Exhibit 10.29
XXXXXXX X. XXXXXXXXX, XX. 6C316
VP - Global Tax & Trade 000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
000-000-0000
FAX 000-000-0000
March 4, 2002
Agere Systems Inc.
Xx. Xxxx X. Xxxxxxxxxx, Xx.
0 Xxx Xxx, Xxxx 0XX00
Xxxxxxxx Xxxxxxx, XX 00000
RE: Tax Sharing/Certain Restructuring Adjustments
Dear Xxxx,
This letter confirms the agreement reached between Lucent Technologies Inc.
(Lucent) and Agere Systems Inc. (Agere) with respect to the treatment of certain
Restructuring Adjustments under the Tax Sharing Agreement ("TSA") by and between
Lucent and Agere dated as of February 1, 2001. We have agreed, notwithstanding
any provisions of the TSA to the contrary, as follows:
1) The terms of this letter shall apply only to Restructuring Adjustments
(as defined in the TSA, except that for the purpose of paragraph 4 of
this letter Restructuring Adjustments will include increases in taxes
made on amended returns) of federal income tax and state and local
income tax relating to transactions undertaken outside the United
States in order to restructure Lucent's international holdings in
preparation for the Agere spin-off, other than Restructuring
Adjustments resulting from the disqualification of any of these
transactions as tax-free pursuant to section 355 of the Internal
Revenue Code. (Restructuring Adjustments that are the subject of this
letter are hereinafter referred to as "Specified Adjustments").
2) Solely with respect to Specified Adjustments the amount referred to in
section 2.3 (a) of the TSA shall be increased to $79 million. In the
event of a Specified Adjustment, this $79 million shall be reduced
dollar for dollar by the portion, if any, of the $50 million referred
to in section 2.3(a) of the TSA that has been or is concurrently used
to satisfy Restructuring Adjustments. Similarly, in the event Agere
makes a payment relating to a Specified Adjustment, any amount paid in
excess of $29 million shall be applied on a dollar for dollar basis to
reduce any remaining portion of the $50 million referred to in section
2.3(a) of the TSA.
3) The amount of any Specified Adjustment will be reduced by Correlative
Adjustments (as defined in the TSA) due to Xxxxxx's foreign tax credits
only when and to the extent that such credits are actually used by
Lucent to reduce its federal income tax liability. Such reduction in
the amount of a Specified Adjustment will occur even if the credits are
utilized after a Final Determination (as defined in the TSA) on the
Specified Adjustment is received. In calculating the amount of such
Correlative Adjustments, Xxxxxx's foreign tax credits will be
considered carried forward from the earliest year eligible until those
carry forwards are exhausted and then from the next succeeding year and
so on, and foreign tax credits from the same year will be considered
utilized pro rata. Any payment to Agere resulting from the utilization
of a foreign tax credit that constitutes a Correlative Adjustment after
the receipt of a Final Determination with regard to a Specified
Adjustment will be promptly paid by Lucent after its utilization of
such credit.
4) In event that Lucent disposes of Agere in a manner other than a spin
off described in sections 355(a) or 368(a) of the Internal Revenue
Code then the Specified Adjustments will be the sole obligation of
Lucent.
Please acknowledge your concurrence with and receipt of this letter by
signing and dating in the space provided below.
Very truly yours,
Xxxxxxx X. Xxxxxxxxx, Xx.
Agreed for
Agere Systems Inc.
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Xxxx X. Xxxxxxxxxx, Xx.
Vice President Tax & Tax Counsel
