UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant |X| Filed by a Party other than the Registrant|_|
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|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (As Permitted
by Rule 14A-6(e)(2))
|_| Definitive Proxy Statement
| | Definitive Additional Materials
|X| Soliciting Material Pursuant to ss.240.14a-12
LUCENT TECHNOLOGIES INC.
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(NAME OF PERSON(S) FILING PROXY STATEMENT IF OTHER THAN THE REGISTRANT)
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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:
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The following material was used by employees of Lucent Technologies Inc.
(the "Company") in connection with the Company's announcement of its financial
results for the third fiscal quarter of 2006:
LUCENT TECHNOLOGIES TODAY NEWSFLASH
Wednesday, July 26, 2006
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In This Issue:
* A Message from Pat Russo
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Dear Colleagues:
This morning we announced our third quarter results, which are
consistent with our July 10th announcement of preliminary results. While there
were some bright spots in the quarter, it was on the whole disappointing and
does not reflect what I know our team can accomplish. Our revenues for the third
quarter, which ended June 30, came in at $2.05 billion, slightly above our
preliminary results announced earlier this month. However, this is a decrease of
4 percent from the second quarter and 12 percent from the year-ago quarter. We
reported earnings of 2 cents per diluted share for the quarter, and thanks to
our continued emphasis on financial discipline across our operations, we
achieved a gross margin rate of 41 percent, despite decreasing revenues and a
less favorable product and geographic mix. Certainly the most significant
negative impact on our performance in 2006 versus 2005 and versus our plan is
the year-over-year declines in China as well as North America, predominately
CDMA, where we are feeling both the impending shifts to next-generation
technologies, as well as some impact from consolidation of our customer base.
Having said that, we all need to remember -- in spite of some comments you may
be reading in the news media -- CDMA continues to represent a large
and sustainable market, there is significant growth in the UMTS market and China
will ultimately issue 3G licenses. It is up to us to capture these market
opportunities. Having pointed to the primary causes of the revenue declines,
it's important to remember there continue to be a number of opportunities for
growth. Our market is large and we continue to invest across our portfolio in
those areas that support our vision of convergence including wireline, wireless,
applications and services. This quarter we enhanced our portfolio in the carrier
Ethernet space with the completion of the Riverstone acquisition and saw the
following pockets of growth:
o Our Services segment grew both sequentially and year-over-year, posting its
highest quarterly revenue for this fiscal year;
o Our Multimedia Network Solutions segment also grew both sequentially and
year-over-year, primarily driven by the data and access businesses. Also it's
important to note that our optical product revenues are growing on a
year-to-date basis;
o And we grew our revenues outside the United States sequentially this quarter,
particularly in Europe.
These are the kind of results that we need to duplicate across the
entire company -- all regions, business units, and product teams. We are a "pay
for performance" company. In '04 and '05, we had strong performance relative to
our plans and delivered good growth on the top and bottom lines. And, in those
years, employees shared in our success through the annual bonus plan. This year,
we included revenue growth as an additional measure to determine annual bonus
funding. This past quarter's results clearly had a negative impact on the
funding level for our end-of-year incentive bonus payments and we needed to
adjust for our year-to-date performance. However, there continues to be an
opportunity to earn some level of bonus funding for 2006 provided we have strong
fourth quarter revenues and earnings. I ask that everyone remain focused on how
you can contribute on a daily basis to helping us achieve our goals. Continued
tight control of all costs and expenses will be a positive contributor to our
overall results. In a separate release issued today with Alcatel, we announced
leaders for some of the critical corporate functions postmerger. Jeong Kim's
responsibilities are unchanged as he will continue as president of Bell Labs.
Alcatel Chief Technology Officer Olivier Baujard, will serve as CTO for the
combined company. Helle Kristoffersen, currently vice president of corporate
strategy for Alcatel, will become the vice president of corporate strategy for
the combined company. Baujard, Kim and Kristoffersen will report to Mike
Quigley, who will serve as president, Science, Technology and Strategy, in the
combined company. Quigley is currently president and chief operating officer of
Alcatel. John Giere, currently chief marketing officer for Lucent, will assume
that post for the combined company. Lucent CIO Elizabeth Hackenson, has been
named to lead the combined company's Information Systems/Information Technology
organization. In addition to overseeing the combined company's overall
integration efforts, Frank D'Amelio will also have reporting to him a number of
key corporate functions and cross-company support organizations, including the
IS/IT organization and the corporate marketing function, which will work very
closely with the regions and business groups. We will continue to keep you
posted as
decisions are made on the leadership team for the combined company. The
integration teams are continuing to work very hard, planning for implementation
once the deal closes, so that the combined company can hit the ground running.
That important work will continue to move forward toward completing the merger
by the end of this calendar year. We will keep you updated on our progress.
Meanwhile, The rest of us need to remain focused on having our business deliver
a strong fourth quarter and preparing for fiscal 2007. I recognize, with the
pending merger, we have a great deal going on. Our charge is to execute our
business, remain focused on those things necessary for a strong finish to this
fiscal year and good momentum to start a new fiscal year. Execution is key. We
must deliver our EV-DO Rev. A and HSDPA rollouts on time and in a manner that
exceeds our customers' expectations. We are currently on track to do that, and
if we do, this can be our highest revenue quarter for the year. Our pending
merger transaction with Alcatel represents an exciting opportunity for us to
create the true global leader in communications networks. Let's do all we canto
build momentum for the combined company. A strong fourth quarter will go a long
way toward achieving that. We gained a first-mover advantage with the
announcement of our merger; now we need to capitalize on that advantage by
focusing on the near term job at hand -- executing with excellence for our
customers, our shareholders and ourselves. I noted earlier that we have a great
deal underway as we run the business and prepare for the proposed merger. I want
to close with an acknowledgement and a sincere thank you for all that you are
doing in many large and small ways to advance our efforts on both of these
fronts.
Sincerely,
Pat
/acp
SAFE HARBOR FOR FORWARD LOOKING STATEMENTS AND OTHER IMPORTANT INFORMATION
This document 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. 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 annual report on Form 10-K for the year ended
September 30, 2005 and quarterly reports on Form 10-Q for the periods ended
December 31, 2005 and March 31, 2006 and Alcatel's annual report on Form 20-F
for the year ended December 31, 2005 as well as other filings by Lucent and
Alcatel with the U.S. Securities and Exchange Commission (the "SEC"). Except as
required under the U.S. federal securities laws and the rules and regulations of
the SEC, Lucent and Alcatel disclaim any intention or obligation to update any
forward-looking statements after the distribution of this document, whether as a
result of new information, future events, developments, changes in assumptions
or otherwise.
IMPORTANT ADDITIONAL INFORMATION FILED WITH THE SEC
In connection with the proposed transaction between Lucent and Alcatel, Alcatel
has filed a registration statement on Form F-4 (File no. 33-133919) (the "Form
F-4") to register the Alcatel ordinary shares underlying the Alcatel American
Depositary Shares ("ADS") to be issued in the proposed transaction. Alcatel and
Lucent have also filed, and intend to continue to file, additional relevant
materials with the SEC, including a registration statement on Form F-6 (the
"Form F-6" and together with the Form F-4, the "Registration Statements") to
register the Alcatel ADSs to be issued in the proposed transaction. The
Registration Statements and the related proxy statement/prospectus contain and
will contain important information about Lucent, Alcatel, the proposed
transaction and related matters. Investors and security holders are urged to
read the Registration Statements and the related proxy statement/prospectus
carefully, and any other relevant documents filed with the SEC, including all
amendments, because they contain important information. Investors and security
holders may obtain free copies of the documents filed with the SEC by Lucent and
Alcatel (including the Form F-4 and, when filed, the Form F-6) through the web
site maintained by the SEC at www.sec.gov. In addition, investors and security
holders may obtain free copies of materials filed with the SEC by Lucent and
Alcatel (including the Form F-4 and, when filed, the Form F-6) 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 is included in the Form F-4 (and will be included in the
definitive proxy statement/prospectus for the proposed transaction). 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 is included in the Form F-4 (and will be included in the
definitive proxy statement/prospectus for the proposed transaction). Additional
information regarding these directors and executive officers is also included in
Alcatel's annual report on 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.