231 Pinetuck Lane    Winston-Salem, NC 27104   Phone: 336-765-9765

email: kraschke@triad.rr.com     LRO Website: www.lucentretirees.com

May 27, 2007

Ms. Patricia F. Russo

Chief Executive Officer

Alcatel-Lucent

54 rue la Boetie

Paris 75008, France

Dear Pat,

Because of the high number of emails and phone calls the LRO has received from retirees concerned about their lost personal information and that of their dependents, I’m writing this letter as a follow-up to my May 18, 2007 letter on this subject.

The LRO Board has concluded that the less-than-timely flow of information and the minimal practical actions and advice from your USA team have been, thus far, inadequate. We believe that, by not being as forthcoming as this high profile incident warrants, the image of your new company is being jeopardized - - not only with employees, retirees, and their dependents, but with your customers and your markets and with American government leaders and the public as well.

It is our intent to reflect to you the urgency of the situation and to offer specific suggestions that help both the retirees with whom we clearly share an interest and who may suffer serious impact as a consequence of these events and to help you better mobilize to find effective ways to resolve a situation that could possibly deteriorate further.

Our intent is also to improve the current situation or to mitigate the short-term problems and longer-term risks and liabilities Alcatel-Lucent could face AND to address concerns that we know that have been expressed to us by those who are directly impacted by this incident.

• For example, an LRO board member who has substantial professional experience with the management of such security incidents both from the operational and public policy/political perspectives is willing to offer concrete assistance to you on conditions that you may set.
• We urge Alcatel-Lucent to communicate and to act in a timelier, more comprehensive and public way regarding this serious security breach of personal information.  
• We also believe it would be beneficial for Alcatel-Lucent to enable the LRO to assist in direct contact with selected HR, CIO-IT and Security professionals to examine this situation and to assist in establishing better procedures to address the special concerns of the 182,000 retirees who receive benefits and pensions from Lucent, and the concerns of their dependents as well.
• We also urge you to present a more integrated response from those who interact with the public and for those who are potentially impacted.  By that we mean a response that reflects the Hewitt, AON, Fidelity (401K) and Alcatel-Lucent actions being taken to minimize current threats and risks and to address comprehensive remediation in an explicitly more coordinated way. Such an approach is critical, but not in evidence.

Please respond to this letter with specifics as to these proposals.  We truly believe that time is of the essence. A lack of visible, timely action is working against us. Retirees are a special part of Lucent's heritage, but are also a particularly vulnerable segment of the Alcatel-Lucent family.  They must be helped through this unfortunate event with concern, responsiveness and collaboration. We stand ready to immediately engage with your USA leaders in this matter in the most concrete ways possible.

Sincerely,

               Ken

Copy to:

Frank D’Amelio

Cindy Christy

John Hickey

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