EXHIBIT 10(iii)(A)(7)
LUCENT TECHNOLOGIES INC. DEFERRED COMPENSATION
PLAN
Amended through December 18, 2002
Preamble
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Effective
October 1, 1996, Lucent Technologies Inc. (the
“Company”) established the Lucent Technologies Inc.
Officer Incentive Award Deferral Plan and the Lucent Technologies
Inc. Deferred Compensation Plan for Non-Employee Directors, each of
which was merged into the Lucent Technologies Inc. Deferred
Compensation Plan (the “Plan”) in July 1997. The Plan
is intended to constitute an unfunded, deferred compensation plan
maintained primarily for a select group of management or highly
compensated employees and for members of the Board of Directors who
are not employees of the Company. The purpose of the Plan is to
provide a means by which eligible employees and non-employee
Directors may defer the receipt of certain forms of compensation
while at the same time giving the Company the present use of the
compensation so deferred. The Plan is intended to be an employee
pension benefit plan within the meaning of Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended. The
Plan is not a qualified plan under Section 401(a) of the Internal
Revenue Code of 1986, as amended. Benefits under the Plan are paid
directly by the Company out of its general assets when due. The
Plan has been amended and restated as set forth herein effective as
of December 18, 2002 to prohibit any future deferrals under the
Plan after December 31, 2002 except for stock-based deferrals by
the Company’s non-employee Directors.
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Definitions.
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As
used in the Plan, the following terms shall have the meanings set
forth below:
(a) “1996
Program” shall mean the Lucent Technologies Inc. 1996 Long
Term Incentive Program.
(b) “Account”
shall mean, for each Participant, such Participant’s Deferred
Cash Equivalent Account and Deferred Share Equivalent
Account.
(c) “Administrator”
shall mean the Senior Vice President — Human Resources of the
Company.
(d) “Affiliate”
shall mean (i) any Person that directly, or through one or more
intermediaries, controls, or is controlled by, or is under common
control with, the Company or (ii) any entity in which the Company
has a significant equity interest, as determined by the
Committee.
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(e) “Beneficiary
Election” shall mean a written instrument, in a form
prescribed by the Administrator, relating to elections under
Section 5.
(f) “Board”
shall mean the Board of Directors of the Company.
(g) “Change
in Control” shall mean the happening of any of the following
events:
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(1)
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An acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) (an “Entity”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (A) the then outstanding
shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the “Outstanding
Company Voting Securities”); excluding, however, the
following: (1) any acquisition directly from the Company,
other than an acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted was itself
acquired directly from the Company, (2) any acquisition by
the Company, (3) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (4) any acquisition by
any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (3) of this Section 1(g);
or
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(2)
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A change in the Composition of
the Board during any two year period such that the individuals who,
as of the beginning of such two year period, constitute the Board
(such Board shall be hereinafter referred to as the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided , however
, that for purposes of this definition, any individual who becomes
a member of the Board subsequent to the beginning of the two year
period, whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a
majority of those individuals who are members of the Board and who
were also members of the Incumbent Board (or deemed to be such
pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Board; and
provided further , however , that any such
individual whose initial assumption of office occurs as a result of
or in connection with a solicitation subject to Rule 14a-12(c) of
Regulation 14A promulgated under the Exchange Act or other actual
or threatened solicitation of proxies or consents by or on behalf
of an Entity other than the Board shall not be so considered as a
member of the Incumbent Board; or;
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(3)
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The approval by the shareowners
of the Company of a merger, reorganization or consolidation or sale
or other disposition of all or substantially all of the assets of
the Company (each, a “Corporate Transaction”) or, if
consummation of such Corporate Transaction is subject, at the time
of such approval by shareowners, to the consent of any government
or governmental agency, the obtaining of such consent (either
explicitly or implicitly by consummation); excluding however, such
a Corporate Transaction pursuant to which (A) all or substantially
all of the individuals and entities who are the beneficial owners
of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Corporate Transaction
will beneficially own, directly or indirectly, more than 60% of the
outstanding shares of common stock, and the combined voting power
of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation resulting
from such Corporate Transaction (including, without limitation, a
corporation or other Person which as a result of such transaction
owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries (a
“Parent Company”)) in substantially the same
proportions as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, (B) no Entity (other than
the Company, any employee benefit plan (or related trust) of the
Company, such corporation resulting from such Corporate Transaction
or, if reference was made to equity ownership of any Parent Company
for purposes of determining whether clause (A) above is satisfied
in connection with the applicable Corporate Transaction, such
Parent Company) will beneficially own, directly or indirectly, 20%
or more of the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the
combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of directors
unless such ownership resulted solely from ownership of securities
of the Company prior to the Corporate Transaction, and (C)
individuals who were members of the Incumbent Board will
immediately after the consummation of the Corporate Transaction
constitute at least a majority of the members of the board of
directors of the corporation resulting from such Corporate
Transaction (or, if reference was made to equity ownership of any
Parent Company for purposes of determining whether clause (A) above
is satisfied in connection with the applicable Corporate
Transaction, of the Parent Company); or
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(4)
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The approval by the shareowners
of the Company of a complete liquidation or dissolution of the
Company.
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(h) “Change
in Control Election” shall mean a written instrument, in a
form prescribed by the Administrator, relating to elections under
Section 7.
(i) “Code”
shall mean the Internal Revenue Code of 1986, as
amended.
(j) “Committee”
shall mean the Corporate Governance and Compensation Committee of
the Board (or any successor committee).
(k) “Company”
shall mean Lucent Technologies Inc.
(l) “Deferral
Election” shall mean a written election, in a form prescribed
by the Administrator, to defer receipt of Incentive Awards or
Retainer Payments otherwise payable to a Participant.
(m) “Deferred
Cash Equivalent Account” shall mean a book-entry account in
the name of a Participant maintained in the Company’s records
with entries denominated in dollars.
(n) “Deferred
Share Equivalent Account” shall mean a book-entry account in
the name of a Participant maintained in the Company’s records
with entries denominated in Share equivalents.
(o) “Director”
shall mean any non-employee member of the Board.
(p) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as
amended.
(q) “Eligible
Member” shall mean an Officer, a Director, Other Participant
or a participant in either Predecessor Plan or another person or
group of employees who is designated by the Administrator as an
Eligible Member.
(r) “Fiscal
Year” shall mean the period commencing October 1 and ending
on the next succeeding September 30, or such other period as the
Company may from time to time adopt as its fiscal year.
(s) “Incentive
Award” shall mean any award under the Short Term Plan, any
other bonus payment (including sales compensation plans), any
performance awards, stock unit awards or other awards under the
1996 Program (other than options) and any dividend equivalent
payment under the 1996 Program.
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(t) “NYSE”
shall mean the New York Stock Exchange, Inc.
(u) “Officer”
shall mean any employee of the Company or any of its Affiliates
holding a position evaluated or classified above the executive
(“E-band”) level or its equivalent, and identified in
the Company’s records as an officer of the Company (including
an Officer who was a participant in any Predecessor
Plan).
(v) “Other
Participant” shall mean any employee of the Company or any of
its Affiliates (1) holding a position evaluated or classified at or
above the “D-Band” level or its equivalent, and
identified in the Company’s records as affected by the
limitations on covered compensation described in Section 401(a)(17)
of the Code or the limitations on benefits described in Section 415
of the Code or who has an Account with a positive balance, or (2)
holding a position evaluated or classified at or above the
“E-Band” level or its equivalent, in either case, only
if the Administrator determines that such group of employees shall
be eligible to participate in the Plan.
(w) “Participant”
shall mean an Eligible Member who delivers a Deferral Election to
the Company or who receives a Savings Plan Make-Up Credit. A person
shall not cease being a Participant if the person ceases being an
Eligible Member, if the person has an Account with a positive
balance.
(x) “Participating
Company” shall mean the Company and any of its
Affiliates.
(y) “Payment
Election” shall have the meaning set forth in Section
6(a).
(z) “Person”
shall mean any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, limited
liability company, other entity or government or political
subdivision thereof.
(aa) “Plan”
shall mean this Lucent Technologies Inc. Deferred Compensation
Plan.
(bb) “Plan
Year” shall mean each twelve (12) consecutive month period
commencing January 1 and ending on December 31 of the same calendar
year.
(cc) “Potential
Change in Control” shall mean:
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(1)
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the commencement of a tender or
exchange offer by any third person which, if consummated, would
result in a Change in Control;
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(2)
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the execution of an agreement by
the Company, the consummation of which would result in the
occurrence of a Change in Control;
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(3)
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the public announcement by any
person (including the Company) of an intention to take or to
consider taking actions which if consummated would constitute a
Change in Control other than through a contested election for
directors of the Company; or
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(4)
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the adoption by the Board, as a
result of other circumstances, including, without limitation,
circumstances similar or related to the foregoing, of a resolution
to the effect that a Potential Change in Control has
occurred.
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A Potential Change in Control
shall be deemed to be pending until the earliest of (i) the second
anniversary thereof, (ii) the occurrence of a Change in Control and
(iii) the occurrence of a subsequent Potential Change in
Control.
(dd) “Predecessor
Plans” shall mean the Lucent Technologies Inc. Officer
Incentive Award Deferral Plan and the Lucent Technologies Inc.
Deferred Compensation Plan for Non-Employee Directors.
(ee) “Retainer
Payments” shall mean any amounts payable to a Director for
service as a Director.
(ff) “Savings
Plan” shall mean the Lucent Technologies Inc. Long Term
Savings Plan for Management Employees.
(gg) “Savings
Plan Make-Up Credit” shall mean, for any Eligible Member, and
for any Plan Year ended before January 1, 2000, an amount equal to
the excess, if any, of the value of the contribution that would
have been made by the Company for the applicable Plan Year on
behalf of the Eligible Member under Section 4.4 of the Savings Plan
or any similar provision under any similar plan of the Company,
without regard to any limitation imposed by Sections 401(a)(17),
401(m)(2)(A) or 415 of the Code, over the contribution actually
made to the Savings Plan pursuant to such Section 4.4, or to such
other plan pursuant to such similar provision, for the applicable
Plan Year.
(hh) “Shares”
shall mean the shares of common stock, $.01 par value, of the
Company.
(ii) “Short
Term Plan” shall mean the Lucent Technologies Inc. Short Term
Incentive Plan.
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Section
2. Deferral Elections.
(a)
Delivery and Effectiveness of Deferral Elections . Effective
December 18, 2002, a Participant who is an Officer or an Other
Participant shall not have the right to defer receipt of Incentive
Awards. A Participant who is a Director may elect to defer
receipt of the stock portion (but not the cash portion) of his or
her Retainer Payments otherwise payable to such Participant in
future Fiscal Years by delivering a Deferral Election to the
Company not later than June 30 preceding the Fiscal Year in which
the Deferral Election is to become effective or such other time as
the Administrator shall determine. A Deferral Election shall become
irrevocable for a Fiscal Year at the end of the last day of the
preceding Fiscal Year or, if later, on the date made. A deferral
election under a Predecessor Plan that has not been terminated
shall be deemed a Deferral Election for purposes of the Plan.
During the period that a Deferral Election is effective, the
Participant shall not be entitled to receive currently payments
covered by such Deferral Election. The Company shall instead make
credits to the Participant’s Account in accordance with
Section 3.
(b)
Contents of Deferral Elections . Each Deferral Election
shall specify the types of compensation which shall be subject to
such Deferral Election and the effective date of the Deferral
Election and shall contain the Participant’s Payment
Election. A Deferral Election may also contain the date on which
the Deferral Election is to terminate.
(c)
Modification and Renewal of Deferral Elections . A Deferral
Election shall remain effective until the Participant terminates or
modifies such election by written notice to the Company. Any such
termination or modification shall become effective immediately
following the end of the Fiscal Year in which such notice is given.
A Participant who has terminated a Deferral Election may, so long
as such Participant remains an Eligible Member or has an Account
with a positive balance, thereafter file a new Deferral Election in
accordance with Section 2(a).
(d)
Deferral of Incentive Awards . A Deferral Election may
relate to all or any portion of the Incentive Awards otherwise
payable to a Participant. If the amount of the part of any
Incentive Award (other than dividend equivalent payments) subject
to a Deferral Election is less than $1,000 (based on a valuation at
the time the award would otherwise be paid), that Incentive Award
will be paid currently and no credit relating to such Incentive
Award will be made under the Plan.
(e)
Deferral of Retainer Payments . A Director’s Deferral
Election shall relate to the stock portion of the Retainer Payments
otherwise payable to the Director. Notwithstanding Section 2(a), a
newly-elected Director may deliver a Deferral Electi
