Summary of LRO Board Meeting held on September 16 & 17, 2005

Greensboro, North Carolina

 

1. The meeting opened with report regarding the 8-16-05 meeting with Lucent representatives.

  • Pension Fund is essentially capped.
  • Citing the airlines as an example, Lucent contends that the Pension Fund is in better shape than those of other corporations.
  • The Lucent representatives indicated that Pension Fund amounts above the 125% level will be used for such purposes as payment of healthcare benefit costs.
  • In response to a question as to whether the Pension Plans are fully funded on a PBGC basis, the answer was essentially: “No”. [Comparing the 10K vs. ERISA requirements and given the information it has been able to attain, the LRO’s best assessment is that the Management Pension Plan is currently about $1.7 billion under-funded.]
  • Lucent did not provide any answers to the questions presented by the LRO. They said that any information considered as proprietary could not be provided.
  • Lucent has requested that the LRO support Lucent’s position that the Pension Plan is in a positive health condition.  [At the meeting the LRO representatives explained that the LRO cannot do that unless it is provided with sufficient information to support such a position because the LRO leadership owes all members assurance that what is communicated is factually correct.]

 

2. The LRO intends to write to all Lucent Board Members and inform each person as to its position(s). .A copy of the letter will be provided to the LRO membership.

 

3. Discussion was held concerning funds to be committed. It was agreed that advocates will develop a list of the most important items for consideration. The LRO must prioritize and expend funds that are in support of the best interests of retirees.

 

4. The LRO’s main focus should be on supporting legislation that is in the best interest of the LRO constituency.  On the legal front, support lawsuits that meet that same test.

 

5. With regard to the Q & A section of the LRO website: it was agreed that only issues directly affecting Lucent and LRO members would be inserted.

 

6. It was agreed that the LRO’s fundamental goal is the security of its members’ health care, pension and life insurance benefits. LRO should endorse and pursue the 420 Death Benefit Case as well as supporting our resolutions to the greatest degree possible. The LRO is interfacing with the attorney on this.

 

7. Discussion was held regarding support of proxy submittals for this year. The Board will support expenditures for proxy letter preparation and mailings to the appropriate shareholders.

 

8. It was agreed that the LRO Board should inform LRO members and the media regarding LRO issues with Lucent since the first of this year.

 

9. Discussion regarding Media Relations:

-Contact with reporters on major newspapers and producers for television news networks has continued.  This effort has produced in recent months stories of Lucent retirees and widows of retirees in the Wall Street Journal, and on ABC, CBS and NBC national evening news programs.

-Working relationships with reporters will be used to draw attention to any legal action against Lucent that is supported by the LRO.

 

10. Treasurer’s Report was given. LRO expenditures and income from dues are in line with the 2005 budget. Hopefully the most recently published newsletter will result in accelerated dues paying activity. That would be a big help in supporting the planned activities outlined herein.

 

11. Discussion pertaining to Lucent’s operating profits per diluted common share and, a comparison of Medicare D and Lucent’s Prescription Drug Plans.  It was recommended that the LRO consider the following to deal with the impending and present prescription drug problem:

 

a- Support legislation that permits the importation of lower cost drugs from other countries.

b- Get behind legislation that supports the introduction of competitive bidding for drug

    pricing.

c-Support legislation that takes the position that actuarial equivalency of private industry’s prescription drug plans to Federal Government’s Medicare D is an insufficient test to qualify for government subsidy.

 

12. Conference call with one of the attorneys associated with the Chastain versus AT&T lawsuit Received update on the status of the case as well as what assistance the attorneys would like to get from LRO.  The complaint has been filed. Some of the points he made are as follows:

 

a- Case will be heard in a different circuit court than other cases that have been filed.

b- AT&T unsuccessfully filed to dismiss.  The Chastain lawyers are optimistic.

 

13. Discussion regarding amendments to the LRO By Laws.  A number of suggested modifications were reviewed, incorporated, and collectively agreed upon. The revised By Laws will be submitted to our attorney for review and comment. The legally approved By Laws will then be sent to all Board members for final review and approval.

 

14. Agreed: Membership dues will remain at the current $25 per year. There will be no discount for signing up later in the year.

 

15. It was affirmed that spouses are eligible to be LRO members and some already are members. Spouses are to be encouraged to join the LRO.

 

Meeting adjourned.