Exhibit
10.3


AVAYA INC. DEFERRED
COMPENSATION PLAN


As Amended and
Restated Effective January 1, 2005


Preamble


The Avaya Inc. Deferred Compensation Plan is intended
to constitute an unfunded, deferred compensation plan maintained primarily for
a select group of management or highly compensated employees and for members of
the Board of Directors who are not employees of the Company.  The purpose of the Plan is to provide a means
by which eligible employees and non-employee Directors may defer the receipt of
certain forms of compensation while at the same time giving the Company the
present use of the compensation so deferred. 
The Plan is intended to be an employee pension benefit plan within the
meaning of Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended.  The Plan is not a qualified
plan under Section 401(a) of the Internal Revenue Code of 1986, as amended (the
“Code”).  Benefits under the Plan are
paid directly by the Company out of its general assets when due.  The Plan was originally effective as of
October 1, 2000, and is a successor plan to the Lucent Technologies Inc. (“Lucent”)
Deferred Compensation Plan for the benefit of Eligible Members whose employment
was transferred from Lucent to the Company in connection with the spinoff of
the Company from Lucent, and for non-employee Directors of the Company who were
non-employee directors of Lucent prior to the spinoff of the Company.  The Plan is hereby amended and restated
effective January 1, 2005 to comply with Code Section 409A as enacted by
the American Jobs Protection Act of 2004. 
The Plan, as amended and restated herein, shall apply to amounts
deferred after December 31, 2004. 
Amounts deferred before January 1, 2005, shall be governed by the Plan
document in effect on December 31, 2004.


Section
1.              Definitions.


As used in the Plan, the following terms shall have
the meanings set forth below:


(a) “Account” shall mean, for each
Participant, such Participant’s Deferred Cash Equivalent Account and Deferred
Share Equivalent Account.


(b) “Administrator” shall mean the Senior
Vice President of Human Resources of the Company.


(c) “Affiliate” shall mean (i) any Person
that directly, or through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Company or (ii) any entity
in which the Company has a significant equity interest, as determined by the
Committee.


(d) “Beneficiary” shall mean the individual
or individuals designated by the Participant pursuant to Section 4(g) to
receive amounts credited to his or her Account at death.


(e) “Board” shall mean the Board of Directors
of the Company.













(f) “Code” shall mean the Internal Revenue
Code of 1986, as amended.


(g) “Committee” shall mean the Corporate
Governance and Compensation Committee of the Board (or any successor
committee).


(h) “Company” shall mean Avaya Inc.


(i) “Deferral Election” shall mean a written
election, in a form prescribed by the Administrator, to defer receipt of
Incentive Awards or Retainer Payments otherwise payable to a Participant.


(j) “Deferred Cash Equivalent Account” shall
mean a book-entry account in the name of a Participant maintained in the
Company’s records with entries denominated in dollars.


(k) “Deferred Share Equivalent Account” shall
mean a book-entry account in the name of a Participant maintained in the
Company’s records with entries denominated in Share equivalents.


(l) “Director” shall mean any non-employee
member of the Board.


(m) “Disability” shall mean a medically
determinable physical or mental impairment of the Participant which can be ex pected
to result in death or to last for a continuous period of not less than twelve
months, and for which the Participant is receiving income replacement benefits
for a period of at least three months under Avaya Inc. Long-Term Disability
Plan for Salaried Employees.


(n) “Distribution Change in Control” shall
mean the change in ownership of the Company, the change in effective control of
the Company, or the change in ownership of a substantial portion of the
Company, as described below.


(1)           Change
in Ownership of the Company.  Any one
Person, or more than one Person Acting as a Group, acquires ownership of stock
of the Company that, together with stock held by such Person or Group,
constitutes more than 50%  of the total fair
market value or total voting power of the stock of the Company.  Notwithstanding the foregoing, for purposes
of this paragraph, if any one Person, or more than one Person Acting as a
Group, is considered to own more than 50% of the total fair market value or
total voting power of the stock of the Company, the acquisition of additional
stock by the same Person or Persons is not considered to cause a Change in
Control.


(2)           Change
in Effective Control of the Company.


(A)          any
one Person, or more than one Person Acting as a Group, acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such 



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Person or
Persons) ownership of stock of the Company possessing 30%  or more of the total voting power of the
stock of the Company; or


(B)           a
majority of the members of the Company’s Board of Directors is replaced during
any 12-month period by directors whose appointment or election is not endorsed
by a majority of the members of the Company’s Board of Directors before the
date of the appointment or election.


(C)           Notwithstanding
the foregoing, for purposes of this paragraph, if any one Person, or more than
one Person Acting as a Group, is considered to effectively control the Company,
the acquisition of additional control of the Company by the same Person or
Persons is not considered to cause a Change in Control.


(3)           Change
in Ownership of a Substantial Portion of the Company’s Assets.  Any one Person, or more than one Person
Acting as a Group, acquires (or has acquired during the 12-month period ending
on the date of the most recent acquisition by such Person or Persons) assets
from the Company that have a total gross fair market value equal to or more
than 40% of the total gross fair market value of all of the assets of the
Company immediately prior to such acquisition or acquisitions.  For purposes of this paragraph, “gross fair
market value” means the value of the assets of the Company, or the value of the
assets being disposed of, determined without regard to any liabilities
associated with such assets. 
Notwithstanding the foregoing, a transfer of assets by the Company is
not treated as a Change in Control if the assets are transferred to:


(A)          a
shareholder of the Company (immediately before the asset transfer) in exchange
for or with respect to its stock;


(B)           an
entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by the Company;


(C)           a
Person, or more than one Person Acting as a Group, that owns, directly or
indirectly, 50% or more of the total value or voting power of all the
outstanding stock of the Company; or


(D)          an
entity, at least 50% of the total value or voting power of which is owned,
directly or indirectly, by a Person, or more than one Person Acting as a Group,
that owns, directly or 



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indirectly,
50% or more of the total value or voting power of all the outstanding stock of
the Company.


(4)           “Person”
and “Acting as a Group”.  For purposes of
this Section/(m):


(A)          “Person”
shall have the meaning set forth in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended.


(B)           Persons
will be considered to be “Acting as a Group” if they are owners of a
corporation that enters into a merger, consolidation, purchase or acquisition
of stock or assets, or similar business transaction with the Company.  If a Person, including an entity, owns stock
in both corporations that enter into a merger, consolidation, purchase or
acquisition of stock or assets, or similar transaction, such shareholder is
considered to be Acting as a Group with other shareholders in a corporation
prior to the transaction giving rise to the change and not with respect to the
ownership interest in the other corporation. 
Notwithstanding the foregoing, Persons will not be considered to be
Acting as a Group solely because they purchase or own stock or assets of the
same corporation at the same time, or as a result of the same public offering.


(o) “Distribution Events” shall mean the
events designated by a Participant pursuant to Section 4(a).


(p) “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.


(q) “Eligible Member” shall mean an Officer,
a Director, Other Participant or another person or group of employees who is
designated by the Administrator as an Eligible Member.


(r) Unforeseeable Emergency shall mean a
severe financial hardship to the Participant resulting from a sudden or
unexpected illness or accident of a Participant or his or her dependent (as
defined in Code Section 152(a)), loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant that
constitute an Unforeseeable Emergency within the meaning of Code Section 409A.


(s) “Incentive Award” shall mean amounts
payable in any form other than cash under the Short Term Plan, any other bonus
payment, performance award, stock unit award or other award under any of the
Other Avaya Plans (other than options), and any dividend equivalent payment
under the Other Avaya Plans.



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(t) “NYSE” shall mean the New York Stock
Exchange, Inc.


(u) “Officer” shall mean the Chief Executive
Officer and any Senior Vice President or Group Vice President of the Company.


(v) “Other Avaya Plans” shall mean the Avaya
Inc. Long Term Incentive Plan for Management Employees and the Avaya Inc. 2004
Long Term Incentive Plan, as those plans may be amended from time to time, and
shall include any successor plans to the Other Avaya Plans.


(w) “Other Participant” shall mean any
employee of the Company or any of its Affiliates, but only if the Administrator
determines that such employee shall be eligible to participate in the Plan.


(x) “Participant” shall mean an Eligible
Member who delivers a Deferral Election to the Company. A person shall not
cease being a Participant if the person ceases being an Eligible Member, if the
person has an Account with a positive balance.


(y) “Participating Company” shall mean the
Company and any of its Affiliates.


(z) “Payment Election” shall mean a
Participant’s election pursuant to Section 4(a).


(aa)    “Performance Based Compensation” shall mean as
defined in Regulation Section 1.409A-1(e).


(bb)   “Person” shall mean any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated organization,
limited liability company, other entity or government or political subdivision
thereof.


(cc)    “Plan” shall mean this Avaya Inc. Deferred
Compensation Plan.


(dd)   “Plan Year” shall mean each twelve (12) consecutive
month period commencing January 1 and ending on December 31 of the
same calendar year.


(ee)    “Potential Change in Control” shall mean:


(1)           the
commencement of a tender or exchange offer by any third Person which, if
consummated, would result in a Change in Control;


(2)           the
execution of an agreement by the Company, the consummation of which would
result in the occurrence of a Change in Control;


(3)           the
public announcement by any Person (including the Company) of an intention to
take or to consider taking actions which if consummated would constitute a
Change in Control other than through a contested election for directors of the
Company; or



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(4)           the
adoption by the Board, as a result of other circumstances, including, without
limitation, circumstances similar or related to the foregoing, of a resolution
to the effect that a Potential Change in Control has occurred.


A Potential Change in
Control shall be deemed to be pending until the earliest of (i) the second
anniversary thereof, (ii) the occurrence of a Change in Control and (iii) the
occurrence of a subsequent Potential Change in Control.


(ff)     “Retainer Payments” shall mean any amounts payable
to a Director for service as a Director.


(gg)   “Separation from Service” shall mean for a
Participant who is an Employee, that he or she ceases to perform services for
the Company and all Affiliates of the Company, or such services decrease to a
level that is 20 percent or less than the average level of services performed
by the Participant over the immediately preceding 36-month period.  However, temporary absence from employment
because of vacation or approved leaves of absences, and transfers of employment
among the Company and its Affiliates shall not be considered a Separation from
Service or an interruption of employment. 
Separation from Service shall mean for a Participant who is a Director
that he or she has ceased to be a Director.


(hh)   “Shares” shall mean the shares of common stock, $.01
par value, of the Company.


(ii)      “Short Term Plan” shall mean the Avaya Short Term
Incentive Plan.


(jj)      “Vesting Change in Control” shall mean the
happening of any of the following events:


(1)           An
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (an “Entity”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (A) the then outstanding shares of common stock of the Company
(the “Outstanding Company Common Stock”) or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”); excluding, however, the following:  (1) any acquisition directly from the
Company, other than an acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted was itself acquired directly
from the Company,  (2) any acquisition by
the Company,  (3) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any 



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corporation
controlled by the Company, or (4) any acquisition by any corporation pursuant
to a transaction which complies with clauses (A), (B) and (C) of subsection (3)
of this Section 1(f); or


(2)           A change in the composition of the Board during
any two year period such that the individuals who, as of the beginning of such
two year period, constitute the Board (such Board shall be hereinafter referred
to as the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that for purposes of
this definition, any individual who becomes a member of the Board subsequent to
the beginning of the two year period, whose election, or nomination for
election by the Company’s shareowners, was approved by a vote of at least a
majority of those individuals who are members of the Board and who were also
members of the Incumbent Board (or deemed to be such pursuant to this proviso)
shall be considered as though such individual were a member of the Incumbent Board;
and provided, further  however, that any such individual
whose initial assumption of office occurs as a result of or in connection with
either an actual or threatened election contest (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of an Entity
other than the Board shall not be so considered as a member of the Incumbent
Board; or


(3)           The approval by the shareowners of the
Company of a merger, reorganization or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (each, a “Corporate
Transaction”) or, if consummation of such Corporate Transaction is subject, at
the time of such approval by shareowners, to the consent of any government or
governmental agency, the obtaining of such consent (either explicitly or
implicitly by consummation); excluding however, such a Corporate Transaction
pursuant to which (A) all or substantially all of the individuals and entities
who are the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 60% of the
outstanding shares of common stock, and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation or other Person which as a result
of such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries (a “Parent Company”))
in substantially the same proportions as their ownership, immediately prior to
such Corporate Transaction, of the Outstanding Company Common 



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Stock and Outstanding Company Voting Securities, (B) no Entity (other
than the Company, any employee benefit plan (or related trust) of the Company,
such corporation resulting from such Corporate Transaction or, if reference was
made to equity ownership of any Parent Company for purposes of determining
whether clause (A) above is satisfied in connection with the applicable
Corporate Transaction, such Parent Company) will beneficially own, directly or
indirectly, 20% or more of the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the combined voting
power of the outstanding voting securities of such corporation entitled to vote
generally in the election of directors unless such ownership resulted solely
from ownership of securities of the Company prior to the Corporate Transaction,
and (C) individuals who were members of the Incumbent Board will immediately
after the consummation of the Corporate Transaction constitute at least a
majority of the members of the board of directors of the corporation resulting
from such Corporate Transaction (or, if reference was made to equity ownership
of any Parent Company for purposes of determining whether clause (A) above is
satisfied in connection with the applicable Corporate Transaction, of the
Parent Company); or


(4)           The approval by the shareowners of the
Company of a complete liquidation or dissolution of the Company.


Section
2.              Deferral Elections.


(a)   Delivery and
Effectiveness of Deferral Elections.


(i)            A Participant may elect to defer receipt of
any non-Performance Based Incentive Award with a performance period of at least
13 months by delivering a Deferral Election to the Administrator not later than
the 30th day following the date the Incentive Award is
granted.


(ii)           A Participant may elect to defer receipt of
any Performance Based Incentive Award by delivering a Deferral Election to the
Administrator not later than six months before the end of the performance
period to which such Incentive Award relates, provided, however,
that the amount payable under the Performance Based Incentive Award is not
readily ascertainable when such Deferral Election is made.


(iii)          A Participant may elect to defer receipt of a
Retainer Payment by delivering a Deferral Election to the Administrator not
later than the December 31st preceding the calendar year in which the
Retainer Payment is earned.  A Director’s
Deferral Election may relate to all or part of the Retainer Payments otherwise
payable to the Director. Notwithstanding the foregoing, a newly-elected
Director may deliver a Deferral Election to the Administrator within 30 days
after his or her election to the 



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Board of Directors, which Deferral Election
shall be effective for all Retainer Payments relating to services after the
date on which the Deferral Election is delivered to the Administrator.


(b)   Contents of
Deferral Elections. Each Deferral Election shall specify the types
of compensation covered by such Deferral Election, the effective date of the
Deferral Election and shall contain the Participant’s elections under Section
4(a).


(c)   Modification and
Renewal of Deferral Elections. After the date specified in Section
2(a), a Deferral Election shall remain effective until the Participant
terminates or modifies such election by written notice to the Administrator.
Any such termination or modification shall become effective immediately
following the end of the calendar year in which such notice is given. A
Participant who has terminated a Deferral Election may, so long as such
Participant remains an Eligible Member thereafter file a new Deferral Election
in accordance with Section 2(a).


Section
3.              Participant Accounts.


(a)   Deferred Cash Equivalent
Account. (i) The portion of a Director’s Retainer Payment deferred
under Section 2 that the Participant elects to have credited to the Deferred
Cash Equivalent Account shall be credited to that account.


(ii)           Amounts credited to the Participant’s Deferred
Cash Equivalent Account shall bear interest as is determined, from time to
time, by the Board.  Such rate may be
applied by the Board to a Participant’s existing balance in a Deferred Cash
Equivalent Account or to amounts subsequently credited to such Participant’s
Account.  The determination of the
applicable interest rate by the Board pursuant to this Section 3 shall be
within its sole discretion and its decision shall be conclusive, final and
binding upon all parties concerned. Interest shall accrue from the date the
Retainer Payment would otherwise have been paid to the Participant. Interest
shall be credited to Deferred Cash Equivalent Accounts at the end of each
fiscal quarter of the Company.


(b)   Deferred Share Equivalent Account.  (i)  The following amounts deferred under Section 2 shall be credited
to a Participant’s Deferred Share Equivalent Account:


(A)          Incentive
Awards;


(B)           that
portion of a Director’s Retainer Payment that would have been paid in Company
stock if the Participant had not made a deferral election pursuant to Section
2; and


(C)           that
portion of a Director’s Retainer Payment that the Participant elects to have
credited to such account.


(ii)           Cash amounts credited
to a Participant’s Deferred Share Equivalent Account shall be converted to the
number of Share equivalents determined by dividing such cash amount by the
Conversion Price. In addition, the Participant’s 



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Deferred Share
Equivalent Account shall be credited on each dividend payment date for Shares,
with an amount equal to the number of Shares that could be purchased at the
Conversion Price with dividends that would have been payable on the number of
Shares equal to the number of Share equivalents in the Participant’s Deferred
Share Equivalent Account on the record date for such dividend.  “Conversion Price” means the average of the
daily high and low sale prices of Shares on the NYSE for the period of five
trading days ending on the date such amount otherwise would have been paid to
the Participant or, in the case of a dividend equivalent, on the dividend
payment date, or the period of five trading days immediately preceding such
applicable date if the NYSE is closed on such applicable date.


(ii)           In the event of any
change in outstanding Shares by reason of any stock dividend or stock split,
recapitalization, merger, consolidation, combination or exchange of shares or
other similar corporate change, the Board shall make such adjustments, if any,
that it deems appropriate in the number of Share equivalents then credited to
Participants’ Deferred Share Equivalent Accounts. Any and all such adjustments
shall be within the sole discretion of the Board and its decision in regard to
such adjustments shall be conclusive, final and binding upon all parties
concerned.


Section
4.              Payments.


(a)   Payment Election.  When a Participant makes a Deferral Election,
he or she shall also elect applicable Distributions Events and the payment form
for each such Distribution Event.


(b)   Distribution
Events. As elected by the Participant, the distribution of a
Participant’s Account shall commence on the first day of the calendar quarter
next following the month in which the earlier of the following distribution
dates occur:


(i)            The date the Participant attains the age
specified in his election, which age shall not be earlier than 55 or later than
70;


(ii)           The date of the Participant’s Separation
from Service;


(iii)          The date of the Participant’s termination of
service as a member of the Board;


(iv)          The date of the Participant’s Disability; and


(v)           The date of the Participant’s death.


Notwithstanding the
foregoing, any distribution under the Plan to a Participant who is not a
Director on account of such Participant’s Separation from Service when the
Company is Publicly traded shall be made no earlier than the seventh month
after such Separation from Service.



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(c)   Payment
Options.  (i)      The following payment options are
available under the Plan: (A) one lump-sum payment or (B) approximately equal
annual installments over a period not exceeding 10 years, provided, however,
that the number of annual installments may not extend beyond the life
expectancy of the Participant, determined as of the date the first installment
is paid.


(ii)           Installment
payments after the first installment payment shall be paid on the first day of
the applicable calendar quarter in each succeeding calendar year until the
entire amount subject to the installment payment option has been paid. Prior to
distribution, Accounts shall continue to receive credits under Section 3(a)(ii)
and Section 3(b)(ii).


(d)   Form of
Distributions.  Amounts
credited to a Participant’s Deferred Cash Equivalent Account shall be
distributed in cash. Amounts credited to a Participant’s Deferred Share
Equivalent Account shall be distributed as Shares, with fractional Shares being
paid in cash.


(e)   Unforeseeable
Emergency Distributions.  A
Participant may request that all or a portion of his or her Account balance be
distributed at any time by submitting a written request to the Administrator,
provided that the Participant has incurred an Unforeseeable Emergency, and the
distribution is necessary to alleviate such Unforeseeable Emergency.  In determining whether the Unforeseeable
Emergency distribution request should be approved, the Administrator shall be
entitled to rely on the Participant’s representation that the Unforeseeable
Emergency cannot be alleviated:


(i)            through reimbursement or compensation by
insurance or otherwise;


(ii)           by reasonable liquidation of the Participant’s
assets, to the extent such liquidation would not itself cause an immediate and
heavy financial need; or


(iii)          by cessation of contributions under the Plan
and other deferred compensation arrangements.


An Unforeseeable
Emergency distribution may not exceed the amount necessary to alleviate such
emergency plus taxes attributable to such distribution.  The portion of the Participant’s Account that
is not distributed.  Distributions to
alleviate an Unforeseeable Emergency will be made as soon as administratively
feasible after the Administrator has reviewed and approved the request.


(f)    Beneficiary
Designation.  A Participant
may deliver a Beneficiary designation to the Administrator designating one or
more beneficiaries for amounts credited to his or her Account at death. If a
Participant fails to designate such a Beneficiary, or the designated
Beneficiary(ies) predecease(s) him or her, payment following the death of the
Participant shall be made to the Participant’s surviving spouse or, if there is
no surviving spouse, to the Participant’s estate.  A Participant may change his or her
designated Beneficiary or Beneficiaries at any time by delivering a new
Beneficiary designation to the Administrator.



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Section
5.              Change in Control.


Notwithstanding any provision of this Plan to the
contrary, a Participant shall be 100 percent vested in his or her Account upon
the occurrence of a Vesting Change in Control. 
Notwithstanding any Payment Election, the aggregate amount credited to a
Participant’s Account shall be paid in one lump-sum payment as soon as practicable
following a Distribution Change in Control, but in no event later than 90 days
after such Distribution Change in Control.


Section
6.              Administration.


(a)   Administration.
The Administrator shall have the authority to administer and to interpret the Plan.


(b)   Responsibilities
and Powers of the Administrator. In administering the Plan, the
Administrator shall have the following responsibilities:


(1)           To
administer the Plan in accordance with the terms hereof, and to exercise all
powers specifically conferred upon the Administrator hereby or necessary to
carry out the provisions hereof;


(2)           To
construe this Plan, which construction shall be conclusive, correct any
defects, supply omissions, and reconcile inconsistencies to the extent
necessary to effectuate the Plan;


(3)           To
determine in his or her sole discretion the amount of benefits payable to
Participants under the Plan.  Any
interpretation or determination made by the Plan Administrator pursuant to its
discretionary authority shall be final and binding on the Company, any
Participant, and any other affected party; and


(4)           To
keep all records relating to Participants and such other records as are
necessary for proper operation of the Plan.


(c)   Actions of the
Administrator. In carrying out the responsibilities set forth in
Section 6(b):


(1)           The
Administrator may adopt rules and regulations necessary for the administration
of the Plan which are consistent with the provisions hereof.


(2)           All
acts and decisions of the Administrator shall apply uniformly to all
Participants in like circumstances. 
Written records shall be kept of all acts and decisions.



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(3)           The
Administrator may delegate, in writing, any of his or her responsibilities and
powers with respect to the Plan to another individual or individuals.


(d)   Professional
Assistance.  The Administrator
shall have the right to hire, at the expense of the Company, such professional
assistants and consultants as he or she, in his or her sole discretion, deems
necessary or advisable, including but not limited to accountants, actuaries,
consultants, counsel and such clerical assistance as is necessary for proper
discharge of his or her duties hereunder.


Section
7.              Miscellaneous.


(a)   Benefits Payable
by the Company. All benefits payable under this Plan constitute an
unfunded obligation of the Company. Payments shall be made, as due, from the
general funds of the Company or, in the case of Share payments, from newly
issued Shares, Shares purchased in the market, treasury Shares or otherwise.
The Company may, at its option, maintain one or more bookkeeping reserve
accounts to reflect its obligations under the Plan and may make such
investments as it may deem desirable to assist it in meeting its obligations.
Any such investments shall be assets of the Company subject to the claims of
its general creditors. No person eligible for a benefit under this Plan shall
have any right, title to, or interest in any such investments.  Nothing contained in this Section 7(a) shall
limit the ability of the Company to pay benefits through one or more grantor
trusts as provided in Section 7(b). Participants are general, unsecured
creditors of the Company. This Plan constitutes a mere promise to pay benefits
in the future.


(b)   Grantor Trusts.
(i) The Company shall create a grantor trust or utilize an existing grantor
trust to assist it in accumulating the shares of Common Stock and cash needed
to fulfill its obligations under this Plan to Directors (including former
Directors), to which it shall be obligated to make contributions, no later than
the date upon which any Potential Change in Control occurs, of a number of
Shares and an amount of cash such that the assets of such trust are sufficient
to discharge all of the Company’s obligations under this Plan to Directors
(including former Directors) accrued as of the date of the Potential Change in
Control. While a Potential Change in Control is pending and after any Vesting
Change in Control, the Company shall be obligated to make additional
contributions at least once each fiscal quarter to the extent necessary to
ensure that the assets of such trust remain sufficient to discharge all such
obligations accrued as of the last day of such fiscal quarter.  If a Potential Change in Control occurs but
ceases to be pending without the occurrence of a Vesting Change in Control or a
subsequent Potential Change in Control then the Company shall be permitted (but
not required) to cause the trustee of such trust to distribute any or all of
the assets of the Trust to the Company.


(ii)           The Company may create a grantor trust or
utilize an existing grantor trust to assist it in accumulating the Shares and
cash needed to fulfill its obligations under this Plan to Participants who are
not Directors (or former Directors). 



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The Board shall determine whether it is
necessary or desirable to create such a trust and to deposit Shares and cash in
such trust to enable the Company to meets its obligations under this Plan and
the extent of any such deposit to such trust.


(iii)          Participants shall have no beneficial or other
interest in any trust referred to in this Section 7(b) and the assets thereof,
and their rights under the Plan shall be as general creditors of the Company,
unaffected by the existence of any trust, except that payments to Participants
from any such trust shall, to the extent thereof, be treated as satisfying the
Company’s obligations under this Plan.


(c)   Obligation for
Payment of Benefits. The obligation to make a distribution of
amounts credited to a Participant’s Account shall be borne by the Participating
Company which otherwise would have paid such amounts currently.  However, the obligation to make a
distribution with respect to Accounts which are related to amounts credited
under a Predecessor Plan, and with respect to which no Participating Company
would otherwise have paid the related award or deferred amount currently, shall
be borne by the Participating Company to which the Participant was assigned on
October 1, 2000.


(d)   Amendment or
Termination. (i) The Board may amend the Plan or terminate the Plan
at any time, but such amendment or termination shall not adversely affect the
rights of any Participant, without his or her consent, to any benefit under the
Plan to which such Participant may have previously become entitled prior to the
effective date of such amendment or termination.  Notwithstanding the foregoing, the Board may
amend the Plan as necessary to address changes in applicable law in order to
assure that amounts contributed to the Plan are not subject to federal income
tax before distribution or withdrawal, which amendment may (among other things)
limit a Participant’s ability to withdraw amounts previously credited to his or
her Account before a Distribution Event and/or limit previously available
methods of distribution. The Administrator with the concurrence of the General
Counsel of the Company or his or her delegate shall be authorized to make minor
or administrative changes to the Plan, as well as amendments required by
applicable federal or state law (or authorized or made desirable by such
statutes).  Any amendment to the Plan by
the Board shall be made in writing, with or without a meeting, or shall be made
in writing by the Administrator, to the extent of the aforementioned
authorization.


(ii)           If this Plan is to be terminated and liquidated,
all deferred compensation plans of the same type under Regulation Section
1.409A-1(c)(2) must also be terminated and liquidated, and no deferred
compensation plan of that same type may be established by the Company for three
years following the termination.


(e)   Entire Agreement.
This Plan constitutes the entire agreement of the Company with respect to the
benefits provided herein and cannot be modified orally or in any writing other
than as set forth in Section 7(d).



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(f)    Payments to
Incompetents. If a Participant entitled to receive any benefits
hereunder is adjudged to be legally incapable of giving valid receipt and
discharge for such benefits, they will be paid to the duly appointed guardian
of such Participant or to such other legally appointed person as the
Administrator may designate. Such payment shall, to the extent made, be deemed
a complete discharge of any liability for such payment under the Plan.


(g)   Benefits not
Transferable. The right of any person to any benefit or payment
under the Plan shall not be subject to voluntary or involuntary transfer,
alienation or assignment and, to the fullest extent permitted by law, shall not
be subject to attachment, execution, garnishment, sequestration or other legal
or equitable process.  In the event a
person who is receiving or is entitled to receive benefits under the Plan
attempts to assign, transfer or dispose of such right, or if an attempt is made
to subject said right to such process, such assignment, transfer, or
disposition shall be null and void.


(h)   Tax Withholding.
The Company is authorized to withhold from any Account or payment due under the
Plan the amount of applicable withholding taxes in respect of such pay­ment or
Account and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such federal, state or
other governmental entity tax obligation.


(i)    Governing Law. The
provisions of the Plan shall be construed in accordance with the laws of the
State of Delaware.


IN WITNESS WHEREOF, the Company
has caused this Plan, as amended, to be executed this 2nd day of August, 2007.


AVAYA INC.


 


	
  By:

  	
  /s/Michael Harrison

  	
   

  
	
   

  	
  Michael Harrison

  
	
   

  	
  Vice President – Total Rewards and HR Services

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
  /s/Eric Sherbet

  	
   

  
	
   

  	
  Eric Sherbet

  
	
   

  	
  Vice President – Law, Corporate and Securities,

  
	
   

  	
  and Corporate Secretary

  



 



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