EX-10.III.A.7



 





Exhibit
10(iii)(A)7









LUCENT TECHNOLOGIES INC. 2003 LONG TERM INCENTIVE PROGRAM (“PLAN”)

PERFORMANCE AWARD AGREEMENT




	 	 	 
	Name
	 	Lucent HRID
	 	 	 
	«First_Name» «Last_Name»
	 	«HRID»
	 	 	 
	 
	 	 	 
	Performance Period
	 	Issuance Date
	 	 	 
	October 1, 2005 through September 30, 2008
	 	«Cash_LTIP_Issuance_Date»






     Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan.


You have been granted, as of the Issuance Date set forth above, a Performance Award in the
amount of <shares> Lucent Technologies Inc. (“Lucent”) common shares (“Shares”), par value
$0.01 of Lucent if all target performance levels during the Performance Period are achieved ( the
“Target Award”). The Performance Period for this Performance Award begins October 1, 2005 and
ends September 30, 2008.





	1.	 	Performance Award Amount. Except as provided below, distribution of Shares under
this Performance Award, if any, will be made following the close of the Performance Period and
on or before December 15, 2008. The Committee will determine the performance criteria that
will apply to each fiscal year included in the Performance Period. The determination of
whether, and to what extent, such criteria are satisfied, and the determination of the
percentage, if any, of the Performance Award to be distributed to you, will be conclusively
determined by the Committee. The actual Performance Award amount will be equal to the sum of
each fiscal year amount where each fiscal year amount is calculated as follows:
	 
	 	 	     A x T/N x C/M,
	 
	 	 	where:





	 	 	 
	A =

	 	Actual performance criteria percentage achieved for such fiscal year
	 
	 	 
	T =

	 	Target Award amount in Shares subject to this Performance Award
	 
	 	 
	N =

	 	Number of fiscal years in the Performance Period of this Performance Award
	 
	 	 
	C =

	 	Number of calendar months (with any partial month considered as a full month) in such fiscal year during which you were eligible for this Performance Award in accordance with section 3 below
	 
	 	 
	M =

	 	Number of calendar months covered by this Performance Award in such fiscal year







	 	 	The Shares distributed for the third fiscal year of the Performance Period will be in the form
of Restricted Stock Units, and will be subject to a one-year vesting period, commencing no later
than December 15, 2008.






	2.	 	Termination of Employment.






	 	(a)	 	Except as provided below with respect to terminations of employment by reason of
Company Action, death, Disability or Retirement, upon your termination of employment with
Lucent for any reason prior to the day on which the Performance Award, if any, is
distributed, this Performance Award will be immediately forfeited and canceled in its
entirety. You will not be eligible for any distribution under this Performance Award.
	 
	 	(b)	 	In the event of the termination of your employment by reason of Company Action, death
or Disability during the Performance Period, no month following the month of your Company
Action, death or Disability will be considered an eligible month for purposes of Section
1 above. Your Performance Award, if any, will be distributed following the close of the
fiscal year during which your termination of employment occurred, and you will not be
eligible for any distribution under this Performance Award for any subsequent fiscal year
remaining in the Performance Period.
	 
	 	(c)	 	In the event of the termination of your employment by reason of Retirement during the
Performance Period, no month following the month of your Retirement will be considered an
eligible month for purposes of Section 1 above. Your Performance Award, if any, will be
distributed following the close of the Performance Period, and you will not be eligible for
any distribution under this Performance Award for any subsequent fiscal year remaining in
the Performance Period. If your employment terminates under circumstances constituting
both a Company Action and Retirement, this Performance Award will follow the provisions
under paragraph (b) above for termination of employment by reason of Company Action.
	 
	 	(d)	 	In the event your employment is terminated under the terms of the Officer Severance
Program, for reasons other than Cause, any months following the month of such event will
not be considered eligible months for purposes of Sections 1 and 2. Your Performance
Award, if any, for the fiscal year during which your employment is terminated, will be
distributed in the amount of A x T/N x C/M, as defined in Section 1,




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	 	 	 	following the close of such fiscal year, and you will not be eligible for any distribution
under this Performance Award for any subsequent fiscal year remaining in the Performance
Period.
	 
	 	(e)	 	In the event you are placed on a company initiated leave of absence, as defined in the
Officer Severance Program, for reasons other than Cause, any months following the month of
such event will not be considered eligible months for purposes of Sections 1 and 2. Your
Performance Award, if any, for the fiscal year during which you are placed on a company
initiated leave of absence, will be distributed in the amount of A x T/N x C/M, as defined
in Section 1, following the close of the fiscal year during which your leave of absence
terminated, and you will not be eligible for any distribution under this Performance Award
for any subsequent fiscal year remaining in the Performance Period.
	 
	 	(f)	 	In the event of the termination of your employment at any time for Cause or for
unsatisfactory performance as determined in accordance with the Company’s policy, this
Performance Award will be immediately forfeited and canceled in its entirety. You will not
be eligible for any distribution under this Performance Award.
	 
	 	(g)	 	It shall not be considered a termination of your employment if you (i) transfer between
Lucent and any Affiliate or (ii) are placed on an approved leave of absence. It shall be
considered a termination of your employment if your employer ceases to be Lucent or an
Affiliate, except in the event of a Change in Control or unless otherwise determined by the
Committee.






	3.	 	Eligibility for Performance Award.






	 	(a)	 	To be eligible for this Performance Award, your job level with Lucent must be a job
level that is eligible for this Performance Award. If you are demoted into a job level
that is not eligible for this Performance Award, variable C (of section 1 above) will
only include those months during which you held a job level that is eligible for this
Performance Award.
	 
	 	(b)	 	Also for purposes of calculating your Performance Award, in the event you are issued
a subsequent agreement covering the same Performance Period but with a different Target
Award, your eligibility for the Target Award under this Performance Award Agreement will
be in effect through the end of the month prior to the Issuance Date of the subsequent
agreement for the Performance Period. The subsequent agreement for the Performance
Period will be in effect as of the beginning of the month of its Issuance Date. Please
note that the Target Award for the subsequent agreement may be greater than or less than
the Target Award in this Performance Award Agreement. In any given month during the
Performance Period, only one Performance Award Agreement will be in effect and the
calculation in Section 1 of the Performance Award Agreement will only be based on one
Target Award amount.






	4.	 	Definitions.






	 	(a)	 	Cause. “Cause” means:






	 	(i)	 	Violation of Lucent’s code of conduct, Business Guideposts;
	 
	 	(ii)	 	Conviction (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.






	 	(b)	 	Company Action. “Company Action” means a Company or Subsidiary declared force
management program, sale of a unit or portion of a unit, Company or Subsidiary initiated
transfer of a Participant to a corporation, partnership, limited liability company or
other business entity in which the Company has an equity interest and which does not
constitute a Subsidiary or placement of the job function of a Participant with an
outsourcing contractor.
	 
	 	(c)	 	Disability. “Disability” means termination of employment under circumstances where
you qualify for and receive payments under a long-term disability pay plan maintained by
Lucent or any Subsidiary or as required by or available under applicable local law.
	 
	 	(d)	 	Performance Period. “Performance Period” means the fiscal year period or periods
covered by this Performance Award.
	 
	 	(e)	 	Retirement. “Retirement” means termination of employment with Lucent or any
Subsidiary under any of the following circumstances or entitlements:






	 	(i)	 	Service Pension under the Lucent Retirement Income Plan as defined in
such plan;
	 
	 	(ii)	 	Similar pension under any comparable plan or arrangement with Lucent or
a Subsidiary; or
	 
	 	(iii)	 	You are at least age 50 with a minimum of 15 years service with Lucent
at the time of your termination of employment.






	5.	 	No Right of Employment. Neither the Plan nor this Award shall be construed as
giving you the right to be retained in the employ of Lucent or any Affiliate.
	 
	6.	 	Taxes. Lucent may withhold from any distribution or any payment hereunder, or
require payment of, any taxes due in connection with this Award.




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	7.	 	Transferability. This Award may not be sold, assigned, transferred, pledged or
otherwise encumbered. In the event of your death, amounts distributable to you hereunder
shall be distributed to your estate, in which event neither Lucent nor any Affiliate shall
have any further liability to anyone with respect to such amount.
	 
	8.	 	Determinations of the Committee. Any determinations or decisions made or actions
taken arising out of or in connection with the interpretation and administration of this
Award Agreement and the Plan by the Committee shall be final and conclusive.
	 
	9.	 	Regulatory Approvals. If the Senior Vice President — Human Resources or the Senior
Vice President, General Counsel and Secretary of Lucent, or the successor of either of them,
determines, on advice of counsel, that the consent or approval of any governmental or
regulatory agency or authority is necessary or desirable as a condition of, or in connection
with, this Performance Award, no portion of the Award may be payable until or unless such
consent or approval shall have been effected or obtained. The foregoing shall not be
construed as requiring any such registration, qualification, consent or approval.
	 
	10.	 	Governing Law. The validity, construction and effect of this Award Agreement shall
be determined in accordance with the laws of the state of Delaware in the United States
without giving effect to the principles of conflicts of laws.
	 
	11.	 	Amendments made by the Committee. This Award Agreement may be amended by the
Committee, provided that no such amendment shall impair your rights hereunder without your
consent. Notwithstanding any other provisions to the contrary herein, the Committee, if it
determines in its sole discretion that it is necessary or desirable under the circumstances,
may authorize the proration or early distribution (or a combination thereof) of the
Performance Award in the case of termination of the Plan.
	 
	12.	 	Other Terms.






	 	(a)	 	The Plan is discretionary in nature and Lucent may cancel or terminate it at any
time. The grant of a Performance Award is a one-time benefit and does not create any
contractual or other right to receive a grant of Performance Awards, or benefits or
payments in lieu of Performance Awards in the future. Future grants, if any, will be at
the sole discretion of Lucent, including, but not limited to, the timing of any grant,
the Target Award, duration of Performance Period, and distribution provisions.
	 
	 	(b)	 	Your participation in the Plan is voluntary. The value of the Performance Award is an
extraordinary item of compensation outside the scope of your employment contract, if any.
As such, the Performance Award is not part of normal or expected compensation for purposes
of calculating any severance, resignation, redundancy, end of service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments.
	 
	 	(c)	 	This Award Agreement is subject to the provisions of Section 12 of the Plan, relating
to Internal Revenue Code Section 162(m).
	 
	 	(d)	 	This Agreement shall be subject to such amendments or modifications as are determined
by the Committee to be necessary or beneficial under the American Jobs Creation Act of
2004.
	 
	 	(e)	 	Lucent makes no representation as to the value of this Award or whether you will be
able to realize any profit out of it.
	 
	 	(f)	 	By accepting this Award or deriving any benefit from it, you signify your understanding
of its terms and conditions.
	 
	 	(g)	 	You understand that in order for Lucent to perform its requirements under the Plan,
Lucent may process personal data and/or sensitive personal data about you. Such data
includes, but it not limited to, your name, home address, telephone number, employee
number, job title, tax related information and tax identification number (“Personal Data”).
You hereby request, authorize, and direct your employer to furnish Lucent (and any agent
of Lucent administering the Plan or providing plan record keeping services) with such
Personal Data as it shall request in order to facilitate the grant of awards and
administration of the Plan and you waive any data privacy rights you might have with
respect to such information.





	 	 	 	 	 
	 	Lucent Technologies Inc.

 	 
	 	
 	 
	 	Pamela O. Kimmet 	 
	 	SVP-Human Resources 	 
	 




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