1 (10) (iii) (A)5
Consulting Agreement of Xx. Xxxxxxx effective March 1, 1998
March 1, 1998
Xx. Xxxxx X. Xxxxxxx
Dear Xxxxx,
I am writing this letter to set out the details of our agreement with respect to
your retention by Lucent Technologies Inc. (the "Company") as an independent
consultant and the benefits to be provided to you by the Company after your
retirement as Chairman of the Board of the Company.
Because of the contributions which you have made to the Company since its
formation and your extensive knowledge and contacts concerning the Company's
business both within and outside the United States, the Company wishes to have
the opportunity to consult with you in the future with respect to various
matters within your expertise. Accordingly, we have offered, and you have
accepted, a consulting arrangement on the terms and conditions set forth below.
1. Scope of Engagement
(a) Your termination of employment with the Company will become
effective February 28, 1998, and shall not affect your status as a member of the
Board of Directors of the Company.
(b) Commencing March 1, 1998, and continuing for twelve months until
February 28, 1999, the Company shall retain you in the capacity of an
independent contractor to provide it with consulting services as follows:
i. The Company agrees to cause you to be elected as, and you
agree to serve as, Chairman of the Board of Lucent Venture Partners Inc.
("LVPI"), a wholly-owned subsidiary of the Company formed in February 1998 for
the purpose of making venture capital investments in enterprises in the
Company's field of business. As Chairman of the Board of LVPI, you will attend
such number of meetings and perform such other duties as the Board of LVPI shall
determine, such duties to be customary with those normally associated with the
office of chairman of the Board of a venture capital fund of comparable size and
scope.
ii. The Company agrees to retain you, and you agree to provide
services to the Company, at such times as you and the Company shall mutually
agree, with respect to the development, for the benefit of the Company's
business, of opportunities in the communications equipment markets of India and
Russia. Such consultation shall include, as reasonably requested by the Company,
travel, to one or both such markets or to other destinations in furtherance of
the Company's opportunities in such markets. The Company agrees to give you
reasonable notice of its requests for travel outside the United States.
iii. Although the Company reserves the right to determine when
and if to seek to consult with you, this agreement is understood by you to
require your personal services and is not assignable.
(c) As consideration for your services pursuant to the consulting
arrangements, as well as the other terms of this agreement, the Company will pay
you compensation as described in subparagraphs i and ii and, in conjunction with
such services, the Company will provide you with the accommodations described in
paragraphs iii and iv.
2 (10) (iii) (A)5
i. For your service as Chairman of the Board of LVPI from March
1, 1998 through February 28, 1999, you shall receive the amount of $150,000,
payable in cash, in quarterly installments of $37,500, beginning March 1,1998;
ii. For your services as consultant in connection with developing
the Company's business opportunities in India and Russia for the period from
March 1, 1998 through February 28, 1999, you shall receive the amount of
$200,000, also payable in cash, in quarterly installments of $50,000, beginning
March 1, 1998.
iii. You will be entitled to First Class airline accommodations
while traveling on Company business in connection with either of your consulting
assignments and will receive reimbursement for your associated travel and
out-of-pocket business expenses according to the Company's policies for expense
reimbursement for members of the Company's Office of the Chief Executive. In
addition, you may make use of the Company's aircraft when such aircraft is
available in connection with the performance of your services in either capacity
according to the same policies as apply to members of the Company's Office of
the Chief Executive.
iv. In order to facilitate your consulting services, the Company
shall make available to you at no cost to you, (A) office space at the Company's
facility at 00 Xxx Xxxx, Xxx Xxxx, Xxx Xxxx or at another Company location in
New York, New York determined by the Company. Such office space shall include
accommodations for yourself and a secretary, including access to conference
rooms available at such facility, and shall be equipped with personal computers,
electronic mail and Internet access capability, and reproduction, facsimile and
other customary office equipment and services as are also made available
generally at such facility and (B) secretarial service mutually satisfactory to
you and the Company as is required to support your consulting assignments. Also,
you may use both the office and secretarial support in connection with your
other business and investment activities. In addition, after the conclusion of
your consulting assignment, and notwithstanding the termination of this
agreement, the Company agrees to furnish you as a former Chairman of the Board
of the Company with office space and secretarial support at a mutually agreed
location for the period during which you have an active need for such space and
support.
2. Compensation and Benefit Plans
Attachment A summarizes your treatment under the various Company
compensation and benefit programs upon your termination of employment. Reference
should be made to the benefit plan documents and your award agreements for the
complete description of your benefits. Nothing contained in this agreement
affects your compensation or benefits as a member of the Company's Board of
Directors, which shall be administered in accordance with the benefit plans,
policies and practices applicable to directors of the Company from time to time
in effect, as approved by the Board of Directors.
3 (10) (iii) (A)5
3. Non-Compete and Confidentiality
At the same time, because the employment relationship between you and
the Company will terminate, we are also asking, as part of the consideration for
receipt of the compensation described in this letter, that you agree: (i) that
the terms of Paragraph 4 of your Non-Statutory Stock Option Agreement dated
October 6, 1997, with respect to activities in competition with the Company will
apply during the term of this agreement; (ii) to treat any proprietary or
confidential information that relates to the Company's business in accordance
with the Company's policies for handling confidential and proprietary
information; and (iii) to promptly bring to the Company's attention for its
consideration and action any corporate opportunities that you identify during
your consulting, such as new businesses, acquisitions, joint ventures, and the
like, in areas of present or anticipated interest to the Company.
4. Early Termination of Agreement
This agreement may be terminated by you or the Company at any time for
any reason whatsoever and will be terminated in the event of your death, and in
either event your compensation under this agreement shall terminate. Your
obligations under paragraph 3, however, will survive any termination of this
agreement, as set forth therein. Termination of the agreement will not affect
your rights or the rights of any beneficiary under any benefit plan of the
Company.
5. Severability
In the event that any one or more of the provisions of this agreement is
or are held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
6. Entire Agreement/Choice of New Jersey Law
This letter sets forth the entire agreement between us with respect to
the terms and conditions of your becoming a consultant to the Company but does
not supersede any Company benefit plan or award agreement between you and the
Company except as expressly agreed herein. When signed by you and a duly
authorized representative of the Company, this agreement shall become legally
binding on all parties hereto. In the case of a dispute as to its meaning, this
agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey.
After you have carefully reviewed this letter, please sign the enclosed
copy and return it to me.
My best,
/s/ Xxxxxxx X. XxXxxx
Xxxxxxx X. XxXxxx
Chairman and Chief Executive Officer
The above Letter Agreement is Agreed to:
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
0 (00) (xxx) (X)0
Att. A
Private
LUCENT OFFICER COMPENSATION AND BENEFIT SUMMARY
FOR
XXXXX XXXXXXX
EFFECTIVE 02/28/98
Benefit Programs/Plans
Health Insurance Plans:
Medical and Dental Coverage will continue under the medical and
dental care plans for management employees
for an indefinite period. Lucent will xxxx
you for the full cost of the premiums, and
such coverage will be secondary to your
coverage through Cummins Engine Company and
Medicare.
Long Term Disability Coverage will terminate 2/28/98.
Short Term Incentive Lucent Award: Will be prorated for time on
payroll. Payable December 1998.
Individual Award: Will be prorated for time
on payroll. Payable December 1998.
Long Term Awards
Stock Options Fully vested for the remainder of the term.
Special Equity Grant Fully vested for the remainder of the term.
325,000 options remaining
Performance Cash
1997-1999 Cycle Payout, December 1999
1998-2000 Cycle Payout, December 2000
Stock Units (1996-1998) Payout, January 1999
24,903 units
Deferred Compensation Long Term Deferral: Current Value $7,866.65.
(Dividends on long term
incentive from the
1996-1998 three year
cycle).
Lucent Technologies - Proprietary (Restricted)
Solely for Authorized Persons Having a Need to Know Pursuant to Company
Instructions
Private
5 (10) (iii) (A)5
LUCENT OFFICER COMPENSATION AND BENEFIT SUMMARY
FOR
XXXXX XXXXXXX
EFFECTIVE 02/28/98
Benefit Programs/Plans
Insurances:
Officer Basic Life Insurance agents will be notified of
Insurance termination date (2/28/98). Agents will
forward an analysis for continuation of
coverage. May continue policy by paying
premiums based on alternatives of
continuation. The Trust will have to act on
the continuation of the policy.
Officer Individual Life Insurance agents will be notified of
Insurance termination date (2/28/98). Agents will
forward an analysis for continuation of
coverage. May continue policy by paying
premiums based on alternatives of
continuation. The Trust will have to act on
the continuation of the policy.
Officer Life Insurance Premiums are fully paid. Will receive
Option Plan (estate imputed income each year for the lifetime of
enhancement plan) both himself and Xxx. Xxxxxxx.
Accidental Life The Company paid coverage (1X salary) will
Insurance terminate at end of month (2/28/98). No
conversion policy available.
Financial Counseling Coverage will continue for one year.
Long Term Savings Plan
(401k) May elect distribution at time of
termination; or may leave in 401k account
until 70 1/2 years of age, when the minimum
distribution is required.
Telephone Reimbursement Coverage terminates at end of month
(2/28/98).
Vacation Will receive pay in-lieu of 31 unused
vacation days.
Lucent Technologies - Proprietary (Restricted)
Solely for Authorized Persons Having a Need to Know Pursuant to Company
Instructions
