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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
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<TABLE>
<S> <C>
LUCENT TECHNOLOGIES INC.
- ------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
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<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[COVER ART HERE]
***PRELIMINARY COPY***
HOW TO VOTE
YOUR VOTE IS IMPORTANT. MOST SHAREOWNERS HAVE A CHOICE OF VOTING OVER THE
INTERNET, BY TELEPHONE OR BY USING A TRADITIONAL PROXY CARD. PLEASE REFER TO
YOUR PROXY CARD OR THE INFORMATION FORWARDED BY YOUR BANK, BROKER OR OTHER
HOLDER OF RECORD TO SEE WHICH OPTIONS ARE AVAILABLE TO YOU.
ELECTRONIC ACCESS TO PROXY STATEMENT
MOST SHAREOWNERS CAN VIEW FUTURE PROXY STATEMENTS AND ANNUAL REPORTS OVER
THE INTERNET RATHER THAN RECEIVING PAPER COPIES IN THE MAIL. PLEASE REFER TO THE
PROXY STATEMENT AND YOUR PROXY CARD FOR FURTHER INFORMATION.
REDUCE MULTIPLE MAILINGS
IF YOU ARE A SHAREOWNER OF RECORD AND HAVE MORE THAN ONE ACCOUNT IN YOUR
NAME OR THE SAME ADDRESS AS OTHER SHAREOWNERS OF RECORD, YOU CAN AUTHORIZE THE
COMPANY TO DISCONTINUE MAILINGS OF MULTIPLE ANNUAL REPORTS. IF YOU ARE A
SHAREOWNER OF RECORD VOTING OVER THE INTERNET OR BY TELEPHONE, TO DISCONTINUE
FUTURE MAILINGS OF DUPLICATE ANNUAL REPORTS, FOLLOW THE INSTRUCTIONS PROVIDED
AFTER YOU VOTE.
<PAGE>
***PRELIMINARY COPY***
LUCENT TECHNOLOGIES INC.
600 MOUNTAIN AVENUE
MURRAY HILL, NEW JERSEY 07974
-----------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
-----------------------------------------------------
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<S> <C>
TIME........................ February 16, 2000
PLACE....................... XXXX
ITEMS OF BUSINESS........... (1) To elect two members of the Board of
Directors, whose terms are described
in the proxy statement.
(2) To approve an amendment to the
certificate of incorporation to
increase the number of authorized
common shares.
(3) To transact such other business,
including consideration of shareowner
proposals, as may properly come
before the meeting and any
adjournment thereof.
RECORD DATE................. Holders of Lucent common stock of record
at the close of business on December 21,
1999 are entitled to vote at the meeting.
ANNUAL REPORT............... The company's 1999 annual report, which
is not a part of the proxy soliciting
material, is enclosed.
PROXY VOTING................ It is important that your shares be
represented and voted at the meeting. You
can vote your shares by completing and
returning the enclosed proxy card. Most
shareowners can also vote their shares
over the Internet or by telephone. If
Internet or telephone voting is available
to you, voting instructions are printed
on the proxy card sent to you. You can
revoke a proxy at any time prior to its
exercise at the meeting by following the
instructions in the accompanying proxy
statement.
</TABLE>
PAMELA F. CRAVEN
Vice President-Law
and Secretary
December 21, 1999
<PAGE>
TABLE OF CONTENTS
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PAGE
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PROXY STATEMENT............................................. 1
Proxies and Voting Procedures............................. 2
Shareowners Entitled to Vote.............................. 3
Required Vote............................................. 4
Multiple Copies of Annual Report to Shareowners........... 4
Electronic Access to Proxy Materials and Annual Report.... 5
Cost of Proxy Solicitation................................ 5
Shareowner Communications................................. 6
Shareowner Account Maintenance............................ 6
GOVERNANCE OF THE COMPANY................................... 6
Committees of the Board of Directors...................... 6
Compensation of Directors................................. 7
Compensation Committee Interlocks and Insider
Participation........................................... 9
Relationship with Independent Public Accountants.......... 9
Section 16(a) Beneficial Ownership Reporting Compliance... 10
ELECTION OF DIRECTORS....................................... 10
Nominees for Term Expiring in 2003........................ 11
Directors Whose Terms Will Expire in 2001................. 12
Directors Whose Terms Will Expire in 2002................. 13
SHARE OWNERSHIP OF MANAGEMENT AND DIRECTORS................. 14
DIRECTORS' PROPOSAL......................................... 15
SHAREOWNER PROPOSALS........................................ 17
EXECUTIVE COMPENSATION...................................... 18
Board Compensation Committee Report on Executive
Compensation............................................ 18
Performance Graph......................................... 19
Summary Compensation Table................................ 20
Option Grants in Last Fiscal Year......................... 21
Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Values......................................... 21
Pension Plans............................................. 22
Executive Employment Agreements........................... 22
OTHER MATTERS............................................... 23
</TABLE>
<PAGE>
***PRELIMINARY COPY***
Lucent Technologies Inc.
Executive Offices
600 Mountain Avenue
Murray Hill, New Jersey 07974
[LOGO]
PROXY STATEMENT
----------------------------------------------------------
We are providing these proxy materials in connection with the solicitation
by the Board of Directors of Lucent Technologies Inc., of proxies to be voted at
the company's 2000 Annual Meeting of Shareowners and at any meeting following
adjournment thereof.
You are cordially invited to attend the annual meeting on February 16, 2000,
beginning at XX:XX a.m. Shareowners will be admitted beginning at XX:XX a.m. The
meeting will be held in XXXX. The location is accessible to handicapped persons
and we will provide wireless headsets for hearing amplification upon request.
You will need an admission ticket to enter the meeting. If you are a
shareowner of record, you will find an admission ticket attached to the proxy
card sent to you. If you plan to attend the meeting in person, please retain the
admission ticket.
If your shares are held in the name of a bank, broker or other holder of
record and you plan to attend the meeting in person, you can obtain an admission
ticket in advance by sending a written request, along with proof of ownership,
such as a bank or brokerage account statement, to our transfer agent, The Bank
of New York, Church Street Station, P.O. Box 11009, New York, NY 10286. If you
arrive at the meeting without an admission ticket, we will admit you if we are
able to verify that you are a Lucent shareowner.
Lucent's fiscal year begins on October 1 and ends September 30. References
in this proxy statement to the year 1999 or fiscal 1999 refer to the
twelve-month period from October 1, 1998 through September 30, 1999.
We are mailing this proxy statement and accompanying forms of proxy and
voting instructions to holders of the company's common stock on December 21,
1999, the record date for the meeting.
<PAGE>
PROXIES AND VOTING PROCEDURES
YOUR VOTE IS IMPORTANT. Because many shareowners cannot attend the meeting
in person, it is necessary that a large number be represented by proxy. Most
shareowners have a choice of voting over the Internet, by using a toll-free
telephone number or by completing a proxy card and mailing it in the
postage-paid envelope provided. Please refer to your proxy card or the
information forwarded by your bank, broker or other holder of record to see
which options are available to you. Please be aware that if you vote over the
Internet, you may incur costs such as telephone and Internet access charges for
which you will be responsible. The Internet and telephone voting facilities for
shareowners of record will close at 12:01 a.m. E.S.T. on February 16, 2000.
You can revoke your proxy at any time before it is exercised by timely
delivery of a properly executed, later-dated proxy (including an Internet or
telephone vote) or by voting by ballot at the meeting. By providing your voting
instructions promptly, you may save the company the expense of a second mailing.
The Internet and telephone voting procedures are designed to authenticate
shareowners by use of a control number and to allow you to confirm that your
instructions have been properly recorded.
The method by which you vote will in no way limit your right to vote at the
meeting if you later decide to attend in person. If your shares are held in the
name of a bank, broker or other holder of record, you must obtain a proxy,
executed in your favor, from the holder of record, to be able to vote at the
meeting.
All shares entitled to vote and represented by properly completed proxies
received prior to the meeting and not revoked will be voted at the meeting in
accordance with your instructions. IF YOU DO NOT INDICATE HOW YOUR SHARES SHOULD
BE VOTED ON A MATTER, THE SHARES REPRESENTED BY YOUR PROPERLY COMPLETED PROXY
WILL BE VOTED AS THE BOARD OF DIRECTORS RECOMMENDS.
If any other matters are properly presented at the annual meeting for
consideration, including, among other things, consideration of a motion to
adjourn the meeting to another time or place, the persons named as proxies and
acting thereunder will have discretion to vote on those matters according to
their best judgment to the same extent as the person delivering the proxy would
be entitled to vote. At the date this proxy statement went to press, we did not
anticipate that any other matters would be raised at the meeting.
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SHAREOWNERS ENTITLED TO VOTE
Shareowners at the close of business on the record date are entitled to
notice of and to vote at the annual meeting.
On October 1, 1999, there were 3,071,784,797 shares of common stock
outstanding. Each share is entitled to one vote on each matter properly brought
before the meeting.
FOR BUYDIRECT-SM- PARTICIPANTS: If you are a participant in the BuyDIRECT
dividend reinvestment and stock purchase plan, common shares held in your
BuyDIRECT account are included on, and may be voted using, the proxy card sent
to you. The plan's administrator is the shareowner of record of your plan shares
and will not vote those shares unless you provide it with instructions, which
you can do over the Internet, by telephone or by mail using the proxy card sent
to you.
FOR LUCENT PLAN PARTICIPANTS: If you are a participant in the Lucent INS
401(k) Plan, Lucent Long Term Savings Plan for Management Employees, Lucent Long
Term Savings and Security Plan, Lucent Retirement Savings Plan, Lucent Employee
Stock Purchase Plan, Lucent Long Term Savings and Security Employee Stock
Ownership Trust, or Lucent Employee Stock Ownership Plan, you will receive one
proxy card for all shares you own through those plans or in an Employee Stock
Purchase Plan account. That proxy card will serve as a voting instruction card
for the trustees or administrators of those plans, where all accounts are
registered in the same name. If you own shares through these plans or in an
Employee Stock Purchase Plan account and do not vote, the plan trustees will
vote the plan shares in the same proportion as shares for which instructions
were received under each plan and shares held in an Employee Stock Purchase Plan
account will be voted in accordance with normal brokerage industry practices.
If you hold Lucent stock through any other company's stock purchase or
savings plan, you will receive voting instructions from that plan's
administrator. Please sign and return those instructions promptly to assure that
your shares are represented at the meeting.
In accordance with Delaware law, a list of shareowners entitled to vote at
the meeting will be available at the location of the annual meeting on
February 16, 2000, and for 10 days prior to the meeting, between the hours of 9
a.m. and 4 p.m. at the location of the annual meeting.
- -SM- BuyDIRECT is a service mark of
The Bank of New York
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REQUIRED VOTE
The presence, in person or by proxy, of the holders of a majority of the
shares entitled to vote generally for the election of Directors is necessary to
constitute a quorum at the meeting. Abstentions and broker "non-votes" are
counted as present and entitled to vote for purposes of determining a quorum. A
broker "non-vote" occurs when a nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not received
instructions from the beneficial owner.
A plurality of the votes duly cast is required for the election of Directors
(i.e., the nominees receiving the greatest number of votes will be elected).
Abstentions and broker "non-votes" are not counted for purposes of the election
of Directors.
The affirmative vote of the holders of a majority of the outstanding common
shares entitled to vote is required to approve the Directors' proposal to
increase the number of authorized common shares. The affirmative vote of the
holders of a majority of the common shares present in person or represented by
proxy and entitled to vote is required to approve the shareowner proposals. An
abstention is counted as a vote against the Directors' proposal and the
shareowner proposals. A broker "non-vote" is counted as a vote against the
Directors' proposal and is not counted for purposes of approving the shareowner
proposals.
MULTIPLE COPIES OF ANNUAL REPORT TO SHAREOWNERS
If you received more than one copy of our 1999 annual report and wish to
reduce the number of reports you receive and save Lucent the cost of producing
and mailing these reports, we will discontinue the mailing of reports on the
accounts you select if you mark the designated box on the appropriate proxy
card(s), or follow the instructions provided when you vote over the Internet or
by telephone.
At least one account at your address must continue to receive annual
reports, unless you elect to view future annual reports and proxy statements
over the Internet. Mailing of dividends, dividend reinvestment statements, proxy
materials and special notices will not be affected by your election to
discontinue duplicate mailings of the annual report. To discontinue or resume
the mailing of an annual report for an account, please call the Lucent
Shareowner Services toll-free number, 1-888-LUCENT6. If you own Lucent stock
through a bank, broker or other holder of record and receive more than
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one Lucent Annual Report, contact the holder of record to eliminate duplicate
mailings.
ELECTRONIC ACCESS TO PROXY MATERIALS AND ANNUAL REPORT
This proxy statement and the 1999 annual report are available on Lucent's
Internet site at HTTP://WWW.XXXX.COM. Most shareowners can elect to view future
proxy statements and annual reports over the Internet instead of receiving paper
copies in the mail.
If you are a shareowner of record, you can choose this option and save the
company the cost of producing and mailing these documents by checking the
appropriate box on your proxy card or by following the instructions provided if
you vote over the Internet or by telephone. You can also choose between paper
documents and electronic access by calling the Lucent Shareowner Services toll-
free number, 1-888-LUCENT6.
If you choose to view future proxy statements and annual reports over the
Internet, that choice will remain in effect until you call the Lucent Shareowner
Services toll-free number and tell us otherwise. You do not have to elect
Internet access each year.
If you hold your Lucent stock through a bank, broker or other holder of
record, please refer to the information provided by that entity for instructions
on how to elect to view future proxy statements and annual reports over the
Internet.
If you are a shareowner of record and choose to view future proxy statements
and annual reports over the Internet, you will receive a proxy card in the mail
next year with instructions containing the Internet address of those materials.
Most shareowners who hold their Lucent stock through a bank, broker or other
holder of record and who elect electronic access will receive an e-mail next
year containing the Internet address to use to access Lucent's proxy statement
and annual report.
COST OF PROXY SOLICITATION
Lucent will pay the cost of soliciting proxies. Proxies may be solicited on
behalf of the company by Directors, officers or employees of the company in
person or by telephone, facsimile or other electronic means. We have engaged the
firm of Morrow & Co., Inc. to assist us in the distribution and solicitation of
proxies. We have agreed to pay Morrow & Co. Inc. a fee of $17,000 plus expenses
for these services.
In accordance with the regulations of the Securities and Exchange Commission
and the New York Stock Exchange, we will also reimburse brokerage
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firms and other custodians, nominees and fiduciaries for their expenses incurred
in sending proxies and proxy materials to beneficial owners of Lucent stock.
SHAREOWNER COMMUNICATIONS
You can obtain a transcript of the meeting by writing to Shareowner Meeting
Transcript Requests, 600 Mountain Avenue, Room 3C-515, Murray Hill, New Jersey
07974.
As a shareowner, your comments pertaining to any aspect of company business
are welcome. Space is provided for this purpose on the proxy card given to
shareowners of record. Although shareowner comments are not answered on an
individual basis, they do assist us in understanding the concerns of
shareowners.
SHAREOWNER ACCOUNT MAINTENANCE
Our transfer agent is The Bank of New York. All communications concerning
accounts of shareowners of record, including address changes, name changes,
inquiries as to requirements to transfer Lucent stock and similar issues, can be
handled by calling the Lucent Shareowner Services toll-free number,
1-888-LUCENT6. For other company information, you can visit Lucent's Internet
site at HTTP://WWW.LUCENT.COM.
GOVERNANCE OF THE COMPANY
----------------------------------------------------------
Pursuant to the Delaware General Corporation Law and the company's by-laws,
Lucent's business, property and affairs are managed under the direction of the
Board of Directors. Members of the Board are kept informed of the company's
business through discussions with the Chairman and officers, by reviewing
materials provided to them and by participating in meetings of the Board and its
committees.
During fiscal 1999, the Board held twelve meetings and the committees held a
total of 10 meetings. The average attendance in the aggregate of the total
number of Board and committee meetings was 98%.
COMMITTEES OF THE BOARD OF DIRECTORS
During fiscal 1999, the Board of Directors had two ongoing committees: an
Audit and Finance Committee and a Corporate Governance and Compensation
Committee.
The Audit and Finance Committee meets with management periodically to
consider the adequacy of the company's internal controls and the objectivity of
its
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financial reporting. The committee also meets with the independent auditors and
with appropriate company financial personnel and internal auditors regarding
these matters. Both the independent auditors and the internal auditors regularly
meet privately with the committee and have unrestricted access to the committee.
The Audit and Finance Committee recommends to the Board the appointment of the
independent auditors. The Audit and Finance Committee reviews the company's
financing plans and reports recommendations to the full Board for approval and
to authorize action. The committee has a written charter. The members of the
committee have reviewed the charter and believe that the committee complied with
the charter in fiscal 1999. The Audit and Finance Committee met five times in
fiscal 1999.
The functions of the Corporate Governance and Compensation Committee
include: recommending to the full Board nominees for election as Directors of
the company, making recommendations to the Board from time to time as to matters
of corporate governance, administering management incentive compensation plans,
establishing the compensation of officers and reviewing the compensation of
Directors. The committee will consider qualified candidates for Director
suggested by shareowners in written submissions to Lucent's Corporate Secretary.
The Corporate Governance and Compensation Committee met five times in fiscal
1999.
Under Lucent's by-laws, nominations for Director may be made only by the
Board or a Board committee, or by a shareowner entitled to vote who delivers
notice to the Corporate Secretary of the company not less than 45 days nor more
than 75 days prior to the first anniversary of the record date for the preceding
year's annual meeting. For Lucent's annual meeting in the year 2001, we must
receive this notice on or after October 7, 2000, and on or before November 6,
2000.
You can obtain a copy of the full text of the by-law provision discussed
above by writing to the Corporate Secretary, 600 Mountain Avenue, Room 3C-515,
Murray Hill, New Jersey 07974.
COMPENSATION OF DIRECTORS
Each non-employee Director receives annually a retainer of $100,000 and an
option to purchase 5,000 shares of Lucent stock. The Chairman of each committee
described in the previous section receives an additional retainer of $10,000.
Directors may elect to receive between 50% and 100% of their
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retainer in Lucent stock or an option to purchase Lucent stock or a combination
of stock and an option. Any remainder will be paid in cash. Any option elected
will enable the Director to purchase a number of shares equal to three times the
number of shares that could have been purchased with the portion of the retainer
elected to be received as an option. The exercise price per share under the
option will be the fair market value of a share on the date of grant. Options
will generally become exercisable on the six-month anniversary of the date of
grant and have a 10-year term.
Under the company's Deferred Compensation Plan, non-employee Directors may
defer all or a portion of their cash and stock compensation to a deferred
compensation account. Deferred compensation plan accounts have two components.
The first is a Lucent stock portion. The second is a cash portion. Directors can
defer receipt of cash retainers to either portion of their accounts. The stock
portion of a retainer can be deferred only to the Lucent stock portion of an
account. The value of the Lucent stock portion of an account fluctuates based on
changes in the price of Lucent stock. Dividend equivalents are credited on the
Lucent stock portion of accounts. The cash portion of an account earns interest,
compounded quarterly at an annual rate equal (a) to 120% of the average interest
rate for 10-year U.S. Treasury notes for the previous quarter, in the case of
deferrals after October 1, 1997, and (b) to the average interest rate for
10-year U.S. Treasury notes for the previous quarter plus 5%, in the case of
deferrals on or before that date. Interest rates for deferrals to the cash
account may be revised by the Board.
All distributions from the Lucent stock portion of an account will be made
in Lucent stock, unless the company decides otherwise. In the event of a
Potential Change in Control, as defined in the plan, the plan will be supported
by a benefits protection grantor trust, the assets of which will be subject to
the claims of the company's creditors.
Lucent also maintains a general insurance policy that provides non-employee
Directors with travel accident insurance when on company business. An individual
who became a non-employee director before 1999 may purchase life insurance under
a company program pursuant to which the company will pay a portion of the
premium. The amount paid by the company is to be returned to the company no
later than following the death of the individual. This benefit will continue
after
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the non-employee Director's retirement from the Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In fiscal 1999, all of our independent Directors served on the Corporate
Governance and Compensation Committee. Franklin A. Thomas was the Chairman of
the committee. The other committee members were: Paul A. Allaire, Carla A.
Hills, Drew Lewis, Paul H. O'Neill, Donald S. Perkins and John A. Young.
Patricia F. Russo, Executive Vice President and CEO, Service Provider Networks,
is a director of Xerox Corporation, of which Mr. Allaire is currently Chairman
of the Board. During fiscal 1999, Mrs. Russo was also a member of the Executive
Compensation and Benefits and Nominating Committees of Xerox.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Upon recommendation of the Audit and Finance Committee, the Board has
reappointed PricewaterhouseCoopers LLP as the independent public accounting firm
to audit our financial statements for the fiscal year beginning October 1, 1999.
Representatives of PricewaterhouseCoopers will be present at the meeting.
They will be given the opportunity to make a statement if they desire to do so,
and they will be available to respond to appropriate questions.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our Directors
and executive officers to file reports of holdings and transactions in Lucent
stock with the Securities and Exchange Commission and the New York Stock
Exchange. Based on our records and other information, we believe that all
Securities and Exchange Commission filing requirements applicable to our
Directors and executive officers with respect to fiscal 1999 were met.
ELECTION OF DIRECTORS
----------------------------------------------------------
The Board of Directors is divided into three classes, currently consisting
of three Directors each, whose terms expire at successive annual meetings. Two
Directors will be elected at the annual meeting to serve for a three-year term
expiring at the Lucent's annual meeting in the year 2003.
The persons named in the enclosed proxy intend to vote such proxy for the
election of each of the two nominees named below, unless you indicate that your
vote should be withheld from either or both of them. They will not vote for
additional directors. Each nominee elected as a Director will continue in office
until his or her successor has been duly elected and qualified, or until the
earliest of his or her death, resignation or retirement.
THE BOARD OF DIRECTORS HAS PROPOSED THE FOLLOWING NOMINEES FOR ELECTION AS
DIRECTORS AT THE ANNUAL MEETING:
CARLA A. HILLS
DREW LEWIS
We expect each nominee for election as a Director to be able to serve if
elected. If either nominee is unable to serve if elected, proxies will be voted
in favor of the remaining nominee. Mr. Donald S. Perkins, a Director of Lucent
since 1996, is retiring from the Board. We thank Mr. Perkins for the counsel and
business advice that he consistently provided as a Board member.
The Board of Directors has commenced a search for qualified candidates to
fill the vacancy of Mr. Perkins which emphasizes experience in the
communications networking industry and ability to help guide the company in the
next phase of becoming the pre-eminent communications networking provider. Any
candidate elected by the Board will not be elected until after the annual
meeting. We recently amended the company's by-laws so that any director elected
by the Board must stand for election at the next year's annual meeting. Thus,
under the amended by-laws, any candidate elected by the Board to fill the
vacancy of Mr. Perkins will stand for election by the shareowners at the 2001
Annual Meeting.
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The principal occupation and certain other information are set forth below
regarding the nominees and other Directors whose terms of office will continue
after the annual meeting. Information about the share ownership of the nominees
and other Directors can be found on page 14.
NOMINEES FOR TERMS EXPIRING AT THE ANNUAL MEETING TO BE HELD IN THE YEAR
2003 APPEAR BELOW.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NAMED
NOMINEES FOR ELECTION AS DIRECTORS.
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NOMINEES FOR TERMS EXPIRING IN 2003
----------------------------------------------------------
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CARLA A. HILLS, Director of Lucent since 1996.
[PHOTO] Chairman and Chief Executive Officer of Hills
& Company (international consultants) since
1993, United States Trade Representative
(1989-1993). Director of American
International Group, Inc., Chevron Corp. and
Time Warner Inc. Committees: Member of the
Corporate Governance and Compensation
Committee. Age: 65.
----------------------------
DREW LEWIS, Director of Lucent since 1996.
[PHOTO] Retired Chairman of the Board and Chief
Executive Officer of Union Pacific Corporation
(rail transportation and trucking)
(1987-1996). Director of American Express
Company, Aegis Communications Group, Inc., FPL
Group, Inc., Gannett Co., Inc., Union Pacific
Resources Group Inc., Millennium Bank.
Committees: Member of the Audit and Finance
and Corporate Governance and Compensation
Committees. Age: 66.
----------------------------
</TABLE>
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- ----------------------------------------------------------------
DIRECTORS WHOSE TERMS WILL EXPIRE IN 2001
----------------------------------------------------------
<TABLE>
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RICHARD A. MCGINN, Chairman of the Board and
[PHOTO] Chief Executive Officer of Lucent since 1998,
and Chief Executive Officer and President of
Lucent (1997-1998). President and Chief
Operating Officer of Lucent from 1996 to 1997
and Director of Lucent since 1996. Executive
Vice President of AT&T and Chief Executive
Officer of the AT&T Network Systems Group
(1994-1996). Director of Oracle Corporation
and American Express Company. Age: 53.
----------------------------
PAUL H. O'NEILL, Director of Lucent since
[PHOTO] 1996. Chairman of the Board of Alcoa Inc.
(production of aluminum) since 1987. Chief
Executive Officer of Alcoa Inc. (1987-1999).
Chairman of the Rand Corporation. Director of
Eastman Kodak Company, the National
Association of Securities Dealers, Inc., the
Gerald R. Ford Foundation and Manpower
Demonstration Research Corporation.
Committees: Member of the Audit and Finance
and Corporate Governance and Compensation
Committees. Age: 64.
----------------------------
FRANKLIN A. THOMAS, Director of Lucent since
[PHOTO] 1996. Consultant to the TFF Study Group since
1996 (a non-profit initiative assisting
development in southern Africa). Retired
President of The Ford Foundation (1979-1996).
Director of Alcoa Inc., Citigroup N.A.,
Cummins Engine Company, Inc. and PepsiCo, Inc.
Committees: Chairman of the Corporate
Governance and Compensation Committee and
Member of the Audit and Finance Committee.
Age: 65.
</TABLE>
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DIRECTORS WHOSE TERMS WILL EXPIRE IN 2002
----------------------------------------------------------
<TABLE>
<S> <C>
PAUL A. ALLAIRE, Director of Lucent since
[PHOTO] 1996. Chief Executive Officer of Xerox
Corporation (1991-1999). Chairman of the Board
of Xerox Corporation (document processing
services and products) since 1991. Director of
Sara Lee Corp., SmithKline Beecham p.l.c.,
J.P. Morgan & Co. and priceline.com.
Committees: Member of the Audit and Finance
and Corporate Governance and Compensation
Committees. Age: 61.
----------------------------
HENRY B. SCHACHT, Director of Lucent since
[PHOTO] 1996. Chairman of the Board of Lucent from
1996 to 1998. Chief Executive Officer of
Lucent from 1996 to 1997. Chairman (1977-1995)
and Chief Executive Officer (1973-1994) of
Cummins Engine Company, Inc. Director and
Senior Advisor, E.M. Warburg, Pincus & Co.,
LLC. Director of The Chase Manhattan
Corporation and The Chase Manhattan Bank,
N.A., Alcoa Inc., Cummins Engine Company,
Inc., Johnson & Johnson, Knoll, Inc. and The
New York Times Co. Age: 65.
----------------------------
JOHN A. YOUNG, Director of Lucent since 1996.
[PHOTO] Vice-Chairman of Novell, Inc. since 1997.
Retired President and Chief Executive Officer
of Hewlett-Packard Company (manufacturer of
measurement and computation products)
(1978-1992). Vice Chairman of SmithKline
Beecham p.l.c. since 1999. Director of Wells
Fargo Bank, Wells Fargo & Co., Chevron Corp.,
International Integration Incorporated,
SmithKline Beecham p.l.c., Affymetrix, Inc.
and Novell, Inc. Committees: Member of the
Corporate Governance and Compensation
Committee. Age: 67.
</TABLE>
13
<PAGE>
SHARE OWNERSHIP OF MANAGEMENT AND DIRECTORS
----------------------------------------------------------
The following table sets forth information concerning the beneficial
ownership of the company's common stock as of October 1, 1999, for: (a) each
Director and each of the nominees for Director; (b) the four most highly
compensated executive officers who are not also Directors; and (c) the Directors
and executive officers as a group. Except as otherwise noted, the named
individual or family members had sole voting and investment power with respect
to such securities.
<TABLE>
<CAPTION>
COMMON STOCK
AND OPTIONS OTHER
BENEFICIALLY COMMON STOCK
NAME OWNED(1) EQUIVALENTS TOTAL
- --------------------------------- -------------- ------------- ---------------
<S> <C> <C> <C>
(a)
Richard A. McGinn
Paul A. Allaire
Carla A. Hills
Drew Lewis
Paul H. O'Neill
Donald S. Perkins
Henry B. Schacht
Franklin A. Thomas
John A. Young
(b)
(c)
Directors and Executive
Officers as a Group (14 persons)
</TABLE>
FOOTNOTES
(1) No individual Director or nominee for Director or officer identified above
beneficially owns 1% or more of Lucent's outstanding common stock, nor do
the Directors and executive officers as a group. The company does not know
of any person who beneficially owns more than 5% of the outstanding common
stock.
14
<PAGE>
DIRECTORS' PROPOSAL TO APPROVE AN AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
----------------------------------------------------------
The Board of Directors believes that it is in the company's best interest to
approve a proposal to amend the company's certificate of incorporation to
increase the number of shares of common stock the company is authorized to issue
from 6 billion to 10 billion.
As of October 1, 1999, approximately 3.1 billion of Lucent's 6 billion
currently authorized common shares were issued and outstanding. Of the remaining
authorized shares, approximately 800 million were reserved for issuance in
connection with the company's stock-based compensation plans.
During 1998 and 1999, we effected 2-for-1 stock splits following significant
increases in the market price for Lucent stock. In the event the Board
determined that it would again be appropriate to effect a stock split, the
current number of authorized shares of common stock that are not outstanding or
reserved are not sufficient to enable the company to complete another 2-for-1
stock split. Although we cannot guarantee that Lucent's stock price will
continue to rise or that the Board would declare a stock split at any specific
price or at all, the Board believes that the increase in the number of
authorized shares will provide us with the flexibility necessary to maintain a
reasonable stock price through future stock splits (effected in the form of a
stock dividend) without the expense of a special shareowner meeting or having to
wait until the next annual meeting.
During fiscal 1999, Lucent continued to acquire companies as part of its
strategy to broaden its portfolio of product offerings, to augment its
technological capabilities and to expand its geographic markets and distribution
channels. As part of this strategy, we may acquire additional companies for
these and other business reasons. From time to time, we pay for acquisitions
with Lucent stock. The Board believes that the proposed increase in the number
of authorized shares is desirable to maintain the company's flexibility in
choosing how to pay for acquisitions and other corporate actions such as equity
offerings to raise capital and adoption of additional benefit plans. The Board
will determine the terms of any such issuance of additional shares.
15
<PAGE>
If this proposal is approved, all or any of the authorized shares may be
issued without further shareowner action (unless such approval is required by
applicable law or regulatory authorities) and without first offering those
shares to the shareowners for subscription. The issuance of shares otherwise
than on a pro-rata basis to all shareowners would reduce the proportionate
interest in the company of each shareowner.
We have not proposed the increase in the authorized number of shares with
the intention of using the additional shares for anti-takeover purposes,
although we could theoretically use the additional shares to make more difficult
or to discourage an attempt to acquire control of the company.
If this proposal is approved, Section 1 of Article IV of the certificate of
incorporation will be amended to read as follows:
Section 1. The Corporation shall be authorized to issue 10,250,000,000
shares of capital stock, of which 10,000,000,000 shares shall be shares of
Common Stock, $.01 par value ("Common Stock"), and 250,000,000 shares shall be
shares of Preferred Stock, $1.00 par value ("Preferred Stock").
We do not have any current plans, agreements or understandings for stock
issuances which in the aggregate would involve the use of a number of shares
that exceeds the amount currently authorized but unissued.
The Board has unanimously adopted resolutions setting forth the proposed
amendment to the certificate, declaring its advisability and directing that the
proposed amendment be submitted to the shareowners for their approval at the
annual meeting. If adopted by the shareowners, the amendment will become
effective upon filing of an appropriate certificate with the Secretary of State
of the State of Delaware.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREOWNERS VOTE FOR THIS PROPOSAL.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREOWNERS
SPECIFY OTHERWISE IN THEIR PROXIES.
16
<PAGE>
SHAREOWNER PROPOSALS
----------------------------------------------------------
Any shareowner who intends to present a proposal at the annual meeting in
the year 2001 must deliver the proposal to the Corporate Secretary at 600
Mountain Avenue, Murray Hill, NJ 07974, not later than:
- August 24, 2000, if the proposal is submitted for inclusion in our proxy
materials for that meeting pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934
- On or after October 7, 2000 and on or before November 6, 2000, if the
proposal is submitted pursuant to Lucent's by-laws, in which case we are
not required to include the proposal in our proxy materials.
17
<PAGE>
EXECUTIVE COMPENSATION
----------------------------------------------------------
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
AND THE PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY
GENERAL STATEMENT INCORPORATING THIS PROXY STATEMENT INTO ANY FILING UNDER THE
SECURITIES ACT OF 1933 OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO
THE EXTENT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE,
AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
BOARD COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
----------------------------------------------------------------
18
<PAGE>
PERFORMANCE GRAPH
----------------------------------------------------------
The graph below provides an indicator of cumulative total shareowner returns
for Lucent as compared with the S&P 500 Stock Index and the S&P Technology
Sector Index weighted by market value at each measurement point.
This graph covers the period of time beginning April 4, 1996, when Lucent's
common shares were first traded on the New York Stock Exchange, through
September 30, 1999.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TOTAL RETURN (1) LUCENT S&P TECHNOLOGY SECTOR S&P 500 STOCK INDEX
<S> <C> <C> <C>
4/4/96 $100.00 $100.00 $100.00
9/30/96 $150.39 $116.61 $105.98
9/30/97 $267.74 $189.39 $148.84
9/30/98 $456.95 $214.40 $162.31
9/30/99 $857.42 $374.69 $207.43
</TABLE>
<TABLE>
<CAPTION>
APRIL 4, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1996 1997 1998 1999
-------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Lucent............... $100.00 $150.39 $267.74 $456.95 $857.42
S&P Technology
Sector Index....... $100.00 $116.61 $189.39 $214.40 $374.69
S&P 500 Stock
Index.............. $100.00 $105.98 $148.84 $162.31 $207.43
</TABLE>
FOOTNOTES
(1) Assumes $100 invested on April 4, 1996, in Lucent stock, the S&P 500 Stock
Index and S&P Technology Sector and reinvestment of dividends.
19
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
OTHER
NAME ANNUAL RESTRICTED ALL OTHER
AND COMPEN- STOCK SECURITIES LTIP COMPEN-
PRINCIPAL SALARY BONUS SATION AWARD(S) UNDERLYING PAYOUTS SATION
POSITION YEAR ($) ($) ($) ($) OPTIONS ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
Explanatory footnotes begin on page XX
20
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SHARES GRANTED GRANT
UNDERLYING TO DATE
OPTIONS EMPLOYEES EXERCISE PRESENT
GRANTED IN FISCAL PRICE EXPIRATION VALUE
NAME (#) YEAR ($/SH) DATE ($)
- ---- ----------- ----------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR END (#) YEAR END ($)
SHARES ----------------- -----------------
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- ------------ ----------------- -----------------
<S> <C> <C> <C> <C>
</TABLE>
21
<PAGE>
PENSION PLANS
EXECUTIVE EMPLOYMENT
AGREEMENTS AND OTHER RELATIONSHIPS
22
<PAGE>
OTHER MATTERS
----------------------------------------------------------------
On the date this proxy statement went to press, we did not know of any other
matters to be brought before the meeting other than those described in this
proxy statement. If any matters properly come before the meeting that are not
specifically set forth on the proxy card and in this proxy statement, the
persons appointed as proxies will vote on those matters in accordance with their
best judgment.
Whether or not you plan to attend the meeting, please vote over the Internet
or by telephone or mark, sign, date and promptly return the proxy sent to you.
No postage is required for mailing in the United States.
Richard A. McGinn
Chairman of the Board and
Chief Executive Officer
December 21, 1999
23
<PAGE>
***PRELIMINARY PROXY CARD***
DETACH PROXY CARD HERE IF YOU ARE NOT VOTING OVER THE INTERNET OR BY TELEPHONE
- --------------------------------------------------------------------------------
PROXY CARD [LOGO]
- ----------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard A. McGinn, Donald K. Peterson and
Richard J. Rawson, or any of them as proxies, with full power of substitution,
to vote as directed all shares of common stock of Lucent Technologies Inc. the
undersigned is entitled to vote at the 2000 Annual Meeting of Shareowners of
Lucent Technologies Inc. to be held February 16, 2000. This proxy card also
provides voting instructions for Shares held in BUYDIRECT-SM- and, if
registrations are identical, shares held in the various employee stock purchase
and benefit plans as described in the proxy statement. THIS PROXY AUTHORIZE(S)
EACH OF THE PERSONS NAMED ABOVE TO VOTE AT HIS OR HER DISCRETION ON ANY OTHER
MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF. IF
THIS CARD CONTAINS NO SPECIFIC VOTING INSTRUCTIONS, MY (OUR) SHARES WILL BE
VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS.
(Continued, and to be signed and dated on the reverse side.)
<TABLE>
<S> <C>
LUCENT TECHNOLOGIES INC.
P.O. BOX 1162
COMMENTS: NEWARK, NJ 07101-9664
If you have written in the above space, please
mark the comments notification box on the
reverse side.
</TABLE>
<PAGE>
**Preliminary Copy**
/ / **Proxy Card**
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
PROPOSAL 2 AND A VOTE "AGAINST" PROPOSALS 3, 4 AND 5.
1. ELECTION OF DIRECTORS--The Board of Directors recommends a vote "FOR" the
nominees listed below:
/ / FOR / / WITHHOLD AUTHORITY / / EXCEPTIONS
Nominees: 01--Carla A. Hills 02--Drew Lewis
INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the
"Exceptions" box and write that nominee's name in the space provided below.
Exceptions. ____________________________________________________________________
2. DIRECTORS' PROPOSAL--To Approve an Amendment to the Certificate of
Incorporation to Increase Authorized Common Stock.
/ / FOR / / AGAINST / / ABSTAIN
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
/ / I have included comments, or / / I do not wish to receive an / / I plan to attend the Annual / /
have included a change of Annual Report for this Meeting.
address. account at this address.
<S> <C>
/ / I agree to access future
Proxy Statements and Annual
Reports electronically.
</TABLE>
Please sign exactly as name or names
appear on this Proxy. When signing as
attorney, executor, administrator,
trustee, custodian, guardian or
corporation officer, give full title. If
more than one trustee, all should sign.
Dated:____________________________________
__________________________________________
Signature of Shareowner
__________________________________________
Signature of Shareowner
<PAGE>
YOUR VOTE IS IMPORTANT
VOTE BY INTERNET / TELEPHONE
24 HOURS A DAY, 7 DAYS A WEEK
[GRAPHIC]
<TABLE>
<CAPTION>
INTERNET TELEPHONE MAIL
-------- --------- ----
<S> <C> <C>
- - GO TO THE WEBSITE ADDRESS - USE ANY TOUCH-TONE TELEPHONE. - MARK, SIGN AND DATE YOUR PROXY
LISTED ABOVE. CARD.
- - HAVE YOUR PROXY CARD READY. - HAVE YOUR PROXY CARD READY. - DETACH YOUR PROXY CARD.
- - ENTER YOUR CONTROL NUMBER - ENTER YOUR CONTROL NUMBER - RETURN YOUR PROXY CARD IN
LOCATED IN THE BOX BELOW. LOCATED IN THE BOX BELOW. POSTAGE-PAID ENVELOPE
PROVIDED.
- - FOLLOW THE SIMPLE INSTRUCTIONS - FOLLOW THE SIMPLE RECORDED
THAT APPEAR ON YOUR COMPUTER INSTRUCTIONS.
SCREEN.
</TABLE>
<PAGE>
**PRELIMINARY COPY**
ADMISSION TICKET
ANNUAL MEETING OF SHAREOWNERS
FEBRUARY 16, 2000
map and directions to be provided
