Exhibit
10.1


AVAYA INC. 2004 LONG TERM INCENTIVE PLAN (“PLAN”)

FORM OF PERFORMANCE VESTING RESTRICTED STOCK UNIT AWARD AGREEMENT

FOR FISCAL 2007 AWARDS


	
  Name

  	
   

  	
  Grant Date

  
	
   

  	
   

  	
   

  
	
  «FirstName» «LastName»

  	
   

  	
  «GrantDate»

  
	
   

  	
   

  	
   

  
	
  Capitalized terms
  not otherwise defined herein shall have the same meanings as in the Plan.

  	
   

  	
   

  
					



 


You have been
granted as of the Grant Date set forth above, «XX» restricted stock units (“Restricted Stock Units”) (subject
to Section 1 below). Upon termination of the restrictions related thereto, each
Restricted Stock Unit will be converted into one share of Avaya Inc. (“Avaya”
or “Company”) common stock, par value $.01 (“Shares”), subject to the terms and
conditions of the Plan and this Agreement.


1.               Vesting of Award.  The Restricted Stock Units shall vest and
become nonforfeitable based upon the terms and conditions set forth below:


(a)          For the period from and
including October 1, 2006 (the “Period Start Date”) through and including
September 30, 2009 (such period is referred to as the “Restriction Period”),
the Committee must determine that the Company has achieved a Total Shareholder
Return greater than or equal to the 25th percentile of the Peer Group; provided,
however, that the number of Restricted Stock Units that may vest and become
nonforfeitable may be between 0 and 200% of the number of Restricted Stock
Units referenced above based on the Company’s Total Shareholder Return
performance relative to the Peer Group, all as set forth on the schedule
attached hereto as Appendix A  (the
number of Restricted Stock Units finally determined in accordance with this
provision shall be known as the “Eligible Restricted Stock Units”).


(b)         Assuming the Committee
makes its determination under Section 1(a), then all Eligible Restricted Stock
Units shall vest, become nonforfeitable and shall be payable on the first
trading day following the date on which the Committee makes its determination
in Section 1(a) (the date on which any Restricted Stock Unit vests being the “Vesting
Date” for such Restricted Stock Unit).


(c)          Consistent with the
terms of the Plan, the Committee may, in its discretion, reduce the amount of
any Award subject to Article 22 of the Plan based on such criteria as it shall
determine, including but not limited to individual merit.


(d)         Total Shareholder Return
is defined as the difference in Stock Price Values on the Measurement Dates,
adjusted for dividend reinvestment, determined as set forth below:


(i)                                        The
term “Measurement Dates” means:


	
  

  	
   

  	
  (A)

  	
   

  	
  Initial Measurement Date:

  	
   

  	
  September 30, 2006

  
	
   

  	
   

  	
  (B)

  	
   

  	
  Final Measurement Date:

  	
   

  	
  September 30, 2009

  



 


(ii)                                     The
term “Stock Price Values” means the average of the closing stock prices for the
30 consecutive trading days ending on each Measurement Date, as reported on
each Peer Group company’s principle trading exchange.


(e)          Peer Group is defined as
those companies which continuously comprise the Standard & Poor’s
Information Technology Index during the entire Restriction Period, including
Avaya.


2.               Termination of Employment.  If prior to September 30, 2009 your
employment terminates for any reason other than death or disability as
described below, including without limitation, retirement and termination as a
result of your employer ceasing to be either Avaya or a Subsidiary, all
Restricted Stock Units subject to this Award shall be forfeited and cancelled.
If on or after September 30, 2009 but prior to the date on which the Committee
makes its determination in Section 1(a) above your employment terminates for any
reason, then the Restricted Stock Units that are the subject of this Award
shall continue without cancellation and shall vest and









 



be payable in accordance with Section 1 above.  Transfer to and from Avaya and any Subsidiary
shall not be considered a termination of employment for purposes of this
Agreement.  Nor shall it be considered a
termination of employment for purposes of this Agreement if you are placed on
an approved leave of absence, unless the Committee shall otherwise determine.


(a)                                  Death - If you die prior to September 30, 2009, then the
Restriction Period related to the Eligible Restricted Stock Units will end and
the award will be paid only if the condition set forth in Section 1(a) is met,
in which case the award will be paid in accordance with Section 1(b) above
according to the following formula and all other Restricted Stock Units not so
paid will be forfeited and cancelled: 
the number of Restricted Stock Units that will vest shall be determined
by multiplying the total number of Eligible Restricted Stock Units by a
fraction, the numerator of which shall be equal to the number of complete
months in the Restriction Period in which you survived following the Period
Start Date, and the denominator of which shall be equal to the number of complete
months in the Restriction Period.


(b)                                 Disability
- “Disability” means termination of employment under circumstances where you
qualify for and receive payments under a long-term disability pay plan
maintained by Avaya or any Subsidiary or as required by or available under
applicable local law.  If your employment
is terminated prior to September 30, 2009, then the Restriction Period related
to the Eligible Restricted Stock Units will end and the award will be paid only
if the condition set forth in Section 1(a) is met, in which case the award will
be paid in accordance with Section 1(b) according to the following formula and
all other Restricted Stock Units not so paid will be forfeited and
cancelled:  the number of Restricted
Stock Units that will vest shall be determined by multiplying the total number
of Eligible Restricted Stock Units by a fraction, the numerator of which shall
be equal to the number of complete months in the Restriction Period you were
employed by Avaya or any Subsidiary following the Period Start Date, and the
denominator of which shall be equal to the number of complete months in the
Restriction Period.


3.               Delivery of Shares.   Subject to Section 6, the Company will
deliver a certificate representing the Shares being distributed to you or to
your legal representative in accordance with the provisions of Section 1(b).


4.               Transferability.  Unless otherwise provided for in the Plan,
you may not transfer, pledge, assign, sell or otherwise alienate your
Restricted Stock Units.


5.               No Right of Employment.  Neither the Plan nor this Restricted Stock
Unit Award shall be construed as giving you the right to be retained in the
employ of Avaya or any Subsidiary.


6.               Taxes.  Avaya shall deduct or cause to be deducted
from, or collect or cause to be collected with respect to, your Restricted
Stock Units any federal, state, or local taxes required by law to be withheld
or paid with respect to your Restricted Stock Units, and you or your legal
representative or beneficiaries shall be required to pay any such amounts.  Avaya shall have the right to take such
action as may be necessary, in Avaya’s opinion, to satisfy such obligations.


7.               Beneficiary.  You may, in accordance with procedures
established by the Committee, designate one or more beneficiaries to receive
all or part of this award in case of your death, and you may change or revoke
such designation at any time.  Such
designation shall not be effective unless and until the Senior Vice President-
Human Resources shall determine, on advice of counsel, that resale of Shares by
your beneficiary(ies) does not require any registration, qualification, consent
or approval of any securities exchange or governmental or regulatory agency or
authority.  In the event of your death,
any portion of this Award that is subject to such a designation (to the extent
such designation is valid, effective and enforceable under this Agreement and
applicable law) shall be distributed to such beneficiary or beneficiaries in
accordance with this Agreement.  Any
other portion of this Award shall be distributed to your estate.  If there shall be any question as to the
legal right of any beneficiary to receive a distribution hereunder, or to the
extent your designation is not effective, such portion will be delivered to
your estate, in which event neither Avaya nor any Subsidiary shall have any
further liability to anyone with respect to such award.


8.               Confidentiality; Non-solicitation; Recoupment of
Profits.


(a)                                  You
recognize and acknowledge that during your employment with Avaya you have had
access to highly confidential and proprietary Company information and trade
secrets (“Proprietary Information,” as described herein) and the use,
misappropriation or disclosure of 
Proprietary Information would cause irreparable injury to Avaya; and it
is essential to the protection of Avaya’s good will and to the









 



maintenance of Avaya’s competitive position that
Proprietary Information be kept secret and that you not disclose  Proprietary Information to others or use any
Proprietary Information to your own advantage or the advantage of any third
parties.  For purposes of this Agreement,
the term “Proprietary Information” shall include any and all information, in
any form whatsoever, including but not limited to, hard copy, computer floppy
diskette, CD, CD-ROM drive, information retained in electronic storage, or
other information storage means, relating to Avaya’s technology; techniques;
processes; tools; research and development; market research, data and strategy;
and, information relating to sales, pricing and customers, including
customer-specific sales information, pricing policies and strategies.


(b)                                 You
further recognize and acknowledge that it is vital for the proper protection of
Avaya’s legitimate interests that during the term of your employment and for a
period of one (1) year from the date of termination of your Avaya employment
you may not directly or indirectly: (i) solicit, induce, or attempt to induce
employees of Avaya or any affiliate of Avaya to terminate their employment with,
or otherwise cease their relationship with Avaya or any affiliated company; or
(ii)  solicit, induce, hire or attempt to
solicit, induce or hire any employee of Avaya to work or provide services to
any third party; or (iii) solicit to divert or take away or attempt to divert
or to take away, the business or patronage of any of Avaya’s clients, customers
or accounts, or prospective clients, customers or accounts.  Insofar as the restrictions set forth in this
paragraph prohibit the solicitation, inducement or attempt to hire a licensed
attorney who is employed at Avaya, they shall not apply to you if you are a
licensed attorney and the restrictions contained herein are illegal,
unethical or unenforceable under the laws, rules and regulations of the jurisdiction
in which you are licensed as an attorney.


(c)                                  You
agree that if you violate the terms of this Section (a) or (b), this Agreement
will be cancelled immediately in its entirety, and any benefit already paid out
within twelve (12) months prior to Avaya’s notice to you of such violation
shall, at the sole discretion of Avaya, be required to be repaid to Avaya
within ten (10) business days of Avaya’s demand of you in writing.  Further, insofar as any violation of this
Section (a) or (b) may cause harm or injury to Avaya which may not be
calculable or remedial by way of monetary damages, you understand and
acknowledge that Avaya may initiate an action in law or in equity to prevent
you from engaging in any conduct which is in violation of this Section (a) or
(b) and/or to initiate an action to recoup any and all profits you have earned
as a result of this Agreement.


(d)                                 If
any restriction set forth in this Section is found by a court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities or in too broad a geographic area,
it shall be interpreted to extend over the maximum period of time, range of
activities or geographic areas as to which it may be enforceable.


(e)                                  You
understand and agree that the restrictions contained in this Section are
necessary for the protection of the business and goodwill of Avaya and are
expressly considered by you to be reasonable for such purpose.


9.               Governing Law.  The validity, construction and effect of this
Agreement shall be determined in accordance with the laws of the State of
Delaware without giving effect to principles of conflicts of law.


10.         Subject
to Plan.  This Agreement
and grant of Restricted Stock Units are subject to all of the terms and
conditions of the Plan.


	
  Please indicate your acceptance of terms 1-10,
  and acknowledge that you have received a copy of the Plan, as currently in
  effect, by signing at the place provided and returning the original of this
  Agreement.

  
	
   

  	
   

  	
   

  
	
  ACCEPTED AND AGREED:

  	
   

  	
  Avaya Inc.

  
	
  SIGNATURE

  	
   

  	
  BY