from different acquired companies, such as: ITT
(US) in 1987, Rockwell (US) in 1991, Teletra (Italy) in 1992, Nortel Submarine &
Cables (UK) in 1994, DSC (US) in 1998, Genesys (US) and Newbridge Networks
(Canada) in 2000, and Timetra in 2003. Furthermore, the creation of Alcatel
Shanghai Bell in 2002 represented a major milestone enhancing the Alcatel
footprint in China where currently the company employees about 6,800 people, of
which approximately 2,000 are part of the R&D organization. Therefore, Alcatel
is today one of the most multicultural companies in Europe (English is the
official language of the company).
Lucent also was built over the years from different acquired companies, such as:
Telica (US) in 2004, Ascend Communications (US) in 1999, Yurie Systems, (US)
in1998. Moreover, Lucent has major engineering centers across the globe: Major
centers in the Americas are located in Westford, Mass., Holmdel, N.J.; Whippany,
N.J.; Lisle/Naperville, Ill.; and Campinas, Brazil. Major centers in EMEA are
located in Nuremberg, Germany; Swindon, England; Bydgoszcz, Poland; and
Alcobendas, Spain. Major centers in Asia are located in Bangalore and Hyderabad,
India; and in Shanghai, Qingdao, Beijing and Nanjing in China. There are
additional smaller engineering offices around the world.
Lucent Technologies Senior Leadership Update is a proprietary publication
of Lucent Technologies Public Relations. We send the publication to all
senior leaders and directors in the company so that you will have advance
information about major announcements and initiatives, and so that you can
pass the information on to the people with whom you work. For additional
information, please contact Fran Anderson; telephone: 908-582-2612;
facsimile: 908-582-4552; mail: 600 Mountain Ave. Room 3A-402B, Murray Hill,
NJ 07974
Please click here and read the Safe Harbor For Forward Looking Statements.
SAFE HARBOR FOR FORWARD LOOKING STATEMENTS AND OTHER IMPORTANT INFORMATION:
This communication contains statements regarding the proposed transaction
between Lucent and Alcatel, the expected timetable for completing the
transaction, future financial and operating results, benefits and synergies of
the proposed transaction and other statements about Lucent and Alcatel's
managements' future expectations, beliefs, goals, plans or prospects that are
based on current expectations, estimates, forecasts and projections about Lucent
and Alcatel and the combined company, as well as Lucent's and Alcatel's and the
combined company's future performance and the industries in which Lucent and
Alcatel operate and the combined company will operate, in addition to
managements' assumptions. These statements constitute forward-looking statements
within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
Words such as "expects," "anticipates," "targets," "goals," "projects,"
"intends," "plans," "believes," "seeks," "estimates," variations of such words
and similar expressions are intended to identify such forward-looking statements
which are not statements of historical facts. These forward-looking statements
are not guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to assess. Therefore, actual
outcomes and results may differ materially from what is expressed or forecasted
in such forward-looking statements. These risks and uncertainties
are based upon a number of important factors including, among others: the
ability to consummate the proposed transaction; difficulties and delays in
obtaining regulatory approvals for the proposed transaction; difficulties and
delays in achieving synergies and cost savings; potential difficulties in
meeting conditions set forth in the definitive merger agreement entered into by
Lucent and Alcatel; fluctuations in the telecommunications market; the pricing,
cost and other risks inherent in long-term sales agreements; exposure to the
credit risk of customers; reliance on a limited number of contract manufacturers
to supply products we sell; the social, political and economic risks of our
respective global operations; the costs and risks associated with pension and
postretirement benefit obligations; the complexity of products sold; changes to
existing regulations or technical standards; existing and future litigation;
difficulties and costs in protecting intellectual property rights and exposure
to infringement claims by others; and compliance with environmental, health and
safety laws. For a more complete list and description of such risks and
uncertainties, refer to Lucent's Form 10-K for the year ended September 30, 2005
and Alcatel's Form 20-F for the year ended December 31, 2005 as well as other
filings by Lucent and Alcatel with the US Securities and Exchange Commission.
Except as required under the US federal securities laws and the rules and
regulations of the US Securities and Exchange Commission, Lucent and Alcatel
disclaim any intention or obligation to update any forward-looking statements
after the distribution of this communication, whether as a result of new
information, future events, developments, changes in assumptions or otherwise.
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC
In connection with the proposed transaction, Alcatel and Lucent intend to file
relevant materials with the Securities and Exchange Commission (the "SEC"),
including the filing by Alcatel with the SEC of a Registration Statement on Form
F-6 and a Registration Statement on Form F-4 (collectively, the "Registration
Statements"), which will include a preliminary prospectus and related materials
to register the Alcatel American Depositary Shares ("ADS"), as well as the
Alcatel ordinary shares underlying such Alcatel ADSs, to be issued in exchange
for Lucent common shares, and Lucent and Alcatel plan to file with the SEC and
mail to their respective stockholders an Proxy Statement/Prospectus relating to
the proposed transaction. The Registration Statements and the Proxy
Statement/Prospectus will contain important information about Lucent, Alcatel,
the transaction and related matters. Investors and security holders are urged to
read the Registration Statements and the Proxy Statement/Prospectus carefully
when they are available. Investors and security holders will be able to obtain
free copies of the Registration Statements and the Proxy Statement/Prospectus
and other documents filed with the SEC by Lucent and Alcatel through the web
site maintained by the SEC at www.sec.gov. In addition, investors and security
holders will be able to obtain free copies of the Registration Statements and
the Proxy Statement/Prospectus when they become available from Lucent by
contacting Investor Relations at www.lucent.com, by mail to 600 Mountain Avenue,
Murray Hill, New Jersey 07974 or by telephone at 908-582-8500 and from Alcatel
by contacting Investor Relations at www.alcatel.com, by mail to 54, rue La
Boetie, 75008 Paris, France or by telephone at 33-1-40-76-10-10.
Lucent and its directors and executive officers also may be deemed to be
participants in the solicitation of proxies from the stockholders of Lucent in
connection with the transaction described herein. Information regarding the
special interests of these directors and executive officers in the transaction
described herein will be included in the Proxy Statement/Prospectus described
above. Additional information regarding these directors and executive officers
is also included in Lucent's proxy statement for its 2006 Annual Meeting of
Stockholders, which was filed with the SEC on or about January 3, 2006. This
document is available free of charge at the SEC's web site at www.sec.gov and
from Lucent by contacting Investor Relations at www.lucent.com, by mail to 600
Mountain Avenue, Murray Hill, New Jersey 07974 or by telephone at 908-582-8500.
Alcatel and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the stockholders of Lucent in
connection with the transaction described herein. Information regarding the
special interests of these directors and executive officers in the transaction
described herein will be included in the Proxy Statement/Prospectus described
above. Additional information regarding these directors and executive officers
is also included in Alcatel's Form 20-F filed with the SEC on March 31, 2006.
This document is available free of charge at the SEC's web site at www.sec.gov
and from Alcatel by contacting Investor Relations at www.alcatel.com, by mail to
54, rue La Boetie, 75008 Paris, France or by telephone at 33-1-40-76-10-10.