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Board to commence search for new CEO
CEO Russo to remain at helm until successor is named to
ensure business continuity
Board of Directors announces plans to reorganize and change
composition
Paris, July 29, 2008 - Alcatel-Lucent (Euronext Paris and NYSE: ALU)
today announced changes to its leadership and Board of Directors. The
company also announced its quarterly results and demonstrated improvements to
its operational results for the third straight quarter. The Company reported
that it is making steady progress on the strategy the company laid out last
fall.
To pave the way for a fully aligned governance and management model going
forward, the company announced the following changes to its management team and
Board of Directors:
- Non-Executive Chairman Serge Tchuruk has decided to step down on October 1,
2008.
- CEO Pat Russo has decided to step down no later than the end of the year,
and at the Board’s request will continue to run the company until a new CEO is
in place to effect a smooth transition and maintain the continuity of the
company’s business.
- The Board will commence a search for a new non-executive Chairman and CEO
immediately.
- The Board is also initiating a process to change the composition of the
Board to a smaller group that will include new members.
“The merger phase is now behind us. I am proud that Alcatel-Lucent has
become a world leader in a technology which is transforming our society.
It is now time that the company acquires a personality of its own, independent
from its two predecessors. The Board must also evolve and the Chairman
should give the first example, which I have decided to do,” said Serge
Tchuruk.
“I am very pleased with the progress we are making especially in light of a
difficult market environment,” said Pat Russo. “Our strategy is taking
hold and our results are demonstrating good operational progress. That
said, I believe it is the right time for me to step down. The company
will benefit from new leadership aligned with a newly composed Board to bring a
fresh and independent perspective that will take Alcatel-Lucent to its next
level of growth and development in a rapidly changing global market. I
have every desire to ensure a smooth transition of leadership within the
company and I have informed the Board of my determination to work closely with
them until the end of the year or sooner if a successor is named, and we are in
agreement on this approach. I have great confidence in Alcatel-Lucent and
believe this to be a company with tremendous potential,” said
Russo.
Now that the company has moved beyond the transitional phase of the merger,
the Board has determined to restructure itself in a way consistent with the
company’s needs going forward. As part of this process the Board will
reduce the size of its membership over time while adding several new members
with strong industry expertise. To initiate this process, Henry Schacht
announced that he will resign from the Board immediately believing that, being
a former CEO, he should not remain beyond the transitional stage of the
merger. Mr. Schacht was the CEO of Lucent Technologies prior to Ms. Russo
becoming CEO in January 2002.
Alcatel-Lucent will host an audio webcast at 1:00 p.m. CET to discuss the
leadership changes and the company’s second quarter financial results. The
webcast can be accessed at http://www.alcatel-lucent.com/2q2008
SAFE HARBOR FOR FORWARD LOOKING STATEMENTS
Except for historical information, all other information in this press
release consists of forward-looking statements within the meaning of the US
Private Securities Litigation Reform Act of 1995, as amended. These forward
looking statements include statements regarding the future financial and
operating results of Alcatel-Lucent. Words such as "expects,"
"anticipates," "targets," "projects,"
"intends," "plans," "believes," "estimates,"
variations of such words and similar expressions are intended to identify such
forward-looking statements which are not statements of historical facts. These
forward-looking statements are not guarantees of future performance and involve
certain risks, uncertainties and assumptions that are difficult to assess.
Therefore, actual outcomes and results may differ materially from what is
expressed or forecasted in such forward-looking statements. These risks and
uncertainties are based upon a number of important factors including, among
others: our ability to appoint a new non-executive chairman and a new chief
executive officer, as well as to locate additional board members with industry
expertise, within the expected timeframes; our ability to operate effectively
in a highly competitive industry with many participants; our ability to keep
pace with technological advances and correctly identify and invest in the
technologies that become commercially accepted; difficulties and delays in
achieving synergies and cost savings; fluctuations in the telecommunications
market; exposure to the pricing pressures in the regions in which we sell; the
pricing, cost and other risks inherent in long-term sales agreements; exposure
to the credit risk of customers; reliance on a limited number of contract
manufacturers to supply products we sell; the social, political and economic
risks of our global operations; the costs and risks associated with pension and
postretirement benefit obligations; the complexity of products sold; changes to
existing regulations or technical standards; existing and future litigation;
difficulties and costs in protecting intellectual property rights and exposure
to infringement claims by others; compliance with environmental, health and
safety laws; whether Alcatel-Lucent can continue to obtain product cost
improvements and to implement cost cutting and restructuring programs, and
whether these efforts will achieve their expected benefits; the economic
situation in general (including exchange rate fluctuations) and uncertainties
in Alcatel-Lucent’s customers’ businesses in particular; customer demand for
Alcatel-Lucent’s products and services; control of costs and expenses;
international growth; conditions and growth rates in the telecommunications
industry; and the impact of each of these factors on sales and income. For a
more complete list and description of such risks and uncertainties, refer to
Alcatel-Lucent's Form 20-F for the year ended December 31, 2007, as well as
other filings by Alcatel-Lucent with the US Securities and Exchange Commission.
Except as required under the US federal securities laws and the rules and
regulations of the US Securities and Exchange Commission, Alcatel-Lucent
disclaims any intention or obligation to update any forward-looking statements
after the distribution of this news release, whether as a result of new
information, future events, developments, changes in assumptions or
otherwise.
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