EXHIBIT 10.IIIA14

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To: Janet Davidson

 
From: Henry Schacht

 
Date: January 23, 2001

 
Re: Officer Severance Policy

 
 
This is a challenging time for our company. While I am confident in our ability
to successfully work through the issues we are facing, I am also aware that our
current business climate creates an uncertainty and raises concerns that could
distract you from the turnaround work at hand. To address such concerns, I’m
pleased to inform you that the Board of Directors has approved your eligibility
for enhanced severance coverage in the event your employment is terminated by
Lucent for reasons other than “cause.” This new severance benefit does not apply
to all officers, so I ask that you keep your eligibility confidential.

The severance benefit provides for continuation of salary and target bonus for
24 months if certain events occur. During this 24-month period, your stock
options and restricted stock units will continue to vest. In addition, your
coverage under many of Lucent’s benefit plans, including the medical, dental,
stock purchase and savings plans, will continue as normal. The attached outline
provides further detail of the new severance benefit. If you have any questions
about the terms and conditions of the new severance benefit, please contact Pam
Kimmet at 908-582-8557.

Challenging times can be the most satisfying and rewarding times of our
professional lives. With your help we can take our company to new levels of
success.

 
 
 
 
Attachment

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Attachment

Officer Severance Policy

Eligibility
•  Lucent or Agere Officer status
• Participation for new officers is contingent upon Board/CEO approval
• Company initiated termination, other than for “Cause” as defined on page 2
• Contingent upon signing the standard, Lucent Release Agreement (including
non-compete, non-solicitation provisions)
• All payments and benefits listed below will be offset by any individually
negotiated or legally required arrangement
Leave of
Absence
Payment
•  24 months of base salary and target bonus
• Base salary will be paid monthly. Target bonus will be paid annually in
December. Both payments are benefits bearing.
Equity
Stock Options
•  Options continue vesting as scheduled during the 24 month period.
• At end of the 24 month period, your employment will end and options will
follow normal termination provisions:
-Pension eligible – Keep vested remainder of term; unvested options cancel
-Not Pension eligible – 90 days to exercise vested; unvested options cancel
Restricted Stock
• Restricted stock continues vesting as scheduled during the 24 month period.
ESPP
• Your participation will continue through payroll deductions.

Retirement
Benefits
Service Pension
Retirement eligible: Your severance pay will count towards your pension. Pension
payments begin after termination of this arrangement.
Not retirement eligible: Deferred vested employees can elect to begin payment at
the termination of this arrangement. The severance period can be used to accrue
service/age toward achieving pension eligibility.
Cash Balance Pension
•  Severance pay will count towards the cash balance plan. The cash balance is
payable at the end of the 24 month period or later at employee election.
401(k)
• Payroll deductions continue
Health and
Welfare
Benefits
•  Medical, Dental, Disability, Life Insurance, Car Allowance, Financial
Counseling benefits continue the same as actively employed Officers.
• Company credit cards, home office equipment, voice mail and e-mail will be
cancelled at the beginning of the 24 month period.

Termination
Provisions
•  In the event you need to terminate this arrangement during the 24 month leave
period for any reason (including conflict with another employer), the Company
may approve the payment of the remaining amount of base salary and target bonus
in a lump sum. The normal “voluntary” termination provisions for the stock and
benefit plans will apply.

 

Lucent Technologies Proprietary (Restricted)
Solely for Authorized Persons Having a Need to Know Pursuant to Company
Instructions

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Page 2

Officer Severance Policy

Change in
Control
Provisions
•  Upon or after a Change in Control (as defined in the 1996 Long Term Incentive
Program or its successor plan as in effect immediately before the Change in
Control) this policy will remain in effect.
• Upon or after a Change in Control (as defined in the 1996 Long Term Incentive
Program or its successor plan as in effect immediately before the Change in
Control), you will also be entitled to the benefits of this policy if you
terminate your employment within three months of an event constituting Good
Reason. Good Reason is defined as follows:
   (i)  the assignment to you by the Board of Directors or another
representative of the Company of duties which represent a material decrease in
responsibility and are materially inconsistent with the duties associated with
your position, any reduction in your job title, or a material negative change in
the level of Officer to whom you report, or
  (ii)  a material negative change in the terms and conditions or your
employment, including a reduction by the Company of your annual base salary or a
material decrease in your target opportunity for a Short Term Incentive Award,
or
  (iii)  the requirement to change your work location to one in a different
country, even for a comparable or superior position.

 

 
“Cause” is defined as:

(i)
  violation of Lucent’s code of conduct, Business Guideposts;

(ii)
  conviction of (including a plea of guilty or nolo contendere) of a felony or
any crime of theft, dishonesty or moral turpitude, or

(iii)
  gross omission or gross dereliction of any statutory or common law duty of
loyalty to Lucent.

Lucent Technologies Proprietary (Restricted)
Solely for Authorized Persons Having a Need to Know Pursuant to Company
Instructions

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