Dear Brothers and Sisters,
 
The contractual language regarding retiree healthcare and the legislation that was required to continue to provide a level of company provided healthcare had to be enacted by September 1, 2006.   CWA, IBEW and Lucent worked diligently with legislators to make that happen.  The pension reform bill was enacted, however, it does require some technical changes to the language.  Lucent and the Unions have come to an agreement to extend the contractual deadline for these technical changes from September 1, 2006 to June 30, 2007 so that they may continue to work on achieving those goals.  In addition, we have agreed to change the contractual pension funding level from 125% to 120% to conform with the new legislation. 
 
While the change in the deadline is a step in the right direction I do want you to know this in no way changes the difficulties we have around the soaring costs of retiree healthcare.  The Joint Retiree Healthcare Committee (JRHC) has been working diligently in coming up with ways to contain costs while minimizing the cost sharing by the retiree.  Unfortunately the company and union have not come to an agreement on medical/prescription drug plan changes or premium costs.   We continue to disagree.   Make no mistake – the company will make changes to the medical expense plan and what you currently pay for healthcare.
 
As a reminder if an eligible retiree elects the government Medicare Part D for their prescription drug coverage they are NOT covered under Lucent’s prescription drug plan.  They will still have coverage under the medical expense plan and dental plan if that is what they elected. 
 
With the Lucent/Alcatel merger approved there will no longer be Lucent stock therefore the Employee Stock Purchase Plan will be discontinued as of the end of October.    Along with that the Lucent stock option will no longer be offered as an investment vehicle in the Lucent 401(k) plan.  The remainder of the plan remains unchanged.  As the merger plans are finalized and we receive more information on the nuances of the conversion of Lucent stock to American Depository Shares (ADS) we will communicate that to you.
 
In Unity,
Ralph V Maly, Vice President
CWA Communications & Technologies