Woo vs. Harmon - Witness Carla Hills

David C. Farmer, Successor-Trustee vs. Harmon

(Formerly Woo vs. Harmon & Nicholson vs. Harmon)

CV05-00030 DAE KSC

U.S. District Court For the District of Hawaii

Judges: David A. Ezra; Kevin S. Chang

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DEFENDANT’S WITNESS

CARLA A. HILLS

c/o The Forum for International Policy
Fax: 202-296-9395
Email: TheForum@FFIP.com

Carla Anderson Hills is Chairman and Chief Executive Officer of Hills & Company, International Consultants, which advises companies on global trade and investment issues, particularly in the emerging markets. Carla Hills is a Director for Chevron-Texaco; American International Group (AIG); AOL-Time Warner; and Lucent Technologies..

In 1989, President George H.W. Bush appointed her to another cabinet level position, this time as US Trade Representative. (At the same time, Bush appointed Elizabeth Dole, the former Secretary of Transportation, as Secretary of Labor.)

A free trade advocate, Hills was the primary US negotiator of the North American Free Trade Agreement (NAFTA).

Born Carla Anderson in Los Angeles, she graduated from Yale Law School in 1958 and married Roderick M. Hills the same year.

Among other offices, she was president of the National Association of Women Lawyers in 1965.

She was first offered an appointment as assistant US Attorney by Elliot L. Richardson in 1973, but he resigned shortly thereafter during the Watergate scandal. The offer was renewed by his successor, William B. Saxbe, in 1974.

Ambassador Hills served as Secretary of the U.S. Department of Housing and Urban Development in the Ford Administration. From 1974-75, she was Assistant Attorney General, Civil Division, U.S. Department of Justice.

According to a story by Michael C. Ruppert dated January 16, 2002, in August [2001] Attorney General John Ashcroft authorized the creation of a special commission to evaluate years of serious and well-documented FBI lapses ranging from mishandling of key evidence in the crime lab, as exposed by FBI whistleblower Fred Whitehurst, to the loss of sensitive intelligence materials. Commission members included former CIA Director William Webster, former Secretary of Defense William Cohen, former House Speaker Tom Foley and former HUD Secretary and U.S. Trade Rep Carla Hills.

According to a GovExec story, "All of the commission's meetings will be closed to the public to protect sensitive information according to a July 16 memo from the Justice Department." The key question is, "Information sensitive to whom, that might damage whose interests?"

Ambassador Hills serves on a number of corporate boards. She is Vice Chair of the National Committee on U.S.-China Relations, the U.S.-China Business Council, and the Inter-American Dialogue; Trustee of the Council on Foreign Relations and the Institute of International Economics; Member of the Board of the Asia Society; and a Member of the Trilateral Commission.

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NEW DISCOVERY (06-24-08):

Lucent Technologies Inc · DEF 14A · For 2/16/0

Filed On 12/21/99 · SEC File 1-11639 · Accession Number 912057-99-10197

...

COMMITTEES OF THE BOARD OF DIRECTORS

During fiscal 1999, the Board of Directors had two ongoing committees: an Audit and Finance Committee and a Corporate Governance and Compensation Committee. The Audit and Finance Committee meets with management periodically to consider the adequacy of the company's internal controls and the objectivity of its financial reporting. The committee also meets with the independent auditors and with appropriate company financial personnel and internal auditors regarding these matters. Both the independent auditors and the internal auditors regularly 6 meet privately with the committee and have unrestricted access to the committee. The Audit and Finance Committee recommends to the Board the appointment of the independent auditors. The Audit and Finance Committee reviews the company's financing plans and reports recommendations to the full Board for approval and to authorize action. The committee has a written charter. The members of the committee have reviewed the charter and believe that the committee complied with the charter in fiscal 1999. The Audit and Finance Committee met five times in fiscal 1999. The functions of the Corporate Governance and Compensation Committee include: recommending to the full Board nominees for election as Directors of the company, making recommendations to the Board from time to time as to matters of corporate governance, administering management incentive compensation plans, establishing the compensation of officers and reviewing the compensation of Directors. The committee will consider qualified candidates for Director suggested by shareowners in written submissions to Lucent's Corporate Secretary....

COMPENSATION OF DIRECTORS

Each non-employee Director receives annually a retainer of $100,000 and an option to purchase 5,000 shares of Lucent stock. The Chairman of each committee described in the previous section receives an additional retainer of $10,000. Directors may elect to receive between 50% and 100% of their retainer in Lucent stock or an option to purchase Lucent stock or a combination of stock and an option. Any remainder will be paid in cash. Any option elected will enable the Director to purchase a number of shares equal to three times the number of shares that could have been purchased with the portion of the retainer elected to be received as an option. The exercise price per share under the option will be the fair market value of a share on the date of grant. Options will generally become exercisable on the six-month anniversary of the date of grant and have a 10-year term. Under the company's Deferred Compensation Plan, non-employee Directors may defer all or a portion of their cash and stock compensation to a deferred compensation account. Deferred compensation plan accounts have two components. The first is a Lucent stock portion. The second is a cash portion. Directors can defer receipt of cash retainers to either portion of their accounts. The stock portion of a retainer can be deferred only to the Lucent stock portion of an account. The value of the Lucent stock portion of an account fluctuates based on changes in the price of Lucent stock. Dividend equivalents are credited on the Lucent stock portion of accounts. The cash portion of an account earns interest, compounded quarterly, at an annual rate equal (a) to 120% of the average interest rate for 10-year U.S. Treasury notes for the previous quarter, in the case of deferrals after October 1, 1997, and (b) to the average interest rate for 10-year U.S. Treasury notes for the previous quarter plus 5%, in the case of deferrals on or before that date. Interest rates for deferrals to the cash account may be revised by the Board. All distributions from the Lucent stock portion of an account will be made in Lucent stock, unless the company decides otherwise. In the event of a Potential Change in Control, as defined in the plan, the plan will be supported by a benefits protection grantor trust, the assets of which will be subject to the claims of the company's creditors. Lucent also maintains a general insurance policy that provides non-employee Directors with travel accident insurance when on company business. An individual who became a non-employee director before 1999 may purchase life insurance under a company program pursuant to which the company will pay a portion of the premium. The amount paid by the company is to be returned to the company no later than following the death of the individual. This benefit will continue after the non-employee Director's retirement from the Board of Directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

In fiscal 1999, all of our independent Directors served on the Corporate Governance and Compensation Committee. Franklin A. Thomas was the Chairman of the committee. The other committee members were: Paul A. Allaire, Carla A. Hills, Drew Lewis, Paul H. O'Neill, Donald S. Perkins and John A. Young. Patricia F. Russo, Executive Vice President and CEO, Service Provider Networks, is a director of Xerox Corporation, of which Mr. Allaire is currently Chairman of the Board. During fiscal 1999, Mrs. Russo was also a member of the Executive Compensation and Benefits and Nominating Committees of Xerox.

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

Upon recommendation of the Audit and Finance Committee, the Board has reappointed PricewaterhouseCoopers LLP as the independent public accounting firm to audit our financial statements for the fiscal year beginning October 1, 1999. Representatives of PricewaterhouseCoopers will be present at the meeting. They will be given the opportunity to make a statement if they desire to do so, and they will be available to respond to appropriate questions...

BOARD OF DIRECTORS

The Board of Directors is divided into three classes currently consisting of three Directors each, whose terms expire at successive annual meetings. This year, Messrs. Drew Lewis and Donald S. Perkins will be retiring from the Board after the annual meeting. Messrs. Lewis and Perkins have been Directors of the company since 1996 and we are grateful to them for their counsel and business advice. Following their retirement, one of the classes of Directors will consist of one Director. We have nominated Mrs. Carla A. Hills, the remaining Director in the class of Directors whose terms expire at the annual meeting, for a three-year term that will expire at our annual meeting in the year 2003. You can find the principal occupation and other information about Mrs. Hills below....

CARLA A. HILLS, Director of Lucent since 1996. Chairman and Chief Executive Officer of Hills & Company (international consultants) since 1993, United States Trade Representative (1989 -1993). Director of American International Group, Inc., Chevron Corp. and Time Warner Inc. Committees: Member of the Corporate Governance and Compensation Committee. Age: 65....

For more on Lucent Technologies’ $1.1 billion accounting fraud, see:

http://www.sec.gov/news/press/2004-67.htm

www.aicpa.org/download/antifraud/120.ppt

http://www.cfo.com/article.cfm/3013903?f=search

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Carla Hills is expected to testify regarding her business, professional, personal and political relationships with Kamehameha Schools/Bishop Estate, Chevron-Texaco, John Waihee, Ben Cayetano, Linda Lingle, Mark Bennett, Margery Bronster, Earl Anzai, Hugh Jones, Lyn Anzai, Faye Kurren, Office of Hawaiian Affairs, Hawaii Housing Authority, Henry Paulson, Robert Rubin, Goldman Sachs, James A. Baker, Henry Kissinger, Donald Rumsfeld, Elizabeth Dole, Mark McConaghy, PricewaterhouseCoopers, Ben Benson, Gale Norton, Norman Brownstein, Jack Abramoff, American International Group, Enron, Arthur Andersen, Fred Whitehurst, John Ashcroft, William Webster, William Cohen, Tom Foley, Condoleezza Rice, Roger Stillwell, John McCain, Brent Scowcroft, The Forum for International Policy, Dwayne Andreas, Archer-Daniels-Midland, Steve Case, Jeff Watanabe, Lucent Technologies, Xerox Corporation, George Ariyoshi, and other entities to be determined upon discovery.