LUCENT TECHNOLOGIES INC.
CORPORATE GOVERNANCE AND COMPENSATION COMMITTEE CHARTER

Adopted February 18, 1998

The Corporate Governance and Compensation Committee (the "Committee") is responsible for matters relating to the organization and membership of the Board of Directors and for other issues relating to the Company's corporate governance. The Committee is also responsible for the Company's compensation and benefit programs.

Composition and Term of Office

The Committee will consist of at least three members all of whom are non-employee directors of the Company and individuals that would qualify as "outside directors" under Section 162(m) of the Internal Revenue Code. One member shall serve as Chairman of the Committee. The members of the Committee shall serve one-year terms, and shall be elected annually on the day of the Annual Meeting of Shareowners or on such other date as the Board of Directors shall determine.

Committee Meetings - Operating Principles

  • The Committee shall meet at least three times each year.
  • Regularly scheduled Committee meetings will occur in conjunction with meetings of the full Board of Directors.
  • Special meetings of the Committee may be called as needed by the Committee Chairman, the Chairman of the Board, the Chief Executive Officer or the Senior Vice President, Human Resources.
  • The Committee may request that members of management or outside consultants be present to assist the Committee in performing its duties.
  • Minutes of each meeting will be kept and distributed to the entire Committee.

Compensation/Employee Benefits Responsibilities

The Committee shall perform the following functions:

  • Provide oversight and guidance in the development of compensation and benefit programs for all employees of the Company.
  • Approve compensation and benefit programs for officers (individuals holding positions classified as Senior Vice President, or higher). This includes salary, annual incentive and long term incentive programs, whether stock or cash, and determinations relating to the deductibility of compensation under Section 162(m) of the Internal Revenue Code of 1986.
  • Approve base salaries and incentive awards for Senior Vice Presidents and above.
  • Confer, as needed, with the Senior Vice President, Human Resources on compensation and benefit matters.
  • Review the individual performance of Senior Vice Presidents and above, including the Chairman of the Board (in February 1998, this included the Company's top 20 Officers).
  • Review and make recommendations to the Board on matters concerning the Directors' annual retainer, as well as any other compensation programs relating to the Board of Directors.
  • Prepare the Annual Report on Executive Compensation for inclusion in the Company's Proxy Statement.
  • Exercise any fiduciary, administrative or other function assigned to the Committee under any of the Company's benefit or welfare plans.

The Committee may delegate (where legally permissible) authority to perform any of the foregoing responsibilities where desirable to facilitate the operation or administration of the plans or programs.

Corporate Governance Responsibilities

The Committee shall perform the following functions:

  • Review the performance of the Board annually and the performance of Board members before nominating for re-election.
  • Review the composition of the full Board of Directors to determine the qualifications and areas of expertise needed to further enhance the composition of the Board of Directors and work with management in attracting candidates with those qualifications.
  • Review the qualifications of prospective nominees; recommend the slate of nominees for inclusion in the Company's proxy statement and presentation to the Shareowners at the Annual Meeting.
  • Periodically review all standing or any ad hoc committees and recommend to the full Board of Directors, as appropriate, changes in number, function or composition of committees.
  • Review and make recommendations to the full Board of Directors with respect to succession planning.
  • Review, prior to consideration by the full Board of Directors, management's proposals to make significant organizational changes in the Company.
  • Review and make recommendations to the full Board of Directors on matters relating to the governance of the Company.
  • Periodically review the Company's director and officer liability insurance coverage.
  • Confer, as appropriate, with the General Counsel on matters of corporate governance.

Other Responsibilities

  • Report at the next meeting of the full Board of Directors all significant items discussed at any Committee meeting.
  • Recommend changes to this Charter to the full Board of Directors as appropriate.
  • Take such further actions or provide such further advice as the full Board of Directors may from time to time delegate to the Committee.